<PAGE> 1
As filed with the Securities and Exchange Commission on August 2, 1999
Registration No. 333-80737
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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HORSESHOE GAMING HOLDING CORP.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7999 88-0425131
(State or other jurisdiction (Primary Standard Industrial Classification (I.R.S. Employer
of incorporation or organization) Code Number) Identification No.)
</TABLE>
4024 SOUTH INDUSTRIAL ROAD
LAS VEGAS, NEVADA 89103
(702) 650-0080
(Address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------------------
KIRK C. SAYLOR
CHIEF FINANCIAL OFFICER
HORSESHOE GAMING HOLDING CORP.
568 COLONIAL ROAD
MEMPHIS, TENNESSEE 38117
TELEPHONE: (901) 820-2460
FACSIMILE: (901) 820-2461
(Name, address, including ZIP code, and telephone number, including area code,
of agent for service)
---------------------------------
Copy to:
ROBERT M. FRIEDMAN, ESQ.
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 758-9500
FACSIMILE: (212) 758-9526
---------------------------------
Approximate date of commencement of proposed sale of securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
<PAGE> 2
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
---------------------------------
WE HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY
BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE SHALL FILE A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEN BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SEC,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 3
Explanatory Note
This amendment is being filed solely to add an exhibit to the registration
statement.
<PAGE> 4
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of the State of Delaware (the "Delaware Law")
permits indemnification of directors, employees and agents of corporations
under certain conditions and subject to certain limitations. Pursuant to the
Delaware Law, we have included in our Certificate of Incorporation and bylaws a
provision to eliminate the personal liability of our directors for monetary
damages for breach or alleged breach of their duty of care to the fullest
extent permitted by the Delaware Law.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following is a complete list of Exhibits filed as a part of this
Registration Statement, which are incorporated herein:
1.1 #### Purchase Agreement, dated May 6, 1999, by and among
Horseshoe Gaming Holding Corp. and the initial
purchasers.
2.1 ## First Amendment to Deposit Escrow Agreement, by and among
Horseshoe Gaming, L.L.C. and Empress Entertainment, Inc.,
dated March 25, 1999.
2.2 ## First Amendment to Agreement and Plan of Merger, dated as
of March 25, 1999, to the Agreement and Plan of Merger,
dated as of September 22, 1998, by and among Horseshoe
Gaming, L.L.C., Horseshoe Gaming (Midwest), Inc., Empress
Acquisition Illinois, Inc., Empress Acquisition Indiana,
Inc., Empress Casino Joliet Corporation, Empress Casino
Hammond Corporation and Empress Entertainment, Inc.
2.3 # Agreement and Plan of Merger, dated as of September 2,
1998, by and among Horseshoe Gaming, L.L.C., Horseshoe
Gaming (Midwest), Inc., Empress Acquisition Illinois,
Inc., Empress Acquisition Indiana, Inc., Empress Casino
Joliet Corporation, Empress Casino Hammond Corporation
and Empress Entertainment, Inc.
2.4 #### Subscription and Reorganization Agreement, dated as of
April 23, 1999, by and among Horseshoe Gaming Holding
CCCCCorp, Horseshoe Gaming, L.L.C., Robinson Property
Group, Inc., and others listed therein.
2.5 ##### Second Amendment to Agreement and Plan of Merger, Dated
as of July 23, 1999, to the Agreement and Plan of Merger,
dated as of September 22, 1998, by and among Horseshoe
Gaming, L.L.C., Horseshoe Gaming (Midwest), Inc., Empress
Acquisition Illinois, Inc., Empress Acquisition Indiana,
Inc., Empress Entertainment, Inc., Empress Casino Joliet
Corporation and Empress Casino Hammond Corporation.
3.1 #### Certificate of Incorporation of Horseshoe Gaming Holding
Corp.
3.2 #### By-laws of Horseshoe Gaming Holding Corp.
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4.1 #### Indenture, dated as of May 11, 1999, by and between
Horseshoe Gaming Holding Corp. and U.S. Trust Company,
National Association.
4.2 #### Second Supplemental Indenture, dated as of May 11, 1999,
to Indenture, dated as of October 10, 1995, by and
between Horseshoe Gaming, L.L.C., Robinson Property Group
Limited Partnership and U.S. Trust Company, National
Association.
4.3 * Mortgage, Security Agreement and Assignment of Leases and
Rents executed by Horseshoe Entertainment, as Mortgagor,
in favor of Horseshoe Gaming, L.L.C., as Mortgagee.
4.4 * First Preferred Ship Mortgage on the whole of the Queen
of the Red executed by Horseshoe Entertainment, as Owner
and Mortgagor, in favor of Horseshoe Gaming, L.L.C., as
Mortgagee.
4.5 * Bossier City Security Agreement and Assignment thereof.
4.6 * Deed of Trust Security Agreement and Assignment of Leases
and Rents from Robinson Property Group Limited
Partnership, as Grantor, to Rowan H. Taylor, Jr., an
individual, as Trustee for the benefit of Horseshoe
Gaming, L.L.C., and Hanwa American Corp., Yewdale
Holdings Limited and debis Financial Services, Inc., as
Beneficiaries.
4.7 * First Preferred Ship Mortgage on the whole of the
Horseshoe Casino and Hotel, Tunica executed by Robinson
Property Group Limited Partnership, as Owner and
Mortgagor, in favor of Horseshoe Gaming, L.L.C. and
Chemical Trust Company of California, as Mortgagee.
4.8 * Tunica County Security Agreement and Assignment thereof.
4.9 * Intercompany Senior Secured Note due September 30, 2000,
executed by Horseshoe Entertainment in favor of Horseshoe
Gaming, L.L.C.
4.10 * Intercompany Senior Secured Note due September 30, 2000,
executed by Robinson Property Group Limited Partnership
in favor of Horseshoe Gaming, L.L.C.
4.11 * Form of Senior Note of Horseshoe Gaming, L.L.C. 12.75%
Senior Notes due 2000.
4.12 * Indenture, dated as of October 10, 1995, by and among
Horseshoe Gaming, L.L.C., U.S. Trust Company of
California, N.A., as Trustee, and Robinson Property Group
Limited Partnership, as Guarantor, with respect to the
12.75% Senior Notes due 2000.
4.13 * Collateral Agency Agreement, dated as of October 6, 1995,
by and among Horseshoe Gaming, L.L.C., Robinson Property
Group Limited Partnership, B&O Development Limited
Partnership, JBB Gaming Investments, L.L.C. (formerly
Worldwide Gaming Investments, L.L.C.), and Jack Binion,
as Grantors, the Purchasers of the 12.75% Senior Notes
due 2000, and United States Trust Company of New York, as
Collateral Agent.
4.14 * Second Pledge Agreement, dated as of October 10, 1995,
from Jack Binion, B&O Development Limited Partnership,
and JBB Gaming Investments, L.L.C. (formerly Worldwide
Gaming Investments, L.L.C.) in favor of United States
Trust Company of New York, as Collateral Agent for the
benefit of the Holders of 12.75% Senior Notes due
September 30, 2000 issued by Horseshoe Gaming, L.L.C.
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4.15 #### Amendment No. 1 to Second Pledge Agreement, from Jack
Binion, B&O Development Limited Partnership, JBB Gaming
Investments, L.L.C. in favor of United States Trust
Company of New York for the benefit of the Holders of
12.75% Senior Notes due September 30, 2000.
4.16 * Second Pledge Agreement, dated as of October 10, 1995,
from Horseshoe Gaming, L.L.C. in favor of United States
Trust Company of New York, for the ratable benefit of the
Holders of 12.75% Senior Notes due September 30, 2000
issued by Horseshoe Gaming, L.L.C.
4.17 #### Amendment No. 1 to Second Pledge Agreement, from
Horseshoe Gaming, L.L.C. in favor of United States Trust
Company of New York for the ratable benefit of the
Holders of 12.75% Senior Notes due September 30, 2000.
4.18 * Second Ship Mortgage on the Whole of the Queen of the Red
by Horseshoe Entertainment owner and mortgagor in favor
of Horseshoe Gaming, L.L.C., as Mortgagee.
4.19 #### Amendment No. 1 to Second Ship Mortgage on the Whole of
the Queen of the Red by Horseshoe Entertainment in favor
of Horseshoe Gaming, L.L.C.
4.20 * Bossier City Second Security Agreement and Assignment
thereof.
4.21 * Second Deed of Trust, Security Agreement and Assignment
of Leases and Rents from Robinson Property Group Limited
Partnership, as Grantor, to Rowan H. Taylor, Jr., an
individual, as Trustee for the benefit of Horseshoe
Gaming, L.L.C. and United States Trust Company of New
York, as Collateral Agent for the Senior Note Holder, as
beneficiaries.
4.22 #### Amendment No. 1 to Second Deed of Trust, Security
Agreement and Assignment of Leases and Rents from
Robinson Property Group, Limited Partnership to Rowan H.
Taylor, Jr. for the benefit of Horseshoe Gaming, L.L.C.
and United States Trust Company of New York for the
ratable benefit of the Holders of 12.75% Senior Notes due
September 30, 2000.
4.23 * Second Ship Mortgage on the Whole of the Horseshoe Casino
& Hotel, Tunica executed by Robinson Property Group
Limited Partnership, as Owner and Mortgagor, in favor of
Horseshoe Gaming, L.L.C. and United States Trust Company
of New York, as Collateral Agent for the ratable benefit
of the Senior Note Holders.
4.24 #### Amendment No. 1 to Second Ship Mortgage on the Whole of
the Horseshoe Casino & Hotel, Tunica executed by Robinson
Property Group Limited Partnership, as Owner and
Mortgagor, in favor of Horseshoe Gaming, L.L.C. and
United Trust Company of New York.
4.25 *** Amendment No. 1 to Indenture, dated as of July 19, 1996,
by and among Horseshoe Gaming, L.L.C., Robinson Property
Group Limited Partnership and U.S. Trust Company of
California, N.A., as Trustee under the Indenture.
4.26 + Intercompany Senior Secured Note due September 30, 2000
executed by Robinson Property Group Limited Partnership
in favor of Horseshoe Gaming, L.L.C.
4.27 + Intercompany Senior Secured Note due September 30, 2000
executed by Horseshoe Entertainment in favor of Horseshoe
Gaming, L.L.C.
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4.28 ++ Purchase Agreement for 9 3/8% Series A Senior
Subordinated Notes by and among Horseshoe Gaming, L.L.C.
and Robinson Property Group Limited Partnership, as
guarantor, and Wasserstein Perella Securities, Inc. as
Initial Purchaser.
4.29 ++ Form of 9 3/8% Senior Subordinated Note due 2007 of
Horseshoe Gaming, L.L.C.
4.30 ++ Indenture, dated as of June 15, 1997, by and among
Horseshoe Gaming, L.L.C., U.S. Trust Company of Texas,
N.A., as Trustee, and Robinson Property Group Limited
Partnership, as guarantor, with respect to the 9 3/8%
Senior Subordinated Notes due 2007.
4.31 ++ Exchange and Registration Rights Agreement, dated as of
June 25, 1997, by and among Horseshoe Gaming, L.L.C.,
Robinson Property Group Limited Partnership and
Wasserstein Perella Securities, Inc.
4.32 ++ Intercompany Senior Secured Note due June 15, 2007
executed by Robinson Property Group Limited Partnership
in favor of Horseshoe Gaming, L.L.C.
4.33 ++ Intercompany Senior Secured Note due June 15, 2007
executed by Horseshoe Entertainment in favor of Horseshoe
Gaming, L.L.C.
4.34 +++ Intercompany Senior Secured Note due June 15, 2000
executed by Robinson Property Group Limited Partnership
in favor of Horseshoe Gaming, L.L.C.
4.35 +++ Intercompany Senior Secured Note due June 15, 2000
executed by Horseshoe Entertainment in favor of Horseshoe
Gaming, L.L.C.
4.36 +++ Amended and Restated Credit Facility Agreement, dated as
of November 12, 1997, by and among Horseshoe Gaming,
L.L.C. and Canadian Imperial Bank of Commerce as agent
for the lenders.
4.37 #### Amendment No. 1 to the Amended and Restated Note
Assignment, dated as of May 11, 1999, from Horseshoe
Gaming, L.L.C. in favor of the Holders of Senior Secured
Credit Facility Notes due September 30, 2000.
4.38 +++ Form of Revolving Note between Horseshoe Gaming, L.L.C.
and Lender pursuant to the Amended and Restated Credit
Facility Agreement.
4.39 +++ Form of Swingline Note between Horseshoe Gaming, L.L.C.
and Canadian Imperial Bank of Commerce pursuant to the
Amended and Restated Credit Facility Agreement.
4.40 +++ Security Agreement made as of November 12, 1997 by the
Company in favor of Canadian Imperial Bank of Commerce
(the "Bank").
4.41 +++ Guarantee and Security Agreement made by Horseshoe
Gaming, Inc. as of November 12, 1997 in favor of the Bank
4.42 +++ Guarantee and Security Agreement made by Horseshoe GP,
Inc. as of November 12, 1997 in favor of the Bank
4.43 +++ Amended and Restated Guarantee and Security Agreement
made by Robinson Property Group LP as of November 12,
1997 in favor of the Bank.
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4.44 +++ Guarantee and Security Agreement made by New Gaming
Capital Partnership as of November 12, 1997 in favor of
the Bank.
4.45 +++ Guarantee and Security Agreement made by Horseshoe
Ventures as of November 12, 1997 in favor of the Bank.
4.46 +++ Amended and Restated Note Assignment made by Horseshoe
Gaming, L.L.C. as of November 12, 1997 in favor of the
Bank and United States Trust Company of New York for the
ratable benefit of the Holders of 12.75% Senior Notes due
September 30, 2000 issued by Horseshoe Gaming, L.L.C.
4.47 +++ Amended and Restated Pledge Agreement of HGHC as of
November 12, 1997 in favor of the Bank.
4.48 +++ Amended and Restated Pledge Agreement of JBB Gaming
Investments as of November 12, 1997 in favor of the Bank.
4.49 +++ Amended and Restated Intercreditor Agreement, dated as of
November 12, 1997, by and between Horseshoe Gaming,
L.L.C. and Canadian Imperial Bank of Commerce.
4.50 ### Dealer Manager Agreement, dated as of April 20, 1999, by
and between Horseshoe Gaming, L.L.C. and Donaldson,
Lufkin & Jenrette Securities Corporation.
4.51 ++++ Horseshoe Gaming Holding Corp. Credit Agreement, dated as
of June 30, 1999, by and among Horseshoe Gaming Holding
Corp., the Lenders Listed Therein, DLJ Capital Funding,
Inc. and Canadian Imperial Bank of Commerce.(1)
5.1 ##### Opinion of Swidler Berlin Shereff Friedman, LLP.
10.1 #### Settlement Term Sheet, dated as of May 19, 1999, by and
among Jack B. Binion, Horseshoe Gaming, Inc., Horseshoe
Gaming, L.L.C., Paul R. Alanis, Loren Ostrow, John
Schreiber and Cliff Kortman.
10.2 #### Horseshoe Note Pledge and Security Agreement, dated as of
and on May 11, 1999, by and among Horseshoe Gaming
Holding Corp., Horseshoe Gaming, L.L.C. and U.S. Trust
Company, National Association.
10.3 #### Promissory Note, dated May 11, 1999, from Horseshoe
Gaming, L.L.C. to Horseshoe Gaming Holding Corp. for
$240,349,125.00.
10.4 #### Registration Rights Agreement, dated May 11, 1999, by and
among Horseshoe Gaming Holding Corp. and the initial
purchasers.
- -------------------
(1) In accordance with item 601 of Regulation S-K, the Registrant has
not filed the schedules to this Agreement with the Securities and Exchange
Commission. The Registrant undertakes to supplementally provide a copy of such
schedules to the Securities and Exchange Commission upon request.
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10.5 #### Security and Control Agreement, dated as of and on May
11, 1999, by and among Horseshoe Gaming Holding Corp. and
U.S. Trust Company, National Association.
10.6 #### Guarantee, dated as of May 11, 1999, by Robinson Property
Group, Limited Partnership for the benefit of Horseshoe
Gaming Holding Corp.
10.7 #### Guarantee, dated as of May 11, 1999, by Horseshoe
Entertainment for the benefit of Horseshoe Gaming Holding
Corp.
10.8 #### Stockholders' Agreement for Horseshoe Gaming Holding
Corp., dated as of April 29 1999, by and among Horseshoe
Gaming Holding Corp. and parties listed therein.
10.9 * 401(k) Plan of Robinson Property Group Limited
Partnership.
10.10 ** Registration Rights Agreement, dated as of October 10,
1995, by and between Horseshoe Gaming, L.L.C., on the one
hand, and Yewdale Holdings Limited, Post Balanced Fund,
L.P., Capital Fund Foundation, Raymond Zimmerman, as
Trustee for the Charles N. Mathewson Charitable Remainder
Uni Trust, Hanwa American Corp., Onyx Partners, Inc.,
Alpine Associates, Janless Corp, Andrew Astrachan, and
Donald Schupak, on the other hand.
10.11 ++ Second Amended and Restated Employment Agreement, dated
as of October, 1, 1995, by and between Horseshoe Gaming,
Inc. and Walter J. Haybert.
10.12 * Employment Agreement, dated January 1, 1996, by and
between Horseshoe Gaming, Inc. and Paul Alanis.
10.13 * Employment Agreement, dated January 1, 1996, by and
between Horseshoe Gaming, L.L.C. and Loren S. Ostrow.
10.14 ++ Second Amended and Restated Employment Agreement, dated
as of October 1, 1995, by and between Horseshoe Gaming,
Inc. and John Michael Allen.
10.15 ++ Second Amended and Restated Employment Agreement, dated
as of October 1, 1995, by and between Horseshoe Gaming,
Inc. and John J. Schreiber.
10.16 ++ 1997 Unit Option Plan of Horseshoe Gaming, L.L.C.
10.17 ## Unit Option Agreement, dated as of February 1, 1997, by
and between Horseshoe Gaming, L.L.C. and Larry Lepinski.
10.18 ## Unit Option Agreement, dated as of February 1, 1997, by
and between Horseshoe Gaming, L.L.C. and Cliff Kortman.
10.19 ## Warrant Purchase Agreement, dated as of December 21,
1998, by and between Hanwa Co., Ltd. and Horseshoe
Gaming, L.L.C.
10.20 ## Settlement Agreement, dated as of December 31, 1998, by
and among Horseshoe Gaming, Inc., Horseshoe Gaming,
L.L.C. and Hollywood Park, Inc.
10.21 ## Settlement Agreement, dated as of February 3, 1999, by
and among Horseshoe Gaming, Inc., Horseshoe Gaming,
L.L.C. and Mike Allen.
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10.22 ## Letter Agreement, dated October 19, 1998, by Horseshoe
Gaming, Inc. and Horseshoe Gaming, L.L.C. and accepted by
Walter Haybert.
10.23 ## Letter Agreement, dated January 4, 1999, by Horseshoe
Gaming, Inc. and Horseshoe Gaming, L.L.C. and accepted by
Walter Haybert.
10.24 ## Mutual General Release, dated February 23, 1999, by and
among Horseshoe Gaming, L.L.C., Horseshoe Gaming, Inc.,
Horseshoe GP, Inc., Robinson Property Group Limited
Partnership, New Gaming Capital Partnership, Horseshoe
Entertainment, and Nobutaka Mutaguchi.
10.25 ## Exclusive License Agreement, dated July 2, 1998, by and
between Horseshoe Gaming, L.L.C. and Horseshoe License
Company.
10.26 ## Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and Gary
Border.
10.27 ## Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and Larry
Lepinski.
10.28 ## Amended and Restated Employment Agreement, dated October
15, 1998, by and between Horseshoe Gaming, Inc. and
Robert McQueen.
10.29 ## Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and Kirk
Saylor.
10.30 #### Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and David
Carroll.
10.31 #### Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and John
Moran.
10.32 #### Employment Agreement, dated as of November 3, 1998, by
and between Horseshoe Gaming, Inc. and Roger Wagner.
10.33 ## Unit Option Agreement, dated as of February 1, 1997, by
and between Horseshoe Gaming, L.L.C. and Urs Vogel.
10.34 ## Unit Option Agreement, dated as of February 1, 1997, by
and between Horseshoe Gaming, L.L.C. and Glen Buxton.
10.35 ### Agreement, dated as of April 21, 1999, by and among
Horseshoe Gaming, L.L.C., Horseshoe Gaming, Inc.,
Horseshoe Entertainment, LP, and New Gaming Capital
Partnership; Jack B. Binion; The Robin Group, Inc. and
August Robin.
10.36 ### Agreement, dated as of April 21, 1999, by and among
Horseshoe Gaming, L.L.C., Horseshoe Gaming, Inc.,
Horseshoe Entertainment, LP, and New Gaming Capital
Partnership; Jack B. Binion; Wendell Piper; Cassandra
Piper; and Robert E. Piper, Jr.
10.37 ##### Employment Agreement, dated as of January 11, 1999, by
and between Horseshoe Gaming, Inc. and Joseph J. Canfora.
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10.38 ##### Consulting Agreement, dated as of July 23, 1999, by and
between Horseshoe Gaming, L.L.C. and Empress
Entertainment, Inc.
12.1 #### Statements re Computations of Ratios
20.1 # Press Release issued on September 2, 1998 by Horseshoe
Gaming, L.L.C. announcing that it had executed an
agreement to acquire the riverboat gaming operations of
Empress Entertainment, Inc.
21.1 #### Subsidiaries of Horseshoe Gaming Holding Corp.
23.1 ##### Consent of Arthur Andersen LLP.
23.2 ##### Consent of Ernst & Young LLP.
23.3 ##### Consent of Swidler Berlin Shereff Friedman, LLP (included
in Exhibit 5.1 to this Registration Statement).
24.1 #### Power of Attorney (included on signature page hereto).
25.1 #### Statement of Eligibility of Trustee.
27.1 #### Financial Data Schedule
99.1 #### Form of Letter of Transmittal for Tender of all
Outstanding 85/8% Series A Senior Subordinated Notes Due
2009 in exchange for 85/8% Series B Senior Subordinated
Notes Due 2009 of Horseshoe Gaming Holding Corp.
99.2 #### Form of Tender for all Outstanding 85/8% Series A Senior
Subordinated Notes Due 2009 in exchange for 85/8% Series
B Senior Subordinated Notes Due 2009 of Horseshoe Gaming
Holding Corp.
99.3 #### Form of Instruction to Registered Holder from Beneficial
Owner of 85/8% Series A Senior Subordinated Notes Due
2009 of Horseshoe Gaming Holding Corp.
99.4 #### Form of Notice of Guaranteed Delivery for Outstanding
85/8% Series A Senior Subordinated Notes Due 2009 in
exchange for 85/8% Series B Senior Subordinated Notes Due
2009 of Horseshoe Gaming Holding Corp.
- -----------------------------
* Filed as an Exhibit to Horseshoe Gaming, L.L.C. Registration Statement
on Form S-4 (No. 333-0214) (the "1996 Form S-4") filed on January 8,
1996.
** Filed as an Exhibit to Horseshoe Gaming, L.L.C. Amendment No. 1 to the
1996 Form S-4 filed on April 26, 1996.
*** Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-Q for the
Quarter Ended June 30, 1996.
+ Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-Q for the
Quarter Ended March 31, 1997.
++ Filed as an Exhibit to Horseshoe Gaming, L.L.C. Registration Statement
on Form S-4 (No. 333-33145) filed on August 7, 1997.
+++ Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-K for the Year
Ended December 31, 1997.
# Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 8-K filed on
September 12, 1998.
## Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-K for the
fiscal year ended December 31, 1998.
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### Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-Q for the
Quarter Ended March 31, 1999.
#### Filed as an Exhibit to Horseshoe Gaming Holding Corp.'s Form S-4
Registration Statement filed on June 15, 1999.
##### Filed as an Exhibit to Horseshoe Gaming Holding Corp. Amendment No. 1
to Form S-4 Registration Statement filed on July 30, 1999.
++++ Filed herewith.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
- To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
- To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
- To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) That prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) under the Securities Act of 1933, as amended, or the
Securities Act, the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other Items of the applicable form.
(5) That every prospectus (x) that is filed pursuant to paragraph (4)
immediately preceding, or (y) that purports to meet the requirements of section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415 under the Securities Act, will be filed as a
part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrants
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
enforceable. In the event that a claim for indemnification against such
liabilities, other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceedings, is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of Form S-4 promulgated by the SEC, within one
business day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(d) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(e) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrants' annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934, that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-10
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Horseshoe Gaming Holding Corp. has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Las Vegas, State of Nevada, on July 30, 1999.
HORSESHOE GAMING HOLDING CORP.
By: *
---------------------------------------
Jack B. Binion
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 30, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
*
- ---------------------------------- Chairman of the Board, President and Chief Executive
Jack B. Binion Officer (Principal Executive Officer) and Director
/s/ Kirk C. Saylor
- ---------------------------------- Chief Financial Officer (Principal Financial Officer)
Kirk C. Saylor
Director
- ----------------------------------
Peri Cope Howard
* Director
- ----------------------------------
Leslie Kenny
</TABLE>
II-11
<PAGE> 15
*By: /s/ Kirk C. Saylor
- ----------------------------------
Attorney-in-Fact
EXHIBIT INDEX
1.1 #### Purchase Agreement, dated May 6, 1999, by and among
Horseshoe Gaming Holding Corp. and the initial
purchasers.
2.1 ## First Amendment to Deposit Escrow Agreement, by and among
Horseshoe Gaming, L.L.C. and Empress Entertainment, Inc.,
dated March 25, 1999.
2.2 ## First Amendment to Agreement and Plan of Merger, dated as
of March 25, 1999, to the Agreement and Plan of Merger,
dated as of September 22, 1998, by and among Horseshoe
Gaming, L.L.C., Horseshoe Gaming (Midwest), Inc., Empress
Acquisition Illinois, Inc., Empress Acquisition Indiana,
Inc., Empress Casino Joliet Corporation, Empress Casino
Hammond Corporation and Empress Entertainment, Inc.
2.3 # Agreement and Plan of Merger, dated as of September 2,
1998, by and among Horseshoe Gaming, L.L.C., Horseshoe
Gaming (Midwest), Inc., Empress Acquisition Illinois,
Inc., Empress Acquisition Indiana, Inc., Empress Casino
Joliet Corporation, Empress Casino Hammond Corporation
and Empress Entertainment, Inc.
2.4 #### Subscription and Reorganization Agreement, dated as of
April 23, 1999, by and among Horseshoe Gaming Holding
Corp, Horseshoe Gaming, L.L.C., Robinson Property Group,
Inc., and others listed therein.
2.5 ##### Second Amendment to Agreement and Plan of Merger, dated
as of July 23, 1999, to the Agreement and Plan of Merger,
dated as of September 22, 1998, by and among Horseshoe
Gaming, L.L.C., Horseshoe Gaming (Midwest),Inc., Empress
Acquisition Illinois, Inc., Empress Acquisition
Indiana,Inc., Empress Entertainment, Inc., Empress Casino
Joliet Corporation and Empress Casino Hammond
Corporation.
3.1 #### Certificate of Incorporation of Horseshoe Gaming Holding
Corp.
3.2 #### By-laws of Horseshoe Gaming Holding Corp.
4.1 #### Indenture, dated as of May 11, 1999, by and between
Horseshoe Gaming Holding Corp. and U.S. Trust Company,
National Association.
4.2 #### Second Supplemental Indenture, dated as of May 11, 1999,
to Indenture, dated as of October 10, 1995, by and
between Horseshoe Gaming, L.L.C., Robinson Property Group
Limited Partnership and U.S. Trust Company, National
Association.
4.3 * Mortgage, Security Agreement and Assignment of Leases and
Rents executed by Horseshoe Entertainment, as Mortgagor,
in favor of Horseshoe Gaming, L.L.C., as Mortgagee.
<PAGE> 16
4.4 * First Preferred Ship Mortgage on the whole of the Queen
of the Red executed by Horseshoe Entertainment, as Owner
and Mortgagor, in favor of Horseshoe Gaming, L.L.C., as
Mortgagee.
4.5 * Bossier City Security Agreement and Assignment thereof.
4.6 * Deed of Trust Security Agreement and Assignment of Leases
and Rents from Robinson Property Group Limited
Partnership, as Grantor, to Rowan H. Taylor, Jr., an
individual, as Trustee for the benefit of Horseshoe
Gaming, L.L.C., and Hanwa American Corp., Yewdale
Holdings Limited and debis Financial Services, Inc., as
Beneficiaries.
4.7 * First Preferred Ship Mortgage on the whole of the
Horseshoe Casino and Hotel, Tunica executed by Robinson
Property Group Limited Partnership, as Owner and
Mortgagor, in favor of Horseshoe Gaming, L.L.C. and
Chemical Trust Company of California, as Mortgagee.
4.8 * Tunica County Security Agreement and Assignment thereof.
4.9 * Intercompany Senior Secured Note due September 30, 2000,
executed by Horseshoe Entertainment in favor of Horseshoe
Gaming, L.L.C.
4.10 * Intercompany Senior Secured Note due September 30, 2000,
executed by Robinson Property Group Limited Partnership
in favor of Horseshoe Gaming, L.L.C.
4.11 * Form of Senior Note of Horseshoe Gaming, L.L.C. 12.75%
Senior Notes due 2000.
4.12 * Indenture, dated as of October 10, 1995, by and among
Horseshoe Gaming, L.L.C., U.S. Trust Company of
California, N.A., as Trustee, and Robinson Property Group
Limited Partnership, as Guarantor, with respect to the
12.75% Senior Notes due 2000.
4.13 * Collateral Agency Agreement, dated as of October 6, 1995,
by and among Horseshoe Gaming, L.L.C., Robinson Property
Group Limited Partnership, B&O Development Limited
Partnership, JBB Gaming Investments, L.L.C. (formerly
Worldwide Gaming Investments, L.L.C.), and Jack Binion,
as Grantors, the Purchasers of the 12.75% Senior Notes
due 2000, and United States Trust Company of New York, as
Collateral Agent.
4.14 * Second Pledge Agreement, dated as of October 10, 1995,
from Jack Binion, B&O Development Limited Partnership,
and JBB Gaming Investments, L.L.C. (formerly Worldwide
Gaming Investments, L.L.C.) in favor of United States
Trust Company of New York, as Collateral Agent for the
benefit of the Holders of 12.75% Senior Notes due
September 30, 2000 issued by Horseshoe Gaming, L.L.C.
4.15 #### Amendment No. 1 to Second Pledge Agreement, from Jack
Binion, B&O Development Limited Partnership, JBB Gaming
Investments, L.L.C. in favor of United States Trust
Company of New York for the benefit of the Holders of
12.75% Senior Notes due September 30, 2000.
4.16 * Second Pledge Agreement, dated as of October 10, 1995,
from Horseshoe Gaming, L.L.C. in favor of United States
Trust Company of New York, for the ratable benefit of the
Holders of 12.75% Senior Notes due September 30, 2000
issued by Horseshoe Gaming, L.L.C.
4.17 #### Amendment No. 1 to Second Pledge Agreement, from
Horseshoe Gaming, L.L.C. in favor of United States Trust
Company of New York for the ratable benefit of the
Holders of 12.75% Senior Notes due September 30, 2000.
<PAGE> 17
4.18 * Second Ship Mortgage on the Whole of the Queen of the Red
by Horseshoe Entertainment owner and mortgagor in favor
of Horseshoe Gaming, L.L.C., as Mortgagee.
4.19 #### Amendment No. 1 to Second Ship Mortgage on the Whole of
the Queen of the Red by Horseshoe Entertainment in favor
of Horseshoe Gaming, L.L.C.
4.20 * Bossier City Second Security Agreement and Assignment
thereof.
4.21 * Second Deed of Trust, Security Agreement and Assignment
of Leases and Rents from Robinson Property Group Limited
Partnership, as Grantor, to Rowan H. Taylor, Jr., an
individual, as Trustee for the benefit of Horseshoe
Gaming, L.L.C. and United States Trust Company of New
York, as Collateral Agent for the Senior Note Holder, as
beneficiaries.
4.22 #### Amendment No. 1 to Second Deed of Trust, Security
Agreement and Assignment of Leases and Rents from
Robinson Property Group, Limited Partnership to Rowan H.
Taylor, Jr. for the benefit of Horseshoe Gaming, L.L.C.
and United States Trust Company of New York for the
ratable benefit of the Holders of 12.75% Senior Notes due
September 30, 2000.
4.23 * Second Ship Mortgage on the Whole of the Horseshoe Casino
& Hotel, Tunica executed by Robinson Property Group
Limited Partnership, as Owner and Mortgagor, in favor of
Horseshoe Gaming, L.L.C. and United States Trust Company
of New York, as Collateral Agent for the ratable benefit
of the Senior Note Holders.
4.24 #### Amendment No. 1 to Second Ship Mortgage on the Whole of
the Horseshoe Casino & Hotel, Tunica executed by Robinson
Property Group Limited Partnership, as Owner and
Mortgagor, in favor of Horseshoe Gaming, L.L.C. and
United Trust Company of New York.
4.25 *** Amendment No. 1 to Indenture, dated as of July 19, 1996,
by and among Horseshoe Gaming, L.L.C., Robinson Property
Group Limited Partnership and U.S. Trust Company of
California, N.A., as Trustee under the Indenture.
4.26 + Intercompany Senior Secured Note due September 30, 2000
executed by Robinson Property Group Limited Partnership
in favor of Horseshoe Gaming, L.L.C.
4.27 + Intercompany Senior Secured Note due September 30, 2000
executed by Horseshoe Entertainment in favor of Horseshoe
Gaming, L.L.C.
4.28 ++ Purchase Agreement for 9 3/8% Series A Senior
Subordinated Notes by and among Horseshoe Gaming, L.L.C.
and Robinson Property Group Limited Partnership, as
guarantor, and Wasserstein Perella Securities, Inc. as
Initial Purchaser.
4.29 ++ Form of 9 3/8% Senior Subordinated Note due 2007 of
Horseshoe Gaming, L.L.C.
4.30 ++ Indenture, dated as of June 15, 1997, by and among
Horseshoe Gaming, L.L.C., U.S. Trust Company of Texas,
N.A., as Trustee, and Robinson Property Group Limited
Partnership, as guarantor, with respect to the 9 3/8%
Senior Subordinated Notes due 2007.
4.31 ++ Exchange and Registration Rights Agreement, dated as of
June 25, 1997, by and among Horseshoe Gaming, L.L.C.,
Robinson Property Group Limited Partnership and
Wasserstein Perella Securities, Inc.
<PAGE> 18
4.32 ++ Intercompany Senior Secured Note due June 15, 2007
executed by Robinson Property Group Limited Partnership
in favor of Horseshoe Gaming, L.L.C.
4.33 ++ Intercompany Senior Secured Note due June 15, 2007
executed by Horseshoe Entertainment in favor of Horseshoe
Gaming, L.L.C.
4.34 +++ Intercompany Senior Secured Note due June 15, 2000
executed by Robinson Property Group Limited Partnership
in favor of Horseshoe Gaming, L.L.C.
4.35 +++ Intercompany Senior Secured Note due June 15, 2000
executed by Horseshoe Entertainment in favor of Horseshoe
Gaming, L.L.C.
4.36 +++ Amended and Restated Credit Facility Agreement, dated as
of November 12, 1997, by and among Horseshoe Gaming,
L.L.C. and Canadian Imperial Bank of Commerce as agent
for the lenders.
4.37 #### Amendment No. 1 to the Amended and Restated Note
Assignment, dated as of May 11, 1999, from Horseshoe
Gaming, L.L.C. in favor of the Holders of Senior Secured
Credit Facility Notes due September 30, 2000.
4.38 +++ Form of Revolving Note between Horseshoe Gaming, L.L.C.
and Lender pursuant to the Amended and Restated Credit
Facility Agreement.
4.39 +++ Form of Swingline Note between Horseshoe Gaming, L.L.C.
and Canadian Imperial Bank of Commerce pursuant to the
Amended and Restated Credit Facility Agreement.
4.40 +++ Security Agreement made as of November 12, 1997 by the
Company in favor of Canadian Imperial Bank of Commerce
(the "Bank").
4.41 +++ Guarantee and Security Agreement made by Horseshoe
Gaming, Inc. as of November 12, 1997 in favor of the Bank
4.42 +++ Guarantee and Security Agreement made by Horseshoe GP,
Inc. as of November 12, 1997 in favor of the Bank
4.43 +++ Amended and Restated Guarantee and Security Agreement
made by Robinson Property Group LP as of November 12,
1997 in favor of the Bank.
4.44 +++ Guarantee and Security Agreement made by New Gaming
Capital Partnership as of November 12, 1997 in favor of
the Bank.
4.45 +++ Guarantee and Security Agreement made by Horseshoe
Ventures as of November 12, 1997 in favor of the Bank.
4.46 +++ Amended and Restated Note Assignment made by Horseshoe
Gaming, L.L.C. as of November 12, 1997 in favor of the
Bank and United States Trust Company of New York for the
ratable benefit of the Holders of 12.75% Senior Notes due
September 30, 2000 issued by Horseshoe Gaming, L.L.C.
4.47 +++ Amended and Restated Pledge Agreement of the Company as
of November 12, 1997 in favor of the Bank.
<PAGE> 19
4.48 +++ Amended and Restated Pledge Agreement of JBB Gaming
Investments as of November 12, 1997 in favor of the Bank.
4.49 +++ Amended and Restated Intercreditor Agreement, dated as of
November 12, 1997, by and between Horseshoe Gaming,
L.L.C. and Canadian Imperial Bank of Commerce.
4.50 ### Dealer Manager Agreement, dated as of April 20, 1999, by
and between Horseshoe Gaming, L.L.C. and Donaldson,
Lufkin & Jenrette Securities Corporation.
4.51 ++++ Credit Facility for Acquisition of Empress Casino Hammond
Corporation and Horseshoe Gaming Holding Corp. Credit
Agreement, dated as of June 30, 1999, by and among
Horseshoe Gaming Holding Corp., the Lenders listed
therein, DLJ Capital Funding, Inc. and Canadian Imperial
Bank of Commerce.(2)
5.1 ##### Opinion of Swidler Berlin Shereff Friedman, LLP.
10.1 #### Settlement Term Sheet, dated as of May 19, 1999, by and
among Jack B. Binion, Horseshoe Gaming, Inc., Horseshoe
Gaming, L.L.C., Paul R. Alanis, Loren Ostrow, John
Schreiber and Cliff Kortman.
10.2 #### Horseshoe Note Pledge and Security Agreement, dated as of
and on May 11, 1999, by and among Horseshoe Gaming
Holding Corp., Horseshoe Gaming, L.L.C. and U.S. Trust
Company, National Association.
10.3 #### Promissory Note, dated May 11, 1999, from Horseshoe
Gaming, L.L.C. to Horseshoe Gaming Holding Corp. for
$240,349,125.00.
10.4 #### Registration Rights Agreement, dated May 11, 1999, by and
among Horseshoe Gaming Holding Corp. and the initial
purchasers.
10.5 #### Security and Control Agreement, dated as of and on May
11, 1999, by and among Horseshoe Gaming Holding Corp. and
U.S. Trust Company, National Association.
10.6 #### Guarantee, dated as of May 11, 1999, by Robinson Property
Group, Limited Partnership for the benefit of Horseshoe
Gaming Holding Corp.
10.7 #### Guarantee, dated as of May 11, 1999, by Horseshoe
Entertainment for the benefit of Horseshoe Gaming Holding
Corp.
10.8 #### Stockholders' Agreement for Horseshoe Gaming Holding
Corp., dated as of April 29, 1999, by and among Horseshoe
Gaming Holding Corp. and parties listed therein.
10.9 * 401(k) Plan of Robinson Property Group Limited
Partnership.
- --------
(2) In accordance with item 601 of Regulation S-K, the Registrant has
not filed the schedules to this Agreement with the Securities and Exchange
Commission. The Registrant undertakes to supplementally provide a copy of such
schedules to the Securities and Exchange Commission upon request.
<PAGE> 20
10.10 ** Registration Rights Agreement, dated as of October 10,
1995, by and between Horseshoe Gaming, L.L.C., on the one
hand, and Yewdale Holdings Limited, Post Balanced Fund,
L.P., Capital Fund Foundation, Raymond Zimmerman, as
Trustee for the Charles N. Mathewson Charitable Remainder
Uni Trust, Hanwa American Corp., Onyx Partners, Inc.,
Alpine Associates, Janless Corp, Andrew Astrachan, and
Donald Schupak, on the other hand.
10.11 ++ Second Amended and Restated Employment Agreement, dated
as of October, 1, 1995, by and between Horseshoe Gaming,
Inc. and Walter J. Haybert.
10.12 * Employment Agreement, dated January 1, 1996, by and
between Horseshoe Gaming, Inc. and Paul Alanis.
10.13 * Employment Agreement, dated January 1, 1996, by and
between Horseshoe Gaming, L.L.C. and Loren S. Ostrow.
10.14 ++ Second Amended and Restated Employment Agreement, dated
as of October 1, 1995, by and between Horseshoe Gaming,
Inc. and John Michael Allen.
10.15 ++ Second Amended and Restated Employment Agreement, dated
as of October 1, 1995, by and between Horseshoe Gaming,
Inc. and John J. Schreiber.
10.16 ++ 1997 Unit Option Plan of Horseshoe Gaming, L.L.C.
10.17 ## Unit Option Agreement, dated as of February 1, 1997, by
and between Horseshoe Gaming, L.L.C. and Larry Lepinski.
10.18 ## Unit Option Agreement, dated as of February 1, 1997 by
and between Horseshoe Gaming, L.L.C. and Cliff Kortman.
10.19 ## Warrant Purchase Agreement, dated as of December 21,
1998, by and between Hanwa Co., Ltd. and Horseshoe
Gaming, L.L.C.
10.20 ## Settlement Agreement, dated as of December 31, 1998, by
and among Horseshoe Gaming, Inc., Horseshoe Gaming,
L.L.C. and Hollywood Park, Inc.
10.21 ## Settlement Agreement, dated as of February 3, 1999, by
and among Horseshoe Gaming, Inc., Horseshoe Gaming,
L.L.C. and Mike Allen.
10.22 ## Letter Agreement, dated October 19, 1998, by Horseshoe
Gaming, Inc. and Horseshoe Gaming, L.L.C. and accepted by
Walter Haybert.
10.23 ## Letter Agreement, dated January 4, 1999, by Horseshoe
Gaming, Inc. and Horseshoe Gaming, L.L.C. and accepted by
Walter Haybert.
10.24 ## Mutual General Release, dated February 23, 1999, by and
among Horseshoe Gaming, L.L.C., Horseshoe Gaming, Inc.,
Horseshoe GP, Inc., Robinson Property Group Limited
Partnership, New Gaming Capital Partnership, Horseshoe
Entertainment, and Nobutaka Mutaguchi.
10.25 ## Exclusive License Agreement, dated July 2, 1998, by and
between Horseshoe Gaming, L.L.C. and Horseshoe License
Company.
<PAGE> 21
10.26 ## Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and Gary
Border.
10.27 ## Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and Larry
Lepinski.
10.28 ## Amended and Restated Employment Agreement, dated October
15, 1998, by and between Horseshoe Gaming, Inc. and
Robert McQueen.
10.29 ## Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and Kirk
Saylor.
10.30 #### Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and David
Carroll.
10.31 #### Amended and Restated Employment Agreement, dated November
23, 1998, by and between Horseshoe Gaming, Inc. and John
Moran.
10.32 #### Employment Agreement, dated as of November 3, 1998, by
and between Horseshoe Gaming, Inc. and Roger Wagner.
10.33 ## Unit Option Agreement, dated as of February 1, 1997, by
and between Horseshoe Gaming, L.L.C. and Urs Vogel.
10.34 ## Unit Option Agreement, dated as of February 1, 1997, by
and between Horseshoe Gaming, L.L.C. and Glen Buxton.
10.35 ### Agreement, dated as of April 21, 1999, by and among
Horseshoe Gaming, L.L.C., Horseshoe Gaming, Inc.,
Horseshoe Entertainment, LP, and New Gaming Capital
Partnership; Jack B. Binion; The Robin Group, Inc. and
August Robin.
10.36 ### Agreement, dated as of April 21, 1999, by and among
Horseshoe Gaming, L.L.C., Horseshoe Gaming, Inc.,
Horseshoe Entertainment, LP, and New Gaming Capital
Partnership; Jack B. Binion; Wendell Piper; Cassandra
Piper; and Robert E. Piper, Jr.
10.37 ##### Employment Agreement, dated as of January 11, 1999, by
and between Horseshoe Gaming, Inc. and Joseph J. Canfora.
10.38 ##### Consulting Agreement, dated as of July 23, 1999, by and
between Horseshoe Gaming, L.L.C. and Empress
Entertainment, Inc.
12.1 #### Statements re Computations of Ratios
20.1 # Press Release issued on September 2, 1998 by Horseshoe
Gaming, L.L.C. announcing that it had executed an
agreement to acquire the riverboat gaming operations of
Empress Entertainment, Inc.
21.1 #### Subsidiaries of Horseshoe Gaming Holding Corp.
23.1 ##### Consent of Arthur Andersen LLP.
23.2 ##### Consent of Ernst & Young LLP.
<PAGE> 22
23.3 ##### Consent of Swidler Berlin Shereff Friedman, LLP (included
in Exhibit 5.1 to this Registration Statement).
24.1 #### Power of Attorney (included on signature page hereto).
25.1 #### Statement of Eligibility of Trustee.
27.1 #### Financial Data Schedule
99.1 #### Form of Letter of Transmittal for Tender of all
Outstanding 8 5/8% Series A Senior Subordinated Notes Due
2009 in exchange for 8 5/8% Series B Senior Subordinated
Notes Due 2009 of Horseshoe Gaming Holding Corp.
99.2 #### Form of Tender for all Outstanding 85/8% Series A Senior
Subordinated Notes Due 2009 in exchange for 8 5/8% Series
B Senior Subordinated Notes Due 2009 of Horseshoe Gaming
Holding Corp.
99.3 #### Form of Instruction to Registered Holder from Beneficial
Owner of 8 5/8% Series A Senior Subordinated Notes Due
2009 of Horseshoe Gaming Holding Corp.
99.4 #### Form of Notice of Guaranteed Delivery for Outstanding 8
5/8% Series A Senior Subordinated Notes Due 2009 in
exchange for 8 5/8% Series B Senior Subordinated Notes
Due 2009 of Horseshoe Gaming Holding Corp.
- -----------------------------
* Filed as an Exhibit to Horseshoe Gaming, L.L.C. Registration Statement on
Form S-4 (No. 333-0214) (the "1996 Form S-4") filed on January 8, 1996.
** Filed as an Exhibit to Horseshoe Gaming, L.L.C. Amendment No. 1 to the
1996 Form S-4 filed on April 26, 1996.
*** Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-Q for the Quarter
Ended June 30, 1996.
+ Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-Q for the Quarter
Ended March 31, 1997.
++ Filed as an Exhibit to Horseshoe Gaming, L.L.C. Registration Statement on
Form S-4 (No. 333-33145) filed on August 7, 1997.
+++ Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-K for the Year
Ended December 31, 1997.
# Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 8-K filed on
September 12, 1998.
## Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-K for the fiscal
year ended December 31, 1998.
### Filed as an Exhibit to Horseshoe Gaming, L.L.C. Form 10-Q for the Quarter
Ended March 31, 1999.
#### Filed as an Exhibit to Horseshoe Gaming Holding Corp.'s Form S-4
Registration Statement filed on June 15, 1999.
##### Filed as an Exhibit to Horseshoe Gaming Holding Corp's Amendment No. 1 to
Form S-4 Registration Statement filed on July 30, 1999.
++++ Filed herewith
<PAGE> 1
EXHIBIT 4.51
U.S. $375,000,000
CREDIT AGREEMENT
DATED AS OF JUNE 30, 1999
AMONG
HORSESHOE GAMING HOLDING CORP.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
DLJ CAPITAL FUNDING, INC.,
AS SYNDICATION AGENT,
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT,
LEAD ARRANGER AND BOOK RUNNER:
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
CO-ARRANGER:
CIBC WORLD MARKETS CORP.
<PAGE> 2
HORSESHOE GAMING HOLDING CORP.
CREDIT AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 1. DEFINITIONS............................................... 2
1.1 Certain Defined Terms..................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.............................. 32
1.3 Other Definitional Provisions and Rules of
Construction.............................................. 32
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................ 32
2.1 Commitments; Making of Loans; the Register; Notes......... 32
2.2 Interest on the Loans..................................... 40
2.3 Fees...................................................... 45
2.4 Repayments, Prepayments and Reductions in Revolving
Loan Commitments; General Provisions Regarding
Payments.................................................. 45
2.5 Use of Proceeds........................................... 53
2.6 Special Provisions Governing Adjusted Eurodollar Rate
Loans..................................................... 53
2.7 Increased Costs; Taxes; Capital Adequacy.................. 55
2.8 Obligation of Lenders and Issuing Lenders to
Mitigate; Replacement of Lender........................... 59
Section 3. LETTERS OF CREDIT......................................... 61
3.1 Issuance of Letters of Credit and Lenders' Purchase
of Participations......................................... 61
3.2 Letter of Credit Fees..................................... 63
3.3 Drawings and Reimbursement of Amounts Paid Under
Letters of Credit......................................... 63
3.4 Obligations Absolute...................................... 66
3.5 Nature of Issuing Lenders' Duties......................... 67
</TABLE>
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<TABLE>
<S> <C> <C>
Section 4. CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND TO LOANS
AND LETTERS OF CREDIT..................................... 68
4.1 Conditions to Effectiveness of Agreement.................. 68
4.2 Conditions to Tranche B Term Loans and Initial
Revolving Loans and Swing Line Loans...................... 69
4.3 Conditions to All Loans................................... 76
4.4 Conditions to Letters of Credit........................... 77
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES.................. 78
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries................................. 78
5.2 Authorization of Borrowing, etc........................... 79
5.3 Financial Condition....................................... 79
5.4 No Material Adverse Effect; No Restricted Junior
Payments.................................................. 80
5.5 Title to Properties; Liens; Real Property................. 80
5.6 Litigation; Adverse Facts................................. 81
5.7 Payment of Taxes.......................................... 81
5.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts............................ 81
5.9 Governmental Regulation................................... 82
5.10 Securities Activities..................................... 82
5.11 Employee Benefit Plans.................................... 82
5.12 Certain Fees.............................................. 82
5.13 Environmental Protection.................................. 83
5.14 Employee Matters.......................................... 83
5.15 Solvency.................................................. 83
5.16 Matters Relating to Collateral............................ 84
5.17 Disclosure................................................ 84
5.18 Year 2000 Compliance...................................... 85
5.19 Compliance With Laws; Maintenance of Licenses............. 85
5.20 Intangible Property....................................... 86
5.21 Classification of Ships................................... 86
</TABLE>
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<TABLE>
<S> <C> <C>
Section 6. COMPANY'S AFFIRMATIVE COVENANTS.......................... 86
6.1 Financial Statements and Other Reports................... 86
6.2 Legal Existence, etc..................................... 91
6.3 Payment of Taxes and Claims; Tax Consolidation........... 91
6.4 Maintenance of Properties; Insurance; Application of
Net Insurance/Condemnation Proceeds...................... 92
6.5 Inspection Rights; Lender Meeting........................ 92
6.6 Compliance with Laws; Maintenance of Licenses............ 93
6.7 Environmental Review and Investigation, Disclosure,
Etc.; Company's Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of
Environmental Laws....................................... 93
6.8 Execution of Subsidiary Guaranty and Personal
Property Collateral Documents by Certain Subsidiaries
and Future Subsidiaries; IP Collateral................... 95
6.9 Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral...................... 96
6.10 Additional Ship Mortgages, Etc........................... 98
6.11 Year 2000 Compliance..................................... 98
6.12 Redemption of Existing Empress Bonds..................... 99
Section 7. COMPANY'S NEGATIVE COVENANTS............................. 99
7.1 Indebtedness............................................. 99
7.2 Liens and Related Matters................................ 100
7.3 Investments; Joint Ventures.............................. 101
7.4 Contingent Obligations................................... 102
7.5 Restricted Junior Payments............................... 102
7.6 Financial Covenants...................................... 103
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions............................................. 104
7.8 Consolidated Capital Expenditures........................ 105
7.9 Restriction on Leases.................................... 105
7.10 Sales and Lease-Backs.................................... 106
7.11 Transactions with Stockholders and Affiliates............ 106
7.12 Disposal of Subsidiary Equity............................ 106
7.13 Conduct of Business...................................... 107
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
7.14 Amendments of Documents Relating to Subordinated
Indebtedness............................................. 107
7.15 Fiscal Year.............................................. 107
Section 8. EVENTS OF DEFAULT........................................ 107
8.1 Failure to Make Payments When Due........................ 107
8.2 Default in Other Agreements.............................. 107
8.3 Breach of Certain Covenants.............................. 108
8.4 Breach of Warranty....................................... 108
8.5 Other Defaults Under Loan Documents...................... 108
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc..... 108
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc....... 109
8.8 Judgments and Attachments................................ 109
8.9 Dissolution.............................................. 109
8.10 Employee Benefit Plans................................... 109
8.11 Change in Control........................................ 109
8.12 Invalidity of Subsidiary Guaranty; Failure of
Security; Repudiation of Obligations..................... 110
8.13 Loss of Gaming License................................... 110
Section 9. THE AGENTS............................................... 111
9.1 Appointment.............................................. 111
9.2 Powers and Duties; General Immunity...................... 113
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness............................ 114
9.4 Right to Indemnity....................................... 114
9.5 Successor Agents and Swing Line Lender................... 115
9.6 Collateral Documents and Subsidiary Guaranty............. 115
Section 10. MISCELLANEOUS............................................ 116
10.1 Assignments and Participations in Loans and Letters
of Credit................................................ 116
10.2 Expenses................................................. 120
10.3 Indemnity................................................ 121
10.4 Set-Off; Security Interest in Deposit Accounts........... 122
10.5 Ratable Sharing.......................................... 122
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C> <C>
10.6 Amendments and Waivers................................... 123
10.7 Independence of Covenants................................ 124
10.8 Notices.................................................. 124
10.9 Survival of Representations, Warranties and
Agreements............................................... 125
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.... 125
10.11 Marshalling; Payments Set Aside.......................... 125
10.12 Severability............................................. 125
10.13 Obligations Several; Independent Nature of Lenders'
Rights................................................... 125
10.14 Headings................................................. 126
10.15 Applicable Law........................................... 126
10.16 Successors and Assigns................................... 126
10.17 Consent to Jurisdiction and Service of Process........... 126
10.18 Waiver of Jury Trial..................................... 127
10.19 Confidentiality.......................................... 127
10.20 Counterparts; Effectiveness.............................. 128
10.21 Cooperation With Gaming Authorities...................... 128
Signature pages ................................................. S-1
</TABLE>
v
<PAGE> 7
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
I. FORM OF NOTICE OF BORROWING
II. FORM OF NOTICE OF CONVERSION/CONTINUATION
III. FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV. FORM OF TRANCHE B TERM NOTE
V. FORM OF REVOLVING NOTE
VI. FORM OF SWING LINE NOTE
VII. FORM OF COMPLIANCE CERTIFICATE
VIII. FORM OF SIGNING DATE OPINION OF SWIDLER BERLIN SHEREFF
FRIEDMAN, LLP
IX. FORM OF INITIAL FUNDING DATE OPINION OF SWIDLER BERLIN SHEREFF
FRIEDMAN, LLP
X. FORM OF SIGNING DATE OPINION OF O'MELVENY & MYERS LLP
XI. FORM OF INITIAL FUNDING DATE OPINION OF O'MELVENY & MYERS LLP
XII. FORM OF ASSIGNMENT AGREEMENT
XIII. FORM OF CERTIFICATE RE NON-BANK STATUS
XIV. FORM OF SOLVENCY CERTIFICATE
XV. FORM OF SUBSIDIARY GUARANTY
XVI. FORM OF SECURITY AGREEMENT
XVII. FORM OF CONFIRMATION OF EFFECTIVENESS CERTIFICATE
XVIII. FORM OF AGREEMENT OF JOINDER
XIX. FORM OF DEBT CAPACITY CERTIFICATE
</TABLE>
vi
<PAGE> 8
SCHEDULES
<TABLE>
<S> <C>
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.2E INITIAL FUNDING DATE MORTGAGED PROPERTIES
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
5.16 GOVERNMENTAL CONSENTS
5.20 SERVICE MARKS AND TRADEMARKS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.11 AFFILIATE TRANSACTIONS
</TABLE>
<PAGE> 9
HORSESHOE GAMING HOLDING CORP.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of June 30, 1999 and entered into
by and among HORSESHOE GAMING HOLDING CORP., a Delaware corporation ("COMPANY"),
THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "LENDER" and collectively as "LENDERS"), DLJ CAPITAL FUNDING, INC.
