<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
{X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1995
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission file number: 1-8540
BALLY'S PARK PLACE, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3432384
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
Park Place & The Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 340-2000
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if the disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. X
At March 25, 1996, all 100 outstanding shares of the registrant's common
stock were held by Bally's Casino Holdings, Inc., an indirect wholly owned
subsidiary of Bally Entertainment Corporation.
The registrant meets the conditions set forth in General Instruction J (1)
(a) and (b) of Form 10-K and is therefore filing this form with the reduced
disclosure format.<PAGE>
PART I
Except as otherwise stated, the information contained in this Annual Report
is as of December 31, 1995, the end of the registrant's last fiscal year.
ITEMS 1 and 2. BUSINESS AND PROPERTIES
Introduction
The registrant, Bally's Park Place, Inc. (the "Company"), is incorporated
in Delaware and is a wholly owned subsidiary of Bally's Casino Holdings,
Inc. ("Casino Holdings"), which is an indirect wholly owned subsidiary of
Bally Entertainment Corporation ("BEC"), an operator of casinos and casino
hotel resorts. The Company, through its wholly owned subsidiary Bally's
Park Place, Inc., a New Jersey corporation ("Bally's Park Place--New
Jersey"), owns and operates the casino hotel resort in Atlantic City, New
Jersey known as Bally's Park Place Casino Hotel and Tower ("Bally's Park
Place"). The Company operates in one industry segment and all significant
revenues arise from its casino and supporting hotel operations. Unless
otherwise specified in the text, references to the Company include the
Company and its subsidiaries.
Bally's Park Place
Bally's Park Place is situated on an eight-acre site with ocean frontage at
the well-known intersection of Park Place and the Boardwalk in Atlantic
City, New Jersey. The casino hotel resort is adjacent to the Boardwalk and
within four blocks of both the existing Atlantic City Convention Hall and
the new convention center, which is currently under construction. A
corridor project, which is expected to beautify the area linking the
Boardwalk with the new convention center, is under development. Bally's
Park Place's strategic location on the Boardwalk contributes to its success
in attracting significant walk-in business, including strong crossover
business from competing casino hotels located nearby. Equipped with two
multi-story parking garages and surface valet parking lots providing over
2,300 parking spaces, management believes that Bally's Park Place is also
strongly positioned to attract desirable drive-in business.
Bally's Park Place is the largest casino hotel resort in Atlantic City with
1,265 guest rooms (including 104 suites). Bally's Park Place has
approximately 2.6 million square feet of space, including approximately
80,100 square feet of gaming space, a 30-story hotel tower and a 12-story
hotel facility. At December 31, 1995, Bally's Park Place offered 2,326
slot machines and 114 table games, including blackjack, craps, roulette and
poker, among others.
During the first quarter of 1995, Bally's Park Place completed a slot
machine upgrade which was initiated in 1994, replacing the majority of its
slot machine inventory with state-of-the-art machines with embedded bill
acceptors and reconfigured its slot machine layout, adding slot stools and
increasing aisle space. Bally's Park Place competes for higher margin slot
business by employing the latest slot machine technology and placing
particular attention to the location, design, signage and lighting of its
slot machine areas.
Bally's Park Place, the largest four-star hotel in New Jersey as rated by
the Mobil Travel Guide, contains approximately 50,000 square feet of
meeting and exhibition space, a 38,000-square foot health spa facility and
a premium players' lounge. Dining areas include three specialty
restaurants, two cocktail lounges, a coffee shop, a buffet, a delicatessen,
two fast food facilities and a restaurant with a bar and lounge in the spa.
Bally's Park Place's operating strategy capitalizes on its central location
and quality facilities, which allows it to expand its success with mid-level
and high-end players. Historically believed to be a leader in
Atlantic City's middle to upper-middle tier slot player segments, Bally's
Park Place expects to continue targeting and marketing to premium table
game and slot players through enhanced facility accommodations without
compromising its focus on mid-level slot play. Successful promotional
marketing campaigns and special events augmented by diverse advertising
programs continue to expand the customer base. The marketing strategy of
Bally's Park Place is to generate a high volume of play from casino
customers from New York, Philadelphia and other northeastern metropolitan
areas, as well as to further develop its position in all segments of the
Atlantic City hotel and convention market.
The Company has announced its intention to develop a western-themed casino
complex on approximately 4 acres of Boardwalk property it owns adjacent to
Bally's Park Place. The complex is presently planned to include
approximately 70,000 square feet of casino space and cost between $80 and
$100 million, with completion anticipated in mid-1997. The planned
expansion is subject to various governmental approvals and delays inherent
with construction projects. Construction of the complex is expected to
commence in the second quarter of 1996 and capital expenditures for this
expansion are anticipated to be approximately $50 million during 1996. In
addition, the Company plans to make capital expenditures of approximately
$18 million during 1996 for improvements, renovations and equipment to
maintain Bally's Park Place in first-class condition.
Bally's Park Place's operations are conducted 24 hours a day every day of
the year. Revenues and earnings peak during the summer season, with less
favorable operating results during the winter. Bally's Park Place employs
approximately 4,100 persons in the operation of its business and has
collective bargaining contracts with unions covering approximately 1,600 of
these employees.
Casino Hotel Competition
Bally's Park Place faces considerable competition in the Atlantic City
market from other companies in the gaming industry. Since April 1990,
there have been eleven casino hotel facilities operating in Atlantic City
in competition with Bally's Park Place, including GNOC, CORP., another
wholly owned subsidiary of BEC which owns and operates the casino hotel
resort known as "The Grand." Several Atlantic City casino hotels have
recently expanded or are currently in the process of expanding their
facilities, and competition increases as additional slot machines and hotel
rooms are added. In addition, proposals for several new casino hotel
resorts were recently announced for the marina district in Atlantic City
and, if and when such resorts are opened, capacity and competition will
further increase. To enhance its competitiveness in the Atlantic City
market, Bally's Park Place recently completed six penthouse suites in its
hotel tower and intends to develop the aforementioned western-themed casino
complex.
Management believes that competition in Atlantic City is based primarily on
the location and physical design of the casino and hotel accommodations,
the extent and quality of personalized service offered to guests and casino
customers, the price and quality of rooms and food and beverages, the
number and quality of its restaurants, convention and other public
facilities, promotional allowances, the entertainment offered, the variety
of table games and slot machines, table limits, casino credit granted to
customers and parking availability. Management believes that Bally's Park
Place's central location and reputation as a first-class facility helps it
to compete in the Atlantic City market.
Bally's Park Place also competes for gaming customers, to a lesser extent,
with casino hotel operations located in Nevada and elsewhere and with other
forms of legalized gaming. Management believes that the legalization of
casino gaming in various jurisdictions over the last several years and the
opening of gaming facilities operated by Native Americans have not, to
date, had a material adverse impact on Bally's Park Place's operations.
Proposals have been made for casinos in several jurisdictions near New
Jersey. Management believes that the adoption of legislation approving
casino gaming and the opening of significant gaming establishments in any
of these jurisdictions (particularly New York or Pennsylvania) or the
advent of full-scale gaming on nearby Native American lands could have a
material adverse effect on Bally's Park Place's operations.
New Jersey Regulation
Gaming activities in Atlantic City are subject to the New Jersey Casino
Control Act (the "Act"), regulations of the New Jersey Casino Control
Commission (the "CCC") and other applicable laws. No casino may operate
unless the required permits or licenses and approvals are obtained from the
CCC. The CCC is authorized under the Act to adopt regulations covering a
broad spectrum of gaming and gaming-related activities and to prescribe the
methods and forms of applications from all classes of licensees. These
laws and regulations concern primarily: (i) the financial stability,
integrity, responsibility, good character, honesty and business ability of
casino service suppliers and casino operators, their directors, officers
and employees, their security holders and others financially interested in
casino operations, (ii) the nature of casino hotel facilities, and (iii)
the operating methods and financial and accounting practices used in
connection with the casino operations. Taxes are imposed by the State of
New Jersey on gaming operations at the rate of 8% of gross gaming revenues.
In addition, the Act provides for an investment alternative tax of 2 1/2%
of gross gaming revenues. This investment alternative tax may be offset by
investment tax credits equal to 1 1/4% of gross gaming revenues, which are
obtained by purchasing bonds issued by or investing in housing or other
development projects approved by the New Jersey Casino Reinvestment
Development Authority (the "CRDA"), a state agency. New laws and
regulations, as well as amendments to existing laws and regulations,
relating to gaming activities in Atlantic City are periodically introduced
or proposed and sometimes adopted. In January 1995, a comprehensive
package of amendments to the Act was enacted into law, which amendments,
among other things, reduced certain regulatory requirements.
The CCC has broad discretion with regard to the issuance, renewal and
revocation or suspension of casino licenses. A casino license is not
transferable, is issued for a term of up to one year for the first two
renewals and thereafter for a term of up to four years (subject to
discretionary reopening of the licensing hearing by the CCC at any time),
and must be renewed by filing an application which must be acted on by the
CCC prior to the expiration of the license in force. At any time, upon a
finding of disqualification or noncompliance, the CCC may revoke or suspend
a license or impose fines.
The Act imposes certain restrictions on the ownership and transfer of
securities issued by a corporation that holds a casino license or is deemed
a holding company, intermediary company, subsidiary or entity qualifier
(each, an "affiliate") of a casino licensee. "Security" is defined by the
Act to include instruments that evidence either a beneficial ownership in
an entity (such as common stock or preferred stock) or a creditor interest
in an entity (such as a bond, note or mortgage). Pursuant to the Act, the
corporate charter of a publicly traded affiliate of a casino licensee must
require that a holder of the Company's securities dispose of such
securities if the holder's continued holding would result in the Company or
any other affiliate being no longer qualified to continue as a casino
licensee under the Act. The corporate charter of a casino licensee or any
privately held affiliate of the licensee must: (i) establish the right of
prior approval by the CCC with regard to a transfer of any security in the
company and (ii) create the absolute right of the company to repurchase at
the market price or purchase price, whichever is less, any security in the
company in the event the CCC disapproves a transfer of such security under
the Act. The corporate charter of the Company and the charters of its
privately held affiliates conform with the Act's requirements described
above for privately held companies.
If the CCC finds that an individual owner or holder of securities of a
corporate licensee or an affiliate of such corporate licensee is not
qualified under the Act, the CCC may propose remedial action. The CCC may
require divestiture of the securities held by any disqualified holder who
is required to be qualified under the Act (e.g., officers, directors,
security holders and key casino and other employees). In the event that
disqualified persons fail to divest themselves of such securities, the CCC
may revoke or suspend the license. However, if an affiliate of a casino
licensee is a publicly traded company and the CCC finds disqualified any
holder of any security thereof who is required to be qualified, and the CCC
also finds that: (i) such company has complied with aforesaid charter
provisions, (ii) such company has made a good faith effort, including the
prosecution of all legal remedies, to comply with any order of the CCC
requiring the divestiture of the security interest held by the disqualified
holder, and (iii) such disqualified holder does not have the ability to
control the corporate licensee or the affiliate, or to elect one or more
members of the board of directors of such affiliate, the CCC will not take
action against the casino licensee or its affiliate with respect to the
continued ownership of the security interest by the disqualified holder.
For purposes of the Act, a security holder is presumed to have the ability
to control a publicly traded corporation, or to elect one or more members
of its board of directors, and thus require qualification, if such holder
owns or beneficially holds 5% or more of any class of the equity securities
of such corporation, unless such presumption of control or ability to elect
is rebutted by clear and convincing evidence. An "institutional investor,"
as that term is defined under the Act, is entitled to a waiver of
qualification if it holds less than 10% of any class of the equity
securities of a publicly traded holding or intermediary company of a casino
licensee and: (i) the holdings were purchased for investment purposes only,
(ii) there is no cause to believe the institutional investor may be found
unqualified, and (iii) upon request by the CCC, the institutional investor
files a certified statement to the effect that it has no intention of
influencing or affecting the affairs of the issuer, the casino licensee or
its other affiliates. The CCC may grant a waiver of qualification to an
institutional investor holding 10% or more of such securities upon a
showing of good cause and if the conditions specified above are met.
With respect to debt securities, the CCC generally requires a person
holding 15% or more of a debt issue of a publicly traded affiliate of a
casino licensee to qualify as a "financial source" where the use of the
proceeds from the debt issue is related in any way to the financing of the
casino licensee. There can be no assurance that the CCC will continue to
apply the 15% threshold, and the CCC could at any time establish a lower
threshold for qualification. An exception to the qualification requirement
is made for institutional investors, in which case the institutional holder
is entitled to a waiver of qualification if the holder's position in the
aggregate is less than 20% of the total outstanding debt of the affiliate
and less than 50% of any outstanding publicly traded issue of such debt,
and if the conditions specified in the above paragraph are met. As with
equity securities, a waiver of qualification may be granted to
institutional investors holding larger positions upon a showing of good
cause and if all conditions specified in the above paragraph are met.
Generally, the CCC would require each institutional holder seeking a waiver
of qualification to execute a certificate to the effect that: (i) the
holder has reviewed the definition of institutional investor under the Act
and believes that it meets the definition of institutional investor, (ii)
the holder purchased the securities for investment purposes only and holds
them in the ordinary course of business, (iii) the holder has no
involvement in the business activities of, and no intention of influencing
or affecting the affairs of, the issuer, the casino licensee or any
affiliate, and (iv) if the holder subsequently determines to influence or
affect the affairs of the issuer, the casino licensee or any affiliate, it
shall provide not less than 30 days notice of such intent and shall file
with the CCC an application for qualification before taking any such
action.
Commencing on the date the CCC serves notice on a corporate licensee or an
affiliate of such corporate licensee that a security holder of such
corporation has been found disqualified, it will be unlawful for the
security holder to: (i) receive any dividends or interest upon any such
securities, (ii) exercise, directly or through any trustee or nominee, any
right conferred by such securities, or (iii) receive any remuneration in
any form from the corporate licensee for services rendered or otherwise.
Persons who are required to qualify under the Act by reason of holding debt
or equity securities are required to place the securities into an Interim
Casino Authorization ("ICA") trust pending qualification. Unless and until
the CCC has reason to believe that the investor may not qualify, the
investor will retain the ability to direct the trustee how to vote, or
whether to dispose of, the securities. If at any time the CCC finds
reasonable cause to believe that the investor may be found unqualified, it
can order the trust to become "operative," in which case the investor will
lose voting power, if any, over the securities but will retain the right to
petition the CCC to order the trustee to dispose of the securities.
Once an ICA trust is created and funded, and regardless of whether it
becomes operative, the investor has no right to receive a return on the
investment until the investor becomes qualified. Should an investor
ultimately be found unqualified, the trustee would dispose of the trust
property, and the proceeds would be distributed to the unqualified
applicant only in an amount not exceeding the actual cost of the trust
property. Any excess proceeds would be paid to the State of New Jersey.
If the securities were sold by the trustee pending qualification, the
investor would receive only actual cost, with disposition of the remainder
of the proceeds, if any, to await the investor's qualification hearing.
In the event it is determined that a licensee has violated the Act or its
regulations, then under certain circumstances, the licensee could be
subject to fines or have its license suspended or revoked. In addition, if
a person who is required to qualify under the Act fails to qualify, or if a
security holder who is required to qualify fails to qualify and does not
dispose of the related securities in the licensee or in any affiliate of
the licensee, as may be required by the Act, then, under certain
circumstances, the licensee could have its license suspended or revoked.
If a casino license was not renewed, was suspended for more than 120 days
or was revoked, the CCC could appoint a conservator. The conservator would
be charged with the duty of conserving and preserving the assets so
acquired and continuing the operation of the hotel and casino of a
suspended licensee or with operating and disposing of the casino hotel
facilities of a former licensee. Such suspended licensee or former
licensee, however, would be entitled only to a fair return on its
investment, to be determined under New Jersey law, with any excess to go to
the State of New Jersey, if so directed by the CCC. Suspension or
revocation of any licenses or the appointment of a conservator by the CCC
would have a material adverse effect on the business of the Company.
In June 1994, the CCC renewed the casino license of the Company through
June 1996. The Company is not aware of any reason that the license would
not be renewed during 1996 for four years.
Federal Registration
The Company is required to make annual filings with the Attorney General of
the United States in connection with the operation of slot machines. All
requisite filings for the present year have been made.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 4 is omitted pursuant to General Instruction J of Form 10-K.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Item 5 is inapplicable.
ITEM 6. SELECTED FINANCIAL DATA
Item 6 is omitted pursuant to General Instruction J of Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Item 7 is presented in the reduced disclosure format pursuant to General
Instruction J of Form 10-K.
RESULTS OF OPERATIONS
Revenues of the Company for 1995 were $412.1 million compared to $377.0
million for 1994, an increase of $35.1 million (9%). Casino revenues for
1995 were $356.7 million compared to $321.5 million in 1994, an increase of
$35.2 million (11%). Slot revenues increased $29.9 million (14%) due to a
19% increase in slot handle (volume) offset, in part, by a decline in the
win percentage from 8.8% in 1994 to 8.4% in 1995. On average, the Company
had 68 (3%) more slot machines in 1995 than in 1994. Slot revenues
approximated 70% of Bally's Park Place's casino revenues in 1995 compared
to 68% in 1994. Table game revenues, excluding poker, increased $4.2
million (4%) from 1994 due to an 8% increase in the drop (amount wagered)
offset, in part, by a decrease in the hold percentage from 17.1% in 1994 to
16.6% in 1995. Other casino revenues increased $1.1 million (16%) due
primarily to the introduction of horse race simulcasting and keno in June
1994. Rooms revenues decreased $2.1 million (8%) due to increased
complimentaries in 1995 causing reduced occupancy of rooms by paying
customers. Other revenues increased $2.6 million (26%) principally due to
increased special event revenues and interest income.
Atlantic City casino revenues (excluding poker, horse race simulcasting and
keno) for all operators in 1995 increased approximately 10% from 1994 due
to a 12% increase in slot revenues and a 5% increase in table game
revenues. Revenues during the first quarter of 1994 were negatively
affected by severe weather in the northeastern United States. During 1995,
the number of slot machines in Atlantic City increased approximately 8% and
the number of table games, excluding poker tables, increased approximately
2%. Slot revenues approximated 68% and 67% of total gaming revenues in
Atlantic City for 1995 and 1994, respectively. Management believes that
the expansion of several casino hotel facilities in Atlantic City, which
includes additional hotel rooms and slot machines, has caused and will
continue to cause intense promotional efforts to attract slot players as
both Bally's Park Place and its competitors continue to seek to expand
their share of slot revenues and maximize the utilization of their slot
machines. Further, as a result of the aggressive competition for slot
patrons, the Atlantic City slot win percentage has declined. Management
believes that the slot win percentage will continue to be subject to
competitive pressure and may decline further. However, management also
believes it is well-positioned to compete for additional casino revenues by
continuing to offer attractive promotional gaming programs and special
events, and by enhancing the appearance and comfort of Bally's Park Place's
gaming space and hotel accommodations. In 1994, Bally's Park Place
expanded its casino floor from 68,100 to 71,400 square feet and added
another 8,700 square feet of gaming space to offer horse race simulcasting
and keno and to relocate and expand its poker operations. During the first
quarter of 1995, Bally's Park Place completed a slot machine upgrade,
replacing the majority of its slot machines with state-of-the-art machines
with embedded bill acceptors, and reconfigured its slot machine layout,
adding slot stools and increasing aisle space. In addition, Bally's Park
Place intends to develop the aforementioned western-themed casino complex.
Operating income of the Company for 1995 was $113.4 million compared to
$88.3 million for 1994, an increase of $25.1 million (28%) as the
aforementioned 9% revenue increase was offset, in part, by a 3% increase in
operating expenses. Casino expenses increased $11.0 million (9%) due to
expanded promotional efforts, increased gaming taxes associated with higher
gaming revenues and an increase in salaries, benefits and other costs
associated with the operation of horse race simulcasting and keno
throughout all of 1995. Selling, general and administrative expenses
increased $3.1 million (8%) primarily due to increased marketing, legal,
insurance and advertising costs offset, in part, by a gain on the
settlement of a supplemental executive retirement plan in 1995. Other
operating expenses increased $2.4 million (4%) principally due to increased
real estate taxes and special event costs. These increases in operating
expenses were offset, in part, by a $3.5 million (11%) decrease in
depreciation and amortization expense primarily due to 1994 including
accelerated depreciation associated with the aforementioned slot machine
upgrade and certain assets becoming fully depreciated in 1994. Operating
costs and expenses include allocations from BEC of its overhead (including
executive salaries and benefits, public company reporting costs and other
corporate headquarter's costs) of $5.0 million and $5.7 million for 1995
and 1994, respectively. Management of BEC believes that the methods used
to allocate these costs are reasonable and expects similar allocations,
subject to changes in circumstances which may warrant modification, in
future years.
Interest expense was $41.7 million in 1995 compared to $42.3 million in
1994, a decrease of $.6 million (1%).
Effective rates of the provision for income taxes were 44% in 1995 and 40%
in 1994. The 1995 and 1994 income tax rates differed from the U.S.
statutory tax rate of 35% due principally to state income taxes, net of the
related federal income tax benefit. In addition, the provision for income
taxes for 1995 was affected by adjustments of prior years' taxes. A
reconciliation of the provision for income taxes with amounts determined by
applying the U.S. statutory tax rate to income before income taxes,
extraordinary item and cumulative effect on prior years of change in
accounting for income taxes is included in Notes to consolidated financial
statements -- Income taxes.
<PAGE>
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX
Reference
Report of independent auditors. . . . . . . . . . . . . . . . . . 10
Consolidated balance sheet. . . . . . . . . . . . . . . . . . . . 11
Consolidated statement of income. . . . . . . . . . . . . . . . . 13
Consolidated statement of stockholder's equity. . . . . . . . . . 14
Consolidated statement of cash flows. . . . . . . . . . . . . . . 15
Notes to consolidated financial statements. . . . . . . . . . . . 17
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholder
BALLY'S PARK PLACE, INC.
We have audited the accompanying consolidated balance sheet of Bally's Park
Place, Inc. (an indirect wholly owned subsidiary of Bally Entertainment
Corporation) as of December 31, 1995 and 1994, and the related consolidated
statements of income, stockholder's equity, and cash flows for each of the
three years in the period ended December 31, 1995. Our audits also
included the financial statement schedule listed in the Index at Item
14(a). These financial statements and the schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion
on these financial statements and the schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Bally's Park Place, Inc. at December 31, 1995 and 1994, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles. Also, in our opinion, the
related financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
As discussed in the "Summary of significant accounting policies -- Income
taxes" note to the consolidated financial statements, in 1993 the Company
changed its method of accounting for income taxes.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
February 7, 1996
<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED BALANCE SHEET
(In thousands)
<CAPTION>
December 31
--------------------
1995 1994
-------- --------
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents. . . . . . . . . . . . . $ 31,508 $ 13,949
Receivables -
Casino and hotel, less allowances of
$1,490 and $1,167 . . . . . . . . . . . . 3,563 2,936
Affiliates. . . . . . . . . . . . . . . . . 958 731
Other . . . . . . . . . . . . . . . . . . . 1,886 2,178
-------- --------
6,407 5,845
Income taxes receivable from Bally
Entertainment Corporation . . . . . . . . . --- 5,378
Inventories . . . . . . . . . . . . . . . . . 2,129 2,228
Prepaid expenses. . . . . . . . . . . . . . . 1,367 1,748
Deferred income taxes . . . . . . . . . . . . 8,655 6,972
-------- --------
Total current assets . . . . . . . 50,066 36,120
Property and equipment, at cost:
Land. . . . . . . . . . . . . . . . . . . . . 90,639 90,745
Buildings and improvements. . . . . . . . . . 550,419 549,466
Furniture, fixtures and equipment . . . . . . 156,493 152,323
Construction in progress. . . . . . . . . . . 5,123 507
-------- --------
802,674 793,041
Accumulated depreciation. . . . . . . . . . . 335,787 309,672
-------- --------
Net property and equipment . . . . 466,887 483,369
Deferred finance costs, less accumulated
amortization of $3,021 and $1,270 . . . . . . 11,877 13,628
Casino Reinvestment Development Authority
investment obligations. . . . . . . . . . . . 13,108 11,681
Other assets. . . . . . . . . . . . . . . . . . 7,836 1,516
-------- --------
$549,774 $546,314
======== ========
<FN>
(Continued)
</TABLE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
<CAPTION>
December 31
--------------------
1995 1994
-------- --------
LIABILITIES AND STOCKHOLDER'S EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . $ 3,028 $ 2,805
Payable to affiliates. . . . . . . . . . . . . 534 707
Income taxes payable . . . . . . . . . . . . . 5,681 1,159
Accrued liabilities -
Payroll and benefit related. . . . . . . . . 14,095 12,524
Interest . . . . . . . . . . . . . . . . . . 11,617 11,933
Other. . . . . . . . . . . . . . . . . . . . 15,397 13,494
Current maturities of long-term debt . . . . . 49 47
-------- --------
Total current liabilities . . . . . 50,401 42,669
Long-term debt, less current maturities. . . . . 427,554 427,641
Deferred income taxes. . . . . . . . . . . . . . 41,912 41,306
Other long-term liabilities. . . . . . . . . . . 9,671 10,725
Stockholder's equity:
Common stock, no par value, at stated value,
3,000 shares authorized, 100 shares
issued and outstanding . . . . . . . . . . . 1 1
Additional paid-in capital . . . . . . . . . . 20,235 23,972
Retained earnings. . . . . . . . . . . . . . . --- ---
-------- --------
Total stockholder's equity. . . . . 20,236 23,973
-------- --------
$549,774 $546,314
======== ========
<FN>
See accompanying notes.