("DLJ"), as syndication agent hereunder for Lenders (in such capacity,
"SYNDICATION AGENT") and CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as
administrative agent for Lenders (in such capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, Horseshoe (this and other capitalized terms used in these
recitals without definition being used as defined in subsection 1.1) has entered
into the Empress Acquisition Agreement;
WHEREAS, (i) certain of the members of Horseshoe have caused Company
to be formed and have contributed their membership interests in Horseshoe in
exchange for the capital stock of Company; (ii) Horseshoe has tendered for the
Former Senior Horseshoe Bonds in an aggregate amount of up to approximately
$135.4 million (including tender premiums of approximately $6.8 million); (iii)
Company has issued $600 million of New Sub Debt; (iv) Company has lent
approximately $240.3 million to Horseshoe, which was applied as follows: $75.0
million to repay the Indebtedness outstanding under the Existing Horseshoe
Credit Agreement, approximately $135.4 million in connection with the
transaction described in (ii) above and approximately $29.9 million of working
capital; and (v) the commitment available under the Existing Horseshoe Credit
Agreement has been reduced to $20 million.
WHEREAS, in accordance with the Empress Acquisition Agreement, on
the Initial Funding Date and, if Empress Joliet is acquired later, the Empress
Joliet Acquisition Date, (i) Company will acquire 100% of the outstanding
capital stock of Empress Hammond or Empress Hammond and Empress Joliet; (ii)
approximately $460.9 million (excluding the application of a $10 million cash
deposit made previously) will be paid to the Empress shareholders in connection
with the events described in (i); and (iii) Company will own 100% of the equity
of Horseshoe. The events described in clauses (i) and (ii), together with any
other transactions contemplated by the Empress Acquisition Agreement, are
referred to collectively herein as the "Empress Acquisition".
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company, the proceeds of which will be used by Company, together with the
proceeds of the issuance of the New Sub Debt; (i) to finance the Empress
Acquisition; (ii) to refinance the Existing Horseshoe Credit Facility; (ii) to
pay the Transaction Costs; (iii) to fund the repurchase of the Existing Empress
Bonds; and (iv) to provide for working capital and/or other general purposes of
Company and its Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a
<PAGE> 10
first priority Lien on substantially all of its personal property and its real
property including a pledge of all of the capital stock of its Domestic
Subsidiaries and a pledge of 65% of the capital stock of its Foreign
Subsidiaries that are owned by Company or a Domestic Subsidiary;
WHEREAS, all of Company's Domestic Subsidiaries have agreed to
guarantee the Obligations hereunder and under the other Loan Documents and to
secure their Subsidiary Guaranty by granting to Administrative Agent on behalf
of Lenders, a First Priority Lien on substantially all of their respective
personal property and substantially all of their respective real property
including a pledge of all of the capital stock of each of their Domestic
Subsidiaries and 65% of the capital stock of each of their Foreign Subsidiaries
that is owned by Company or a Domestic Subsidiary;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders, Syndication Agent
and Administrative Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to any Interest Period for an Adjusted
Eurodollar Rate Loan, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) obtained by dividing (x) the rate of interest equal to (a)
the interest rate per annum for deposits in Dollars in an amount approximately
equal to the amount of CIBC's Adjusted Eurodollar Rate Loan and for a period
approximately equal to such Interest Period which appears on page 3750 of the
Dow Jones Telerate Screen as of 11:00 A.M. (London time) two (2) Business Days
prior to the beginning of such Interest Period for delivery on the first day of
such Interest Period, or (b) if such a rate does not appear on page 3750 of the
Dow Jones Telerate Screen, the average (rounded upwards, if necessary, to the
nearest 1/100 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to CIBC in the interbank Eurodollar
market as at or about 11:00 A.M. (New York City time) two (2) Business Days
prior to the beginning of such Interest Period for delivery on the first day of
such Interest Period, and in an amount approximately equal to the amount of
CIBC's Adjusted Eurodollar Rate Loan and for a period approximately equal to
such Interest Period, by (y) a percentage equal to 100% minus the stated maximum
rate (expressed as a percentage) of all reserve requirements (including any
marginal, emergency, supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D (or
any successor category of liabilities under Regulation D).
"ADJUSTED EURODOLLAR RATE LOANS" means Loans bearing interest at
rates determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
2
<PAGE> 11
"AFFECTED CLASS" has the meaning assigned to that term in
subsection 10.6.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person, or any trust for the benefit of such Person or established by such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AFFILIATED FUND" means, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"AGENTS" means, collectively, the Syndication Agent and the
Administrative Agent.
"AGREEMENT" means this Credit Agreement dated as of June 30, 1999,
as it may be amended, supplemented or otherwise modified from time to time.
"APPLICABLE CAPITAL GAIN TAX RATE" in respect of each of Company or
any of its Subsidiaries means for each such entity calculated separately an
amount equal to the sum of (i) the highest marginal Federal capital gain tax
rate applicable to any Equity Holder of Company plus (ii) an amount equal to the
sum of the highest marginal state and local capital gain tax rates applicable to
any Equity Holder of Company multiplied by a factor equal to 1 minus such
highest marginal Federal capital gain tax rate.
"APPLICABLE CONSOLIDATED LEVERAGE RATIO" means, at any date of
determination, the Consolidated Leverage Ratio as set forth in an Officer's
Certificate delivered in accordance with the provisions of subsection 4.2B(vii)
or the most recent Compliance Certificate or Margin Determination Certificate,
as the case may be, delivered in accordance with the provisions of subsection
6.1(iv).
"APPLICABLE INCOME TAX RATE" in respect of each of Company or any of
its Subsidiaries means for each such entity calculated separately, an amount
equal to the sum of (i) the highest marginal Federal income tax rate applicable
to any Equity Holder of Company plus (ii) an amount equal to the sum of the
highest marginal state and local income tax rates applicable to any Equity
Holder of Company multiplied by a factor equal to 1 minus such highest marginal
Federal income tax rate.
"ARRANGERS" means DLJ Securities and CIBC World Markets as arrangers
of the credit facilities described herein.
"ASSET SALE" means the sale by Company or any of its Subsidiaries to
any Person other than Company or any of its wholly-owned Subsidiaries of (i) any
of the equity ownership of any of Company's Subsidiaries, (ii) substantially all
of the assets of any division or line of
3
<PAGE> 12
business of Company or any of its Subsidiaries, or (iii) any other assets
(whether tangible or intangible) of Company or any of its Subsidiaries (other
than Excluded Asset Sales).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit XII annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (x) the Reference Rate
or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate or any Adjusted Eurodollar Rate Loans, any day that is a Business Day
described in clause (i) above and that is also a day for trading by and between
banks in Dollar deposits in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Moody's
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's.
4
<PAGE> 13
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of Exhibit XIII annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"CHANGE OF CONTROL" means
(a) prior to the consummation of an underwritten initial public
offering, the failure of Majority Shareholders to own, free
and clear of all Liens or other encumbrances, at least 80% of
the outstanding shares of Company on a fully diluted basis; or
(b) following the consummation of an underwritten initial public
offering, the failure of Majority Shareholders to own, free
and clear of all Liens or other encumbrances, at least 51% of
the outstanding shares of Company on a fully diluted basis; or
(c) the occurrence of a "change in control" as defined in the New
Sub Debt Indenture; or
(d) the occurrence of a "change in control" as defined in the
Existing Subordinated Horseshoe Indenture.
"CIBC" has the meaning assigned to that term in the introduction
to this Agreement.
"CIBC WORLD MARKETS" means CIBC World Markets Corp.
"CLASS" means, as applied to Lenders, each of the following classes
of Lenders: (i) Lenders having Tranche B Term Loan Exposure; (ii) Lenders having
Revolving Loan Exposure; and (iii) Lenders having exposure in additional
commitments made in accordance with clause (viii) of subsection 10.6.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any Collateral
is located or any warehouseman or processor in possession of any Inventory of
any Loan Party, in form and substance reasonably satisfactory to Agents.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Mortgages,
the Ship Mortgages and all other instruments or documents delivered by any Loan
Party pursuant to this Agreement or any of the other Loan Documents in order to
grant to Administrative Agent, on behalf of Lenders, a Lien on any real,
personal or mixed property of that Loan Party as security for the Obligations.
5
<PAGE> 14
"COMMITMENT FEE PERCENTAGE" means, as of any date of determination,
a percentage per annum as set forth opposite the Applicable Consolidated
Leverage Ratio:
<TABLE>
<CAPTION>
Applicable Consolidated Commitment
Leverage Ratio Fee Percentage
-------------- --------------
<S> <C>
> or equal to 3.5:1.0 0.500%
< 3.5:1.0 0.375%
</TABLE>
"COMMITMENTS" means the commitments of Lenders to make Loans as
set forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of Exhibit VII annexed hereto delivered to Agents and Lenders by Company
pursuant to subsection 6.1(iv).
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of
Administrative Agent (which writing has been delivered to Administrative Agent),
whether under the terms of the applicable lease, under the terms of a Landlord
Consent and Estoppel, or otherwise, to the matters described in the definition
of "Landlord Consent and Estoppel," which interest, if a subleasehold or
sub-subleasehold interest, is not subject to any contrary restrictions contained
in a superior lease or sublease.
"CONSOLIDATED CAPITAL EXPENDITURES" means Maintenance Capital
Expenditures, New Venture Capital Expenditures and Expansion Capital
Expenditures.
"CONSOLIDATED EBITDA" means, for any period, the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) provisions for taxes based on income (if incurred), (iv) total
depreciation expense, (v) total amortization expense, (vi) Consolidated
Preopening Expenses and (vii) other non-cash items reducing Consolidated Net
Income less other non-cash items increasing Consolidated Net Income, all of the
foregoing as determined on a consolidated basis for Company and its Subsidiaries
in conformity with GAAP; provided that all components of Consolidated EBITDA for
the period of four Fiscal Quarters ending at the end of each Fiscal Quarter
shall include or exclude, as the case may be, without duplication, such
components of Consolidated EBITDA attributable to any business or assets that
have been acquired or disposed of by Company or any of its Subsidiaries
(including businesses and assets acquired in the Empress Acquisition and through
mergers or consolidations but excluding Excluded Asset Sales) after the first
day of such period of four Fiscal Quarters and prior to the end of such period,
as determined in good faith by Company on a pro forma basis for such period of
four Fiscal Quarters as if such acquisition or disposition had occurred on such
first day of such period.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, for any Fiscal
Quarter, the ratio of (i) Consolidated EBITDA less Maintenance Capital
Expenditures for the consecutive
6
<PAGE> 15
four Fiscal Quarter period ending on the last day of such Fiscal Quarter to (ii)
Consolidated Fixed Charges for such period.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Interest
Expense, (ii) provisions for taxes based on income and, without duplication,
Permitted Tax Distributions, (iii) scheduled principal payments in respect of
Consolidated Total Debt and (iv) all dividends and distributions paid on any
shares of capital stock of Company and all cash repurchases or redemptions of
capital stock of Company, all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP; provided that
the amounts in clauses (i) and (ii) shall be calculated (a) for the first full
Fiscal Quarter following the Initial Funding Date by multiplying the amount for
the Fiscal Quarter ended on such date by four, (b) for the second full Fiscal
Quarter following the Initial Funding Date by multiplying the sum of the amounts
for that Fiscal Quarter and the immediately preceding Fiscal Quarter by two, and
(c) for the third full Fiscal Quarter following the Initial Funding Date by
multiplying the sum of the amounts for that Fiscal Quarter and the two
immediately preceding Fiscal Quarters by 1.33; and provided, further that the
amount in clauses (iii) and (iv) shall include only those payments,
distributions and dividends made after the Initial Funding Date.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense paid in cash (including that portion attributable to Capital
Leases in accordance with GAAP and capitalized interest) of Company and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Company and its Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Interest Rate Agreements, but
excluding, however, any amounts referred to in subsection 2.3 payable to
Arrangers and Agents on or before the Initial Funding Date.
"CONSOLIDATED LEVERAGE RATIO" means, for any Fiscal Quarter, the
ratio of (a) Consolidated Total Debt as of the last day of such Fiscal Quarter
to (b) Consolidated EBITDA for the consecutive four Fiscal Quarters ending on
the last day of such Fiscal Quarter.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; provided
that there shall be excluded (i) the income (or loss) of any Person (other than
a Subsidiary of Company) in which any other Person (other than Company or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.
7
<PAGE> 16
"CONSOLIDATED NET WORTH" means, as at any date of determination, the
sum of the capital stock and additional paid-in capital plus retained earnings
(or minus accumulated deficits) of Company and its Subsidiaries on a
consolidated basis determined in conformity with GAAP.
"CONSOLIDATED OPERATING LEASE RENTAL PAYMENTS" means, for any
period, the aggregate amount of all rents paid or payable by Company and its
Subsidiaries on a consolidated basis during that period under all Operating
Leases to which Company or any of its Subsidiaries is a party as lessee.
"CONSOLIDATED PREOPENING EXPENSES" means, for any period, those
costs incurred prior to the commencement of a new operation, including payroll,
consulting fees, legal expenses, licensing, supplies, travel, printing,
relocation expense, temporary housing and other similar expenses of Company and
its Subsidiaries on a consolidated basis, that are expensed in accordance with
GAAP.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct
or indirect liability, contingent or otherwise, of that Person (i) with respect
to any Indebtedness, lease, dividend or other obligation of another if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof or (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings. Contingent Obligations shall include (a) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
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<PAGE> 17
"DEBT CAPACITY CERTIFICATE" means an Officer's Certificate of
Company in the form attached hereto as Exhibit XIX delivered to Agents and
Lenders pursuant to subsections 4.2T, 6.1(ii) and (iii) calculating the maximum
amount of Indebtedness that can be incurred by Company and its Subsidiaries
under the Debt Restrictive Agreements.
"DEBT RESTRICTIVE AGREEMENTS" means the Existing Subordinated
Horseshoe Indenture, the New Sub Debt Indenture, the Existing Empress Indenture
(if applicable), and any other applicable agreements to which Company and its
Subsidiaries are party or are bound which limit the maximum amount of
Indebtedness which can be incurred by Company and its Subsidiaries.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DLJ" has the meaning assigned to that term in the introduction
to this Agreement.
"DLJ SECURITIES" means Donaldson, Lufkin & Jenrette Securities
Corporation.
"DOCUMENTATION AGENT" means Wells Fargo Bank, National
Association.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means a Subsidiary organized under the laws of
the United States or any state or territory thereof or the District of Columbia.
"ELIGIBLE ASSIGNEE" means (I) to the extent required under
applicable Gaming Laws, registered with, approved by, or not disapproved by
(whichever may be required under applicable Gaming Laws), all applicable Gaming
Authorities and (II) (A) (i) a commercial bank, savings and loan association or
savings bank organized under the laws of the United States or any state thereof;
provided that such financial institution has combined capital and surplus of at
least $100,000,000; (ii) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iii) any other entity which is an "accredited investor" (as
defined in Regulation D under the Securities Act) which extends credit or buys
loans as one of its businesses including insurance companies, mutual funds,
lease financing companies and investment funds; and (B) any Lender, any
Affiliate of any Lender and any Affiliated Fund of any Lender; provided that no
Affiliate of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"EMPRESS" means Empress Entertainment, Inc., a Delaware
corporation.
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<PAGE> 18
"EMPRESS ACQUISITION" has the meaning given to such term in the
recitals hereof.
"EMPRESS ACQUISITION AGREEMENT" means that certain Agreement and
Plan of Merger by and among Horseshoe, Horseshoe Gaming (Midwest), Inc., Empress
Acquisition Illinois, Empress Acquisition Indiana, Empress, Empress Joliet and
Empress Hammond dated as of September 2, 1998, as amended by that certain First
Amendment dated as of March 25, 1999, both in the form delivered to Agents and
Lenders prior to their execution of this Agreement and as such agreement may be
amended from time to time thereafter to the extent permitted under subsection
4.2B.
"EMPRESS ACQUISITION ILLINOIS" means Empress Acquisition
Illinois, Inc., a Delaware corporation and a wholly-owned subsidiary of
Horseshoe.
"EMPRESS ACQUISITION INDIANA" means Empress Acquisition Indiana,
Inc., a Delaware corporation and a wholly-owned subsidiary of Horseshoe.
"EMPRESS HAMMOND" means Empress Casino Hammond Corporation, an
Indiana corporation.
"EMPRESS JOLIET" means Empress Casino Joliet Corporation, an
Illinois corporation.
"EMPRESS JOLIET ACQUISITION DATE" means the date on or after the
Initial Funding Date on which Company acquires Empress Joliet.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et
seq) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
Section 11001 et seq.), each as amended or supplemented,
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<PAGE> 19
any analogous present or future state or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.
"EQUITY HOLDER" means (a) with respect to a corporation, each
shareholder of such corporation, (b) with respect to a limited liability company
or similar entity, each member of such limited liability company or similar
entity, (c) with respect to a partnership, each partner of such partnership and
(d) with respect to any disregarded entity, the owner of such entity.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of Company or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of Company
or such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the material failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the material failure to make by its due
date a required installment under Section 412(m) of the Internal Revenue Code
with respect to any Pension Plan or the material failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the administrator
of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section
4041(c) of ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or any
of their respective ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting in
material liability pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of any material liability on Company, any of
its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there
is any potential for material liability therefor, or the receipt by Company, any
of its Subsidiaries or any of their respective ERISA Affiliates of notice from
any Multiemployer Plan that it is in reorganization or
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<PAGE> 20
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges, in a material amount, under Chapter
43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or
(l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCLUDED ASSET SALES" means (a) gaming equipment sold in the
ordinary course of business to the extent the proceeds of such sale are promptly
invested in other gaming equipment, (b) the vessel known by the name Queen of
the Red, (c) the Le Bossier Hotel and (d) sales of assets (i) the aggregate
value of such assets sold in any single transaction or related series of
transactions is equal to $5,000,000 or less and (ii) the aggregate value of such
assets sold during the term of this Agreement is equal to $10,000,000 or less.
"EXISTING EMPRESS BONDS" means the 8.125% Senior Subordinated Notes
due July 1, 2006 issued by Empress.
"EXISTING EMPRESS BONDS REPURCHASE" means the repurchase by Empress
or by Company as successor obligor of the Existing Empress Bonds pursuant to the
"change in control" provisions of Section 10.14 of the Existing Empress
Indenture or pursuant to the "asset sale repurchase offer" provisions of Section
10.13 of the Existing Empress Indenture, in either case in an aggregate maximum
amount not to exceed approximately $151.5 million (including tender premiums not
exceeding $1.5 million plus accrued and unpaid interest thereon).
"EXISTING EMPRESS CREDIT AGREEMENT" means that certain Credit
Agreement dated as of June 17, 1998 among Empress, Empress Joliet, Empress
Hammond, the Lenders named therein and Wells Fargo Bank, National Association,
as Swingline Lender, L/C Issuer and Agent Bank.
"EXISTING EMPRESS INDENTURE" means that certain Indenture, dated as
of June 18, 1998, among Empress, the Guarantor and U.S. Bank Trust National
Association, as Trustee, pursuant to which the existing Empress Bonds were
issued.
"EXISTING HORSESHOE CREDIT AGREEMENT" means that certain amended and
restated credit facility agreement dated as of November 12, 1997 by and among
Horseshoe,
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<PAGE> 21
certain commercial lending institutions as lenders, CIBC, as administrative
agent and CIBC Oppenheimer Corp., as arranger.
"EXISTING SUBORDINATED HORSESHOE BONDS" means the 9.375% Senior
Subordinated Notes of Horseshoe due 2007.
"EXISTING SUBORDINATED HORSESHOE INDENTURE" means that certain
Indenture dated as of June 15, 1997 between Company, as issuer, and U.S. Trust
Company of Texas, N.A., as trustee, pursuant to which the Existing Subordinated
Horseshoe Bonds were issued.
"EXPANSION CAPITAL EXPENDITURES" means any expenditures (whether
paid in cash or other consideration or accrued as a liability and including that
portion of Capital Leases which is capitalized on the consolidated balance sheet
of Company and its Subsidiaries) by Company and its Subsidiaries during that
period that, in conformity with GAAP, are included in "purchases of property and
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries that are made with respect to any Related
Business that further expands or enhances the Gaming Facilities pledged under
the Collateral Documents and which is not properly characterized as a
Maintenance Capital Expenditure.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon and all Gaming
Facilities) now, hereafter or heretofore owned, leased, operated or used by
Company or any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, 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 Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2A) and (ii) such Lien
is the only Lien (other than Permitted Encumbrances and Liens permitted pursuant
to subsection 7.2A) to which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year.
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<PAGE> 22
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"FLOW THROUGH ENTITY" means an entity which (x) for Federal income
tax purposes constitutes (i) an "S corporation" (as defined in Section 1361(a)
of the code), (ii) a "qualified subchapter S subsidiary" (as defined in Section
1361(b)(3)(B) of the Code), (iii) a "partnership" (within the meaning of Section
7701(a)(2) of the Code) other than a "publicly traded partnership" (as defined
in Section 7704 of the code), or (iv) a business entity which is disregarded as
an entity separate from its owner under the Code, the Treasury Regulations or
any published administrative guidance of the Internal Revenue Service and (y)
for state and local jurisdictions in respect of which Permitted Tax
Distributions are being made, is subject to substantially similar "flow through"
treatment under the applicable state or local income tax law.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FORMER SENIOR HORSESHOE BONDS" means the 12.75% Senior Notes of
Horseshoe due 2000.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent and Swing Line Lender located at CIBC, 425 Lexington Avenue, New York, New
York 10017 or (ii) such other office of Administrative Agent and Swing Line
Lender as may from time to time hereafter be designated as such in a written
notice delivered by Administrative Agent and Swing Line Lender to Company and
each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GAMING AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States federal or foreign government, any state, province or any city
of other political subdivision or otherwise and whether now or hereafter in
existence, or any officer of official thereof, including, without limitation,
the Illinois Gaming Authorities, the Indiana Gaming Authorities, the Louisiana
Gaming Authorities and the Mississippi Gaming Authorities, with authority to
regulate any gaming operation (or proposed gaming operation) owned, managed or
operated by Company or any of its Subsidiaries.
"GAMING FACILITY" means any gaming establishment and other property
or assets directly ancillary thereto or used in connection therewith, including,
without limitation, any casinos, hotels, resorts, race tracks, theaters, parking
facilities, recreational vehicle parks, timeshare operations, retail shops,
restaurants, other buildings, land, golf courses and other recreation and
entertainment facilities, marinas, vessels, barges, ships and related equipment.
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<PAGE> 23
"GAMING LAWS" means all statutes, rules, regulations, ordinances,
codes and administrative or judicial precedents pursuant to which any Gaming
Authority possesses regulatory, licensing or permit authority over gambling,
gaming or casino activities conducted by Company and its Subsidiaries within its
jurisdiction, including the Illinois Riverboat Gambling Act, the Indiana
Riverboat Act, the Louisiana Riverboat Economic Development and Gaming Control
Act and the Mississippi Gaming Act.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court or any Gaming
Authority.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance
at any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority or which
may or could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HORSESHOE" means Horseshoe Gaming, L.L.C., a Delaware limited
liability company.
"ILLINOIS GAMING AUTHORITIES" means, without limitation, the
Illinois Gaming Board and any other applicable Governmental Authority involved
in the regulation of gaming and gaming activities conducted by Company or any of
its Subsidiaries in the State of Illinois.
"ILLINOIS RIVERBOAT GAMBLING ACT" means the Riverboat Gambling Act
of Illinois, as from time to time amended, or any successor provision of law,
and the regulations promulgated thereunder.
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<PAGE> 24
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA and
trade accounts payable and accrued obligations incurred in the ordinary course
of business), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person and (vi) Contingent Obligations in
respect of letters of credit (including Letters of Credit outstanding) and under
guarantees in the ordinary course of business of the obligations of suppliers,
customers, franchisees and licensees of Company and its Subsidiaries.
Obligations under Interest Rate Agreements constitute Investments, and not
Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in subsection
10.3.
"INDIANA GAMING AUTHORITIES" means, without limitation, the Indiana
Gaming Commission and any other applicable Governmental Authority involved in
the regulation of gaming and gaming activities conducted by Company or any of
its Subsidiaries in the State of Indiana.
"INDIANA RIVERBOAT ACT" means Indiana Code section 4-33-1-1, et
seq., as from time to time amended, or any successor provision of law, and the
regulations promulgated thereunder.
"INITIAL FUNDING DATE" means the date on or before December 1, 1999
on which the initial Loans are made and on which Empress Hammond or Empress
Hammond and Empress Joliet are acquired.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently or
hereafter conducted that are material to the condition (financial or otherwise),
business or operations of Company and its Subsidiaries, taken as a whole.
"INTEREST PAYMENT DATE" means, (i) with respect to any Base Rate
Loan, the last day of each March, June, September and December, commencing on
the first such date to occur after the Initial Funding Date, and (ii) with
respect to any Adjusted Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that, in the case of each Interest
Period of longer than three months, "Interest Payment Date" shall also include
each date that is three months, or an multiple thereof, after the commencement
of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
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<PAGE> 25
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVENTORY" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person other than a Person that prior
to such purchase or acquisition was a Subsidiary of Company, (ii) any direct or
indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Company or any of
its Subsidiaries to any other Person (other than a wholly-owned Subsidiary of
Company), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business, or (iii) Interest Rate Agreements.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"IP COLLATERAL" means, collectively, the Collateral under the
Security Agreement that constitutes Intellectual Property .
"ISSUING LENDER" means, with respect to any Letter of Credit, CIBC
and also means any Revolving Lender that agrees or is otherwise obligated to
issue such Letter of Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that in no event shall any Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Agents, pursuant
to which such lessor agrees, for the benefit of Administrative Agent, (i) that
without any further consent of such lessor or any further action on the part of
the Loan Party holding such Leasehold Property, such Leasehold Property may be
encumbered pursuant to a Mortgage and may be assigned to the purchaser at a
foreclosure sale or in a transfer in lieu of such a sale (and to a subsequent
third party assignee if any Agent, any Lender, or an Affiliate of either so
acquires such Leasehold Property), (ii) that such lessor shall not terminate
such lease as a result of a default by such Loan Party thereunder without first
giving Agents notice of such default and at least 60 days (or, if such default
cannot reasonably be cured by Agents within such period, such longer period as
may reasonably be required) to cure such default, (iii) to the matters contained
in a Collateral Access Agreement, and (iv) to such other matters relating to
such Leasehold Property as any Agents may reasonably request.
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"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party
as lessee under any lease of real property.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Standby Letters of
Credit issued or to be issued by Issuing Lenders for the account of Company
pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to subsection
3.3B).
"LICENSE REVOCATION" means the revocation, failure to renew or
suspension of, or the appointment of a receiver, supervisor or similar official
with respect to, any casino, gambling or gaming licenses issued by any Gaming
Authority covering any casino, gambling or gaming facility owned or operated by
Company or any of its Subsidiaries.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Tranche B Term Loans,
Revolving Loans or Swing Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Company in favor of an Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
"LOAN PARTY" means each of Company and any of Company's Subsidiaries
from time to time executing a Loan Document, and "LOAN PARTIES" means all such
Persons, collectively.
"LOUISIANA GAMING AUTHORITIES" means, without limitation, the
Louisiana Gaming Control Board, the Riverboat Gaming Enforcement Division of the
Louisiana State Police and any other applicable Governmental Authority involved
in the regulation of gaming and gaming activities conducted by Company or any of
its Subsidiaries in the State of Louisiana.
"LOUISIANA GAMING CONTROL ACT" means the Louisiana Riverboat
Economic Development and Gaming Control Act, as from time to time amended, or
any successor provision of law, and the regulations promulgated thereunder.
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<PAGE> 27
"MAINTENANCE CAPITAL EXPENDITURES" means any expenditures (whether
paid in cash or other consideration or accrued as a liability and including that
portion of Capital Leases which is capitalized on the consolidated balance sheet
of Company and its Subsidiaries) by Company and its Subsidiaries during that
period that, in conformity with GAAP, are included in "purchases of property and
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries and which are made to maintain, restore or
refurbish the condition or usefulness of then-existing property of Company or
its Subsidiaries, or otherwise to support the continuation of such Person's
day-to-day operations as then conducted, but which are not properly chargeable
to repairs and maintenance in accordance with GAAP; provided, however, that such
term shall not include any Consolidated Capital Expenditures to restore the
condition or usefulness of property to the extent funded from insurance proceeds
delivered to Company or its Subsidiaries in accordance with the terms of the
Loan Documents.
"MAJORITY SHAREHOLDERS" means Jack B. Binion, Phyllis Cope and
their family members and their Affiliates.
"MARGIN DETERMINATION CERTIFICATE" means an Officer's Certificate of
Company delivered to Agents and Lenders pursuant to subsection 6.1(iv).
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon
the business, operations, properties, assets, performance, licenses, approvals,
regulatory outlook or prospects of Company and its Subsidiaries and, prior to
the earlier of December 1, 1999 or the Empress Joliet Acquisition Date, Empress
and its Subsidiaries, taken as a whole or (ii) the material impairment of the
ability of any Loan Party to perform, or of Agents or Lenders to enforce, the
Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Agents to be of material value as Collateral or of material
importance to the operations of Company or any of its Subsidiaries.
"MISSISSIPPI GAMING AUTHORITIES" means, without limitation, the
Mississippi Gaming Commission, the Mississippi State Tax Commission and any
other applicable Governmental Authority involved in the regulation of gaming and
gaming activities conducted by Company or any of its Subsidiaries in the State
of Mississippi.
"MISSISSIPPI GAMING ACT" means the Mississippi Gaming Control Act,
as from time to time amended, or any successor provision of law, and the
regulations promulgated thereunder.
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<PAGE> 28
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, in such form as may be approved by Agents in their reasonable
discretion, in each case with such changes thereto as may be recommended by
Administrative Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices, or (ii) at the option of Agents, in the
case of an Additional Mortgaged Property (as defined in subsection 6.9B), an
amendment to an existing Mortgage, in form reasonably satisfactory to Agents,
adding such Additional Mortgaged Property to the Real Property Assets encumbered
by such existing Mortgage, in either case as such security instrument or
amendment may be amended, supplemented or otherwise modified from time to time.
"MORTGAGES" means all such instruments, including any Additional Mortgages (as
defined in subsection 6.9B), collectively.
"MORTGAGED PROPERTY" means an Initial Funding Date Mortgaged
Property (as defined in subsection 4.2E) or an Additional Mortgaged Property
(as defined in subsection 6.9B).
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale,
Cash payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when
so received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
"NEW SUB DEBT" means $600 million of 8-5/8% Senior Subordinated
Notes due 2009 issued by the Company.
"NEW SUB DEBT INDENTURE" means that certain Indenture dated as of
May 11, 1999, between Company and U.S. Trust Company, National Association, as
trustee, pursuant to which the New Sub Debt was issued.
"NEW VENTURES CAPITAL EXPENDITURES" means any expenditures of
Company or any of its Subsidiaries made with the expectation of acquiring or
developing new Gaming Facilities at a location at which neither Company nor its
Subsidiaries currently conducts business.
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<PAGE> 29
"NOTES" means one or more of the Tranche B Term Notes, Revolving
Notes or Swing Line Notes or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent pursuant
to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to Administrative
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 3.1B(i) with respect to the proposed
issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each Loan
Party from time to time owed to Arranger, Agents, Lenders or any of them under
the Loan Documents, whether for principal, interest, reimbursement of amounts
drawn under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president, any of its
vice presidents or its chief financial officer (or if there is no chief
financial officer, its chief accounting officer or controller); provided that
every Officer's Certificate with respect to the compliance with a condition
precedent to the making of any Loans hereunder shall include (i) a statement
that the officer making or giving such Officer's Certificate has read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signer, such
officer has made or has caused to be made such examination or investigation as
is necessary to enable him or her to express an informed opinion as to whether
or not such condition has been complied with, and (iii) a statement as to
whether, in the opinion of the signer, such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease in
accordance with GAAP other than any such lease under which that Person is the
lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED DISTRIBUTION AMOUNT" means, for any date of
determination, the lesser of (a) an amount equal to (y) 50% of the remainder of
(1) Consolidated Net Income for the period (taken as one accounting period),
commencing on October 1, 1999 to and including the last day of the latest Fiscal
Quarter ended immediately prior to the date of determination less (2) Permitted
Tax Distributions for such period less (z) the sum of dividends or similar
21
<PAGE> 30
distributions on the capital stock of Company made during such period pursuant
to subsection 7.5(iii) and Investments made during such period permitted
pursuant to subsection 7.3(viii) or (b) the amount permitted for permitted
dividend and similar distributions under the most restrictive of the New Sub
Debt Indenture, the Existing Subordinated Horseshoe Indenture and the Existing
Empress Indenture.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in
each case incurred in the ordinary course of business (a) for amounts not
yet overdue or (b) for amounts that are overdue and that (in the case of
any such amounts overdue for a period in excess of 30 days) are being
contested in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts, and (2) in the
case of a Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal 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), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in
any material respect with the ordinary conduct of the business of Company
or any of its Subsidiaries or resulting in a material diminution in the
value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary conduct
of the business of Company or any of its Subsidiaries or result in a
material diminution in the value of any Collateral as security for the
Obligations;
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<PAGE> 31
(vii) any (a) interest or title of a lessor or sublessor under any
lease permitted by subsection 7.9, (b) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b),
so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements relating
solely to leases, including capital leases, not prohibited by this
Agreement;
(ix) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(x) any zoning, landmark, historical preservation or similar law or
right reserved to or vested in any governmental office or agency to
control or regulate the use of any real property;
(xi) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or
similar agreements entered into in the ordinary course of business of
Company and its Subsidiaries;
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of Company or such Subsidiary;
and
(xiii) until the close of business on the Initial Funding Date,
Liens securing the Indebtedness of Company under the Existing Horseshoe
Credit Agreement.
"PERMITTED TAX DISTRIBUTIONS" in respect of Company, and each of its
Subsidiaries that qualify as a Flow Through Entity means, with respect to any
taxable year, the sum of: (I) the product of (A) the excess of (i) all items of
taxable income or gain (other than capital gain) allocated by Company and each
such Subsidiary to their respective Equity Holders for that year over (ii) all
items of taxable deduction or loss (other than capital loss) allocated to such
Equity Holders by Company and each such Subsidiary, respectively, for such year
and (B) the Applicable Income Tax Rate, plus (II) the product of (A) the net
capital gain (i.e., net long-term capital gain over net short-term capital
loss), if any, allocated by us and each such Subsidiary to their respective
Equity Holders for such year and (B) the Applicable Capital Gain Tax Rate, plus
(III) taking into account the capital gain and loss of Company and each such
Subsidiary, respectively, the product of (A) the net short-term capital gain
(i.e., net short-term capital gain in excess of net long-term capital loss), if
any, allocated by Company and each such subsidiary to their respective Equity
Holders for such year and (B) the Applicable Income Tax Rate, minus (IV) the
aggregate Tax Loss Benefit Amounts for Company and each such Subsidiary,
respectively, for such year. For purposes of calculating the amount of Permitted
Tax Distributions of Company, the proportionate part of the items of taxable
income, gain, deduction or loss (including capital gain or loss) of any
subsidiary which is a Flow Through Entity shall be
23
<PAGE> 32
included in determining taxable income, gain, deduction or loss (including
capital gain or loss of Company.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan Commitment or
the Tranche B Term Loan of any Lender, the percentage obtained by dividing (x)
the Tranche B Term Loan Exposure of that Lender by (y) the aggregate Tranche B
Term Loan Exposure of all Lenders, (ii) with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or participations
therein purchased by any Lender or any participations in any Swing Line Loans
purchased or deemed purchased by any Revolving Lender, the percentage obtained
by dividing (x) the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, and (iii) for all other purposes with
respect to each Lender, the percentage obtained by dividing (x) the sum of the
Tranche B Term Loan Exposure of that Lender plus the Revolving Loan Exposure of
that Lender by (y) the sum of the aggregate Tranche B Term Loan Exposure of all
Lenders plus the aggregate Revolving Loan Exposure of all Lenders, in any such
case as the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1. The initial Pro Rata Share of each Lender for
purposes of each of clauses (i), (ii) and (iii) of the preceding sentence is set
forth opposite the name of that Lender in Schedule 2.1 annexed hereto.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in the reasonable judgment of Agents, to give
constructive notice of such Leasehold Property to third-party purchasers and
encumbrancers of the affected real property. For purposes of this definition,
the term "RECORD DOCUMENT" means, with respect to any Leasehold Property, (a)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (b)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form reasonably
satisfactory to Agents.
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<PAGE> 33
"REFERENCE RATE" means the rate that CIBC announces from time to
time as its prime lending rate, as in effect from time to time.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(iii).
"REGISTER" has the meaning set forth in subsection 2.1D.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED BUSINESS" means the gaming (including pari-mutuel betting)
business and any and all reasonably related businesses necessary for, in support
or anticipation of and ancillary to or in preparation for, the gaming business
including, without limitation, the development, expansion or operation of any
Gaming Facility (including any land-based, dockside, riverboat or other type of
Gaming Facility) owned, or to be owned, by Company or one of its Subsidiaries.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUISITE CLASS LENDERS" means, at any time of determination, (i)
for the Class of Lenders having Tranche B Term Loan Exposure, Lenders having or
holding more than 51% of the aggregate Tranche B Term Loan Exposure of all
Lenders, (ii) for the Class of Lenders having Revolving Loan Exposure, Lenders
having or holding more than 51% of the aggregate Revolving Loan Exposure and
(iii) for any Lenders having exposure in additional commitments or loans in any
additional Class created in accordance with clause (viii) of subsection 10.6,
Lenders having or holding more than 51% of the aggregate exposure in commitments
or loans of such Class.
"REQUISITE LENDERS" means Lenders having or holding 51% or more of
the sum of (i) the aggregate Tranche B Term Loan Exposure of all Lenders plus
(ii) the aggregate Revolving Loan Exposure of all Lenders plus (iii) the
aggregate exposure of any Lenders having exposure in additional commitments or
loans made in accordance with clause (viii) of subsection 10.6.
"RESTRICTED JUNIOR PAYMENT" means (i) any distribution, direct or
indirect, on account of any class of stock of Company now or hereafter
outstanding, except a distribution payable solely in shares of that class of
stock payable solely to holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any class of stock of Company now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other
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<PAGE> 34
rights to acquire shares of any class of stock of Company now or hereafter
outstanding, and (iv) any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness that is not approved by Agents and Requisite
Lenders.
"REVOLVING LENDER" means a Lender having a Revolving Loan
Commitment.
"REVOLVING LOAN APPLICABLE BASE RATE MARGIN" means, as of any date
of determination, a percentage per annum as set forth opposite the Applicable
Consolidated Leverage Ratio:
<TABLE>
<CAPTION>
Applicable Revolving
Consolidated Loan Applicable
Leverage Ratio Base Rate Margin
-------------- ----------------
<S> <C>
> or equal to 4.5:1.0 1.50%
> or equal to 4.0:1.0 < 4.5:1.0 1.25%
> or equal to 3.5:1.0 < 4.0:1.0 1.00%
> or equal to 3.0:1.0 < 3.5:1.0 0.75%
<3.0:1.0 0.50%
</TABLE>
; provided that for the first six months after the Initial Funding Date, the
Revolving Loan Applicable Base Rate Margin shall be (a) 1.25% per annum if the
Applicable Consolidated Leverage Ratio is less than 4.5:1.0 or (b) 1.50% per
annum if such Applicable Consolidated Leverage Ratio is equal to or greater than
4.5:1.0; and provided further that if Company acquires Empress Hammond but not
Empress Joliet on the Initial Funding Date, each of the percentages set forth
for Revolving Loan Applicable Base Rate Margin in the above table and the
immediately preceding proviso shall be increased by 0.25% until the earlier of
the Empress Joliet Acquisition Date and the Revolving Loan Commitment
Termination Date.
"REVOLVING LOAN APPLICABLE ADJUSTED EURODOLLAR RATE MARGIN" means,
as of any date of determination, a percentage per annum as set forth opposite
the Applicable Consolidated Leverage Ratio:
<TABLE>
<CAPTION>
Applicable Revolving Loan
Consolidated Applicable Adjusted
Leverage Ratio Eurodollar Rate Margin
-------------- ----------------------
<S> <C>
> or equal to 4.5:1.0 2.50%
> or equal to 4.0:1.0 < 4.5:1.0 2.25%
> or equal to 3.5:1.0 < 4.0:1.0 2.00%
> or equal to 3.0:1.0 < 3.5:1.0 1.75%
<3.0:1.0 1.50%
</TABLE>
; provided that for the first six months after the Initial Funding Date, the
Revolving Loan Applicable Adjusted Eurodollar Rate Margin shall be (a) 2.25% per
annum if the Applicable Consolidated Leverage Ratio is less than 4.5:1.0 or (b)
2.50% per annum if the Applicable Consolidated Leverage Ratio is equal to or
greater than 4.5:1.0; and provided further that if Company acquires Empress
Hammond but not Empress Joliet on the Initial Funding Date, each
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<PAGE> 35
of the percentages set forth for Revolving Loan Applicable Adjusted Eurodollar
Rate Margin shall be increased by 0.25% until the earlier of the Empress Joliet
Acquisition Date and the Revolving Loan Commitment Termination Date.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii), and "REVOLVING LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means September 30,
2004.
"REVOLVING LOAN EXPOSURE" means, with respect to any Revolving
Lender as of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Revolving Lender's Revolving Loan Commitment
and (ii) after the termination of the Revolving Loan Commitments, the sum of (a)
the aggregate outstanding principal amount of the Revolving Loans of that
Revolving Lender plus (b) in the event that Revolving Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Revolving Lender (in each case net of any participations
purchased by other Revolving Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Revolving Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit plus (d) in the
case of Swing Line Lender, the aggregate outstanding principal amount of all
Swing Line Loans (net of any participations therein purchased by other Revolving
Lenders) plus (e) the aggregate amount of all participations purchased by that
Revolving Lender in any outstanding Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Revolving Lenders to
Company pursuant to subsection 2.1A(ii).
"REVOLVING NOTES" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(ii) on the Initial Funding Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving Loan Commitments and
Revolving Loans of any Revolving Lenders, in each case substantially in the form
of Exhibit V annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SECURITIES COLLATERAL" means, collectively, the "Securities
Collateral" as defined in the Security Agreement.
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<PAGE> 36
"SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Company and the Subsidiary Guarantors on the Signing Date,
substantially in the form of Exhibit XVI annexed hereto, as such Security
Agreement may thereafter be amended, supplemented or otherwise modified from
time to time.
"SHIP MORTGAGES" means the First Preferred Ship Mortgages by each of
the respective owners of the Ships with respect to the relevant Ships in favor
of the Administrative Agent on behalf of Lenders, each dated as of the Initial
Funding Date or, in the case of any Ships owned by Empress Joliet, the Empress
Joliet Acquisition Date, and in a form satisfactory to Agents, as such mortgages
may hereafter be amended, supplemented or otherwise modified, from time to time.
"SHIPS" means, collectively, King of the Red (U.S. Coast Guard
Official Number D1061968), Empress (U.S. Coast Guard Official Number 984286),
Empress II (U.S. Coast Guard Official Number 998517), Empress III (U.S. Coast
Guard Official Number 1035267) and the barge located at the Horseshoe Casino and
Hotel, Tunica, all together with any and all present and future engines,
boilers, machinery, components, masts, boats, anchors, cables, chains, rigging,
tackle, apparel, furniture, capstans, outfit, tools, pumps, gear, furnishings,
appliances, fittings, spare and replacement parts, and any and all appurtenances
thereto or belonging to such ship, whether now or hereafter acquired, and
whether on board or not on board, together with any and all present and future
additions, improvements and replacements therefore, made in or to such ship, or
any part or parts thereof; and all accounts, earned hire, charter payments,
freight, earnings, revenues, income and profits therefrom and additionally all
log books, manuals, trip records, maintenance records, inspection records,
seaworthiness certificates and other historical records or information relating
to such ship.
"SIGNING DATE" means the date on or before June 30, 1999 on which
this Agreement is executed and delivered by the Persons then party hereto.
"SOLVENCY CERTIFICATE" means an Officer's Certificate substantially
in the form of Exhibit XIV annexed hereto.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
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<PAGE> 37
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of third party
insurers of Company or any of its Subsidiaries, (iv) obligations with respect to
Capital Leases or Operating Leases of Company or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of Company or any of its
Subsidiaries, in any case if required by law or governmental rule or regulation
or in accordance with custom and practice in the industry; provided that Standby
Letters of Credit may not be issued for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting "antecedent debt" (as that term is
used in Section 547 of the Bankruptcy Code).
"SUBORDINATED INDEBTEDNESS" means Indebtedness, including the New
Sub Debt, the Existing Empress Bonds, the Existing Subordinated Horseshoe Bonds
and other Indebtedness, of Company subordinated in right of payment to the
Obligations pursuant to documentation containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions and other
material terms in form and substance satisfactory to Agents.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof. On and after the Initial Funding Date and, if different, the Empress
Joliet Acquisition Date, Empress Joliet and Empress Hammond, as applicable, will
each be a Subsidiary of Company.
"SUBSIDIARY GUARANTOR" means any Domestic Subsidiary of Company that
executes and delivers a counterpart of the Subsidiary Guaranty on the Initial
Funding Date or from time to time thereafter pursuant to subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by existing Domestic Subsidiaries of Company on the Initial Funding
Date and to be executed and delivered by additional Domestic Subsidiaries of
Company from time to time thereafter in accordance with subsection 6.8,
substantially in the form of Exhibit XV annexed hereto, as such Subsidiary
Guaranty may hereafter be amended, supplemented or otherwise modified from time
to time.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that
term in subsection 9.1B.
"SWING LINE LENDER" means CIBC, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iii).
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<PAGE> 38
"SWING LINE LOANS" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iii).
"SWING LINE NOTE" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(iii) on the Initial Funding Date and (ii) any
promissory note issued by Company to any successor Administrative Agent and
Swing Line Lender pursuant to the last sentence of subsection 9.5B, in each case
substantially in the form of Exhibit VI annexed hereto, as it may be amended,
supplemented or otherwise modified from time to time.
"SYNDICATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"TAX LOSS BENEFIT AMOUNT" as to any taxable year of Company or any
of its Subsidiaries means the amount by which the Permitted Tax Distributions
would be reduced were a net operating loss or net capital loss from a prior
taxable year of such entity ending subsequent to the Signing Date carried
forward to the applicable taxable year; provided, that for such purpose the
amount of any such net operating loss or net capital loss shall be utilized only
once and in each case shall be carried forward to the next succeeding taxable
year until so utilized.
"TITLE COMPANY" means one or more title insurance companies selected
by Company and reasonably satisfactory to Agents.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made, but not yet
applied, for the purpose of repaying any Refunded Swing Line Loans or
reimbursing the applicable Issuing Lender for any amount drawn under any Letter
of Credit) plus (ii) the aggregate principal amount of all outstanding Swing
Line Loans plus (iii) the Letter of Credit Usage.
"TRANCHE B APPLICABLE ADJUSTED EURODOLLAR RATE MARGIN" means, as of
any date of determination, a percentage per annum as set forth opposite the
Applicable Consolidated Leverage Ratio:
<TABLE>
<CAPTION>
Applicable Tranche B
Consolidated Applicable Adjusted
Leverage Ratio Eurodollar Rate Margin
-------------- ----------------------
<S> <C>
> or equal to 4.5:1.0 2.75%
<4.5:1.0 2.50%
</TABLE>
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<PAGE> 39
; provided that if Company acquires Empress Hammond but not Empress Joliet on
the Initial Funding Date, each of the percentages set forth for Tranche B Loan
Applicable Adjusted Eurodollar Rate Margin in the above table and the
immediately preceding proviso shall be increased by 0.25% until the earlier of
the Empress Joliet Acquisition Date and the date on which the Tranche B Term
Loans must be paid in full pursuant to subsection 2.4A.
"TRANCHE B APPLICABLE BASE RATE MARGIN" means, as of any date of
determination, a percentage per annum as set forth opposite the Applicable
Consolidated Leverage Ratio:
<TABLE>
<CAPTION>
Applicable Consolidated Tranche B Applicable
Leverage Ratio Base Rate Margin
-------------- ----------------
<S> <C>
> or equal to 4.5:1.0 1.75%
<4.5:1.0 1.50%
</TABLE>
; provided that if Company acquires Empress Hammond but not Empress Joliet on
the Initial Funding Date, each of the percentages set forth for Tranche B Loan
Applicable Base Rate Margin in the above table and the immediately preceding
proviso shall be increased by 0.25% until the earlier of the Empress Joliet
Acquisition Date and the date on which the Tranche B Term Loans must be paid in
full pursuant to subsection 2.4A.
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a Lender
to make a Tranche B Term Loan to Company pursuant to subsection 2.1A(i), and
"TRANCHE B TERM LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any Tranche B
Term Loan Lender as of any date of determination (i) prior to the funding of the
Tranche B Term Loans, that Lender's Tranche B Term Loan Commitment and (ii)
after the funding of the Tranche B Term Loans, the outstanding principal amount
of the Tranche B Term Loan of that Lender.
"TRANCHE B TERM LOAN LENDER" means any Lender who holds a Tranche B
Term Loan Commitment or who has made a Tranche B Term Loan hereunder, and any
assignee of such Lender pursuant to subsection 10.1B.
"TRANCHE B TERM LOANS" means the Tranche B Term Loans made by
Tranche B Term Loan Lenders to Company pursuant to subsection 2.1A(i).
"TRANCHE B TERM NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(i) on the Initial Funding Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Tranche B Term Loan Commitments
or Tranche B Term Loans of any Tranche B Term Loan Lenders, in each case
substantially in the form of Exhibit IV annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Company in connection with the transaction contemplated by the Loan Documents
and the Empress Acquisition Agreement.
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<PAGE> 40
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Company herein set
forth, each Tranche B Term Loan Lender hereby severally agrees to make the
Tranche B Term Loans described in subsection 2.1A(i), each Revolving Lender
hereby severally agrees to make the Revolving Loans described in subsection
2.1A(ii) and Swing Line Lender hereby agrees to make the Loans described in
subsection 2.1A(iii).
(i) Tranche B Term Loans. Each Tranche B Term Loan Lender severally
agrees to lend to Company on the Initial Funding Date an amount not
exceeding its Pro Rata Share of the aggregate amount of the Tranche B Term
Loan Commitments to be used for the purposes identified in subsection
2.5A. The amount of each Tranche B Term Loan Lender's Tranche B Term Loan
Commitment is set forth opposite its name on
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<PAGE> 41
Schedule 2.1 annexed hereto and the aggregate amount of the Tranche
B Term Loan Commitments is $125,000,000; provided that the Tranche B Term
Loan Commitments of Tranche B Term Loan Lenders shall be adjusted to give
effect to (a) any Tranche B Term Loan increases pursuant to subsection
2.1A(iv) and (b) any assignments of the Tranche B Term Loan Commitments
pursuant to subsection 10.1B. Each Tranche B Term Loan Lender's Tranche B
Term Loan Commitment shall expire immediately and without further action
on December 1, 1999, if Tranche B Term Loans in the full amount of the
Tranche B Term Loan Commitments (without taking account of any increase
permitted under subsection 2.1A(iv))are not made on or before that date.
Except as permitted by subsection 2.1A(iv), Company may make only one
borrowing under the Tranche B Term Loan Commitments. Amounts borrowed
under this subsection 2.1A(i) and subsequently repaid or prepaid may not
be reborrowed.
(ii) Revolving Loans. Each Revolving Lender severally agrees,
subject to the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time to time,
to lend to Company from time to time during the period from the Initial
Funding Date to but excluding the Revolving Loan Commitment Termination
Date an aggregate amount not exceeding its Pro Rata Share of the aggregate
amount of the Revolving Loan Commitments to be used for the purposes
identified in subsection 2.5B. The original amount of each Revolving
Lender's Revolving Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate original amount of the
Revolving Loan Commitments is $250,000,000; provided that the Revolving
Loan Commitments of the Revolving Lenders shall be adjusted to give effect
(a) any Revolving Loan Commitment increases pursuant to subsection
2.1A(iv) and (b) to any assignments of the Revolving Loan Commitments
pursuant to subsection 10.1B; and provided, further that the amount of the
Revolving Loan Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsections 2.4B,
2.4C(ii) and 2.4C(iii). Each Revolving Lender's Revolving Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full
no later than that date; provided that each Revolving Lender's Revolving
Loan Commitment shall expire immediately and without further action on
December 1, 1999 if Tranche B Term Loans in the full amount of the Tranche
B Term Loan Commitments (without taking account of any increase permitted
under subsection 2.1A(iv)) are not made on or before that date and
provided further that no Revolving Loans may be made prior to December 1,
1999 unless the entire amount of the Tranche B Term Loan Commitment
(without taking account of any increase permitted under subsection
2.1A(iv)) has been borrowed. Amounts borrowed under this subsection
2.1A(ii) may be repaid and reborrowed up to but excluding the Revolving
Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in
effect.
(iii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
the limitations set forth below with respect to the maximum amount of
Swing Line Loans
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<PAGE> 42
permitted to be outstanding from time to time, to make a portion of
the Revolving Loan Commitments available to Company from time to time
during the period from the Initial Funding Date up to but excluding the
Revolving Loan Commitment Termination Date by making Swing Line Loans to
Company in an aggregate amount not exceeding the amount of the Swing Line
Loan Commitment to be used for the purposes identified in subsection 2.5B,
notwithstanding the fact that such Swing Line Loans, when aggregated with
Swing Line Lender's outstanding Revolving Loans and Swing Line Lender's
Pro Rata Share of the Letter of Credit Usage then in effect, may exceed
Swing Line Lender's Revolving Loan Commitment. The original amount of the
Swing Line Loan Commitment is $10,000,000; provided that any reduction of
the Revolving Loan Commitments made pursuant to subsection 2.4B, 2.4C(ii)
or 2.4C(iii) which reduces the aggregate Revolving Loan Commitments to an
amount less than the then current amount of the Swing Line Loan Commitment
shall result in an automatic corresponding reduction of the Swing Line
Loan Commitment to the amount of the Revolving Loan Commitments, as so
reduced, without any further action on the part of Company, Administrative
Agent or Swing Line Lender. The Swing Line Loan Commitment shall expire on
the Revolving Loan Commitment Termination Date and all Swing Line Loans
and all other amounts owed hereunder with respect to the Swing Line Loans
shall be paid in full no later than that date; provided that the Swing
Line Loan Commitment shall expire immediately and without further action
on December 1, 1999, if Tranche B Term Loans are not made on or before
that date; provided, further that no Swing Line Loan shall be outstanding
for more than five Business Days. Amounts borrowed under this subsection
2.1A(iii) may be repaid and reborrowed up to but excluding the Revolving
Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan Commitment
shall be subject to the limitation that in no event shall the Total
Utilization of Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4C(i), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 10:00 A.M. (New York City
time) on the first Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Borrowing given by
Company) requesting Revolving Lenders to make Revolving Loans that are
Base Rate Loans on such Funding Date in an amount equal to the amount of
such Swing Line Loans (the "REFUNDED SWING LINE LOANS") outstanding on the
date such notice is given which Swing Line Lender requests Revolving
Lenders to prepay. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans made by
Revolving Lenders other than Swing Line Lender shall be immediately
delivered by Administrative Agent to Swing Line Lender (and not to
Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Revolving Loans are made, Swing
Line Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender, and such portion of the Swing Line Loans deemed to be so paid
shall no longer be outstanding as Swing Line Loans and shall no longer be
due under the Swing Line Note of Swing Line Lender but shall instead
34
<PAGE> 43
constitute part of Swing Line Lender's outstanding Revolving Loans and
shall be due under the Revolving Note of Swing Line Lender. Company hereby
authorizes Administrative Agent and Swing Line Lender to charge Company's
accounts with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line
Lender the amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by Revolving Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not sufficient
to repay in full the Refunded Swing Line Loans. If any portion of any such
amount paid (or deemed to be paid) to Swing Line Lender should be
recovered by or on behalf of Company from Swing Line Lender in bankruptcy,
by assignment for the benefit of creditors or otherwise, the loss of the
amount so recovered shall be ratably shared among all Revolving Lenders in
the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request
of Swing Line Lender as provided in the immediately preceding paragraph in
an amount sufficient to repay any amounts owed to Swing Line Lender in
respect of any outstanding Swing Line Loans or (b) the Revolving Loan
Commitments are terminated at a time when any Swing Line Loans are
outstanding, each Revolving Lender shall be deemed to, and hereby agrees
to, have purchased a participation in such outstanding Swing Line Loans in
an amount equal to its Pro Rata Share (calculated, in the case of the
foregoing clause (b), immediately prior to such termination of the
Revolving Loan Commitments) of the unpaid amount of such Swing Line Loans
together with accrued interest thereon. Upon one Business Day's notice
from Swing Line Lender, each Revolving Lender shall deliver to Swing Line
Lender an amount equal to its respective participation in same day funds
at the Funding and Payment Office. In order to further evidence such
participation (and without prejudice to the effectiveness of the
participation provisions set forth above), each Revolving Lender agrees to
enter into a separate participation agreement at the request of Swing Line
Lender in form and substance reasonably satisfactory to such Revolving
Lender, Swing Line Lender and the other Revolving Lenders. In the event
any Revolving Lender fails to make available to Swing Line Lender the
amount of such Revolving Lender's participation as provided in this
paragraph, Swing Line Lender shall be entitled to recover such amount on
demand from such Revolving Lender together with interest thereon at the
rate customarily used by Swing Line Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate. In
the event Swing Line Lender receives a payment of any amount in which
other Revolving Lenders have purchased participations as provided in this
paragraph, Swing Line Lender shall promptly distribute to each such other
Revolving Lender its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Revolving Lender's obligation to make Revolving Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to the second preceding
paragraph and each Revolving Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and shall not be
affected by any circumstance, including (a) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Lender may have
against Swing Line Lender, Company or any other Person for any reason
whatsoever; (b) the occurrence or
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<PAGE> 44
continuation of an Event of Default or a Potential Event of Default;
(c) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Company or any of its
Subsidiaries; (d) any breach of this Agreement or any other Loan Document
by any party thereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that
such obligations of each Revolving Lender are subject to the condition
that (X) Swing Line Lender believed in good faith that all conditions
under Section 4 to the making of the applicable Refunded Swing Line Loans
or other unpaid Swing Line Loans, as the case may be, were satisfied at
the time such Refunded Swing Line Loans or unpaid Swing Line Loans were
made or (Y) the satisfaction of any such condition not satisfied had been
waived in accordance with subsection 10.6 prior to or at the time such
Refunded Swing Line Loans or other unpaid Swing Line Loans were made.
(iv) Increases of the Tranche B Term Loans or Revolving Loan
Commitments. At the mutual discretion of Company and Arrangers, Company
may request in writing at any time during the period from the Signing Date
to and including September 30, 2000 that (x) the then effective aggregate
principal amount of Tranche B Term Loans be increased, and/or (y) the then
effective aggregate principal amount of Revolving Loan Commitments be
increased; provided that (1) the aggregate principal amount of
the increases in Tranche B Term Loans and/or Revolving Loan Commitments
pursuant to this subsection 2.1A(iv) shall not exceed $50,000,000, (2)
Company may not make more than one request for such increase in Tranche B
Term Loans and/or Revolving Loan Commitments, (3) no Event of Default or
Potential Event of Default shall have occurred and be continuing or shall
occur as a result of such increases in Tranche B Term Loans and/or
Revolving Loan Commitments, (4) such increases shall be subject to any
prior approvals or exemptions required under any applicable Gaming Laws
and (5) Company shall, and shall cause its Subsidiaries to, execute and
deliver such documents and instruments and take such other actions
(including, without limitation, obtaining appropriate endorsements to
title insurance policies) as may be reasonably requested by Agents in
connection with such increases. Any request under this subsection 2.1A(iv)
shall be submitted by Company to Agents (which shall forward copies to
Lenders), specify the proposed effective date and amount of such increase
and be accompanied by an Officer's Certificate stating that no Event of
Default or Potential Event of Default exists or will occur as a result of
such increase. Company may also specify any fees offered to those Lenders
(the "INCREASING LENDERS") which agree to increase the principal amount of
their Tranche B Term Loans or Revolving Loan Commitments, as the case may
be, which fees may be variable based upon the amount by which any such
Lender is willing to increase the principal amount of its Term Loan or
Revolving Loan Commitment, as the case may be. No Lender shall have any
obligation, express or implied, to offer to increase the aggregate
principal amount of its Tranche B Term Loan or Revolving Loan Commitment,
as the case may be. Only the consent of each Increasing Lender shall be
required for an increase in the aggregate principal amount of Tranche B
Term Loans or Revolving Loan Commitments, as the case may be, pursuant to
this subsection 2.1A(iv). No Lender which elects not to increase the
principal amount of its Tranche B Term Loan or Revolving Loan Commitment,
as the case may be, may be replaced in respect of its existing Tranche B
Term Loan or Revolving Loan Commitment, as the case may be, as a result
thereof without such Lender's consent.
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<PAGE> 45
Each Increasing Lender shall as soon as practicable specify
the amount of the proposed increase which it is willing to assume. Company
may accept some or all of the offered amounts or designate new lenders who
qualify as Eligible Assignees and which are reasonably acceptable to
Agents as additional Lenders hereunder in accordance with this subsection
2.1A(iv) (each such new lender being a "NEW LENDER"), which New Lender may
assume all or a portion of the increase in the aggregate principal amount
of the Tranche B Term Loans or Revolving Loan Commitments, as the case may
be. Company and Agents shall have discretion jointly to adjust the
allocation of the increased aggregate principal amount of Tranche B Term
Loans or Revolving Loan Commitments, as the case may be, among Increasing
Lenders and New Lenders.
Each New Lender designated by Company and reasonably
acceptable to Agents shall become an additional party hereto as a New
Lender concurrently with the effectiveness of the proposed increase in the
aggregate principal amount of the Tranche B Term Loans or Revolving Loan
Commitments, as the case may be, upon its execution of an Agreement of
Joinder in the form of Exhibit XVIII, in each case in form and substance
reasonably satisfactory to Agents.
Subject to the foregoing, any increase requested by Company
shall be effective as of the date proposed by Company and shall be in the
principal amount equal to (i) the principal amount which Increasing
Lenders are willing to assume as increases to the principal amount of
their Tranche B Term Loans or Revolving Loan Commitments, as the case may
be, plus (ii) the principal amount offered by New Lenders with respect to
Tranche B Term Loans or Revolving Loan Commitments, as the case may be, in
either case as adjusted by Company and Agents pursuant to this subsection
2.1A(iv). All new Tranche B Term Loans to be made under this subsection
2.1A(iv) shall be made to Company on the same day as such increase in
Tranche B Term Loans under this subsection 2.1A(iv) becomes effective.
Upon effectiveness of any such increase, the Pro Rata Share of each Lender
will be adjusted to give effect to the increase in Tranche B Term Loans or
Revolving Loan Commitments, as the case may be, Administrative Agent shall
distribute to Lenders a revised Schedule 2.1 reflecting the Tranche B Term
Loan, Revolving Loan Commitment and Pro Rata Share of each Lender after
giving effect to such increase. To the extent that the adjustment of Pro
Rata Shares results in loss or expenses to any Lender as a result of the
prepayment of any Adjusted Eurodollar Rate Loan on a date other than the
scheduled last day of the applicable Interest Period, Company shall be
responsible for such loss or expense pursuant to subsection 2.6D.
B. BORROWING MECHANICS. Tranche B Term Loans or Revolving Loans made
on any Funding Date (other than Revolving Loans made pursuant to a request by
Swing Line Lender pursuant to subsection 2.1A(iii) for the purpose of repaying
any Refunded Swing Line Loans or Revolving Loans made pursuant to subsection
3.3B for the purpose of reimbursing any Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it) shall be in an aggregate minimum
amount of $1,000,000 and multiples of $1,000,000 in excess of that amount;
provided that Tranche B Term Loans or Revolving Loans made on any Funding Date
as Adjusted Eurodollar Rate Loans with a particular Interest Period shall be in
an aggregate minimum amount of $1,000,000 and multiples of $1,000,000 in excess
of that amount. Swing Line Loans made on any Funding Date shall be in an
aggregate minimum amount of $100,000 and multiples of $100,000 in excess of that
amount. Whenever Company desires that Lenders make Tranche B
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<PAGE> 46
Term Loans or Revolving Loans it shall deliver to Administrative Agent a Notice
of Borrowing no later than 10:00 A.M. (New York City time) at least three
Business Days in advance of the proposed Funding Date (in the case of an
Adjusted Eurodollar Rate Loan) or at least one Business Day in advance of the
proposed Funding Date (in the case of a Base Rate Loan). Whenever Company
desires that Swing Line Lender make a Swing Line Loan, it shall deliver to
Administrative Agent a Notice of Borrowing no later than 12:00 Noon (New York
City time) on the proposed Funding Date. The Notice of Borrowing shall specify
(i) the proposed Funding Date (which shall be a Business Day), (ii) the amount
and type of Loans requested, (iii) in the case of Swing Line Loans and any Loans
made on the Initial Funding Date, that such Loans shall be Base Rate Loans, (iv)
in the case of Revolving Loans not made on the Initial Funding Date, whether
such Loans shall be Base Rate Loans or Adjusted Eurodollar Rate Loans, and (v)
in the case of any Loans requested to be made as Adjusted Eurodollar Rate Loans,
the initial Interest Period requested therefor. Tranche B Term Loans and
Revolving Loans may be continued as or converted into Base Rate Loans and
Adjusted Eurodollar Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of
any Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
C. DISBURSEMENT OF FUNDS. Except to the extent provided in subsection
2.1A(iv), all Tranche B Term Loans and Revolving Loans under this Agreement
shall be made by Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative Agent of a Notice
of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender or Swing Line Lender, as the case
may be, of the proposed borrowing. Each Lender shall make the amount of its Loan
available to Administrative Agent not later than 12:00 Noon (New York City time)
on the applicable Funding Date, and Swing Line Lender shall make the amount of
its Swing Line Loan available to Administrative Agent not later than 2:00 P.M.
(New York City time) on the applicable Funding Date, in each case in same day
funds in Dollars, at the Funding and Payment
38
<PAGE> 47
Office. Except as provided in subsection 2.1A(iii) or subsection 3.3B with
respect to Revolving Loans used to repay Refunded Swing Line Loans or to
reimburse any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it, upon satisfaction or waiver of the conditions precedent
specified in subsections 4.2 (in the case of Loans made on the Initial Funding
Date) and 4.3 (in the case of all Loans), Administrative Agent shall make the
proceeds of such Loans available to Company on the applicable Funding Date by
causing an amount of same day funds in Dollars equal to the proceeds of all such
Loans received by Administrative Agent from Lenders or Swing Line Lender, as the
case may be, to be credited to the account of Company at the Funding and Payment
Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the rate customarily used by Administrative Agent for
the correction of errors among banks for three Business Days and thereafter at
the Base Rate. If such Lender does not pay such corresponding amount forthwith
upon Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and addresses of
Lenders and the Commitments and Loans of each Lender from time to time (the
"REGISTER"). The Register shall be available for inspection by Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(ii) Administrative Agent shall record in the Register the Tranche B
Term Loan Commitment and Revolving Loan Commitment and the Tranche B Term Loans
and Revolving Loans from time to time of each Lender and each repayment or
prepayment in respect of the principal amount of the Tranche B Term Loans or
Revolving Loans of each Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided that failure
to make any such recordation, or any error in such recordation, shall not affect
any Lender's Commitments or Company's Obligations in respect of any applicable
Loans.
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<PAGE> 48
(iii) Each Lender shall record on its internal records (including,
any Notes held by such Lender) the amount of the Tranche B Term Loans and each
Revolving Loan made by it and each payment in respect thereof. To the extent
permitted by applicable law, any such recordation shall be prima facie evidence
of the amount of such Loans and payments; provided that failure to make any such
recordation, or any error in such recordation, shall not affect any Lender's
Commitments or Company's Obligations in respect of any applicable Loans; and
provided, further that in the event of any inconsistency between the Register
and any Lender's records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof, and
no assignment or transfer of any such Commitment or Loan shall be effective, in
each case unless and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent and recorded
in the Register as provided in subsection 10.1B(ii). Prior to such recordation,
all amounts owed with respect to the applicable Commitment or Loan shall be owed
to the Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v) Company hereby designates CIBC to serve as Company's agent
solely for purposes of maintaining the Register as provided in this subsection
2.1D, and Company hereby agrees that, to the extent CIBC serves in such
capacity, CIBC and its officers, directors, employees, agents and affiliates
shall constitute Indemnitees for all purposes under subsection 10.3.
E. NOTES. Company shall execute and deliver on the Initial Funding Date
(i) to each Tranche B Term Loan Lender (or to Administrative Agent for that
Lender) a Tranche B Term Note substantially in the form of Exhibit IV annexed
hereto to evidence that Lender's Tranche B Term Loan, in the principal amount of
that Lender's Tranche B Term Loan and with other appropriate insertions, (ii) to
each Revolving Lender (or to Administrative Agent for that Lender) a Revolving
Note substantially in the form of Exhibit V annexed hereto to evidence that
Lender's Revolving Loans, in the principal amount of that Lender's Revolving
Loan Commitment and with other appropriate insertions and (iii) to Swing Line
Lender (or to Administrative Agent for Swing Line Lender) a Swing Line Note
substantially in the form of Exhibit VI annexed hereto to evidence Swing Line
Lender's Swing Line Loans, in the principal amount of the Swing Line Loan
Commitment and with other appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and 2.7,
each Tranche B Term Loan and each Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable basis for determining
the rate of
40
<PAGE> 49
interest with respect to any Tranche B Term Loan or any Revolving Loan shall be
selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B, and the basis for determining
the interest rate with respect to any Tranche B Term Loan or any Revolving Loan
may be changed from time to time pursuant to subsection 2.2D. If on any day a
Tranche B Term Loan or Revolving Loan is outstanding with respect to which
notice has not been delivered to Administrative Agent in accordance with the
terms of this Agreement specifying the applicable basis for determining the rate
of interest, then for that day that Loan shall bear interest determined by
reference to the Base Rate.
(i) (a) Subject to the provisions of subsections 2.2E and 2.7, the
Revolving Loans shall bear interest through maturity as follows:
(1) if a Base Rate Loan, then at the sum of the Base Rate plus
the Revolving Loan Applicable Base Rate Margin; or
(2) if an Adjusted Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus the Revolving Loan Applicable
Adjusted Eurodollar Rate Margin.
(b) Subject to the provisions of subsections 2.2E and 2.7, the
Tranche B Term Loans shall bear interest through maturity as follows:
(1) if a Base Rate Loan, then at the sum of the Base Rate plus
the Tranche B Applicable Base Rate Margin; or
(2) if an Adjusted Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Tranche B Applicable Adjusted
Eurodollar Rate Margin.
Upon delivery of the Margin Determination Certificate or Compliance
Certificate, as the case may be, by Company to Administrative Agent
pursuant to subsection 6.1(iv), the applicable margins shall automatically
be adjusted in accordance with such Margin Determination Certificate or
Compliance Certificate, such adjustment to become effective on the next
succeeding March 1, June 1, September 1 or December 1, as applicable,
following the receipt by Administrative Agent of such Margin Determination
Certificate or Compliance Certificate; provided that, for the period
commencing on the Business Day following the date that is six months after
the Initial Funding Date, the applicable margins shall be determined by
reference to the Margin Determination Certificate or Compliance
Certificate most recently received by Administrative Agent and provided
further that, if at any time a Margin Determination Certificate or
Compliance Certificate, as the case may be, is not delivered at the time
required pursuant to subsection 6.1(iv), from the time such Margin
Determination Certificate or Compliance Certificate was required to be
delivered until delivery of such Margin Determination Certificate or
Compliance Certificate, such applicable margins shall be the maximum
percentage amount for the relevant Loan set forth above.
(ii) Subject to the provisions of subsections 2.2E and 2.7, the
Swing Line Loans shall bear interest through maturity at the sum of the
Base Rate plus the Revolving Loan Applicable Base Rate Margin.
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<PAGE> 50
B. INTEREST PERIODS. In connection with each Adjusted Eurodollar
Rate Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice
of Conversion/Continuation, as the case may be, select an interest period (each
an "INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Adjusted Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in the
case of a Loan initially made as an Adjusted Eurodollar Rate Loan, or on
the date specified in the applicable Notice of Conversion/Continuation, in
the case of a Loan converted to an Adjusted Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to an Adjusted Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that 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;
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause
(v) of this subsection 2.2B, end on the last Business Day of a
calendar month; (v) no Interest Period with respect to any portion of the
Tranche B Term Loans shall extend beyond September 30, 2006 or, if
Existing Empress Bonds remain outstanding in an aggregate amount of
greater than $50 million 60 days after the Empress Joliet Acquisition
Date, March 17, 2006;
(vi) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the date on which a permanent
reduction of the Revolving Loan Commitments is scheduled to occur unless
the sum of (a) the aggregate principal amount of Revolving Loans that are
Base Rate Loans plus (b) the aggregate principal amount of Revolving Loans
that are Adjusted Eurodollar Rate Loans with Interest Periods expiring on
or before such date plus (c) the excess of the Revolving Loan Commitments
then in effect over the aggregate principal amount of Revolving Loans then
outstanding equals or exceeds the permanent reduction of the Revolving
Loan Commitments that is scheduled to occur on such date;
(vii) no Interest Period with respect to any portion of the
Tranche B Term Loans shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the Tranche B Term
Loans, as the case may be, unless the sum of (a) the aggregate principal
amount of Tranche B Term Loans, as the case may be, that are Base Rate
Loans plus (b) the aggregate principal amount of Tranche B Term Loans, as
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<PAGE> 51
the case may be, that are Adjusted Eurodollar Rate Loans with Interest
Periods expiring on or before such date equals or exceeds the principal
amount required to be paid on the Tranche B Term Loans, as the case may
be, on such date;
(viii) there shall be no more than 10 Interest Periods
outstanding at any time; and
(ix) in the event Company fails to specify an Interest Period for
any Adjusted Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have
selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4C(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Tranche B Term Loans or Revolving Loans equal to $1,000,000 and
multiples of $1,000,000 in excess of that amount from Loans bearing interest at
a rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to an Adjusted Eurodollar Rate Loan, to continue
all or any portion of such Loan equal to $1,000,000 and multiples of $1,000,000
in excess of that amount as an Adjusted Eurodollar Rate Loan; provided, however,
that an Adjusted Eurodollar Rate Loan may only be converted into a Base Rate
Loan on the expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, an Adjusted Eurodollar Rate Loan). A Notice of
Conversion/Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation,
(iv) in the case of a conversion to, or a continuation of, an Adjusted
Eurodollar Rate Loan, the requested Interest Period, and (v) in the case of a
conversion to, or a continuation of, an Adjusted Eurodollar Rate Loan, that no
Potential Event of Default or Event of Default has occurred and is continuing.
In lieu of delivering the above-described Notice of Conversion/Continuation,
Company may give Administrative Agent telephonic notice by the required time of
any proposed conversion/continuation under this subsection 2.2D; provided that
such notice shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed
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<PAGE> 52
conversion/continuation under this subsection 2.2D, Administrative Agent shall
promptly transmit such notice by telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, an
Adjusted Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder on such Loans,
shall thereafter bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans that are Tranche B Term Loans); provided that, in the case of
Adjusted Eurodollar Rate Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective such Adjusted
Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans. Payment or acceptance of the increased rates of interest provided for in
this subsection 2.2E is not a permitted alternative to timely payment and shall
not constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of any Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed (i) in
the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of Adjusted Eurodollar Rate Loans, on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from an Adjusted
Eurodollar Rate Loan, the date of conversion of such Adjusted Eurodollar Rate
Loan to such Base Rate Loan, as the case may be, shall be included, and the date
of payment of such Loan or the expiration date of an Interest Period applicable
to such Loan or, with respect to a Base Rate Loan being converted to an Adjusted
Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Adjusted Eurodollar Rate Loan, as the case may be, shall be excluded; provided
that if a Loan is repaid on the same day on which it is made, one day's interest
shall be paid on that Loan.
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<PAGE> 53
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Administrative Agent, for
distribution to each Revolving Lender in proportion to that Lender's Pro Rata
Share, (i) commitment fees for the period from and including the Signing Date to
and excluding the Initial Funding Date equal to the Revolving Loan Commitment
multiplied by 0.50%, calculated on the basis of a 360-day year and the actual
number of days elapsed, (ii) commitment fees for the period from and including
the Signing Date to and excluding the Initial Funding Date equal to the Tranche
B Term Loan Commitment multiplied by (a) on or prior to September 30, 1999,
0.50% and (b) after September 30, 1999, 1.50% and (iii) commitment fees for the
period from and including the Initial Funding Date to and excluding the
Revolving Loan Commitment Termination Date equal to the average of the daily
excess of the Revolving Loan Commitments over the aggregate principal amount of
outstanding Revolving Loans (but not including any outstanding Swing Line Loans
or the Letter of Credit Usage) multiplied by the Commitment Fee Percentage,
calculated on the basis of a 360-day year and the actual number of days elapsed,
all to be payable in arrears on the Initial Funding Date and quarterly in
arrears thereafter on the last day of March, June, September and December of
each year, commencing on the first such date to occur after the Signing Date,
and on the Final Maturity of the Revolving Loans (whether or not Revolving Loan
Commitment Termination Date).
B. OTHER FEES. Company agrees to pay to Arrangers and Agents such other
fees in the amounts and at the times separately agreed upon between Horseshoe,
Company, Agents and Arrangers in that certain Fee Letter dated April 23, 1999.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF TRANCHE B TERM LOANS. Company shall make
principal payments on the Tranche B Term Loans in installments on the dates and
in the amounts set forth below:
<TABLE>
<CAPTION>
Scheduled Repayment
Date of Tranche B Term Loans
---- -----------------------
<S> <C>
December 31, 1999, each March $ 312,500
31, June 30, September 30 and
December 31, in the years 2000-
2004, and each of March 31,
June 30 and September 30, 2005
Each of December 31, 2005 and 29,375,000
March 31, June 30 and
September 30, 2006
----------------
Total $ 125,000,000
</TABLE>
<PAGE> 54
; provided that the scheduled installments of principal of the Tranche B
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Term Loans in
accordance with subsection 2.4C(iv); provided, further that the Tranche B
Term Loans and all other amounts owed hereunder with respect to the
Tranche B Term Loans shall be paid in full no later than September 30,
2006, and the final installment payable by Company in respect of the
Tranche B Term Loans on such date shall be in an amount, if such amount
is different from that specified above, sufficient to repay all amounts
owing by Company under this Agreement with respect to the Tranche B Term
Loans; provided, further that if Existing Empress Bonds remain
outstanding in an aggregate amount of greater than $50 million 60 days
after the Empress Joliet Acquisition Date, the Tranche B Term Loans and
all other amounts owed hereunder with respect to the Tranche B Term Loans
shall be paid in full no later than March 17, 2006; provided further that
in the event that the aggregate principal amount of Tranche B Term Loans
is increased pursuant to subsection 2.1A(iv), then each scheduled
principal repayment to be made after such increase becomes effective
shall be increased by an amount equal to (a) the aggregate principal
amount of the increase in Tranche B Term Loans pursuant to subsection
2.1A(iv) multiplied by (b) a fraction equal to (x) such scheduled
repayment amount divided by (y) the aggregate principal amount of Tranche
B Term Loans to be repaid immediately prior to giving effect to the
increase in Tranche B Term Loans made pursuant to subsection 2.1A(iv).
B. SCHEDULED REDUCTIONS OF REVOLVING LOAN COMMITMENTS. The Revolving
Loan Commitments shall be permanently reduced on the dates and in the amounts
set forth below:
<TABLE>
<CAPTION>
Scheduled Reduction of
Date Revolving Loan Commitments
---- --------------------------
<S> <C>
December 31, 2001 $ 9,375,000
March 31, 2002 9,375,000
June 30, 2002 9,375,000
September 30, 2002 9,375,000
December 31, 2002 12,500,000
March 31, 2003 12,500,000
June 30, 2003 12,500,000
September 30, 2003 12,500,000
December 31, 2003 40,625,000
March 31, 2004 40,625,000
June 30, 2004 40,625,000
September 30, 2004 40,625,000
------------
$250,000,000
</TABLE>
; provided that the scheduled reductions of the Revolving Loan Commitments set
forth above shall be reduced in connection with any voluntary or mandatory
reductions of the Commitments in accordance with subsection 2.4C(iv); and
provided further that in the event that the aggregate principal amount of
Revolving Loan Commitments is increased pursuant to subsection 2.1A(iv), then
each scheduled reduction to be made after such increase becomes effective shall
be increased by an amount equal to (a) the aggregate principal amount of the
increase in Revolving Loan Commitments pursuant to subsection 2.1A(iv)
multiplied by (b) a fraction equal to (x) such
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<PAGE> 55
scheduled reduction amount divided by (y) the aggregate principal amount of
Revolving Loan Commitments to be repaid immediately prior to giving effect to
the increase in Revolving Loan Commitments made pursuant to subsection 2.1A(iv).
C. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon written or telephonic
notice to Administrative Agent on or prior to 12:00 Noon (New York City
time) on the date of prepayment, which notice, if telephonic, shall be
promptly confirmed in writing, at any time and from time to time prepay
any Swing Line Loan on any Business Day in whole or in part in an
aggregate minimum amount of $100,000 and multiples of $100,000 in excess
of that amount. Company may, upon not less than one Business Day's prior
written or telephonic notice, in the case of Base Rate Loans, and three
Business Days' prior written or telephonic notice, in the case of
Adjusted Eurodollar Rate Loans, in each case given to Administrative
Agent by 12:00 Noon (New York City time) on the date required and, if
given by telephone, promptly confirmed in writing to Administrative Agent
(which original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay any Tranche B Term Loans or Revolving
Loans on any Business Day in whole or in part in an aggregate minimum
amount of $1,000,000 and multiples of $1,000,000 in excess of that
amount; provided, however, that an Adjusted Eurodollar Rate Loan may only
be prepaid on the expiration of the Interest Period applicable thereto
unless Company complies with subsection 2.6D with respect to any breakage
costs resulting from such prepayment being made on a date prior to the
expiration of the applicable Interest Period. Notice of prepayment having
been given as aforesaid, the principal amount of the Loans specified in
such notice shall become due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be applied as specified in
subsection 2.4C(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company
may, upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly transmit
by telefacsimile or telephone to each Revolving Lender), at any time and
from time to time terminate in whole or permanently reduce in part,
without premium or penalty, the Revolving Loan Commitments in an amount
up to the amount by which the Revolving Loan Commitments exceed the Total
Utilization of Revolving Loan Commitments at the time of such proposed
termination or reduction; provided that any such partial reduction of the
Revolving Loan Commitments shall be in an aggregate minimum amount of
$1,000,000 and multiples of $1,000,000 in excess of that amount.
Company's notice to Administrative Agent shall designate the date (which
shall be a Business Day) of such termination or reduction and the amount
of any partial reduction, and such termination or reduction of the
Revolving Loan Commitments shall be effective on the date specified in
Company's notice and shall reduce the Revolving Loan Commitment of each
Revolving Lender proportionately to its Pro Rata Share. Any such
voluntary reduction of the Revolving Loan Commitments shall be applied as
specified in subsection 2.4C(iv).
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(iii) Mandatory Prepayments and Mandatory Reductions of Revolving
Loan Commitments. The Loans shall be prepaid and/or the Revolving Loan
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and/or reductions to
be applied as set forth below or as more specifically provided in
subsection 2.4C(iv):
(a) Prepayments and Reductions From Net Asset Sale
Proceeds. No later than the first Business Day following the date
of receipt by Company or any of its Subsidiaries of any Net Asset
Sale Proceeds in respect of any Asset Sale, Company shall prepay
the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to such Net Asset
Sale Proceeds.
(b) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than the first Business
Day following the date of receipt by Administrative Agent or by
Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds, Company shall prepay the Loans
and/or the Revolving Loan Commitments shall be permanently reduced
in an aggregate amount equal to the amount of such Net
Insurance/Condemnation Proceeds; provided, however, that no such
prepayment shall be required to the extent (i) under the terms of
any lease or other agreement existing on the date hereof such Net
Insurance/Condemnation Proceeds are required to be used to
replace, rebuild or repair the asset so damaged, destroyed or
taken or (ii) Company determines to utilize such Net
Insurance/Condemnation Proceeds to replace, rebuild or repair the
asset damaged, destroyed or taken, and in each case referred to in
clauses (i) and (ii) above, Company so utilizes such Net
Insurance/Condemnation Proceeds within 18 months of the receipt
thereof.
(c) Prepayments and Reductions Due to Issuance of Debt
Securities. On the date of receipt by Company or any of its
Subsidiaries of the Cash proceeds (any such cash proceeds, net of
underwriting discounts and commissions and other reasonable costs
and expenses associated therewith, including reasonable legal fees
and expenses, being "NET DEBT SECURITIES PROCEEDS"), from the
issuance of debt Securities of Company or any of its Subsidiaries
(other than Indebtedness permitted by subsection 7.1) after the
Initial Funding Date, Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to such Net Debt Securities Proceeds.
(d) Prepayments and Reductions Due to Issuance of Equity
Securities. On the date of receipt by Company or any of its
Subsidiaries of the Cash proceeds (any such cash proceeds, net of
underwriting discounts and commissions and other reasonable costs
and expenses associated therewith, including reasonable legal fees
and expenses, being "NET EQUITY SECURITIES PROCEEDS") at any time
during which the Consolidated Leverage Ratio determined as of the
last day of the immediately preceding Fiscal Quarter is greater
than or equal to 3.5:1, from the issuance of equity Securities of
Company or any of its Subsidiaries after the Initial Funding Date,
Company shall prepay the Loans and/or the Revolving Loan
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Commitments shall be permanently reduced in an aggregate amount
equal to 50% of such Net Equity Securities Proceeds.
(e) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction of
the Revolving Loan Commitments pursuant to subsections
2.4C(iii)(a)-(d), Company shall deliver to Agents an Officer's
Certificate demonstrating the calculation of the amount (the "NET
PROCEEDS AMOUNT") of the applicable Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds, Net Debt Securities Proceeds (as
such term is defined in subsection 2.4C(iii)(c)) or Net Equity
Securities Proceeds (as such term is defined in subsection
2.4C(iii)(d)), as the case may be, that gave rise to such
prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officer's Certificate,
Company shall promptly make an additional prepayment of the Loans
(and/or, if applicable, the Revolving Loan Commitments shall be
permanently reduced) in an amount equal to the amount of such
excess, and Company shall concurrently therewith deliver to Agents
an Officer's Certificate demonstrating the derivation of the
additional Net Proceeds Amount resulting in such excess.
(f) Change of Control. On the date which is the earlier of
(x) 30 days after the date on which a "change of control" (as
defined in the Existing Subordinated Horseshoe Indenture or the
New Sub Debt Indenture, as applicable) occurs and (y) the date on
which Company shall have offered to repurchase the Existing
Subordinated Horseshoe Bonds or the New Sub Debt, as a result of
such change of control (i) Company shall prepay in full the Loans,
(ii) the Revolving Loan Commitments shall be terminated in full
and (iii) Company shall cash collateralize any outstanding Letter
of Credit on terms reasonably satisfactory to the Administrative
Agent.
(g) Existing Empress Bonds Remain Outstanding. If Existing
Empress Bonds in an aggregate amount of at least $25 million but
no more than $75 million remain outstanding 60 days after the
Empress Joliet Acquisition Date, the Revolving Loan Commitments
shall be immediately and permanently reduced by the aggregate
amount of Existing Empress Bonds outstanding.
(h) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Company shall from time to time prepay
first the Swing Line Loans and second the Revolving Loans to the
extent necessary so that the Total Utilization of Revolving Loan
Commitments shall not at any time exceed the Revolving Loan
Commitments then in effect.
(iv) Application of Prepayments and Unscheduled Reductions of
Commitments.
(a) Application of Voluntary Prepayments by Type of Loans
and Order of Maturity. Any voluntary prepayments pursuant to
subsection 2.4C(i)
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shall be applied as specified by Company in the applicable notice
of prepayment; provided that in the event Company fails to specify
the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding Swing Line
Loans to the full extent thereof, second to repay outstanding
Tranche B Term Loans to the full extent thereof and third to repay
outstanding Revolving Loans to the full extent thereof. Any
voluntary prepayments of the Tranche B Term Loans pursuant to
subsection 2.4C(i) (whether the application thereof is specified
by Company or not) shall be applied to prepay the Tranche B Term
Loans on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) and to reduce the scheduled
installments of principal of the Tranche B Term Loans set forth in
subsection 2.4A on a pro rata basis.
(b) Application of Mandatory Prepayments by Type of Loans.
Any amount (the "APPLIED AMOUNT") required to be applied as a
mandatory prepayment of the Loans and/or a reduction of the
Revolving Loan Commitments pursuant to subsections
2.4C(iii)(a)-(h) shall be applied first to prepay the Tranche B
Term Loans to the full extent thereof, second, to the extent of
any remaining portion of the Applied Amount, to prepay the Swing
Line Loans to the full extent thereof and to permanently reduce
the Revolving Loan Commitments by the amount of such prepayment
and third, to the extent of any remaining portion of the Applied
Amount, to prepay the Revolving Loans to the full extent thereof
and to further permanently reduce the Revolving Loan Commitments
by the amount of such prepayment; provided that Company may elect
in writing to offer the Lenders with Tranche B Term Loans
outstanding the opportunity to waive such right to receive the
amount of such mandatory prepayment, and if any Lender so elects,
50% of the amount that would otherwise have been applied as a
mandatory repayment of such Lender's Tranche B Term Loan shall be
applied to the prepayment of the outstanding principal amount
under, and a reduction in, the Revolving Loan Commitments and the
remaining 50% shall be retained by Company.
(c) Application of Mandatory Prepayments of Tranche B Term
Loans and the Scheduled Installments of Principal Thereof. Any
mandatory prepayments of the Tranche B Term Loans pursuant to
subsection 2.4C(iii) shall be applied on a pro rata basis (in
accordance with the respective outstanding principal amounts
thereof) and to reduce the scheduled installments of principal of
the Tranche B Term Loans set forth in subsection 2.4A on a pro
rata basis.
(d) Application of Prepayments to Base Rate Loans and
Adjusted Eurodollar Rate Loans. Considering Tranche B Term Loans
and Revolving Loans being prepaid separately, any prepayment
thereof shall be applied first to Base Rate Loans to the full
extent thereof before application to Adjusted Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any
payments required to be made by Company pursuant to subsection
2.6D.
(e) Application of Unscheduled Reductions of Revolving Loan
Commitments. Any voluntary reduction of the Revolving Loan
Commitments
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pursuant to subsection 2.4C(ii) shall be applied to reduce the
scheduled reductions of the Revolving Loan Commitments set forth
in subsection 2.4B in forward chronological order. Any mandatory
reduction of Revolving Loan Commitments pursuant to subsection
2.4C(iii) shall be applied on a pro rata basis (in accordance with
the respective outstanding principal amounts thereof) to each
scheduled reduction of the Revolving Loan Commitments set forth in
subsection 2.4B that is remaining at the time of such mandatory
reduction.
D. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 Noon (New York City time) on
the date due at the Funding and Payment Office for the account of
Lenders; funds received by Administrative Agent after that time on such
due date shall be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes Administrative Agent
to charge its accounts with Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal, interest,
fees and expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the
payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Tranche B Term Loans and Revolving Loans shall be
apportioned among all outstanding Loans to which such payments relate, in
each case proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each Lender, at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request, its Pro
Rata Share of all such payments received by Administrative Agent and the
commitment fees of such Lender when received by Administrative Agent
pursuant to subsection 2.3. Notwithstanding the foregoing provisions of
this subsection 2.4D(iii), if, pursuant to the provisions of subsection
2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes Base Rate Loans in lieu
of its Pro Rata Share of any Adjusted Eurodollar Rate Loans,
Administrative Agent shall give effect thereto in apportioning payments
received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest, the commitment fees or Letter of Credit fees hereunder, as the
case may be.
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(v) Notation of Payment. Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of
any Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
E. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
SUBSIDIARY GUARANTY
(i) Application of Proceeds of Collateral. Except as provided
in subsection 2.4C(iii)(a) with respect to prepayments from Net Asset
Sale Proceeds, all proceeds received by Administrative Agent in respect
of any sale of, collection from, or other realization upon all or any
part of the Collateral under any Collateral Document may, in the
discretion of Administrative Agent, be held by Administrative Agent as
Collateral for, and/or (then or at any time thereafter) applied in full
or in part by Administrative Agent against, the applicable Secured
Obligations (as defined in such Collateral Document) in the following
order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation
to Administrative Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, and all amounts for
which Administrative Agent is entitled to indemnification under
such Collateral Document and all advances made by Administrative
Agent thereunder for the account of the applicable Loan Party, and
to the payment of all costs and expenses paid or incurred by
Administrative Agent in connection with the exercise of any right
or remedy under such Collateral Document, all in accordance with
the terms of this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds,
to the payment of all other such Secured Obligations for the
ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds,
to the payment to or upon the order of such Loan Party or to
whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
(ii) Application of Payments Under Subsidiary Guaranty. All
payments received by Administrative Agent under any of the Subsidiary
Guaranty shall be applied promptly from time to time by Administrative
Agent in the following order of priority:
(a) to the payment of the costs and expenses of any
collection or other realization under the Subsidiary Guaranty,
including reasonable compensation to Administrative Agent and its
agents and counsel, and all expenses, liabilities and
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advances made or incurred by Administrative Agent in connection
therewith, all in accordance with the terms of this Agreement and
such Guaranty;
(b) thereafter, to the extent of any excess such payments,
to the payment of all other Guarantied Obligations (as defined in
such Guaranty) for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such payments,
to the payment to the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. TRANCHE B TERM LOANS. The proceeds of the Tranche B Term Loans,
together with the proceeds of the New Sub Debt, shall be applied by Company to
finance the Empress Acquisition, to refinance the Existing Horseshoe Credit
Agreement and to pay Transaction Costs.
B. REVOLVING LOANS; SWING LINE LOANS. In addition to the purposes
set forth in 2.5A, the proceeds of the Revolving Loans and any Swing Line Loans
shall be applied by Company to repurchase the Existing Empress Bonds and for
general corporate purposes.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING ADJUSTED EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Adjusted
Eurodollar Rate Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Adjusted Eurodollar Rate Loans for which an interest rate is
then being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Adjusted Eurodollar Rate Loans, that by
reason of circumstances affecting the London interbank market adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to
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Company and each Lender of such determination, whereupon (i) no Loans may be
made as, or converted to, Adjusted Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF ADJUSTED EURODOLLAR RATE
LOANS. In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative
Agent) that the making, maintaining or continuation of its Adjusted Eurodollar
Rate Loans (i) has become unlawful as a result of compliance by such Lender in
good faith with any law, treaty, governmental rule, regulation, guideline or
order (or would conflict with any such treaty, governmental rule, regulation,
guideline or order not having the force of law even though the failure to
comply therewith would not be unlawful) or (ii) has become impracticable, or
would cause such Lender material hardship, as a result of contingencies
occurring after the date of this Agreement which materially and adversely
affect the London interbank market or the position of such Lender in that
market, then, and in any such event, such Lender shall be an "AFFECTED LENDER"
and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Company and Administrative Agent of such determination
(which notice Administrative Agent shall promptly transmit to each other
Lender). Thereafter (a) the obligation of the Affected Lender to make Loans as,
or to convert Loans to, Adjusted Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to an Adjusted Eurodollar Rate
Loan then being requested by Company pursuant to a Notice of Borrowing or a
Notice of Conversion/Continuation, the Affected Lender shall make such Loan as
(or convert such Loan to, as the case may be) a Base Rate Loan, (c) the
Affected Lender's obligation to maintain its outstanding Adjusted Eurodollar
Rate Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur
of the expiration of the Interest Period then in effect with respect to the
Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to an Adjusted Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Administrative Agent of such rescission
on the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to make or maintain Loans as, or to
convert Loans to, Adjusted Eurodollar Rate Loans in accordance with the terms
of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its Adjusted
Eurodollar Rate Loans and any loss, expense or liability sustained by that
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Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Adjusted Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Adjusted Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment (including any prepayment pursuant to subsection 2.4C(i))
or other principal payment or any conversion of any of its Adjusted Eurodollar
Rate Loans occurs on a date prior to the last day of an Interest Period
applicable to that Loan, (iii) if any prepayment of any of its Adjusted
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Adjusted Eurodollar Rate Loans when required by
the terms of this Agreement.
E. BOOKING OF ADJUSTED EURODOLLAR RATE LOANS. Any Lender may make,
carry or transfer Adjusted Eurodollar Rate Loans at, to, or for the account of
any of its branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF ADJUSTED EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Adjusted Eurodollar Rate Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i)
of the definition of Adjusted Eurodollar Rate in an amount equal to the amount
of such Adjusted Eurodollar Rate Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America; provided, however, that each Lender may fund each
of its Adjusted Eurodollar Rate Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this subsection 2.6 and under subsection 2.7A.
G. ADJUSTED EURODOLLAR RATE LOANS AFTER DEFAULT. After the
occurrence of and during the continuation of a Potential Event of Default or an
Event of Default, (i) Company may not elect to have a Loan be made or maintained
as, or converted to, an Adjusted Eurodollar Rate Loan after the expiration of
any Interest Period then in effect for that Loan and (ii) subject to the
provisions of subsection 2.6D, any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to a requested borrowing
or conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (including any Issuing
Lender) shall determine (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) that any law, treaty
or governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
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central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Lender (or its applicable lending office or
letter of credit office) to any additional Tax (other than any Tax on the
overall net income of such Lender and franchise taxes in lieu of such Tax
on income) with respect to this Agreement or any of its obligations
hereunder (including issuing or maintaining Letters of Credit or
purchasing or maintaining participations therein) or any payments to such
Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account
of, or advances or loans by, or Letters of Credit issued by, or
participations therein purchased by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender (other than any
such reserve or other requirements with respect to Adjusted Eurodollar
Rate Loans that are reflected in the definition of Adjusted Eurodollar
Rate); or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable lending or
letter of credit office) or its obligations hereunder or the London
interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder, agreeing to issue,
issuing or maintaining any Letter of Credit or agreeing to purchase, purchasing
or maintaining any participations therein or to reduce any amount received or
receivable by such Lender (or its applicable lending or letter of credit office)
with respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased fee or rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to reasonably compensate
such Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender and franchise taxes in lieu of such Tax
on income) imposed, levied, collected, withheld or assessed by or within
the United States of America or any political subdivision in or of the
United States of America or any other jurisdiction from or to which a
payment is made by or on behalf of
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Company or by any federation or organization of which the United States
of America or any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative Agent
or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as
Company becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Company) for its own account or (if
that liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of Administrative
Agent or such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making
of that deduction, withholding or payment, Administrative Agent or
such Lender, as the case may be, receives on the due date a net
sum equal to what it would have received had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within
30 days after the due date of payment of any Tax which it is
required by clause (b) above to pay, Company shall deliver to
Administrative Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature
pages hereof) or after the date of the Assignment Agreement pursuant to
which such Lender became a Lender (in the case of each other Lender) in
any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of this
Agreement or at the date of such Assignment Agreement, as the case may
be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to Administrative
Agent for transmission to Company, on or prior to the Initial
Funding Date (in the case of each Lender listed on the signature
pages hereof) or on or prior to the date of the Assignment
Agreement pursuant to which it becomes
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a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms), properly completed and
duly executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue Code
or the regulations issued thereunder to establish that such Lender
is not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of
the Loan Documents or (2) if such Lender is not a "bank" or other
Person described in Section 881(c)(3) of the Internal Revenue Code
and cannot deliver either Internal Revenue Service Form 1001 or
4224 pursuant to clause (1) above, a Certificate re Non-Bank
Status together with two original copies of Internal Revenue
Service Form W-8 (or any successor form), properly completed and
duly executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue Code
or the regulations issued thereunder to establish that such Lender
is not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender of
interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates
or other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence, whenever a
lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any
material respect, that such Lender shall promptly (1) deliver to
Administrative Agent for transmission to Company two new original
copies of Internal Revenue Service Form 1001 or 4224, or a
Certificate re Non-Bank Status and two original copies of Internal
Revenue Service Form W-8, as the case may be, properly completed
and duly executed by such Lender, together with any other
certificate or statement of exemption required in order to confirm
or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Company of its inability to deliver any
such forms, certificates or other evidence.
(c) Company shall not be required to pay any additional
amount to any Non-US Lender under clause (c) of subsection
2.7B(ii) if such Lender shall have failed to satisfy the
requirements of clause (a) or (b)(1) of this subsection 2.7B(iii);
provided that if such Lender shall have satisfied the requirements
of subsection 2.7B(iii)(a) on the Initial Funding Date (in the
case of each Lender listed on the signature pages hereof) or on
the date of the Assignment Agreement pursuant to which it became a
Lender (in the case of each other Lender), nothing in this
subsection 2.7B(iii)(c) shall relieve Company of its obligation to
pay any additional amounts pursuant to clause (c) of subsection
2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or
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application thereof, such Lender is no longer properly entitled to
deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE; REPLACEMENT OF
LENDER.
A. MITIGATION. Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or Issuing Lender
responsible for administering the Loans or Letters of Credit of such Lender or
Issuing Lender, as the case may be, becomes aware of the occurrence of an event
or the existence of a condition that would cause such Lender to become an
Affected Lender or that would entitle such Lender or Issuing Lender to receive
payments under subsection 2.7, it will, to the extent not inconsistent with the
internal policies of such Lender or Issuing Lender and any applicable legal or
regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or the affected Loans or Letters of
Credit of such Lender or Issuing Lender through another lending or letter of
credit office of such Lender or Issuing Lender, or (ii) take such other measures
as such Lender or Issuing Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender or Issuing Lender pursuant to subsection 2.7 would be materially
reduced and if, as determined by such Lender or Issuing Lender in its sole
discretion, the making, issuing, funding or maintaining of such Commitments or
Loans or Letters of Credit through such other lending or letter of credit office
or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all
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incremental expenses incurred by such Lender or Issuing Lender as a result of
utilizing such other lending or letter of credit office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this subsection 2.8 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender or Issuing Lender to
Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
B. REPLACEMENT OF LENDER. If Company receives a notice pursuant to
subsection 2.7A, 2.7C or 3.6, Company shall have the right, if no Potential
Event of Default or Event of Default then exists, to replace such Lender (a
"REPLACED LENDER") with one or more Eligible Assignees (collectively, the
"REPLACEMENT LENDER") acceptable to Agents; provided that (i) at the time of any
replacement pursuant to this subsection 2.8B, the Replacement Lender shall enter
into one or more Assignment Agreements pursuant to subsection 10.1B (and with
all fees payable pursuant to such subsection 10.1B to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
outstanding Loans and Commitments of, and in each case participations in Letters
of Credit and Swing Line Loans 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 (A) an amount equal to the principal of all outstanding
Loans of the Replaced Lender and (B) an amount equal to all unpaid drawings with
respect to Letters of Credit that have been funded by (and not reimbursed to)
such Replaced Lender, (y) the appropriate Issuing Lender an amount equal to such
Replaced Lender's Pro Rata Share of any unpaid drawings with respect to Letters
of Credit (which at such time remains an unpaid drawing) issued by it to the
extent such amount was not theretofore funded by such Replaced Lender, and (z)
Swing Line Lender an amount equal to such Replaced Lender's Pro Rata Share of
any Refunded Swing Line Loans to the extent such amount was not theretofore
funded by such Replaced Lender, and (ii) all obligations (including, without
limitation, all such amounts, if any, owing under subsection 2.6D) of Company
owing to the Replaced Lender (other 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. All accrued but unpaid interest, commitment
fees and letter of credit fees and other amounts payable to the Replaced Lender
shall be paid in accordance with the terms set forth in the respective
Assignment Agreement. Upon the execution and delivery of the respective
Assignment Agreements, the payment of amounts referred to in clauses (i) and
(ii) above and delivery to the Replacement Lender of the appropriate Note or
Notes executed by Company, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder
except with respect to indemnification and confidentiality provisions under this
Agreement which by the terms of this Agreement survive the termination of this
Agreement, which indemnification and confidentiality provisions shall survive as
to such Replaced Lender. Notwithstanding anything to the contrary contained
above, no Issuing Lender may be replaced hereunder at any time while it has
Letters of Credit outstanding hereunder unless arrangements satisfactory to such
Issuing Lender (including the furnishing of a Standby Letter of Credit in form
and substance, and issued by an issuer, satisfactory to such Issuing Lender or
the furnishing of cash collateral in amounts and pursuant to arrangements
satisfactory to such Issuing Lender or the cancellation and return of such
outstanding Letter of Credit) have been made with respect to such outstanding
Letters of Credit.
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SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS .
A. LETTERS OF CREDIT. In addition to Company requesting that
Revolving Lenders make Revolving Loans pursuant to subsection 2.1A(ii), Company
may request, in accordance with the provisions of this subsection 3.1, from time
to time during the period from the Initial Funding Date to but excluding the
Revolving Loan Commitment Termination Date, that one or more Revolving Lenders
issue Letters of Credit for the account of Company for the purposes specified in
the definition of Standby Letters of Credit. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of
Company herein set forth, any one or more Revolving Lenders may, but (except as
provided in subsection 3.1B(ii)) shall not be obligated to, issue such Letters
of Credit in accordance with the provisions of this subsection 3.1; provided
that Company shall not request that any Revolving Lender issue, and no Revolving
Lender shall issue:
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $20,000,000; or
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) the Revolving Loan Commitment Termination Date
and (b) the date that is one year from the date of issuance of such
Standby Letter of Credit; provided that the immediately preceding clause
(b) shall not prevent any Issuing Lender from agreeing that a Standby
Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each unless such Issuing Lender
elects not to extend for any such additional period; and provided,
further that such Issuing Lender shall elect not to extend such Standby
Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time such Issuing Lender must elect whether or
not to allow such extension.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
annexed hereto no later than 12:00 Noon (New York City time) at least
three Business Days, or such shorter period as may be agreed to by the
Issuing Lender in any particular instance, in advance of the proposed
date of issuance. The Notice of Issuance of Letter of Credit shall
specify (a) the proposed date of issuance (which shall be a Business
Day), (b) the face amount of the Letter of Credit, (c) the expiration
date of the Letter of Credit, (d) the name and address of the
beneficiary, and (e) either the verbatim text of the proposed Letter of
Credit or the proposed terms and conditions thereof, including a precise
description of any documents to be presented by the beneficiary which, if
presented by the beneficiary in substantial compliance with such terms
and conditions and on or before the expiration date of the Letter of
Credit, would
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require the Issuing Lender to make payment under the Letter of Credit;
provided that the Issuing Lender, in its reasonable discretion, may
require changes in the text of the proposed Letter of Credit or any such
documents; and provided, further that no Letter of Credit shall require
payment against a conforming draft to be made thereunder on the same
business day (under the laws of the jurisdiction in which the office of
the Issuing Lender to which such draft is required to be presented is
located) that such draft is presented if such presentation is made after
10:00 A.M. (in the time zone of such office of the Issuing Lender) on
such business day.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing Lender)
prior to the issuance of any Letter of Credit in the event that any of
the matters to which Company is required to certify in the applicable
Notice of Issuance of Letter of Credit is no longer true and correct as
of the proposed date of issuance of such Letter of Credit, and upon the
issuance of any Letter of Credit Company shall be deemed to have
re-certified, as of the date of such issuance, as to the matters to which
Company is required to certify in the applicable Notice of Issuance of
Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit pursuant
to subsection 3.1B(i) requesting the issuance of a Letter of Credit, in
the event Administrative Agent elects to issue such Letter of Credit,
Administrative Agent shall promptly so notify Company, and Administrative
Agent shall be the Issuing Lender with respect thereto. In the event that
Administrative Agent, in its sole discretion, elects not to issue such
Letter of Credit, Administrative Agent shall promptly so notify Company,
whereupon Company may request any other Revolving Lender to issue such
Letter of Credit by delivering to such Revolving Lender a copy of the
applicable Notice of Issuance of Letter of Credit. Any Revolving Lender
so requested to issue such Letter of Credit shall promptly (but in any
event within three Business Days) notify Company and Administrative Agent
whether or not, in its sole discretion, it has elected to issue such
Letter of Credit, and any such Lender which so elects to issue such
Letter of Credit shall be the Issuing Lender with respect thereto. In the
event that all other Revolving Lenders do not agree to issue such Letter
of Credit within three Business Days following delivery of the Notice of
Issuance of Letter of Credit, notwithstanding the prior election of
Administrative Agent not to issue such Letter of Credit, Administrative
Agent shall be obligated to issue such Letter of Credit and shall be the
Issuing Lender with respect thereto, notwithstanding the fact that the
Letter of Credit Usage with respect to such Letter of Credit and with
respect to all other Letters of Credit issued by Administrative Agent,
when aggregated with Administrative Agent's outstanding Revolving Loans
and Swing Line Loans, may exceed Administrative Agent's Revolving Loan
Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set forth in
subsection 4.4, the Issuing Lender shall issue the requested Letter of
Credit in accordance with the Issuing Lender's standard operating
procedures.