</TABLE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
<CAPTION>
Years Ended December 31
-------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Casino . . . . . . . . . . . . . . $356,671 $321,465 $297,688
Rooms. . . . . . . . . . . . . . . 22,866 24,988 25,019
Food and beverage. . . . . . . . . 19,828 20,432 20,993
Other. . . . . . . . . . . . . . . 12,705 10,118 9,107
-------- -------- --------
412,070 377,003 352,807
Costs and expenses:
Casino . . . . . . . . . . . . . . 140,040 129,060 117,718
Rooms. . . . . . . . . . . . . . . 9,751 10,784 10,116
Food and beverage. . . . . . . . . 17,785 18,995 18,993
Other operating expenses . . . . . 58,594 56,149 53,060
Selling, general and
administrative . . . . . . . . . 39,291 36,240 36,352
Depreciation and amortization. . . 28,286 31,819 26,581
Allocations from Bally
Entertainment Corporation. . . . 4,967 5,659 4,141
-------- -------- --------
298,714 288,706 266,961
-------- -------- --------
Operating income . . . . . . . . . . 113,356 88,297 85,846
Interest expense . . . . . . . . . . 41,693 42,260 44,919
-------- -------- --------
Income before income taxes,
extraordinary item and cumulative
effect on prior years of change
in accounting for income taxes . . 71,663 46,037 40,927
Provision for income taxes . . . . . 31,200 18,450 18,500
-------- -------- --------
Income before extraordinary item
and cumulative effect on prior
years of change in accounting
for income taxes . . . . . . . . . 40,463 27,587 22,427
Extraordinary loss on
extinguishment of debt . . . . . . --- (20,735) ---
Cumulative effect on prior years of
change in accounting for income
taxes. . . . . . . . . . . . . . . --- --- (11,377)
-------- -------- --------
Net income . . . . . . . . . . . . . $ 40,463 $ 6,852 $ 11,050
======== ======== ========
<FN>
See accompanying notes.
/TABLE
<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(In thousands, except share data)
<CAPTION>
Total
Number Additional stock-
of shares Common paid-in Retained holder's
issued stock capital earnings equity
--------- ------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1992 . . . . . 100 $ 1 $ 90,829 $ --- $ 90,830
Net income . . . . . . . . . . . . --- --- --- 11,050 11,050
Dividends paid . . . . . . . . . . --- --- (5,650) (11,050) (16,700)
--------- ------- ---------- -------- ---------
Balance at December 31, 1993 . . . . . 100 1 85,179 --- 85,180
Net income . . . . . . . . . . . . --- --- --- 6,852 6,852
Dividends paid . . . . . . . . . . --- --- (61,207) (6,852) (68,059)
--------- ------- ---------- -------- ---------
Balance at December 31, 1994 . . . . . 100 1 23,972 --- 23,973
Net income . . . . . . . . . . . . --- --- --- 40,463 40,463
Dividends paid . . . . . . . . . . --- --- (3,737) (40,463) (44,200)
--------- ------- ---------- -------- ---------
Balance at December 31, 1995 . . . . . 100 $ 1 $ 20,235 $ --- $ 20,236
========= ======= ========== ======== =========
<FN>
See accompanying notes.
/TABLE
<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
<CAPTION>
Years Ended December 31
------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Operating:
Income before extraordinary item and
cumulative effect on prior years of
change in accounting for income taxes. $ 40,463 $ 27,587 $ 22,427
Adjustments to reconcile to cash
provided-
Depreciation and amortization. . . . 28,286 31,819 26,581
Other amortization included in
interest expense . . . . . . . . . 1,751 1,592 1,712
Provision for doubtful receivables . 1,365 144 421
Gain on settlement of supplemental
executive retirement plan. . . . . (1,800) --- ---
Deferred income taxes. . . . . . . . (1,077) 8,735 6,753
Change in operating assets and
liabilities. . . . . . . . . . . . 6,087 (1,434) (8,092)
-------- -------- --------
Cash provided by operating
activities . . . . . . . . . . . 75,075 68,443 49,802
Investing:
Purchases of property and equipment. . . (11,760) (27,906) (14,436)
Proceeds from disposals of property
and equipment. . . . . . . . . . . . . 379 293 750
Purchases of Casino Reinvestment
Development Authority investment
obligations, net . . . . . . . . . . . (1,850) (1,444) (1,350)
-------- -------- --------
Cash used in investing
activities . . . . . . . . . . . (13,231) (29,057) (15,036)
Financing:
Debt transactions -
Net repayments under revolving
credit agreement . . . . . . . . . . --- (2,000) (1,000)
Repayments to affiliate, net . . . . . --- --- (16,000)
Proceeds from issuance of long-term
debt . . . . . . . . . . . . . . . . --- 425,000 ---
Repayments of long-term debt . . . . . (85) (377,775) (1,046)
Debt issuance costs. . . . . . . . . . --- (14,898) ---
-------- -------- --------
Cash provided by (used in) debt
transactions . . . . . . . . . . (85) 30,327 (18,046)
Equity transactions -
Dividends paid . . . . . . . . . . . . (44,200) (68,059) (16,700)
-------- -------- --------
Cash used in financing
activities . . . . . . . . . . . (44,285) (37,732) (34,746)
-------- -------- --------
Increase in cash and equivalents . . . . . 17,559 1,654 20
Cash and equivalents, beginning of
year . . . . . . . . . . . . . . . . . . 13,949 12,295 12,275
-------- -------- --------
Cash and equivalents, end of year. . . . . $ 31,508 $ 13,949 $ 12,295
======== ======== ========
<FN>
(Continued)
/TABLE
<PAGE>
<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
<CAPTION>
Years Ended December 31
------------------------------
1995 1994 1993
-------- -------- --------
SUPPLEMENTAL CASH FLOW INFORMATION
<S> <C> <C> <C>
Changes in operating assets and
liabilities:
Increase in receivables. . . . . . . $ (1,927) $ (1) $ (2,506)
(Increase) decrease in income
taxes receivable from Bally
Entertainment Corporation. . . . . 5,378 (5,378) ---
(Increase) decrease in inventories
and prepaid expenses . . . . . . . 480 (1,117) 279
(Increase) decrease in other assets. (6,320) (280) 3,941
Increase (decrease) in accounts
payable, payable to affiliates
and accrued liabilities. . . . . . 3,208 (4,957) 2,160
Increase in income taxes payable . . 4,522 9,734 1,374
Increase (decrease) in other
long-term liabilities. . . . . . . 746 565 (13,340)
-------- -------- --------
$ 6,087 $ (1,434) $ (8,092)
======== ======== ========
Cash payments for interest
and income taxes:
Interest paid. . . . . . . . . . . . $ 40,332 $ 44,733 $ 43,278
Interest capitalized . . . . . . . . (76) (342) (71)
Income taxes paid (net of refunds) . 22,377 5,359 10,373
Investing activities exclude the
following non-cash activity:
Donation of Casino Reinvestment
Development Authority investment
obligations, net . . . . . . . . . $ 393 $ 245 $ 950
<FN>
See accompanying notes.
</TABLE>
Summary of significant accounting policies
Basis of presentation
The accompanying consolidated financial statements include the accounts of
Bally's Park Place, Inc., a Delaware corporation (the "Company"), which is an
indirect wholly owned subsidiary of Bally Entertainment Corporation ("BEC"),
and its subsidiaries. The Company owns and operates the casino hotel resort
in Atlantic City, New Jersey known as Bally's Park Place Casino Hotel and
Tower ("Bally's Park Place"). The Company operates in one industry segment
and all significant revenues arise from its casino and supporting hotel
operations. Unless otherwise specified in the text, references to the Company
include the Company and its subsidiaries.
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles which require the
Company's management to make estimates and assumptions that affect the amounts
reported therein. Actual results could vary from such estimates. In
addition, certain reclassifications have been made to prior years' financial
statements to conform with the 1995 presentation.
Cash equivalents
The Company considers all highly liquid investments with maturities of three
months or less when purchased to be cash equivalents.
Inventories
Inventories of provisions and supplies are stated at the lower of cost (first-
in, first-out basis) or market, which approximates replacement cost.
Property and equipment
Depreciation of property and equipment is provided principally on the
straight-line method over the estimated economic lives of the related assets.
Depreciation expense was $27,863, $30,742 and $26,581 for 1995, 1994 and 1993,
respectively.
Deferred finance costs
Deferred finance costs are amortized over the terms of the related debt using
the bonds outstanding method.
Fair value of financial instruments
The fair value of the Company's financial instruments approximates their
recorded book values at December 31, 1995 and 1994, excluding the 9 1/4% First
Mortgage Notes due 2004 (the "9 1/4% Notes") the fair market value of which
based on quoted market prices was $430,379 and $361,250 at December 31, 1995
and 1994, respectively. The fair values are not necessarily indicative of the
amounts the Company could realize in a current market exchange.
<PAGE>
Revenue recognition
Casino revenues consist of the net win from gaming activities, which is the
difference between gaming wins and losses. Revenues exclude the retail value
of complimentary food, beverage and hotel services furnished to customers,
which were $42,168, $34,920 and $31,780 for 1995, 1994 and 1993, respectively.
The estimated costs of providing such complimentary services, which are
classified as casino expenses through interdepartment allocations from the
departments granting the services, were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Rooms................................... $ 6,854 $ 5,653 $ 4,919
Food and beverage....................... 22,646 19,818 17,449
Other................................... 1,148 892 513
-------- -------- --------
$ 30,648 $ 26,363 $ 22,881
======== ======== ========
</TABLE>
Income taxes
Taxable income or loss of the Company is included in the consolidated federal
income tax return of BEC. Under agreements between the Company, BEC and
Bally's Casino Holdings, Inc. ("Casino Holdings"), income taxes are allocated
to the Company based on amounts the Company would pay or receive if it filed
a separate consolidated federal income tax return, except that the Company
receives credit from BEC for the tax benefit of the Company's net operating
losses and tax credits, if any, that can be utilized in BEC's consolidated
federal income tax return, regardless of whether these losses or credits could
be utilized by the Company on a separate consolidated federal income tax
return basis. Payments to BEC for tax liabilities are due at such time and
in such amounts as payments are required to be made to the Internal Revenue
Service. Payments from BEC for tax benefits are due at the time BEC files the
applicable consolidated federal income tax return.
Effective January 1, 1993, the Company changed its method of accounting for
income taxes as required by Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes." As permitted by SFAS No.
109, the Company elected to use the cumulative effect approach rather than to
restate the consolidated financial statements of any prior years to apply the
provisions of SFAS No. 109. The cumulative effect on prior years of this
change in accounting for income taxes was a charge of $11,377.
Casino licensing
In June 1994, the New Jersey Casino Control Commission (the "CCC") renewed the
Company's casino license to operate Bally's Park Place through June 1996. A
New Jersey casino license is not transferable and must be renewed by filing
an application.
Casino Reinvestment Development Authority investment obligations
The New Jersey Casino Control Act provides, among other things, for an
assessment of licensees equal to 1 1/4% of their gross gaming revenues in lieu
of an investment alternative tax equal to 2 1/2% of gross gaming revenues.
The Company may satisfy this investment obligation by investing in qualified
eligible direct investments, by making qualified contributions or by
depositing funds with the New Jersey Casino Reinvestment Development Authority
(the "CRDA"). Funds deposited with the CRDA may be used to purchase bonds
designated by the CRDA or, under certain circumstances, may be donated to the
CRDA in exchange for credits against future CRDA investment obligations. CRDA
bonds have terms up to fifty years and bear interest at below market rates.
The Company records a charge to operations when it deposits funds with the
CRDA to reflect the estimated realizable value of its CRDA investment
obligations and these charges totaled $2,107, $2,604 and $2,059 in 1995, 1994
and 1993, respectively.
Allocations from BEC and transactions with related parties
BEC allocates costs to the Company consisting of the Company's allocable share
of BEC's corporate overhead including executive salaries and benefits, public
company reporting costs and other corporate headquarters' costs. While the
Company does not obtain a measurable direct benefit from these allocated
costs, management believes that the Company receives an indirect benefit from
BEC's oversight. BEC's method for allocating costs is designed to apportion
the majority of its operating costs to its subsidiaries and is generally based
upon many subjective factors including various measures of operational size
and extent of BEC's oversight requirements. Management of BEC believes that
the methods used to allocate these costs are reasonable and expects similar
allocations in future years. Because of BEC's controlling relationship with
the Company and the allocation of certain BEC costs, the operating results of
the Company could be significantly different if the Company operated
autonomously. In addition, certain of the Company insurance coverage is
obtained by BEC pursuant to corporate-wide programs. In these circumstances,
BEC charges the Company its proportionate share of the respective insurance
premiums.
Certain executive officers of the Company function in a similar capacity for
certain other BEC subsidiaries and exercise decision-making and operational
authority over these entities. No allocation of cost is made from the Company
to these BEC subsidiaries for these executive officers as management deems the
direct allocable cost to be immaterial. In addition, certain administrative
and support operations of the Company and GNOC, CORP. (a wholly owned
subsidiary of BEC which owns and operates the casino hotel resort in Atlantic
City known as the "The Grand"), are consolidated, including limousine
services, legal services and purchasing. Costs of these operations are
allocated to or from the Company either directly or using various formulas
based on estimates of utilization of such services. On a net basis,
allocations to The Grand were $357, $99 and $1,096 in 1995, 1994 and 1993,
respectively, which management believes were reasonable. The Company also
leases surface area parking lots to The Grand, and rental income was $696 in
each of 1995, 1994 and 1993.
The Company and The Grand have a cash management arrangement whereby The Grand
has advanced excess funds to the Company which the Company used to reduce the
outstanding balance under its revolving credit agreement. The Company paid
interest monthly on these advances (at the prime rate of its agent bank) which
totaled $432 in 1993. No amounts were advanced during 1995 or 1994.
Long-term debt
<TABLE>
<CAPTION>
December 31
---------------------
1995 1994
--------- ---------
<S> <C> <C>
9 1/4% Notes................................... $ 425,000 $ 425,000
Other secured and unsecured debt............... 2,603 2,688
--------- ---------
Total long-term debt........................... 427,603 427,688
Less current maturities........................ 49 47
--------- ---------
Long-term debt, less current maturities........ $ 427,554 $ 427,641
========= =========
</TABLE>
In 1994, the Company issued $425,000 principal amount of the 9 1/4% Notes.
The 9 1/4% Notes are not subject to any sinking fund requirement, but may be
redeemed beginning March 1999, in whole or in part, with premiums ranging from
4.5% in 1999 to zero in 2002 and thereafter. In addition, on or before March
15, 1997, a portion of the 9 1/4% Notes may be redeemed at a premium of 9.25%
out of the proceeds of one or more public equity offerings by the Company or
Casino Holdings if such offerings were to occur, provided that at least
$100,000 principal amount of the 9 1/4% Notes remains outstanding after the
redemption. The 9 1/4% Notes are secured by a first mortgage on and security
interest in substantially all property and equipment of the Company. The
Company used the net proceeds from the sale of the 9 1/4% Notes to retire and
defease its 11 7/8% First Mortgage Notes due 1999 (the "11 7/8% Notes") and
pay dividends of $30,214. The retirement and defeasance of the 11 7/8% Notes
resulted in an extraordinary loss of $20,735, net of an income tax benefit of
$14,137.
In February 1996, the Company amended its revolving credit facility to
increase the available credit line from $50,000 to $65,000 and extend the
expiration date to December 31, 1998. The revolving credit facility provides
for interest on borrowings payable, at the Company's option, at the agent
bank's prime rate or the LIBOR rate plus 2%, each of which increases as the
balance outstanding increases. The credit facility is secured by a pari passu
lien on the collateral securing the 9 1/4% Notes. The Company pays a fee of
1/2% on the unused commitment and the entire amount was unused at December 31,
1995.
The indenture for the 9 1/4% Notes and the $50,000 revolving credit facility
impose restrictions on the Company's ability to incur debt and issue preferred
stock, make acquisitions and certain restricted payments, create liens, sell
assets or enter into transactions with affiliates. The $50,000 revolving
credit facility is, in certain circumstances, more restrictive than the
indenture for the 9 1/4% Notes. The indenture for the 9 1/4% Notes and the
$50,000 revolving credit facility also limit dividends paid by the Company
which are not paid pursuant to a net income test (generally limited to 50% of
aggregate consolidated net income, as defined, earned since April 1, 1994) to
$50,000 in aggregate, of which $25,000 was paid in each of 1995 and 1994. At
December 31, 1995, $3,090 was available to be paid as dividends pursuant to
the net income test.
The Company has no signficant maturities of long-term debt before March 2004.
Income taxes
The provision for income taxes applicable to income before income taxes,
extraordinary item and cumulative effect on prior years of change in
accounting for income taxes consists of the following:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal.......................... $ 25,481 $ 5,217 $ 9,792
State............................ 6,796 4,498 1,955
-------- -------- --------
32,277 9,715 11,747
Deferred:
Federal.......................... (1,159) 9,583 4,627
State............................ 82 (848) 2,126
-------- -------- --------
(1,077) 8,735 6,753
-------- -------- --------
$ 31,200 $ 18,450 $ 18,500
======== ======== ========
</TABLE>
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
and income tax purposes. Significant components of the Company's deferred tax
assets and liabilities as of December 31, 1995 and 1994, along with their
classification, are as follows:
<TABLE>
<CAPTION>
1995 1994
-------------------- --------------------
Assets Liabilities Assets Liabilities
------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Expenses which are not
currently deductible
for tax purposes:
Bad debts............... $ 620 $ --- $ 484 $ ---
Deferred compensation
and pension........... 4,066 --- 4,038 ---
CRDA investment
obligation............ 3,342 --- 4,156 ---
Other................... 8,132 --- 6,569 ---
Depreciation and
capitalized costs......... --- 41,763 --- 40,508
Other, net.................. --- 7,654 --- 9,073
------- ------- ------- -------
$16,160 $49,417 $15,247 $49,581
======= ======= ======= =======
Current..................... $ 8,655 $ --- $ 6,972 $ ---
Long-term................... 7,505 49,417 8,275 49,581
------- ------- ------- -------
$16,160 $49,417 $15,247 $49,581
======= ======= ======= =======
</TABLE>
A reconciliation of the provision for income taxes with amounts determined by
applying the U.S. statutory tax rate to income before income taxes,
extraordinary item and cumulative effect on prior years of change in
accounting for income taxes is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Provision at U.S. statutory tax rate (35%)... $25,082 $16,113 $14,324
Add (deduct):
State income taxes, net of related
federal income tax benefit............... 4,472 2,376 2,647
Prior years' taxes......................... 1,367 --- 1,107
Effect of change in state (1994) and
U.S. (1993) statutory tax rates on
deferred tax balances.................... --- (171) 427
Other, net................................. 279 132 (5)
------- ------- -------
Provision for income taxes................... $31,200 $18,450 $18,500
======= ======= =======
</TABLE>
Retirement and stock plans
The Company has defined contribution plans that provide retirement benefits
for eligible non-union employees. Eligible employees may elect to participate
by contributing a percentage of their pre-tax earnings to the plans. Employee
contributions to the plans, up to certain limits, are matched in various
percentages by the Company. In addition, one plan has profit sharing
features, with discretionary Company contributions allocable based on eligible
employee compensation. The expense for such plans was $3,362, $3,101 and
$3,129 for 1995, 1994 and 1993, respectively.
Certain employees of the Company are covered by union-sponsored, collectively
bargained, multi-employer defined benefit pension plans. The contributions
and charges to expense for these plans were $631, $638 and $583 in 1995, 1994
and 1993, respectively.
Eligible employees of the Company may also participate in BEC's Employee Stock
Purchase Plan, which provides participating employees the opportunity to
purchase (through payroll deductions) shares of BEC common stock at a price
equal to 85% of the fair market value of the stock at specified dates. In
addition, certain officers and key employees of the Company participate in the
1989 Incentive Plan of BEC, pursuant to which BEC has granted these
individuals options (generally becoming exercisable in three equal annual
installments commencing one year after the date of grant) to purchase BEC
common stock at a price equal to the fair market value of the stock at the
date of grant. No expense has been recorded by the Company in connection with
these plans because they are noncompensatory.
During 1995, the Company terminated its noncontributory supplemental executive
retirement plan (the "SERP") for certain key executives, whereby the Company
generally settled its obligations with respect thereto by making a payment to
one of the defined contribution plans described above. As a result of this
settlement, the Company recognized a gain of $1,800 in 1995. The net periodic
pension cost for the SERP in 1994 and 1993 was $949 and $3,090, respectively.
Guarantee
At December 31, 1995, the Company was contingently liable for the guarantee
of payments (up to $35,300) in the event certain affiliates fail to make
required payments pursuant to various contractual obligations.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Item 9 is inapplicable.
PART III
Part III is omitted pursuant to General Instruction J of Form 10-K.
PART IV
ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. Index to Financial Statements.
Reference
Report of independent auditors . . . . . . . . . . . . . . . . . . 10
Consolidated balance sheet at December 31, 1995 and 1994 . . . . . 11
For each of the three years in the period ended December 31, 1995:
Consolidated statement of income . . . . . . . . . . . . . . . . 13
Consolidated statement of stockholder's equity . . . . . . . . . 14
Consolidated statement of cash flows . . . . . . . . . . . . . . 15
Notes to consolidated financial statements . . . . . . . . . . . . 17
2. Index to Financial Statement Schedules.
Schedule II Valuation and qualifying accounts for each of
the three years in the period ended December 31,
1995. . . . . . . . . . . . . . . . . . . . . . . . 28
All other schedules specified under Regulation S-X are omitted because they
are not applicable, not required under the instructions or all information
required is set forth in the Notes to consolidated financial statements.
3. Index to Exhibits.
*3.1Restated Certificate of Incorporation of the Company.
**3.2Amended and Restated By-laws of the Company.
**3.3Certificate of Incorporation of Bally's Park Place Funding, Inc.
**3.4Amended and Restated By-laws of Bally's Park Place Funding, Inc.
*3.5Amended and Restated Certificate of Incorporation of Bally's
Park Place-New Jersey.
*3.6Amended and Restated By-laws of Bally's Park Place-New Jersey.
*4.1Form of Indenture governing 11 7/8% First Mortgage Notes due
1999 of Bally's Park Place Funding, Inc.
*4.1.1Form of First Mortgage Note.
*4.1.2Form of Guaranty of the Company.
**4.2Form of Indenture governing 9 1/4% First Mortgage Notes due 2004
of Bally's Park Place Funding, Inc.
**4.2.1Form of Note (included as part of Article II of the Indenture).
**4.2.2Form of Guaranty of the Company of the Notes (included as part
of Article II of the Indenture).
***10(i).1Intercorporate Agreement dated as of June 24, 1993 among Casino
Holdings, Bally's Park Place-New Jersey and BEC.
***10(i).2Tax Sharing Agreement dated as of June 17, 1993 between BEC and
Casino Holdings.
***10(i).3Tax Sharing Agreement dated as of June 17, 1993 between BEC and
Bally's Park Place-New Jersey.