(iv) Notification to Revolving Lenders. Upon the issuance of any
Letter of Credit, the applicable Issuing Lender shall promptly notify
Administrative Agent and
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each other Revolving Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after receipt of
such notice (or, if Administrative Agent is the Issuing Lender, together
with such notice), Administrative Agent shall notify each Revolving
Lender of the amount of such Lender's respective participation in such
Letter of Credit, determined in accordance with subsection 3.1C.
C. REVOLVING LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender's Pro Rata Share of the
maximum amount which is or at any time may become available to be drawn
thereunder.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own
account, equal to 0.125% per annum of the daily amount available to be
drawn under such Standby Letter of Credit and (b) a letter of credit fee,
payable to Administrative Agent for the account of Revolving Lenders
(based upon their respective Pro Rata Shares), equal to (x) Revolving
Loan Applicable Adjusted Eurodollar Rate Margin set forth in subsection
2.2A hereof for multiplied by (y) the daily amount available from time to
time to be drawn under such Standby Letter of Credit, each such fronting
fee or letter of credit fee to be payable in arrears on the Initial
Funding Date and thereafter in arrears on and to (but excluding) the last
day of March, June, September and December of each year and computed on
the basis of a 360-day year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) above), documentary and
processing charges payable directly to the applicable Issuing Lender for
its own account in accordance with such Issuing Lender's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) of this
subsection 3.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination. Promptly upon receipt by Administrative Agent of any amount
described in clauses (i)(b) of this subsection 3.2, Administrative Agent shall
distribute to each Revolving Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit
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with reasonable care so as to ascertain whether they appear on their face to be
substantially in accordance with the terms and conditions of such Letter of
Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
In the event an Issuing Lender has determined to honor a drawing under a Letter
of Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars and in same day funds
equal to the amount of such honored drawing; provided that, anything contained
in this Agreement to the contrary notwithstanding, (i) unless Company shall have
notified Administrative Agent and such Issuing Lender prior to 10:00 A.M. (New
York City time) on the date such drawing is honored that Company intends to
reimburse such Issuing Lender for the amount of such honored drawing with funds
other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders to
make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an
amount in Dollars equal to the amount of such honored drawing and (ii) subject
to satisfaction or waiver of the conditions specified in subsection 4.3B,
Revolving Lenders shall, on the Reimbursement Date, make Revolving Loans that
are Base Rate Loans in the amount of such honored drawing, the proceeds of which
shall be applied directly by Administrative Agent to reimburse such Issuing
Lender for the amount of such honored drawing; and provided, further that if for
any reason proceeds of Revolving Loans are not received by such Issuing Lender
on the Reimbursement Date in an amount equal to the amount of such honored
drawing, Company shall reimburse such Issuing Lender, on demand, in an amount in
same day funds equal to the excess of the amount of such honored drawing over
the aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Revolving Lender
from its obligation to make Revolving Loans on the terms and conditions set
forth in this Agreement, and Company shall retain any and all rights it may have
against any Revolving Lender resulting from the failure of such Lender to make
such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY REVOLVING LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER
LETTERS OF CREDIT.
(i) Payment by Revolving Lenders. In the event that Company shall
fail for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any drawing honored
by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall promptly notify each other Revolving Lender of the
unreimbursed amount of such honored drawing and of such other Revolving
Lender's respective participation therein based on such Revolving
Lender's Pro Rata Share. Each Revolving Lender shall make available to
such Issuing Lender an amount equal to its respective participation, in
Dollars and in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 12:00 Noon (New York City time)
on the first business day (under the laws of the jurisdiction in which
such office of such Issuing Lender is located) after the date notified by
such Issuing Lender. In the event that any Revolving Lender fails to make
available to such Issuing Lender on such business day the amount of such
Revolving Lender's participation in such Letter of Credit as provided in
this subsection 3.3C, such Issuing Lender shall be entitled to recover
such amount on demand from such Revolving Lender together with interest
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thereon at the Federal Funds Effective Rate for three Business Days and
thereafter at the Base Rate. Nothing in this subsection 3.3C shall be
deemed to prejudice the right of any Revolving Lender to recover from any
Issuing Lender any amounts made available by such Revolving Lender to
such Issuing Lender pursuant to this subsection 3.3C in the event that it
is determined by the final judgment of a court of competent jurisdiction
that the payment with respect to a Letter of Credit by such Issuing
Lender in respect of which payment was made by such Revolving Lender
constituted gross negligence or willful misconduct on the part of such
Issuing Lender.
(ii) Distribution to Revolving Lenders of Reimbursements Received
From Company. In the event any Issuing Lender shall have been reimbursed
by other Revolving Lenders pursuant to subsection 3.3C(i) for all or any
portion of any drawing honored by such Issuing Lender under a Letter of
Credit issued by it, such Issuing Lender shall distribute to each other
Revolving Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing such other
Revolving Lender's Pro Rata Share of all payments subsequently received
by such Issuing Lender from Company in reimbursement of such honored
drawing when such payments are received. Any such distribution shall be
made to a Revolving Lender at its primary address set forth below its
name on the appropriate signature page hereof or at such other address as
such Revolving Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay to each
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender
in respect of each such honored drawing from the date such drawing is
honored to but excluding the date such amount is reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B) at a rate equal to (a) for the period from
the date such drawing is honored to but excluding the Reimbursement Date,
the rate then in effect under this Agreement with respect to Revolving
Loans that are Base Rate Loans and (b) thereafter, a rate which is 2% per
annum in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be computed on
the basis of a 360-day year for the actual number of days elapsed in the
period during which it accrues and shall be payable on demand or, if no
demand is made, on the date on which the related drawing under a Letter
of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each
other Revolving Lender, out of the interest received by such Issuing
Lender in respect of the period from the date such drawing is honored to
but excluding the date on which such Issuing Lender is reimbursed for the
amount of such drawing (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that
such other Revolving Lender would have been entitled to receive in
respect of the letter of credit fee that would have been payable in
respect of such Letter of Credit for such period pursuant to subsection
3.2 if no
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drawing had been honored under such Letter of Credit, and (b) in the
event such Issuing Lender shall have been reimbursed by other Revolving
Lenders pursuant to subsection 3.3C(i) for all or any portion of such
honored drawing, such Issuing Lender shall distribute to each other
Revolving Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing such other
Revolving Lender's Pro Rata Share of any interest received by such
Issuing Lender in respect of that portion of such honored drawing so
reimbursed by other Revolving Lenders for the period from the date on
which such Issuing Lender was so reimbursed by other Revolving Lenders to
but excluding the date on which such portion of such honored drawing is
reimbursed by Company. Any such distribution shall be made to a Revolving
Lender at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Revolving Lender
may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Revolving Lenders pursuant to subsection 3.3B and the
obligations of Revolving Lenders under subsection 3.3C(i) shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Revolving Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for
whom any such transferee may be acting), any Issuing Lender or other
Lender or any other Person or, in the case of a Lender, against Company,
whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between Company or one of its Subsidiaries and the beneficiary for which
any Letter of Credit was procured);
(iii) any draft or 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) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(v) any breach of this Agreement or any other Loan Document by any
party thereto;
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or
(vii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
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provided, in each case, that payment by the applicable Issuing Lender
under the applicable Letter of Credit shall not have constituted gross
negligence or willful misconduct of such Issuing Lender under the
circumstances in question (as determined by a final judgment of a court
of competent jurisdiction); provided, further that reimbursement of an
Issuing Lender by Company does not constitute an acknowledgement by
Company that the actions of such Issuing Lender did not constitute gross
negligence or willful misconduct.
3.5 NATURE OF ISSUING LENDERS' DUTIES.
As between Company and any Issuing Lender, Company assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit issued by
such Issuing Lender by, the respective beneficiaries of such Letters of Credit.
In furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority, and none of the above shall affect
or impair, or prevent the vesting of, any of such Issuing Lender's rights or
powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
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SECTION 4. CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND TO LOANS AND
LETTERS OF CREDIT
The effectiveness of this Agreement and obligations of Lenders to
make Loans and the issuance of Letters of Credit hereunder are subject to the
satisfaction of the following conditions.
4.1 CONDITIONS TO EFFECTIVENESS OF AGREEMENT.
The effectiveness of this Agreement is subject to prior or
concurrent satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Signing Date, Company shall
deliver to Lenders (or to Agents for Lenders with sufficient originally executed
copies, where appropriate, for each Lender and its counsel) the following with
respect to Company each, unless otherwise noted, dated the Signing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of Company, together with a good standing certificate from
the Secretary of State of its jurisdiction of incorporation and each
other state in which Company is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each dated a recent date prior to the Signing Date;
(ii) Copies of the Bylaws of Company, certified as of the Signing
Date by Company's corporate secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors of Company approving
and authorizing the execution, delivery and performance of the Credit
Agreement, certified as of the Signing Date by the corporate secretary or
an assistant secretary of Company as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
Company executing the Credit Agreement;
(v) Executed originals of the Credit Agreement; and
(vi) Such other documents as Agents may reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since December 31, 1998, no Material
Adverse Effect shall have occurred.
C. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their respective
counsel shall have received originally executed copies of one or more favorable
written opinions of Swidler Berlin Shereff Friedman, LLP, special counsel for
Loan Parties, in form and substance reasonably satisfactory to Agents and their
counsel, dated as of the Signing Date and setting forth substantially the
matters in the opinions designated in Exhibit VIII annexed hereto and as to such
other matters as Agents acting on behalf of Lenders may reasonably request.
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D. OPINIONS OF AGENTS' COUNSEL. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Agents, dated as of the Signing Date,
substantially in the form of Exhibit X annexed hereto and as to such other
matters as Agents acting on behalf of Lenders may reasonably request.
E. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Agents an Officer's Certificate, in form and substance
satisfactory to Agents, to the effect that the representations and warranties in
Section 5 hereof are true, correct and complete in all material respects on and
as of the Signing Date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that Company shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall be
performed or satisfied by it on or before the Signing Date except as otherwise
disclosed to and agreed to in writing by Agents.
F. FINANCIAL STATEMENTS. Lenders shall have received unaudited
financial statements of Horseshoe and its Subsidiaries and Empress and its
Subsidiaries for the year-to-date through April 30, 1999 and for the
year-to-date through April 30, 1998.
G. FEES. The Lenders, the Arrangers and the Agents shall have
received all fees and expenses required by that certain Fee Letter dated April
23, 1999 among Horseshoe, Company, Agents and Arrangers to be paid on or before
the Signing Date.
H. CONFIRMATION OF EFFECTIVENESS CERTIFICATE. A certificate shall
have been executed and delivered by Company and the Agents in the form of
Exhibit XVII hereto in which Company certifies that (i) the New Sub Debt was
issued on May 11, 1999, (ii) all of the Former Senior Horseshoe Bonds have been
repaid or defeased and (iii) at least 90% of the membership interests in
Horseshoe are held by Company and in which the Agents confirm that, based upon
the representations made and the documents delivered on the Signing Date, all
conditions to effectiveness of this Agreement have been satisfied or waived.
4.2 CONDITIONS TO TRANCHE B TERM LOANS AND INITIAL REVOLVING LOANS AND SWING
LINE LOANS.
The obligations of Lenders to make the Tranche B Term Loans and
any Revolving Loans and Swing Line Loans to be made on the Initial Funding Date
and, if Empress Hammond and Empress Illinois are acquired in separate
transactions, on the Empress Joliet Acquisition Date, are, in addition to the
conditions precedent specified in subsection 4.3, subject to prior or concurrent
satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Initial Funding Date,
Company shall and/or shall cause each other Loan Party (to the extent such Loan
Party is delivering Loan Documents or Collateral Documents on the Initial
Funding Date) to, deliver to Lenders (or to Agents for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following with respect to Company or such Loan Party, as the case may be,
each, unless otherwise noted, dated the Initial Funding Date; provided that
documents relating to Empress Joliet need not be delivered until the Empress
Joliet Acquisition Date:
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(i) Certified copies of the Certificate or Articles of
Incorporation of such Person, together with a good standing certificate
from the Secretary of State of its jurisdiction of incorporation and each
other state in which such Person is qualified as a foreign corporation to
do business and, to the extent generally available, a certificate or
other evidence of good standing as to payment of any applicable franchise
or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each dated a recent date prior to the Initial Funding
Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Initial Funding Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, certified as of the Initial
Funding Date by the corporate secretary or an assistant secretary of such
Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such Person
is a party (to the extent such Loan Documents were not delivered on the
Signing Date); and
(vi) Such other documents as Agents may reasonably request.
B. CONSUMMATION OF EMPRESS ACQUISITION.
(i) All conditions to the Empress Acquisition (or the acquisition
of Empress Hammond or Empress Joliet, as applicable) to be satisfied by
Company and its affiliates, as Buyers, which conditions are all set forth
in Article VII and Section 9.03 of the Empress Acquisition Agreement,
shall have been satisfied in all material respects or the fulfillment of
any such conditions shall have been waived by Sellers with the consent of
Agents; provided that conditions relating to Empress Joliet need not be
satisfied until the Empress Joliet Acquisition Date;
(ii) The Empress Acquisition or the acquisition of Empress Hammond
shall have been consummated substantially in accordance with the terms of
the Empress Acquisition Agreement or as such agreement may be amended
with the consent of Agents by no later than December 1, 1999;
(iii) If Empress Hammond is acquired prior to Empress Joliet, on
the date each such acquisition is consummated, after giving effect to
such acquisition, the Consolidated Leverage Ratio must not exceed 4.7:1.0
and the ratio of the principal amount of the Loans outstanding to
Consolidated EBITDA must not exceed 2.0:1.0, in each case calculated on a
pro forma basis giving effect to such acquisition as though it had been
consummated on the first day of the four Fiscal Quarter period most
recently concluded and the incurrence of all Indebtedness used to finance
such acquisition;
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(iv) Transaction Costs shall not exceed an aggregate amount
reasonably satisfactory to Arrangers;
(v) Company and its Subsidiaries must have at least $40,000,000 of
Cash and Cash Equivalents and have outstanding an unused portion of the
Revolving Commitment on the Initial Funding Date and, if different, the
Empress Joliet Acquisition Date, equal to or greater than $35,000,000;
(vi) If only Empress Hammond is acquired on the Initial Funding
Date, Empress shall have irrevocably offered to purchase all of the
outstanding Existing Empress Bonds pursuant to section 10.13 of the
Existing Empress Indenture.
(vii) Each Arranger, Agent and Lender shall have received an
Officer's Certificate of Company to the effect set forth in clauses
(i)-(iii), (v) and, if applicable, (vi) above.
C. OWNERSHIP OF HORSESHOE. As of the Initial Funding Date, the Agents
shall have received satisfactory evidence that Company owns 100% of the
membership interests in Horseshoe.
D. NO MATERIAL ADVERSE EFFECT. Since December 31, 1998, no Material
Adverse Effect shall have occurred.
E. MORTGAGES; MORTGAGE POLICIES; ETC. Administrative Agent shall have
received from Company and each applicable Subsidiary Guarantor; provided that
documents relating to Empress Joliet need not be delivered until the Empress
Joliet Acquisition Date:
(i) Mortgages. Fully executed and notarized Mortgages in proper
form for recording in all appropriate places in all applicable
jurisdictions, encumbering each Real Property Asset listed in Schedule
4.2E annexed hereto (each an "INITIAL FUNDING DATE MORTGAGED PROPERTY"
and, collectively, the "INITIAL FUNDING DATE MORTGAGED PROPERTIES");
(ii) Opinions of Local Counsel. An opinion of counsel (which
counsel shall be reasonably satisfactory to Agents) in each state in
which an Initial Funding Date Mortgaged Property is located with respect
to the enforceability of the form(s) of Mortgages to be recorded in such
state and such other matters as Agents may reasonably request, in each
case in form and substance reasonably satisfactory to Agents dated as of
the Initial Funding Date;
(iii) Title Insurance. As determined by Agents in their sole
discretion, (a) unconditional commitments for mortgagee title insurance
policies (the "INITIAL FUNDING DATE MORTGAGE POLICIES") issued by the
Title Company with respect to the Initial Funding Date Mortgaged
Properties in amounts not less than the respective amounts designated
therein with respect to any particular Initial Funding Date Mortgaged
Properties, insuring Administrative Agent that the applicable Mortgages
create valid and enforceable First Priority mortgage Liens on the
respective Initial Funding Date Mortgaged Properties encumbered thereby,
subject only to a standard survey exception, and such other exceptions
approved by Agents, which Initial Funding Date Mortgage
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Policies (1) shall include a lenders aggregation endorsement, an
endorsement for future advances under this Agreement and for any other
matters reasonably requested by Agents and (2) shall provide for
affirmative insurance and such reinsurance as Agents may reasonably
request, all of the foregoing in form and substance reasonably
satisfactory to Agents; and (b) evidence satisfactory to Agents that such
Loan Party has (i) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the issuance
of the Initial Funding Date Mortgage Policies and (ii) paid to the Title
Company or to the appropriate governmental authorities all expenses and
premiums of the Title Company in connection with the issuance of the
Initial Funding Date Mortgage Policies and all recording and stamp taxes
(including mortgage recording and intangible taxes) payable in connection
with recording the Mortgages in the appropriate real estate records;
(iv) Title Reports. With respect to each Initial Funding Date
Mortgaged Property, a title report issued by the Title Company with
respect thereto, dated not more than 30 days prior to the Initial Funding
Date and satisfactory in form and substance to Agents;
(v) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise
referred to in the Initial Funding Date Mortgage Policies or in the title
reports delivered pursuant to subsection 4.2E(iv);
(vi) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether the community in which any Initial
Funding Date Property is located is participating in the National Flood
Insurance Program, (b) such Loan Party's written acknowledgement of
receipt of written notification from Administrative Agent (1)
acknowledging that such Initial Funding Date Property is a Flood Hazard
Property and (2) as to whether the community in which each Initial
Funding Date Property is located is participating in the National Flood
Insurance Program, and (c) in the event any such Initial Funding Date
Property is located in a community that participates in the National
Flood Insurance Program, evidence that Company has obtained flood
insurance in respect of such Initial Funding Date Property to the extent
required under the applicable regulations of the Board of Governors of
the Federal Reserve System; and
(vii) Environmental Indemnity. An environmental indemnity
agreement, satisfactory in form and substance to Agents and their
counsel, with respect to the indemnification of Agents and Lenders for
any liabilities that may be imposed on or incurred by any of them as a
result of any Hazardous Materials Activity.
F. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the extent
not otherwise satisfied pursuant to subsection 4.2E, Agents shall have received
evidence satisfactory to each of them that Company and Subsidiary Guarantors
shall have taken or caused to be taken all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Agents, desirable in
order to create in favor of Administrative Agent, for the benefit of Lenders, a
valid and (upon such filing and recording)
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perfected First Priority security interest in the entire personal and mixed
property Collateral; provided that documents relating to Empress Joliet need not
be delivered until the Empress Joliet Acquisition Date. Such actions shall
include the following:
(i) Schedules to Collateral Documents. Delivery to Agents of
accurate and complete schedules to all of the applicable Collateral
Documents;
(ii) Stock Certificates and Instruments. Delivery to
Administrative Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Agents) representing
all capital stock pledged pursuant to the Security Agreement, and (b) all
promissory notes or other instruments (duly endorsed, where appropriate,
in a manner satisfactory to Agents) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery to
Agents of (a) the results of a recent search, by a Person satisfactory to
Agents, of all effective UCC financing statements and fixture filings and
all judgment and tax lien filings which may have been made with respect
to any personal or mixed property of any Loan Party, together with copies
of all such filings disclosed by such search, and (b) UCC termination
statements duly executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings in respect
of Liens permitted to remain outstanding pursuant to the terms of this
Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the opinion of
Agents, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents;
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
cover sheets or other documents or instruments required to be filed with
the PTO in order to create or perfect Liens in respect of any IP
Collateral;
(vi) Certificates of Title, Etc. Delivery to Administrative Agent
of certificates of title with respect to all motor vehicles and other
rolling stock of Loan Parties and the taking of all actions necessary to
cause Administrative Agent to be noted as lienholder thereon or otherwise
necessary to perfect the First Priority Lien granted to Administrative
Agent on behalf of Lenders in such rolling stock; and
(vii) Opinions of Local Counsel. Delivery to Agents of an opinion
of counsel (which counsel shall be reasonably satisfactory to Agents)
under the laws of each jurisdiction in which any Loan Party or any
personal or mixed property Collateral is located with respect to the
creation and perfection of the security interests in favor of
Administrative Agent in such Collateral and such other matters governed
by the laws of such jurisdiction regarding such security interests as
Agents may reasonably request, in
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each case in form and substance reasonably satisfactory to Agents dated
as of the Initial Funding Date.
G. SHIP MORTGAGES. Company shall have delivered, and have caused
Empress Hammond and, at the time it is acquired, Empress Joliet to deliver, the
Ship Mortgages.
H. EVIDENCE OF INSURANCE. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.
I. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of Swidler Berlin Shereff Friedman, LLP, special
counsel for Loan Parties, and local counsel in form and substance reasonably
satisfactory to Agents and their counsel, dated as of the Initial Funding Date
and setting forth substantially the matters in the opinions designated in
Exhibit IX annexed hereto and as to such other matters as Agents acting on
behalf of Lenders may reasonably request, and (ii) if Empress Joliet is acquired
subsequent to Empress Hammond, written opinion of Swidler Berlin Shereff
Friedman, LLP and local counsel in form and substance reasonably satisfactory to
Agents and dated as of the Empress Joliet Acquisition Date.
J. OPINIONS OF AGENTS' COUNSEL. Lenders shall have received (i)
originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Agents, dated as of the Initial Funding Date,
substantially in the form of Exhibit XI annexed hereto and as to such other
matters as Agents acting on behalf of Lenders may reasonably request and (ii) if
Empress Joliet is acquired subsequent to Empress Hammond, written opinion of
O'Melveny & Myers LLP in form and substance reasonably satisfactory to Agents
and dated as of the Empress Joliet Acquisition Date.
K. FEES. Company shall have paid to the Lenders, the Arrangers and
the Agents the fees and expenses payable on or before the Initial Funding Date
and, if different, the Empress Joliet Acquisition Date, including, but not
limited to, the fees referred to in Section 2.3.
L. SOLVENCY CERTIFICATE. Company shall have delivered to Arrangers
and Agents a Solvency Certificate dated the Initial Funding Date and, if
applicable, the Empress Joliet Acquisition Date.
M. ENVIRONMENTAL MATTERS. Arrangers and Agents shall have received
reports and other information in form, scope and substance reasonably
satisfactory to Arrangers and Agents regarding environmental matters related to
the Facilities.
N. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Agents an Officer's Certificate, in form and substance
satisfactory to Agents, to the effect that the representations and warranties in
Section 5 hereof are true, correct and complete in all material respects on and
as of the Initial Funding Date and, if applicable, the Empress Joliet
Acquisition Date to the same extent as though made on and as of that date (or,
to the extent such representations and warranties specifically relate to an
earlier date, that such representations and warranties were true, correct and
complete in all material respects on and as
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of such earlier date) and that Company shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before the Initial Funding
Date and, if different, the Empress Joliet Acquisition Date except as otherwise
disclosed to and agreed to in writing by Agents.
O. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Company shall have obtained all Governmental
Authorizations (including, without limitation, Governmental Authorizations from
Gaming Authorities, including Company obtaining gaming licenses from the states
of Indiana and, on or prior to the Empress Joliet Acquisition Date, Illinois and
all consents of other Persons, in each case that are necessary or advisable in
connection with all transactions contemplated by the Loan Documents and each of
the foregoing shall be in full force and effect, in each case other than those
the failure to obtain or maintain which, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
All applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Empress Acquisition and all other
transactions contemplated by the Loan Documents, and no law or regulation shall
be applicable which in the judgment of either Arrangers or either Agent could
have any such effect. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
P. FINANCIAL STATEMENTS. Lenders shall have received (i) unaudited
financial statements of Horseshoe and its Subsidiaries and Empress and its
Subsidiaries for the year-to-date through the last day of the month immediately
prior to the month most recently ended prior to the Initial Funding Date and the
Empress Joliet Acquisition Date and for the same periods during 1998 and (ii) a
consolidating pro-forma opening balance sheet of Company and its subsidiaries as
of the Initial Funding Date and the Empress Joliet Acquisition Date, giving
effect to the acquisition of Empress Hammond and/or Empress Joliet, as
applicable.
Q. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by each Agent,
acting on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Agents and such counsel, and Agents and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Agents may reasonably request.
R. LITIGATION. There shall exist no pending or threatened material
litigation, proceedings or investigations which (x) would contest the
consummation of the Empress Acquisition or any of the related transactions or
(y) could reasonably be expected to have a material adverse effect or change on
the condition (financial or otherwise), operations, assets, businesses,
properties, performance, licenses, approvals, regulatory outlook or prospects of
either Company or Empress or any of their respective subsidiaries or on the
facts and information as represented to date.
S. REPAYMENT OF EXISTING INDEBTEDNESS. As of the Initial Funding
Date, all Indebtedness under the Existing Credit Agreement and the Existing
Empress Credit Agreement shall have been repaid in full, all commitments
relating thereto shall have been terminated, and
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all liens or security interests related thereto shall have been terminated or
released, in each case on terms satisfactory to the Arrangers and the Agents.
After giving effect to the acquisition of Empress Hammond and/or Empress Joliet,
as applicable, and the related transactions contemplated thereby, Company,
Horseshoe, Empress Joliet and Empress Hammond and their respective subsidiaries
shall have no existing indebtedness outstanding other than (i) Existing
Subordinated Horseshoe Bonds in an aggregate principal amount not exceeding $160
million, (ii) Existing Empress Bonds, (iii) notes issued to former minority
investors in Horseshoe Entertainment L.P. and to former management of Horseshoe
as set forth in Schedule 7.1, (iv) notes issued to shareholders of Horseshoe, to
the extent permitted by subsection 7.1(vi) and (v) the New Sub Debt.
T. DEBT CAPACITY CERTIFICATE. Company shall have delivered to
Arrangers and Agents a Debt Capacity Certificate dated the Initial Funding Date
and, if applicable, the Empress Joliet Acquisition Date certifying that the
incurrence of all Indebtedness and Liens incurred on such date or dates shall
not contravene any Debt Restrictive Agreement.
U. APPRAISALS. The Agents shall have received copies of MAI
appraisals prepared in accordance with the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, addressed to the Agents, with respect to
each Gaming Facility, prepared by HVS International and in form, scope and
substance reasonably satisfactory to the Agents in all material respects, which
appraisals shall not have been withdrawn or modified.
V. THIRD PARTY CONSENTS. Company and its Subsidiaries shall have used
their best efforts to obtain, in form and substance satisfactory to Agents, all
consents required for Lenders to obtain a First Priority security interest in
Empress Hammond's interests in leases and licenses of real property and
improvements, including but not limited to those of the City of Hammond,
Indiana, the Hammond Port Authority and the City of Hammond, Indiana Department
of Redevelopment.
4.3 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
chief financial officer or the treasurer of Company or by any executive officer
of Company designated by any of the above-described officers on behalf of
Company in a writing delivered to Administrative Agent.
B. AS OF THAT FUNDING DATE:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
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(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such Notice
of Borrowing that would constitute an Event of Default or a Potential
Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that Funding
Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall
not violate any law including Regulation T, Regulation U or Regulation X
of the Board of Governors of the Federal Reserve System;
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries that has not been
disclosed by Company in writing pursuant to subsection 5.6 or 6.1(x)
prior to the making of the last preceding Loans (or, in the case of the
initial Loans, prior to the execution of this Agreement), and there shall
have occurred no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so disclosed, that,
in either event, in the opinion of Agents or of Requisite Lenders, would
be expected to have a Material Adverse Effect; and
(vii) The incurrence of all Indebtedness and Liens incurred shall
not contravene any Debt Restrictive Agreement.
4.4 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as the
applicable Issuing Lender may reasonably require in connection with the issuance
of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.3B shall be satisfied to the same extent as
if the issuance of such Letter
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of Credit were the making of a Loan and the date of issuance of such Letter of
Credit were a Funding Date.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and the Agents to enter into this
Agreement and to make the Loans, to induce Issuing Lenders to issue Letters of
Credit and to induce other Lenders to purchase participations therein, Company
represents and warrants to each Lender and the Agents, on the date of this
Agreement, on each Funding Date and on the date of issuance of each Letter of
Credit, that the following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1 annexed hereto. Each
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified or in good standing has
not had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.13.
D. SUBSIDIARIES. All of the Subsidiaries of Company are identified in
Schedule 5.1 annexed hereto, as said Schedule 5.1 may be supplemented from time
to time pursuant to the provisions of subsection 6.1(xvi). The capital stock of
each of the Subsidiaries of Company identified in Schedule 5.1 annexed hereto
(as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock. Each of
the Subsidiaries of Company identified in Schedule 5.1 annexed hereto (as so
supplemented) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and authority
has not had and will not have a Material Adverse Effect. Schedule 5.1 annexed
hereto (as so supplemented) correctly sets forth the ownership interest of
Company and each of its Subsidiaries in each of the Subsidiaries of Company
identified therein.
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5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
actions on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan
Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not (i) violate any provision
of any law or any governmental rule or regulation applicable to Company or any
of its Subsidiaries, the Certificate or the Articles of Incorporation or Bylaws
of Company or any of Company's Subsidiaries or any order, judgment or decree of
any court or other agency of government binding on Company or any of Company's
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
Company's Subsidiaries (other than any Liens created under any of the Loan
Documents in favor of Administrative Agent on behalf of Lenders), or (iv)
require any approval of or consent of any Person under any Contractual
Obligation of Company or any of Company's Subsidiaries, except for such
approvals or consents which will be obtained on or before the Initial Funding
Date and disclosed in writing to Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body except (i)
those that have been obtained and copies of which have been delivered to
Administrative Agent pursuant to subsection 4.2O or the absence of which
Administrative Agent has deemed satisfactory pursuant to subsection 4.2O, (ii)
those notices or informational filings or both that will be required to be given
to the Securities and Exchange Commission or any Gaming Authority but that are
not yet due and (iii) any right of any Gaming Authority to object to any Lender
or participant in the Loans at any future date.
D. BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability (regardless of whether such enforcement is sought in
a proceeding in equity or at law).
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request,
the following financial statements and information: (i) the audited consolidated
balance sheet of Horseshoe and its Subsidiaries and Empress and its Subsidiaries
as at December 31, 1998 and the related consolidated statements of income,
stockholders' equity and cash flows of Horseshoe and its Subsidiaries and
Empress and its Subsidiaries for the Fiscal Year then ended and (ii) the
unaudited consolidated balance sheet of Horseshoe and its Subsidiaries and
Empress and its
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Subsidiaries as of March 31, 1999 and March 31, 1998 and the related unaudited
consolidated statements of income, stockholders' equity and cash flows of
Horseshoe and its Subsidiaries and Empress and its Subsidiaries for the one
month then ended. All such statements were prepared in conformity with GAAP and
fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from normal year-end adjustments.
5.4 NO MATERIAL ADVERSE EFFECT; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1998, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. None of Company, any of its Subsidiaries nor Empress Joliet or Empress
Hammond has directly or indirectly declared, ordered, paid or made, or set apart
any sum or property for, any Restricted Junior Payment or agreed to do so except
as permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective material properties and assets
reflected in the financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case except for assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted under subsection
7.7. Except as permitted by this Agreement, all such properties and assets are
free and clear of Liens.
B. REAL PROPERTY. As of the Initial Funding Date, Schedule 5.5
annexed hereto contains a true, accurate and complete list of (i) all real
property owned by Company or any Subsidiary and (ii) all material leases,
subleases or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting each Real Property
Asset of any Loan Party, regardless of whether such Loan Party is the landlord
or tenant (whether directly or as an assignee or successor in interest) under
such lease, sublease or assignment. Except as specified in Schedule 5.5 annexed
hereto, each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and Company does not have knowledge of any
default that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
C. OWNERSHIP. From and after the Initial Funding Date, Company or its
Subsidiaries will be the true owner of all rights in and to all existing
agreements, permits and licenses relating to all of its Facilities (now or
hereafter acquired) (other than rights of third parties under leases and
agreements permitted hereunder), and will be the true owner of all rights in and
to all future agreements, permits and licenses relating to all of its Facilities
(now or
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hereafter acquired), other than rights of third parties under leases and
agreements permitted hereunder, except where the absence of such true ownership
would not have a Material Adverse Effect. Company's interest in all such
agreements, permits, and licenses is not and, to Company's best knowledge, will
not be subject to any present claim (other than under the Loan Documents),
set-off or deduction other than in the ordinary course of business.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or known governmental investigations
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax returns
and reports of Horseshoe or Company and their respective Subsidiaries required
to be filed by any of them have been timely filed, and all material taxes shown
on such tax returns to be due and payable and all assessments, fees and other
governmental charges upon Company and its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and to the knowledge
of Company, no condition exists that, with the giving of notice or the lapse of
time or both, would constitute such a default, except where the consequences,
direct or indirect, of such default or defaults, if any, would not have a
Material Adverse Effect.
B. Schedule 5.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Initial Funding Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect except to
the extent such material contracts have expired in accordance with their terms
or have been terminated by a Loan Party in accordance therewith and no material
defaults currently exist thereunder.
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5.9 GOVERNMENTAL REGULATION.
Except for the Gaming Laws, neither Company nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company, each of its Subsidiaries and each of their respective
ERISA Affiliates are in compliance in all material respects with all applicable
provisions and requirements of ERISA and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have
in all material respects performed all their obligations under each Employee
Benefit Plan. Each Employee Benefit Plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $1,000,000.
E. As of the most recent valuation date for each Multiemployer Plan
for which the actuarial report is available, the potential liability of Company,
its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $1,000,000.
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5.12 CERTAIN FEES.
Except as disclosed to the Arrangers, no broker's or finder's fee
or commission will be payable with respect to this Agreement or any of the
transactions contemplated hereby, and Company hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred by any Loan Party in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
(i) Neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding
written order, consent decree or settlement agreement with any Person
relating to (a) any Environmental Law, (b) any Environmental Claim, or
(c) any Hazardous Materials Activity;
(ii) neither Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9604) or any comparable state law;
(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of a material Environmental
Claim against Company or any of its Subsidiaries;
(iv) neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries has
filed any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, and none of Company's
or any of its Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of hazardous waste, as
defined under 40 C.F.R. Parts 260-270 or any state equivalent; and
(v) compliance by Company and its Subsidiaries with all current or
reasonably foreseeable future requirements pursuant to or under
Environmental Laws will not, individually or in the aggregate, have a
reasonable possibility of giving rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the
contrary, no event or condition has occurred or is occurring with respect to
Company or any of its Subsidiaries relating to any Environmental Law, any
Release of Hazardous Materials, or any Hazardous Materials Activity, which
individually or in the aggregate has had or would reasonably be expected to
have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that would reasonably be expected
to have a Material Adverse Effect.
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5.15 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations by
such Loan Party on any date on which this representation is made, will be,
Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.2E, 4.2F,
6.8 and 6.9 and (ii) the delivery to Administrative Agent of any Securities
Collateral not delivered to Administrative Agent at the time of execution and
delivery of the applicable Collateral Document (all of which Securities
Collateral has been so delivered) are effective to create in favor of
Administrative Agent for the benefit of Lenders, as security for the respective
Secured Obligations (as defined in the applicable Collateral Document in respect
of any Collateral), a valid and perfected First Priority Lien on all of the
Collateral, and as of the Initial Funding Date all filings and other actions
necessary or desirable to perfect and maintain the perfection and First Priority
status of such Liens have been duly made or taken and remain in full force and
effect, other than the filing of any UCC financing statements delivered to
Administrative Agent for filing (but not yet filed) and the periodic filing of
UCC continuation statements in respect of UCC financing statements filed by or
on behalf of Administrative Agent.
B. GOVERNMENTAL AUTHORIZATIONS. Other than the authorization and
approvals set forth on Schedule 5.16, all of which have been obtained except as
otherwise set forth on Schedule 5.16, no authorization, approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body (including the Gaming Authorities) is required for either (i) the pledge or
grant by any Loan Party of the Liens purported to be created in favor of
Administrative Agent pursuant to any of the Collateral Documents or (ii) the
exercise by Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by subsection 5.16A and except as may be
required, in connection with the disposition of any Securities Collateral, by
laws generally affecting the offering and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A or
with respect to Liens permitted by this Agreement, (i) no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the
IP Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Securities Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All written information supplied
to Agents by or on behalf of any Loan Party with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
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5.17 DISCLOSURE.
No representation or warranty of any Loan Party contained in any
Loan Document or in any other document, certificate or written statement
furnished to Lenders by or on behalf of Company or any of its Subsidiaries for
use in connection with the transactions contemplated by this Agreement contains
any untrue statement of a material fact or omits to state a material fact (known
to Company, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. Any projections and pro forma
financial information contained in materials supplied to Agents or Lenders in
writing are based upon good faith estimates and assumptions believed by Company
to be reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results.
5.18 YEAR 2000 COMPLIANCE..
Company has (i) initiated a review and assessment of its and its
Subsidiaries' business and operations (including those affected by suppliers and
vendors) that Company believes could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by Company or
Subsidiaries (or suppliers and vendors) may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan
substantially in accordance with that timetable. Company believes that its own
computer applications that are material to its or its Subsidiaries' business and
operations will on a timely basis be able to perform properly date-sensitive
functions for all dates before and after December 31, 1999 (that is, be "Year
2000 compliant") except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
5.19 COMPLIANCE WITH LAWS; MAINTENANCE OF LICENSES.
A. COMPLIANCE WITH LAWS. Company and its Subsidiaries are in
compliance with the requirements of all applicable laws, rules, regulations,
ordinances and orders (including, without limitation, Gaming Laws) if
noncompliance would affect the ability of any such party to operate any of the
Facilities or the ability of any of Company or any of its Subsidiaries to
perform its obligations under the Loan Documents to which it is a party, except
where the failure to so comply or perform would not have a Material Adverse
Effect. The use of each of the Facilities complies with applicable zoning
ordinances, regulations, restrictive covenants and requirements of Governmental
Authorizations affecting the respective Facilities as well as all environmental,
ecological, landmark, and other applicable laws and regulations (including,
without limitation, Gaming Laws); and all requirements for such use have been
satisfied, except where the failure to so comply would not have a Material
Adverse Effect.
B. MAINTENANCE OF LICENSES. Company and its Subsidiaries have (i)
such valid material gaming licenses, registrations and findings of suitability
in all jurisdictions as may be necessary to operate each of its Gaming Facility
businesses and (ii) all material liquor licenses
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and registrations as may be necessary to sell alcoholic beverages from and in
its Gaming Facilities.
5.20 INTANGIBLE PROPERTY.
Company and its Subsidiaries own or are licensed to use all trade
names, unregistered trademarks and service marks, brand names, patents,
registered and unregistered copyrights, registered trademarks and service marks,
and all applications for any of the foregoing, and all permits, grants and
licenses or other rights with respect thereto, except where the absence of such
ownership, license or permit, grant or other right would not have a Material
Adverse Effect. Schedule 5.20 annexed hereto sets forth a true and complete list
of all service marks and registered trademarks (or trademarks for which
registration is pending) owned or licensed by Company and its Subsidiaries. None
of Company and its Subsidiaries has been charged with any material infringement
of any intangible property of the character described above or been notified or
advised of any material claim of any other Person relating to any of the
intangible property.
5.21 CLASSIFICATION OF SHIPS.
From and after the Effective Date, the American Bureau of Shipping
classification of each Ship shall remain the highest applicable classification
and rating to which a ship of the same age and type as such Ship can qualify
under the rules and standards of the American Bureau of Shipping.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Agents for delivery to Lenders:
(i) Monthly Financials: as soon as available and in any event
within 30 days after the end of each month ending after the Signing Date,
(a) the consolidated operating statements of Company and its Subsidiaries
and, until the earlier of the Empress Joliet Acquisition Date or December
1, 1999, Empress and its Subsidiaries, as at the end of such month,
setting forth in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year, to the extent prepared
on a monthly basis, all in reasonable detail and certified by the chief
financial officer, chief accounting officer or controller of Company that
they fairly present, in all material respects, the financial condition of
Company and its Subsidiaries as at the dates indicated and the
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results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments, and (b) a narrative report describing the operations of
Company and its Subsidiaries in the form prepared for presentation to
senior management for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each of the first three Fiscal Quarters,
(a) the consolidated balance sheet of Company and its Subsidiaries as at
the end of such Fiscal Quarter and the related consolidated statements of
income, stockholders' equity and cash flows of Company and its
Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal
Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and normal
year-end adjustments and (b) a Debt Capacity Certificate in the form of
Exhibit XIX;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Company and its Subsidiaries as at the end of such
Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the Financial Plan for the Fiscal Year covered by such
financial statements, all in reasonable detail and certified by the chief
financial officer, chief accounting officer or controller of Company that
they fairly present, in all material respects, the financial condition of
Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, (b) in
the case of such consolidated financial statements, a report thereon of
Arthur Andersen LLP or other independent certified public accountants of
recognized national standing selected by Company and reasonably
satisfactory to Agents, which report shall be unqualified, shall express
no doubts about the ability of Company and its Subsidiaries to continue
as a going concern, and shall state that such consolidated financial
statements fairly present, in all material respects, the consolidated
financial position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and (c) a Debt
Capacity Certificate in the form of Exhibit XIX;
(iv) Officer's, Margin Determination and Compliance Certificates:
together with each delivery of financial statements of Company and its
Subsidiaries pursuant to subdivisions (ii) and (iii) above, (a) an
Officer's Certificate of Company stating that the signers have reviewed
or are familiar with the terms of this Agreement and the other
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Loan Documents and have made, or caused to be made under their
supervision, a review in reasonable detail of the material transactions
and condition of Company and its Subsidiaries during the accounting
period covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the
date of such Officer's Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the nature and
period of existence thereof and what action Company has taken, is taking
and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the restrictions
contained in Section 7, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable
accounting period; and within 45 days after the end of each Fiscal Year,
a Margin Determination Certificate demonstrating in reasonable detail the
Consolidated Leverage Ratio for the four consecutive Fiscal Quarters
ending on the last day of the accounting period covered by such financial
statements;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies
been made, then (a) together with the first delivery of financial
statements pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, consolidated financial statements
of Company and its Subsidiaries for (y) the current Fiscal Year to the
effective date of such change and (z) the two full Fiscal Years
immediately preceding the Fiscal Year in which such change is made, in
each case prepared on a pro forma basis as if such change had been in
effect during such periods, and (b) together with each delivery of
financial statements pursuant to subdivision (i), (ii), (iii) or (xiii)
of this subsection 6.1 following such change, a written statement of the
chief accounting officer or chief financial officer of Company setting
forth the differences (including any differences that would affect any
calculations relating to the financial covenants set forth in subsection
7.6) which would have resulted if such financial statements had been
prepared without giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit examination has included a review of the terms
of Section 7 of this Agreement as they relate to accounting matters, (b)
stating whether, in connection with their audit examination, any
condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to
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believe either or both that the information contained in the certificates
delivered therewith pursuant to subdivision (iv) above is not correct or
that the matters set forth in the Compliance Certificates delivered
therewith pursuant to clause (c) of subdivision (iv) above for the
applicable Fiscal Year are not stated in accordance with the terms of
this Agreement; which statement shall be limited to accounting matters
and disclaim responsibility for legal interpretations;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management
in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by Company
to its security holders or by any Subsidiary of Company to its security
holders other than Company or another Subsidiary of Company, (b) all
regular and periodic reports and all registration statements (other than
on Form S-8 or a similar form) and prospectuses, if any, filed by Company
or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other statements
made available generally by Company or any of its Subsidiaries to the
public concerning material developments in the business of Company or any
of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of Company
permitted by the terms of this Agreement to sign an Officer's Certificate
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that
any Lender has given any notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to
Company or any of its Subsidiaries or taken any other action with respect
to a claimed default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be required to
be disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as
in effect on the date hereof) if Company were required to file such
reports under the Exchange Act, or (d) of the occurrence of any event or
change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officer's Certificate specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken, is taking
and proposes to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any officer
of Company obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries (collectively,
"PROCEEDINGS") not
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previously disclosed in writing by Company to Lenders or (Y) any material
development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility
of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their respective
counsel to evaluate such matters; and (b) within twenty days after the
end of each Fiscal Quarter, a schedule of all Proceedings involving an
alleged liability of, or claims against or affecting, Company or any of
its Subsidiaries equal to or greater than $5,000,000, and promptly after
request by Agents such other information as may be reasonably requested
by Agents to enable Agents and their respective counsel to evaluate any
of such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) all
notices received by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor concerning
an ERISA Event; and (b) copies of such other documents or governmental
reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
later than 30 days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year (the
"FINANCIAL PLAN" for such Fiscal Year), including a forecasted
consolidated balance sheet reported on a quarterly basis and forecasted
consolidated statements of income reported on a quarterly basis and cash
flows of Company and its Subsidiaries for each such Fiscal Year, together
with pro forma financial covenant calculations for each such Fiscal Year
determined in a manner consistent with financial covenant calculations
shown in a Compliance Certificate and an explanation of the assumptions
on which such forecasts are based;
(xiv) Insurance: as soon as practicable and in any event by
January 1 of each year, a report in form and substance satisfactory to
Administrative Agent outlining all material insurance coverage maintained
as of the date of such report by Company and its Subsidiaries and all
material insurance coverage planned to be maintained by Company and its
Subsidiaries in the twelve months ending on the next succeeding January
1;
(xv) Board of Directors: with reasonable promptness, written
notice of any change in the Board of Directors of Company;
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(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of
Company and (b) all of the data required to be set forth in Schedule 5.1
annexed hereto with respect to all Subsidiaries of Company (it being
understood that such written notice shall be deemed to supplement
Schedule 5.1 annexed hereto for all purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xviii) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries
as from time to time may be reasonably requested by any Lender.
Administrative Agent shall give prompt notice to each Lender of each notice or
request required or permitted to be given to Administrative Agent by Company
pursuant to the terms of this Agreement (unless concurrently delivered to
Lenders by Company). Administrative Agent will distribute to each Lender each
document or instrument received for its account and copies of all other
communications received by Administrative Agent from Company for distribution to
Lenders by Administrative Agent in accordance with the terms of this Agreement.
6.2 LEGAL EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and will
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its legal existence and all rights and franchises material to its
business; provided, however that neither Company nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (1) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (2) in the case of a charge or claim which has or may become a
Lien
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against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such charge or claim.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Except as otherwise provided in or
permitted under subsection 7.7, Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material tangible
properties used or useful in the business of Company and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Agents in their commercially reasonable judgment. Each such
policy of insurance shall (a) name Administrative Agent for the benefit of
Lenders as an additional insured thereunder as its interests may appear and (b)
in the case of each business interruption and casualty insurance policy, contain
a loss payable clause or endorsement, satisfactory in form and substance to
Agents, that names Administrative Agent for the benefit of Lenders as the loss
payee thereunder for any covered loss in excess of $5,000,000 and provides for
at least 30 days prior written notice to Agents of any modification or
cancellation of such policy.
6.5 INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable
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advance written notice and at such reasonable times during normal business hours
and as often as may reasonably be requested.
B. LENDER MEETING. Company will, upon the written request of Agents
or Requisite Lenders, participate in a meeting of Agents and Lenders once during
each Fiscal Year to be held at Company's corporate offices (or at such other
location as may be agreed to by Company and Agents) at such time as may be
agreed to by Company and Agents.
6.6 COMPLIANCE WITH LAWS; MAINTENANCE OF LICENSES.
A. COMPLIANCE WITH LAWS. Company shall comply, and shall cause each
of its Subsidiaries to comply, and shall use commercially reasonable efforts to
cause all other Persons on or occupying any Facilities to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority, including all Gaming Laws and Environmental Laws, and to
obtain and keep in full force and effect any permit, license, consent or
approval required under this Agreement if such noncompliance or failure to
obtain and keep in full force and effect could reasonably be expected to cause,
individually or in the aggregate, a Material Adverse Effect. Company shall and
shall cause each of its Subsidiaries to comply in all material respects with the
requirements of all Gaming Laws applicable to such Person.
B. MAINTENANCE OF LICENSES. Company shall, and shall cause each of
its Subsidiaries to, maintain (i) such valid gaming licenses, registrations and
findings of suitability in all jurisdictions as may be necessary for and
material to the operation of each of its Gaming Facility businesses and (ii) all
liquor licenses and registrations as may be necessary to sell alcoholic
beverages from and in its Gaming Facilities.
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; COMPANY'S
ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS
AND VIOLATIONS OF ENVIRONMENTAL LAWS.
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Company agrees that Agents
may, from time to time and in their reasonable discretion, (i) retain, at
Company's expense, an independent professional consultant to review any
environmental audits, investigations, analyses and reports relating to Hazardous
Materials prepared by or for Company and (ii) in the event (a) Agent reasonably
believes that Company has breached any representation, warranty or covenant
contained in subsection 5.6, 5.13, 6.6 or 6.7 or that there has been a material
violation of Environmental Laws at any Facility or by Company or any of its
Subsidiaries at any other location, or (b) an Event of Default has occurred and
is continuing, conduct its own investigation of any Facility; provided that, in
the case of any Facility no longer owned, leased, operated or used by Company or
any of its Subsidiaries, Company shall only be obligated to use its best efforts
to obtain permission for Agents' professional consultant to conduct an
investigation of such Facility. For purposes of conducting such a review and/or
investigation, Company hereby grants to Agents and their respective agents,
employees, consultants and contractors the right to enter into or onto any
Facilities currently owned, leased, operated or used by Company or any of its
Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by Company and Agents,
during normal business hours and, to the extent
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reasonably practicable, shall be conducted so as not to interfere with the
ongoing operations at such Facility or to cause any damage or loss to any
property at such Facility. Company and Agents hereby acknowledge and agree that
any report of any investigation conducted at the request of Agents pursuant to
this subsection 6.7A will be obtained and shall be used by Agents and Lenders
for the purposes of Lenders' internal credit decisions, to monitor and police
the Loans and to protect Lenders' security interests, if any, created by the
Loan Documents. Agents agree to deliver a copy of any such report to Company
with the understanding that Company acknowledges and agrees that (x) it will
indemnify and hold harmless each Agent and each Lender from any costs, losses or
liabilities relating to Company's use of or reliance on such report, (y) neither
of the Agents nor any Lender makes any representation or warranty with respect
to such report, and (z) by delivering such report to Company, neither of the
Agents nor any Lender is requiring or recommending the implementation of any
suggestions or recommendations contained in such report.
B. ENVIRONMENTAL DISCLOSURE. Company will deliver to Agents and
Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
after an officer of the Company or any Subsidiary or any employee
responsible for compliance with any Environmental Law or for the conduct
of any Hazardous Waste Activity at the Company or any Subsidiary obtains
or has reason to obtain knowledge of any of the following, written notice
describing in reasonable detail (a) any Release required to be reported
to any federal, state or local governmental or regulatory agency under
any applicable Environmental Laws, (b) any remedial action taken by
Company or any other Person in response to (1) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or in
the aggregate, a Material Adverse Effect, or (2) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility of
resulting in a Material Adverse Effect, and (c) Company's discovery of
any occurrence or condition on any real property adjoining or in the
vicinity of any Facility that could cause such Facility or any part
thereof to be subject to any material restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (b) any Release required to be
reported to any federal, state or local governmental or regulatory
agency, and (c) any request for information from any governmental agency
that suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity.
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(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that could reasonably be expected to (1) expose Company
or any of its Subsidiaries to, or result in, Environmental Claims that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability of Company or any of
its Subsidiaries to maintain in full force and effect all material
Governmental Authorizations required under any Environmental Laws for
their respective operations and (b) any proposed action to be taken by
Company or any of its Subsidiaries to commence manufacturing or other
industrial operations or to modify current operations in a manner that
could reasonably be expected to subject Company or any of its
Subsidiaries to any additional obligations or requirements under any
Environmental Laws.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Agents in relation to any matters disclosed pursuant to this
subsection 6.7.
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Company shall promptly undertake, and shall cause each of its
Subsidiaries promptly to undertake, any and all investigations, studies,
sampling, testing, abatement, cleanup, removal, remediation or other
response actions necessary to remove, remediate, clean up or abate any
Hazardous Materials Activity on, under or about any Facility that is in
violation of any Environmental Laws or that presents a material risk of
giving rise to an Environmental Claim. In the event Company or any of its
Subsidiaries undertakes any such action with respect to any Hazardous
Materials, Company or such Subsidiary shall conduct and complete such
action in compliance with all applicable Environmental Laws and in
accordance with the policies, orders and directives of all federal, state
and local governmental authorities except when, and only to the extent
that, Company's or such Subsidiary's liability with respect to such
Hazardous Materials Activity is being contested in good faith by Company
or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations
of Environmental Laws. Company shall promptly take, and shall cause each
of its Subsidiaries promptly to take, any and all actions necessary to
(a) cure any violation of applicable Environmental Laws by Company or its
Subsidiaries and (b) make an appropriate response to any Environmental
Claim against Company or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder where failure to do so
could reasonably be expected to have individually or in the aggregate, a
Material Adverse Effect.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES; IP COLLATERAL.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Person becomes a Domestic Subsidiary of Company
after the
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date hereof, Company will promptly notify Administrative Agent of that fact and
cause such Domestic Subsidiary to execute and deliver to Administrative Agent
counterparts of the Subsidiary Guaranty and the Security Agreement and to take
all such further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsection 4.2F) as may be reasonably necessary or, in the reasonable opinion of
Agents, desirable to create in favor of Administrative Agent, for the benefit of
Lenders, a valid and perfected First Priority Lien on all of the personal and
mixed property assets of such Domestic Subsidiary described in the applicable
forms of Collateral Documents.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Domestic Subsidiary's Certificate or Articles of
Incorporation, together with a good standing certificate from the Secretary of
State of the jurisdiction of its incorporation and each other state in which
such Person is qualified as a foreign corporation to do business and, to the
extent generally available, a certificate or other evidence of good standing as
to payment of any applicable franchise or similar taxes from the appropriate
taxing authority of each of such jurisdictions, each to be dated a recent date
prior to their delivery to Administrative Agent, (ii) a copy of such Domestic
Subsidiary's Bylaws certified by its secretary or an assistant secretary as of
a recent date prior to their delivery to Administrative Agent, (iii) a
certificate executed by the secretary or an assistant secretary of such
Domestic Subsidiary as to (a) the fact that the attached resolutions of the
Board of Directors of such Domestic Subsidiary approving and authorizing the
execution, delivery and performance of such Loan Documents are in full force
and effect and have not been modified or amended and (b) the incumbency and
signatures of the officers of such Domestic Subsidiary executing such Loan
Documents, and (iv) a favorable opinion of counsel to such Domestic Subsidiary,
in form and substance satisfactory to Agents and their respective counsel, as
to (a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Domestic Subsidiary of such Loan
Documents, (c) the enforceability of such Loan Documents against such Domestic
Subsidiary, (d) such other matters (including matters relating to the creation
and perfection of Liens in any Collateral pursuant to such Loan Documents) as
Agents may reasonably request, all of the foregoing to be reasonably
satisfactory in form and substance to Agents and their respective counsel.
C. IP COLLATERAL. If any Domestic Subsidiary becomes an owner of any
Intellectual Property, Company shall cause such Domestic Subsidiary to promptly
execute and deliver to Administrative Agent such security agreement as
Administrative Agent shall reasonably deem appropriate and take such further
action and execute such further documents and instruments as may be necessary,
or in the reasonable opinion of Administrative Agent, desirable to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
First Priority Lien on such Intellectual Property.