*10(i).4Amended and Restated Loan Agreement dated as of June 30, 1992
among Bally's Park Place-New Jersey, the Company, Bally's Park
Place Realty Co. ("Realty Co."), and the Senior Lender, as agent
and the other banks named therein governing the existing credit
facility (filed as an exhibit to the Annual Report on Form 10-K
for the Company for the year ended December 31, 1992).
**10(i).5Form of Mortgage and Security Agreement with Assignment of Rents
among Bally's Park Place-New Jersey, Realty Co., Bally's
Park Place Funding, Inc. and First Bank.
**10(i).6Form of Assignment of Leases and Rents among Bally's Park Place-
New Jersey, Realty Co. and First Bank.
**10(i).7Form of Note Pledge Agreement among Bally's Park Place-New
Jersey, Bally's Park Place Funding, Inc. and First Bank.
**10(i).8Form of Note.
**10(i).9Form of Intercreditor Agreement.
*10(i).10Mortgage and Security Agreement with Assignment of Rents dated
August 31, 1989 among Bally's Park Place-New Jersey, Realty Co.,
Bally's Park Place Funding, Inc. and First Fidelity Bank.
*10(i).11Assignment of Leases and Rents dated August 31, 1989 among
Bally's Park Place-New Jersey, Realty Co. and First Fidelity
Bank.
*10(i).12Note Pledge Agreement dated August 31, 1989 among Bally's Park
Place-New Jersey, Realty Co. and First Fidelity Bank.
*10(i).13$350,000,000 Note dated August 31, 1989.
****10(i).14Loan and Guaranty Agreement dated March 8, 1994 among the
Company, Bally's Park Place-New Jersey, Realty Co. and First Fidelity
Bank, as agent and lender and Midlantic National
Bank as lender.
*****10(i).15First Amendment to Credit and Guaranty Agreement dated as of
December 5, 1994 among the Company, Bally's Park Place-New
Jersey, Realty Co. and First Fidelity Bank, as agent and
lender and Midlantic National Bank as lender.
*****10(i).16Guaranty of the Company to Arthur Goldberg in an amount up to
$10,000,000.
10(i).17Amended and Restated Credit and Guaranty Agreement dated as of
February 27, 1996 among Bally's Park Place-New Jersey, the Company, Realty
Co., First Union National Bank as agent and lender, Midlantic Bank,
National Association and La Salle National Bank as lenders.
10(i).18Modification of Mortgage and Assignment of Leases dated as
of February 27, 1996 among Bally's Park Place-New Jersey, Realty Co., and
First Union National Bank.
10(i).19Mortgage and Security Agreement with Assignment of Rents dated as
of February 27, 1996 among Bally's Park Place-New Jersey and First Union
National Bank.
10(i).20Assignment of Leases and Rents dated as of February 27, 1996 among
Bally's Park Place-New Jersey and First Union National Bank.
10(i).21Form of Tranche A Note.
10(i).22Form of Tranche B Note.
10(i).23Form of Modification to Intercreditor Agreement dated as of
February 15, 1996.
*10(ii).1Lease Agreement dated June 8, 1977, between Bally's Park Place -
New Jersey and the Palley Blatt Company respecting the
Marlborough-Blenheim Hotel Property (filed as an exhibit to the
Company's Registration Statement on Form S-1, Registration No.
2-65017).
*10(ii).2Letter dated April 27, 1979, from Bally's Park Place-New Jersey
to Alexander K. Blatt and Norman Palley, as Trustees, agreeing
to the purchase and modification of the First Peoples National
Bank of New Jersey's $4,000,000 mortgage loan to the Palley
Blatt Company (filed as an exhibit to the Company's Registration
Statement on Form S-1, Registration No. 2-65017).
*10(iii).1Retirement and Separation Agreement dated January 8, 1993
between BEC, Bally's Park Place-New Jersey and Richard Gillman
(filed as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992).
*10(iii).2Split-Dollar Life Insurance Agreements and Collateral
Assignments by and among the Company, Bally's Park Place-New
Jersey, Richard Gillman and Scott Gillman dated February 1,
1985.
*10(iii).3Split-Dollar Life Insurance Agreements and Collateral
Assignments by and among the Company, Bally's Park Place-New
Jersey, Richard Gillman and Marc Gillman dated February 1, 1985.
*10(iii).4Supplemental Executive Retirement Plan of Bally's Park Place-New
Jersey effective as of January 1, 1987.
*10(iii).5Group Travel Accident Policy between Bally's Park Place-New
Jersey and Hartford Insurance Group effective February 5, 1988.
*10(iv).1Employment Agreement dated as of November 1, 1990, as amended,
between BEC and Arthur Goldberg (filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December
31, 1991).
*10(iv).1.1First Amendment to Employment Agreement effective as of November
1, 1991 between BEC and Arthur Goldberg (filed as an exhibit to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1992).
**10(iv).1.2Second Amendment to Employment Agreement effective September 29,
1993 between BEC and Arthur Goldberg.
******10(iv).1.3Third Amendment to Employment Agreement dated as of May 16, 1995
between BEC and Arthur Goldberg.
***10(iv).2Employment Agreement effective as of January 1, 1993 between BEC
and Wallace R. Barr.
10(iv).2.1Employment Agreement effective as of January 1, 1995 between
Bally's Park Place-New Jersey and Wallace R. Barr.
***10(iv).3Employment Agreement effective as of July 1, 1992 between BEC
and Robert Conover.
10(iv).3.1Employment Agreement effctive as of January 1, 1995 between Bally's
Park Place-New Jersey and Robert Conover.
**10(iv).4Severance Agreement effective as of March 1, 1993 between
Bally's Park Place-New Jersey and C. Patrick McKoy.
10(iv).4.1Employment Agreement effective January 1, 1996 between Bally's Park
Place-New Jersey and C. Patrick McKoy.
***10(iv).5Settlement Agreement and Release dated July 30, 1993 between
Bally's Park Place-New Jersey and Charles Tannenbaum.
10(iv).6Employment Agreement effective January 1, 1996 between Bally's Park
Place-New Jersey and Ken Condon.
**21Subsidiaries of Bally's Park Place-New Jersey.
27Financial Data Schedule. (Filed electronically only.)
*Incorporated herein by reference and filed as an exhibit to Bally Park Place
Funding, Inc.'s Registration Statement on Form S-1, Registration No. 33-26464,
unless otherwise indicated.
**Incorporated herein by reference and filed as an exhibit to Bally's Park
Place Funding, Inc.'s Registration Statement on Form S-1, Registration No.
33-51765.
***Incorporated herein by reference and filed as an exhibit to Bally's Casino
Holdings, Inc.'s Registration Statement on Form S-1, Registration No.
33-654438.
****Incorporated herein by reference and filed as an exhibit to Bally's
Park Place, Inc.'s 1993 Annual Report on Form 10-K.
*****Incorporated herein by reference and filed as an exhibit to Bally's
Park Place, Inc.'s 1994 Annual Report on Form 10-K.
******Incorporated herein by reference and filed as an exhibit to Annual
Report on Form 10-K, File No. 1-7244 for the fiscal year ended December 31,
1995.<TABLE>
BALLY'S PARK PLACE, INC.
(An Indirect Wholly Owned Subsidiary of Bally Entertainment Corporation)
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1995, 1994 and 1993
(In thousands)
<CAPTION>
Additions
--------------------
Balance at Charged to Charged Balance at
beginning costs and to other end of
Description of period expenses accounts Deductions period
----------- ---------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for
doubtful
receivables:
1995. . . . . $1,167 $1,365 $ --- $1,042 $1,490
====== ====== ====== ====== ======
1994. . . . . $1,265 $ 144 $ --- $ 242 $1,167
====== ====== ====== ====== ======
1993. . . . . $1,800 $ 421 $ --- $ 956 $1,265
====== ====== ====== ====== ======
<FN>
Note:
Deductions consist of write-offs of uncollectible amounts, net of
recoveries.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Annual Report to be signed on its behalf by
the undersigned thereunto duly authorized.
Bally's Park Place, Inc.
Dated: March 29, 1996 /s/ Joseph A. D'Amato
---------------------------------
Joseph A. D'Amato
Vice President and Treasurer
(principal financial and accounting
officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. This Annual
Report may be signed in multiple identical counterparts, all of which taken
together, shall constitute a single document.
Dated: March 29, 1996 /s/ Arthur M. Goldberg
---------------------------------
Arthur M. Goldberg
Chairman of the Board,
Chief Executive Officer
and Director
(principal executive officer)
Dated: March 29, 1996 /s/ Wallace R. Barr
---------------------------------
Wallace R. Barr
President, Chief Operating
Officer and Director
Dated: March 29, 1996 /s/ Joseph A. D'Amato
---------------------------------
Joseph A. D'Amato
Vice President and Treasurer
(principal financial and accounting
officer)
Dated: March 29, 1996 /s/ Lee S. Hillman
---------------------------------
Lee S. Hillman
Director
Dated: March 29, 1996 /s/ J. Kenneth Looloian
---------------------------------
J. Kenneth Looloian
Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1995, AND THE CONSOLIDATED
STATEMENT OF OPERATIONS AND THE CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 31,508
<SECURITIES> 0
<RECEIVABLES> 7,897
<ALLOWANCES> 1,490
<INVENTORY> 2,129
<CURRENT-ASSETS> 50,066
<PP&E> 802,674
<DEPRECIATION> 335,787
<TOTAL-ASSETS> 549,774
<CURRENT-LIABILITIES> 50,401
<BONDS> 427,554
<COMMON> 1
0
0
<OTHER-SE> 20,235
<TOTAL-LIABILITY-AND-EQUITY> 549,774
<SALES> 0
<TOTAL-REVENUES> 412,070
<CGS> 0
<TOTAL-COSTS> 224,805
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,365<F1>
<INTEREST-EXPENSE> 41,693
<INCOME-PRETAX> 71,663
<INCOME-TAX> 31,200
<INCOME-CONTINUING> 40,463
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,463
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>
THE PROVISION FOR DOUBTFUL ACCOUNTS IS INCLUDED IN CASINO AND ROOMS OPERATING
COSTS AND EXPENSES IN THE CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED
DECEMBER 31, 1995.
</FN>
</TABLE>
THE SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF ANY INTEREST IN THE
LOANS MADE UNDER THIS AGREEMENT OR OF ANY PARTICIPATION IN THE LOANS MADE
UNDER THIS AGREEMENT IS CONDITIONAL AND SHALL BE INEFFECTIVE IF THE NEW
JERSEY CASINO CONTROL COMMISSION DISAPPROVES.
AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT (the "Agreement")
dated as of February 27, 1996, among Bally's Park Place, Inc., a New Jersey
corporation (the "Borrower"); Bally's Park Place, Inc., a Delaware
corporation ("Park Place-Delaware"); Bally's Park Place Realty Co., a New
Jersey corporation ("Realty"; Park Place-Delaware and Realty, each a
"Guarantor" and collectively the "Guarantors"); First Union National Bank
("First Union"); Midlantic Bank, National Association ("Midlantic"); LaSalle
National Bank ("LaSalle") and First Union, as agent (the "Agent").
RECITALS
A. The Borrower, the Guarantors, First Union (then known as First
Fidelity Bank, N.A.) and Midlantic (then known as Midlantic National Bank)
entered into a Credit and Guaranty Agreement dated March 8, 1994 pursuant
to which First Union and Midlantic agreed to lend and otherwise extend
credit to the Borrower in an aggregate amount up to $50,000,000 until
December 31, 1996.
B. The Borrower and the Guarantors have requested that First Union and
Midlantic agree to amend and restate the foregoing agreement to extend the
maturity date of the existing $50,000,000 revolving credit facility and to
provide a $15,000,000 additional credit facility.
C. The Borrower and the Guarantor have further requested that LaSalle
be added as a lender under such amended and restated agreement.
D. First Union, Midlantic and LaSalle are willing to extend the
maturity date of the existing revolving credit facility and to provide the
additional credit requested by the Borrower and the Guarantors on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the agreement of the parties
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Additional Mortgage" means the mortgage, security agreement and
assignment of rents being executed simultaneously with this Agreement by the
Borrower, securing the obligations of the Borrower under this Agreement and
under the Notes, and creating a first priority lien on the New Casino
Facility.
"Additional Assignment of Leases" means the assignment of leases and
rents being executed simultaneously with this Agreement by the Borrower and
securing the obligations of the Borrower under this Agreement and under the
Notes.
"Adjusted Prime Rate" means an interest rate equal to the Prime Rate
plus the Applicable Prime Rate Margin.
"Adjusted LIBO Rate" means an interest rate equal to the LIBO Rate plus
the Applicable LIBO Rate Margin.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls or is controlled by, or is under common control with
such Person. For the purposes of the preceding sentence, "controls"
(including, with correlative meanings, the terms "controlling", "controlled
by" and "under common control with"), as used with respect to any Person,
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise, and
in any case shall include direct or indirect ownership (beneficially or of
record) of, or direct or indirect power to vote, ten percent (10%) or more
(on a fully diluted basis) of the outstanding shares of any class of capital
stock of such Person (or in the case of any Person that is not a
corporation, ten percent (10%) or more (on a fully diluted basis) of any
class of equity interest).
"Agent" means First Union National Bank in its capacity as agent for
the Banks hereunder and any successor agent appointed hereunder.
"Agreement" means this amended and restated credit and guaranty
agreement, as amended, supplemented or modified from time to time in
accordance with its terms.
"Amortization" means, for any Person during any period, all amounts
which would, in accordance with GAAP, be included under amortization on a
statement of cash flow for such Person during such period.
"Applicable Prime Rate Margin" means (a) at any time the aggregate
principal amount of the Loans outstanding under the Commitments are
$20,000,000 or less, zero percent, (b) at any time that the aggregate
principal amount of the Loans outstanding under the Commitments are greater
than $20,000,000 but less than $40,000,000, .5 percent, and (c) at any time
that the aggregate principal amount of the Loans outstanding under the
Commitments are $40,000,000 or more, 1.0 percent.
"Applicable LIBO Rate Margin" means (a) at any time the aggregate
principal amount of the Loans outstanding under the Commitments are
$20,000,000 or less, 2.0 percent, (b) at any time the aggregate principal
amount of the Loans outstanding under the Commitments are greater than
$20,000,000 but less than $40,000,000, 2.25 percent, and (c) at any time the
aggregate principal amount of the Loans outstanding under the Commitments
are $40,000,000 or more, 2.75 percent.
"Assignment of Leases" means the Assignment of Leases and Rents
executed and delivered by the Borrower and Realty on March 8, 1994 as
modified by a Modification of Mortgage and Assignment of Leases being
executed simultaneously with this Agreement, which assignment, as so
modified, is collateral security for the obligations of the Borrower under
this Agreement.
"Bally Entertainment" means Bally Entertainment Corporation, a Delaware
corporation.
"Banks" means on the Closing Date, First Union, Midlantic and LaSalle,
and thereafter means First Union, Midlantic, LaSalle and their successors
or permitted assignees.
"Board of Directors" of any Person means the Board of Directors of such
Person or any authorized committee of the Board of Directors.
"Burdensome Restriction" means as to any Person, any provision in any
Contractual Obligation that has a Material Adverse Effect.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks are authorized or required to close under the laws
of New Jersey.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of any Person, any
and all equivalent's ownership interests in a Person (other than a
corporation) whether now outstanding or issued after the date hereof and any
and all warrants or options to purchase any of the foregoing.
"Casino Control Commission" means the New Jersey Casino Control
Commission or any successor agency appointed pursuant to the Casino Control
Act.
"Casino Hotel" means the casino hotel presently known as Bally's Park
Place Casino Hotel and any additions thereto or improvements thereof.
"CEO" means the chief executive officer of any Person.
"CFO" means the chief financial officer of any Person.
"Closing Date" means February 27, 1996.
"Code" means the Internal Revenue Code of 1986 and regulations
promulgated thereunder, all as amended from time to time.
"Collateral" means the real and personal property described in the
Mortgage, the Additional Mortgage, the Assignment of Leases and the
Additional Assignment of Leases as security for the obligations of the
Borrower and Guarantors hereunder.
"Compliance Certificate" means a certficate in the form of Exhibit
4.04(e) properly completed and signed by the CFO of Park Place-Delaware.
"Commitment" means, with respect to any Bank, such Bank's undertaking
to make Loans and issue Letters of Credit or purchase Letter of Credit Risk
Participations, as the case may be, hereunder subject to the terms and
conditions hereof, in an aggregate outstanding principal amount as of the
Closing Date not to exceed the amount set forth next to the name of such
Bank in the table below:
<TABLE>
<S> <C> <C> <C>
Tranche A Tranche B
Commitment Commitment Percentage
First Union $23,076,923.08 $ 6,923,076.92 46.15%
Midlantic $19,230,769.23 $ 5,769,230.77 38.46%
LaSalle $ 7,692,307.69 $ 2,307,692.31 15.39%
Total $50,000,000.00 $15,000,000.00 100.00%
</TABLE>
Upon the assignment of any Bank's obligations under the terms of this
Agreement the amount of such Bank's undertaking and their respective
percentages shall be adjusted accordingly.
"Commitment Fees" has the meaning given to such term in Section 2.04
hereof.
"Commitment Percentage" means, with respect to any Bank, the
percentage of which such Bank's Commitment then constitutes of the aggregate
Commitments (or at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Bank's Loans then outstanding constitutes of the aggregate principal amount
of the Loans then outstanding.
"Confidential Information" has the meaning given to such term in
Section 9.14 hereof.
"Consolidated" refers to the consolidation of the accounts of Park
Place-Delaware and its Subsidiaries in accordance with GAAP, including
principles of consolidation.
"Consolidating" refers to the separation of the accounts of Park Place-
Delaware and its Subsidiaries in accordance with GAAP.
"Contingent Liabilities" means as to any Person, all obligations under
standby letters of credit issued for the account of such Person and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent (a) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor (except for obligations to purchase property which are
undertaken solely for the purpose of acquiring such property and not for the
purpose of indirectly guaranteeing the primary obligation), (b) to advance
or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the Net Worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (d) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Liabilities shall not include endorsements of instruments for
deposit or collection in the ordinary course of business.
"Contractual Obligation" means as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person or any of its property is bound.
"CRDA" means the Casino Reinvestment Development Authority.
"Depreciation" means for any Person all amounts which would, in
accordance with GAAP, be included under depreciation on a statement of
income or cash flows for any applicable determination period.
"Disqualified Preferred Stock" means, with respect to any Person, any
Capital Stock of such Person which, by its terms, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise (other than
in connection with the maintenance of Gaming Licenses), or redeemable at the
option of the holder thereof, in whole or in part, prior to the Maturity
Date.
"EBITDA" means with respect to any Person for any period, the sum of
(a) Net Income, plus (b) any extraordinary loss reflected in such Net Income
amount, minus (c) any extraordinary gain reflected in such Net Income
amount, plus (d) Interest Expense for such period, plus (e) the aggregate
amount of Taxes on or measured by income of such Person for such period
(whether or not paid during that period), plus (f) Depreciation,
Amortization and all other non-cash expenses for such period, in each such
case determined in accordance with GAAP and, in the case of items (d) and
(e) only to the extent deducted in the determination of Net Income for such
period.
"Effective Date" means the date the Borrower designates as the date on
which a LIBO Interest Period is to commence.
"Environmental Concern Materials" means (i) any flammable substance,
explosive, radioactive material, hazardous material, hazardous waste, toxic
substance, solid waste, pollution, contaminate, or any related material, raw
material, substance, product or by-product of any substance, specified in
or regulated or otherwise affected by any Environmental Law (including, but
not limited to, any "hazardous substance" as defined in any Environmental
Law), (ii) any toxic chemical or other substance from or related to
industrial, commercial or institutional activities, specified in or
regulated or otherwise affected by any Environmental Law and (iii) asbestos,
gasoline, diesel fuel, motor oil, waste and used oil, heating oil and other
petroleum products or compounds, polychlorinated biphenyls, radon and urea-
formaldehyde, specified in or regulated or otherwise affected by any
Environmental Law.
"Environmental Laws" means all applicable laws, regulations and other
requirements of Governmental Authorities having jurisdiction over the
Borrower or any of the Guarantors relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, or hazardous or toxic
materials or wastes into ambient air, surface water, ground water, or land,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or hazardous or toxic material or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations promulgated thereunder, all as amended from time to time.
"ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Borrower or a Guarantor would be
deemed to be a "single employer" within the meaning of Section 4001 of
ERISA.
"Event of Default" or "Events of Defaults" has the meaning given such
term in Section 6.01 of this Agreement.
"Financing Lease" means any lease of property, real or personal, if the
then-present value of the minimum rental commitment thereunder should, in
accordance with GAAP, be capitalized on a balance sheet of the lessee.
"Fiscal Quarter" means the following three month periods of each Fiscal
Year: January 1 through March 31, April 1 through June 30, July 1 through
September 30, and October 1 through December 31.
"Fiscal Year" means that period commencing on January 1 and ending on
December 31 of each year or such other period as the Borrower or Park Place-
Delaware may designate and the Banks may approve.
"Fronting Fee" has the meaning given to such term in Section 2.04
hereof.
"Funded Debt" means as of any date for any Person the sum of (a) the
aggregate amount of Indebtedness for Borrowed Money by such Person on that
date, plus (b) the aggregate amount of all capital lease obligations of such
Person on that date.
"Funded Debt Ratio" means, as of the last day of any Fiscal Quarter
(including the last day of a Fiscal Quarter which is also the last day of
a Fiscal Year), the ratio of (a) Funded Debt as of that date, to (b) EBITDA
for the fiscal period consisting of the Fiscal Quarter then ending and the
three immediately preceding Fiscal Quarters.
"Funding" means Bally's Park Place Funding, Inc., a New Jersey
corporation.
"GAAP" means generally accepted accounting principles in the United
States of America, as in effect from time to time, as developed, modified
and set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and the Financial Accounting Standards Board.
"Gaming License" means any license, franchise or other authorization
required to be obtained from any Governmental Authority to conduct casino
gaming at the Casino Hotel.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Obligations" has the meaning given to such term in Section
7.01.
"Indebtedness" means with respect to any Person any indebtedness,
contingent or otherwise, in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only
a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or letters of credit or representing the balance deferred and
unpaid of the purchase price of any property purchased, except any such
balance that shall constitute a trade payable or an accrued liability
arising in the ordinary course of business, if and to the extent any of the
foregoing indebtedness would appear as a liability upon a balance sheet of
such Person prepared on a Consolidated basis in accordance with GAAP.
"Indebtedness" shall also include, to the extent not otherwise included, (i)
any Financing Lease obligations, (ii) obligations for borrowed money secured
by a Lien to which any property or asset owned by such Person is subject,
whether or not such obligations secured thereby shall have been assumed, and
(iii) guaranties of items which would be included within this definition
(exclusive of whether such items would appear upon such balance sheet).
"Indebtedness for Borrowed Money" of any Person means Indebtedness of
such Person excluding Contingent Liabilities of such Person but including
any obligations of such Person with respect to standby letters of credit.
"Indemnification Fee" means an amount equal to the Indemnification Rate
times the amount of principal being prepaid times the remaining number of
days in the LIBO Interest Period divided by 360.
"Indemnification Rate" means the difference between the Adjusted LIBO
Rate and the U.S. Treasury Yield as determined by the Agent as of the date
of the prepayment for U.S. Treasury obligations having a maturity date of
on or about the termination of the LIBO Interest Period.
"Indemnified Party" and "Indemnified Parties" means the Banks and the
directors, officers, trustees, employees, agents, attorneys and controlling
shareholders of the Banks.
"Indenture" means the indenture dated as of March 8, 1994, by and
among Funding as obligor, Park Place-Delaware as guarantor, Realty, the
Borrower, and the Trustee, pursuant to which was issued certain notes in the
principal amount of $425,000,000 due in the year 2004.
"Independent Certified Public Accountant" means Ernst & Young, LLP or
any other independent certified public accountants selected by the Borrower
or Park Place-Delaware which accounting firm is reasonably satisfactory to
the Banks.
"Intellectual Property" of any Person means all trademarks, tradenames,
copyrights, patents, technology, know-how and processes necessary for the
conduct of such Person's business.
"Intercreditor Agreement" means an intercreditor agreement among the
Banks, the Borrower, the Guarantors and the Trustee substantially in the
form attached to the Indenture as Schedule D.
"Interest Coverage Ratio" of any Person for any period, means the ratio
of (a) the sum of Net Income plus (i) any extraordinary loss reflected in
such Net Income amount, minus (ii) any extraordinary gain reflected in such
Net Income amount, plus (iii) Taxes, plus (iv) Interest Expense, plus (v)
Depreciation, and plus (vi) Amortization of such Person for such period to
(b) Interest Expense of such Person for such period.
"Interest Expense" of any Person for any period means any amount which,
in conformity with GAAP, is included as interest expense on an income
statement of such Person excluding (a) amortization of debt issuance costs,
and (b) amortization of original issue discount or premium.
"Interest Period" means a LIBO Interest Period and any period during
which the Interest Rate is the Adjusted Prime Rate.
"Investment" by any Person means, directly or indirectly, (a) any
advance, loan or other extension of credit or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others for which such Person
has not been reimbursed) or any purchase or acquisition by such Person of
any stock, bonds, notes, debentures or other securities issued or owned by,
any other Person, and (b) the purchase of all or substantially all of the
assets of any Person.
"Issuing Bank" means First Union or its successors or permitted
assigns.
"Letter of Credit" means any standby letter of credit issued pursuant
to this Agreement under Section 2.01 as may be supplemented, modified,
renewed or extended.
"Letter of Credit Fees" has the meaning given to such term in Section
2.04 hereof.
"Letter of Credit Obligations" means at any time the aggregate amount
available to beneficiaries for payment under the Letters of Credit together
with any unreimbursed drawings under any Letters of Credit.
"Letter of Credit Risk Participation" has the meaning given such term
in Section 2.09 hereof.
"LIBO Rate" means, for a selected LIBO Interest Period, the rate is
equal to:
X
1-Y
where "X" is the interest rate (expressed as a decimal) for deposits in U.S.
Dollars approximately equal in principal amount of the Loan for which such
LIBO Interest Period was selected (but not less than $500,000), and for a
period equal in length of such LIBO Interest Period, which rate appears on
the Telerate Page 3750 as of 11:00 a.m., London time, on the date that is
two Business Days prior to the first Business Day of such LIBO Interest
Period (If such rate does not appear on the Telerate Page 3750, the rate
utilized shall be the rate which appears, or if more than one such rate
appears, the average of the rates which appear on the Reuters Screen LIBO
Page as of 11:00 a.m., London time, on the day that is two Business Days
prior to such date) and "Y" is the percentage amount (expressed as a
decimal) of reserves that applicable U.S. laws would require the Agent to
maintain with respect to liabilities incurred on the London Interbank Market
including, without limitation, reserves required under Regulation D of the
Board of Governors of the Federal Reserve System for euro-currency
liabilities (as defined in such regulation and deemed, for purposes of this
Agreement, to include the Agent's liabilities incurred on the London
Interbank Market) without benefit of or credit for pro-ration, exception,
or offsets otherwise available from time to time under such regulation.
"LIBO Rate Loan" means a Loan to which the Adjusted LIBO Rate applies.
"LIBO Interest Period" means a period of time, beginning on an
Effective Date, and ending one, two or three months thereafter, as selected
by the Borrower in its notice of borrowing (subject to availability) as
determined by the Agent, during which the Interest Rate is the Adjusted LIBO
Rate, provided, that the foregoing is subject to the following: (i) if any
LIBO Interest Period would otherwise end on a day which is not a Business
Day, such LIBO Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such LIBO
Interest Period into another calendar month in which event such LIBO
Interest Period shall end on the immediately preceding Business Day; (ii)
no LIBO Interest Period shall extend beyond the Maturity Date; and (iii) any
LIBO 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 LIBO Interest Period) shall end on the
last Business Day of a calendar month.
"Lien" means, with respect to the property of any Person, any mortgage,
pledge, hypothecation, assignment, deposit arrangement (excluding demand
deposit accounts maintained for operational purposes in the ordinary course
of business) encumbrance, lien (statutory or other), or any preference,
priority, charge or other security interest or preferential arrangement of
any kind or nature whatsoever that encumbers such property (including,
without limitation, any conditional sale or other title retention agreement,
any Financing Lease having substantially the same economic effect as any of
the foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction in respect of any of
the foregoing).
"Loan Documents" refers to this Agreement, the Mortgage, the Additional
Mortgage, the Assignment of Leases, the Additional Assignment of Leases and
the Notes and any amendments, supplements or modifications of any of the
foregoing.
"Loans" means the Tranche A Loans and the Tranche B Loans.
"Long-Term Lease" means any lease of real or personal property by any
Person as lessee which expires more than five years from the date upon which
such lease becomes effective.
"Margin Stock" has the same meaning that Regulation U of the Board of
Governors of the Federal Reserve System gives to that term.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition, business, property or operations of the Borrower,
individually, or the Borrower and the Guarantors taken as a whole, (ii) the
ability of the Borrower, individually, or the Borrower and the Guarantors
taken as a whole, to perform their obligations under this Agreement or any
of the other Loan Documents, (iii) the validity or enforceability of this
Agreement, the notes or the other Loan Documents, or (iv) the value of the
Collateral or the ability of the Agent to exercise its rights under the Loan
Documents with respect to the Collateral for the benefit of the Banks.
"Maturity Date" means December 31, 1998, or such other later date as
the Banks, in their sole discretion, may agree with the Borrower in writing.
"Mortgage" means the mortgage, security agreement and assignment of
rents executed by the Borrower and Realty on March 8, 1994 as modified by
a Modification of Mortgage and Assignment of Leases being executed
simultaneously with this Agreement, which mortgage, as so modified, secures
the obligations of the Borrower under this Agreement and under the Notes.
"Mortgage Notes" means the notes issued pursuant to the Indenture.
"Net Income" for any Person during any period, means the net income (or
deficit) of such Person for such period, determined in accordance with GAAP.
"Net Worth" means with respect to any Person, as of any date, the
Stockholders' Equity of such Person after deducting each of the following:
(i) such portion of the assets which is attributable to interests held by
Persons other than such Person and its subsidiaries (to the extent not
already deducted from Stockholders' Equity), and (ii) treasury stock (to the
extent not already deducted from Stockholders' Equity).
"New Casino Facility" means the new casino facility to be constructed
on property subject to the Additional Mortgage substantially in the form of
the drawings supplied to the Banks on the Closing Date.
"Notes" means the Tranche A Notes and the Tranche B Notes.
"Participant Bank" means any bank to which a Bank has sold a
participation in the Loans under Section 9.08.
"Permitted Indebtedness" means (a) borrowings arising or funded under
the Indenture and related obligations, (b) the Loans, (c) indebtedness
outstanding on September 30, 1995, (d) guaranties of amounts permitted
pursuant to Section 5.05, (e) obligations arising under the Tax Sharing
Agreement, (f) additional Indebtedness in an aggregate amount of not more
than $2,500,000, (g) Indebtedness of Subsidiaries to the Borrower which
arise out of a Permitted Investment by the Borrower in the form of a loan
by the Borrower to such Subsidiary; (h) obligations to Affiliates of Park
Place-Delaware incurred in connection with services rendered in a manner
consistent with past practices in an aggregate amount of not more than
$5,000,000; (i) Indebtedness due to GNOC, Inc. or to Bally Entertaintment
(1) which is unsecured, (2) for which interest and fees payable in
connection with such Indebtedness do not exceed the interest and fees
payable under this Agreement, and (3) which is in an aggregate amount of the
lesser of (A) $10,000,000, or (B) an amount which, when added to the
aggregate amount of the Tranche A Loans and the Letters of Credit
outstanding under the Agreement, does not exceed $50,000,000; and (j) other
Indebtedness as agreed to in writing by the Banks.
"Permitted Investments" means (a) investments by Subsidiaries of the
Borrower or the Guarantors in the Borrower or Park Place-Delaware; (b)
commercial paper rated, on the date of acquisition, P-1 by Moody's or A-1
by Standard & Poor's with maturities not to exceed 180 days after the date
of acquisition; (c) certificates of deposit of United States commercial
banks (having a combined capital and surplus in excess of $300,000,000) with
maturities not to exceed 180 days after the date of acquisition; (d)
obligations of, or guaranteed by, the United States government or any agency
thereof with maturities not to exceed 180 days after the date of
acquisition; (e) money market funds organized under the laws of the United
States or any state thereof that invest substantially all their assets in
any of the types of investments described in subclause (b), (c) or (d) of
this definition; (f) any temporary investment deemed to be cash equivalents
under GAAP which is made by the Borrower with either of the Banks; (g)
negotiable instruments held for collection in the ordinary course of
business; (h) outstanding travel, moving and other like advances to
officers, employees and consultants; (i) lease, utility and other similar
deposits; (j) stock, obligations or securities received in settlement of
debts as a result of foreclosure, perfection or enforcement of any Lien, in
each of the foregoing cases in the ordinary course of business; (k) sales
of goods or services on credit terms consistent with past practices or as
otherwise consistent with credit terms in common use in the casino industry;
(l) loans to any employee in an amount not to exceed $250,000 for any
individual and $1,000,000 for all employees in the aggregate; (m) deposits
with, or bonds issued by the CRDA as may be required to comply with the
Borrower's obligations under the New Jersey Casino Control Act; (n)
extensions of credit to customers of the Borrower pursuant to the Borrower's
existing credit policies and consistent with past historical practices; and
(o) investments in Subsidiaries and Affiliates of the Borrower which, when
combined with the aggregate amount of guaranties of the obligations of
Subsidiaries and Affiliates permitted under Section 5.05 (but excluding from
the calculation of such aggregate amount any items listed on Schedule 3.06),
do not in the aggregate exceed $25,000,000.
"Permitted Liens" means (a) Liens securing the obligations funded by
or arising under the Indenture, (b) Liens securing the Loans, (c) Liens for
Taxes not yet due and payable or being contested in good faith and by
appropriate proceedings diligently conducted and for which adequate reserves
as required by GAAP consistently applied have been established and
maintained, (d) deposits, Liens or pledges to secure payments of workers'
compensation, unemployment or other insurance, (e) Liens arising from
judgments in an aggregate amount (i) equal to or less than $500,000 entered
against the Borrower, any Subsidiary or the Guarantors, or (ii) greater than
$500,000 entered against the Borrower, any Subsidiary or the Guarantors so
long as such judgments are paid, discharged or bonded for appeal within
thirty (30) days after the entry thereof, (f) Liens arising by operation of
law, such as those in favor of carriers, warehousemen and landlords incurred
in the ordinary course of business for sums not yet due and payable, (g)
Liens securing Permitted Indebtedness, (h) easements, rights of way, zoning
and similar covenants and restrictions and other similar encumbrances or
defects or irregularities in title which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of business, (i) liens which may be contested pursuant to
Article 10 of the Mortgage, (j) leases or subleases granted to others not
interfering in any material respect with the business of the Borrower or the
Guarantors, and (k) Liens listed on Schedule A.
"Person" means any individual, corporation, partnership, joint venture,
joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Plan" means an employee pension benefit plan within the meaning of
Section 3(2) of ERISA (other than a multiemployer Plan) covered by Title IV
of ERISA by reason of Section 4021 of ERISA, of which the Borrower, the
Guarantors or any ERISA Affiliate is or has been within the preceding five
years a "contributing sponsor" within the meaning of Section 4001(a)(13) of
ERISA, or which is or has been within the preceding five years maintained
for employees of the Borrower, the Guarantors or any ERISA Affiliate.
"Potential Default" means an event, condition or situation which with
the giving of notice, the passage of time, or any combination of the
foregoing, would constitute an Event of Default.
"Prime Rate" means the rate of interest announced by First Union from
time to time as its reference rate in making loans, which is not necessarily
the rate of interest that it charges any particular class of customers.
"Prime Rate Loan" means a Loan to which the Adjusted Prime Rate
applies.
"Prohibited Transaction" has the meaning given to such term
in Section 406 of ERISA or Section 4975 of the Code.
"Reportable Event" has the meaning assigned to such term in section
4043(b) of ERISA or regulations issued thereunder, excluding events as to
which the thirty (30) day notice period is waived pursuant to the regulations
issued thereunder.
"Required Banks" means Banks holding at least 66-2/3% of the
Commitments; and if no Commitments remain outstanding it means Banks holding
at least 66-2/3% of the Loans.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and each law, treaty, rule, regulation, interpretation or
determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer" means a CFO, CEO, President, Treasurer or General
Counsel of the Borrower or a Guarantor, as the context requires.
"Restricted Payments" means (a) the declaration or payment by Park
Place-Delaware of any dividend on, or any distribution to holders of, any
shares of its Capital Stock, unless such dividend or distribution is solely
in the form of Capital Stock of Park Place-Delaware or warrants or other
rights to acquire such stock, (b) the purchase, redemption, acquisition or
retirement by Park Place-Delaware for value of any of its Capital Stock or
any options, warrants or other rights to acquire such Capital Stock, or (c)
any prepayment of amounts due under the Indenture prior to the Maturity
Date.
"Reuters Screen LIBO Page" means the display designated as page "LIBO"
on the Reuter Monitor Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London interbank
offering rates of major banks).
"Stockholders' Equity" as of any date means, with respect to any
Person, the amount of stockholders' equity (including all Capital Stock
other than Disqualified Preferred Stock) that would appear on the balance
sheet of such Person as of such date as determined in accordance with GAAP.
"Subsidiary" means any corporation or other entity, more than fifty
percent (50%) of the voting Capital Stock or other voting ownership
interests of which is owned, directly or indirectly, by Guarantor or
Borrower (as the context requires).
"Taxes" means any amounts paid by a Person to any Governmental
Authority and which would be classified as taxes, assessments, other
governmental charges or levies in accordance with GAAP.
"Tax Sharing Agreement" means the tax sharing agreement between the
Borrower, the Guarantors and Bally Entertainment dated June 17, 1993.
"Telerate Page 3750" means the display designated as page 3750 on the
Dow Jones Telerate Service (or such other page as may replace the LIBO page
on that service for the purpose of displaying 8 London interbank offering
rates of major banks).
"Tranche A Commitment" means the commitment of each of the Banks to
make Tranche A Loans and issue Letters of Credit in the amount listed in the
definition of Commitment above, as may be adjusted from time to time
pursuant to the terms of this Agreement.
"Tranche A Loan" has the meaning given to such term in Section 2.01
hereof.
"Tranche A Notes" has the meaning given to such term in Section 2.03
hereof.
"Tranche B Commitment" means the commitment of each of the Banks to
make Tranche B Loans in the amount listed in the definition of Commitment
above, as may be adjusted from time to time pursuant to the terms of this
Agreement.
"Tranche B Loans" has the meaning given to such term in Section 2.01
hereof.
"Tranche B Notes" has the meaning given to such term in Section 2.03
hereof.
"Trustee" means the trustee under the Indenture.
"Unqualified Opinion" means the opinion of Independent Certified Public
Accountants opining that the financial statements of any Person were
prepared in accordance with GAAP, consistently applied by such Person,
without qualification as to (i) the scope of the audit undertaken with
respect to such opinion, (ii) such Person's status as a going concern, or
(iii) any other matter which the Banks reasonably deem to impact on facts
or conditions that could have a Material Adverse Effect.
"Upfront Fee" has the meaning given to such term in Section 2.04
hereof.
SECTION 1.02 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the meanings defined herein when used in the Loan
Documents or any certificate or other document made or delivered pursuant
hereto.
(b) As used herein and in the Loan Documents and any certificate or
other document made or delivered pursuant hereto, accounting terms not
defined in Section 1.01, shall have the respective meanings given to them
under GAAP. If any changes in accounting principles are hereafter
occasioned by promulgation of rules, regulations, pronouncements or opinions
by or are otherwise required by the Financial Accounting Standards Board ,
the Accounting Principles Board, or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar
functions), and any of such changes result in a change in the method of
calculation of, or affect the results of such calculation of, any of the
financial covenants and the definitions relating to such financial
covenants, then the parties hereto agree to enter into and diligently pursue
negotiations in order to amend such financial covenants or terms so as to
equitably reflect such changes, with the desired result that the criteria
for evaluating the financial condition and results of operations of the
Borrower or Park Place-Delaware and its Subsidiaries shall be the same after
such changes as if such changes had not been made.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified. <PAGE>
ARTICLE II
THE CREDITS
SECTION 2.01. The Credits; Letters of Credit.
(a) The Tranche A Loans. Subject to the terms and conditions hereof,
each Bank severally agrees to extend credit in the form of revolving credit
loans (each a "Tranche A Loan" and collectively the "Tranche A Loans") to
the Borrower from time to time from the date hereof until one Business Day
prior to the Maturity Date, during which period the Borrower may borrow,
repay, and reborrow in accordance with the provisions hereof. The aggregate
unpaid principal amount of each Bank's Tranche A Loans when added to such
Bank's Commitment Percentage of the then outstanding Letter of Credit
Obligations shall not exceed such Bank's Tranche A Commitment. Each
disbursement of the Tranche A Loans shall be from all of the Banks ratably
according to their respective Commitments. Each Tranche A Loan shall be in
an aggregate amount of not less than $1,000,000 or multiples of $1,000,000
in excess thereof. Within the limits of the amounts set forth above, the
Borrower may borrow, repay and reborrow Tranche A Loans under this Section.
(b) The Letters of Credit. Subject to the terms and conditions
hereof, the Issuing Bank shall issue Letters of Credit for the account of
the Borrower until the Maturity Date in such form and for the benefit of
such parties as the Issuing Bank may, in its reasonable discretion, approve.
No Letter of Credit shall have an expiration date later than a date one year
after the Maturity Date nor contain a term providing for an automatic
extension of the expiration, provided that Letters of Credit (i) issued to
insurance companies providing worker's compensation insurance in connection
with such insurance, and (ii) in an aggregate amount not to exceed $50,000,
may contain a term providing for such an automatic extension. The aggregate
unpaid principal amount of all of the Tranche A Loans and the Letter of
Credit Obligations at any one time outstanding shall not exceed the
aggregate amount of the Tranche A Commitments hereunder. The Letter of
Credit Obligations shall not exceed in the aggregate at any one time the
amount of $5,000,000. Upon the issuance of any Letter of Credit by the
Issuing Bank each of the Banks shall be deemed to have purchased, pursuant
to the terms of this Agreement, from the Issuing Bank a Letter of Credit
Risk Participation in an amount equal to the Letter of Credit multiplied by
that Bank's Commitment Percentage. The Issuing Bank shall not be obligated
to issue any Letter of Credit hereunder if the issuance of such letter would
conflict with, or cause the Issuing Bank or any Bank to exceed any limits
imposed by, any applicable Requirement of Law.
(c) The Tranche B Loans. Subject to the terms and conditions
hereof, each Bank severally agrees to extend credit in the form of revolving
credit loans (each a "Tranche B Loan" and collectively the "Tranche B
Loans") to the Borrower from time to time from the date hereof until one
Business Day prior to the Maturity Date, during which period the Borrower
may borrow, repay, and reborrow in accordance with the provisions hereof.
The aggregate unpaid principal amount of each Bank's Tranche B Loans shall
not exceed such Bank's Tranche B Commitment. Each disbursement of Tranche
B Loans shall be from all of the Banks ratably according to their respective
Commitments. Each Tranche B Loan shall be in an aggregate amount of not
less than $1,000,000 or multiples of $1,000,000 in excess thereof. Within
the limits of the amounts set forth above, the Borrower may borrow, repay
and reborrow Tranche B Loans under this Section.
SECTION 2.02 Notices of Borrowing; Requests for Letter of Letters of
Credit.
(a) Borrowings. Borrower shall notify the Agent by telephone by 11:00
A.M. at least one Business Day before the proposed borrowing date (confirmed
by a written notice in the form of Exhibit 2.02(a), telecopied or otherwise
delivered to the Agent within twenty-four hours of the telephonic notice)
for each Prime Rate Loan, specifying the date and amount of the proposed
Prime Rate Loan, and the Agent in turn shall notify each other Bank of the
proposed Prime Rate Loan by 3:00 p.m. of the same day. Borrower shall
notify the Agent by telephone by 11:00 A.M. at least three Business Days
before the proposed borrowing date (confirmed by a written notice in the
form of Exhibit 2.02(a) telecopied or otherwise delivered to the Agent
within twenty-four hours of the telephonic notice) for each LIBO Rate Loan,
specifying the date and amount of the proposed LIBO Rate Loan and the length
of the proposed LIBO Interest Period, and the Agent shall in turn notify
each other Bank by 11:00 A.M. on the second Business Day preceding the
proposed borrowing date. On the specified borrowing date each Bank shall
make available to the Agent by no later than 12:00 noon (Newark, New Jersey
time), at its offices located at 550 Broad Street, Newark, New Jersey, in
funds immediately available to the Agent, such Bank's ratable share of such
Loan. Upon receipt of such funds by the Agent and upon fulfillment of the
applicable conditions set forth in Section 2.14, the Agent will immediately
make such funds available to Borrower.
(b) Issuance of Letters of Credit. Borrower shall provide to Issuing
Bank at least seven (7) Business Days (or such shorter time as Issuing Bank
may agree in a particular instance) prior to the proposed date of the
issuance, a request for issuance of a Letter of Credit. Each request for
issuance of a Letter of Credit shall be by telecopy, confirmed immediately
in writing, in substantially the form of supplied by the Issuing Bank which
shall specify: (i) the proposed date of issuance (which shall be a Business
Day); (ii) the face amount of the Letter of Credit; (iii) the date of
expiration of the Letter of Credit which date shall not be more than one
year after the issuance of the Letter of Credit; (iv) the name and address
of the beneficiary thereof; (v) the documents to be presented by the
beneficiary of the Letter of Credit in case of any drawing thereunder; and
(vi) the full text of any certificate to be presented by the beneficiary in
case of any drawing thereunder.
SECTION 2.03. The Notes. (a) The obligation of Borrower to repay the
Tranche A Loans shall be evidenced by a promissory note of Borrower (a
"Tranche A Note"), dated the date of this Agreement, payable to the order
of each Bank in a principal amount equal to such Bank's Commitment to make
Tranche A Loans and otherwise substantially in the form of Exhibit 2.03(a)
attached hereto.
(b) The obligation of Borrower to repay the Tranche B Loans shall be
evidenced by a promissory note of Borrower (a "Tranche B Note"), dated the
date of this Agreement, payable to the order of each Bank in a principal
amount equal to such Bank's Commitment to make Tranche B Loans and otherwise
substantially in the form of Exhibit 2.03(b) attached hereto.
(c)Each Bank is hereby authorized to record on its books and records,
the date and amount of each Loan made by such Bank, the date and amount of
each payment or prepayment of principal thereof and the interest rate with
respect thereto. Any such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded; provided, however, that the
failure to make any such recordation or any incorrect recordation shall not
affect the obligations of the Borrower hereunder or under Notes. Each Note
shall be stated to mature on the Maturity Date.
SECTION 2.04. Fees
(a) Upfront. Borrower shall pay on the date hereof a non-refundable
upfront fee (the "Upfront Fee") in the principal amount of $325,000 to the
Agent for the pro-rata distribution to the Banks.
(b) Commitment. Borrower shall pay to the Agent for distribution to
each of the Banks a non-refundable commitment fee (the "Commitment Fees")
computed at the rate of one half (1/2) of one percent (1/2%) per annum on
the average daily unused portion of such Bank's Commitment (to the extent
that such Commitment has not been reduced or terminated pursuant to Section
2.05 hereof). The Commitment Fees shall be payable quarterly in arrears on
the last day of March, June, September and December in each year, commencing
on March 31, 1996, up to and including the Maturity Date.
(c)Letter of Credit. For each Letter of Credit issued hereunder the
Borrower shall pay to the Agent for the ratable benefit of the Banks an
annual fee computed at the rate of one and one quarter percent (1.25%) per
annum of the amount of the Letter of Credit (the "Letter of Credit Fee").
The Letter of Credit Fee shall be payable prior to the issuance of the
Letter of Credit and on the yearly anniversary of the issuance of the Letter
of Credit so long as the Letter of Credit remains outstanding. The Letter
of Credit Fee shall be nonrefundable.