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL..
A. CONFORMING LEASEHOLD INTERESTS. If Company or any of its
Subsidiaries acquires any Leasehold Property, Company shall, or shall cause such
Subsidiary to, cause such Leasehold Property to be a Conforming Leasehold
Interest.
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B. ADDITIONAL MORTGAGES, ETC. From and after the Initial Funding
Date, in the event that (i) Company or any Subsidiary Guarantor acquires any fee
interest in real property or any Material Leasehold Property or (ii) at the time
any Person becomes a Subsidiary Guarantor, such Person owns or holds any fee
interest in real property or any Material Leasehold Property, in either case
excluding any such Real Property Asset the encumbrancing of which requires the
consent of any applicable lessor or then-existing senior lienholder, where
Company and its Subsidiaries are unable to obtain such lessor's or senior
lienholder's consent (any such non-excluded Real Property Asset described in the
foregoing clause (i) or (ii) being an "ADDITIONAL MORTGAGED PROPERTY"), Company
or such Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Additional Mortgaged Property or
becomes a Subsidiary Guarantor, as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized
Mortgage (an "ADDITIONAL MORTGAGE"), duly recorded in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to
such Loan Party, in form and substance reasonably satisfactory to Agents
and their respective counsel, as to the due authorization, execution and
delivery by such Loan Party of such Additional Mortgage and such other
matters as Agents may reasonably request, and (b) if required by Agents,
an opinion of counsel (which counsel shall be reasonably satisfactory to
Agents) in the state in which such Additional Mortgaged Property is
located with respect to the enforceability of the form of Additional
Mortgage recorded in such state and such other matters (including any
matters governed by the laws of such state regarding personal property
security interests in respect of any Collateral) as Agents may reasonably
request, in each case in form and substance reasonably satisfactory to
Agents;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest.
In the case of an Additional Mortgaged Property consisting of a Leasehold
Property, (a) a Landlord Consent and Estoppel, unless Company or such
Subsidiary is unable to obtain the Landlord Consent and Estoppel after
using commercially reasonable efforts to obtain the same and (b) evidence
that such Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Agents, an ALTA
mortgagee title insurance policy or an unconditional commitment therefor
(an "ADDITIONAL MORTGAGE POLICY") issued by the Title Company with
respect to such Additional Mortgaged Property, in an amount satisfactory
to Agents, insuring fee simple title to, or a valid leasehold interest
in, such Additional Mortgaged Property vested in such Loan Party and
assuring Agents that such Additional Mortgage creates a valid and
enforceable First Priority mortgage Lien on such Additional Mortgaged
Property, subject only to a standard survey exception, which Additional
Mortgage Policy (1) shall include an endorsement for mechanics' liens,
for future advances under this Agreement and for any other matters
reasonably requested by Agents and (2) shall provide for affirmative
insurance and such reinsurance as Agents may reasonably request, all of
the foregoing in form and substance reasonably satisfactory to Agents;
and (b) evidence reasonably satisfactory to Agents that such Loan Party
has (i) delivered to the Title Company all certificates and affidavits
required by the Title Company in connection with the issuance
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of the Additional Mortgage Policy and (ii) paid to the Title Company or
to the appropriate governmental authorities all reasonable expenses and
premiums of the Title Company in connection with the issuance of the
Additional Mortgage Policy and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with
recording the Additional Mortgage in the appropriate real estate records;
(v) Title Report. If no Additional Mortgage Policy is required
with respect to such Additional Mortgaged Property, a title report issued
by the Title Company with respect thereto, dated not more than 30 days
prior to the date such Additional Mortgage is to be recorded and
reasonably satisfactory in form and substance to Agents;
(vi) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise
referred to in the Additional Mortgage Policy or title report delivered
pursuant to clause (iv) or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged Property
is a Flood Hazard Property and (2) if so, whether the community in which
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if such Additional Mortgaged Property is a
Flood Hazard Property, such Loan Party's written acknowledgement of
receipt of written notification from Administrative Agent (1) that such
Additional Mortgaged Property is a Flood Hazard Property and (2) as to
whether the community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and (c) in the
event such Additional Mortgaged Property is a Flood Hazard Property that
is located in a community that participates in the National Flood
Insurance Program, evidence that Company has obtained flood insurance in
respect of such Flood Hazard Property to the extent required under the
applicable regulations of the Board of Governors of the Federal Reserve
System; and
(viii) Environmental Audit. Reports and other information, in
form, scope and substance reasonably satisfactory to Agents and prepared
by environmental consultants reasonably satisfactory to Agents,
concerning any environmental hazards or liabilities to which Company or
any of its Subsidiaries may be subject with respect to such Additional
Mortgaged Property.
6.10 ADDITIONAL SHIP MORTGAGES, ETC.
From and after the Initial Funding Date, in the event that
Company or any Subsidiary Guarantor acquires any ship, barge or other vessel as
part of a Gaming Facility, Company or such Subsidiary Guarantor shall deliver
to Administrative Agent, as soon as practicable after such Person acquires such
additional ship, barge or other vessel, either (x) a Ship Mortgage with respect
to such acquired ship, barge or other vessel or (y) an assignment of an
existing Ship Mortgage, in form and substance reasonably satisfactory to
Administrative Agent, and such other approvals, opinions or documents in
connection with the foregoing as Administrative Agent may reasonably request.
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6.11 YEAR 2000 COMPLIANCE.
Company will promptly notify Administrative Agent in the event an
officer of the Company discovers or determines that any computer application
(including those of its suppliers and vendors) that is material to its or any of
its Subsidiaries' business and operations will not be year 2000 compliant as of
January 1, 2000, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
6.12 REDEMPTION OF EXISTING EMPRESS BONDS.
Company shall promptly offer, or cause Empress to offer, to
repurchase the Existing Empress Bonds after the Initial Funding Date and, if
different, the Empress Joliet Acquisition Date (either pursuant to the "change
of control" provisions or the "asset sale offer" provisions of the Existing
Empress Indenture), and shall repurchase all Existing Empress Bonds tendered no
later than 30 Business Days after the Empress Joliet Acquisition Date; and
provided that if Empress Joliet is not acquired on the Initial Funding Date,
Company shall require Empress to offer to repurchase the Existing Empress Bonds
pursuant to section 10.13 of the Existing Empress Indenture no later than 30
Business Days after the Initial Funding Date.
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other then outstanding monetary Obligations and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise
give prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or guaranty, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company and its Subsidiaries may become and remain liable
with respect to the Obligations;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished;
(iii) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any
wholly-owned Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned Subsidiary
of Company; provided that (a) all such intercompany Indebtedness shall be
evidenced by promissory notes, (b) all such intercompany Indebtedness
owed by Company to any of its Subsidiaries shall be subordinated in right
of payment to the payment in full of the Obligations pursuant to the
terms of the
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applicable promissory notes or an intercompany subordination agreement,
and (c) any payment by any Subsidiary of Company under any guaranty of
the Obligations shall result in a pro tanto reduction of the amount of
any intercompany Indebtedness owed by such Subsidiary to Company or to
any of its Subsidiaries for whose benefit such payment is made;
(iv) Company and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness described in Schedule 7.1 annexed
hereto including all interest and other amounts owing thereon and any
extensions, renewals or replacements of such Indebtedness so long as the
principal amount thereof is not increased;
(v) Company and its Subsidiaries, as applicable, may remain
liable with respect to the Existing Empress Bonds, the Existing
Subordinated Horseshoe Bonds and the New Sub Debt, and, until the Initial
Funding Date, the Existing Horseshoe Credit Facility and any replacements
of the Existing Subordinated Horseshoe Bonds and the New Sub Debt so long
as the terms of such replacement are acceptable to Agents and such
replacement occurs after the earliest redemption date under such
Indebtedness;
(vi) After the Signing Date but prior to the earlier of the
Empress Joliet Acquisition Date and the date on which the Tranche B Term
Loans must be paid in full pursuant to subsection 2.4A, Company and its
Subsidiaries may become liable for up to $35,000,000 on terms acceptable
to Agents in Indebtedness relating to the repurchase of Company's capital
stock from its shareholders (including no more than $3,000,000 to the
Majority Shareholders), and Company may remain liable for such
Indebtedness;
(vii) On or after the Empress Joliet Acquisition Date, Company
and its Subsidiaries may become and remain liable on terms acceptable to
Agents for up to $25,000,000 in Indebtedness relating to the repurchase
of Company's capital stock from its shareholders;
(viii) Company and its Subsidiaries may become and remain liable
with respect to other Indebtedness in an aggregate principal amount not
to exceed $20,000,000 at any time outstanding; provided that no more than
$15,000,000 of such Indebtedness may be secured or in respect of Capital
Leases.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
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(iii) Liens described in Schedule 7.2 annexed hereto;
(iv) Liens on property acquired after the Signing Date that
existed at the time of the acquisition by Company or its Subsidiaries
thereof, including purchase money Liens; and
(v) Other Liens securing Indebtedness permitted by subsection
7.1(viii) in an aggregate amount not to exceed $15,000,000 at any time
outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither Company
nor any of its Subsidiaries shall enter into any agreement (other than an
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except as provided herein, Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.
7.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, in a single transaction or series of transactions,
make or own any Investment in any Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Signing Date in any Subsidiaries of
Company;
(iii) Company and its Subsidiaries may make intercompany loans to
the extent permitted under subsection 7.1(iv);
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(iv) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by 7.6, 7.8 and 7.9;
(v) Company and its Subsidiaries may own Subsidiaries acquired
after the Signing Date in accordance with the terms of this Agreement;
(vi) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $5,000,000;
and
(vii) So long as no Event of Default or Potential Event of
Default shall exist or be caused thereby and the Applicable Consolidated
Leverage Ratio is less than 3.5:1.0 immediately prior to, and after
giving pro forma effect to any Indebtedness incurred to make such
payment, immediately after, Company and its Subsidiaries may make and own
other Investments in an aggregate amount not to exceed the Permitted
Distribution Amount.
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or become or remain liable with respect to
any Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations (other than Contingent Obligations
that constitute Indebtedness) in respect of any Indebtedness of Company
or any of its Subsidiaries permitted by subsection 7.1; and
(iii) Company and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in Schedule 7.4
annexed hereto.
7.5 RESTRICTED JUNIOR PAYMENTS.
A. PERMITTED PAYMENTS. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, declare, order, pay, make or set
apart any sum for any Restricted Junior Payment; provided that any Subsidiary
may pay dividends or make other distributions to Company and provided further,
Company may (i) make and consummate a "Change of Control Offer" (as defined in
the Existing Empress Indenture) with respect to the Existing Empress Bonds, (ii)
make regularly scheduled payments of interest on the Existing Empress Bonds, the
Existing Subordinated Horseshoe Bonds, the New Sub Debt and any other
Subordinated Indebtedness (including any Subordinated Indebtedness referred to
on Schedule 7.1), in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions contained in, the
indenture or other agreement pursuant to which such Subordinated Indebtedness
was issued, as such indenture or other agreement may be amended from time to
time to the extent permitted under subsection 7.14, (iii) so long as no Event of
Default or Potential Event of Default shall exist or be caused thereby and the
Applicable Consolidated Leverage Ratio is less than 3.5:1.0 immediately prior
to, and after giving pro forma effect to any Indebtedness incurred to make such
payment, immediately after, pay dividends or
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make similar distributions on the capital stock of Company in a cumulative
aggregate amount not exceeding the Permitted Distribution Amount, (iv) make Cash
payments on and become liable for Indebtedness permitted by subsections 7.1(vi)
and (vii) and (v) make Permitted Tax Distributions.
B. PERMITTED TAX DISTRIBUTIONS. Permitted Tax Distributions shall be
made within fifteen days following March 31, May 31, August 31, and December 31
based upon an estimate of the excess of (x) the tax distributions that would be
payable for the period beginning on January 1 of such year and ending on March
31, May 31, August 31, and December 31 if such period were a taxable year
(computed as provided above) over (y) distributions attributable to all prior
periods during such taxable year. Promptly after filing by Company and each such
Subsidiary of their respective annual tax return, each Equity Holder shall
reimburse Company or the applicable Subsidiary, as the case may be, to the
extent such estimated tax distributions made to such Equity Holder exceeded the
actual Permitted Tax Distributions, as determined on the basis of such tax
returns filed in respect of such taxable year for that Equity Holder and Company
or the applicable Subsidiary, as the case may be, shall make a further payment
to its respective Equity Holders to the extent such estimated tax distributions
were less than the tax distributions actually payable to such Equity Holders
with respect to such taxable year. If the appropriate Federal or state taxing
authority finally determines that the amount of the items of Company or any
Subsidiary's taxable income, gain, deduction or loss (including capital gain or
loss) for any taxable year or the aggregate Tax Loss Benefit Amounts carried
forward to such taxable year should be changed or adjusted, then each Equity
Holder shall reimburse Company or the applicable Subsidiary, as the case may be,
to the extent the Permitted Tax Distributions previously made to such Equity
Holder in respect of that taxable year exceeded the Permitted Tax Distributions
with respect to such taxable year taking into account such change or adjustment
for that Equity Holder, or as the case may be, Company shall make a further
payment to its respective Equity Holders to the extent the permitted Tax
Distributions previously paid to such Equity Holder were less than the Permitted
Tax Distributions payable to such Equity Holders with respect to such taxable
year taking into account such change or adjustment.
To the extent that any tax distribution would otherwise be made to any
Equity Holder at a time when an obligation of such Equity Holder to make a
payment to Company or the applicable subsidiary pursuant to the two previous
sentences remains outstanding, the amount of any tax distribution to be made
shall be reduced by the amounts such Equity Holder is obligated to pay Company
or the applicable Subsidiary.
7.6 FINANCIAL COVENANTS.
A. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall maintain a
Consolidated Fixed Charge Coverage Ratio of 1.5:1.0.
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B. MAXIMUM LEVERAGE RATIO. Company shall not permit the Consolidated
Leverage Ratio as of the last day of each Fiscal Quarter during any of the
periods set forth below to exceed the correlative ratio indicated:
<TABLE>
<CAPTION>
PERIOD MAXIMUM LEVERAGE RATIO
- ------ ----------------------
<S> <C>
Initial Funding Date
through September 30, 2000 5.00:1.00
October 1, 2000
through September 30, 2001 4.75:1.00
October 1, 2001
through March 31, 2002 4.50:1.00
April 1, 2002
through September 30, 2002 4.25:1.00
October 1, 2002 and thereafter 4.00:1.00
</TABLE>
C. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth to be less than the sum of (a) 90% of Consolidated Net
Worth as of the last day of the Fiscal Quarter next succeeding the Initial
Funding Date (the "Net Worth Reference Date") plus (b) 50% of the remainder of
(x) Consolidated Net Income less (y) Permitted Tax Distributions for the period
commencing on the Net Worth Reference Date and ending on the date of
determination (without giving effect to any losses) plus (c) 50% of the net
proceeds of offerings of equity Securities of Company made after the Net Worth
Reference Date.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Company shall not, and shall not permit any of Company's
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of Company's Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) Company may consummate the Empress Acquisition;
(ii) any Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary Guarantor, or be liquidated, wound
up or dissolved, or all or any part of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of, in
one transaction or a series of transactions, to Company or any
wholly-owned Subsidiary Guarantor; provided that, in the case of such a
merger, Company or such wholly-owned Subsidiary Guarantor shall be the
continuing or surviving corporation;
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(iii) Company and its Subsidiaries may make expenditures
permitted under subsection 7.8;
(iv) Company and its Subsidiaries may dispose of obsolete, worn
out, or surplus property in the ordinary course of business;
(v) Company and its Subsidiaries may sell or otherwise dispose
of assets in transactions that do not constitute Asset Sales; provided
that the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof; and
(vi) Company may make Excluded Asset Sales.
7.8 CONSOLIDATED CAPITAL EXPENDITURES .
Except as otherwise approved by the Requisite Lenders, Company
will not, and will not permit any of its Subsidiaries to, make or commit to make
any Consolidated Capital Expenditures other than:
(a) Expansion Capital Expenditures so long as the aggregate
amount thereof does not exceed $225,000,000 during the term of
this Agreement; provided that if Company's Consolidated Leverage
Ratio is less than 4.0:1.0 and is projected to remain less than
4.0:1.0 on a pro forma basis thereafter taking such expenditures
into account, the limit on such expenditures shall be
$300,000,000; provided that such expenditures shall be permitted
only to the extent that Lenders receive a First Priority security
interest in substantially all the property so expanded or
enhanced; and provided, further that until the earlier of December
31, 1999 or the Empress Joliet Acquisition Date only Expansion
Capital Expenditures not in excess of $25,000,000 may be made;
(b) Maintenance Capital Expenditures in any Fiscal Year
(beginning in the 1999 Fiscal Year) in an amount not to exceed
$25,000,000; and
(c) New Venture Capital Expenditures so long as the
aggregate amount thereof does not exceed $50,000,000; provided
that if Company's Consolidated Leverage Ratio is less than 4.0:1.0
and will remain less than 4.0:1.0 on a pro forma basis taking such
expenditures into account, the maximum amount of such expenditures
shall be $75,000,000; provided that such expenditures shall be
permitted only to the extent that Lenders receive a First Priority
security interest in substantially all property so acquired or
developed; and provided further that no such expenditures shall be
made until the earlier of December 31, 1999 or the Empress Joliet
Acquisition Date.
7.9 RESTRICTION ON LEASES.
Company shall not, and shall not permit any of its Subsidiaries
to, become liable in any way, whether directly or by assignment or as a
guarantor or other surety, for the obligations of the lessee under any Capital
Lease (other than intercompany leases between Company and its wholly-owned
Subsidiaries); unless, immediately after giving effect to the incurrence of
liability with respect to such lease, the Consolidated Rental Payments shall not
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exceed $5,000,000 (excluding escalations resulting from a rise in the consumer
price or similar index) for any Fiscal Year; provided, however, that any
calculations made for purposes of this subsection 7.9 shall exclude any amounts
required to be expended for maintenance and repairs, insurance, taxes,
assessments and other similar charges.
7.10 SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, become or remain liable as lessee or as a guarantor
or other surety with respect to any lease, whether an Operating Lease or a
Capital Lease, of any property (whether real, personal or mixed), whether now
owned or hereafter acquired, (i) which Company or any of its Subsidiaries has
sold or transferred or is to sell or transfer to any other Person (other than
Company or any of its Subsidiaries) or (ii) which Company or any of its
Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by Company or any of its
Subsidiaries to any Person (other than Company or any of its Subsidiaries) in
connection with such lease; provided that Company and its Subsidiaries may
become and remain liable as lessee, guarantor or other surety with respect to
any such lease with respect to any such lease if and to the extent that Company
or any of its Subsidiaries would be permitted to enter into, and remain liable
under, such lease to the extent that the transaction would be permitted under
subsection 7.1, assuming the sale and lease back transaction constituted
Indebtedness in a principal amount equal to the gross proceeds of the sale.
7.11 TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES.
Except for the transactions described on Schedule 7.11, Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly-owned Subsidiaries or between
any of its wholly-owned Subsidiaries otherwise permitted hereunder, (ii)
reasonable and customary fees paid to members of the Boards of Directors of
Company and its Subsidiaries or (iii) compensation for services provided as an
officer or employee so long as such compensation is comparable to the amount
which would be paid on an arm's length basis; provided further that, except as
provided in subsection 7.1(vi), in no circumstances shall Company or its
Subsidiaries repurchase shares of Company capital stock owned by Majority
Shareholders unless required under Gaming Laws.
7.12 DISPOSAL OF SUBSIDIARY EQUITY.
Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if
required by applicable law; or
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(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, another Subsidiary of
Company, or to qualify directors if required by applicable law.
7.13 CONDUCT OF BUSINESS.
From and after the Signing Date, Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly engage in any of
business activity other than a Related Business.
7.14 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries
to, amend or otherwise change the terms of any Subordinated Indebtedness, or
make any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to increase the interest rate on such
Subordinated Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Company or Lenders.
7.15 FISCAL YEAR
Company shall not change its Fiscal Year-end from December 31 of
each calendar year.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Company
to pay when due any amount payable to an Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or failure by Company to pay any interest on
any Loan or any fee or any other amount due under this Agreement within five
days after the date due; or
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8.2 DEFAULT IN OTHER AGREEMENTS.
Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in either an individual or an aggregate principal
amount of $10,000,000 or more, in each case beyond the end of any grace period
provided therefor; or (ii) breach or default by Company or any of its
Subsidiaries with respect to any other material term of (a) one or more items of
Indebtedness or Contingent Obligations in the individual or aggregate principal
amounts referred to in clause (i) above or (b) any loan agreement, mortgage,
indenture or other agreement relating to such item(s) of Indebtedness or
Contingent Obligation(s), if the effect of such breach or default is to cause,
or to permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice, lapse of
time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Company or any of its Subsidiaries
in writing pursuant hereto or thereto or in connection herewith or therewith
shall be false in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from any Agent
or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Company or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other
similar relief shall be granted under any applicable federal or state
law; or (ii) an involuntary case shall be commenced against Company or
any of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the
premises for the
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appointment of a receiver, liquidator, sequestrator, trustee, custodian
or other officer having similar powers over Company or any of its
Subsidiaries, or over all or a substantial part of its property, shall
have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Company
or any of its Subsidiaries for all or a substantial part of its property;
or a warrant of attachment, execution or similar process shall have been
issued against any substantial part of the property of Company or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for 60 days unless dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, or shall consent to the entry of
an order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or shall
consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or
Company or any of its Subsidiaries shall make any assignment for the
benefit of creditors; or (ii) Company or any of its Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability,
to pay its debts as such debts become due; or the Board of Directors of
Company or any of its Subsidiaries (or any committee thereof) shall adopt
any resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving either in any individual case or in the aggregate at any time
an amount in excess of $10,000,000 (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company or
any of its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or
in the aggregate results in or might reasonably be expected to result in
liability of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $10,000,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed benefit liabilities), which exceeds $10,000,000; or
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8.11 CHANGE IN CONTROL.
A Change in Control occurs; or
8.12 INVALIDITY OF SUBSIDIARY GUARANTY; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS.
At any time after the execution and delivery thereof, (i) any
Guaranty for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void, (ii) any Collateral Document
shall cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the then outstanding monetary Obligations or any other
termination of such Collateral Document in accordance with the terms hereof or
thereof) or shall be declared null and void, or Administrative Agent shall not
have or shall cease to have a valid and perfected First Priority Lien in any
Collateral purported to be covered thereby, in each case for any reason other
than the failure of any Agent or any Lender to take any action within its
control, or (iii) any Loan Party shall contest the validity or enforceability of
any Loan Document in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any Loan
Document to which it is a party; or
8.13 LOSS OF GAMING LICENSE.
The occurrence of a License Revocation by any Gaming Authority
in a jurisdiction in which Company or any of its Subsidiaries owns or operates a
casino, hotel, casino/hotel, resort, casino/resort, riverboat casino, dock
casino, any other type of casino, golf course, entertainment center or similar
facility; provided that such License Revocation continues for at least fifteen
(15) calendar days.
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other then outstanding monetary
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by Company, and the obligation of each Lender to make
any Loan, the obligation of Administrative Agent to issue any Letter of Credit
and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate, and (ii) upon the occurrence and during the continuation of
any other Event of Default, Administrative Agent shall, upon the written request
or with the written consent of Requisite Lenders, by written notice to Company,
declare all or any portion of the amounts described in clauses (a) through (c)
above to be, and the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan, the obligation of
Administrative Agent to issue any Letter of Credit and the right of any Lender
to issue any Letter of Credit hereunder shall thereupon terminate; provided that
the foregoing shall not affect in any way the obligations of Revolving Lenders
under subsection 3.3C(i) or the obligations of Revolving Lenders to purchase
participations in any unpaid Swing Line Loans as provided in subsection
2.1A(iv).
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Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent and applied as
follows:
If for any reason the aggregate amount delivered by Company as aforesaid is less
than the amount described in clause (b) above (the "AGGREGATE AVAILABLE
AMOUNT"), the aggregate amount so delivered shall be apportioned among all
outstanding Letters of Credit in accordance with the ratio of the maximum amount
available for drawing under each such Letter of Credit (as to such Letter of
Credit, the "MAXIMUM AVAILABLE AMOUNT") to the Aggregate Available Amount. Upon
any drawing under any outstanding Letters of Credit in respect of which Company
has delivered to Administrative Agent any amounts described above,
Administrative Agent shall apply such amounts to reimburse the Issuing Lender
for the amount of such drawing. In the event of cancellation or expiration of
any Letter of Credit in respect of which Company has delivered any amounts
described above, or in the event of any reduction in the Maximum Available
Amount under such Letter of Credit, Administrative Agent shall apply the amount
then on deposit with it in respect of such Letter of Credit (less, in the case
of such a reduction, the Maximum Available Amount under such Letter of Credit
immediately after such reduction) first, to the extent of any excess, to the
cash collateralization of any outstanding Letters of Credit in respect of which
Company has failed to pay all or a portion of the amounts described above (such
cash collateralization to be apportioned among all such Letters of Credit in the
manner described above), second, to the extent of any further excess, to the
payment of any other outstanding Obligations in such order as Administrative
Agent shall elect, and third, to the extent of any further excess, to the
payment to whomsoever shall be lawfully entitled to receive such funds.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Company shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
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SECTION 9. THE AGENTS
9.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS. CIBC is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. DLJ is hereby
appointed Syndication Agent hereunder and under the other Loan Documents and
each Lender hereby authorizes Syndication Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. Each
of Syndication Agent and Administrative Agent agrees to act upon the express
conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of each
of Syndication Agent and Administrative Agent, and Lenders and Company shall
have no rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, each of Syndication
Agent and Administrative Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Administrative Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually as a
"SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL COLLATERAL
AGENTS").
In the event that Administrative Agent appoints a
Supplemental Collateral Agent with respect to any Collateral, (i) each and every
right, power, privilege or duty expressed or intended by this Agreement or any
of the other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
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Should any instrument in writing from Company or any
other Loan Party be required by any Supplemental Collateral Agent so appointed
by Administrative Agent for more fully and certainly vesting in and confirming
to him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably
authorizes each Agent to take such action on such Lender's behalf and to
exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to such Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Each Agent may exercise such powers, rights and remedies and
perform such duties by or through its agents or employees. No Agent shall have,
by reason of this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon any Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by such Agent to Lenders or by or on
behalf of Company to such Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall such Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither of the Agents nor any of
their respective officers, directors, employees or agents shall be liable to
Lenders for any action taken or omitted by any such Agent under or in connection
with any of the Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents or from the
exercise of any
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power, discretion or authority vested in it hereunder or thereunder unless and
until such Agent shall have received instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6) and, upon receipt of such instructions from
Requisite Lenders (or such other Lenders, as the case may be), such Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6).
D. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, each Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties
and functions delegated to it hereunder, and the term "Lender" or "Lenders" or
any similar term shall, unless the context clearly otherwise indicates, include
such Agent in its individual capacity. Any Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking,
trust, financial advisory or other business with Company or any of its
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Company for services in connection
with this Agreement and otherwise without having to account for the same to
Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its
own independent investigation of the financial condition and affairs of Company
and its Subsidiaries in connection with the making of the Loans and the issuance
of Letters of Credit hereunder and that it has made and shall continue to make
its own appraisal of the creditworthiness of Company and its Subsidiaries. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender 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, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent, to the extent that such Agent shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
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costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent or Syndication Agent, as the case may be, in
any way relating to or arising out of this Agreement or the other Loan
Documents; 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 any Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
9.5 SUCCESSOR AGENTS AND SWING LINE LENDER.
A. SUCCESSOR AGENTS. Syndication Agent may resign at any time upon
one Business Day's prior notice thereof to Company and Administrative Agent.
Administrative Agent may resign at any time by giving 30 days' prior written
notice thereof to Syndication Agent, Lenders and Company, and Administrative
Agent may be removed at any time with or without cause by an instrument or
concurrent instruments in writing delivered to Company and Administrative Agent
and signed by Requisite Lenders. Upon any such notice of resignation of
Syndication Agent or Administrative Agent or any such removal of Administrative
Agent, Requisite Lenders shall have the right, upon five Business Days' notice
to Company, to appoint a successor Syndication Agent or Administrative Agent, as
the case may be. If for any reason Requisite Lenders cannot agree on a successor
Administrative Agent or a successor Syndication Agent, the resigning
Administrative Agent or Syndication Agent shall have the right to designate a
successor Administrative Agent or Syndication Agent, respectively, after
consulting with Company. Upon the acceptance of any appointment as
Administrative Agent or Syndication Agent, as the case may be, hereunder by a
successor Administrative Agent or Syndication Agent, as the case may be, that
successor Administrative Agent or Syndication Agent, as the case may be, shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent or Syndication Agent,
as the case may be, and the retiring or removed Administrative Agent or
Syndication Agent, as the case may be, shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's or Syndication Agent's resignation or removal hereunder as
Administrative Agent or Syndication Agent, as the case may be, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent or Syndication Agent, as the
case may be, under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of CIBC or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the retiring or
removed Administrative Agent and Swing Line Lender shall surrender the Swing
Line Note held by it to Company for cancellation, and (iii) Company shall issue
a new Swing Line Note to the successor Administrative Agent and Swing Line
Lender substantially in the form of Exhibit VI annexed
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hereto, in the principal amount of the Swing Line Loan Commitment then in effect
and with other appropriate insertions.
9.6 COLLATERAL DOCUMENTS AND SUBSIDIARY GUARANTY.
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
as secured party and to be the agent for and representative of Lenders under
each Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and Guaranty; provided that Administrative Agent shall not
(i) enter into or consent to any material amendment, modification, termination
or waiver of any provision contained in any Collateral Document or Guaranty or
(ii) release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or, if required
pursuant to subsection 10.6, all Lenders); provided further, however, that,
without further written consent or authorization from Lenders, Administrative
Agent may execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite Lenders
have otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the equity Securities of such Subsidiary Guarantor
is sold to any Person (other than an Affiliate of Company) pursuant to a sale or
other disposition permitted hereunder or to which Requisite Lenders have
otherwise consented. Anything contained in any of the Loan Documents to the
contrary notwithstanding, Company, each Agent and each Lender hereby agree that
(X) no Lender shall have any right individually to realize upon any of the
Collateral under any Collateral Document or to enforce any Guaranty, it being
understood and agreed that all rights and remedies under the Collateral
Documents and the Subsidiary Guaranty may be exercised solely by Administrative
Agent for the benefit of Lenders in accordance with the terms thereof, and (Y)
in the event of a foreclosure by Administrative Agent on any of the Collateral
pursuant to a public or private sale, any Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and Administrative
Agent, as agent for and representative of Lenders (but not any Lender or Lenders
in its or their respective individual capacities unless Requisite Lenders shall
otherwise agree in writing) shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
any Loan or Loans made by it or its Letters of Credit or participations therein
or any other interest herein or in any other Obligations owed to it; provided
that no such sale, assignment, transfer or participation shall, without the
consent of Company, require Company to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of
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any state; provided, further that no such sale, assignment, transfer or
participation of any Letter of Credit or any participation therein may be made
separately from a sale, assignment, transfer or participation of a corresponding
interest in the Revolving Loan Commitment and the Revolving Loans of the
Revolving Lender effecting such sale, assignment, transfer or participation; and
provided, further that, anything contained herein to the contrary
notwithstanding, the Swing Line Loan Commitment and the Swing Line Loans of
Swing Line Lender may not be sold, assigned or transferred as described in
clause (i) above to any Person other than a successor Administrative Agent and
Swing Line Lender to the extent contemplated by subsection 9.5. Except as
otherwise provided in this subsection 10.1, no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment or transfer of, or any granting of participations in, all
or any part of its Commitments or the Loans, the Letters of Credit or
participations therein, or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment, Loan,
Letter of Credit or participation therein, or other Obligation may (a) be
assigned in any amount to another Lender, or to an Affiliate or
Affiliated Fund of the assigning Lender or another Lender, with the
giving of notice to Company and Administrative Agent or (b) be assigned
in an aggregate amount of not less than $2,000,000 (or such lesser amount
as shall constitute the aggregate amount of the Commitments, Loans,
Letters of Credit and participations therein, and other Obligations of
the assigning Lender or as may be consented to by Company and
Administrative Agent) to any other Eligible Assignee with the consent of
Company (which consent shall only be required so long as no Event of
Default has occurred and is continuing) and Administrative Agent, with
respect to all Lenders other than DLJ and Administrative Agent (which
consent of Company and Administrative Agent shall not be unreasonably
withheld or delayed), with prompt notification to Company and
Administrative Agent of all assignments by DLJ and Administrative Agent.
To the extent of any such assignment in accordance with either clause (a)
or (b) above, the assigning Lender shall be relieved of its obligations
with respect to its Commitments, Loans, Letters of Credit or
participations therein, or other Obligations or the portion thereof so
assigned. The parties to each such assignment shall execute and deliver
to Administrative Agent, for its acceptance, and recording in the
Register an Assignment Agreement, together with a processing fee of
$3,500 (to be assessed only if the assignee is not an Affiliate or
Affiliated Fund of the Lender and otherwise at Administrative Agent's
discretion) and such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation from and after the
effective date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under subsection
10.9B) and be released from its obligations under this Agreement (and, in
the case of an Assignment Agreement covering all or the remaining portion
of an assigning Lender's
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rights and obligations under this Agreement, such Lender shall cease to
be a party hereto; provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is the Issuing
Lender with respect to any outstanding Letters of Credit such Lender
shall continue to have all rights and obligations of an Issuing Lender
with respect to such Letters of Credit until the cancellation or
expiration of such Letters of Credit and the reimbursement of any amounts
drawn thereunder). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance of
Notes hereunder, the assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable, surrender its
applicable Notes to Administrative Agent for cancellation, and thereupon
new Notes shall be issued to the assignee and to the assigning Lender,
substantially in the form of Exhibit IV, Exhibit V, or Exhibit VI annexed
hereto, as the case may be, with appropriate insertions, to reflect the
new Commitments and/or outstanding Tranche B Term Loans, as the case may
be, of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent, Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing fee referred to in subsection
10.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to Administrative Agent pursuant to subsection
2.7B(iii)(a), Administrative Agent shall, if Administrative Agent and
Company have consented to the assignment evidenced thereby (in each case
to the extent such consent is required pursuant to subsection 10.1B(i)),
(a) accept such Assignment Agreement by executing a counterpart thereof
as provided therein (which acceptance shall evidence any required consent
of Administrative Agent to such assignment) (b) record the information
contained therein in the Register, and (c) give prompt notice thereof to
Company. Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this subsection
10.1B(ii).
(iii) Mandatory Assignment by Non-Suitable Lender. In the event
any Lender is found unsuitable as a Lender by any Gaming Authority (an
"Unsuitable Lender"): (a) Administrative Agent shall use its best efforts
to find a replacement Lender (a "Substitute Lender"), (b) if
Administrative Agent is unable to find a replacement Lender within 10
days, Company shall have an additional 90 day period, or such lesser
period as specified by such Gaming Authority, to find a Substitute
Lender, (c) the Substitute Lender shall assume the rights and obligations
of the Unsuitable Lender pursuant to an Assignment Agreement, which
assumption shall be required to comply with, and shall become effective
in accordance with, the provisions of subsection 10.1B. In the event that
Company shall not have found a Substitute Lender within such period of
time, Company shall immediately (i) prepay in full the outstanding
principal amount of Loans held by such Unsuitable 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 Company
either (A) place an amount equal to such Former Lender's Pro Rata Share
in each Letter of Credit issued by Administrative Agent, in a separate
cash collateral account with Administrative Agent for each outstanding
Letter of Credit, which amount will be applied by Administrative Agent to
satisfy Company's reimbursement obligations
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to Administrative Agent in respect of unreimbursed drawings under the
applicable Letter of Credit or (B) if no Event of Default then exists,
terminate the Commitments of such Former Lender, at which time the other
Lenders' Pro Rata Shares 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 Pro Rata Share and (b) the sum of (I) the aggregate amount of
all outstanding Letters of Credit at such time and (II) the aggregate
amount of all Swing Line Loans then outstanding, would exceed such
Lender's Revolving Loan Commitments at such time. Each Lender agrees
that, to the extent and for so long as required by any applicable Gaming
Authority, such Lender's rights and obligations under this Agreement are
subject to the provisions of this subsection 10.1B(iii) and all
restrictions of any applicable Gaming Authority.
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
and all amounts payable by Company hereunder (including amounts payable to such
Lender pursuant to subsections 2.6D and 2.7) shall be determined as if such
Lender had not sold such participation. Company and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 10.4 and 10.5,
(a) any participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS; INVESTOR PLEDGES. In
addition to the assignments and participations permitted under the foregoing
provisions of this subsection 10.1, any Lender may assign and pledge all or any
portion of its Loans, the other Obligations owed to such Lender, and its Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; provided that (i) no Lender shall, as
between Company and such Lender, be relieved of any of its obligations hereunder
as a result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder. Any Lender
that invests in bank loans may, without the consent of the Administrative Agent
or Company, pledge all or any portion of its rights and obligations hereunder to
any trustee for, or any other representative of, holders of obligations owed, or
securities issued, by such fund, as security for such obligations or securities;
provided that any foreclosure or similar action by such trustee shall be subject
to the provisions of this section concerning assignments (including any required
consents).
E. ASSIGNMENTS AND PARTICIPATIONS SUBJECT TO GAMING LAWS. Subject to
the last sentence of this subsection 10.1E, each Lender agrees that all
assignments and participations made hereunder shall be subject to, and made in
compliance with, all Gaming Laws applicable to Lenders. Company hereby
acknowledges that unless Company has provided Lenders with a written opinion of
counsel as to the suitability standards applicable to Lenders of any relevant
Gaming Authority with jurisdiction over the business of Company and its
Subsidiaries, no Lender shall have the responsibility of determining whether or
not a potential assignee or
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participant of such Lender would qualify as a suitable Lender under the Gaming
Laws of any such jurisdiction.
F. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
G. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making or acquisition of loans such as the Loans; and (iii)
that it will make its Loans for its own account in the ordinary course of its
business and without a view to distribution of such Loans within the meaning of
the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions requested
by Agents or Lenders as to any legal matters arising hereunder) and of Company's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with environmental, insurance
and solvency requirements; (iii) the reasonable fees, expenses and disbursements
of counsel to Arrangers, Syndication Agent and Administrative Agent (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Administrative
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to each of Syndication Agent and Administrative Agent and of counsel
providing any opinions that Syndication Agent, Administrative Agent or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all the actual costs and reasonable expenses (including
the reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and agents
employed or retained by Syndication Agent, Administrative Agent or their
respective counsel) of obtaining and reviewing any appraisals provided for under
subsection 4.2T or 6.9, any environmental audits or reports provided for under
subsection 4.2M or 6.9B(viii); (vi) the custody or preservation of any of the
Collateral; (vii) all other actual and reasonable costs and expenses incurred by
Arranger, Syndication Agent or Administrative Agent in connection with the
syndication of the Commitments and the negotiation, preparation and
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execution of the Loan Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby; and (viii)
after the occurrence of an Event of Default, all costs and reasonable expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by Agents and Lenders in enforcing
any Obligations of or in collecting any payments due from any Loan Party
hereunder or under the other Loan Documents by reason of such Event of Default
(including in connection with the sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Subsidiary Guaranty or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings).
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Arranger, Agents, Issuing Lenders and Lenders,
and the officers, directors, trustees, employees, agents and affiliates of
Arranger, Agents and Lenders (collectively called the "Indemnitees"), from and
against any and all Indemnified Liabilities (as hereinafter defined); provided
that Company shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any
and all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the failure of an Issuing Lender
to honor a drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority or the use or intended use of any thereof,
or any enforcement of any of the Loan Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty), (ii) the statements contained in the
commitment letter delivered by any Lender to Company with respect thereto, or
(iii) any Environmental Claim or any Hazardous Materials Activity relating to or
arising from, directly or
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indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 10.3 may be unenforceable in whole or
in part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by Company
at any time or from time to time, without notice to Company or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Company against and
on account of the obligations and liabilities of Company to that Lender under
this Agreement, the Letters of Credit and participations therein and the other
Loan Documents, including all claims of any nature or description arising out of
or connected with this Agreement, the Letters of Credit and participations
therein or any other Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of Credit or any
other amounts due hereunder shall have become due and payable pursuant to
Section 8 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Company hereby further grants to each Agent and each
Lender a security interest in all deposits and accounts maintained with such
Agent or such Lender as security for the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by
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such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Company or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without
interest. Company expressly consents to the foregoing arrangement and agrees
that any holder of a participation so purchased may exercise any and all rights
of banker's lien, set-off or counterclaim with respect to any and all monies
owing by Company to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, and no consent to any departure by
Company therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: reduces the principal
amount of any of the Loans; changes in any manner any of the following
definitions "Pro Rata Share", "Class", "Requisite Class Lenders" or "Requisite
Lenders"; changes in any manner any provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of all Lenders; postpones
the scheduled final maturity date or the date of any scheduled installment of
principal of any of the Loans; postpones the date or reduces the amount of any
scheduled reduction of the Revolving Loan Commitments; postpones the date on
which any interest or any fees are payable; decreases the interest rate borne
by any of the Loans (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2E) or the amount of
any fees payable hereunder; increases the maximum duration of Interest Periods
permitted hereunder; reduces the amount or postpones the due date of any amount
payable in respect of, or extends the required expiration date of, any Letter
of Credit; changes in any manner the obligations of Lenders relating to the
purchase of participations in Letters of Credit; releases any Lien granted in
favor of Administrative Agent with respect to all or substantially all of the
Collateral, other than in accordance with the Loan Documents; releases any
Subsidiary Guarantor from its obligations under a Guaranty, other than in
accordance with the terms of the Loan Documents; or changes in any manner the
provisions contained in this subsection 10.6 shall be effective only if
evidenced by a writing signed by or on behalf of all Lenders; provided,
further, that if any matter described in the foregoing proviso relates only to
a Revolving Loan, the approval of all Revolving Lenders shall be sufficient; if
any matter described in the foregoing proviso relates only to a Tranche B Term
Loan, the approval of all Tranche B Term Loan Lenders shall be sufficient. In
addition, (i) any amendment, modification, termination or waiver of any of the
provisions contained in Section 4 shall be effective only if evidenced by a
writing signed by or on behalf of Agents and Requisite Lenders, (ii) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender which is the
holder of that Note, (iii) no amendment, modification, termination or waiver of
any provision of any Letter of Credit shall be effective without the consent of
the Issuing Lender of such Letter of Credit and no amendment, modification,
termination or waiver of Section 3 that changes in any manner the rights and
obligations of an Issuing Lender with respect to an outstanding Letter of
Credit shall be effective without the consent of that Issuing Lender, (iv) no
amendment, modification, termination or waiver of subsection 2.1A(iv) or of any
other provision of this Agreement relating to the Swing Line Loan Commitment or
the Swing Line Loans shall be effective without the written concurrence of
Swing Line Lender, (v) no amendment, modification, termination or waiver of
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any provision of Section 9 or of any other provision of this Agreement which,
by its terms, expressly requires the approval or concurrence of Agents shall be
effective without the written concurrence of Agents, (vi) no amendment,
modification, termination or waiver of any provision of subsection 2.4 that has
the effect of changing any voluntary or mandatory prepayments or Commitment
reductions applicable to any Class (the "AFFECTED CLASS") in a manner that
disproportionately disadvantages such Class relative to the other Class shall
be effective without the written concurrence of Requisite Class Lenders of the
Affected Class (it being understood and agreed that any amendment,
modification, termination or waiver of any such provision that only postpones
or reduces voluntary or mandatory prepayment or Commitment reduction upon those
set forth in subsection 2.4 with respect to one Class but not the other Class
shall be deemed to disproportionately disadvantage one class but not to
disproportionately disadvantage such other Class for purposes of this clause
(vi), and it being further understood that any amendment covered by clause
(vii) or clause (viii) shall be deemed not to disproportionately disadvantage
any Class), (vii) any increase in the Tranche B Commitments or the Revolving
Commitments (and any appropriate conforming and supplemental modifications to
this Agreement) shall require only the approval of Requisite Lenders and each
Lender increasing its Tranche B Commitment or its Revolving Commitment, as the
case may be (provided that increases pursuant to subsection 2.1A(iv) do not
require the consent of Requisite Lenders), and (viii) the creation of an
additional Class of commitments and loans made thereunder (and any appropriate
conforming and supplemental modifications to this Agreement) shall require only
the approval of Requisite Lenders and each Lender providing a commitment under
such additional Class. Administrative Agent may, but shall have no obligation
to, with the concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of that Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on Company in any case shall entitle
Company to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company,
on Company.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that
if a particular action or condition is not permitted by any of such covenants,
the fact that it would be permitted by an exception to, or would otherwise be
within the limitations of, another covenant shall not avoid the occurrence of an
Event of Default or Potential Event of Default if such action is taken or
condition exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Agents shall not be effective
until received. For the purposes hereof, the address of each party hereto shall
be as set forth under such party's name on the signature pages hereof or (i) as
to Company and Agents, such other address as shall be
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designated by such Person in a written notice delivered to the other parties
hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections 9.2C,
9.4 and 10.5 shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amounts drawn
thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
None of Agents or Lenders shall be under any obligation to marshal
any assets in favor of Company or any other party or against or in payment of
any or all of the Obligations. To the extent that Company makes a payment or
payments to Administrative Agent or Lenders (or to Administrative Agent for the
benefit of Lenders), or any of Agents or Lenders enforce any security interests
or exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
125
<PAGE> 134
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
126
<PAGE> 135
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
127
<PAGE> 136
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature and in accordance with safe
and sound banking practices, it being understood and agreed by Company that in
any event a Lender may make disclosures to Affiliates and professional advisors
of such Lender or disclosures reasonably required by (a) any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participations therein or (b) by 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 hereunder, or disclosures required or requested by any governmental
agency or representative thereof or pursuant to legal process; provided that,
unless specifically prohibited by applicable law or court order, each Lender
shall notify Company of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information; and
provided, further that in no event shall any Lender be obligated or required to
return any materials furnished by Company or any of its Subsidiaries.
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Agents of written or telephonic notification of such execution and authorization
of delivery thereof.
10.21 COOPERATION WITH GAMING AUTHORITIES.
Administrative Agent and each Lender agree to cooperate with all
Gaming Boards in connection with the administration of their regulatory
jurisdiction over any Loan Party, including the provision of such documents or
other information as may be requested by any such Gaming Authority relating to
any Loan Party or to the Loan Documents.
[Remainder of page intentionally left blank]
128
<PAGE> 137
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
HORSESHOE GAMING HOLDING CORP.
By:
/s/ Kirk C. Saylor
------------------------------
Chief Financial Officer and
Treasurer
Notice Address:
568 Colonial Road
Memphis, Tennessee 38117
Attention: Chief Financial Officer
S-1
<PAGE> 138
AGENTS AND LENDERS:
DLJ CAPITAL FUNDING, INC., individually and as
Syndication Agent
By: /s/ Illegible
----------------------------------
Title: Managing Director
Notice Address:
2121 Avenue of the Stars
Los Angeles, CA 90067-5014
Attention:
CANADIAN IMPERIAL BANK OF COMMERCE,
individually and as Administrative Agent
By: /s/ Illegible
----------------------------------
Title: Managing Director
CIBC World Markets Corp., AS AGENT
Notice Address:
425 Lexington Avenue
New York, New York 10017
Attention: Agency Services Department
With a copy to:
Canadian Imperial Bank of Commerce
350 South Grand Avenue, Suite 2600
Los Angeles, California 90071
Attention: Carter Harned
S-2
<PAGE> 139
CIBC INC.,
By: /s/ Illegible
----------------------------------------------
Title: Managing Director
CIBC World Markets Corp., AS AGENT
Notice Address:
425 Lexington Avenue
New York, New York 10017
Attention: Agency Services Department
With a copy to:
Canadian Imperial Bank of Commerce
350 South Grand Avenue, Suite 2600
Los Angeles, California 90071
Attention: Carter Harned
S-3
<PAGE> 140
WELLS FARGO BANK, N.A.
individually and as Documentation Agent
By: /s/ Illegible
----------------------------------------------
Title: Senior Vice President
Notice Address:
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attention: Virginia Christenson
S-4
<PAGE> 141
U.S. BANK
By: /s/ David Walquist
----------------------------------------------
Name: David Walquist
Title: Vice President
Notice Address:
U.S. Bank
2300 W. Sahara, Suite 120
Las Vegas, NV 89102
Attention: D. Walquist
Telephone: (702) 386-3938
Telecopy: (702) 386-3916
S-5
<PAGE> 142
SUMMIT BANK
By: /s/ Carter E. Evans
----------------------------------------------
Name: Carter E. Evans, Summit Bank
Title: Vice President and Associate Director
Notice Address:
Summit Bank
750 Walnut Avenue, Large Corporate Group
Cranford, NJ 07016
Attention: Carter Evans
Telephone: (908) 709-6421
Telecopy: (908) 709-6433
S-6
<PAGE> 143
FIRST SECURITY BANK, N.A.
By: /s/ David P. Williams
----------------------------------------------
Name: David P. Williams
Title: Vice President
Notice Address:
First Security Bank, N.A.
Corporate Banking Division
15 East 100 South, 2nd Floor
Salt Lake City, Utah 84111
Telephone: (801) 246-5540
Telecopy: (801) 246-5532
S-7
<PAGE> 144
BANK OF HAWAII
By: /s/ Robert M. Wheeler, III
----------------------------------------------
Name: Robert M. Wheeler, III
Title: Vice President
Notice Address:
130 Merchant Street
20th Floor
Honolulu, HI 96813
Telephone: (808) 537-8237
Telecopy: (808) 537-8301
S-8
<PAGE> 145
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ William H. Powell
----------------------------------------------
Name: William Powell
Title: Assistant Vice President
Notice Address:
The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
Attention: Robert F. Simon
Telephone: (312) 732-8543
Telecopy: (312) 732-4840
S-9
<PAGE> 146
MERCANTILE NATIONAL BANK OF INDIANA
By: /s/ Daryl D. Pomranke, V.P.
----------------------------------------------
Name: Daryl D. Pomranke
Title: Vice President
Notice Address:
Mercantile National Bank of IN
5243 Hohman Avenue
Hammond, IN 46320
Attention: Daryl D. Pomranke
Telephone: (219) 933-3807
Telecopy: (219) 933-3719
S-10
<PAGE> 147
BANK OF SCOTLAND
By: /s/ Annie Glynn
----------------------------------------------
Name: Annie Glynn
Title: Senior Vice President
Notice Address:
Bank of Scotland
565 Fifth Avenue
New York, NY 10017
Attention: Karen Workman
Telephone: (212) 450-0877
Telecopy: (212) 687-4412
S-11
<PAGE> 148
FIRST AMERICAN NATIONAL BANK, OPERATING AS
DEPOSIT GUARANTY NATIONAL BANK
By: /s/ Larry C. Ratzlaff
----------------------------------------------
Name: Larry C. Ratzlaff
Title: Senior Vice President
Notice Address:
Deposit Guaranty National Bank
210 East Capitol Street
Mail Code- JA3226
Jackson, MS 39201
Attention: Larry C. Ratzlaff
Telephone: (601) 968-4749
Telecopy: (601) 354-8315
S-12
<PAGE> 149
HIBERNIA NATIONAL BANK
By: /s/ Christopher K. Haskew
----------------------------------------------
Name: Christopher K. Haskew
Title: Vice President
Notice Address:
Hibernia National Bank
333 Travis Street
Shreveport, Louisiana 71101
Attention: Christopher K. Haskew
Telephone: (318) 674-3796
Telecopy: (318) 674-3758
S-13
<PAGE> 150
IMPERIAL BANK
By: /s/ Steven K. Johnson
----------------------------------------------
Steven K. Johnson
Title: Senior Vice President
Notice Address:
Imperial Bank
9920 South La Cienega Blvd, 14th Floor
Inglewood, California 90310
Attention: Steven K. Johnson
Telephone: (310) 417-5657
Telecopy: (310) 417-5997
S-14
<PAGE> 151
THE CIT GROUP/ EQUIPMENT FINANCING,
INC.
By: /s/ Stephen Turpin
----------------------------------------------
Name: Stephen Turpin
Title: Vice President
Notice Address:
The CIT Group/ Equipment Financing, Inc.
900 Ashwood Parkway
Suite 600
Atlanta, Georgia 30338
Attention: John Palmer
Telephone: (770) 551-7827
Telecopy: (770) 206-9295
S-15
<PAGE> 152
COMERICA WEST INCORPORATED
By: /s/ Eoin P. Collins
----------------------------------------------
Name: Eoin P. Collins
Title: Account Officer
Notice Address:
3980 Howard Hughes Parkway
Suite 350
Las Vegas, Nevada 89109
Attention: Eoin P. Collins
Telephone: (702) 791-4802
Telecopy: (702) 791-2371
S-16
<PAGE> 153
EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Credit Agreement dated as of June __, 1999, as
amended, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Horseshoe Gaming Holding Corp., a
Delaware corporation ("COMPANY"), the financial institutions listed therein as
Lenders ("LENDERS"), DLJ Capital Funding, Inc., as Syndication Agent, and
Canadian Imperial Bank of Commerce, as Administrative Agent ("ADMINISTRATIVE
AGENT"), this represents Company's request to borrow as follows:
<TABLE>
<S> <C> <C>
1. Date of borrowing: ___________________, _________
2. Amount of borrowing: $___________________
3. Lender(s): a. Lenders, in accordance with their
applicable Pro Rata Shares
b. Swing Line Lender
4. Type of Loans: a. Tranche B Term Loans
b. Revolving Loans
c. Swing Line Loan
5. Interest rate option: a. Base Rate Loan(s) (must select for
Swing Line Loans and Loans made on
the Initial Funding Date)
b. Adjusted Eurodollar Rate Loans with
an initial Interest Period of
______ month(s)
</TABLE>
The proceeds of such Loans are to be deposited in Company's account at
Administrative Agent.
The undersigned officer, to the best of his or her knowledge and
without any personal liability to such officer, on behalf of the Company
certifies that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to
the same extent as though made on and as of the date hereof, except
to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and
warranties were true, correct and complete in all material respects
on and as of such earlier date;
<PAGE> 154
(ii) No event has occurred and is continuing or would result from
the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default; and
(iii) Company has performed in all material respects all agreements
and satisfied all conditions which the Credit Agreement provides
shall be performed or satisfied by it on or before the date hereof.
DATED: HORSESHOE GAMING HOLDING CORP.
--------------------
By:
-----------------------------------
Title:
--------------------------------
2
<PAGE> 155
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Credit Agreement dated as of June __, 1999, as
amended, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Horseshoe Gaming Holding Corp., a
Delaware corporation ("COMPANY"), the financial institutions listed therein as
Lenders, DLJ Capital Funding, Inc., as Syndication Agent, and Canadian Imperial
Bank of Commerce, as Administrative Agent, this represents Company's request to
convert or continue Loans as follows:
1. Date of conversion/continuation: __________________, _______
2. Amount of Loans being converted/continued: $___________________
3. Type of Loans being a. Tranche B Term Loans
converted/continued: b. Revolving Loans
4. Nature of conversion/continuation:
a. Conversion of Base Rate Loans to Adjusted Eurodollar
Rate Loans
b. Conversion of Adjusted Eurodollar Rate Loans to Base
Rate Loans
c. Continuation of Adjusted Eurodollar Rate Loans as such
5. If Loans are being continued as or converted to Adjusted Eurodollar
Rate Loans, the duration of the new Interest Period that commences
on the conversion/ continuation date: _______________ month(s)
In the case of a conversion to or continuation of Adjusted Eurodollar Rate
Loans, the undersigned officer, to the best of his or her knowledge and without
any personal liability to such officer, on behalf of the Company certifies that
no Event of Default or Potential Event of Default has occurred and is continuing
under the Credit Agreement.