(d) Fronting. For each Letter of Credit the Borrower shall pay to the
Issuing Bank as issuer of the Letter of Credit an annual fee computed at the
rate of one quarter of one percent (.25%) per annum of the amount of the
Letter of Credit (the "Fronting Fee"). The Fronting Fee shall be payable
prior to the issuance of the Letter of Credit and on the yearly anniversary
of the issuance of the Letter of Credit so long as the Letter of Credit
remains outstanding. The Fronting Fee shall be nonrefundable.
(e) Other Letter of Credit Fees. In addition to the foregoing, the
Borrower shall pay or reimburse the Issuing Bank for such normal and
customary costs and expenses as are incurred or charged by the Issuing Bank
in issuing, effecting payment under, amending or otherwise administering any
Letter of Credit.
(f) Agent. Borrower shall pay to the Agent a fee in the amount, on
the dates and according to the terms of the Agent's fee letter.
SECTION 2.05. Repayment and Conversion of Loans. Borrower may at any
time repay, in whole or, in a minimum aggregate amount of $1,000,000 as to
any Loan, in part, the outstanding principal amount of the Loans, upon one
Business Day's notice to the Agent. All such payments shall be applied pro
rata amongst the Banks. Prime Rate Loans must be repaid on the Maturity
Date if not repaid sooner, and may be repaid at any time without penalty or
premium. LIBO Rate Loans must be repaid on the last day of the applicable
LIBO Interest Period. LIBO Rate Loans may be repaid from the proceeds of
a new LIBO Rate Loan for which the required notice has been given. If no
notice is given for a new LIBO Rate Loan, the LIBO Rate Loan has not
otherwise been repaid, and the last day of such LIBO Interest Period is not
the Maturity Date, the LIBO Rate Loan will be repaid by an automatic
conversion of the LIBO Rate Loan to a Prime Rate Loan. LIBO Rate Loans may
be repaid prior to the last day of the applicable LIBO Rate Period, provided
that Borrower shall (i) provide not less than three Business Day's notice
to the Agent, and (ii) indemnify each Bank, in accordance with Section 2.12
(d) hereof, against any loss or expense such Bank incurs as a result of the
prepayment of a LIBO Rate Loan. On the date of any such repayment of any
LIBO Rate Loan, the Borrower shall pay accrued interest on the amount of the
prepayment together with the Indemnification Fee.
SECTION 2.06 Termination or Reduction of the Commitments. Borrower
shall have the right at any time and from time to time, upon two (2)
Business Days' prior written notice to the Banks, to ratably terminate the
unused portions of the Commitments in whole or ratably reduce them in part,
without penalty or premium. Any partial reduction shall be in the minimum
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof. Any termination or reduction of the Banks' respective
Commitments hereunder shall be permanent, and the Commitments cannot
thereafter be restored or increased without the written consent of the
Banks.
SECTION 2.07 Interest. (a) Prime Rate Loans. Borrower shall pay
interest on the unpaid principal amount of each Prime Rate Loan from the
date on which the Prime Rate Loan is disbursed until such principal amount
has been repaid in full, payable monthly in arrears on the last Business Day
of each calendar month at an annual rate equal to the Adjusted Prime Rate,
which annual rate shall change simultaneously with each change in the Prime
Rate.
(b) LIBO Rate Loans. Borrower shall pay interest on the unpaid
principal amount of each LIBO Rate Loan, for the period that begins on the
applicable Effective Date and that ends on the last day of the applicable
LIBO Interest Period, payable on the last day of the applicable LIBO
Interest Period, at an annual rate equal to the Adjusted LIBO Rate.
(c) Computation of Interest and Commitment Fees. The Commitment Fees
and interest on the Prime Rate Loans shall be computed on the basis of a
year of 365 days or 366 days, as the case may be, for the actual number of
days elapsed. Interest on the LIBO Rate Loans shall be computed on the
basis of a year of 360 days for the actual number of days elapsed.
SECTION 2.08 Payments. (a) Borrower will make all repayments and
prepayments of principal of the Loans, all payments of interest on the
Loans, and all payments of Commitment Fees to the Agent, for the account of
the Banks, at 550 Broad Street, Newark, New Jersey, in funds immediately
available to the Agent, and the Agent will, by wire transfer, immediately
distribute to each Bank, in funds immediately available to each Bank, each
Bank's ratable share of the amounts so received by the Agent. Funds
received by the Agent later than 1:00 p.m. (Newark, New Jersey time) on the
date due shall be deemed to have been paid on the next succeeding Business
Day. All payments will be applied first to fees and expenses due under this
Agreement, second to accrued and unpaid interest due under this Agreement,
and third, to principal due under this Agreement.
(b) Whenever any payment to be made hereunder or under the Notes shall
be stated to be due on a day that is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time
shall be included in the computation of interest hereunder or under the
Notes or the Commitment Fees, as the case may be.
SECTION 2.09 The Letters of Credit.
(a) Reimbursement Obligation. The Borrower agrees to reimburse the
Issuing Bank on the day following the date on which the Issuing Bank
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit for the amount of (i) such draft so paid, (ii) interest on
the amount of the draft calculated at the Adjusted Prime Rate from the date
of payment by the Issuing Bank on the draft, and (ii) any taxes, fees,
charges or other costs or expenses incurred by the Issuing Bank in
connection with such payment. The Borrower's obligation under this section
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank, any Bank or any
beneficiary of such Letter of Credit. The Borrower agrees that the Issuing
Bank and the Banks shall not be responsible for, and the Borrower's
reimbursement obligations hereunder shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower
against any beneficiary or transferee of such letter of credit. The Issuing
Bank shall not be liable for any error, omission, interruption or delay in
transmission, in connection with any Letter of Credit except for its own
gross negligence or willful misconduct.
(b) Letter of Credit Risk Participations. Promptly after issuance of
each Letter of Credit, the Issuing Bank shall deliver to Borrower and the
Banks a copy of such Letter of Credit. Immediately upon the issuance of each
Letter of Credit, each Bank (other than the Issuing Bank) shall be deemed
to, and hereby agrees to, have irrevocably purchased from the Issuing Bank
a participation in such Letter of Credit and each drawing thereunder in any
amount equal to the Commitment Percentage of such Bank (a "Letter of Credit
Risk Participation"). In the event Borrower shall fail to reimburse Issuing
Bank for the full amount of any drawing on the date following the date such
drawing is honored by the Issuing Bank under the Letter of Credit, the
Borrower shall be deemed to have requested a Prime Rate Loan in the amount
of such drawing and any interest and expenses thereon, and the Agent shall
pay to the Issuing Bank the proceeds of such loan in reimbursement for the
drawing under the Letter of Credit. Each Bank agrees to perform its
obligations to make a Prime Rate Loan necessary to fund an unreimbursed
drawing under a Letter of Credit despite the expiration of their Commitment
to make a Tranche A Loan as such, the occurrence of a Default or any Event
of Default or any inability of Borrower to require such Bank to fulfill its
other obligations hereunder including, without limitation, any inability
resulting from the operation of Bankruptcy Code section 365(c)(2) (11 U.S.C.
section 365(c)(2)) or otherwise. The obligation of each Bank to make a Prime
Rate Loan necessary to fund an unreimbursed drawing under a Letter of Credit
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which such
Bank may have or have had against the Issuing Bank (or any other Bank),
including, without limitation, any defense based on the failure of the
demand for payment under such Letter of Credit to conform to the terms of
such Letter of Credit or the legality, validity, regularity or
enforceability of such Letter of Credit or any defense based on the identity
of the transferee of such Letter of Credit or the sufficiency of the
transfer if such Letter of Credit is transferable.
(c)Obligation to Provide Cash Collateral. On the Maturity Date the
Borrower shall provide to the Issuing Bank cash in an amount equal to the
face amount of the Letters of Credit then outstanding to be held as cash
collateral until the termination of the obligations of the Issuing Bank
thereunder.
SECTION 2.10 Reimbursement to Banks for Cost Increases Imposed By Law.
(a) If any Bank shall determine that the adoption of any applicable law,
rule, regulation or guideline (including those regarding capital adequacy),
or any change therein, or any change in the interpretation or administration
thereof, by any Governmental Authority, central bank or comparable authority
charged with the interpretation or administration thereof, or the
effectiveness after the date hereof of any of the foregoing which have been
previously adopted but are not yet fully effective (including, but not
limited to, each phase in the effectiveness of the "Risk-Based Capital
Guidelines" which have been previously adopted by the United States Office
of the Comptroller of the Currency and certain other United States banking
regulatory agencies), or compliance by any Bank with any direction,
requirement or request regarding capital adequacy (whether or not having the
force of law) of any Governmental Authority, central bank or comparable
agency: (a) affects or would affect the amount of capital required or
expected to be maintained by such Bank or any corporation controlling such
Bank and such Bank determines that the amount of such capital is increased
as a consequence of such Bank's obligations under this Agreement (taking
into consideration such Bank's policies (in effect on the date hereof) with
respect to capital adequacy and such Bank's targeted return on capital, or
(b) subjects any Bank to any tax, duty or other charge, or changes the basis
of taxation of the Loans (other than income or franchise taxes payable by
the Banks); then, upon receiving notice as described in subsection 2.10(b)
from such Bank, the Borrower shall promptly pay to such Bank, any additional
amounts as will compensate such Bank and/or any corporation controlling such
Bank for such change.
(b) Each Bank will promptly notify the Borrower of any event of which
it has knowledge, occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section. A certificate of any Bank
claiming compensation under this Section and setting forth in reasonable
detail the basis for and the calculation of the additional amount or amounts
to be paid to it hereunder shall be conclusive in the absence of material
error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 2.11 Mandatory Repayments. (a) If at any time the aggregate
unpaid principal amount of the Tranche A Loans and the Letter of Credit
shall be in excess of $50,000,000 (or such lesser amount which may be in
effect after the Borrower shall have reduced the Commitments pursuant to
Section 2.05), the Borrower shall immediately make a repayment of principal
on such Loans in an amount equal to such excess, together with accrued
interest, on each amount being prepaid to and including the date of such
repayment and any Indemnification Fee related thereto.
(b) If at any time the aggregate unpaid principal amount of the
Tranche B Loans shall be in excess of $15,000,000 (or such lesser amount
which may be in effect after the Borrower shall have reduced the Commitments
pursuant to Section 2.06), the Borrower shall immediately make a repayment
of principal on such Loans in an amount equal to such excess, together with
accrued interest, on each amount being prepaid to and including the date of
such repayment and any Indemnification Fee related thereto.
SECTION 2.12 Special Provisions for LIBO Rate Loans.
(a) Unavailability of Funds and Indeterminate Interest Rates. If
on or before the date the Banks are to make any LIBO Rate Loan or on or
before any Effective Date (i) the Agent determines in good faith that it is
unable to obtain funds at the LIBO Rate for an elected Interest Period,
including due to the unavailability of funds at such rate, any change in
existing law, any new law, the length of such Interest Period, or otherwise
or (ii) no adequate means exists to determine the Adjusted LIBO Rate for
such Interest Period, then Borrower shall be required to elect an Interest
Period of a length for which Agent may obtain funds at the LIBO Rate or,
alternatively, to request that the Banks make a Prime Rate Loan in lieu of
a LIBO Rate Loan.
(b) Changes Affecting Ability to Maintain Funds. If, during any
Interest Period, any change in existing law, any new law, or any other
factor prevents Agent in its good faith determination from maintaining funds
at the LIBO Rate for such Interest Period and requires Agent to cease so
maintaining funds actually so maintained prior to termination of such
Interest Period, then on the date of such required cessation, Borrower shall
be required to elect an Interest Period of a length for which Agent may
maintain funds at the LIBO Rate or, alternatively, to request that on that
date the Banks make a Prime Rate Loan in the amount of the outstanding LIBO
Rate Loan, all of the proceeds of which shall be used to prepay the
outstanding LIBO Rate Loan. In addition, within thirty (30) days after
demand by any Bank, Borrower shall reimburse such Bank against any loss or
expense such Bank has certified in writing to Borrower and Agent that such
Bank has incurred as a result of any such required cessation, including, but
not limited to, any interest or fees payable by such Banks to lenders of
funds obtained by them in order to make or maintain such LIBO Rate Loans.
(c) Ineligible Interest Periods. If, on any date Banks are to
make a LIBO Rate Loan or on any Effective Date, the period of time from such
date or such Effective Date to the Maturity Date is less than one month, a
Prime Rate Loan shall be made on such date in lieu of a LIBO Rate Loan.
(d) Reimbursement for Losses. Within thirty (30) days after
demand by any Bank, Borrower shall reimburse by payment of an
Indemnification Fee to such Bank for any loss or expense (including, but not
limited to, any interest or fees payable by such Banks to lenders of funds
obtained by them in order to make or maintain such LIBO Rate Loans) which
such Bank incurs as a result of any prepayment, or conversion of a LIBO Rate
Loan to a Prime Rate Loan, on a date other than the last day of the
applicable Interest Period. With each demand for reimbursement under this
Section 2.12, such Bank shall submit a certificate to Agent and Borrower
setting forth the basis for the demand.
(e) Funding Through Other Offices. Each Bank may fulfill its
Commitment for LIBO Rate Loans by causing a foreign branch or affiliate of
such Bank to make LIBO Rate Loans. Nevertheless, the Borrower shall owe its
obligations on LIBO Rate Loans to such Bank rather than to any foreign
branches or affiliates of such Bank. Each Bank shall repay its foreign
branches or affiliates.
(f) Discretion of Banks as to Manner of Funding. Notwithstanding
any other provision of this Agreement, each Bank may fund or maintain its
funding of all or any part of the Loans in any manner it chooses.
SECTION 2.13 Taxes Related to Agreement.
(a) All payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu
of net income taxes) imposed on the Agent or any Bank as a result of a
present or former connection between the Agent or such Bank and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Agent or such Bank having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Agent or any Bank
hereunder, the amounts so payable to the Agent or such Bank shall be
increased to the extent necessary to yield to the Agent or such Bank (after
payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Bank that is not organized under
the laws of the United States of America or a state thereof if such Bank
fails to comply with the requirements of paragraph (b) of this subsection.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Agent for its own account
or for the account of such Bank, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof.
If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Banks for any incremental taxes, interest or
penalties that may become payable by the Agent or any Bank as a result of
any such failure. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
b. Each Bank that is not incorporated under the laws of the United
States of America or a state thereof shall:
I. deliver to the Borrower and the Agent (A) two (2) duly
completed copies of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be, and (B) an Internal
Revenue Service Form W-8 or W-9, or successor applicable form, as the case
may be;
ii. deliver to the Borrower and the Agent two (2) further copies
of any such form or certification on or before the date that any such form
or certification expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously delivered by it
to the Borrower; and
iii. obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower or
the Agent;
unless in any such case an event (including, without limitation, any change
in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank so advises the
Borrower and the Agent. Such Bank shall certify (i) in the case of a Form
1001 or 4224, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes
and (ii) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax. Each Person that shall
become a Bank or a Participant pursuant to Section 9.08 shall, upon the
effectiveness of the related transfer, be required to provide all of the
forms and statements required pursuant to this subsection, provided that in
the case of a Participant such Participant shall furnish all such required
forms and statements to the Bank from which the related participation shall
have been purchased.
SECTION 2.14. Conditions Precedent to Loans. The obligation of each
Bank to make any Loan or issue any Letter of Credit is subject to the
conditions precedent that:
(a) The representations and warranties contained in this Agreement
shall be true and correct in all material respects on and as of the date of
such Loan as though made on and as of such date, except to the extent that
(i) such statements expressly are made only as of the Closing Date, or (ii)
the Borrower has previously provided to the Banks written notice of any
material change in the facts set forth in such representations and
warranties.
(b) No Potential Default or Event of Default shall have occurred and
be continuing, or will result from the making of such Loan.
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to make
the Loans, the Borrower and each Guarantor hereby represents and warrants
to the Banks that the statements set forth in this Article III are true,
correct and complete.
SECTION 3.01. Existence. Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of New Jersey. Park
Place-Delaware is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. Realty is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of New Jersey. The Borrower and each Guarantor have
all requisite corporate power and authority to conduct its business and to
own its properties and each is duly qualified as a foreign corporation in
good standing in all jurisdictions, if any, in which its failure so to
qualify could reasonably be expected to produce have a Material Adverse
Effect.
SECTION 3.02. Authorization; No Legal Bar; No Default.
The execution, delivery and performance by the Borrower and the Guarantors
of the Loan Documents have been duly authorized by all necessary corporate
action, and do not and will not violate or conflict with any current
provision of any Requirement of Law, including the Casino Control Act and
any rules or regulations of the Casino Control Commission, or of the charter
or by-laws of Borrower or either of the Guarantors or result in a breach of
or constitute a default under any indenture (including the Indenture), or
other material instrument or agreement to which the Borrower or a Guarantor
is a party or by which any of them or their properties may be bound or
affected.
SECTION 3.03 Validity of the Loan Documents. The Loan Documents when
duly executed and delivered will constitute, valid and legally binding
obligations of Borrower and each of the Guarantors enforceable in accordance
with their respective terms, except as such enforceability may be limited
by bankruptcy, insolvency or other similar laws affecting the enforcement
of creditors' rights generally or general principles of equity.
SECTION 3.04. Financial Information. The Guarantors and the Borrower
have previously furnished to the Banks true and complete copies of the
Consolidated balance sheet and statements of income, Stockholders' Equity
and cash flows of Park Place-Delaware and its Subsidiaries as of December
31, 1994, audited by the Borrower's Independent Certified Public
Accountants. The Guarantors and the Borrower have previously furnished to
the Bank an unaudited Consolidated balance sheet and statements of income,
stockholder's equity and cash flows of Park Place-Delaware and its
subsidiaries as of September 30, 1995 prepared by Park Place-Delaware. The
aforementioned financial statements show all material liabilities, direct
and contingent, and present fairly the financial position, the results of
operations and cash flows at such dates and for the periods ended on such
dates, all in accordance with GAAP consistently applied. From September 30,
1995 to the Closing Date, there has been no material adverse change in the
business, financial condition, operations or prospects of the Borrower and
the Guarantors taken as a whole.
SECTION 3.05. Litigation. Except as disclosed in Schedule 3.05
attached hereto, there are no actions, suits or proceedings pending or to
their knowledge threatened against Borrower or any Guarantor or any of their
respective properties before any court or governmental department,
commission, board, bureau, agency, instrumentality (domestic or foreign)
or other Governmental Authority that, if determined adversely to Borrower
or a Guarantor, could reasonably be expected to produce a Material Adverse
Effect.
SECTION 3.06. Disclosure of Indebtedness and Contingent Liabilities.
Except for Indebtedness and Contingent Liabilities which in the aggregate
total $500,000 or less, as of the date of this Agreement there are no
Contingent Liabilities or Indebtedness of Park Place-Delaware and its
Subsidiaries that are not disclosed on the financial statements mentioned
in Section 3.04, permitted by Section 5.05 or listed on Schedule 3.06
SECTION 3.07. Taxes. Borrower and each Guarantor have been included
in all Consolidated federal income tax returns and unitary state income and
franchise tax returns required to be filed with respect to each entity
before the date of this Agreement and all Taxes, assessments and charges
shown to be due thereon have been paid, to the extent they were required to
be paid before the date of this Agreement. Borrower and each of the
Guarantors have each filed all other tax returns and reports required to be
filed before the date of this Agreement and each has paid all Taxes,
assessments and charges shown to be due thereon, to the extent that they
were required to be paid before the date of this Agreement. To the extent
that Taxes, assessments or charges for periods before the date of this
Agreement are imposed on Borrower or a Guarantor, which additional Taxes,
assessments or charges exceed those amounts previously paid by Borrower or
such Guarantor, adequate reserves for such amounts have been accrued in
accordance with GAAP in the financial statements of Borrower and the
Guarantors.
SECTION 3.08. Liens. The property and assets of Borrower and each
Guarantor are not subject to any Lien other than Permitted Liens.
SECTION 3.09. Consents. No authorization, consent, approval, license,
exemption by or filing or registration with any court or Governmental
Authority (including the Casino Control Commission and the Board of
Governors of the Federal Reserve System) is or will be necessary for the
valid execution, delivery or performance by Borrower or the Guarantors of
the Loan Documents (except as may have been obtained prior to the execution
of this Agreement).
SECTION 3.10. ERISA. Each Plan maintained for employees of Borrower
and each Guarantor and covered by Title IV of ERISA is in good standing.
No Reportable Event or material failure of compliance with the Code has
occurred and is continuing with respect to any Plan.
SECTION 3.11. Ownership of Borrower. Park Place-Delaware owns one
hundred percent (100%) of the voting securities of Borrower.
SECTION 3.12. Ownership of Guarantor. Bally's Casino Holdings, Inc.
owns one hundred percent (100%) of the voting securities of Park Place-
Delaware.
SECTION 3.13. Gaming Licenses. As of the date hereof, all Gaming
Licenses of the Borrower have been obtained and are in full force and
effect. The Borrower's Gaming Licenses are renewed periodically but
generally every four (4) years, and the next date for such renewal is June
30, 1996.
SECTION 3.14. Margin Stock. Borrower does not engage in the business
of making loans to purchase or carry Margin Stock and none of the proceeds
of the Loans will be used to purchase or carry Margin Stock.
SECTION 3.15. Stock as Collateral. The Collateral does not include
any stock in any corporation.
SECTION 3.16. Environmental Matters. Except as set forth in Schedule
3.16 attached hereto, Park Place-Delaware and each of its Subsidiaries have
to the best of their knowledge obtained all permits, licenses and other
authorizations which are required with respect to their businesses under all
applicable Environmental Laws. Park Place-Delaware and each of its
Subsidiaries are in compliance with all Environmental Laws, and all terms
and conditions of the required permits, licenses and authorizations, except
where a failure to comply will not result in a Material Adverse Effect, and
are also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in those laws or contained in any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder, except where a failure to comply will not result in a
Material Adverse Effect. Neither Park Place-Delaware nor any of its
Subsidiaries has received from any Person or Governmental Authority written
notice of any past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with
or prevent continued compliance except where the lack of such continued
compliance would not have a Material Adverse Effect, or which may give rise
to any liability, or otherwise form the basis of any claim, action, suit,
proceeding, hearing or investigation reasonably expected to have a Material
Adverse Effect, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or
the emission, discharge, release or threatened release into the environment,
of any pollutant, contaminant, or hazardous or toxic material or waste.
Neither Park Place-Delaware nor any of its Subsidiaries are aware of any
past, present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or prevent
continued substantial compliance in a way that would reasonably be expected
to have a Material Adverse Effect, or which may give rise to any liability,
or otherwise form the basis of any claim, action, suit, proceeding, hearing
or investigation reasonably expected to have a Material Adverse Effect,
based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the emission,
discharge, release or threatened release into the environment, of any
pollutant, contaminant, or hazardous or toxic material or waste.
SECTION 3.17. Burdensome Restrictions. Except as reflected on
Schedule 3.17, the Borrower and Guarantors are not subject to any Burdensome
Restriction or Potential Default under any material contract to which they
are a party.
SECTION 3.18. Projections; Budgets. All of the projections and
budgets submitted to the Banks by the Borrower and/or each Guarantor were
prepared and submitted in good faith.
SECTION 3.19. Compliance with Laws. The Borrower and each of the
Guarantors is in compliance with all laws including, without limitation, all
tax laws, Environmental Laws and ERISA except (a) where noncompliance would
not have a Material Adverse Effect, or (b) such compliance is being
contested under Article 10 of the Mortgage.
SECTION 3.20. Intellectual Property. The Borrower and each of the
Guarantors has the right to use its Intellectual Property. No claim has
been asserted and is pending by any Person challenging or questioning the
use of any such Intellectual Property or the validity or effectiveness of
such Intellectual Property, nor does it know of any valid basis for any such
claim. To its knowledge, the use of such Intellectual Property does not
infringe on the rights of any Person.