DATED: HORSESHOE GAMING HOLDING CORP.
---------------------
By:
-----------------------------------
Title:
--------------------------------
<PAGE> 156
EXHIBIT III
[FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT]
NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Credit Agreement dated as of June __, 1999, as
amended, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Horseshoe Gaming Holding Corp., a
Delaware corporation ("COMPANY"), the financial institutions listed therein as
Lenders, DLJ Capital Funding, Inc., as Syndication Agent, and Canadian Imperial
Bank of Commerce, as Administrative Agent ("ADMINISTRATIVE AGENT"), this
represents Company's request for the issuance of a Letter of Credit as follows:
1. Date of issuance of Letter of Credit: ________________, ________
2. Face amount of Letter of Credit: $________________________
3. Expiration date of Letter of Credit: ________________, ________
4. Name and address of beneficiary:
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
5. Attached hereto is:
a. the verbatim text of such proposed Letter of Credit
b. a description of the proposed terms and conditions of such Letter
of Credit, including a precise description of any documents to be
presented by the beneficiary which, if presented by the beneficiary
prior to the expiration date of such Letter of Credit, would require
the Issuing Lender to make payment under such Letter of Credit.
The undersigned officer, to the best of his or her knowledge and
without any personal liability to such officer, on behalf of the Company
certifies that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to
the same extent as though made on and as of the date hereof, except
to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and
warranties were true, correct and complete in all material respects
on and as of such earlier date;
(ii) No event has occurred and is continuing or would result from
the issuance of the Letter of Credit contemplated hereby that would
constitute an Event of Default or a Potential Event of Default; and
<PAGE> 157
(iii) Company has performed in all material respects all agreements
and satisfied all conditions which the Credit Agreement provides
shall be performed or satisfied by it on or before the date hereof.
DATED: HORSESHOE GAMING HOLDING CORP.
--------------------
By:
-----------------------------------
Title:
--------------------------------
2
<PAGE> 158
EXHIBIT IV
[FORM OF TRANCHE B TERM NOTE]
HORSESHOE GAMING HOLDING CORP.
PROMISSORY NOTE DUE SEPTEMBER 30, 2006
$___[1]_______ [2]
[3]
FOR VALUE RECEIVED, HORSESHOE GAMING HOLDING CORP., a Delaware corporation
("COMPANY"), promises to pay to ______[4]__________ ("PAYEE") or its registered
assigns the principal amount of ________[5]__________ ($____[1]_____) in the
installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of June __, 1999 by and among Company, the financial
institutions listed therein as Lenders, DLJ Capital Funding, Inc., as
Syndication Agent, and Canadian Imperial Bank of Commerce, as Administrative
Agent (said Credit Agreement, as it may be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
Company shall make principal payments on this Note in consecutive
quarterly installments, commencing on December 31, 1999 and ending on September
30, 2006. Each such installment shall be due on the date specified in the Credit
Agreement and in an amount determined in accordance with the provisions thereof;
provided that the last such installment shall be in an amount sufficient to
repay the entire unpaid principal balance of this Note, together with all
accrued and unpaid interest thereon.
This Note is one of Company's "Tranche B Term Notes" that collectively
have an aggregate principal amount of $125,000,000, subject to increases
pursuant to 2.1A(iv), and is issued pursuant to and entitled to the benefits of
the Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Tranche B Term Loan
evidenced hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the
- ------------
1 Insert amount of Lender's Tranche B Term Loan in numbers.
2 Insert place of delivery of Note.
3 Insert Initial Funding Date.
4 Insert Lender's name in capital letters
5 Insert amount of Lender's Tranche B Term Loan in words.
<PAGE> 159
assignment or transfer of this Note shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 10.1B(ii) of the
Credit Agreement, Company and Administrative Agent shall be entitled to deem and
treat Payee as the owner and holder of this Note and the Loan evidenced hereby.
Payee hereby agrees, by its acceptance hereof, that before disposing of this
Note or any part hereof it will make a notation hereon of all principal payments
previously made hereunder and of the date to which interest hereon has been
paid; provided, however, that the failure to make a notation of any payment made
on this Note shall not limit or otherwise affect the obligations of Company
hereunder with respect to payments of unpaid principal of or unpaid interest
accrued on this Note.
Whenever any payment on this Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4C(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4C(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
Upon the occurrence and during the continuance of an Event of Default, the
unpaid balance of the principal amount of this Note, together with all accrued
and unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligations of Company, which
are absolute and unconditional, to pay the unpaid principal of and unpaid
interest accrued on this Note at the place, at the respective times, and in the
currency herein prescribed.
Company promises to pay all costs and reasonable expenses, including
reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. Company and
any endorsers of this Note hereby consent to renewals and extensions of time at
or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
2
<PAGE> 160
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
HORSESHOE GAMING HOLDING CORP.
By:
-----------------------------------
Title:
--------------------------------
3
<PAGE> 161
EXHIBIT V
[FORM OF REVOLVING NOTE]
HORSESHOE GAMING HOLDING CORP.
PROMISSORY NOTE DUE SEPTEMBER 30, 2004
$___[1]______ [2]
[3]
FOR VALUE RECEIVED, HORSESHOE GAMING HOLDING CORP., a Delaware corporation
("COMPANY"), promises to pay to _____[4]___________ ("PAYEE") or its registered
assigns, on or before September 30, 2004, the lesser of (x) _____[5]______
($____[1]________) and (y) the unpaid principal amount of all advances made by
Payee to Company as Revolving Loans under the Credit Agreement referred to
below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of June __, 1999 by and among Company, the financial
institutions listed therein as Lenders, DLJ Capital Funding, Inc., as
Syndication Agent, and Canadian Imperial Bank of Commerce, as Administrative
Agent (said Credit Agreement, as it may be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
This Note is one of Company's "Revolving Notes" that collectively have an
aggregate principal amount of $250,000,000, subject to increases pursuant to
2.1A(iv) and is issued pursuant to and entitled to the benefits of the Credit
Agreement, to which reference is hereby made for a more complete statement of
the terms and conditions under which the Revolving Loans evidenced hereby were
made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Agent and recorded in the Register as
provided in subsection 10.1B(ii) of the Credit Agreement, Company and Agent
shall be entitled to deem and treat Payee as the owner and holder of this Note
and the Loans evidenced hereby. Payee hereby agrees, by its acceptance hereof,
that before disposing of this Note or any part hereof it will make a notation
hereon of all principal payments previously made hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to
- ---------------
1 Insert amount of Lender's Revolving Loan Commitment in numbers.
2 Insert place of delivery of Note.
3 Insert Initial Funding Date.
4 Insert Lender's name in capital letters.
5 Insert amount of Lender's Revolving Loan Commitment in words.
<PAGE> 162
make a notation of any payment made on this Note shall not limit or otherwise
affect the obligations of Company hereunder with respect to payments of unpaid
principal of or unpaid interest accrued on this Note.
Whenever any payment on this Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsections
2.4B and 2.4C(iii) of the Credit Agreement and to prepayment at the option of
Company as provided in subsection 2.4C(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
Upon the occurrence and during the continuance of an Event of Default, the
unpaid balance of the principal amount of this Note, together with all accrued
and unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligations of Company, which
are absolute and unconditional, to pay the unpaid principal of and unpaid
interest accrued on this Note at the place, at the respective times, and in the
currency herein prescribed.
Company promises to pay all costs and reasonable expenses, including
reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. Company and
any endorsers of this Note hereby consent to renewals and extensions of time at
or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
2
<PAGE> 163
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
HORSESHOE GAMING HOLDING CORP.
By:
-----------------------------------
Title:
--------------------------------
3
<PAGE> 164
TRANSACTIONS
ON
REVOLVING NOTE
<TABLE>
<CAPTION>
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- -------------- ----------- --------
<S> <C> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 165
EXHIBIT VI
[FORM OF SWING LINE NOTE]
HORSESHOE GAMING HOLDING CORP.
PROMISSORY NOTE DUE SEPTEMBER 30, 2004
$____[1]_______ [2]
[3]
FOR VALUE RECEIVED, HORSESHOE GAMING HOLDING CORP., a Delaware corporation
("COMPANY"), promises to pay to ________[4]___________ ("PAYEE"), on or before
September 30, 2004, the lesser of (x) _____[5]____________ and no/100 Dollars
($___[1]_____) and (y) the unpaid principal amount of all advances made by Payee
to Company as Swing Line Loans under the Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit Agreement dated as of June __, 1999 by and among Company, the financial
institutions listed therein as Lenders, DLJ Capital Funding, Inc., as
Syndication Agent, and Canadian Imperial Bank of Commerce, as Administrative
Agent (said Credit Agreement, as it may be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
This Note is Company's "Swing Line Note" and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Swing Line Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Whenever any payment on this Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4C(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4C(i) of the Credit Agreement.
- ------------------------------
1 Insert amount of Lender's Swing Line Loan Commitment in numbers.
2 Insert place of delivery of Note.
3 Insert Initial Funding Date.
4 Insert name of Lender in capital letters.
5 Insert amount of Lender's Swing Line Loan Commitment in words.
<PAGE> 166
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
Upon the occurrence and during the continuance of an Event of Default, the
unpaid balance of the principal amount of this Note, together with all accrued
and unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as provided
in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligations of Company, which
are absolute and unconditional, to pay the unpaid principal of and unpaid
interest accrued on this Note at the place, at the respective times, and in the
currency herein prescribed.
Company promises to pay all costs and reasonable expenses, including
reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit
Agreement, incurred in the collection and enforcement of this Note. Company and
any endorsers of this Note hereby consent to renewals and extensions of time at
or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
2
<PAGE> 167
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
HORSESHOE GAMING HOLDING CORP.
By:
-----------------------------------
Title:
--------------------------------
3
<PAGE> 168
TRANSACTIONS
ON
SWING LINE NOTE
<TABLE>
<CAPTION>
Amount of Outstanding
Amount of Principal Principal
Loan Made Paid Balance Notation
Date This Date This Date This Date Made By
---- ---------- ----------- ----------- --------
<S> <C> <C> <C> <C>
</TABLE>
4
<PAGE> 169
EXHIBIT VII
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES (WITH NO PERSONAL LIABILITY TO THE
UNDERSIGNED) THAT:
(1) I am the duly elected ______________ of Horseshoe Gaming Holding
Corp., a Delaware corporation ("COMPANY");
(2) I have reviewed or am familiar with the terms of that certain
Credit Agreement dated as of June __, 1999 as amended, supplemented
or otherwise modified to the date hereof (said Credit Agreement, as
so amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined in
this Certificate (including Attachment No. 1 annexed hereto and made
a part hereof) being used in this Certificate as therein defined),
by and among Company, the financial institutions listed therein as
Lenders, DLJ Capital Funding, Inc., as Syndication Agent and
Canadian Imperial Bank of Commerce, as Administrative Agent, and the
terms of the other Loan Documents, and I have made, or have caused
to be made under my supervision, a review in reasonable detail of
the material transactions and condition of Company and its
Subsidiaries during the accounting period covered by the attached
financial statements; and
(3) The examination described in paragraph (2) above did not
disclose, and we have no knowledge of, the existence of any
condition or event which constitutes an Event of Default or
Potential Event of Default during or at the end of the accounting
period covered by the attached financial statements or as of the
date of this Certificate[, except as set forth below].
Set forth below are all exceptions to paragraph (3) above listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which Company has taken, is taking, or proposes to take
with respect to each such condition or event:
<PAGE> 170
The foregoing certifications, together with the computations set forth in
Attachment No. 1 annexed hereto and made a part hereof and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this __________ day of _____________, _____ pursuant to subsection
6.1(iv) of the Credit Agreement.
HORSESHOE GAMING HOLDING CORP.
By:
-----------------------------------
Title:
----------------------------------
2
<PAGE> 171
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a
Compliance Certificate dated as of ____________, _____ and pertains to the
period from ____________, ____ to ____________, ____. Subsection references
herein relate to subsections of the Credit Agreement.
<TABLE>
<CAPTION>
A. INDEBTEDNESS
<S> <C> <C>
1. Indebtedness permitted under subsection 7.1(vi): $
-------------
2. Maximum permitted under subsection 7.1(vi): $ 35,000,000
3. Indebtedness to the Majority Shareholders
permitted under subsection 7.1(vi): $
-------------
4. Maximum Indebtedness to the Majority Shareholders permitted under
subsection 71.(vi): $ 3,000,000
5. Indebtedness permitted under subsection 7.1(vii): $
-------------
6. Maximum permitted under subsection 7.1(vii): $ 25,000,000
7. Indebtedness permitted under subsection 7.1(viii): $
-------------
8. Maximum permitted under subsection 7.1(viii): $ 20,000,000
9. Secured Indebtedness and Indebtedness in respect of Capital Leases
permitted under subsection 7.1(viii): $
-------------
10. Maximum secured Indebtedness and Indebtedness in respect of Capital
Leases permitted under subsection 7.1(viii): $ 15,000,000
B. INVESTMENTS
1. Investments permitted under subsection 7.3(vi): $
-------------
2. Maximum permitted under subsection 7.3(vi): $ 5,000,000
C. CONSOLIDATED EBITDA (for the four-Fiscal Quarter
period ending _____________, ___)
1. Consolidated Net Income: $
-------------
2. Consolidated Interest Expense: $
-------------
</TABLE>
3
<PAGE> 172
<TABLE>
<S> <C> <C>
3. Provisions for taxes based on income: $
-------------
4. Total depreciation expense: $
-------------
5. Total amortization expense: $
-------------
6. Consolidated Preopening Expenses $
-------------
7. Other non-cash items reducing Consolidated
Net Income: $
-------------
8. Other non-cash items increasing Consolidated
Net Income: $
-------------
9. Consolidated EBITDA (1+2+3+4+5+6+7-8): $
-------------
10. [describe and set forth calculations for any
pro forma adjustments]
D. MINIMUM FIXED CHARGE COVERAGE RATIO (for the four-Fiscal Quarter period
ending _____________, ____) (annualized in accordance with the Credit
Agreement for the first three full Fiscal Quarters following the Initial
Funding Date)
1. Consolidated Adjusted EBITDA (C.9 above): $
-------------
2. Maintenance Capital Expenditures: $
-------------
3. Consolidated Interest Expense: $
-------------
4. Provisions for taxes based on income and Permitted Tax
Distributions: $
-------------
5. Scheduled principal payments on Consolidated
Total Debt: $
-------------
6. All dividends and distributions paid on and all Cash repurchases
and redemptions of, any shares of capital stock of Company: $
-------------
7. Consolidated Fixed Charges (3+4+5+6): $
-------------
8. Fixed Charge Coverage Ratio (1-2):(7): ____:1.00
9. Minimum ratio required under subsection 7.6A: 1.50:1.00
</TABLE>
4
<PAGE> 173
<TABLE>
<S> <C> <C>
E. MAXIMUM LEVERAGE RATIO (as of _____________, ____)
1. Consolidated Total Debt: $
-------------
2. Consolidated EBITDA (C.9 above): $
-------------
3. Consolidated Leverage Ratio (1):(2): ____:1.00
4. Maximum ratio permitted under
subsection 7.6B: ____:1.00
F. MINIMUM CONSOLIDATED NET WORTH (as of ____________, ____)
1. Consolidated Net Worth: $
-------------
2. Minimum required under subsection 7.6C: $
-------------
G. CONSOLIDATED CAPITAL EXPENDITURES
1. Expansion Capital Expenditures: $
-------------
2. Maximum amount of Expansion Capital Expenditures permitted under
subsection 7.8(a): $
-------------
3. Maintenance Capital Expenditures in Fiscal Year: $
-------------
4. Maintenance Capital Expenditures permitted
under subsection 7.8(b): $ 25,000,000
5. New Venture Capital Expenditures: $
-------------
6. New Venture Capital Expenditures permitted under subsection
7.8(c): $
-------------
H. LEASES
1. Consolidated Rental Payments in
effect during current Fiscal Year: $
-------------
2. Maximum permitted under subsection 7.9: $ 5,000,000
I. RESTRICTION ON ASSET SALES
1. Aggregate value of assets sold in largest single
transaction: $
-------------
2. Maximum value of assets sold in a single
transaction permitted as Excluded Asset Sales: $ 5,000,000
</TABLE>
5
<PAGE> 174
<TABLE>
<S> <C> <C>
3. Aggregate value of assets sold: $
-------------
4 Maximum aggregate value of assets sold
permitted as Excluded Asset Sales: $ 10,000,000
J. PERMITTED DISTRIBUTION AMOUNT
1. Aggregate amount of investments pursuant
to subsection 7.3(vii) from October 1, 1999
(must be 0 if conditions are not met): $
-------------
2. Aggregate amount of dividends and distributions pursuant to
subsection 7.5A(iii) from October 1, 1999 (must be 0 if
conditions are not met): $
-------------
3. Sum of 1 + 2: $
-------------
4. Consolidated Net Income from October 1, 1999: $
-------------
5. Permitted Tax Distributions from October 1, 1999: $
-------------
6. 50% of (4-5): $
-------------
7. 6 - 3: $
-------------
8. Permitted dividends and similar distributions under most
restrictive of New Sub Debt Indenture, Existing Horseshoe
Indenture and Existing Empress Indenture: $
-------------
9. Permitted Distribution Amount (lesser of 7 or 8): $
-------------
</TABLE>
6
<PAGE> 175
EXHIBIT VIII
[FORM OF SIGNING DATE OPINION OF
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP]
[to be provided by SBSF]
<PAGE> 176
EXHIBIT IX
[FORM OF INITIAL FUNDING DATE OPINION OF
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP]
[Initial funding date]
DLJ Capital Funding, Inc.
2121 Avenue of the Stars
Los Angeles, CA 90067-5014
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, NY 10017
Attn: Agency Services Department
and
The Lenders Listed on
Schedule A Hereto
Re: Credit Agreement dated as of June __, 1999 among Horseshoe Gaming
Holding Corp., the financial institutions listed therein as Lenders,
DLJ Capital Funding, Inc., as Syndication Agent, and Canadian
Imperial Bank of Commerce, as Administrative Agent
Ladies and Gentlemen:
We have acted as counsel to Horseshoe Gaming Holding Corp., a
Delaware corporation ("Company"), in connection with that certain Credit
Agreement dated as of June __, 1999 (the "Credit Agreement") among Company, the
financial institutions listed therein as Lenders ("Lenders"), DLJ Capital
Funding, Inc., as Syndication Agent, and Canadian Imperial Bank of Commerce, as
Administrative Agent ("Administrative Agent"). This opinion is rendered to you
at the request of the Company and the other Loan Parties in compliance with
subsection 4.2I of the Credit Agreement. Capitalized terms used herein without
definition have the same meanings as in the Credit Agreement. We have also acted
as counsel to the Subsidiaries of Company that have executed the Subsidiary
Guaranty are collectively referred to herein as the "Subsidiary Guarantors").
The Company and the Subsidiary Guarantors are collectively referred to herein as
the "Loan Parties").
In our capacity as such counsel, we have examined originals, or
copies identified to our satisfaction as being true copies, of such records,
documents or other instruments as in our judgment are necessary or appropriate
to enable us to render the opinions expressed below. These records, documents
and instruments included the following:
IX-1
<PAGE> 177
(a) The Certificates or Articles of Incorporation of each Loan
Party, as amended to date;
(b) The Bylaws of each Loan Party, as amended to date;
(c) All records of proceedings and actions of the Board of
Directors of each Loan Party relating to the Credit Agreement, the other
Loan Documents (as herein defined), the Empress Acquisition Agreement,
and the transactions contemplated thereby;
(d) The Credit Agreement;
(e) The Tranche B Term Loan Notes, the Revolving Loan Notes, and
the Swing Line Loan Note delivered today (the "Notes");
(f) The Security Agreement;
(g) executed copies of UCC-1 Financing Statements naming the
Company as debtor and the Administrative Agent as secured party to be
filed in the states of [LIST JURISDICTIONS](the "Company Filing States"),
which Financing Statements we understand will be filed for the Company in
the respective filing offices listed on Schedule 1 hereto (the "Company
Filing Offices");
(h) The Subsidiary Guaranty;
(i) executed copies of UCC-1 Financing Statements naming the
Subsidiary Guarantors as debtors and the Administrative Agent as secured
party to be filed in the states of [LIST STATES](the "Subsidiary
Guarantor Filing States") which Financing Statements we understand will
be Filed for the Subsidiary Guarantors in the respective filing offices
listed on Schedule 1 (the "Subsidiary Guarantors Filing Offices");
[(j) describe real property mortgage documents]
(k) The Empress Acquisition Agreement; and
(l) The New Sub Debt Indenture.
The documents referred to in paragraphs (d), (e), (f) and (g)
above are collectively referred to herein as the "Company Loan Documents." The
documents referred to in paragraphs (f), (h), (i) and (j) above are collectively
referred to herein as the "Subsidiary Loan Documents." The Company Loan
Documents, the Notes, and the Subsidiary Loan Documents are collectively
referred to herein as the "Loan Documents." The documents referred to in (k) and
(l) above are collectively referred to herein as the "Related Agreements."
We have been furnished with, and with Lenders' consent have relied
upon, certificates of officers of each Loan Party with respect to certain
factual matters, copies of
IX-2
<PAGE> 178
which have been delivered to Lenders. In addition, we have obtained and relied
upon such certificates and assurances from public officials as we have deemed
necessary, copies of which have been delivered to Lenders. In all such
examinations, we have assumed the genuineness of all signatures on original and
certified documents, and the conformity to original or certified documents of
all documents submitted to us as conformed or photostatic copies.
We have investigated such questions of law for the purpose of
rendering this opinion as we have deemed necessary. We are opining herein as to
the effect on the subject transactions of only United States Federal law, the
General Corporation Law of the State of Delaware, the General Corporation Law of
the states of [states of organization for Subsidiary Guarantors], the laws of
the State of New York, and, for purposes of paragraph 12 the Uniform Commercial
Code as in effect in each of the Company Filing States and Subsidiary Guarantor
Filing States.
On the basis of the foregoing, and in reliance thereon, and
subject to the limitations, qualifications and exceptions set forth below, we
are of the opinion that:
1. The Company has been duly organized and is validly existing and in
good standing under the laws of Delaware. The Company has all requisite
corporate power and authority to own and operate its properties and to carry on
its business as now conducted. The Company is qualified to do business and is in
good standing in Louisiana, Mississippi, Illinois and Indiana.
2. Each Subsidiary Guarantor has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each Subsidiary Guarantor has all requisite corporate power and
authority to own and operate its properties and to carry on its business as now
conducted. Each Subsidiary Guarantor is qualified to do business and is in good
standing in [LIST OTHER JURISDICTIONS].
3. The Company has all requisite corporate power and authority to
execute, deliver and perform the Company Loan Documents and the Related
Agreements, to issue the Notes and to carry out the transactions contemplated
thereby.
4. Each Subsidiary Guarantor has all requisite corporate power and
authority to execute, deliver and perform the Subsidiary Loan Documents and to
carry out the transactions contemplated thereby.
5. The execution, delivery and performance of the Company Loan Documents
and the Related Agreements and the issuance and payment of the Notes have been
duly authorized by all necessary corporate action on the part of Company. The
Company Loan Documents, the Related Agreements and the Notes have been duly
executed and delivered by Company and constitute the legally valid and binding
obligations of Company, enforceable against Company in accordance with their
respective terms.
IX-3
<PAGE> 179
6. The execution, delivery and performance of the Subsidiary Loan
Documents have been duly authorized by all necessary corporate action on the
part of each Subsidiary Guarantor that is a party thereto. The Subsidiary Loan
Documents have been duly executed and delivered by each Subsidiary Guarantor
that is a party thereto and constitute the legally valid and binding obligations
of such Subsidiary Guarantor, enforceable against each such Subsidiary Guarantor
in accordance with their respective terms.
7. Neither the execution and delivery of the Loan Documents and Related
Agreements by the Loan Parties to which they are a party nor the issuance and
payment of the Notes by Company nor the consummation of the transactions
contemplated thereby nor the compliance with the terms and conditions thereof by
the Loan Parties (A) conflicts with, results in a breach or violation of, or
constitutes a default under, any of the terms, conditions or provisions of (x)
the Certificate or Articles of Incorporation or Bylaws of any Loan Party, (y)
any term of any material agreement, instrument, order, writ, judgment or decree
known to us after due inquiry to which any Loan Party is a party or by which any
of its respective properties or assets are bound, or (z) any present federal,
Delaware corporation[, other state corporate law] or New York statute, rule or
regulation binding on any Loan Party, or (B) results in the creation of any Lien
upon any of the properties or assets of any Loan Party under any agreement or
order referred to in clause (y) above (other than Liens created pursuant to the
Collateral Documents).
8. No consents or approvals of, authorizations by, or registrations,
declarations or filings with, any federal, Delaware[, other state corporate law]
or New York governmental authority are required by any Loan Party in connection
with the execution and delivery by the Loan Parties of the Loan Documents and
Related Agreements to which they are a party or the extensions of credit under
the Credit Agreement or the payment by Company of the Obligations thereunder or
the issuance and payment of the Notes or the consummation of the transactions
contemplated thereby [other than filings in Indiana and Illinois to effect the
merger of Horseshoe subsidiaries into Empress Hammond and Empress Joliet.
9. To the best of our knowledge after due inquiry, (i) there are no
actions, suits or proceedings pending or threatened against any Loan Party which
have a significant likelihood of materially and adversely affecting either the
ability of any Loan Party to perform its obligations under any Loan Document or
Related Agreement or the financial condition or operations of any Loan Party
individually or the Loan Parties taken as a whole and (ii) there are no action,
suits or proceedings pending against any Loan Party that seek to enjoin the
consummation of the Empress Joliet Acquisition.
10. Schedule B hereto sets forth the number of shares of each class of
capital stock of each Subsidiary Guarantor that are authorized and that are
issued and outstanding. Such issued and outstanding shares have been duly
authorized by all necessary corporate action on the part of the applicable
Subsidiary Guarantor and are validly issued, fully-paid and nonassessable.
IX-4
<PAGE> 180
11. The Security Agreement creates in favor of the Administrative Agent a
security interest in such of the Collateral (as defined in such Security
Agreement) of the Company and each Subsidiary Guarantor that is a party thereto
that is of a type in which a security interest can be created under Article 9 of
the Uniform Commercial Code as in effect in the State of New York (the "Code").
12. The Administrative Agent upon the filing of the UCC-1 Financing
Statements with the Company Filing Offices and the Subsidiary Guarantors Filing
Offices will have a perfected security interest in the Company's and each
Subsidiary Guarantor's interest in the Collateral described therein, to the
extent a security interest in such Collateral can be perfected by the filing of
a financing statement in the Company Filing States and the Subsidiary Guarantor
Filing States under the Uniform Commercial Code as in effect in such States.
13. The Security Agreement, together with delivery of the Instruments (as
defined below) to the Agent in the State of New York, create in favor of the
Agent a perfected security interest under the New York UCC, in that portion of
the Article 9 Collateral consisting of the Instruments identified on Schedule __
to the Security Agreement. For purposes of this paragraph, "Instruments" means
"instruments" as defined in Section 9-105 of the New York UCC (but excluding any
instruments constituting "certificated securities" as defined in Section
8-102(1)(a) of the New York UCC).
14. The Security Agreement and delivery to the Administrative Agent in
the State of New York of the certificated securities representing the Pledged
Shares, endorsed to the Administrative Agent or in blank, create in favor of the
Administrative Agent a perfected security interest under the New York UCC, in
the Pledged Shares free of adverse claims.
15. [Opinions relating to Mortgages]
16. [Opinions relating to Empress Acquisitions]
17. The making of the Loans and the application of the proceeds thereof
as provided in the Credit Agreement do not violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
18. It is not necessary in connection with the execution and delivery of
the Notes or the Credit Agreement to the Lenders to register the Notes, the
Credit Agreement or the Loans under the Securities Act of 1933, as amended, or
to qualify any indenture in respect thereof under the Trust Indenture Act of
1939, as amended.
19. No Loan Party is an "investment company" or a company "controlled" by
an "investment company" as such terms are defined in the Investment Company Act
of 1940, as amended.
IX-5
<PAGE> 181
[STATE QUALIFICATIONS AND LIMITATIONS FOR OPINIONS]
This opinion is rendered only to the Agents and the Lenders and is
solely for their benefit in connection with the above transactions. This opinion
may not be relied upon by any Agent or Lender for any other purpose, or quoted
to or relied upon by any other person, firm or corporation for any purpose
without our prior written consent. However, a copy of this opinion may be
delivered to the accountants, attorneys and other professional advisors of any
Agent or Lender, to regulatory agencies having jurisdiction over any Agent or
Lender and to permitted assignees and participants of any Lender; any such
assignee or participant may rely on this opinion as if it were addressed and had
been delivered to it on the date of this opinion.
Very truly yours,
IX-6
<PAGE> 182
SCHEDULE A
LENDERS:
<PAGE> 183
SCHEDULE B
AUTHORIZED CAPITAL STOCK
SUBSIDIARY GUARANTOR AUTHORIZED ISSUED AND OUTSTANDING
<PAGE> 184
SCHEDULE C
FILING OFFICES
LOAN PARTY STATE FILING OFFICES LOCAL FILING OFFICES
COMPANY
<PAGE> 185
EXHIBIT X
[FORM OF SIGNING DATE OPINION OF
O'MELVENY & MYERS LLP]
June __, 1999
218,107-019
DLJ Capital Funding, Inc.
2121 Avenue of the Stars
Los Angeles, CA 90067-5014
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, NY 10017
Attn: Agency Services Department
and
The Lenders Party to the Credit
Agreement Referenced Below
Re: Credit Agreement of Horseshoe Gaming Holding Corp.
Ladies and Gentlemen:
We have acted as counsel to DLJ Capital Funding, Inc., as Syndication
Agent (the "Syndication Agent") and Canadian Imperial Bank of Commerce, as
Administrative Agent (in such capacity, "Administrative Agent"), in connection
with the preparation, execution and delivery of a Credit Agreement dated as of
June __, 1999 (the "Credit Agreement") among Horseshoe Gaming Holding Corp., a
Delaware corporation ("Company"), the financial institutions listed therein as
lenders, the Syndication Agent and Administrative Agent.
We have reviewed the form of the Credit Agreement, and the opinion of
Swidler Berlin Shereff Friedman, LLP (the "Opinion") and the officer's
certificates and other documents delivered at the Signing Date. We have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals or copies and the due authority of all persons executing the
same, and we have relied as to factual matters on the documents that we have
reviewed.
Although we have not independently considered all of the matters covered
by the Opinion to the extent necessary to enable us to express the conclusions
therein stated, we believe
<PAGE> 186
that the Credit Agreement is in substantially acceptable legal form and that the
Opinion and the officers' certificates and other documents delivered in
connection with the execution and delivery of, and as conditions to the
effectiveness of the Credit Agreement are substantially responsive to the
requirements of the Credit Agreement.
Respectfully submitted,
2
<PAGE> 187
EXHIBIT XI
[FORM OF INITIAL FUNDING DATE OPINION OF
O'MELVENY & MYERS LLP]
_______ __, 1999
218,107-019
DLJ Capital Funding, Inc.
2121 Avenue of the Stars
Los Angeles, CA 90067-5014
Attn:
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, NY 10017
Attn: Agency Services Department
and
The Lenders Party to the Credit
Agreement Referenced Below
Re: Loans to Horseshoe Gaming Holding Corp.
Ladies and Gentlemen:
We have acted as counsel to DLJ Capital Funding, Inc. as Syndication Agent
(in such capacity, the "Syndication Agent") and Canadian Imperial Bank of
Commerce, as Administrative Agent (in such capacity, "Administrative Agent"), in
connection with the preparation and delivery of a Credit Agreement dated as of
June __, 1999 (the "Credit Agreement") among Horseshoe Gaming Holding Corp., a
Delaware corporation ("Company"), the financial institutions listed therein as
lenders, Syndication Agent and Administrative Agent and in connection with the
preparation and delivery of certain related documents.
We have participated in various conferences with representatives of
Company and Administrative Agent and conferences and telephone calls with
Swidler Berlin Shereff Friedman LLP, counsel to Company, and with your
representatives, during which the Credit Agreement and related matters have been
discussed, and we have also participated in the meeting held on the date hereof
(the "Initial Funding Date") incident to the funding of the initial loans made
under the Credit Agreement. We have reviewed the forms of the Credit Agreement
and the exhibits thereto, including the forms of the promissory notes annexed
thereto (the "Notes"), and the
<PAGE> 188
opinions of Swidler Berlin Shereff Friedman LLP and [local counsel] (the
"Opinions") delivered at the Initial Funding Date and the officers' certificates
and other documents delivered at the Initial Funding Date. We have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals or copies and the due authority of all persons executing the same,
and we have relied as to factual matters on the documents that we have reviewed.
Although we have not independently considered all of the matters covered
by the Opinion to the extent necessary to enable us to express the conclusions
therein stated, we believe that the Credit Agreement and the exhibits thereto
are in substantially acceptable legal form and that the Opinion and the
officers' certificates and other documents delivered in connection with the
execution and delivery of, and as conditions to the making of the initial loans
under, the Credit Agreement and the Notes are substantially responsive to the
requirements of the Credit Agreement.
Respectfully submitted,
2
<PAGE> 189
EXHIBIT XII
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "AGREEMENT") is entered into by and
between the parties designated as Assignor ("ASSIGNOR") and Assignee
("ASSIGNEE") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "Schedule OF
Terms") and relates to that certain Credit Agreement described in the Schedule
of Terms (said Credit Agreement, as amended, supplemented or otherwise modified
to the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. ASSIGNMENT AND ASSUMPTION.
(a) Effective upon the Settlement Date* specified in Item 4 of the
Schedule of Terms (the "SETTLEMENT DATE"), Assignor hereby sells and assigns to
Assignee, without recourse, representation or warranty (except as expressly set
forth herein), and Assignee hereby purchases and assumes from Assignor, that
percentage interest in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan Documents with respect to
Assignor's Commitments and outstanding Loans, if any, which represents, as of
the Settlement Date, the percentage interest specified in Item 3 of the Schedule
of Terms of all rights and obligations of Lenders arising under the Credit
Agreement and the other Loan Documents with respect to the Commitments and any
outstanding Loans (the "ASSIGNED SHARE"). Without limiting the generality of the
foregoing, the parties hereto hereby expressly acknowledge and agree that any
assignment of all or any portion of Assignor's rights and obligations relating
to Assignor's Revolving Loan Commitment shall include (i) in the event Assignor
is an Issuing Lender with respect to any outstanding Letters of Credit (any such
Letters of Credit being "ASSIGNOR LETTERS OF CREDIT"), the sale to Assignee of a
participation in the Assignor Letters of Credit and any drawings thereunder as
contemplated by subsection 3.1C of the Credit Agreement and (ii) the sale to
Assignee of a ratable portion of any participations previously purchased by
Assignor pursuant to said subsection 3.1C with respect to any Letters of Credit
other than the Assignor Letters of Credit.
(b) In consideration of the assignment described above, Assignee
hereby agrees to pay to Assignor, on the Settlement Date, the principal amount
of any outstanding Loans included within the Assigned Share, such payment to be
made by wire transfer of immediately available funds in accordance with the
applicable payment instructions set forth in Item 5 of the Schedule of Terms.
- --------------------
* If mutually agreed by Assignor and Assignee, may be revised to indicate that
the Settlement Date and the Effective Date are the same day.
<PAGE> 190
(c) Assignor hereby represents and warrants that Item 3 of the
Schedule of Terms correctly sets forth the amount of the Commitments, the
outstanding Tranche B Term Loan and the Pro Rata Share corresponding to the
Assigned Share.
(d) Assignor and Assignee hereby agree that, upon giving effect to the
assignment and assumption described above, (i) Assignee shall be a party to the
Credit Agreement and shall have all of the rights and obligations under the Loan
Documents, and shall be deemed to have made all of the covenants and agreements
contained in the Loan Documents, arising out of or otherwise related to the
Assigned Share, and (ii) Assignor shall be absolutely released from any of such
obligations, covenants and agreements assumed or made by Assignee in respect of
the Assigned Share. Assignee hereby acknowledges and agrees that the agreement
set forth in this Section 1(d) is expressly made for the benefit of Company,
Administrative Agent, Assignor and the other Lenders and their respective
successors and permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the assignment by
Assignor and the assumption by Assignee of Assignor's rights and obligations
with respect to the Assigned Share, (ii) any other assignments by Assignor of a
portion of its rights and obligations with respect to the Commitments and any
outstanding Loans shall have no effect on the Commitments, the outstanding
Tranche B Term Loan and the Pro Rata Share corresponding to the Assigned Share
as set forth in Item 3 of the Schedule of Terms or on the interest of Assignee
in any outstanding Revolving Loans corresponding thereto, and (iii) from and
after the Settlement Date, Agent shall make all payments under the Credit
Agreement in respect of the Assigned Share (including all payments of principal
and accrued but unpaid interest, commitment fees and letter of credit fees with
respect thereto) (A) in the case of any such interest and fees that shall have
accrued prior to the Settlement Date, to Assignor, and (B) in all other cases,
to Assignee; provided that Assignor and Assignee shall make payments directly to
each other to the extent necessary to effect any appropriate adjustments in any
amounts distributed to Assignor and/or Assignee by Agent under the Loan
Documents in respect of the Assigned Share in the event that, for any reason
whatsoever, the payment of consideration contemplated by Section 1(b) occurs on
a date other than the Settlement Date.
SECTION 2. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Loan Documents or for any representations, warranties,
recitals or statements made therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Assignor to Assignee or by or on behalf
of Company or any of its Subsidiaries to Assignor or Assignee in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall Assignor be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to
2
<PAGE> 191
the use of the proceeds of the Loans or the use of the Letters of Credit or as
to the existence or possible existence of any Event of Default or Potential
Event of Default.
(c) Assignee represents and warrants that it is an Eligible Assignee;
that it has experience and expertise in the making or acquisition of loans such
as the Loans; that it has acquired the Assigned Share for its own account in the
ordinary course of its business and without a view to distribution of the Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of
subsection 10.1 of the Credit Agreement, the disposition of the Assigned Share
or any interests therein shall at all times remain within its exclusive
control); and that it has received, reviewed and approved a copy of the Credit
Agreement (including all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received from
Assignor such financial information regarding Company and its Subsidiaries as is
available to Assignor and as Assignee has requested, that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the assignment evidenced by this Agreement,
and that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. Assignor shall have no duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Assignee or to provide Assignee
with any other credit or other information with respect thereto, whether coming
into its possession before the making of the initial Loans or at any time or
times thereafter, and Assignor shall not have any responsibility with respect to
the accuracy of or the completeness of any information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the other
party hereto that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder in accordance with the provisions
hereof, that this Agreement has been duly authorized, executed and delivered by
such party and that this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
SECTION 3. MISCELLANEOUS.
(a) Each of Assignor and Assignee hereby agrees from time to time,
upon request of the other such party hereto, to take such additional actions and
to execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent to or
acceptance of this Agreement) against whom enforcement of such change, waiver,
discharge or termination is sought.
(c) Unless otherwise specifically provided herein, any notice or other
communication
3
<PAGE> 192
herein required or permitted to be given shall be in writing and may be
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or three Business
Days after depositing it in the United States mail with postage prepaid and
properly addressed. For the purposes hereof, the notice address of each of
Assignor and Assignee shall be as set forth on the Schedule of Terms or, as to
either such party, such other address as shall be designated by such party in a
written notice delivered to the other such party. In addition, the notice
address of Assignee set forth on the Schedule of Terms shall serve as the
initial notice address of Assignee for purposes of subsection 10.8 of the Credit
Agreement.
(d) In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
(f) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
(g) This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
(h) This Agreement shall become effective upon the date (the
"EFFECTIVE DATE") upon which all of the following conditions are satisfied: (i)
the execution of a counterpart hereof by each of Assignor and Assignee, (ii) the
execution of a counterpart hereof by Company as evidence of its consent hereto
to the extent required under subsection 10.1B(i) of the Credit Agreement, (iii)
the receipt by Administrative Agent of the processing and recordation fee
referred to in subsection 10.1B(i) of the Credit Agreement, (iv) in the event
Assignee is a Non-US Lender (as defined in subsection 2.7B(iii)(a) of the Credit
Agreement), the delivery by Assignee to Administrative Agent of such forms,
certificates or other evidence with respect to United States federal income tax
withholding matters as Assignee may be required to deliver to Administrative
Agent pursuant to said subsection 2.7B(iii)(a), (v) the execution of a
counterpart hereof by Administrative Agent as evidence of its acceptance hereof
in accordance with subsection 10.1B(ii) of the Credit Agreement, (vi) the
receipt by Administrative Agent of originals or telefacsimiles of the
counterparts described above and authorization of delivery thereof, and (vii)
the recordation by Administrative Agent in the Register of the pertinent
information regarding the assignment effected hereby in accordance with
subsection 10.1B(ii) of the Credit Agreement.
4
<PAGE> 193
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.
5
<PAGE> 194
SCHEDULE OF TERMS
1. Borrower: Horseshoe Gaming Holding Corp.
2. Name and Date of Credit Agreement: Credit Agreement dated as of June __,
1999 by and among Horseshoe Gaming Holding Corp., the financial
institutions listed therein as Lenders, DLJ Capital Funding, Inc., as
Syndication Agent, and Canadian Imperial Bank of Commerce, as
Administrative Agent.
3. Amounts:
<TABLE>
<CAPTION>
Re: Tranche B Re: Revolving
Term Loans Loans
---------- -----
<S> <C> <C> <C>
(a) Aggregate Commitments of all Lenders: $________ $________
(b) Assigned Share/Pro Rata Share: _____% _____%
(c) Amount of Assigned Share of Commitments: $________ $________
(d) Amount of Assigned Share of Tranche B Term Loans: $________
</TABLE>
4. Settlement Date: ____________, ____
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
---------------------------- ----------------------------
---------------------------- ----------------------------
---------------------------- ----------------------------
Attention: _________________ Attention: _________________
Reference: _________________ Reference: _________________
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
---------------------------- ----------------------------
---------------------------- ----------------------------
---------------------------- ----------------------------
---------------------------- ----------------------------
7. Signatures:
_____________________________________, ____________________________________,
as Assignor as Assignee
By: By:
----------------------------------- ----------------------------------
Title: Title:
-------------------------------- -------------------------------
6
<PAGE> 195
<TABLE>
<S> <C>
[Consented to in accordance with [Consented to in accordance with subsection
subsection 10.1B(i) of the Credit Agreement 10.1B(i) of the Credit Agreement and
accepted in accordance with subsection
10.1B(ii) of the Credit Agreement
HORSESHOE GAMING HOLDING CORP. CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By: By:
----------------------------------- ----------------------------------
Title: ] Title: ]
-------------------------------- -------------------------------
</TABLE>
7
<PAGE> 196
EXHIBIT XIII
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Credit Agreement dated as of
June __, 1999 (said Credit Agreement, as amended, supplemented or otherwise
modified to the date hereof, being the "CREDIT AGREEMENT") by and among
Horseshoe Gaming Holding Corp., a Delaware corporation, the financial
institutions listed therein as Lenders, DLJ Capital Funding, Inc., as
Syndication Agent and Canadian Imperial Bank of Commerce, as Administrative
Agent. Pursuant to subsection 2.7B(iii)(b) of the Credit Agreement, the
undersigned hereby certifies that it is not a "bank" or other Person described
in Section 881(c)(3) of the Internal Revenue Code of 1986, as amended.
-----------------------------------
By:
--------------------------------
Title:
-----------------------------
<PAGE> 197
EXHIBIT XIV
[FORM OF SOLVENCY CERTIFICATE]
SOLVENCY CERTIFICATE
This FINANCIAL CONDITION CERTIFICATE (this "CERTIFICATE") is delivered in
connection with that certain Credit Agreement dated as of June __, 1999 (the
"CREDIT AGREEMENT") by and among Horseshoe Gaming Holding Corp., a Delaware
corporation ("COMPANY"), the financial institutions referred to therein as
Lenders ("LENDERS"), DLJ Capital Funding, Inc., as Syndication Agent, and
Canadian Imperial Bank of Commerce, as Administrative Agent ("ADMINISTRATIVE
AGENT"). Capitalized terms used herein without definition have the same meanings
as in the Credit Agreement.
A. I am, and at all pertinent times mentioned herein have been, the
duly qualified and acting Chief Financial Officer of Company. In such capacity I
am a senior financial officer of Company and I have participated actively in the
management of its financial affairs and am familiar with its financial
statements and those of its Subsidiaries. I have, together with other officers
of Company, acted on behalf of Company in connection with the negotiation of the
Credit Agreement and I am familiar with the terms and conditions thereof.
B. I have carefully reviewed the contents of this Certificate, and I
have conferred with counsel for Company for the purpose of discussing the
meaning of its contents.
C. In connection with preparing for the consummation of the Empress
Acquisition and financings contemplated by the Credit Agreement (the "PROPOSED
TRANSACTIONS"), I have participated in the preparation of, and I have reviewed,
pro forma projections of net income and cash flows for Company and its
Subsidiaries for the fiscal years of Company ending 1999 through ____, inclusive
(the "PROJECTED FINANCIAL STATEMENTS"). The Projected Financial Statements,
attached hereto as Exhibit A, give effect to the consummation of the Proposed
Transactions and assume that the debt obligations of Company will be paid from
the cash flow generated by the operations of Company and its Subsidiaries and
other cash resources. The Projected Financial Statements were prepared on the
basis of information available at __________, 1999. I know of no facts that have
occurred since such date that would lead me to believe that the Projected
Financial Statements are inaccurate in any material respect. The Projected
Financial Statements do not reflect (i) any potential changes in interest rates
from those assumed in the Projected Financial Statements, (ii) any potential
material, adverse changes in general business conditions, or (iii) any potential
changes in income tax laws.
D. I have also participated in the preparation of, and I have
reviewed, a pro forma summary balance sheet of Company and its Subsidiaries (the
"FAIR VALUE SUMMARY BALANCE SHEET") as of [date of most recent available
quarterly financial statements], giving effect to the Proposed Transactions. The
Fair Value Summary Balance Sheet is attached hereto as Exhibit B and has been
prepared as described in paragraphs F and G below and not in accordance with
GAAP.
E. In connection with the preparation of the Projected Financial
Statements, I have made such investigations and inquiries as I have deemed
necessary and prudent therefor and,
1
<PAGE> 198
specifically, have relied on historical information with respect to revenues,
expenses and other relevant items supplied by the supervisory personnel of
Company and its Subsidiaries directly responsible for the various operations
involved. The assumptions upon which the Projected Financial Statements are
based are stated therein. Although any assumptions and any projections by
necessity involve uncertainties and approximations, I believe, based on my
discussions with other members of management, that the assumptions on which the
Projected Financial Statements are based are reasonable. Based thereon, I
believe that the projections for Company and its Subsidiaries, taken as a whole,
reflected in the Projected Financial Statements provide reasonable estimations
of future performance, subject, as stated above, to the uncertainties and
approximations inherent in any projections.
F. The Fair Value Summary Balance Sheet has been prepared in a manner
which I believe reflects a conservative estimate of the fair value of the assets
of Company on a parent-company basis (which reflects the estimated fair value of
the stock of Company's Subsidiaries rather than consolidating the individual
assets and liabilities of such Subsidiaries) and the probable liability on all
of its debts, contingent or otherwise. For purposes of this Certificate, I
understand "fair value" of any assets to mean the amount which may be realized
within a reasonable time, either through collection of such assets or through
sale of such assets at the regular market value thereof, conceiving of the
latter as the amount which could be obtained for the property in question within
such period by a capable and diligent businessman from an interested buyer who
is willing to purchase under ordinary selling conditions. The specific
methodology used by management for valuing Company and its Subsidiaries is set
forth in paragraph G below.
G. For purposes of constructing the Fair Value Summary Balance Sheet,
I have utilized the following procedures:
I have separately estimated the fair value of the stock of each of
Company's Subsidiaries by calculating the difference between the fair value of
the assets of such Subsidiary and the probable liability on all of its debts,
contingent or otherwise.
With respect to the asset values reflected in the Fair Value Summary
Balance Sheet (including the asset values used to calculate the fair value of
the stock of each of Company's Subsidiaries), [I have included the net working
capital of Company and its Subsidiaries, calculated as the difference between
the current assets and current liabilities reported in their December 31, 1998
financial statements, and I have reviewed and utilized the separate appraised
values of each of the Subsidiaries as prepared by HVS International].
With respect to liabilities reflected in the Fair Value Summary Balance
Sheet (including liabilities used to calculate the fair value of the stock of
each of Company's Subsidiaries), I have included long-term liabilities reported
by Company and its Subsidiaries in their __________, 1999 financial statements
and debts to be incurred or assumed by Company and its Subsidiaries under the
Credit Agreement and the Proposed Transactions. In addition, with respect to
contingent liabilities (such as litigation, guaranties and pension plan
liabilities), I have consulted with legal, financial and other personnel of
Company and its Subsidiaries and have reflected as liabilities our best judgment
as to the maximum exposure that can reasonably be expected to result therefrom
in light of all the facts and circumstances existing at this time, recognizing
that any such estimation is inherently subject to uncertainties.
2
<PAGE> 199
Based on the foregoing, I have reached the following conclusions:
1. Company is not now, nor will the incurrence of the
Obligations under the Credit Agreement and the incurrence of the
other obligations contemplated by the Proposed Transactions render
Company "insolvent" as defined in this paragraph 1. The recipients
of this Certificate and I have agreed that, in this context,
"insolvent" means that the present fair value of assets is less
than the amount that will be required to pay the probable
liability on existing debts as they become absolute and matured.
We have also agreed that the term "debts" includes any legal
liability, whether matured or unmatured, liquidated or
unliquidated, absolute, fixed or contingent. My conclusion
expressed above is supported by the Fair Value Summary Balance
Sheet. Valuation of Company on the basis thereof would reflect the
net value of Company as $__________ representing the difference
between asset values of $__________ and liabilities of
$__________.
2. By the incurrence of the Obligations under the Credit
Agreement and the incurrence of the other obligations contemplated
by the Proposed Transactions, Company will not incur debts beyond
its ability to pay as such debts mature. I have based my
conclusion in part on the Projected Financial Statements, which
demonstrate that Company will have positive cash flow after paying
all of its scheduled anticipated indebtedness (including scheduled
payments under the Credit Agreement, the other obligations
contemplated by the Proposed Transactions and other permitted
indebtedness). I have concluded that the realization of current
assets in the ordinary course of business will be sufficient to
pay recurring current debt and short-term and long-term debt
service as such debts mature, and that the cash flow (including
earnings plus non-cash charges to earnings [and the disposition of
surplus fixed assets held for sale]) will be sufficient to provide
cash necessary to repay the Loans and other Obligations under the
Credit Agreement, the other obligations contemplated by the
Proposed Transactions and other long-term indebtedness as such
debt matures.
3. The incurrence of the Obligations under the Credit
Agreement and the incurrence of the other obligations contemplated
by the Proposed Transactions will not leave Company with property
remaining in its hands constituting "unreasonably small capital."
In reaching this conclusion, I understand that "unreasonably small
capital" depends upon the nature of the particular business or
businesses conducted or to be conducted, and I have reached my
conclusion based on the needs and anticipated needs for capital of
the businesses conducted or anticipated to be conducted by Company
and its Subsidiaries in light of the Projected Financial
Statements and available credit capacity.
4. To the best of my knowledge, Company has not executed the
Credit Agreement or any documents mentioned therein, or made any
transfer or incurred any obligations thereunder, with actual
intent to hinder, delay or defraud either present or future
creditors.
3
<PAGE> 200
I understand that Agent and Lenders are relying on the truth and accuracy
of the foregoing in connection with the extension of credit to Company pursuant
to the Credit Agreement.
I represent the foregoing information to be, to the best of my knowledge
and belief and without any personal liability, true and correct and execute this
Certificate this _____ day of __________, 1999.
HORSESHOE GAMING HOLDING CORP.
By: ________________________________
Name: ______________________________
Title: _____________________________
4
<PAGE> 201
EXHIBIT XV
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of _________ __, 1999
by THE UNDERSIGNED (each a "GUARANTOR" and collectively, "GUARANTORS") in favor
of and for the benefit of CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative
Agent for and representative of (in such capacity herein called "GUARANTIED
PARTY") the financial institutions ("LENDERS") party to the Credit Agreement
referred to below, and, subject to subsection 3.12, for the benefit of the other
Beneficiaries (as hereinafter defined).
RECITALS
A. Horseshoe Gaming Holding Corp., a Delaware corporation
("COMPANY"), has entered into that certain Credit Agreement dated as of June __,
1999 with Guarantied Party, DLJ Capital Funding, Inc. and Lenders (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "CREDIT AGREEMENT"; capitalized terms defined
therein and not otherwise defined herein being used herein as therein defined).
B. A portion of the proceeds of the Loans may be advanced to
Guarantors and thus the Guarantied Obligations (as hereinafter defined) are
being incurred for and will inure to the benefit of Guarantors (which benefits
are hereby acknowledged).
C. It is a condition precedent to the making of the initial
Loans under the Credit Agreement that Company's obligations thereunder be
guarantied by Guarantors.
D. Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Lenders and Guarantied Party to enter into
the Credit Agreement and to make Loans and other extensions of credit
thereunder, Guarantors hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the
following terms shall have the following meanings unless the context otherwise
requires:
"BENEFICIARIES" means Guarantied Party and Lenders.
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term in
subsection 2.1.
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"GUARANTY" means this Subsidiary Guaranty dated as of ________ __,
1999, as it may be amended, supplemented or otherwise modified
from time to time.
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means
payment in full of the Guarantied Obligations, including all
principal, interest, costs, fees and expenses (including
reasonable legal fees and expenses) of Beneficiaries as required
under the Loan Documents.
1.2 INTERPRETATION.
(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty unless
otherwise specifically provided. (b) In the event of any conflict
or inconsistency between the terms, conditions and provisions of
this Guaranty and the terms, conditions and provisions of the
Credit Agreement, the terms, conditions and provisions of this
Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS. Subject to the
provisions of subsection 2.2(a), Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty the due and punctual payment in full of
all Guarantied Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)). The
term "GUARANTIED OBLIGATIONS" is used herein in its most comprehensive sense and
includes:
(a) any and all Obligations of Company now or hereafter made,
incurred or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising under or
in connection with the Credit Agreement and the other Loan
Documents, including those arising under successive borrowing
transactions under the Credit Agreement which shall either
continue the Obligations of Company or from time to time renew
them after they have been satisfied and including interest which,
but for the filing of a petition in bankruptcy with respect to
Company, would have accrued on any Guarantied Obligations, whether
or not a claim is allowed against Company for such interest in the
related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.9 hereof.
2.2 LIMITATION ON AMOUNT GUARANTIED; CONTRIBUTION BY
GUARANTORS.
(a) Anything contained in this Guaranty to the contrary
notwithstanding, if any Fraudulent Transfer Law (as hereinafter
defined) is determined by a court of competent jurisdiction to be
applicable to the obligations of any Guarantor under this
Guaranty, such obligations of such Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548
of Title 11 of the United States Code or any applicable
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provisions of comparable state law (collectively, the "FRAUDULENT
TRANSFER LAWS"), in each case after giving effect to all other
liabilities of such Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor (x) in
respect of intercompany indebtedness to Company or other
affiliates of Company to the extent that such indebtedness would
be discharged in an amount equal to the amount paid by such
Guarantor hereunder and (y) under any guaranty of Subordinated
Indebtedness which guaranty contains a limitation as to maximum
amount similar to that set forth in this subsection 2.2(a),
pursuant to which the liability of such Guarantor hereunder is
included in the liabilities taken into account in determining such
maximum amount) and after giving effect as assets to the value (as
determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement
(including any such right of contribution under subsection
2.2(b)).
(b) Guarantors under this Guaranty together desire to allocate
among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in
a fair and equitable manner, their obligations arising under this
Guaranty. Accordingly, in the event any payment or distribution is
made on any date by any Guarantor under this Guaranty (a "FUNDING
GUARANTOR") that exceeds its Fair Share (as defined below) as of
such date, that Funding Guarantor shall be entitled to a
contribution from each of the other Contributing Guarantors in the
amount of such other Contributing Guarantor's Fair Share Shortfall
(as defined below) as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate
Payments (as defined below) to equal its Fair Share as of such
date. "FAIR SHARE" means, with respect to a Contributing Guarantor
as of any date of determination, an amount equal to (i) the ratio
of (x) the Adjusted Maximum Amount (as defined below) with respect
to such Contributing Guarantor to (y) the aggregate of the
Adjusted Maximum Amounts with respect to all Contributing
Guarantors multiplied by (ii) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under
this Guaranty in respect of the obligations guarantied. "FAIR
SHARE SHORTFALL" means, with respect to a Contributing Guarantor
as of any date of determination, the excess, if any, of the Fair
Share of such Contributing Guarantor over the Aggregate Payments
of such Contributing Guarantor. "ADJUSTED MAXIMUM AMOUNT" means,
with respect to a Contributing Guarantor as of any date of
determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty, determined as of
such date, in the case of any Guarantor, in accordance with
subsection 2.2(a); provided that, solely for purposes of
calculating the "Adjusted Maximum Amount" with respect to any
Contributing Guarantor for purposes of this subsection 2.2(b), any
assets or liabilities of such Contributing Guarantor arising by
virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution
hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect
to a Contributing Guarantor as of
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any date of determination, an amount equal to (i) the aggregate
amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty
(including in respect of this subsection 2.2(b)) minus (ii) the
aggregate amount of all payments received on or before such date
by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this subsection 2.2(b). The
amounts payable as contributions hereunder shall be determined as
of the date on which the related payment or distribution is made
by the applicable Funding Guarantor. The allocation among
Contributing Guarantors of their obligations as set forth in this
subsection 2.2(b) shall not be construed in any way to limit the
liability of any Contributing Guarantor hereunder.
2.3 CONTRIBUTION BY GUARANTORS. Guarantors under this Guaranty
together desire to allocate among themselves (collectively, the "CONTRIBUTING
GUARANTORS"), in a fair and equitable manner, their obligations arising under
this Guaranty. Accordingly, in the event any payment or distribution is made on
any date by any Guarantor under this Guaranty (a "FUNDING GUARANTOR") that
exceeds its Fair Share (as defined below) as of such date, that Funding
Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below) as of such date, with the result that
all such contributions will cause each Contributing Guarantor's Aggregate
Payments (as defined below) to equal its Fair Share as of such date. "FAIR
SHARE" means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Fair Share
Contribution Amount (as defined below) with respect to such Contributing
Guarantor to (y) the aggregate of the Fair Share Contribution Amounts with
respect to all Contributing Guarantors, multiplied by (ii) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guaranty in respect of the obligations guarantied. "FAIR SHARE SHORTFALL" means,
with respect to a Contributing Guarantor as of any date of determination, the
excess, if any, of the Fair Share of such Contributing Guarantor over the
Aggregate Payments of such Contributing Guarantor. "FAIR SHARE CONTRIBUTION
AMOUNT" means, with respect to a Contributing Guarantor as of any date of
determination, the maximum aggregate amount of the obligations of such
Contributing Guarantor under this Guaranty that would not render its obligations
hereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code or any applicable provisions
of comparable state law; provided that, solely for purposes of calculating the
"Fair Share Contribution Amount" with respect to any Contributing Guarantor for
purposes of this subsection 2.3, any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder shall
not be considered as assets or liabilities of such Contributing Guarantor.
"AGGREGATE PAYMENTS" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (i) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty or the Holdings Guaranty, as applicable
(including in respect of this subsection 2.3 minus (ii) the aggregate amount of
all payments received on or before such date by such Contributing Guarantor from
the other Contributing Guarantors as contributions under this subsection 2.3.
The amounts payable as contributions hereunder shall be determined as of the
date on which the related payment or distribution is made by the applicable
Funding Guarantor. The allocation among Contributing Guarantors of their
obligations as set
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forth in this subsection 2.3 shall not be construed in any way to limit the
liability of any Contributing Guarantor hereunder.
2.4 PAYMENT BY GUARANTORS; APPLICATION OF PAYMENTS. Subject to
the provisions of subsection 2.2(a), Guarantors hereby jointly and severally
agree, in furtherance of the foregoing and not in limitation of any other right
which any Beneficiary may have at law or in equity against any Guarantor by
virtue hereof, that upon the failure of Company to pay any of the Guarantied
Obligations when and as the same shall become due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)),
Guarantors will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guarantied Obligations then due as aforesaid,
accrued and unpaid interest on such Guarantied Obligations (including interest
which, but for the filing of a petition in bankruptcy with respect to Company,
would have accrued on such Guarantied Obligations, whether or not a claim is
allowed against Company for such interest in the related bankruptcy proceeding)
and all other Guarantied Obligations then due to Beneficiaries as aforesaid. All
such payments shall be applied promptly from time to time by Guarantied Party as
provided in subsection 2.4E(ii) of the Credit Agreement.
2.5 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees
that its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Guarantied Obligations. In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Guarantied Party may enforce this Guaranty upon the occurrence
and during the continuance of an Event of Default under the Credit
Agreement (an "EVENT OF DEFAULT" for purposes of this Guaranty)
notwithstanding the existence of any dispute between Company and
any Beneficiary with respect to the existence of such Event of
Default.
(c) The obligations of each Guarantor hereunder are independent of
the obligations of Company under the Loan Documents and the
obligations of any other guarantor (including any other Guarantor)
of the obligations of Company under the Loan Documents, and a
separate action or actions may be brought and prosecuted against
such Guarantor whether or not any action is brought against
Company or any of such other guarantors and whether or not Company
is joined in any such action or actions.
(d) Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or
abridge any Guarantor's liability for any portion of the
Guarantied Obligations which has not been paid. Without limiting
the generality of the foregoing, if Guarantied Party is awarded a
judgment in any suit brought to enforce any Guarantor's covenant
to pay a portion
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of the Guarantied Obligations, such judgment shall not be deemed
to release such Guarantor from its covenant to pay the portion of
the Guarantied Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by
such Guarantor, limit, affect, modify or abridge any other
Guarantor's liability hereunder in respect of the Guarantied
Obligations.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of any
Guarantor's liability hereunder, from time to time may (i) renew,
extend, accelerate, increase the rate of interest on, or otherwise
change the time, place, manner or terms of payment of the
Guarantied Obligations, (ii) settle, compromise, release or
discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Guarantied Obligations or
any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations; (iii) request
and accept other guaranties of the Guarantied Obligations and take
and hold security for the payment of this Guaranty or the
Guarantied Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate
or modify, with or without consideration, any security for payment
of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person
(including any other Guarantor) with respect to the Guarantied
Obligations; (v) enforce and apply any security now or hereafter
held by or for the benefit of such Beneficiary in respect of this
Guaranty or the Guarantied Obligations and direct the order or
manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case
as such Beneficiary in its discretion may determine consistent
with the Credit Agreement and any applicable security agreement
and law, including foreclosure on any such security pursuant to
one or more judicial or nonjudicial sales if and to the extent
permitted under applicable law; whether or not every aspect of any
such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against
Company or any security for the Guarantied Obligations; and (vi)
exercise any other rights available to it under the Loan
Documents.
(f) This Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for
any reason (other than payment in full of the Guarantied
Obligations), including the occurrence of any of the following,
whether or not any Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or
agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of
the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Loan Documents, at law,
in equity or otherwise) with respect to the Guarantied Obligations
or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guarantied
Obligations; (ii) any rescission, waiver, amendment or
modification
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of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) of
the Credit Agreement, any of the other Loan Documents, or any
agreement or instrument executed pursuant thereto, or of any other
guaranty or security for the Guarantied Obligations, in each case
whether or not in accordance with the terms of the Credit
Agreement or such Loan Document, or any agreement relating to such
other guaranty or security; (iii) the Guarantied Obligations, or
any agreement relating thereto, at any time being found to be
illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than
payments received pursuant to the Loan Documents or from the
proceeds of any security for the Guarantied Obligations or from
any of the Guarantors, except to the extent such security also
serves as collateral for indebtedness other than the Guarantied
Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though any Beneficiary might have
elected to apply such payment to any part or all of the Guarantied
Obligations; (v) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or
existence of Company or any of its Subsidiaries and to any
corresponding restructuring of the Guarantied Obligations; (vi)
any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Guarantied
Obligations; (vii) any defenses, set-offs or counterclaims which
Company may allege or assert against any Beneficiary in respect of
the Guarantied Obligations (other than payment), including failure
of consideration, breach of warranty, statute of frauds, statute
of limitations, accord and satisfaction and usury; and (viii) any
other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the
risk of any Guarantor as an obligor in respect of the Guarantied
Obligations.
2.6 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for
the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against
Company, any other guarantor (including any other Guarantor) of
the Guarantied Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any such other
guarantor or any other Person, (iii) proceed against or have
resort to any balance of any deposit account or credit on the
books of any Beneficiary in favor of Company or any other Person,
or (iv) pursue any other remedy in the power of any Beneficiary
whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including
any defense based on or arising out of the lack of validity or the
unenforceability of the Guarantied Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the
liability of Company from any cause other than payment of the
Guarantied Obligations;
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(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon any Beneficiary's errors or omissions
in the administration of the Guarantied Obligations, except
behavior which amounts to gross negligence or bad faith;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of
this Guaranty and any legal or equitable discharge of such
Guarantor's obligations hereunder, (ii) the benefit of any statute
of limitations affecting such Guarantor's liability hereunder or
the enforcement hereof, (iii) any rights to set-offs, recoupments
and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or
insure any security interest or lien or any property subject
thereto;
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under
the Credit Agreement or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the
Guarantied Obligations or any agreement related thereto, notices
of any extension of credit to Company and notices of any of the
matters referred to in subsection 2.4 and any right to consent to
any thereof; and
(g) any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
2.7 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Each
Guarantor hereby waives any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against Company or any of its
assets in connection with this Guaranty or the performance by such Guarantor of
its obligations hereunder, in each case whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise and
including (a) any right of subrogation, reimbursement or indemnification that
such Guarantor now has or may hereafter have against Company, (b) any right to
enforce, or to participate in, any claim, right or remedy that any Beneficiary
now has or may hereafter have against Company, and (c) any benefit of, and any
right to participate in, any collateral or security now or hereafter held by any
Beneficiary, in each case until the Guarantied Obligations shall have been
indefeasibly paid in full and the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled. Further, until such
time, each Guarantor shall withhold exercise of any right of contribution such
Guarantor may have against any other guarantor (including any other Guarantor)
of the Guarantied Obligations. Each Guarantor further agrees that, to the extent
the waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against Company or against any
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collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guarantied
Obligations shall not have been paid in full, such amount shall be held in trust
for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over
to Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations, whether matured or unmatured, in accordance
with the terms hereof.
2.8 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of
Company or any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE
GUARANTOR") is hereby subordinated in right of payment to the Guarantied
Obligations, and any such indebtedness collected or received by the Obligee
Guarantor after an Event of Default has occurred and is continuing shall be held
in trust for Guarantied Party on behalf of Beneficiaries and shall forthwith be
paid over to Guarantied Party for the benefit of Beneficiaries to be credited
and applied against the Guarantied Obligations but without affecting, impairing
or limiting in any manner the liability of the Obligee Guarantor under any other
provision of this Guaranty.
2.9 EXPENSES. Guarantors jointly and severally agree to pay, or
cause to be paid, on demand, and to save Beneficiaries harmless against
liability for, any and all costs and expenses (including reasonable fees and
disbursements of counsel and the reasonably allocated costs of internal counsel)
incurred or expended by any Beneficiary in connection with the enforcement of or
preservation of any rights under this Guaranty.
2.10 CONTINUING GUARANTY. This Guaranty is a continuing guaranty
and shall remain in effect until all of the Guarantied Obligations shall have
been paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Guarantied Obligations.
2.11 AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for
any Beneficiary to inquire into the capacity or powers of any Guarantor or
Company or the officers, directors or any agents acting or purporting to act on
behalf of any of them.
2.12 FINANCIAL CONDITION OF COMPANY. Any Loans may be granted to
Company or continued from time to time without notice to or authorization from
any Guarantor regardless of the financial or other condition of Company at the
time of any such grant or continuation, as the case may be. No Beneficiary shall
have any obligation to disclose or discuss with any Guarantor its assessment, or
any Guarantor's assessment, of the financial condition of Company. Each
Guarantor has adequate means to obtain information from Company on a continuing
basis concerning the financial condition of Company and its ability to perform
its obligations under the Loan Documents, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating
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to the business, operations or conditions of Company now known or hereafter
known by any Beneficiary.
2.13 RIGHTS CUMULATIVE. The rights, powers and remedies given to
Beneficiaries by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Beneficiaries by virtue
of any statute or rule of law or in any of the other Loan Documents, or any
agreement between any Guarantor and any Beneficiary or Beneficiaries or between
Company and any Beneficiary or Beneficiaries. Any forbearance or failure to
exercise, and any delay by any Beneficiary in exercising, any right, power or
remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
2.14 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF
GUARANTY.
(a) So long as any Guarantied Obligations remain outstanding, no
Guarantor shall, without the prior written consent of Guarantied Party acting
pursuant to the instructions of Requisite Lenders, commence or join with any
other Person in commencing any bankruptcy, reorganization or insolvency
proceedings of or against Company. The obligations of Guarantors under this
Guaranty shall not be reduced, limited, impaired, discharged, deferred,
suspended or terminated by any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Company or by any defense which Company may have by reason of the
order, decree or decision of any court or administrative body resulting from any
such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on
any portion of the Guarantied Obligations which accrues after the commencement
of any proceeding referred to in clause (a) above (or, if interest on any
portion of the Guarantied Obligations ceases to accrue by operation of law by
reason of the commencement of said proceeding, such interest as would have
accrued on such portion of the Guarantied Obligations if said proceedings had
not been commenced) shall be included in the Guarantied Obligations because it
is the intention of Guarantors and Beneficiaries that the Guarantied Obligations
which are guarantied by Guarantors pursuant to this Guaranty should be
determined without regard to any rule of law or order which may relieve Company
of any portion of such Guarantied Obligations. Guarantors will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Guarantied Party, or allow the claim of
Guarantied Party in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guarantied Obligations for all purposes under this
Guaranty.
2.15 NOTICE OF EVENTS. As soon as any Guarantor obtains
knowledge thereof, such Guarantor shall give Guarantied Party written notice of
any condition or event which has resulted in (a) a material adverse change in
the financial condition of such Guarantor or
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Company or (b) a breach of or noncompliance with any term, condition or covenant
contained herein, or any other document delivered pursuant hereto.
2.16 SET OFF. In addition to any other rights any Beneficiary
may have under law or in equity, if any amount shall at any time be due and
owing by any Guarantor to any Beneficiary under this Guaranty, such Beneficiary
is authorized at any time or from time to time, without notice (any such notice
being hereby expressly waived), to set off and to appropriate and to apply any
and all deposits (general or special, including indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness of such Beneficiary owing to such Guarantor and any other property
of such Guarantor held by such Beneficiary to or for the credit or the account
of such Guarantor against and on account of the Guarantied Obligations and
liabilities of such Guarantor to such Beneficiary under this Guaranty.
2.17 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
stock of any Guarantor or any of its successors in interest under this Guaranty
shall be sold or otherwise disposed of (including by merger or consolidation) in
an Asset Sale not prohibited by subsection 7.7 of the Credit Agreement or
otherwise consented to by Requisite Lenders, the Guaranty of such Guarantor or
such successor in interest, as the case may be, hereunder shall automatically be
discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale; provided that, as a
condition precedent to such discharge and release, Guarantied Party shall have
received evidence reasonably satisfactory to it that arrangements reasonably
satisfactory to it have been made for delivery to Guarantied Party of the
applicable Net Asset Sale Proceeds.
SECTION 3. MISCELLANEOUS
3.1 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the other Loan Documents and any increase in the Commitments under the
Credit Agreement.
3.2 NOTICES. Any communications between Guarantied Party and
any Guarantor and any notices or requests provided herein to be given may be
given by mailing the same, postage prepaid, or by telex, facsimile transmission
or cable to each such party at its address set forth in the Credit Agreement, on
the signature pages hereof or to such other addresses as each such party may in
writing hereafter indicate. Any notice, request or demand to or upon Guarantied
Party or any Guarantor shall not be effective until received.
3.3 SEVERABILITY. In case any provision in or obligation under
this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
3.4 AMENDMENTS AND WAIVERS. No amendment, modification,
termination or waiver of any provision of this Guaranty, and no consent to any
departure by any Guarantor therefrom, shall in any event be effective without
the written concurrence of Guarantied Party and, in the case of any such
amendment or modification, each Guarantor against whom enforcement of such
amendment or modification is sought. Any such waiver or consent shall be
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effective only in the specific instance and for the specific purpose for which
it was given.
3.5 HEADINGS. Section and subsection headings in this Guaranty
are included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
3.6 APPLICABLE LAW; RULES OF CONSTRUCTION. THIS GUARANTY AND
THE RIGHTS AND OBLIGATIONS OF GUARANTORS AND BENEFICIARIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The rules of construction set forth in subsection 1.3 of the Credit
Agreement shall be applicable to this Guaranty mutatis mutandis.
3.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing
guaranty and shall be binding upon each Guarantor and its respective successors
and assigns. This Guaranty shall inure to the benefit of Beneficiaries and their
respective successors and assigns. No Guarantor shall assign this Guaranty or
any of the rights or obligations of such Guarantor hereunder without the prior
written consent of all Lenders. Any Beneficiary may, without notice or consent,
assign its interest in this Guaranty in whole or in part. The terms and
provisions of this Guaranty shall inure to the benefit of any transferee or
assignee of any Loan, and in the event of such transfer or assignment the rights
and privileges herein conferred upon such Beneficiary shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
3.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO
THIS GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW
YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GUARANTOR, FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO SUCH GUARANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SUBSECTION 3.2;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GUARANTOR IN
ANY SUCH PROCEEDING IN ANY
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SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT;
(V) AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST SUCH GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
3.9 WAIVER OF TRIAL BY JURY. EACH GUARANTOR AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF, EACH BENEFICIARY EACH HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS GUARANTY. The scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including contract claims,
tort claims, breach of duty claims and all other common law and statutory
claims. Each Guarantor and, by its acceptance of the benefits hereof, each
Beneficiary, each (i) acknowledges that this waiver is a material inducement for
such Guarantor and Beneficiaries to enter into a business relationship, that
such Guarantor and Beneficiaries have already relied on this waiver in entering
into this Guaranty or accepting the benefits thereof, as the case may be, and
that each will continue to rely on this waiver in their related future dealings
and (ii) further warrants and represents that each has reviewed this waiver with
its legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED
BY GUARANTIED PARTY AND EACH GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.
In the event of litigation, this Guaranty may be filed as a written consent to a
trial by the court.
3.10 NO OTHER WRITING. This writing is intended by Guarantors
and Beneficiaries as the final expression of this Guaranty and is also intended
as a complete and exclusive statement of the terms of their agreement with
respect to the matters covered hereby. No course of dealing, course of
performance or trade usage, and no parol evidence of any nature, shall be used
to supplement or modify any terms of this Guaranty. There are no conditions to
the full effectiveness of this Guaranty.
3.11 FURTHER ASSURANCES. At any time or from time to time, upon
the request of Guarantied Party, Guarantors shall execute and deliver such
further documents and do such other acts and things as Guarantied Party may
reasonably request in order to effect fully the purposes of this Guaranty.
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3.12 ADDITIONAL GUARANTORS. The initial Guarantors hereunder
shall be such of the Subsidiaries of Company as are signatories hereto on the
date hereof. From time to time subsequent to the date hereof, additional
Subsidiaries of Company may become parties hereto, as additional Guarantors
(each an "ADDITIONAL GUARANTOR"), by executing a counterpart of this Guaranty.
Upon delivery of any such counterpart to Agent, notice of which is hereby waived
by Guarantors, each such Additional Guarantor shall be a Guarantor and shall be
as fully a party hereto as if such Additional Guarantor were an original
signatory hereof. Each Guarantor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the addition or release of any
other Guarantor hereunder, nor by any election of Agent not to cause any
Subsidiary of Company to become an Additional Guarantor hereunder. This Guaranty
shall be fully effective as to any Guarantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Guarantor hereunder.
3.13 COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument. This Guaranty shall become effective
as to each Guarantor upon the execution of a counterpart hereof by such
Guarantor (whether or not a counterpart hereof shall have been executed by any
other Guarantor) and receipt by Guarantied Party of written or telephonic
notification of such execution and authorization of delivery thereof.
3.14 GUARANTIED PARTY AS ADMINISTRATIVE AGENT.
(a) Guarantied Party has been appointed to act as Guarantied
Party hereunder by Lenders. Guarantied Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action,
solely in accordance with this Guaranty and the Credit Agreement; provided that
Guarantied Party shall exercise, or refrain from exercising, any remedies
hereunder in accordance with the instructions of Requisite Lenders.
(b) Guarantied Party shall at all times be the same Person that
is Administrative Agent under the Credit Agreement. Written notice of
resignation by Administrative Agent pursuant to subsection 9.5A of the Credit
Agreement shall also constitute notice of resignation as Guarantied Party under
this Guaranty; removal of Agent pursuant to subsection 9.5A of the Credit
Agreement shall also constitute removal as Guarantied Party under this Guaranty;
and appointment of a successor Administrative Agent pursuant to subsection 9.5A
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5A of the Credit Agreement by a
successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Guarantied Party under this Guaranty, and
the retiring or removed Guarantied Party under this Guaranty shall promptly (i)
transfer to such successor Guarantied Party all sums held hereunder, together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party
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of the rights created hereunder, whereupon such retiring or removed Guarantied
Party shall be discharged from its duties and obligations under this Guaranty.
After any retiring or removed Guarantied Party's resignation or removal
hereunder as Guarantied Party, the provisions of this Guaranty shall inure to
its benefit as to any actions taken or omitted to be taken by it under this
Guaranty while it was Guarantied Party hereunder.
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IN WITNESS WHEREOF, each of the undersigned Guarantors has caused
this Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.
-----------------------------------
By
---------------------------------
Title
------------------------------
Address:
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---------------------------
---------------------------
-----------------------------------
By
---------------------------------
Title
------------------------------
Address:
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IN WITNESS WHEREOF, the undersigned Additional Guarantor has
caused this Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of ______________, ____
-----------------------------------
(Name of Additional Guarantor)
By
---------------------------------
Title
------------------------------
Address:
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EXHIBIT XVI
[FORM OF SECURITY AGREEMENT]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "AGREEMENT") is dated as of ________
__, 1999 and entered into by and among Horseshoe Gaming Holding Corp., a
Delaware corporation ("COMPANY"), each of THE UNDERSIGNED DIRECT AND INDIRECT
SUBSIDIARIES of Company (each of such undersigned Subsidiaries being a
"SUBSIDIARY GRANTOR" and collectively "SUBSIDIARY GRANTORS") and each ADDITIONAL
GRANTOR that may become a party hereto after the date hereof in accordance with
Section 22 hereof (each of the Company, each Subsidiary Grantor, and each
Additional Grantor being a "GRANTOR" and collectively the "GRANTORS") and
Canadian Imperial Bank of Commerce, as Administrative Agent for and
representative of (in such capacity herein called "SECURED PARTY") the financial
institutions ("LENDERS") party to the Credit Agreement referred to below.
PRELIMINARY STATEMENTS
A. Pursuant to the Credit Agreement dated as of June __, 1999
(said Credit Agreement, as amended, to the date hereof, and as it may hereafter
be further amended, restated, supplemented or otherwise modified from time to
time, being the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among Company, the
financial institutions listed therein as Lenders, DLJ Capital Funding, Inc., as
Syndication Agent, and Canadian Imperial Bank of Commerce, as Administrative
Agent (in such capacity, "ADMINISTRATIVE Agent"), Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
B. Subsidiary Grantors have executed and delivered that
certain Subsidiary Guaranty dated the date hereof (said Subsidiary Guaranty, as
amended, to the date hereof, and as it may hereafter be further amended,
restated, supplemented or otherwise modified from time to time, being the
"SUBSIDIARY GUARANTY") in favor of Secured Party for the benefit of Lenders,
pursuant to which each Subsidiary Grantor has guarantied the prompt payment and
performance when due of all obligations of Company under the Credit Agreement,
including without limitation the obligation of Company to make payments
thereunder in the event of early termination thereof.
C. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantors listed on the
signature pages hereof shall have granted the security interests and undertaken
the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Grantor hereby agrees with
Secured Party as follows:
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SECTION 1. GRANT OF SECURITY.
Each Grantor hereby assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of such Grantor's right, title and
interest in and to the following, in each case whether now or hereafter
existing, whether tangible or intangible, or in which such Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"COLLATERAL"):
(a) all equipment in all of its forms, all parts thereof and
all accessions thereto (any and all such equipment, parts and accessions being
the "EQUIPMENT");
(b) all inventory in all of its forms, including but not
limited to (i) all goods held by such Grantor for sale or lease or to be
furnished under contracts of service or so leased or furnished, (ii) all raw
materials, work in process, finished goods, and materials used or consumed in
the manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in such Grantor's
business, (iii) all goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind, and (iv) all goods which are
returned to or repossessed by such Grantor and all accessions thereto and
products thereof (collectively the "INVENTORY") and all negotiable and
non-negotiable documents of title (including without limitation warehouse
receipts, dock receipts and bills of lading) issued by any Person covering any
Inventory (any such negotiable document of title being a "NEGOTIABLE DOCUMENT OF
TITLE");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of any kind
owned by or owing to such Grantor and all rights in, to and under all security
agreements, leases and other contracts securing or otherwise relating to any
such accounts, contract rights, chattel paper, documents, instruments, general
intangibles or other obligations (any and all such accounts, contract rights,
chattel paper, documents, instruments, general intangibles and other obligations
being the "ACCOUNTS", and any and all such security agreements, leases and other
contracts being the "RELATED CONTRACTS");
(d) all deposit accounts ("DEPOSIT ACCOUNTS") including the
restricted deposit account established and maintained by Secured Party pursuant
to Section 12 (the "COLLATERAL ACCOUNT"), together with (i) all amounts on
deposit from time to time in such deposit accounts and (ii) all interest, cash,
instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing;
(e) the "SECURITIES COLLATERAL", which term means:
(i) the shares of stock, partnership interests,
interests in joint ventures, limited liability company interests and all
other equity interests in a Person, including all securities convertible
into, and rights, warrants, options and other rights to purchase or
otherwise acquire, any of the foregoing now or hereafter owned by such
Grantor, including those owned on the date hereof and described on
Schedule 1(e)(i), and the certificates or other instruments representing
any of the foregoing and any interest of such Grantor in the entries on
the books of any securities intermediary pertaining thereto (the "PLEDGED
SHARES"), and all dividends, distributions, returns of capital, cash,
warrants, option, rights, instruments, rights to vote or manage the
business of such Person
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pursuant to organizational documents governing the rights and obligations
of the stockholders, partners, members or other owners thereof and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Pledged
Shares; provided, that if the issuer of any of such Pledged Shares is a
controlled foreign corporation (used hereinafter as such term is defined
in Section 975(a) or a successor provision of the Internal Revenue Code),
the Pledged Shares shall not include any shares of stock of such issuer
in excess of the number of shares of such issuer possessing up to but not
exceeding 65% of the voting power of all classes of capital stock
entitled to vote of such issuer, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Shares;
(ii) the indebtedness from time to time owed to such
Grantor by any obligor that is, or becomes, a direct or indirect
Subsidiary of such Grantor, including the indebtedness described on
Schedule 1(e)(ii) and issued by the obligors named therein, and the
instruments evidencing such indebtedness (the "PLEDGED DEBT"), and all
interest, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt; and
(iii) all other investment property as that term is
defined in the Uniform Commercial Code of any relevant jurisdiction (the
"UCC"), of such Grantor;
(f) the "INTELLECTUAL PROPERTY COLLATERAL", which term means:
(i) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) in and to all trademarks,
service marks, designs, logos, indicia, tradenames, trade dress,
corporate names, company names, business names, fictitious business
names, trade styles and/or other source and/or business identifiers and
applications pertaining thereto, owned by such Grantor, or hereafter
adopted and used, in its business (including, without limitation, the
trademarks specifically identified in Schedule 1(f)(i), as the same may
be amended pursuant hereto from time to time) (collectively, the
"TRADEMARKS"), all registrations that have been or may hereafter be
issued or applied for thereon in the United States and any state thereof
and in foreign countries (including, without limitation, the
registrations and applications specifically identified in Schedule
1(f)(i), as the same may be amended pursuant hereto from time to time)
(the "TRADEMARK REGISTRATIONS"), all common law and other rights in and
to the Trademarks in the United States and any state thereof and in
foreign countries (the "TRADEMARK RIGHTS"), and all goodwill of such
Grantor's business symbolized by the Trademarks and associated therewith
(the "ASSOCIATED GOODWILL"):
(ii) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) in and to all patents and
patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned or held by such Grantor and all patents and
patent applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned by such
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Grantor in whole or in part (including, without limitation, the patents
and patent applications listed in Schedule 1(f)(ii), as the same may be
amended pursuant hereto from time to time), all rights corresponding
thereto (including, without limitation, the right, exercisable only upon
the occurrence and during the continuation of an Event of Default, to sue
for past, present and future infringements in the name of such Grantor or
in the name of Secured Party or Lenders), and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof
(all of the foregoing being collectively referred to as the "PATENTS");
it being understood that the rights and interests included in the
Intellectual Property Collateral hereby shall include, without
limitation, all rights and interests pursuant to licensing or other
contracts in favor of such Grantor pertaining to patent applications and
patents presently or in the future owned or used by third parties but, in
the case of third parties which are not Affiliates of such Grantor, only
to the extent permitted by such licensing or other contracts and, if not
so permitted, only with the consent of such third parties; and
(iii) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) under copyright in various
published and unpublished works of authorship including, without
limitation, computer programs, computer data bases, other computer
software, layouts, trade dress, drawings, designs, writings, owned by
such Grantor (including, without limitation, the works listed on Schedule
1(f)(iii), as the same may be amended pursuant hereto from time to time)
(collectively, the "COPYRIGHTS"), all copyright registrations issued to
such Grantor and applications for copyright registration that have been
or may hereafter be issued or applied for thereon by such Grantor in the
United States and any state thereof and in foreign countries (including,
without limitation, the registrations listed on Schedule 1(f)(iii), as
the same may be amended pursuant hereto from time to time) (collectively,
the "COPYRIGHT REGISTRATIONS"), all common law and other rights in and to
the Copyrights in the United States and any state thereof and in foreign
countries including all copyright licenses (but with respect to such
copyright licenses, only to the extent permitted by such licensing
arrangements) (the "COPYRIGHT RIGHTS"), including, without limitation,
each of the Copyrights, rights, titles and interests in and to the
Copyrights, all derivative works and other works protectable by
copyright, which are presently, or in the future may be, owned, created
(as a work for hire for the benefit of such Grantor), authored (as a work
for hire for the benefit of such Grantor), or acquired by such Grantor,
in whole or in part, and all Copyright Rights with respect thereto and
all Copyright Registrations therefor, heretofore or hereafter granted or
applied for, and all renewals and extensions thereof, throughout the
world, including all proceeds thereof (such as, by way of example and not
by limitation, license royalties and proceeds of infringement suits), the
right to renew and extend such Copyright Registrations and Copyright
Rights and to register works protectable by copyright and the right to
sue for past, present and future infringements of the Copyrights and
Copyright Rights;
(g) all information used or useful or arising from the business
including all goodwill, trade secrets, trade secret rights, know-how, customer
lists, processes of production, ideas, confidential business information,
techniques, processes, and all other proprietary information;
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(h) the agreements listed in Schedule 1(h), as each such
agreement may be amended, restated, supplemented or otherwise modified from time
to time (said agreements, as so amended, restated, supplemented or otherwise
modified, being referred to herein individually as an "ASSIGNED AGREEMENT" and
collectively as the "ASSIGNED AGREEMENTS"), including, without limitation, (i)
all rights of such Grantor to receive moneys due or to become due under or
pursuant to the Assigned Agreements, (ii) all rights of such Grantor to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to the
Assigned Agreements, (iii) all claims of such Grantor for damages arising out of
any breach of or default under the Assigned Agreements, and (iv) all rights of
such Grantor to terminate, amend, supplement, modify or exercise rights or
options under the Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
(i) to the extent not included in any other paragraph of this
Section 1, all other general intangibles (including without limitation tax
refunds, rights to payment or performance, choses in action and judgments taken
on any rights or claims included in the Collateral);
(j) all plant fixtures, business fixtures and other fixtures
and storage and office facilities, and all accessions thereto and products
thereof;
(k) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(l) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall
the Collateral include, and no Grantor shall be deemed to have granted a
security interest in (i) any of such Grantor's rights or interests in any
property that would otherwise constitute Collateral, in any license, contract or
agreement to which such Grantor is a party or any of its rights or interests
thereunder to the extent, but only to the extent, that such a grant with respect
to such license, contract or agreement or with respect to such other property
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which such Grantor is a party (other than to the extent
that any such term would be rendered ineffective pursuant to Section 9-318(4) of
the UCC or any other applicable law (including the Bankruptcy Code) or
principles of equity); provided, that immediately upon the ineffectiveness,
lapse or termination of any such provision, the Collateral shall include, and
such Grantor shall be deemed to have granted a security interest in, all such
rights and interests as if such provision had never been in effect, or (ii) any
real property leasehold, unless a Grantor has executed a leasehold mortgage or
leasehold deed of trust covering such real property leasehold.
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SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral assigned by each
Grantor is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code), of all Secured Obligations of such
Grantor. "SECURED OBLIGATIONS" means:
(a) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents, and
(b) with respect to each Subsidiary Grantor and Additional
Grantor, all obligations and liabilities of every nature of such Grantors now or
hereafter existing under or arising out of or in connection with the Subsidiary
Guaranty;
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company or any other Grantor,
would accrue on such obligations, whether or not a claim is allowed against
Company or such Grantor for such interest in the related bankruptcy proceeding),
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of
Grantors now or hereafter existing under this Agreement.
SECTION 3. GRANTORS REMAIN LIABLE.
Anything contained herein to the contrary notwithstanding, (a)
each Grantor shall remain liable under any contracts and agreements included in
the Collateral, to the extent set forth therein, to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts, licenses, and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
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SECTION 4. REPRESENTATIONS AND WARRANTIES.
Each Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except as expressly permitted by
the Credit Agreement and for the security interest created by this Agreement,
such Grantor owns the Collateral owned by such Grantor free and clear of any
Lien. Except as expressly permitted by the Credit Agreement and such as may have
been filed in favor of Secured Party relating to this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office.
(b) LOCATIONS OF EQUIPMENT AND INVENTORY. All of the Equipment
and Inventory is, as of the date hereof, or in the case of an Additional
Grantor, the date of the applicable counterpart entered into pursuant to Section
22 (each, a "COUNTERPART") located at the places specified in Schedule 4(b),
except for Inventory which, in the ordinary course of business, is in transit
either (i) from a supplier to a Grantor, (ii) between the locations specified in
Schedule 4(b), or (ii) to customers of a Grantor.
(c) OFFICE LOCATIONS. The chief place of business, the chief
executive office and the office where such Grantor keeps its records regarding
the Accounts and all originals of all chattel paper that evidence Accounts are,
as of the date hereof, and [, except as set forth on Schedule 4(d),] have been
for the four month period preceding the date hereof, or, in the case of an
Additional Grantor, the date of the applicable Counterpart, located at the
locations set forth on Schedule 4(d);
(d) NAMES. No Grantor (or predecessor by merger or otherwise of
such Grantor) has, within the four month period preceding the date hereof, or,
in the case of an Additional Grantor, the date of the applicable Counterpart,
had a different name from the name of such Grantor listed on the signature pages
hereof, [except the names listed in Schedule 4(e) annexed hereto].
(e) DELIVERY OF CERTAIN COLLATERAL. All certificates or
instruments (excluding checks) evidencing, comprising or representing the
Securities Collateral have been delivered to Secured Party duly endorsed or
accompanied by duly executed instruments of transfer or assignment in blank.
(f) SECURITIES COLLATERAL. (i) All of the Pledged Shares
described on Schedule 1(e)(i) have been duly authorized and validly issued and
are fully paid and non-assessable; (ii) all of the Pledged Debt described on
Schedule 1(e)(ii) has been duly authorized, authenticated or issued, and
delivered and is the legal, valid and binding obligation of the issuers thereof
and is not in default; (iii) the Pledged Shares constitute all of the issued and
outstanding shares of stock or other equity interests of each issuer thereof
(subject to the proviso to Section 1(e)(i) with respect to shares of a foreign
controlled corporation), and there are no outstanding warrants, options or other
rights to purchase, or other agreements outstanding with respect to, or property
that is now or hereafter convertible into, or that requires the issuance or sale
of, any Pledged Shares; (iv) the Pledged Debt constitutes all of the issued and
outstanding intercompany indebtedness evidenced by a promissory note of the
respective issuers thereof owing to such Grantor; (v) Schedule 1(e)(i) sets
forth all of the Pledged Shares owned by each
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Grantor on the date hereof; and (vi) Schedule 1(e)(ii) sets forth all of the
Pledged Debt in existence on the date hereof.
(g) INTELLECTUAL PROPERTY COLLATERAL.
(i) a true and complete list of all Trademark
Registrations and Trademark applications owned, held (whether pursuant to
a license or otherwise) or used by such Grantor, in whole or in part, is
set forth in Schedule 1(f)(i);
(ii) a true and complete list of all Patents owned, held
(whether pursuant to a license or otherwise) or used by such Grantor, in
whole or in part, is set forth in Schedule 1(f)(ii);
(iii) a true and complete list of all Copyright
Registrations and applications for Copyright Registrations held (whether
pursuant to a license or otherwise) by such Grantor, in whole or in part,
is set forth in Schedule 1(f)(iii);
(iv) such Grantor is not aware of any pending or
threatened claim by any third party that any of the Intellectual Property
Collateral owned, held or used by such Grantor is invalid or
unenforceable; and
(v) no effective security interest or other Lien
covering all or any part of the Intellectual Property Collateral is on
file in the United States Patent and Trademark Office or the United
States Copyright Office.
(h) PERFECTION. The security interests in the Collateral
granted to Secured Party for the ratable benefit of the Lenders hereunder
constitute valid security interests in the Collateral, securing the payment of
the Secured Obligations. Upon (i) in the case of Collateral with respect to
which perfection requires the filing of UCC financing statements, the filing and
proper indexing of UCC financing statements naming each Grantor as "debtor",
naming Secured Party as "secured party" and describing the Collateral in the
filing offices with respect to such Grantor set forth on Schedule 4(i), (ii) in
the case of the Securities Collateral consisting of certificated securities or
evidenced by instruments, delivery of the certificates representing such
certificated securities and delivery of such instruments to Secured Party, in
each case duly endorsed or accompanied by duly executed instruments of
assignment or transfer in blank, (iii) in the case of the Intellectual Property
Collateral, in addition to the filing of such UCC financing statements, the
filing of a Grant of Trademark Security Interest, substantially in the form of
Exhibit I, and a Grant of Patent Security Interest, substantially in the form of
Exhibit II, with the United States Patent and Trademark Office and the filing of
a Grant of Copyright Security Interest, substantially in the form of Exhibit
III, with the United States Copyright Office (each such Grant of Trademark
Security Interest, Grant of Patent Security Interest and Grant of Copyright
Security Interest being referred to herein as a "GRANT"), and (iv) in the case
of Equipment that is covered by a certificate of title, the filing with the
registrar of motor vehicles or other appropriate authority in the applicable
jurisdiction of an application requesting the notation of the security interest
created hereunder on such certificate of title, the security interests in the
Collateral granted to Secured Party for the ratable benefit of the Lenders will
constitute perfected security interests therein prior to all other Liens (except
for those Permitted Encumbrances not
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intended to be junior to the Lien created by this Agreement), and all filings
and other actions necessary or desirable to perfect and protect such security
interest have been duly made or taken.
SECTION 5. FURTHER ASSURANCES.
(a) GENERALLY. Each Grantor agrees that from time to time, at the
expense of Grantors, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, each Grantor will: (i) at the request of Secured Party, mark
conspicuously each item of chattel paper included in the Accounts, each Related
Contract and, at the request of Secured Party, each of its records pertaining to
the Collateral, with a legend, in form and substance satisfactory to Secured
Party, indicating that such Collateral is subject to the security interest
granted hereby, (ii) at the request of Secured Party, deliver and pledge to
Secured Party hereunder all promissory notes and other instruments (including
checks) and all original counterparts of chattel paper constituting Collateral,
duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to Secured Party,
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary, or as
Secured Party may reasonably request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, (iv) furnish to
Secured Party from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail,
(v) promptly after the acquisition by such Grantor of any item of Equipment that
is covered by a certificate of title under a statute of any jurisdiction under
the law of which indication of a security interest on such certificate is
required as a condition of perfection thereof, execute and file with the
registrar of motor vehicles or other appropriate authority in such jurisdiction
an application or other document requesting the notation or other indication of
the security interest created hereunder on such certificate of title, (vi)
within 30 days after the end of each calendar quarter, deliver to Secured Party
copies of all such applications or other documents filed during such calendar
quarter and copies of all such certificates of title issued during such calendar
quarter indicating the security interest created hereunder in the items of
Equipment covered thereby, (vii) at any reasonable time during normal business
hours, upon request by Secured Party, exhibit the Collateral to and allow
inspection of the Collateral by Secured Party, or persons designated by Secured
Party, (viii) at Secured Party's request, appear in and defend any action or
proceeding that may affect such Grantor's title to or Secured Party's security
interest in all or any part of the Collateral, and (ix) use commercially
reasonable efforts to obtain any necessary consents of third parties to the
assignment and perfection of a security interest to Secured Party with respect
to any Collateral. Each Grantor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of any Grantor. Each
Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by such Grantor shall be sufficient
as a financing statement and may be filed as a financing statement in any and
all jurisdictions.
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(b) SECURITIES COLLATERAL. Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder,
promptly (and in any event within five Business Days) deliver to Secured Party a
Pledge Supplement, duly executed by such Grantor, in substantially the form of
Exhibit IV (a "PLEDGE SUPPLEMENT"), in respect of the additional Pledged Shares
or Pledged Debt to be pledged pursuant to this Agreement. Upon each delivery of
a Pledge Supplement to Secured Party, the representations and warranties
contained in clauses (i)-(iv) of Section 4(g) hereof shall be deemed to have
been made by such Grantor as to the Securities Collateral described in such
Pledge Supplement as of the date thereof. Each Grantor hereby authorizes Secured
Party to attach each Pledge Supplement to this Agreement and agrees that all
Pledged Shares or Pledged Debt of such Grantor listed on any Pledge Supplement
shall for all purposes hereunder be considered Collateral of such Grantor;
provided, the failure of any Grantor to execute a Pledge Supplement with respect
to any additional Pledged Shares or Pledged Debt pledged pursuant to this
Agreement shall not impair the security interest of Secured Party therein or
otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
(c) INTELLECTUAL PROPERTY COLLATERAL. Without limiting the generality
of the foregoing Section 5(a), if any Grantor shall hereafter obtain rights to
any new Intellectual Property Collateral or become entitled to the benefit of
(i) any patent application or patent or any reissue, division, continuation,
renewal, extension or continuation-in-part of any Patent or any improvement of
any Patent or (ii) any Copyright Registration, application for Copyright
Registration or renewals or extension of any Copyright, then in any such case,
the provisions of this Agreement shall automatically apply thereto. Each Grantor
shall promptly notify Secured Party in writing of any of the foregoing rights
acquired by such Grantor after the date hereof and of (i) any Trademark
Registrations issued or application for a Trademark Registration or application
for a Patent made, and (ii) any Copyright Registrations issued or applications
for Copyright Registration made, in any such case, after the date hereof.
Promptly after the filing of an application for any (1) Trademark Registration;
(2) Patent; and (3) Copyright Registration, each Grantor shall execute and
deliver to Secured Party and record in all places where a Grant is recorded an
IP Supplement, substantially in the form of Exhibit V (an "IP SUPPLEMENT"),
pursuant to which such Grantor shall grant to Secured Party a security interest
to the extent of its interest in such Intellectual Property Collateral;
provided, if, in the reasonable judgment of such Grantor, after due inquiry, or
upon the advice of counsel, granting such interest would result in the grant of
a Trademark Registration or Copyright Registration in the name of Secured Party,
such Grantor shall give written notice to Secured Party as soon as reasonably
practicable and the filing shall instead be undertaken as soon as practicable
but in no case later than immediately following the grant of the applicable
Trademark Registration or Copyright Registration, as the case may be. Upon
delivery to Secured Party of an IP Supplement, Schedules 1(f)(i), 1(f)(ii), and
1(f)(iii) hereto and Schedule A to each Grant, as applicable, shall be deemed
modified to include reference to any right, title or interest in any existing
Intellectual Property Collateral or any Intellectual Property Collateral
included on Schedule A to such IP Supplement. Each Grantor hereby authorizes
Secured Party to modify this Agreement without the signature or consent of any
Grantor by attaching Schedules 1(f)(i), 1(f)(ii), and 1(f)(iii), as applicable,
that have been modified to include such Intellectual Property Collateral or to
delete any reference to any right, title or interest in any Intellectual
Property Collateral in which any Grantor no longer has or claims any right,
title or interest; provided, the failure of any Grantor to execute an IP
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Supplement with respect to any additional Intellectual Property Collateral
pledged pursuant to this Agreement shall not impair the security interest of
Secured Party therein or otherwise adversely affect the rights and remedies of
Secured Party hereunder with respect thereto.
SECTION 6. CERTAIN COVENANTS OF GRANTORS.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any
change (other than a change necessitated by casualty or other emergency) in such
Grantor's chief place of business, chief executive office or residence or the
office where such Grantor keeps its records regarding the Accounts and all
originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) except as expressly permitted by the Credit Agreement, pay
promptly when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
services, materials and supplies) against, the Collateral, except to the extent
the validity thereof is being contested in good faith; provided that such
Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against such Grantor or
any of the Collateral as a result of the failure to make such payment.
SECTION 7. SPECIAL WITH RESPECT TO EQUIPMENT AND INVENTORY.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at
the places therefor specified on Schedule 4(b) or, upon 30 days' prior written
notice to Secured Party (except in the event of casualty or other emergency), at
such other places in jurisdictions where all action that may be necessary, or
that Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Equipment and Inventory shall have been taken;
(b) cause the Equipment owned by such Grantor to be maintained
and preserved in the same condition, repair and working order as when new,
ordinary wear and tear excepted, and in accordance with such Grantor's past
practices, and shall forthwith make or cause to be made all repairs,
replacements and other improvements in connection therewith that
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are necessary or desirable and reasonable to such end. Each Grantor shall
promptly furnish to Secured Party a statement respecting any material loss or
damage to any of the Equipment owned by such Grantor;
(c) keep correct and accurate records of Inventory owned by
such Grantor, itemizing and describing the kind, type and quantity of such
Inventory, such Grantor's cost therefor and (where applicable) the current list
prices for such Inventory;
(d) if any Inventory is in possession or control of any of such
Grantor's agents or processors, if the aggregate book value of all such
Inventory exceeds $_________, and in any event upon the occurrence of an Event
of Default (as defined in Section 16(a)), instruct such agent or processor to
hold all such Inventory for the account of Secured Party and subject to the
instructions of Secured Party;
(e) promptly upon the issuance and delivery to such Grantor of
any Negotiable Document of Title with respect to Equipment or Inventory, deliver
such Negotiable Document of Title to Secured Party;
(f) at its own expense, maintain insurance with respect to the
Equipment and Inventory in accordance with the terms of the Credit Agreement;
and
(g) upon (i) the occurrence and during the continuation of any
Event of Default or (ii) the actual or constructive loss (in excess of $_______
per occurrence) of any Equipment or Inventory, all insurance payments in respect
of such Equipment or Inventory shall be paid to and applied by Secured Party as
specified in Section 18.
SECTION 8. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED CONTRACTS.
(a) Each Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the locations therefor set forth on Schedule 4(d), upon 30
days' prior written notice to Secured Party (except in the event of casualty or
other emergency), at such other location in a jurisdiction where all action that
may be necessary, or that Secured Party may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby, or to enable Secured Party to exercise and enforce its rights and
remedies hereunder, with respect to such Accounts and Related Contracts shall
have been taken. Each Grantor will hold and preserve such records and chattel
paper and will permit representatives of Secured Party upon notice at any time
during normal business hours to inspect and make abstracts from such records and
chattel paper, and each Grantor agrees to render to Secured Party, at Grantor's
cost and expense, such clerical and other assistance as may be reasonably
requested with regard thereto. Promptly upon the request of Secured Party, each
Grantor shall deliver to Secured Party complete and correct copies of each
Related Contract.
(b) Each Grantor shall, for not less than three (3) years from
the date on which each Account of such Grantor arose, maintain (i) complete
records of such Account, including records of all payments received, credits
granted and merchandise returned, and (ii) all documentation relating thereto.
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(c) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts and Related Contracts. In
connection with such collections, each Grantor may take (and, at Secured Party's
direction, shall take) such action as such Grantor or Secured Party may
reasonably deem necessary or advisable to enforce collection of amounts due or
to become due under the Accounts; provided, however, that Secured Party shall
have the right at any time, upon the occurrence and during the continuation of
an Event of Default and upon written notice to such Grantor of its intention to
do so, to notify the account debtors or obligors under any Accounts of the
assignment of such Accounts to Secured Party and to direct such account debtors
or obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to Secured Party, to notify each Person maintaining a
lockbox or similar arrangement to which account debtors or obligors under any
Accounts have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to Secured Party and,
upon such notification and at the expense of Grantors, to enforce collection of
any such Accounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done. After receipt by such Grantor of the notice from Secured Party referred to
in the proviso to the preceding sentence, (i) all amounts and proceeds
(including checks and other instruments) received by such Grantor in respect of
the Accounts and the Related Contracts shall be received in trust for the
benefit of Secured Party hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to Secured Party in the
same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 18, and (ii) such Grantor shall
not adjust, settle or compromise the amount or payment of any Account, or
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO THE SECURITIES COLLATERAL.
(a) DELIVERY. Each Grantor agrees that all certificates or
instruments representing or evidencing the Securities Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and shall
be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by such Grantor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to Secured Party. Secured Party shall have the right at
any time to exchange certificates or instruments representing or evidencing
Securities Collateral for certificates or instruments of smaller or larger
denominations.
(b) COVENANTS. Each Grantor shall (i) not, except as expressly
permitted by the Credit Agreement, permit any issuer of Pledged Shares to merge
or consolidate unless all the outstanding capital stock or other equity
interests of the surviving or resulting Person is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding shares of any other constituent
corporation; provided, if the surviving or resulting Person upon any such merger
or consolidation involving an issuer of Pledged Shares which is a controlled
foreign corporation is a controlled foreign corporation, then such Grantor shall
only be required to pledge outstanding capital stock of such surviving or
resulting Person possessing up to but not exceeding 65% of the voting power of
all classes of
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capital stock of such issuer entitled to vote; (ii) cause each issuer of Pledged
Shares not to issue any stock, other equity interests or other securities in
addition to or in substitution for the Pledged Shares issued by such issuer,
except to such Grantor; (iii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all additional shares of stock, other
equity interests or other securities of each issuer of Pledged Shares; (iv)
pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all shares of stock or other equity interests of any Person
that, after the date of this Agreement, becomes, as a result of any occurrence,
a direct Subsidiary of such Grantor; provided, notwithstanding anything
contained in this clause (iv) to the contrary, such Grantor shall only be
required to pledge the outstanding capital stock of a controlled foreign
corporation possessing up to but not exceeding 65% of the voting power of all
classes of capital stock of such controlled foreign corporation entitled to
vote; (v) pledge hereunder, immediately upon their issuance, any and all
instruments or other evidences of additional indebtedness from time to time owed
to such Grantor by any obligor on the Pledged Debt; (vi) pledge hereunder,
immediately upon their issuance, any and all instruments or other evidences of
indebtedness from time to time owed to such Grantor by any Person that after the
date of this Agreement becomes, as a result of any occurrence, a direct or
indirect Subsidiary of such Grantor; (vii) promptly notify Secured Party of any
event of which such Grantor becomes aware causing loss or depreciation in the
value of the Securities Collateral; (viii) promptly deliver to Secured Party all
written notices received by it with respect to the Securities Collateral; and
(ix), at the request of Secured Party, promptly execute and deliver to Secured
Party an agreement providing for the control, as that term is defined in the
UCC, by Secured Party of all securities entitlements and securities accounts of
such Grantor.
(c) VOTING AND DISTRIBUTIONS. So long as no Event of Default
shall have occurred and be continuing, (i) each Grantor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Securities Collateral or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the Credit Agreement; provided, no Grantor shall
exercise or refrain from exercising any such right if Secured Party shall have
notified such Grantor that, in Secured Party's judgment, such action would have
a material adverse effect on the value of the Securities Collateral or any part
thereof; and provided further, such Grantor shall give Secured Party at least
three Business Days' prior written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right (it
being understood, however, that neither (A) the voting by such Grantor of any
Pledged Shares for or such Grantor's consent to the election of directors or
other members of a governing body of an issuer of Pledged Shares at a regularly
scheduled annual or other meeting of stockholders or holders of equity interests
or with respect to incidental matters at any such meeting, nor (B) such
Grantor's consent to or approval of any action otherwise permitted under this
Agreement and the Credit Agreement shall be deemed inconsistent with the terms
of this Agreement or the Credit Agreement within the meaning of this Section,
and no notice of any such voting or consent need be given to Secured Party);
(ii) each Grantor shall be entitled to receive and retain, and to utilize
(including, to the extent permitted in the Credit Agreement, the making of
further distributions to its equity holders) free and clear of the lien of this
Agreement, any and all dividends, other distributions and interest paid in
respect of the Securities Collateral; provided, any and all (A) dividends,
distributions and interest paid or payable other than in cash in respect of, and
instruments and other property received, receivable or otherwise distributed in
respect of, or in exchange for, any Securities Collateral, (B) dividends and
other distributions paid or payable in cash in respect of any Securities
Collateral in connection with a partial or total liquidation or
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dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus, and (C) cash paid, payable or otherwise distributed in respect
of principal or in redemption of or in exchange for any Securities Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Securities Collateral and shall, if received by such Grantor, be received in
trust for the benefit of Secured Party, be segregated from the other property or
funds of such Grantor and be forthwith delivered to Secured Party as Securities
Collateral in the same form as so received (with all necessary endorsements);
and (iii) Secured Party shall promptly execute and deliver (or cause to be
executed and delivered) to such Grantor all such proxies, dividend payment
orders and other instruments as such Grantor may from time to time reasonably
request for the purpose of enabling such Grantor to exercise the voting and
other consensual rights which it is entitled to exercise pursuant to clause (i)
above and to receive the dividends, distributions, principal and interest
payments which it is authorized to receive and retain pursuant to clause (ii)
above.