SECTION 3.21 Labor Matters. Except as set forth on Schedule 3.21(a)
attached hereto, neither the Borrower nor any Guarantor is a party to any
labor union or collective bargaining agreements. The Borrower and each
Guarantor are in compliance with all applicable laws respecting employment
and employment practices, including, without limitation, laws, regulations,
and judicial and administrative decisions relating to wages, hours,
conditions of work, collective bargaining, health and safety, payment of
social security, payroll, withholding and other Taxes, worker's
compensation, insurance requirements, as well as requirements of ERISA and
the Consolidated Omnibus Budget Reconciliation Act, except to the extent
that noncompliance would not have a Material Adverse Effect on the business,
operations or financial condition of the Borrower or the Borrower and the
Guarantor taken as a whole. Except as disclosed on Schedule 3.21(b),
hereto, there are no (a) unfair labor practice complaints pending or, to the
best knowledge of the Borrower or any Guarantor, threatened against the
Borrower or a Guarantor before the National Labor Relations Board or any
court nor any pending or, to the best knowledge of the Borrower or any
Guarantor, threatened sexual harassment or wrongful discharge claims which
could result in a cessation of the operations of the Borrower, (b) labor
strike, dispute, slowdown, or stoppage pending or, to the best knowledge of
the Borrower or any Guarantor, threatened against the Borrower or a
Guarantor which could result in a cessation of the operations of the
Borrower, or (c) representation or petition, respecting the employees of the
Borrower or a Guarantor filed or threatened to be filed with the National
Labor Relations Board which could reasonably be expected to have a Material
Adverse Effect.
SECTION 3.22. Brokerage Commissions. Except for fees paid to the
Banks hereunder, no Person is entitled to receive from the Borrower or any
Guarantor any brokerage commission, finder's fee or similar fee or payment
in connection with the consummation of the transactions contemplated by this
Agreement. No brokerage or other fee, commission or compensation is to be
paid by the Banks by reason of any act, alleged act or omission of the
Borrower or any Guarantor with respect to the transactions contemplated
hereby.
SECTION 3.23. Investment Company Act. Neither Park Place-Delaware nor
any of its Subsidiaries is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 3.24. Intangible Assets. The book value of intangible assets
of Park Place-Delaware and its Subsidiaries as of the September 30, 1995
does not exceed $13,000,000. No event has occurred between September 30 and
the Closing Date which would cause any material intangible assets to be
added to the balance sheet of Park Place-Delaware and its Subsidiaries.
SECTION 3.25. Restricted Payments. Except as listed on Schedule 3.25,
neither Park Place-Delaware nor any of its Subsidiaries have made any
Restricted Payments between September 30, 1995 and the Closing Date.<PAGE>
ARTICLE IV
AFFIRMATIVE COVENANTS
So long as any amount due any Bank hereunder remains unpaid, or any
Bank shall have any Commitment hereunder, Park Place-Delaware and its
Subsidiaries on a Consolidated basis or the Borrower shall comply with the
following affirmative covenants:
SECTION 4.01. Consolidated Net Worth. Park Place-Delaware and its
Subsidiaries, on a Consolidated basis, shall maintain at all times a Net
Worth of not less than (a) $15,000,000 during the period from the Closing
Date to September 29, 1996, (b) $25,000,000 from September 30, 1996 to June
29, 1997, (c) $40,000,000 from June 30, 1997 to December 30, 1997, (d)
$55,000,000 from December 31, 1997 to June 29, 1998, and (e) $75,000,000 on
and after June 30, 1998.
SECTION 4.02. Consolidated Interest Coverage Ratio. Park Place-Delaware
and its Subsidiaries, on a Consolidated basis, shall have an
Interest Coverage Ratio of not less than 2.0 to 1 as of the end of each
Fiscal Quarter, commencing with the Fiscal Quarter ending December 31, 1995,
calculated for the four (4) Fiscal Quarters then ending.
SECTION 4.03. Consolidated Funded Debt Ratio. Park Place-Delaware and
its Subsidiaries, on a Consolidated basis, shall have at the end of each
Fiscal Quarter a Funded Debt Ratio of not more than (a) 4.0 to 1 through
June 30, 1997; (b) 3.25 to 1 from September 30, 1997 through December 31,
1997; and (c) 3.0 to 1 thereafter.
SECTION 4.04. Financial and Other Information. The Borrower and each
of the Guarantors will furnish to the Banks the following information and
notices:
(a) as soon as available, but in any event within 60 days after
the end of the first three Fiscal Quarters of each Fiscal Year, unaudited
quarterly Consolidated financial statements of Park Place-Delaware and its
Subsidiaries certified by the CFO of Park Place-Delaware;
(b) as soon as available, but in any event within 120 days after
the end of each Fiscal Year, (i) annual audited Consolidated financial
statements of Park Place-Delaware and its Subsidiaries accompanied by an
Unqualified Opinion, and (ii) unaudited Consolidating financial statements
of Park Place-Delaware and its Subsidiaries certified by the CFO of Park
Place-Delaware;
(c) with the annual audited Consolidated financial statements,
commencing with respect to the period ending December 31, 1995,
certificates, substantially in the form attached as Exhibits 4.04(c)-1 and
4.04(c)-2, of the Independent Certified Public Accountants;
(d) no later than 30 days after delivery of the annual audited
financial statements referred to above, a management letter executed and
delivered by the Independent Certified Public Accountants reporting on such
financial statements or a letter stating that there was no management letter
by such accountants;
(e) concurrently with the delivery of the quarterly financial
statements referred to above, a quarterly Compliance Certificate of the CFO
of Park Place-Delaware stating that no Potential Default or Event of Default
under the Loan Documents is in existence except as specified in such
certificate, and setting forth in reasonable detail the calculations
pursuant to which compliance with financial covenants was determined;
(f) within 5 days following their filing, copies of all documents
filed with the Securities and Exchange Commission by Park Place-Delaware or
the Borrower;
(g) promptly after approval by the Board of Directors of Park
Place-Delaware, annual budgets, projections and forecasts with assumptions
prepared by the Borrower or Park Place-Delaware, or any changes or
adjustments to any such budgets, projections, forecasts or assumptions if
submitted to the Board of Directors of Park Place-Delaware; and
(h) within 30 days following the end of each month a report on
the progress of the construction of the New Casino Facility including (i)
the cost of all completed improvements; (ii) the amount paid to contractors
and suppliers in connection with such completed improvements or otherwise;
(iii) an estimate of the cost of completing the New Casino Facility, and
(iv) any material adverse events that have occurred with respect to the
construction of the New Casino Facility. The obligation to provide the
report described in Section 4.04(h) shall expire upon the completion of the
New Casino Facility.
SECTION 4.05. Reports. The Borrower and each Guarantor will furnish
to the Banks:
(a) as soon as practical and in any event within 5 Business Days
after a Responsible Officer becomes aware of the occurrence of any Potential
Default or Event of Default, a written statement by the CEO or CFO of the
Borrower or Guarantors setting forth details of such default, stating
whether or not the same is continuing and, if so, the action that the
Borrower or Guarantors propose to take with respect thereto;
(b) as soon as practical and in any event within five (5)
Business Days after a Responsible Officer receives knowledge thereof, notice
in writing of all actions, investigations, suits and proceedings before any
court, governmental department, commission, board, bureau, agency,
instrumentality, or other Governmental Authority, domestic or foreign,
affecting the Borrower or either Guarantor that could reasonably be expected
to have a Material Adverse Effect;
(c) as soon as practical and in any event within five (5)
Business Days after a Responsible Officer knows or has reason to know that
any Reportable Event has occurred with respect to any Plan, a written
statement by its CEO or CFO setting forth details of the Reportable Event
and indicating what action, if any, the Borrower or Guarantors propose to
take with respect thereto, together with a copy of any required notice of
such Reportable Event to the Pension Benefit Guaranty Corporation;
(d) as soon as practical and in any event within five (5)
Business Days after a Responsible Officer becomes aware of the occurrence
of a change or event concerning the Borrower or either Guarantor that has
or could reasonably be expected to have a Material Adverse Effect, a
statement from its CEO or CFO setting forth the details of such change or
event and the action that it proposes to take with respect thereto;
(e) as soon as practical and in any event within one (1) Business
Day after a Responsible Officer receives knowledge thereof, notice in
writing of the revocation, suspension or loss of any of its Gaming Licenses;
(f) as soon as practical and in any event within five (5)
Business Days after a Responsible Officer learns of any labor dispute that
could reasonably be expected to have a Material Adverse Effect or the
termination, prior to scheduled expiration, of any collective bargaining
agreement or labor contract to which Park Place-Delaware or its Subsidiaries
is a party or by which one or all of them is bound; and
(g) as soon as practical, such other information respecting its
business, properties, operations, conditions (financial or otherwise) or
prospects as the Banks may at any time and from time to time reasonably
request be furnished to them.
SECTION 4.06. Insurance. Borrower and each of the Guarantors will
maintain the following insurance:
(a) at all times, "All-Risk" fire and hazard insurance in an
amount of at least the full replacement value of the Collateral and
otherwise on terms customary in the casino industry and naming the Agent as
loss payee as its interest may appear under a standard mortgagee endorsement
clause;
(b) at all times, commercial liability insurance (broad form)
covering injury and damage to Persons and property in amounts and on terms
customary in the casino industry and naming the Banks as an additional
insured as their interests may appear;
(c) at all times, flood insurance in an amount equal to the
maximum available amount under the Federal Flood Insurance Program;
(d) during the period of any construction on the New Casino
Facility or the Existing Casino Facility, full extended coverage casualty
insurance written on the standard "Builder's Risk Completed Value" form
(non-reporting full coverage in an amount satisfactory to the Banks); and
(d) at all times, such other insurance as may be from time to
time customary in the casino industry.
All such insurance policies will include a provision that such policy will
not be canceled, altered or in any way limited in coverage or reduced in
amount unless the Banks are notified in writing at least thirty (30) days
prior to such change. Each insurance policy will be written by insurance
companies authorized or licensed to do business in the New Jersey, having
an Alfred M. Best Company, Inc. rating of A or higher and a financial size
category of not less than VII.
SECTION 4.07. Taxes. Borrower and each of the Guarantors will pay
when due all Taxes, assessments and charges imposed upon them or their
respective properties or that they are required to withhold and pay over,
except where the same are being contested in good faith and adequate
reserves have been set aside, which do not result in any Liens other than
Permitted Liens.
SECTION 4.08. Compliance with Laws. Borrower and each of the
Guarantors will comply with all Requirements of Law, including without
limitation, all Tax laws, Environmental Laws and ERISA, except where the
lack of such compliance would not have a Material Adverse Effect.
SECTION 4.09. Inspection of Property; Books and Records; Discussions.
Borrower and each of the Guarantors will keep proper books and records of
accounts in which full, true and correct entries in conformity with GAAP and
all Requirements of Law shall be made of all dealings and transactions in
relation to its businesses and activities. Borrower and each of the
Guarantors shall permit the Banks, upon reasonable notice from the Banks or
their representatives (a) to visit and inspect any of its properties and
examine and make abstracts from any of its books and records during normal
business hours, as often as may reasonably be desired, (b) to discuss its
business, operations, properties, financial and other conditions with its
CEO, CFO and such other officers and employees as the Banks may from time
to time reasonably request, (c) to discuss its affairs with the Borrowers'
Independent Certified Public Accountants together with the Borrower's CEO
or CFO; provided, however, that if a Potential Default exists or an Event
of Default has been declared, the Banks shall not be required to provide
notice to carry out the activities set forth above in (a), (b) and (c). Any
inspection conducted by the Banks shall not relieve the Borrower or the
Guarantors of any obligation to provide any notices required under the terms
of this Agreement or any of the Loan Documents.
SECTION 4.10. ERISA. The Borrower and each Guarantor will comply with
the provisions of ERISA and the Code with respect to each Plan, except where
the lack of such compliance would not have a Material Adverse Effect.
SECTION 4.11. Preservation of Corporate Existence, Etc. The Borrower
and each Guarantor will preserve and maintain its corporate existence, good
standing and compliance with its certificate of incorporation, by-laws and
other corporate documents executed by the Borrower or any of the Guarantors.
SECTION 4.12. Maintaining Ownership of Properties. The Borrower and
each Guarantor will maintain or cause to be maintained in all material
respects in good repair and working order and condition, excepting ordinary
wear and tear, or make diligent efforts to repair, as the case may be, all
of its properties material to its operations, will make or cause to be made
in all material respects all appropriate repairs, renewals and replacements
thereof, consistent with past practice.
SECTION 4.13. Maintenance of Licenses, Permits, etc. The Borrower and
each Guarantor shall maintain in full force and effect all licenses,
permits, governmental approvals, franchises, authorizations or other rights
necessary for the operation of its business, except where the failure to
maintain any of the foregoing would not have a Material Adverse Effect.
SECTION 4.14. Further Assurances. At any time and from time to time
on or after the date of this Agreement, upon the reasonable request of a
Bank, the Borrower or any Guarantor will do, execute, acknowledge, and
deliver or cause to be done, executed, acknowledged, and delivered all such
further instruments, acts, deeds, and assurances as may be reasonably
required by a Bank for the purpose of carrying out the provisions and intent
of the Loan Documents.
SECTION 4.15. Use of Proceeds. The Borrower shall use the proceeds
of the Loans for general corporate purposes including expenses of
construction for the New Casino Facility.<PAGE>
ARTICLE V
NEGATIVE COVENANTS
So long as any amount due any Bank hereunder remains unpaid, or any
Bank shall have any Commitment hereunder, the Borrower, the Guarantors and
each of them shall, and shall cause their Subsidiaries to comply with the
following negative covenants:
SECTION 5.01. Limitation on Restricted Payments. Restricted Payments
made after the date hereof shall not exceed an amount equal to fifty percent
(50%) of the sum of (a) Net Income of Park Place-Delaware and its
Subsidiaries on a Consolidated basis earned after September 30, 1995, plus
(b) any extraordinary loss reflected in such Net Income amount, minus (c)
any extraordinary gain reflected in such Net Income amount.
SECTION 5.02. Limitation on Liens. Park Place-Delaware and its
Subsidiaries will not incur, create, assume or permit to exist any Liens
except Permitted Liens, provided that in the event that a Lien other than
a Permitted Lien should exist (a) which Lien does not have a Material
Adverse Effect, and (b) is other than as a result of the intentional acts
of Park Place- Delaware or its Subsidiaries, such party shall have thirty
(30) days after the receipt of written notice from one or more of the Banks
to remove such Lien.
SECTION 5.03. Limitation on Indebtedness. Park Place-Delaware and its
Subsidiaries will not create, incur, assume or permit to exist any
Indebtedness except Permitted Indebtedness.
SECTION 5.04. Limitation on Investments. Park Place-Delaware and its
Subsidiaries will not make any Investments other than Permitted Investments.
SECTION 5.05. Limitation on Contingent Liabilities. Park Place-
Delaware and its Subsidiaries will not be nor become responsible for any
Contingent Liabilities except for (a) Contingent Liabilities which in the
aggregate total $500,000 or less, (b) Contingent Liabilities listed in
Schedule 3.06, and (c) guaranties of the obligations of the Borrower's
Subsidiaries and Affiliates which, when added to aggregate investments in
Subsidiaries and Affiliates as permitted under clause (o) of the definition
of Permitted Investments, do not in the aggregate exceed $25,000,000.
SECTION 5.06. Limitation on Mergers; Sale of Assets. Park Place-
Delaware, and its Subsidiaries will not (a) consolidate with or be a party
to a merger with any other Person, (b) purchase all or substantially all of
the assets of any Person, (c) purchase stock in any Person, (d) create,
acquire or have any Subsidiaries other than those listed on Schedule 5.06,
or (e) sell, lease or otherwise dispose of all or any substantial part of
its assets.
SECTION 5.07. Limitation on Change of Nature of Business. Park Place-
Delaware and its Subsidiaries will not make any material change in the
nature of their businesses as conducted on the date of this Agreement.
SECTION 5.08. Regulation U.
(a) Borrower will not use the proceeds of the Loans to purchase
or carry any Margin Stock.
(b) Borrower will not engage in the business of making loans to
purchase or carry Margin Stock.
(c) No more than twenty-five (25%) percent of the Borrower's
assets will consist of Margin Stock.
SECTION 5.09. Transactions with Affiliates. Subject to compliance
with the other terms and conditions of this Agreement and except for (a)
Permitted Investments, (b) the payment of reasonable and customary fees to
the directors of the Park Place-Delaware and its Subsidiaries, (c) loans and
advances to and other employment arrangements with any officer or employee
of the Park Place-Delaware or its Subsidiaries, (d) transactions with
Affiliates in effect on the Closing Date or listed on Schedule 5.09, Park
Place-Delaware and its Subsidiaries will not enter into any transaction
(whether constituting a loan, lease, financing, sale or otherwise) with an
Affiliate, unless such transaction occurs in the ordinary course of business
and upon terms and conditions which are not materially less favorable to it
than other comparable arms length transactions between it and a Person other
than an Affiliate.
SECTION 5.10. Limitation on Long-Term Leases; Sale and Lease-Back
Transactions. Except for the transactions listed on Schedule 5.10, attached
hereto, and leases of retail shops, Park Place-Delaware and its Subsidiaries
will not (a) become obligated as lessee or otherwise under any Long-Term
Lease; and (b) enter into any arrangement with any Person providing for the
leasing of any real or personal property, which property has been or is to
be sold or transferred by it to such Person.
SECTION 5.11. Amendment of Articles of Incorporation or By-Laws. The
Borrower and each Guarantor shall not amend, modify or supplement their
respective articles of incorporation or By-Laws, except upon at least ten
(10) days prior express written notice to the Banks.
SECTION 5.12. ERISA. Neither Park Place-Delaware nor any of its
Subsidiaries shall permit any of its ERISA Affiliates to do any of the
following to the extent that such act or failure to act would result in the
aggregate, after taking into account any other such acts or failure to act
except where the lack of such compliance would not have a Material Adverse
Effect:
(a) Engage, or permit an ERISA Affiliate to engage in any
Prohibited Transaction for which a statutory or class exemption is not
available or a private exemption has not been obtained from the United
States Department of Labor;
(b) Permit to exist any accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived;
(c) Fail, or permit an ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any waived
funding deficiency to any Plan;
(d) Terminate, or permit an ERISA Affiliate to terminate, any
benefit Plan which would result in any liability of Park Place-Delaware and
its Subsidiaries or an ERISA Affiliate under Title IV of ERISA; or
(e) Fail, or permit any ERISA Affiliate to fail, to pay any
required installment under section (m) of Section 412 of the Code or any
other payment required under Section 412 of the Code on or before the due
date for such installment or other payment.
SECTION 5.13. Maintenance of Property. Except for construction of the
New Casino Facility, Park Place-Delaware and its Subsidiaries will not
demolish, destroy, replace or build any major structures without the prior
written consent of the Banks.
SECTION 5.14. Amendment to Indenture. Park Place-Delaware and its
Subsidiaries will not amend the Indenture.
SECTION 5.15. No Additional Intangible Assets. After the Closing Date
Park Place-Delaware and its Subsidiaries will not engage in any transaction
which would cause the addition of intangible assets to their balance sheets;
provided that notwithstanding the foregoing, Park Place-Delaware may make
any investment permitted under clause (o) of the definition of Permitted
Investment even though such investment results in the addition of intangible
assets to their balance sheets so long as the amount of additional
intangible assets added to its consolidated balance sheet does not exceed
an aggregate amount of $5,000,000.<PAGE>
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. Each of the following shall be an
Event of Default:
(a) Borrower shall fail to make any payment or payments of
principal under this Agreement on the date when any such payment becomes due
and payable.
(b) Borrower shall fail to make any payment or payments of
interest under this Agreement within two (2) Business Days after the date
when any such payment may become due and payable.
(c) Any representation or warranty made in the Loan Documents or
in any certificate, agreement, affidavit, instrument, statement, opinion or
report of the Borrower or any Guarantor contemplated hereby or made or
delivered pursuant hereto or in connection herewith, shall prove to have
been incorrect in any material respect on or as of the date made or deemed
made pursuant to Section 2.14.
(d) There shall be a default in the observance or performance of
any agreement contained in Article V of this Agreement.
(e) There shall be a default in the observance or performance of
any covenant in this Agreement or any Loan Document other than as provided
for in paragraphs (a) through (d) of this Section 6.01, and such default
shall continue unremedied for a period of thirty (30) days.
(f) Park Place-Delaware or any of its Subsidiaries shall fail to
pay any obligation for the repayment of borrowed money or the installment
purchase price of property, or any interest or premium thereon, when due
(taking into account any applicable grace periods), in an aggregate amount
in excess of $250,000, whether such obligation shall become due by scheduled
maturity, by required prepayment, by acceleration, by demand or otherwise,
except if and so long as such party shall in good faith dispute such
obligation and provide suitable financial assurance demonstrating its
ability to meet such obligation.
(g) There has been an event of default under the Indenture and
the Trustee has made a declaration of acceleration under the terms of the
Indenture.
(h) Bally Entertainment ceases to own or control, directly or
indirectly, a majority of the voting securities of Park Place-Delaware.
(I) Park Place-Delaware ceases to own or control a majority of
the voting securities of the Borrower.
(j) (i) Park Place-Delaware or any of its Subsidiaries commence
any case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or Park Place-Delaware or its Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against Park Place-Delaware or any of its
Subsidiaries any case, proceeding or other action of a nature referred to
in clause (i) above which shall not have been vacated or discharged within
sixty (60) days from the commencement thereof; or (iii) there shall be
commenced against Park Place-Delaware or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within sixty (60) days from the entry thereof; or (iv) the Board of
Directors of Park Place-Delaware or any of its Subsidiaries shall pass any
resolution in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) Park Place-Delaware or any of its Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due.
(k) (i) Park Place-Delaware or any ERISA Affiliate shall engage
in any Prohibited Transaction involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) shall exist with
respect to any Plan, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed to administer or to terminate, any single employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Banks, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any single
employer Plan shall terminate for purposes of Title IV of ERISA, (v) Park
Place-Delaware, any of its Subsidiaries or any ERISA Affiliate shall, or in
the reasonable opinion of the Banks is likely to, incur any liability in
connection with a withdrawal from, or the insolvency or reorganization of,
a multiemployer Plan or (vi) any other event or condition shall occur or
exist, with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material Adverse
Effect.
(l) One or more judgments or decrees shall be entered against
Park Place-Delaware and any of its Subsidiaries involving in the aggregate
a liability (not paid when due) in excess of $1,000,000, unless such
judgments or decrees are fully covered by insurance, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within thirty (30) days from the entry thereof.
(m) The casino license held by Borrower is suspended, revoked or
not renewed, unless the Borrower regains its license within seven (7) days
of the date of such suspension, revocation or non-renewal or the Casino
Control Commission appoints a conservator with respect to the operation of
the Casino Hotel.
(n) Park Place-Delaware or any of its Subsidiaries contest the
validity of the any of the Loan Documents or the extent and priority of the
liens granted in favor of the Banks.
SECTION 6.02. Suspension of Commitment. If a Potential Default or
Event of Default shall occur, the obligation of the Banks to make Loans
shall be immediately suspended without notice to the Borrower, but is
subject to reinstatement (a) if the Potential Default is cured within any
applicable cure period, or (b) if the Event of Default is cured.
SECTION 6.03. Termination of Commitments; Acceleration. If an Event
of Default shall occur and be continuing, the Agent may, and at the
direction of the Required Banks the Agent shall, by notice to Borrower:
(a) declare the Commitments to be terminated, whereupon the
Commitments and the obligations of Banks to make disbursements of Loans
shall be immediately and permanently terminated; and
(b) declare the entire unpaid principal amount of the Loans, all
interest accrued and unpaid thereon and all other amounts payable hereunder
and under the other Loan Documents to be forthwith due and payable,
whereupon (i) the entire unpaid principal amount of the Loans, all interest
accrued and unpaid thereon and all other amounts payable hereunder and under
the other Loan Documents shall be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by Borrower, and (ii) and <PAGE>
the Borrower shall
immediately be obligated pay to the Issuing Bank an
amount equal to its Letter of Credit Obligations to be held as cash
collateral pending any draw on or termination of the Letters of Credit,
provided however, even if there is no notice to the Borrower, the occurrence
of the events described in Subsection 6.01(j) shall result in an immediate
termination of the Commitments of the Banks and an immediate acceleration
of all amounts due by the Borrower under the Notes.
SECTION 6.04. Default Rate of Interest. If an Event of Default occurs
and continues, interest on all amounts due under the Notes shall accrue at
a rate equal to the Prime Rate plus three percent (3%).
SECTION 6.05. Remedies Not Exclusive. The remedies provided herein
in this Article and in the other Loan Documents are cumulative and not
exclusive of any remedies provided by law. Each Bank is entitled to
exercise any remedies simultaneously or in whatever order the Bank deems
appropriate. The exercise of remedies by each Bank against the Collateral
is subject to the terms of the Intercreditor Agreement.