Upon the occurrence and during the continuation of an Event of
Default, (x) upon written notice from Secured Party to any Grantor, all rights
of such Grantor to exercise the voting and other consensual rights which it
would otherwise be entitled to exercise pursuant hereto shall cease, and all
such rights shall thereupon become vested in Secured Party who shall thereupon
have the sole right to exercise such voting and other consensual rights; (y) all
rights of such Grantor to receive the dividends, other distributions and
interest payments which it would otherwise be authorized to receive and retain
pursuant hereto shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to receive and hold as
Securities Collateral such dividends, other distributions and interest payments;
and (z) all dividends, principal, interest payments and other distributions
which are received by such Grantor contrary to the provisions of clause (ii) of
the immediately preceding paragraph or clause (y) above shall be received in
trust for the benefit of Secured Party, shall be segregated from other funds of
such Grantor and shall forthwith be paid over to Secured Party as Securities
Collateral in the same form as so received (with any necessary endorsements).
In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies, dividend
payment orders and other instruments as Secured Party may from time to time
reasonably request, and (II) without limiting the effect of clause (I) above,
each Grantor hereby grants to Secured Party an irrevocable proxy to vote the
Pledged Shares and to exercise all other rights, powers, privileges and remedies
to which a holder of the Pledged Shares would be entitled (including giving or
withholding written consents of shareholders or other holders of equity
interests, calling special meetings of shareholders or other holders of equity
interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Shares on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Shares or any officer or agent
thereof), upon the occurrence of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations or the cure or
other resolution of such Event of Default.
SECTION 10. SPECIAL COVENANTS WITH RESPECT TO THE INTELLECTUAL PROPERTY
COLLATERAL.
(a) Each Grantor shall:
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(i) diligently keep reasonable records respecting the
Intellectual Property Collateral and at all times keep at least one
complete set of its records concerning such Collateral at its chief
executive office or principal place of business;
(ii) use commercially reasonable efforts so as not to permit the
inclusion in any contract to which it hereafter becomes a party of any
provision that could reasonably be expected to impair or prevent the
creation of a security interest in, or the assignment of, such Grantor's
rights and interests in any property included within the definitions of
any Intellectual Property Collateral acquired under such contracts;
(iii) take any and all reasonable steps to protect the secrecy of
all trade secrets relating to the products and services sold or delivered
under or in connection with the Intellectual Property Collateral,
including, without limitation, where appropriate entering into
confidentiality agreements with employees and restricting access to
secret information and documents;
(iv) use proper statutory notice in connection with its use of
any of the Intellectual Property Collateral;
(v) use a commercially appropriate standard of quality (which
may be consistent with such Grantor's past practices) in the manufacture,
sale and delivery of products and services sold or delivered under or in
connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured
Party's reasonable request statements and schedules further identifying
and describing any Intellectual Property Collateral and such other
reports in connection with such Collateral, all in reasonable detail.
(b) Except as otherwise provided in this Section 10, each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor in respect of the Intellectual Property Collateral or any
portion thereof. In connection with such collections, each Grantor may take
(and, at Secured Party's reasonable direction, shall take) such action as such
Grantor or Secured Party may deem reasonably necessary or advisable to enforce
collection of such amounts; provided, Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default and
upon written notice to such Grantor of its intention to do so, to notify the
obligors with respect to any such amounts of the existence of the security
interest created hereby and to direct such obligors to make payment of all such
amounts directly to Secured Party, and, upon such notification and at the
expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done. After receipt by any
Grantor of the notice from Secured Party referred to in the proviso to the
preceding sentence and during the continuation of any Event of Default, (i) all
amounts and proceeds (including checks and other instruments) received by each
Grantor in respect of amounts due to such Grantor in respect of the Intellectual
Property Collateral or any portion thereof shall be received in trust for the
benefit of Secured Party hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to Secured Party in the
same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 18, and (ii) such Grantor shall
not adjust,
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settle or compromise the amount or payment of any such amount or release wholly
or partly any obligor with respect thereto or allow any credit or discount
thereon.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its commercially reasonable judgment, decides
otherwise, (i) any application relating to any of the Intellectual Property
Collateral owned, held or used by such Grantor and identified on Schedules
1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is pending as of the date of
this Agreement, (ii) any Copyright Registration on any existing or future
unregistered but copyrightable works (except for works of nominal commercial
value or with respect to which such Grantor has determined in the exercise of
its commercially reasonable judgment that it shall not seek registration), (iii)
application on any future patentable but unpatented innovation or invention
comprising Intellectual Property Collateral, and (iv) any Trademark opposition
and cancellation proceedings, renew Trademark Registrations and Copyright
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Intellectual Property Collateral. Any
expenses incurred in connection therewith shall be borne solely by Grantors.
Subject to the foregoing, each Grantor shall give Secured Party prior written
notice of any abandonment of any Intellectual Property Collateral or any pending
patent application or any Patent.
(d) Except as provided herein, each Grantor shall have the right to
commence and prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other actions for
infringement, unfair competition, dilution, misappropriation or other damage, or
reexamination or reissue proceedings as are necessary to protect the
Intellectual Property Collateral. Secured Party shall provide, at such Grantor's
expense, all reasonable and necessary cooperation in connection with any such
suit, proceeding or action including, without limitation, joining as a necessary
party. Each Grantor shall promptly, following its becoming aware thereof, notify
Secured Party of the institution of, or of any adverse determination in, any
proceeding (whether in the United States Patent and Trademark Office, the United
States Copyright Office or any federal, state, local or foreign court) or
regarding such Grantor's ownership, right to use, or interest in any
Intellectual Property Collateral. Each Grantor shall provide to Secured Party
any information with respect thereto requested by Secured Party.
(e) In addition to, and not by way of limitation of, the granting of
a security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuation of an Event of Default, hereby
assigns, transfers and conveys to Secured Party the nonexclusive right and
license to use all trademarks, tradenames, copyrights, patents or technical
processes (including, without limitation, the Intellectual Property Collateral)
owned or used by such Grantor that relate to the Collateral, together with any
goodwill associated therewith, all to the extent necessary to enable Secured
Party to realize on the Collateral in accordance with this Agreement and to
enable any transferee or assignee of the Collateral to enjoy the benefits of the
Collateral. This right shall inure to the benefit of all successors, assigns and
transferees of Secured Party and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and license
shall be granted free of charge, without requirement that any monetary payment
whatsoever be made to such Grantor. In addition, each Grantor hereby grants to
Secured Party and its employees, representatives and agents the right to
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visit such Grantor's and any of its Affiliate's or subcontractor's plants,
facilities and other places of business that are utilized in connection with the
manufacture, production, inspection, storage or sale of products and services
sold or delivered under any of the Intellectual Property Collateral (or which
were so utilized during the prior six month period), and to inspect the quality
control and all other records relating thereto upon reasonable advance written
notice to such Grantor and at reasonable dates and times and as often as may be
reasonably requested. If and to the extent that any Grantor is permitted to
license the Intellectual Property Collateral, Secured Party shall promptly enter
into a non-disturbance agreement or other similar arrangement, at such Grantor's
request and expense, with such Grantor and any licensee of any Intellectual
Property Collateral permitted hereunder in form and substance reasonably
satisfactory to Secured Party pursuant to which (i) Secured Party shall agree
not to disturb or interfere with such licensee's rights under its license
agreement with such Grantor so long as such licensee is not in default
thereunder, and (ii) such licensee shall acknowledge and agree that the
Intellectual Property Collateral licensed to it is subject to the security
interest created in favor of Secured Party and the other terms of this
Agreement.
SECTION 11. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED AGREEMENTS.
(a) Each Grantor shall at its expense:
(i) if consistent with sound business practices, perform and
observe all terms and provisions of the Assigned Agreements to be
performed or observed by it, maintain the Assigned Agreements in full
force and effect, enforce the Assigned Agreements in accordance with
their terms, and take all such action to such end as may be from time to
time reasonably requested by Secured Party; and
(ii) upon the reasonable request of Secured Party, (A) furnish
to Secured Party, promptly upon receipt thereof, copies of all notices,
requests and other documents received by such Grantor under or pursuant
to the Assigned Agreements, and (B) from time to time (1) furnish to
Secured Party such information and reports regarding the Assigned
Agreements as Secured Party may reasonably request and (2) make to the
parties to such Assigned Agreements such demands and requests for
information and reports or for action as such Grantor is entitled to make
under the Assigned Agreements.
(b) Upon the occurrence and during the continuance of an Event of
Default, no Grantor shall:
(i) cancel or terminate any of the Assigned Agreements or
consent to or accept any cancellation or termination thereof;
(ii) amend or otherwise modify the Assigned Agreements or give
any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned
Agreements;
(iv) consent to or permit or accept any prepayment of amounts to
become due under or in connection with the Assigned Agreements, except as
expressly provided therein; or
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(v) take any other action in connection with the Assigned
Agreements that could reasonably be expected to materially impair the
value of the interest or rights of such Grantor thereunder or that could
reasonably be expected to materially impair the interest or rights of
Secured Party.
SECTION 12. COLLATERAL ACCOUNT.
Secured Party is hereby authorized to establish and maintain at its
office at 425 Lexington Avenue, New York, New York 10017, as a blocked account
in the name of Company and under the sole dominion and control of Secured Party,
a restricted deposit account designated as "Horseshoe Gaming Holding Corp.
Collateral Account". All amounts at any time held in the Collateral Account
shall be beneficially owned by Grantors but shall be held in the name of Secured
Party hereunder, for the benefit of Lenders, as collateral security for the
Secured Obligations upon the terms and conditions set forth herein. Grantors
shall have no right to withdraw, transfer or, except as expressly set forth
herein, otherwise receive any funds deposited into the Collateral Account.
Anything contained herein to the contrary notwithstanding, the Collateral
Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect. All deposits of funds in the Collateral Account shall be made by wire
transfer (or, if applicable, by intra-bank transfer from another account of a
Grantor) of immediately available funds, in each case addressed in accordance
with instructions of Secured Party. Each Grantor shall, promptly after
initiating a transfer of funds to the Collateral Account, give notice to Secured
Party by telefacsimile of the date, amount and method of delivery of such
deposit. Cash held by Secured Party in the Collateral Account shall not be
invested by Secured Party but instead shall be maintained as a cash deposit in
the Collateral Account pending application thereof as elsewhere provided in this
Agreement. To the extent permitted under Regulation Q of the Board of Governors
of the Federal Reserve System, any cash held in the Collateral Account shall
bear interest at the standard rate paid by Secured Party to its customers for
deposits of like amounts and terms. Subject to Secured Party's rights hereunder,
any interest earned on deposits of cash in the Collateral Account shall be
deposited directly in, and held in the Collateral Account.
SECTION 13. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's
attorney-in-fact, such appointment to be effective only upon and during the
continuance of an Event of Default, with full authority in the place and stead
of such Grantor and in the name of such Grantor, Secured Party or otherwise,
from time to time in Secured Party's discretion to take any action and to
execute any instrument that Secured Party may reasonably deem necessary or
advisable to accomplish the purposes of this Agreement, including without
limitation:
(a) to obtain and adjust insurance required to be maintained by such
Grantor or paid to Secured Party pursuant to Section 7;
(b) to ask for, demand, collect, sue for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
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(c) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clauses (a) and (b) above;
(d) to file any claims or take any action or institute any proceedings
that Secured Party may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of Secured Party with respect
to any of the Collateral;
(e) to sign and endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and
(f) subject to the provisions of the UCC and any other applicable law,
and the provisions of the Credit Agreement, generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Secured Party were the absolute owner thereof
for all purposes, and to do, at Secured Party's option and Grantors' expense, at
any time or from time to time, all acts and things that Secured Party reasonably
deems necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
SECTION 14. SECURED PARTY MAY PERFORM.
If any Grantor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
reasonable out-of-pocket expenses of Secured Party incurred in connection
therewith shall be payable by Grantors under Section 19(b).
SECTION 15. STANDARD OF CARE.
The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder and as otherwise required by applicable law, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property.
SECTION 16. REMEDIES.6.
(a) GENERALLY. If any Event of Default (as defined in the Credit
Agreement) shall have occurred and be continuing, Secured Party may exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral), and also may (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of Secured Party
forthwith, assemble all or part of the Collateral as directed by Secured Party
and make it available to Secured Party at a
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place to be designated by Secured Party that is reasonably convenient to both
parties, (ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent Secured Party reasonably deems appropriate, (iv) take possession of
any Grantor's premises or place custodians in exclusive control thereof, remain
on such premises and use the same and any of such Grantor's equipment for the
purpose of completing any work in process, taking any actions described in the
preceding clause (iii) and collecting any Secured Obligation, (v) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Secured Party may deem
commercially reasonable, (vi) exercise dominion and control over and refuse to
permit further withdrawals from any Deposit Account maintained with Secured
Party or any Lender constituting a part of the Collateral and (vii) without
notice to any Grantor, transfer to or register in the name of Secured Party or
any of its nominees any or all of the Securities Collateral. Secured Party or
any Lender may be the purchaser of any or all of the Collateral at any such sale
and Secured Party, as agent for and representative of Lenders (but not any
Lender in its individual capacity unless Requisite Obligees (as defined in
Section 21(a)) shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, Grantors shall be jointly and severally liable
for the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to Secured
Party, that Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against such Grantor, and each Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities.
(b) SECURITIES COLLATERAL.
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(i) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any sale
of all or any part of the Securities Collateral conducted without prior
registration or qualification of such Securities Collateral under the
Securities Act and/or such state securities laws, to limit purchasers to
those who will agree, among other things, to acquire the Securities
Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. Each Grantor acknowledges that any
such private sales may be at prices and on terms less favorable than
those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement
under the Securities Act) and, notwithstanding such circumstances and the
registration rights granted to Secured Party by such Grantor pursuant
hereto, each Grantor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Secured Party
shall have no obligation to engage in public sales and no obligation to
delay the sale of any Securities Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of
public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should,
agree to so register it. If Secured Party determines to exercise its
right to sell any or all of the Securities Collateral, upon written
request, each Grantor shall and shall cause each issuer of any Pledged
Shares to be sold hereunder from time to time to furnish to Secured Party
all such information as Secured Party may request in order to determine
the number of shares and other instruments included in the Securities
Collateral which may be sold by Secured Party in exempt transactions
under the Securities Act and the rules and regulations of the Securities
and Exchange Commission thereunder, as the same are from time to time in
effect.
(ii) If Secured Party shall determine to exercise its right to
sell all or any of the Securities Collateral pursuant to this Section,
each Grantor agrees that, upon request of Secured Party (which request
may be made by Secured Party in its sole discretion), such Grantor will,
at its own expense (A) execute and deliver, and cause each issuer of the
Securities Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as
may be necessary or, in the reasonable opinion of Secured Party,
advisable to register such Securities Collateral under the provisions of
the Securities Act and to cause the registration statement relating
thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make all
amendments and supplements thereto and to the related prospectus which,
in the reasonable opinion of Secured Party, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission
applicable thereto; (B) use its commercially reasonable efforts to
qualify the Securities Collateral under all applicable state securities
or "Blue Sky" laws and to obtain all necessary governmental approvals for
the sale of the Securities Collateral, as requested by Secured Party; (C)
cause each such issuer to make available to its security holders, as soon
as practicable, an earnings statement which will satisfy the provisions
of Section 11(a) of the Securities Act; (D) do or cause to be done all
such other acts and things as may be necessary to make such sale of the
Securities Collateral or any part thereof valid and binding and in
compliance with applicable law;
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and (E) bear all costs and expenses, including reasonable attorneys'
fees, of carrying out its obligations under this Section; provided,
however, that, notwithstanding the foregoing, no Grantor shall, by reason
of anything contained in this Agreement, be required to qualify generally
to conduct business in any jurisdiction where it is not otherwise
required to do so, to subject staff to taxation in any such jurisdiction
or to consent to service of process in any such jurisdiction.
(iii) Without limiting the generality of subsections 10.2 and
10.3 of the Credit Agreement, in the event of any public sale described
herein, each Grantor agrees to indemnify and hold harmless Secured Party
and each Lender and each of their respective directors, officers,
employees and agents from and against any loss, fee, cost, expense,
damage, liability or claim, joint or several, to which any such Persons
may become subject or for which any of them may be liable, under the
Securities Act or otherwise, insofar as such losses, fees, costs,
expenses, damages, liabilities or claims (or any litigation commenced or
threatened in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, registration statement, prospectus or other such
document published or filed in connection with such public sale, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse Secured Party and such other Persons for
any legal or other expenses reasonably incurred by Secured Party and such
other Persons in connection with any litigation, of any nature
whatsoever, commenced or threatened in respect thereof (including any and
all fees, costs and expenses whatsoever reasonably incurred by Secured
Party and such other Persons and counsel for Secured Party and such other
Persons in investigating, preparing for, defending against or providing
evidence, producing documents or taking any other action in respect of,
any such commenced or threatened litigation or any claims asserted). This
indemnity shall be in addition to any liability which any Grantor may
otherwise have and shall extend upon the same terms and conditions to
each Person, if any, that controls Secured Party or such Persons within
the meaning of the Securities Act.
(c) COLLATERAL ACCOUNT. If an Event of Default has occurred and is
continuing and, in accordance with Section 8 of the Credit Agreement, Company is
required to pay to Secured Party an amount (the "AGGREGATE AVAILABLE AMOUNT")
equal to the maximum amount that may at any time be drawn under all Letters of
Credit then outstanding under the Credit Agreement, Company shall deliver funds
in such an amount for deposit in the Collateral Account. If for any reason the
aggregate amount delivered by Company for deposit in the Collateral Account as
aforesaid is less than the Aggregate Available Amount, the aggregate amount so
delivered by Company shall be apportioned among all outstanding Letters of
Credit for purposes of this Section in accordance with the ratio of the maximum
amount available for drawing under each such Letter of Credit (as to such Letter
of Credit, the "MAXIMUM AVAILABLE AMOUNT") to the Aggregate Available Amount.
Upon any drawing under any outstanding Letter of Credit in respect of which
Company has deposited in the Collateral Account any amounts described
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above, Secured Party shall apply such amounts to reimburse the Issuing Lender
for the amount of such drawing. In the event of cancellation or expiration of
any Letter of Credit in respect of which Company has deposited in the Collateral
Account any amounts described above, or in the event of any reduction in the
Maximum Available Amount under such Letter of Credit, Secured Party shall apply
the amount then on deposit in the Collateral Account in respect of such Letter
of Credit (less, in the case of such a reduction, the Maximum Available Amount
under such Letter of Credit immediately after such reduction) first, to the
payment of any amounts payable to Secured Party pursuant to Section 18 hereof,
second, to the extent of any excess, to the cash collateralization pursuant to
the terms of this Agreement of any outstanding Letters of Credit in respect of
which Company has failed to pay all or a portion of the amounts described above
(such cash collateralization to be apportioned among all such Letters of Credit
in the manner described above), third, to the extent of any further excess, to
the payment of any other outstanding Secured Obligations in such order as
Secured Party shall elect, and fourth, to the extent of any further excess, to
the payment to Grantor or whoever shall be lawfully entitled to receive such
funds.
SECTION 17. ADDITIONAL REMEDIES FOR INTELLECTUAL PROPERTY COLLATERAL.
(a) Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, (i) Secured
Party shall have the right (but not the obligation) to bring suit, in the name
of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and each Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in Sections 10.2 and 10.3 of
the Credit Agreement and Section 19 hereof, as applicable, in connection with
the exercise of its rights under this Section, and, to the extent that Secured
Party shall elect not to bring suit to enforce any Intellectual Property
Collateral as provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement of any of the Intellectual Property Collateral by
others and for that purpose agrees to use its commercially reasonable judgement
in maintaining any action, suit or proceeding against any Person so infringing
reasonably necessary to prevent such infringement; (ii) upon written demand from
Secured Party, each Grantor shall execute and deliver to Secured Party an
assignment or assignments of the Intellectual Property Collateral and such other
documents as are necessary or appropriate to carry out the intent and purposes
of this Agreement; (iii) each Grantor agrees that such an assignment and/or
recording shall be applied to reduce the Secured Obligations outstanding only to
the extent that Secured Party (or any Lender) receives cash proceeds in respect
of the sale of, or other realization upon, the Intellectual Property Collateral;
and (iv) within five Business Days after written notice from Secured Party, each
Grantor shall make available to Secured Party, to the extent within such
Grantor's power and authority, such personnel in such Grantor's employ on the
date of such Event of Default as Secured Party may reasonably designate, by
name, title or job responsibility, to permit such Grantor to continue, directly
or indirectly, to produce, advertise and sell the products and services sold or
delivered by such Grantor under or in connection with the Trademarks, Trademark
Registrations and Trademark Rights, such persons to be available to perform
their prior functions on Secured Party's behalf and to be compensated by Secured
Party at such Grantor's expense on a per diem, pro-rata basis consistent with
the salary and benefit structure applicable to each as of the date of such Event
of Default.
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(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, Secured Party shall promptly execute and deliver
to such Grantor such assignments as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to Secured Party
as aforesaid, subject to any disposition thereof that may have been made by
Secured Party; provided, after giving effect to such reassignment, Secured
Party's security interest granted pursuant hereto, as well as all other rights
and remedies of Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Permitted Encumbrances.
SECTION 18. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in the Credit Agreement.
SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantors jointly and severally agree to indemnify Secured Party
and each Lender from and against any and all claims, losses and liabilities in
any way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including without limitation enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
from Secured Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured Party upon
demand the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 19 shall survive the
termination of this Agreement and the discharge of Grantors' other obligations
under this Agreement, the Credit Agreement and the other Loan Documents.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS; TERMINATION AND
RELEASE.
(a) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all
25
<PAGE> 243
outstanding Letters of Credit, (ii) be binding upon Grantors and their
respective successors and assigns, and (iii) inure, together with the rights and
remedies of Secured Party hereunder, to the benefit of Secured Party and its
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), but subject to the provisions of subsection 10.1 of the
Credit Agreement, any Lender may assign or otherwise transfer any Loans held by
it to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to Lenders herein or otherwise.
(b) Upon the payment in full of all Secured Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
applicable Grantors. Upon any such termination Secured Party will, at Grantors'
expense, execute and deliver to Grantors such documents as Grantors shall
reasonably request to evidence such termination. In addition, upon the proposed
sale, transfer or other disposition of any Collateral by a Grantor in accordance
with the Credit Agreement for which such Grantor desires to obtain a security
interest release from Secured Party, such Grantor shall deliver an Officers'
Certificate (x) stating that the Collateral subject to such disposition is being
sold, transferred or otherwise disposed of in compliance with the terms of the
Credit Agreement and (y) specifying the Collateral being sold, transferred or
otherwise disposed of in the proposed transaction. Upon the receipt of such
Officers' Certificate, Secured Party shall, at Grantor's expense, so long as
Secured Party has no reason to believe that the Officers' Certificate delivered
by such Grantor with respect to such sale is not true and correct, execute and
deliver such releases of its security interest in such Collateral which is to be
so sold, transferred or disposed of, as may be reasonably requested by such
Grantor.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party hereunder
by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 16 in accordance with the instructions of Requisite Lenders.
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5A of the Credit Agreement
shall also constitute notice of resignation as Secured Party under this
Agreement; removal of Administrative Agent pursuant to subsection 9.5A of the
Credit Agreement shall also constitute removal as Secured Party under this
Agreement; and appointment of a successor Administrative Agent pursuant to
subsection 9.5A of the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. Upon the acceptance of any
appointment as Administrative Agent under subsection 9.5A of the Credit
Agreement by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Secured Party under this
Agreement, and the retiring or removed Secured Party under this Agreement shall
promptly (i) transfer to such successor Secured Party all sums, securities and
other items of Collateral held hereunder, together with all
26
<PAGE> 244
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
SECTION 22. ADDITIONAL GRANTORS.
The initial Subsidiary Grantors hereunder shall be such of the
Subsidiaries of Company as are signatories hereto on the date hereof. From time
to time subsequent to the date hereof, additional Subsidiaries of Company may
become parties hereto as additional Grantors (each an "ADDITIONAL GRANTOR"), by
executing a Counterpart substantially in the form of Exhibit VI annexed hereto.
Upon delivery of any such Counterpart to Secured Party, notice of which is
hereby waived by Grantors, each such Additional Grantor shall be a Grantor and
shall be as fully a party hereto as if such Additional Grantor were an original
signatory hereto. Each Grantor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the addition or release of any
other Grantor hereunder, nor by any election of Administrative Agent not to
cause any Subsidiary of Company to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Grantor hereunder.
SECTION 23. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by any Grantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Secured Party and, in the case of any such amendment or modification, by
Grantors; provided this Agreement may be modified by the execution of a
Counterpart by an Additional Grantor in accordance with Section 22 and Grantors
hereby waive any requirement of notice of or consent to any such amendment. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
SECTION 24. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices to
Secured Party shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as provided in subsection 10.8 of the
Credit Agreement or as set forth under such party's name on the signature pages
hereof or such other address as shall be designated by such party in a written
notice delivered to the other parties hereto.
27
<PAGE> 245
SECTION 25. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 26. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 27. HEADINGS.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
SECTION 28. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT
THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code
in the State of New York are used herein as therein defined. The rules of
construction set forth in subsection 1.3 of the Credit Agreement shall be
applicable to this Agreement mutatis mutandis.
SECTION 29. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY
OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON
28
<PAGE> 246
CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION
24; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO
CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; (V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH GRANTOR IN
THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF
THIS SECTION 29 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1402 OR OTHERWISE.
SECTION 30. WAIVER OF JURY TRIAL.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Grantor and Secured Party acknowledge that this waiver is
a material inducement for Grantors and Secured Party to enter into a business
relationship, that Grantors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Grantor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 30 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 31. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
29
<PAGE> 247
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
HORSESHOE GAMING HOLDING CORP.
By:
-----------------------------
Name:
--------------------------
Title:
---------------------------
EACH OF THE ENTITIES LISTED ON SCHEDULE A ANNEXED
HERETO
By:
---------------------------------
on behalf of each of the entities listed on
Schedule A annexed hereto
Name:
----------------------------
Title:
----------------------------
S-1
<PAGE> 248
SCHEDULE A
Name Notice Address for each Subsidiary Grantor
A-1
<PAGE> 249
CANADIAN IMPERIAL BANK OF
COMMERCE, as Secured Party
By:
---------------------------------
Name:
--------------------------
Title:
---------------------------
<PAGE> 250
SCHEDULE 1(e)(i) TO
SECURITY AGREEMENT
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CLASS PERCENTAGE OF
OF STOCK PAR NUMBER OF OUTSTANDING
STOCK ISSUER STOCK CERTIFICATE NOS. VALUE SHARES SHARES PLEDGED
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1(e)(i)-1
<PAGE> 251
SCHEDULE 1(e)(ii) TO
SECURITY AGREEMENT
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
AMOUNT OF
DEBT ISSUER INDEBTEDNESS
- -----------------------------------------------------------------------------------------------------------
<S> <C>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
1(e)(ii)-1
<PAGE> 252
SCHEDULE 1(f)(i) TO
SECURITY AGREEMENT
U.S. TRADEMARKS:
<TABLE>
<CAPTION>
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
<S> <C> <C> <C>
</TABLE>
FOREIGN TRADEMARKS:
<TABLE>
<CAPTION>
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
<S> <C> <C> <C>
</TABLE>
1(f)(i)-1
<PAGE> 253
SCHEDULE 1(f)(ii) TO
SECURITY AGREEMENT
U.S. PATENTS ISSUED:
<TABLE>
<CAPTION>
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
<S> <C> <C> <C>
</TABLE>
U.S. PATENTS PENDING:
<TABLE>
<CAPTION>
Applicant's Date Application
Name Filed Number Invention Inventor
---- ----- ------ --------- --------
<S> <C> <C> <C> <C>
</TABLE>
FOREIGN PATENTS ISSUED:
<TABLE>
<CAPTION>
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
<S> <C> <C> <C>
</TABLE>
1(f)(ii)-1
<PAGE> 254
FOREIGN PATENTS PENDING:
<TABLE>
<CAPTION>
Applicant's Date Application
Name Filed Number Invention Inventor
---- ----- ------ --------- --------
<S> <C> <C> <C> <C>
</TABLE>
1(f)(ii)-2
<PAGE> 255
SCHEDULE 1(f)(iii) TO
SECURITY AGREEMENT
U.S. COPYRIGHTS:
<TABLE>
<CAPTION>
Title Registration No. Date of Issue Registered Owner
- ----- ---------------- ------------- ----------------
<S> <C> <C> <C>
</TABLE>
FOREIGN COPYRIGHT REGISTRATIONS:
<TABLE>
<CAPTION>
Country Title Registration No. Date of Issue
- ------- ----- ---------------- -------------
<S> <C> <C> <C>
</TABLE>
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
<TABLE>
<CAPTION>
Title Reference No. Date of Application Copyright Claimant
- ----- ------------- ------------------- ------------------
<S> <C> <C> <C>
</TABLE>
PENDING FOREIGN COPYRIGHT REGISTRATIONS & APPLICATIONS:
<TABLE>
<CAPTION>
Country Title Registration No. Date of Issue
- ------- ----- ---------------- -------------
<S> <C> <C> <C>
</TABLE>
1(f)(iii)-1
<PAGE> 256
SCHEDULE 1(h) TO
SECURITY AGREEMENT
ASSIGNED AGREEMENTS
1(h)-1
<PAGE> 257
SCHEDULE 4(b)
TO
SECURITY AGREEMENT
LOCATIONS OF EQUIPMENT AND INVENTORY
<TABLE>
<CAPTION>
NAME OF GRANTOR LOCATIONS OF EQUIPMENT AND INVENTORY
- --------------- ------------------------------------
<S> <C>
</TABLE>
4(b)-1
<PAGE> 258
SCHEDULE 4(d)
TO
SECURITY AGREEMENT
OFFICE LOCATIONS
<TABLE>
<CAPTION>
NAME OF GRANTOR OFFICE LOCATIONS
- --------------- ----------------
<S> <C>
</TABLE>
4(d)-1
<PAGE> 259
SCHEDULE 4(e)
TO
SECURITY AGREEMENT
OTHER NAMES
<TABLE>
<CAPTION>
NAME OF GRANTOR OTHER NAMES
- --------------- -----------
<S> <C>
</TABLE>
4(e)-1
<PAGE> 260
SCHEDULE 4(i)
TO
SECURITY AGREEMENT
FILING OFFICES
<TABLE>
<CAPTION>
Grantor Filing Offices
- ------- --------------
<S> <C>
</TABLE>
4(i)-1
<PAGE> 261
EXHIBIT I TO
SECURITY AGREEMENT
[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, _______________, a ___________ corporation ("GRANTOR"), owns and
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and
WHEREAS, Horseshoe Gaming Holding Corp., a Delaware corporation
("COMPANY"), has entered into a Credit Agreement dated as of June __, 1999 (said
Credit Agreement, as it may heretofore have been and as it may hereafter be
amended, supplemented, restated or otherwise modified from time to time, being
the "CREDIT AGREEMENT") with the financial institutions named therein
(collectively, together with their respective successors and assigns party to
the Credit Agreement from time to time, the "LENDERS"), DLJ Capital Funding,
Inc., as Syndication Agent, and Canadian Imperial Bank of Commerce, as
Administrative Agent for the Lenders (in such capacity, "SECURED PARTY"),
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and
WHEREAS, Grantor has executed and delivered that certain Subsidiary
Guaranty dated as of June __, 1999 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "GUARANTY") in favor of Secured Party for the benefit of Lenders,
pursuant to which Grantor has guarantied the prompt payment and performance when
due of all obligations of Company under the Credit Agreement and the other Loan
Documents; and
WHEREAS, pursuant to the terms of a Security Agreement dated as of June
__, 1999 (as amended, supplemented or otherwise modified from time to time, the
"SECURITY AGREEMENT"), among Grantor, Secured Party and the other grantors named
therein, Grantor has agreed to create in favor of Secured Party a secured and
protected interest in, and Secured Party has agreed to become a secured creditor
with respect to, the Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security Agreement, Grantor hereby grants to Secured Party a security
interest in all of Grantor's right, title and interest in and to the following,
in each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"TRADEMARK COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all trademarks,
service marks, designs, logos, indicia, tradenames, trade dress,
corporate names, company names, business names, fictitious business
names, trade styles and/or other source and/or business identifiers and
I-1
<PAGE> 262
applications pertaining thereto, owned by such Grantor, or hereafter
adopted and used, in its business (including, without limitation, the
trademarks specifically identified in Schedule A) (collectively, the
"TRADEMARKS"), all registrations that have been or may hereafter be
issued or applied for thereon in the United States and any state thereof
and in foreign countries (including, without limitation, the
registrations and applications specifically identified in Schedule A)
(the "TRADEMARK REGISTRATIONS"), all common law and other rights (but in
no event any of the obligations) in and to the Trademarks in the United
States and any state thereof and in foreign countries (the "TRADEMARK
RIGHTS"), and all goodwill of such Grantor's business symbolized by the
Trademarks and associated therewith (the "ASSOCIATED GOODWILL"); and
(ii) all proceeds, products, rents and profits of or from any
and all of the foregoing Trademark Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not Secured
Party is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Trademark Collateral. For purposes of this Grant of
Trademark Security Interest, the term "PROCEEDS" includes whatever is
receivable or received when Trademark Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Trademark Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
[Remainder of page intentionally left blank]
I-2
<PAGE> 263
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the __ day of _______, _____.
---------------------------
By:
-----------------------------
Name:
-------------------------
Title:
--------------------------
I-3
<PAGE> 264
SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
<TABLE>
<CAPTION>
United States
Trademark Registration Registration
Registered Owner Description Number Date
- ---------------- ----------- ------ ----
<S> <C> <C> <C>
</TABLE>
I-A-1
<PAGE> 265
EXHIBIT II TO
SECURITY AGREEMENT
[FORM OF GRANT OF PATENT SECURITY INTEREST]
GRANT OF PATENT SECURITY INTEREST
WHEREAS, _______________, a ___________ corporation ("GRANTOR"), owns and
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and
WHEREAS, Horseshoe Gaming Holding Corp., a Horseshoe Gaming Holding
Corp., a Delaware corporation ("COMPANY"), has entered into a Credit Agreement
dated as of June __, 1999 (said Credit Agreement, as it may heretofore have been
and as it may hereafter be amended, supplemented or otherwise modified from time
to time, being the "CREDIT AGREEMENT") with the financial institutions named
therein (collectively, together with their respective successors and assigns
party to the Credit Agreement from time to time, the "LENDERS"), DLJ Capital
Funding, Inc., as Syndication Agent, and Canadian Imperial Bank of Commerce, as
Administrative Agent for the Lenders (in such capacity, "SECURED PARTY"),
pursuant to which Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and
WHEREAS, Grantor has executed and delivered that certain Subsidiary
Guaranty dated as of June __, 1999 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "GUARANTY") in favor of Secured Party for the benefit of, pursuant to
which Grantor has guarantied the prompt payment and performance when due of all
obligations of Company under the Credit Agreement and the other Loan Documents;
and
WHEREAS, pursuant to the terms of a Security Agreement dated as of June
__, 1999 (as amended, supplemented or otherwise modified from time to time, the
"SECURITY AGREEMENT"), among Grantor, Secured Party and the other grantors named
therein, Grantor has agreed to create in favor of Secured Party a secured and
protected interest in, and Secured Party has agreed to become a secured creditor
with respect to, the Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security Agreement, Grantor hereby grants to Secured Party a security
interest in all of Grantor's right, title and interest in and to the following,
in each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located (the "PATENT
COLLATERAL"):
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise but only to the extent permitted by agreements
governing such license or other use) in and to all patents and patent
applications and rights and interests in patents and patent applications
under any domestic or foreign law that are presently, or in the future
may be, owned or held by such Grantor and all patents and patent
applications and rights,
II-1
<PAGE> 266
title and interests in patents and patent applications under any domestic
or foreign law that are presently, or in the future may be, owned by such
Grantor in whole or in part (including, without limitation, the patents
and patent applications listed in Schedule A), all rights (but not
obligations) corresponding thereto to sue for past, present and future
infringements and all re-issues, divisions, continuations, renewals,
extensions and continuations-in-part thereof (all of the foregoing being
collectively referred to as the "PATENTS"); and
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Patent Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any of the
foregoing Patent Collateral. For purposes of this Grant of Patent
Security Interest, the term "PROCEEDS" includes whatever is receivable or
received when Patent Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Patent Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the Patent
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
[Remainder of page intentionally left blank]
II-2
<PAGE> 267
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ____________, _____.
---------------------
By:
-----------------------------
Name:
-------------------------
Title:
--------------------------
II-3
<PAGE> 268
SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST
PATENTS ISSUED:
<TABLE>
<CAPTION>
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
<S> <C> <C> <C>
</TABLE>
PATENTS PENDING:
<TABLE>
<CAPTION>
Applicant's Date Application
Name Filed Number Invention Inventor
---- ----- ------ --------- --------
<S> <C> <C> <C> <C>
</TABLE>
II-A-1
<PAGE> 269
EXHIBIT III TO
SECURITY AGREEMENT
[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]
GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, ________________, a ___________ corporation ("GRANTOR"), owns
and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and
WHEREAS, Horseshoe Gaming Holding Corp., a Delaware corporation
("COMPANY"), has entered into a Credit Agreement dated as of June __, 1999 (said
Credit Agreement, as it may heretofore have been and as it may hereafter be
amended, supplemented or otherwise modified from time to time, being the "CREDIT
AGREEMENT") with the financial institutions named therein (collectively,
together with their respective successors and assigns party to the Credit
Agreement from time to time, the "LENDERS"), DLJ Capital Funding, Inc., as
Syndication Agent, and Canadian Imperial Bank of Commerce, as Administrative
Agent for the Lenders (in such capacity, "SECURED PARTY"), pursuant to which
Lenders have made certain commitments, subject to the terms and conditions set
forth in the Credit Agreement, to extend certain credit facilities to Company;
and
WHEREAS, Grantor has executed and delivered that certain Subsidiary
Guaranty dated as of June __, 1999 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "GUARANTY") in favor of Secured Party for the benefit of Lenders,
pursuant to which Grantor has guarantied the prompt payment and performance when
due of all obligations of Company under the Credit Agreement and the other Loan
Documents; and
WHEREAS, pursuant to the terms of a Security Agreement dated as of June
__, 1999 (as amended, supplemented or otherwise modified from time to time, the
"SECURITY AGREEMENT"), among Grantor, Secured Party and the other grantors named
therein, Grantor has agreed to create in favor of Secured Party a secured and
protected interest in, and Secured Party has agreed to become a secured creditor
with respect to, the Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security Agreement, Grantor hereby grants to Secured Party a security
interest in all of Grantor's right, title and interest in and to the following,
in each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"COPYRIGHT COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) under copyright in
various published and unpublished works of authorship including, without
limitation, computer programs, computer data bases, other computer
software layouts, trade dress, drawings, designs, writings, and formulas
(including, without
III-1
<PAGE> 270
limitation, the works listed on Schedule A, as the same may be amended
pursuant hereto from time to time) (collectively, the "COPYRIGHTS"), all
copyright registrations issued to Grantor and applications for copyright
registration that have been or may hereafter be issued or applied for
thereon in the United States and any state thereof and in foreign
countries (including, without limitation, the registrations listed on
Schedule A, as the same may be amended pursuant hereto from time to
time) (collectively, the "COPYRIGHT REGISTRATIONS"), all common law and
other rights in and to the Copyrights in the United States and any state
thereof and in foreign countries including all copyright licenses (but
with respect to such copyright licenses, only to the extent permitted by
such licensing arrangements) (the "COPYRIGHT RIGHTS"), including,
without limitation, each of the Copyrights, rights, titles and interests
in and to the Copyrights, all derivative works and other works
protectable by copyright, which are presently, or in the future may be,
owned, created (as a work for hire for the benefit of Grantor), authored
(as a work for hire for the benefit of Grantor), or acquired by Grantor,
in whole or in part, and all Copyright Rights with respect thereto and
all Copyright Registrations therefor, heretofore or hereafter granted or
applied for, and all renewals and extensions thereof, throughout the
world, including all proceeds thereof (such as, by way of example and
not by limitation, license royalties and proceeds of infringement
suits), the right (but not the obligation) to renew and extend such
Copyright Registrations and Copyright Rights and to register works
protectable by copyright and the right (but not the obligation) to sue
in the name of such Grantor or in the name of Secured Party or Lenders
for past, present and future infringements of the Copyrights and
Copyright Rights; and
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Copyright Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any of the
foregoing Copyright Collateral. For purposes of this Grant of Copyright
Security Interest, the term "PROCEEDS" includes whatever is receivable or
received when Copyright Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Copyright Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Copyright Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
III-2
<PAGE> 271
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ___________, _____.
---------------------
By:
-----------------------------
Name:
--------------------------
Title:
-------------------------
III-3
<PAGE> 272
SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST
U.S. COPYRIGHTS:
<TABLE>
<CAPTION>
Title Registration No. Date of Issue Registered Owner
- ----- ---------------- ------------- ----------------
<S> <C> <C> <C>
</TABLE>
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
<TABLE>
<CAPTION>
Title Reference No. Date of Application Copyright Claimant
- ----- ------------- ------------------- ------------------
<S> <C> <C> <C>
</TABLE>
III-A-1
<PAGE> 273
EXHIBIT IV TO
SECURITY AGREEMENT
PLEDGE SUPPLEMENT
This Pledge Supplement, dated __________________, is delivered pursuant
to the Security Agreement, dated June __, 1999 between the Horseshoe Gaming
Holding Corp.,, ____________________, a _______________ ("GRANTOR"), the other
Grantors named therein and Canadian Imperial Bank of Commerce, as Secured Party
(as it may be from time to time amended, modified or supplemented, the "SECURITY
AGREEMENT"). Capitalized terms used herein not otherwise defined herein shall
have the meanings ascribed thereto in the Security Agreement.
Grantor hereby agrees that the [Pledged Shares] [Pledged Debt] listed on
the schedule attached hereto shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Amendment to be duly executed
and delivered by its duly authorized officer as of ---------------.
------------------------
By:
---------------------------
Title:
IV-1
<PAGE> 274
EXHIBIT V TO
SECURITY AGREEMENT
IP SUPPLEMENT
This IP SUPPLEMENT, dated _______, ____is delivered pursuant to and
supplements (i) the Security Agreement, dated as of June __, 1999 (as it may be
from time to time amended, modified or supplemented, the "SECURITY AGREEMENT"),
among Horseshoe Gaming Holding Corp., __________________ ("GRANTOR"), the other
Grantors named therein, and Canadian Imperial Bank of Commerce, as Secured
Party, and (ii) the [Grant of Trademark Security Interest] [Grant of Patent
Security Interest] [Grant of Copyright Security Interest] dated as of
___________, _____ (the "GRANT") executed by Grantor. Capitalized terms used
herein not otherwise defined herein shall have the meanings ascribed thereto in
the Grant.
Grantor grants to Secured Party a security interest in all of Grantor's
right, title and interest in and to the [Trademark Collateral] [Patent
Collateral] [Copyright Collateral] listed on Schedule A attached hereto. All
such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be
deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright
Collateral] and shall be hereafter subject to each of the terms and conditions
of the Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of ______________.
--------------------------
By:
------------------------------------
Name:
Title:
V-1
<PAGE> 275
EXHIBIT VI TO
SECURITY AGREEMENT
[FORM OF COUNTERPART]
COUNTERPART (this "COUNTERPART"), dated _______, ____is delivered
pursuant to Section 22 of the Security Agreement referred to below. The
undersigned hereby agrees that this Counterpart may be attached to the Security
Agreement, dated as of June __, 1999 (as it may be from time to time amended,
modified or supplemented, the "SECURITY AGREEMENT"; capitalized terms used
herein not otherwise defined herein shall have the meanings ascribed therein),
among Horseshoe Gaming Holding Corp., the other Grantors named therein, and
Canadian Imperial Bank of Commerce, as Secured Party. The undersigned by
executing and delivering this Counterpart hereby becomes a Grantor under the
Security Agreement in accordance with Section 22 thereof and agrees to be bound
by all of the terms thereof. Without limiting the generality of the foregoing,
the undersigned hereby:
(i) authorizes the Secured Party to add the information set
forth on the Schedules to this Agreement to the correlative Schedules
attached to the Security Agreement;
(ii) agrees that all Collateral of the undersigned, including
the items of property described on the Schedules hereto, shall become
part of the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the
Security Agreement, as amended hereby, to the extent relating to the
undersigned.
------------------------
By:
---------------------------
Name:
Title:
VI-1
<PAGE> 276
EXHIBIT XVII
[FORM OF CONFIRMATION OF EFFECTIVENESS CERTIFICATE]
CONFIRMATION OF EFFECTIVENESS CERTIFICATE
This CONFIRMATION OF EFFECTIVENESS CERTIFICATE (this "CERTIFICATE") is
delivered pursuant to subsection 4.1H of that certain Credit Agreement dated as
of June __, 1999 (the "CREDIT AGREEMENT") by and among Horseshoe Gaming Holding
Corp., a Delaware corporation ("COMPANY"), the financial institutions referred
to therein as Lenders (the "LENDERS"), DLJ Capital Funding, Inc., as Syndication
Agent ("SYNDICATION AGENT"), and Canadian Imperial Bank of Commerce, as
Administrative Agent ("ADMINISTRATIVE AGENT" and together with Syndication
Agent, "AGENTS"). Capitalized terms used herein without definition have the same
meanings as in the Credit Agreement.
The undersigned hereby certifies (with no personal liability to the
undersigned) as follows:
1. I am the duly qualified and acting ___________ of Company;
2. In such capacity I have participated actively in the management of
Company and am familiar with the transactions described herein;
2. The New Sub Debt was issued on May 11, 1999;
3. All of the Former Senior Horseshoe Bonds have been repaid [or
defeased];
4. At least 90% of the membership interests in Horseshoe are held by
Company; and
5. All conditions to the effectiveness of the Credit Agreement have
been satisfied or waived.
I understand that Agents and Lenders are relying on the truth and
accuracy of the foregoing in connection with the entry into the Credit
Agreement.
<PAGE> 277
I represent, without any personal liability to myself and on behalf of
the Company, the foregoing information to be true and correct.
DATED:_______________ HORSESHOE GAMING HOLDING
CORP.
By:
----------------------------
Name:
Title:
<PAGE> 278
Based upon the representations made and the documents delivered on or prior to
this date, including the representations made in this Certificate, the
undersigned Agents confirm that all conditions to effectiveness of the Credit
Agreement have been satisfied or waived.
DATED:_______________ DLJ CAPITAL FUNDING, INC.,
as Syndication Agent
By:
-------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
By:
-------------------------------
Name:
Title:
<PAGE> 279
EXHIBIT XVIII
[FORM OF AGREEMENT OF JOINDER]
AGREEMENT OF JOINDER
This AGREEMENT OF JOINDER TO CREDIT AGREEMENT (this "JOINDER AGREEMENT")
is dated as of ________, ____and entered into by and among HORSESHOE GAMING
HOLDING CORP., a Delaware corporation ("COMPANY"), the LENDERS LISTED ON THE
SIGNATURE PAGES HEREOF (collectively, the "NEW LENDERS" and together with the
Lenders listed on the signature pages of the Credit Agreement (as defined
below)(the "EXISTING LENDERS"), the "LENDERS"), DLJ CAPITAL FUNDING, INC., as
syndication agent (in such capacity, "SYNDICATION AGENT") and CANADIAN IMPERIAL
BANK OF COMMERCE, as administrative agent (the "ADMINISTRATIVE AGENT" and,
together with the Syndication Agent, the "AGENTS"). All terms not herein defined
shall have the meanings set forth in the Credit Agreement.
RECITALS
WHEREAS, the Company, the Existing Lenders and the Agents are parties to
that certain Credit Agreement dated as of June __, 1999 (the "CREDIT
AGREEMENT");
WHEREAS, subsection 2.1A(iv) of the Credit Agreement provides that
additional financial institutions as well as Existing Lenders may furnish
additional [Tranche B Term Loans and/or Revolving Loan Commitments] and join and
become parties to the Credit Agreement;
WHEREAS, the Existing Lenders have provided Tranche B Term Loans in the
amount of $125,000,000 (the "EXISTING LOANS") and Revolving Loan Commitments in
the amount of $250,000,000 (the "EXISTING COMMITMENTS") and New Lenders have
collectively agreed to join and become parties to the Credit Agreement and [the
Existing Lenders and] the New Lenders have collectively agreed to provide
additional [Tranche B Term Loans in the amount of $___________ (the "ADDITIONAL
LOANS" and together with the Existing Loans, the "LOANS")][and][Revolving Loan
Commitments in the amount of $___________] [total no more than $50,000,000](the
"ADDITIONAL COMMITMENTS" and together with the Existing Commitments, the
"COMMITMENTS");
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1
JOINDER AND WAIVER; EXPENSES
The parties to this Joinder Agreement hereby agree that
upon this Joinder Agreement becoming effective in accordance with Section 7
hereof, (a) each New Lender shall
<PAGE> 280
become a party to the Credit Agreement, shall constitute a "Lender" as defined
in the Credit Agreement and shall become bound by all terms and conditions of
the Credit Agreement as though each New Lender had been an original party
thereto.
SECTION 2
COMMITMENTS
Each New Lender hereby agrees to provide, and each Existing Lender hereby
reaffirms its agreement to provide, the Tranche B Term Loans and/or Revolving
Loan Commitments set forth opposite its name on Schedule 1 (revised Schedule 2.1
to the Credit Agreement).
SECTION 3
PREPAYMENT OF OUTSTANDING LOANS
In connection with the provision of the Additional Commitments under this
Joinder Agreement, the Company hereby agrees to prepay, no later than ten (10)
days after the date hereof, outstanding Revolving Loans held by the Existing
Lenders under the Credit Agreement. Borrowings made at the time of such
prepayment and thereafter shall be made from all New Lenders and Existing
Lenders pro rata in accordance with the terms of the Credit Agreement, as
amended by this Joinder Agreement.
SECTION 4
LIMITATIONS
The agreements set forth above shall be limited precisely by their terms,
shall not have any force or effect with respect to any other matter except as
expressly provided above, and nothing in this Joinder Agreement shall be deemed
to:
(i) constitute a waiver or modification of any other term, provision
or condition of the Credit Agreement or any other instrument or agreement
referred to therein; or
(ii) prejudice any right or remedy that either Agent or any Lender may
now have (except to the extent such right or remedy was based upon
existing defaults that will not exist after giving effect to this Joinder
Agreement) or may have in the future under or in connection with the
Credit Agreement or any other instrument or agreement referred to
therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
2
<PAGE> 281
SECTION 5
COMPANY'S REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that after giving effect to this
Joinder Agreement:
(i) as of the date hereof, there exists no Default or Event of Default
under the Credit Agreement;
(ii) all representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in
all material respects on and as of the date hereof except to the extent
such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date;
(iii) as of the date hereof, the Company has performed all agreements
to be performed on their part as set forth in the Credit Agreement; and
(iv) the [Additional Loans/Additional Commitments] are permitted by
any applicable Gaming Laws.
SECTION 6
LENDERS' REPRESENTATIONS AND WARRANTIES
Each New Lender, severally and not jointly, represents and warrants that
(i) as of the date hereof it is duly authorized to enter into and perform the
terms of this Joinder Agreement, and (ii) 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 Joinder Agreement.
SECTION 7
COUNTERPARTS; EFFECTIVENESS
This Joinder Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Joinder Agreement shall become effective upon (i) the execution
of a counterpart hereof by the Company, each of the New Lenders and the Agents;
(ii) receipt by the Company and Agents of written or telephonic notification of
such execution and authorization of delivery thereof; and (iii) receipt by the
Agents of such evidence of appropriate corporate authorization on the part of
the Company with respect to the [Additional Commitments and/or Additional Loans]
contemplated by this Joinder Agreement and such opinions of counsel for the
3
<PAGE> 282
Company with respect to such Additional Commitments as the Administrative Agent
may reasonably request.
SECTION 8
GOVERNING LAW
THIS JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[Remainder of page intentionally left blank]
4
<PAGE> 283
IN WITNESS WHEREOF, the parties hereto have caused this Joinder Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
HORSESHOE GAMING HOLDING CORP.
By:
-----------------------------------------
Name:
Title:
<PAGE> 284
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent
By:
-----------------------------------------
Name:
Title:
<PAGE> 285
CANADIAN IMPERIAL BANK OF COMMERCE, as
Administrative Agent
By:
-----------------------------------------
Name:
Title:
<PAGE> 286
[SIGNATURE BLOCKS FOR NEW LENDERS]
<PAGE> 287
EXHIBIT XIX
[FORM OF DEBT CAPACITY CERTIFICATE]
DEBT CAPACITY CERTIFICATE
This DEBT CAPACITY CERTIFICATE (this "CERTIFICATE") is delivered pursuant
to subsection [4.2T/6.1(ii)/6.1(iii)] of that certain Credit Agreement dated as
of June __, 1999 (the "CREDIT AGREEMENT") by and among Horseshoe Gaming Holding
Corp., a Delaware corporation ("COMPANY"), the financial institutions referred
to therein as Lenders (the "LENDERS"), DLJ Capital Funding, Inc., as Syndication
Agent ("SYNDICATION AGENT"), and Canadian Imperial Bank of Commerce, as
Administrative Agent ("ADMINISTRATIVE AGENT" and together with Syndication
Agent, "AGENTS"). Capitalized terms used herein without definition have the same
meanings as in the Credit Agreement.
I hereby certify (with no personal liability to myself) as follows:
1. I am the duly qualified and acting ___________ of Company;
2. In such capacity I have participated actively in the management
of Company's financial affairs and am familiar with its financial statements and
those of its Subsidiaries; and
3. I have performed the calculations set forth on Exhibit A hereto
and have concluded as a result of such calculations that as at [insert date of
last day of Fiscal Quarter for which this Certificate is being calculated] the
maximum amount of Indebtedness of Company permitted under the most restrictive
of the debt incurrence provisions of the Debt Restrictive Agreements was [insert
debt limitation], that the principal amount of Indebtedness of Company and its
Subsidiaries on that date was [insert amount], that the amount of Indebtedness
of Company and its Subsidiaries is [insert amount] and that the incurrence of
all Indebtedness and Liens incurred or to be incurred on the date hereof do not
contravene the Debt Restrictive Agreements.
I understand that Agents and Lenders are relying on the truth and
accuracy of the foregoing in connection with the making of Loans to Company
pursuant to the Credit Agreement.
<PAGE> 288
I represent, to the best of my knowledge and on behalf of the Company,
the foregoing information to be true and correct.
DATED:_________________ HORSESHOE GAMING HOLDING
CORP.
By:
-----------------------------
Name:
Title:
<PAGE> 289
EXHIBIT A