SECTION 6.06. Set-Off. Each Bank shall have a right of setoff
against, a Lien upon and a security interest in all property of Borrower and
Guarantors now or at any time in the possession of the Bank in any capacity
whatever, including, but not limited to, interests in any deposit account,
as security for all liabilities of Borrower and Guarantors to the Bank.
SECTION 6.07 Rights Under Loan Documents. Upon the occurrence and
during the continuance of any Event of Default, the Banks may take any
lawful action against the Borrower or any Guarantor to collect the payments
then due and thereafter to become due under the Loan Documents.<PAGE>
ARTICLE VII
GUARANTY
SECTION 7.01 The Guaranteed Obligations.
(a) Each Guarantor hereby irrevocably, unconditionally and
absolutely guaranties, jointly and severally, to each Bank and their
successors, endorsees and assigns, (i) the prompt payment when due, whether
at maturity or upon earlier acceleration, by the Borrower to the Banks of
all Indebtedness, obligations and liabilities of any kind and nature arising
under or in connection with this Agreement and the Loan Documents, whether
primary or secondary, direct or indirect, absolute or contingent, sole,
joint or several, secured or unsecured; and (ii) the prompt and complete
compliance with and performance by the Borrower of all covenants,
agreements, indemnities and other obligations of the Borrower to the Banks
under the terms of the Loan Documents. The payment, compliance and
performance obligations hereinabove guaranteed by the Guarantor are
hereinafter collectively referred to as the "Guaranteed Obligations".
(b) The obligation of each Guarantor shall constitute an absolute
and unconditional undertaking by such Guarantor with respect to the payment
and performance of the Guaranteed Obligations by the Borrower. The
liability of the Guarantor shall be direct, joint and several with that of
any other guarantor for the Loans (to the extent of such other guarantor's
or guarantors' liability for the Guaranteed Obligations), and may be
enforced without the Banks being required to resort to any other right,
remedy or security. This Agreement shall be enforceable against the
Guarantor, its successors and assigns, without the necessity of any notice
(i) of acceptance of this Agreement or of the Banks' intention to act in
reliance hereon, or (ii) of any loan to or other transaction between the
Banks and the Borrower, or (iii) of any default by the Borrower, all of
which the Guarantor hereby expressly waives.
SECTION 7.02 Further Undertakings.
(a) The Guarantors expressly:
(I) agree that the validity of their obligation shall in
no way be terminated, affected or impaired by reason of the assertion of or
the failure to assert by the Banks, or their successors or assigns, any of
the rights or remedies reserved pursuant to the Loan Documents or otherwise
available to the Banks at law or in equity;
(ii) waive any right which they might otherwise have under
any statute, rule of law or practice or custom to require them to take any
action against the Borrower or to proceed against or exhaust any security
before proceeding against either Guarantor;
(iii) waive any notice of (x) any presentment, demand,
protest, notice of protest, notice of dishonor, notices of default and all
other notices with respect to any of the Guaranteed Obligations except as
expressly set forth in the Loan Documents, and (y) the commencement or
prosecution of any enforcement proceeding, including any proceeding in any
court, against either of the Borrower or any other person or entity with
respect to any of the Guaranteed Obligations;
(iv) agree that any failure by any Bank to exercise any
right hereunder shall not be construed as a waiver of the right to exercise
the same or any other right at any other time and from time to time
thereafter;
(v) waive the defense of any statute of limitation
affecting the obligation of each Guarantor hereunder or the enforcement
thereof, to the extent permitted by law;
(vi) waive any right to require any Bank to advise the
Guarantor of any information known to the Banks regarding the financial
condition of the Borrower (it being agreed that the Guarantor assumes the
responsibility for being and keeping informed regarding such condition);
(vii) waive any defense arising by reason of any election by
the Banks pursuant to Section 1111(b)(2) of the United States Bankruptcy
Code or any similar or successor section or based upon any borrowing or
grant of a security interest under Section 364 of such Code or any similar
or successor section; and
(viii) agree to pay any Bank on demand all costs and expenses
(including reasonable counsel fees and reasonable expenses) incurred by any
Bank in the administration, amendment, enforcement or collection of any of
the Guaranteed Obligations under this Agreement, including such costs,
expenses and fees incurred after as well as before the entry of any
judgment.
(b) Until all of the Guaranteed Obligations are indefeasibly paid
in full and each Bank and each and every one of the terms, covenants, and
conditions of this Agreement are fully performed, the liability of the
Guarantors hereunder shall not be released, discharged or in any way
impaired by:
(I) any amendment or modification of or supplement to or
extension or renewal of the Notes or any other Loan Document or any
agreements between the Banks and any other guarantor with respect to the
Guaranteed Obligations;
(ii) any exercise or non-exercise by any Bank of any right,
power, remedy or privilege under or with respect to the Notes or any other
Loan Document or this Agreement or any waiver, consent or approval by any
Bank with respect to any of the covenants, terms, conditions or agreements
contained in the Notes or any other Loan Document, or any indulgence,
forbearance or extension of time for performance or observance allowed to
the Borrower from time to time and for any length of time;
(iii) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or similar proceeding
relating to the Borrower or its successors, assigns, properties or
creditors; or
(iv) any act or circumstances which might, but for the terms
and provisions of this Section, be deemed a legal or equitable discharge of
such Guarantor.
(c) Each Guarantor hereby expressly waives and surrenders any
defenses to such Guarantor's liability hereunder based upon any of the
foregoing acts, omissions, agreements, or waivers of any Bank, it being the
purpose and intent of this Agreement that the obligations of the Guarantor
hereunder be absolute and unconditional.
(d) Each Guarantor hereby further agrees and consents that any
Bank may, without affecting the liability of such Guarantor hereunder:
(i) exchange or surrender any property pledged by the
Borrower or any other guarantor or accept additional security for the
Guaranteed Obligations;
(ii) renew and change the terms of any of the liabilities of
the Borrower;
(iii) waive any Bank's rights or remedies against the Borrower
or any other guarantor or surety for the above liabilities;
(iv) release, substitute or add any one or more guarantors
or sureties; or
(v) proceed against either Guarantor without first resorting
to, utilizing or invoking the remedies available against the Borrower or the
other Guarantor under the Loan Documents whether at law or in equity.
The Banks shall not be obligated to marshall remedies or assets as a
condition to enforcing the liabilities incurred hereunder against the
Guarantors. The liability of the Guarantors hereunder shall be in addition
to that stated in any other guaranty agreement, if any, heretofore or
hereafter delivered by any other Person to the Banks.
SECTION 7.03 Liabilities Not Affected.
(a) This Agreement shall be a continuing, absolute, and
unconditional guarantee regardless of the validity, regularity,
enforceability, or legality of:
(i) any of the Guaranteed Obligations;
(ii) any Collateral or interest in Collateral that may secure
the Guaranteed Obligations; or
(iii) any term of any document evidencing or relating to any
of the Guaranteed Obligations, including, but not limited to, the Loan
Documents. In the event that for any reason one or more of the provisions
of this Agreement or their application to any Person or circumstance shall
be held to be invalid, illegal, or unenforceable in any respect or to any
extent, such provisions shall nevertheless remain valid, legal, and
enforceable in all other respects and to such extent as may be permissible,
and such invalidity, illegality, or unenforceability shall not affect any
other provision hereof. Any failure by any Bank to exercise any right
hereunder shall not be construed as a waiver of the right to exercise the
same or any other right at any other time and from time to time.
(b) Except to the extent that the following is prohibited by
statute or case law, no exercise or non-exercise by any Bank of any rights
given the Banks under the Loan Documents, no dealing by the Banks with the
Guarantor or any other guarantor, the Borrower or any other Person, and no
change, impairment, release or suspension of any right or remedy of the
Banks against any Person or entity, including the Borrower and any other
guarantor, shall in any way affect any of the obligations of the Guarantor
hereunder or any security furnished by Guarantor, give the Guarantor any
recourse or offset against the Banks or be construed as a waiver of the
right to exercise the same or any other right at any time and from time to
time thereafter.
(c) This Agreement and Guarantor's payment obligations hereunder
shall continue to be effective or be reinstated, as the case may be, if at
any time payment of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by any Bank, all as though such payments
had not been made. The good faith determination by any Bank as to whether
a payment must be restored or returned shall be binding on the Guarantor
provided that any Bank makes such restoration or return in accordance with
its determination.
SECTION 7.04. SUBROGATION AND CONTRIBUTION
EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE
AT ANY TIME (WHETHER ARISING DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW OR
CONTRACT) TO ASSERT ANY CLAIM AGAINST THE BORROWER OR ANY OTHER GUARANTOR
ON ACCOUNT OF PAYMENTS MADE UNDER THIS AGREEMENT, THE NOTES OR ANY OF THE
LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY AND ALL RIGHTS OF
SUBROGATION, REIMBURSEMENT, EXONERATION, CONTRIBUTION OR INDEMNITY.
<PAGE>
ARTICLE VIII
AGENT
SECTION 8.01. Appointment and Authorization. Each Bank hereby
irrevocably appoints and authorizes the Agent to take such action on its
behalf and to exercise such powers under this Agreement and the Loan
Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not
have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the Agent.
SECTION 8.02. General Immunity. In performing its duties as Agent
hereunder, the Agent will take the same care as it takes in connection with
loans in which it alone is interested. However, neither the Agent nor any
of its directors, officers, agents, attorneys, employees shall be liable for
any action taken or omitted to be taken by it or them hereunder or in
connection herewith except for its or their own gross negligence or willful
misconduct.
SECTION 8.03. Delegation of Duties; Consultation with Counsel. The
Agent may consult with legal counsel selected by it and shall not be liable
for any action taken or suffered in good faith by it in accordance with the
advice of such counsel. The Agent may execute any of its duties under this
Agreement or the Loan Documents by and through agents or attorneys-in-fact.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it.
SECTION 8.04. Documents. The Agent shall not be under a duty to
examine into or pass upon the effectiveness, genuineness or validity of this
Agreement or any of the Notes or any other instrument or document furnished
pursuant hereto or in connection herewith, and the Agent shall be entitled
to assume that the same are valid, effective and genuine and what they
purport to be.
SECTION 8.05. Rights as a Bank. With respect to its Commitment and
its portion of the Loan, the Agent shall have the same rights and powers
hereunder as any Bank and may exercise the same as though it were not the
Agent, and the terms "Bank" and "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. The Agent may
accept deposits from, lend money to and generally engage in any kind of
banking or trust business with Borrower and its affiliates as if it were not
the Agent.
SECTION 8.06. Responsibility of Agent. It is expressly understood and
agreed that the obligations of the Agent hereunder are only those expressly
set forth in this Agreement and that the Agent shall be entitled to assume
that no Event of Default, and no event that with notice or lapse of time or
both would, if unremedied, constitute an Event of Default, has occurred and
is continuing, unless the Agent has actual knowledge of such fact or has
received notice from a Bank that such Bank considers that an Event of
Default or such event has occurred and is continuing and specifying the
nature thereof.
SECTION 8.07. Action by Agent. So long as the Agent shall be
entitled, pursuant to Section 8.06 hereof, to assume that no Event of
Default, and no event that with notice or lapse of time or both would, if
unremedied, constitute an Event of Default, has occurred and is continuing,
the Agent shall be entitled to use its discretion with respect to exercising
or refraining from exercising any rights that may be vested in it by, or
with respect to taking or refraining from taking any action or actions that
it may be able to take under or in respect of, this Agreement. The Agent
shall incur no liability under or in respect of this Agreement by acting
upon any notice, consent, certificate, warranty or other paper or instrument
believed by it to be genuine or authentic or to be signed by the proper
party or parties, or with respect to anything that it may do or refrain from
doing in the reasonable exercise of its judgment, or that may seem to it to
be necessary or desirable under the circumstances.
SECTION 8.08. Notices of Event of Default, Etc. In the event that the
Agent or any Bank shall have acquired actual knowledge of any Event of
Default or Potential Default, the Agent or such other Bank shall promptly
give notice thereof to the Banks and the Agent. Upon receipt of such
notice, the Agent may, consistent with the terms of this Agreement, take
such action and assert such rights as it deems to be advisable in its
discretion for the protection of the interests of Banks.
SECTION 8.09. Indemnification. Banks agree to indemnify the Agent (to
the extent not reimbursed by Borrower), ratably according to the respective
amounts of their Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against the Agent in any way relating
to or arising out of this Agreement or any action taken or omitted by the
Agent under this Agreement, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Agent's gross negligence or willful misconduct.
SECTION 8.10. Non-Reliance on Agent and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representation or warranty to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Guarantors or the
Borrower, shall be deemed to constitute any representation or warranty by
the Agent to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent or any other Bank and
based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the
Guarantors and the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it
will, independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the Guarantors and Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of
the Guarantor or Borrower which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
SECTION 8.11 Successor Agent.
(a) The Agent may resign as Agent upon thirty (30) days notice to the
Borrower and the Banks. If the Agent shall so resign, then the Banks shall,
with the consent of the Borrower (which consent shall not be unreasonably
withheld) appoint a successor agent under this Agreement. Such successor
agent, upon acceptance of such appointment, shall succeed to the rights,
powers and duties of the Agent. If an Event of Default shall have occurred
and be continuing, then the consent of the Borrower to the appointment of
the successor agent shall not be required. Any successor agent shall be a
commercial bank. The Agent shall continue to serve as Agent until a
successor agent has been appointed and accepts such appointment. The term
"Agent" shall mean such successor agent effective upon its appointment, and
the former Agent's rights, power and duties as Agent shall be terminated,
without any further act or deed on the part of such former Agent or any of
the parties to this Agreement. The appointment of any successor agent shall
be subject to the approval by the Casino Control Commission as may be
required by law. Any former Agent shall continue to be entitled to the
benefit of Sections 9.02 and 8.09 hereof.
(b) The Agent may be removed at any time by a vote of Banks which
either (i) are obligated under more than sixty-six and two thirds percent
(66 2/3%) of the aggregate Commitments arising under this Agreement, or (ii)
hold more than sixty-six and two thirds percent (66 2/3%) of the aggregate
Loans outstanding under this Agreement. If the Agent shall be so removed,
then the Banks shall appoint a successor agent under this Agreement
whereupon such successor agent, upon acceptance of such appointment, shall
succeed to the rights, powers and duties of the Agent, the term "Agent"
shall mean such successor agent effective upon its appointment, and the
former Agent's rights, power and duties as Agent shall be terminated,
without any further act or deed on the part of such former Agent or any of
the parties to this Agreement. Any former Agent shall continue to be
entitled to the benefit of Sections 9.02 and 8.09 hereof.
SECTION 8.12 No Benefit. The provisions of this Article are for the
sole benefit of the Banks and shall not be enforceable by, or inure to the
benefit of, the Borrower, the Guarantors or any third Person.
<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendment or Waiver. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. With the prior written consent of the Required Banks, the Agent
and the Borrower may, from time to time, enter into written amendments,
supplements or modifications to the Loan Documents for the purpose of adding
any provisions or changing in any manner the rights of the Banks, the
Borrower or of the Guarantors hereunder or thereunder or waiving, on such
terms and conditions as the Agent may specify in such instrument, any of the
requirements of the Loan Documents or any Default or Event of Default and
its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall, in each case without the prior
written consent of all the Banks (a) (i) increase or decrease the Commitment
of any Bank (except for a ratable decrease in the Commitments of all of the
Banks), postpone the date for any payment hereunder or subject any Bank to
any additional obligation for reimbursement or indemnification, (ii) reduce
the principal of or rate of interest on any Loan or any fees hereunder, or
(iii) change the Commitment Percentages, or (b) (i) amend, modify or waive
any provision of this subsection, (ii) reduce the percentage specified in
the definition of Required Banks, (iii) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement or the other Loan Documents, (iv) consent to the release of any
of the collateral upon which Liens have been created pursuant to the Loan
Documents if the sale of such collateral is not permitted under the terms
of the Loan Documents, or (v) consent to the release of any guaranty, or (c)
amend, modify or waive any provision of Article VIII without the prior
written consent of the then Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Banks and
shall be binding upon the Borrower, the Banks, the Guarantors, the Agent and
all future holders of the Notes. In the case of any waiver, the Borrower,
the Banks, the Guarantors and the Agent shall be restored to their former
position and rights hereunder and under the outstanding Notes and any other
Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right
consequent thereon. No failure or delay on the part of any Bank in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power
or remedy preclude any other or further exercise thereof or the exercise of
any other right, power or remedy hereunder.
SECTION 9.02. Indemnification. The Borrower and the Guarantors
jointly and severally agree to defend, protect, indemnify, and hold harmless
the Indemnified Parties from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of
counsel for the Indemnified Parties in connection with any investigative,
administrative or judicial proceeding, whether or not the Indemnified
Parties shall be designated a party thereto), imposed on, incurred by, or
asserted against the Indemnified Parties (whether direct, indirect or
consequential and whether based on any Federal or state laws or other
statutory regulations, including, without limitation, securities and
commercial laws and regulations, under common law or at equitable cause, or
on contract or otherwise, including any liability and costs under Federal,
state or local Environmental Laws, health or safety laws, regulations, or
common law principles, arising from or in connection with the past, present
or future environmental condition of the Borrower or a Guarantor's real or
personal property, the presence of asbestos-containing materials thereon,
or the release or threatened release of any Environmental Concern Material
into the environment from such property) in any manner relating to or
arising out of this Agreement, or the other Loan Documents, or any act,
event or transaction related or attendant thereto, and the management of
such Loans, or the use or intended use of the proceeds of the Loans
hereunder excluding therefrom the costs and expenses relating to the routine
administration of the Loans and any matters relating to the participation
or assignment of the Loans by the Banks (collectively, the "Indemnified
Matters"): provided, however, that the Borrower and the Guarantors shall not
have any obligation to an Indemnified Party hereunder with respect to
Indemnified Matters caused by or resulting from the willful misconduct or
gross negligence of that Indemnified Party. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnified Parties.
SECTION 9.03. Notices. Unless this Agreement specifically provides
otherwise, all notices, requests, demands and other communications that this
Agreement requires or permits any party to give any other party shall be in
writing (including telecopy) and shall be given to such party at its address
or telecopy number specified on the signature pages of this Agreement or at
such other address or telecopy number as shall be designated by such party
in a notice to each other party complying with the terms of this Section.
Unless this Agreement specifically provides otherwise, all notices,
requests, demands and other communications provided for hereunder shall be
effective (a) if given by mail, when received, (b) if given by telecopy,
when such telecopy is transmitted to the aforesaid telecopy number and the
appropriate confirmation of receipt is received by the sender or (c) if
given by any other means permitted by this Agreement, when delivered orally
or in writing at the aforesaid address, except that notices from Borrower
to the Banks pursuant to any of the provisions of Article II shall not be
effective until received by the Banks.
SECTION 9.04. Costs and Expenses. Borrower agrees to pay on demand
(a) all reasonable out-of-pocket fees, costs and expenses of the Agent,
including without limitation, appraisal fees and the cost of environmental
studies, in connection with the preparation, execution, delivery, amendment,
supplement and administration of the Loan Documents and other instruments
and documents to be delivered hereunder, whether or not the transactions
referred to herein are ultimately consummated; (b) all reasonable costs and
expenses, if any, of the Agent and the Banks in connection with the
enforcement of the Loan Documents (including the reasonable fees and out-of-
pocket expenses of legal counsel with respect thereto).
SECTION 9.05. Obligations Several. The obligations of the Banks
hereunder are several and not joint. Nothing contained in this Agreement
and no action taken by any Bank pursuant hereto shall be deemed to
constitute the Banks a partnership, association, joint venture or other
entity.
SECTION 9.06. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement shall not be
effective until each of the Banks has received a copy of this Agreement
executed by all of the parties hereto.
SECTION 9.07 Assignments.
(a) The Borrower and the Guarantors shall not have the right to
assign their rights hereunder, any portion thereof, or any interest therein.
(b) Any Bank may at any time, without the approval of the
Borrower or the Guarantors, assign all or a portion of its Commitment and
outstanding Loans hereunder to any other entity that is a Bank under this
Agreement immediately prior to the time of the assignment. Upon acceptance
of the Commitment by the assignee, the assigning Bank shall be relieved of
any obligations to the Borrower or the Guarantors under the Loan Documents.
(c) Any Bank may at any time, with the prior written approval of
the Borrower and all the other Banks (which approval shall not to be
unreasonably withheld), assign all or a portion of its Commitment and/or
outstanding Loans hereunder; provided, that if an Event of Default has
occurred and is continuing, then the approval of the Borrower to any
assignment shall not be required. Upon the approval by the Borrower and the
other Banks, and the acceptance of the Commitment by the assignee, the
assigning Bank shall be relieved of any obligations to the Borrower or the
Guarantors under the Loan Documents with respect to the portion of its
Commitment so assigned.
(d) The Borrower may continue to make payments due hereunder to
and deal with the assigning Bank until the Borrower receives notice of the
assignment from the assigning Bank.
(e) Nothing herein shall prohibit any Bank from pledging or
assigning its Note to any Federal Reserve Bank in accordance with applicable
law.
All assignments shall be subject to the approval, if required, of the Casino
Control Commission or other applicable Government Authority.
SECTION 9.08. Participations. Each Bank may sell participations in
its Commitment and/or outstanding Loans hereunder to one or more other banks
(each a "Participant Bank") without the approval of the Borrower; provided
that (a) any agreement pursuant to which any Bank may grant such a
participation shall provide that such Bank shall retain the sole right and
responsibility to receive payments from, communicate with and enforce the
obligations of the Borrower under the Loan Documents including the right to
approve any amendment, modification or waiver of any provision except with
respect to any waiver that varies the maturity of, amount of, or interest
rate on such obligation, (b) such Bank shall notify the Borrower and the
other Bank promptly upon the sale by such Bank of a participation, and (c)
such Bank shall remain responsible to the Borrower for all of its
obligations hereunder. Sales of participations shall be subject to the
approval, if required of the Casino Control Commission. Each Participant
Bank shall be deemed to have a right of setoff in respect of its
participating interest in the amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly
to it as a Bank under this Agreement.
SECTION 9.09. Disproportionate Payments. If at any time, as the
result of receiving any payment on the Loans or exercising any rights
hereunder including any rights of setoff or otherwise, any Bank receives an
amount on account of its portion of the Loans in a proportion greater than
similar payments on account of the portions of the Loans held by the other
Banks, the Bank so receiving such greater proportionate payment will
purchase a participation in the portions of the Loans held by the other
Banks in such amount that after such purchase each Bank shall hold a
proportionate share in the aggregate outstanding principal balance of Loans
equal to its respective proportionate shares in the outstanding principal
balance of Loans before the disproportionate payment. If, however, any
payment on account of the Loans is rescinded or invalidated or must
otherwise be restored or returned by the recipient in a bankruptcy or
insolvency proceeding or otherwise, then any participations purchased as a
result of such payment will be rescinded.
SECTION 9.10 Waiver of Right to Punitive Damages. The Borrower, the
Guarantors, the Banks and the Agent waive any right to punitive damages
arising out of or related to any matter arising under or related to this
Agreement or the other Loan Documents.
SECTION 9.11. Governing Law. This Agreement, the Notes and the other
Loan Documents shall be governed by, and construed and interpreted in
accordance with, the law of the State of New Jersey.
SECTION 9.12. Headings. Article and Section headings used in this
Agreement are for convenience only and shall not affect the construction of
this Agreement.
SECTION 9.13. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect
in such jurisdiction and shall be liberally construed in favor of the Banks
in order to carry out the intentions of the parties hereto as nearly as may
be possible; and (b) the invalidity or enforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability
of such provision in any other jurisdiction.
SECTION 9.14. Confidential Information. Each Bank represents that it
will maintain the confidentiality of any written or oral information
provided under the Loan Documents by or on behalf of the Borrower or either
Guarantor that has been identified in writing by its source as confidential
(hereinafter collectively called "Confidential Information"), subject to
each Bank's (a) obligation to disclose any such Confidential Information
pursuant to a request or order under applicable laws and regulations or
pursuant to a subpoena or other legal process; (b) right to disclose any
such Confidential Information to its bank examiners, Affiliates, auditors,
counsel and other professional advisors to the Banks; (c) right to disclose
any such Confidential Information in connection with any litigation or
dispute involving the Banks and the Borrower or the Guarantors; and (d)
right to provide such information to Participant Banks or Assignees and
prospective Participant Banks or Assignees; provided that such parties
listed in this Subsection (d) shall have agreed in writing to be bound by
the within limitations. Notwithstanding the foregoing, any such information
supplied to a Bank, a Participant Bank or an Assignee under the Loan
Documents shall cease to be Confidential Information if it is or becomes
known to such Bank, Participant Bank or Assignee by other than unauthorized
disclosure, or if it becomes a matter of public knowledge.
SECTION 9.15. WAIVER OF TRIAL BY JURY. EACH OF THE GUARANTORS, THE
BORROWER, EACH BANK AND THE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE NOTES AND/OR ANY OF
THE OTHER LOAN DOCUMENTS. THIS WAIVER SHALL EXTEND TO ANY COUNTERCLAIMS,
CROSSCLAIMS OR THIRD PARTY COMPLAINTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of
the date first above written.
Address and Telecopier Nos.
BALLY'S PARK PLACE, INC., Park Place and the Boardwalk
a New Jersey corporation, Atlantic City, NJ 08401
Telecopier: 609-340-2647
By_________________________
Joseph A. D'Amato
Vice President
BALLY'S PARK PLACE, INC., Park Place and the Boardwalk
a Delaware corporation, Atlantic City, NJ 08401
Telecopier: 609-340-2647
By_________________________
Joseph A. D'Amato
Vice President
BALLY'S PARK PLACE REALTY CO., Park Place and the Boardwalk
a New Jersey corporation, Atlantic City, NJ 08401
Telecopier: 609-340-2647
By_________________________
Joseph A. D'Amato
Vice President
MIDLANTIC BANK, 6000 Midlantic Drive
NATIONAL ASSOCIATION PO Box 6000
Mt. Laurel, NJ 08504-6000
By_______________________ Telecopier: 609-778-2683
Peter J. Cahill Attention: Denise D. Killen
Senior Vice President
LASALLE NATIONAL BANK 120 S. LaSalle Street
Room 205
Chicago, Illinois 60603
By:________________________ Telecopier: 312-904-6469
Kristen L. Simko Attention: Kristen L. Simko
Commercial Banking Officer
FIRST UNION NATIONAL BANK 550 Broad Street
Newark, N.J. 07102
Telecopier: 201-565-6681
By:_________________________ Attention: Robert K. Strunk, II
Patrick McGovern
Vice President <PAGE>
SCHEDULE A
CERTAIN LIENS
The Liens listed in Scedule B of the Pro Forma Policy, Appl. No.
F-39165 and encumbrances as issued by First American Title Insurance Company
and delivered to the Agent on the Closing Date.
SCHEDULE 3.05
LITIGATION
The New Jersey Casino Control commission has scheduled a hearing
on the renewal of the casino license of the Borrower in June of 1996. A
ruling is expected on that date which would extend the license for the four-
year renewal term specified by statute through June of 2000.
SCHEDULE 3.06
INDEBTEDNESS AND CONTINGENT LIABILITIES
1. Guaranty of Employment Agreement $20,000,000
2. Guaranty of obligations of Bally's Casino,
Inc. to the holders of certain shares of
Preferred Stock of Bally's Casino, Inc. $10,000,000
SCHEDULE 3.16
ENVIRONMENTAL MATTERS
NONE
SCHEDULE 3.17
BURDENSOME RESTRICTIONS
1. Indenture dated as of March 8, 1994 among Bally's Park Place Funding,
Inc., a Delaware corporation ("Funding"), Bally's Park Place, Inc., a
Delaware corporation ("Bally's Park Place"), Bally's Park Place, Inc., a New
Jersey corporation ("Operating Co."), Bally's Park Place Realty Co., a New
Jersey corporation ("Realty Co.") and First Bank National Association, as
trustee ("First Bank").
2. Mortgage and Security Agreement with Assignment of Rents dated as of
March 8, 1994 among Operating Co., Realty Co., Funding and First Bank.
3. Intercreditor Agreement dated as of March 8, 1994 among First Fidelity
Bank, National Association and Midlantic National Bank, Bally's Park Place,
Realty Co., Funding and First Bank.
4. Assignment of Leases and Rents dated as of March 8, 1994 among Operating
Co., Realty Co. and First Bank.
5. Promissory Note dated March 8, 1994 in the original principal amount of
$425,000,000 made by Operating Co. in favor of Funding.
6. Note Pledge Agreement dated as of March 8, 1994 among Funding, Operating
Co. and First Bank.
SCHEDULE 3.21A
LABOR CONTRACTS
1. Agreement between Bally's Park Place, Inc. and Local 54 of the
International Union of Hotel Employees and Restaurant Employees (hotel and
restaurant employees) dated 09/15/94.
2. Agreement between Bally's Park Place, Inc. and Local 68 of the
International Union of Operating Engineers (plumbers and electricians) dated
04/30/92.
3. Agreement between Bally's Park Place, Inc. and Local 711 of the
Painters' District Council dated 04/30/92.
4. Agreement between Bally's Park Place, Inc. and Local 917 of the
International Alliance of Theatrical State Employees and Motion Picture
Machine Operators of the United States and Canada (stage hands) and Local
68A of the International Union of Operating Engineers (communications and
electronic technicians) dated 02/01/92.
5. Agreement between Bally's Park Place, Inc. and Local 623 of the
Carpenters' District Council of South Jersey (carpenters) dated 04/30/92.
6. Agreement between Bally's Park Place, Inc. and Local Union 277 of the
National Brotherhood of Painters and Allied Trades (painters) dated
04/30/92.
SCHEDULE 3.21B
LABOR DISPUTES
NONE
SCHEDULE 3.25
RESTRICTED PAYMENTS
November 30, 1995 $8,100,000 (Dividend by Borrower to Bally's Casino
Holdings, Inc.)
SCHEDULE 5.06
SUBSIDIARIES
Bally's Park Place, Inc. (DE)
Bally's Park Place
Funding, Inc. (DE
Bally's Park Place, Inc. (NJ)
B.W. Realty Corp. (NJ) Bally's Park Place Bally Warwick,
Realty Co. (NJ) Inc. (NJ)
SCHEDULE 5.09
TRANSACTIONS WITH AFFILIATES
SEE SCHEDULES 3.06 AND 5.10
SCHEDULE 5.10
LONG TERM LEASES
Leases existing on the date hereof with GNOC, Corp.*
* Portion of lease to be replaced with Ground Lease to be entered into
between Borrower and GNOC, Corp. for Lot 125, Block C26.
<PAGE>
Exhibit 2.02(a)
Form of Borrowing Notification
BORROWING NOTIFICATION
With respect to the Amended and Restated Credit and Guaranty Agreement
dated February 27, 1996 (the "Credit Agreement"), among the Bally's Park
Place, Inc., a New Jersey corporation, as borrower; Bally's Park Place,
Inc., a Delaware corporation and Bally's Park Place Realty, Inc. as
guarantors; First Union National Bank as lender and agent, and Midlantic
National Bank and LaSalle National Bank as lenders, the undersigned hereby
requests that the Bank advance funds as follows:
1. Facility under which request is made: __ Tranche A
__ Tranche B
2. Aggregate amount of loans presently
outstanding under selected facility: $____________
3. Letter of Credit Obligations $____________
4. Indebtedness to GNOC $____________
5. Availability
Tranche A - $50,000,000 minus the sum of the amounts opposite 2, 3 and
4
Tranche B - $15,000,000 minus the amount opposite 2
$____________
6. Amount of requested loan: $____________
7. Date of loan: ____________________
8. Type of Loan: ___ Prime Rate
___ LIBOR
9. LIBO Interest Period: ___ Not Applicable
___ one month
___ two months
___ three months
10. Use of Proceeds: ___ Deposit to Account #____________
___ Use to repay maturing LIBOR Loan
Bally's Park Place, Inc.,
a New Jersey corporation
<PAGE>
Exhibit 2.03(a)
Form of Tranche A Note
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION OF ANY
INTEREST IN THIS NOTE OR OF ANY PARTICIPATION IN THE LOANS THIS NOTE
EVIDENCES IS CONDITIONAL AND SHALL BE INEFFECTIVE IF THE NEW JERSEY CASINO
CONTROL COMMISSION DISAPPROVES.
TRANCHE A NOTE
$amount date
Bally's Park Place, Inc., a corporation organized under the laws of the
State of New Jersey (the "Borrower"), for value received, hereby promises
to pay to the order of ________ (the "Bank") on December 31, 1998, in lawful
money of the United States of America and in immediately available funds,
the principal sum of ____ or such lesser unpaid principal amount as shall
be outstanding hereunder, together with interest from the date hereof on the
unpaid principal balance of this Tranche A Note, payable on the dates and
at the rate provided for in the Amended and Restated Credit and Guaranty
Agreement of even date by and among the Borrower, First Union National Bank,
Midlantic Bank, National Association, LaSalle National Bank, Bally's Park
Place, Inc., a Delaware Corporation, and Bally's Park Place Realty Corp.,
a New Jersey Corporation, as the same may be amended from time to time (the
"Agreement"). In no event shall the interest rate payable hereon exceed the
maximum rate of interest permitted by law. Capitalized terms used herein
which are defined in the Agreement shall have the meanings therein defined.
The holder of this Tranche A Note is authorized to record in its books
and records, pursuant to Section 2.03 of the Agreement, the date and
principal amount of each Tranche A Loan made by the Bank, the date and
amount of each payment or prepayment of principal thereof and the interest
rate with respect thereto. Such recordation shall constitute prima facie
evidence of the accuracy of the information endorsed, provided that the
failure of the Bank to make such recordation shall not affect the
obligations of the Borrower hereunder or under the Agreement. The aggregate
unpaid principal amount of all Tranche A Loans set forth in such schedule
shall be presumptive evidence of the principal amount owing and unpaid on
this Tranche A Note.
This Tranche A Note is one of the Tranche A Notes referred to in the
Agreement, and is entitled to the benefits and is subject to the terms of
the Agreement. This Tranche A Note is repayable in the amounts and under
the circumstances, and its maturity is subject to acceleration upon the
terms, set forth in the Agreement.
Presentment for payment, demand, notice of dishonor, protest, notice
of protest and all other demands and notices in connection with the
delivery, performance and enforcement of this Tranche A Note are hereby
waived.
Upon the occurrence of any Event of Default specified in the Agreement,
all amounts then remaining unpaid on this Tranche A Note may, pursuant to
Section 6.03 of the Agreement, be declared to be immediately due and
payable, all as provided in the Agreement.
This Tranche A Note shall be construed and enforceable in accordance
with, and be governed by the internal laws of, the State of New Jersey.
This Tranche A Note may not be changed orally, but only by an
instrument in writing executed pursuant to the provisions of Section 9.01
of the Agreement.
Bally's Park Place, Inc.,
a New Jersey corporation
By:Exhibit - do not sign
Joseph A. D'Amato
Vice President
<PAGE>
Exhibit 2.03(b)
Form of Tranche B Note
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION OF ANY
INTEREST IN THIS NOTE OR OF ANY PARTICIPATION IN THE LOANS THIS NOTE
EVIDENCES IS CONDITIONAL AND SHALL BE INEFFECTIVE IF THE NEW JERSEY CASINO
CONTROL COMMISSION DISAPPROVES.
TRANCHE B NOTE
$amount date
Bally's Park Place, Inc., a corporation organized under the laws of the
State of New Jersey (the "Borrower"), for value received, hereby promises
to pay to the order of _____ (the "Bank") on December 31, 1998, in lawful
money of the United States of America and in immediately available funds,
the principal sum of ______ or such lesser unpaid principal amount as shall
be outstanding hereunder, together with interest from the date hereof on the
unpaid principal balance of this Tranche B Note, payable on the dates and
at the rate provided for in the Amended and Restated Credit and Guaranty
Agreement of even date by and among the Borrower, First Union National Bank,
Midlantic Bank, National Association, LaSalle National Bank, Bally's Park
Place, Inc., a Delaware Corporation, and Bally's Park Place Realty Corp.,
a New Jersey Corporation, as the same may be amended from time to time (the
"Agreement"). In no event shall the interest rate payable hereon exceed the
maximum rate of interest permitted by law. Capitalized terms used herein
which are defined in the Agreement shall have the meanings therein defined.
The holder of this Tranche B Note is authorized to record in its books
and records, pursuant to Section 2.03 of the Agreement, the date and
principal amount of each Tranche B Loan made by the Bank, the date and
amount of each payment or prepayment of principal thereof and the interest
rate with respect thereto. Such recordation shall constitute prima facie
evidence of the accuracy of the information endorsed, provided that the
failure of the Bank to make such recordation shall not affect the
obligations of the Borrower hereunder or under the Agreement. The aggregate
unpaid principal amount of all Tranche B Loans set forth in such schedule
shall be presumptive evidence of the principal amount owing and unpaid on
this Tranche B Note.
This Tranche B Note is one of the Tranche B Notes referred to in the
Agreement, and is entitled to the benefits and is subject to the terms of
the Agreement. This Tranche B Note is repayable in the amounts and under
the circumstances, and its maturity is subject to acceleration upon the
terms, set forth in the Agreement.
Presentment for payment, demand, notice of dishonor, protest, notice
of protest and all other demands and notices in connection with the
delivery, performance and enforcement of this Tranche B Note are hereby
waived.
Upon the occurrence of any Event of Default specified in the Agreement,
all amounts then remaining unpaid on this Tranche B Note may, pursuant to
Section 6.03 of the Agreement, be declared to be immediately due and
payable, all as provided in the Agreement.
This Tranche B Note shall be construed and enforceable in accordance
with, and be governed by the internal laws of, the State of New Jersey.
This Tranche B Note may not be changed orally, but only by an
instrument in writing executed pursuant to the provisions of Section 9.01
of the Agreement.
Bally's Park Place, Inc.,
a New Jersey corporation
By:Exhibit - do not sign
Joseph A. D'Amato
Vice President
<PAGE>
Exhibit 4.04(c)-1
Form of Accountant's compliance certificate
Board of Directors
Bally's Park Place, Inc.
We have audited, in accordance with generally accepted auditing standards,
the balance sheet of Bally's Park Place, Inc. as of insert date, and the
related statements of income, stockholder's equity, and cash flows for the
year then ended, and have issued our report thereon dated insert date.
In connection with our audit, nothing came to our attention that caused us
to believe that the Company failed to comply with the terms, covenants,
provisions, or conditions of Article VI of the Amended and Restated Credit
and Guaranty Agreement between First Union National Bank, Midlantic Bank,
National Association, LaSalle National Bank (the "Banks") and Bally's Park
Place, Inc. dated February 27, 1996 insofar as they relate to accounting
matters. However, our audit was not directed primarily toward obtaining
knowledge of such noncompliance.
This report is intended solely for the use of the Company and the Banks and
should not be used for any other purpose.
<PAGE>
Exhibit 4.04(c)-2
Form of Accountant's reliance letter
date
Insert name of Bank
Dear Mr. Goldberg:
name of accountant has been engaged to conduct an audit, in accordance with
generally accepted auditing standards, of the consolidated financial
statements for the year ended <insert date> of Bally's Park Place, Inc. (the
"Company") for the primary purpose of expressing an opinion on whether the
consolidated financial statements present fairly its financial position at
<insert date> and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles. Our
audit of the Company's <insert> financial statements was being made for the
purpose stated above, and has not been planned or conducted for the benefit
of First Union National Bank, Midlantic Bank, National Association and
LaSalle National Bank (the "Banks") or in contemplation of the Banks'
ongoing credit decisions related to the Amended and Restated Credit and
guaranty Agreement dated February 27, 1996 between the Company and the Banks
(the "Agreement"). Therefore, items of possible interest to the Banks may
not be specifically addressed.
We acknowledge, however, that the Company plans to provide to the Banks with
a copy of the consolidated financial statements referred to above and of our
report thereon dated <insert>, that the Banks intend to use the audited
consolidated financial statements as part of their ongoing credit decisions
related to the Agreement, and that the Company has knowledge of such
intended reliance.
In providing this letter, we advise both you and the Banks of the following.
The financial statements are the representations of management of the
Company, and management has the responsibility for adopting sound accounting
policies, for maintaining an adequate and effective system of accounts, for
safeguarding the assets, and for devising adequate internal control
structure. Because there are inherent limitations involved in any audit
that is intended to express an opinion on the fairness of the presentation
of the financial statements being reported on, an auditor's report is never
intended to be a warranty or guaranty of any sort, but rather is an opinion,
arrived at in accordance with recognized professional standards, whether the
financial statements as a whole present fairly, in all material respects,
in conformity with generally accepted accounting principles, the Company's
financial position as of the balance sheet date and the results of its
operations and its cash flows for the period then ended. Our use of
professional judgment and our assessment of materiality for the purpose of
our work mean that matters may have existed that would have been assessed
differently by others, including the Banks, in connection with the ongoing
credit decisions related to the Agreement. Our audit should not be taken
to supplant the inquiries and procedures that the Banks should undertake for
the purpose of satisfying itself of the Company's credit worthiness or
compliance with the provisions of the Agreement referred to above. In
addition, we will perform no procedures subsequent to the date of our report
to update our report or the financial statements.
Our opinion should never be mistaken as authorization or approval for a
credit decision. A lender's credit decision should be based not only on the
borrower's financial statements, but also on the lender's exercise of
reasonable due diligence with respect to many other factors, some of which
are internal and some of which are external to the borrower. Moreover, a
lender needs to monitor those factors on a on-going basis and not rely
solely on a once-a-year report by an auditor on the historical financial
statements of the borrower. We wish to emphasize, therefore, that any
lender would be remiss in placing its reliance solely upon our report in
making its ongoing credit decisions with respect to the Agreement and that
it is our understanding that the Banks are not relying solely on the
financial statements audited by insert name of accountant in connection with
the ongoing credit decisions related to the Agreement.
Very truly yours,
<PAGE>
Exhibit 4.04(e)
Form of Quarterly Compliance Certificate
OFFICER'S CERTIFICATE
I, insert, being the Vice President-Finance & Administration of Bally's
Park Place, Inc., a New Jersey corporation (the "Company"), hereby certify,
pursuant to Section 7.02 of the Amended and Restated Credit and Guaranty
Agreement (the "Agreement") dated as of February 27, 1996 among the Company,
First Union National Bank, Midlantic Bank. N.A. and LaSalle National Bank
as follows:
1. The accompanying schedules accurately reflect the calculations of
the financial tests contained in Section 4.01, 4.02, 4.03, 4.04 and 5.01 of
the Agreement.
2. I have no knowledge that an Event of Default (as such term is
defined in the Agreement) has occurred or that any event has occurred that
with the passage of time or giving of notice or both would, if unremedied,
be an Event of Default.
The statements set forth herein above are true, correct and complete
to the best of my knowledge and belief.
Dated:
___________________________________
insert
Vice President-Finance & Administration
<PAGE>
BALLY'S PARK PLACE, NJ
Affirmative Covenants - Line of Credit
Period ended:
SECTION 4.01 CONSOLIDATED NET WORTH
[show calculations]
SECTION 4.02 CONSOLIDATED INTEREST COVERAGE RATIO
[show calculations]
SECTION 4.03 CONSOLIDATED FUNDED DEBT RATIO
[show calculations]<PAGE>
AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
by and among
BALLY'S PARK PLACE, INC., a New Jersey
Corporation, as Borrower, and
BALLY'S PARK PLACE, INC. a Delaware Corporation, and
BALLY'S PARK PLACE REALTY CO. as Guarantors,
and
FIRST UNION NATIONAL BANK,
MIDLANTIC BANK, NATIONAL ASSOCIATION and
LASALLE NATIONAL BANK, as Banks, and
FIRST UNION NATIONAL BANK, as Agent.
Dated: February 27, 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I -- DEFINITIONS AND ACCOUNTING TERMS. . . . . . 2
SECTION 1.01 Certain Defined Terms. . . . . . . . . 2
SECTION 1.02 Other Definitional Provisions. . . . . 17
ARTICLE II -- THE CREDITS. . . . . . . . . . . . . . . . 18
SECTION 2.01 The Credits; Letters of Credit 18
SECTION 2.02 Notices of Borrowing; Requests for
Letter of Letters of Credit 19
SECTION 2.03 The Notes 20
SECTION 2.04 Fees 20
SECTION 2.05 Repayment and Conversion of Loans 21
SECTION 2.06 Termination or Reduction of the Commitments 22
SECTION 2.07 Interest 22
SECTION 2.08 Payments 22
SECTION 2.09 The Letters of Credit 23
SECTION 2.10 Reimbursement to Banks for Cost
Increases Imposed By Law 24
SECTION 2.11 Mandatory Repayments 25
SECTION 2.12 Special Provisions for LIBO Rate Loans 25
SECTION 2.13 Taxes Related to Agreement 27
SECTION 2.14 Conditions Precedent to Loans 28
ARTICLE III -- REPRESENTATIONS AND WARRANTIES 29
SECTION 3.01 Existence 29
SECTION 3.02 Authorization; No Legal Bar; No Default 29
SECTION 3.03 Validity of the Loan Documents 29
SECTION 3.04 Financial Information 29
SECTION 3.05 Litigation 30
SECTION 3.06 Disclosure of Indebtedness and
Contingent Liabilities 30
SECTION 3.07 Taxes 30
SECTION 3.08 Liens 30
SECTION 3.09 Consents 31
SECTION 3.10 ERISA 31
SECTION 3.11 Ownership of Borrower 31
SECTION 3.12 Ownership of Guarantor 31
SECTION 3.13 Gaming Licenses 31
SECTION 3.14 Margin Stock 31
SECTION 3.15 Stock as Collateral 31
SECTION 3.16 Environmental Matters 31
SECTION 3.17 Burdensome Restrictions 32
SECTION 3.18 Projections; Budgets 32
SECTION 3.19 Compliance with Laws 32
SECTION 3.20 Intellectual Property 32
SECTION 3.21 Labor Matters 33
SECTION 3.22 Brokerage Commissions 33
SECTION 3.23 Investment Company Act 33
SECTION 3.24 Intangible Assets 33
SECTION 3.25 Restricted Payments 34
ARTICLE IV -- AFFIRMATIVE COVENANTS 35
SECTION 4.01 Consolidated Net Worth 35
SECTION 4.02 Consolidated Interest Coverage Ratio 35
SECTION 4.03 Consolidated Funded Debt Ratio 35
SECTION 4.04 Financial and Other Information 35
SECTION 4.05 Reports 36
SECTION 4.06 Insurance 37
SECTION 4.07 Taxes 38
SECTION 4.08 Compliance with Laws 38
SECTION 4.09 Inspection of Property; Books
Records; Discussions 38
SECTION 4.10 ERISA 39
SECTION 4.11 Preservation of Corporate Existence, Etc. 39
SECTION 4.12 Maintaining Ownership of Properties 39
SECTION 4.13 Maintenance of Licenses, Permits, etc. 39
SECTION 4.14 Further Assurances 39
SECTION 4.15 Use of Proceeds 40
ARTICLE V -- NEGATIVE COVENANTS 41
SECTION 5.01 Limitation on Restricted Payments 41
SECTION 5.02 Limitation on Liens 41
SECTION 5.03 Limitation on Indebtedness 41
SECTION 5.04 Limitation on Investments 41
SECTION 5.05 Limitation on Contingent Liabilities 41
SECTION 5.06 Limitation on Mergers; Sale of Assets 41
SECTION 5.07 Limitation on Change of Nature of Business 42
SECTION 5.08 Regulation U 42
SECTION 5.09 Transactions with Affiliates 42
SECTION 5.10 Limitation on Long-Term Leases;
Sale and Lease-Back Transactions 42
SECTION 5.11 Amendment of Articles of
Incorporation or By-Laws 42
SECTION 5.12 ERISA 42
SECTION 5.13 Maintenance of Property 43
SECTION 5.14 Amendment to Indenture 43
SECTION 5.15 No Additional Intangible Assets 43
ARTICLE VI -- DEFAULT AND REMEDIES 44
SECTION 6.01 Events of Default 44
SECTION 6.02 Suspension of Commitment 46
SECTION 6.03 Termination of Commitments; Acceleration 46
SECTION 6.04 Default Rate of Interest 47
SECTION 6.05 Remedies Not Exclusive 47
SECTION 6.06 Set-Off 47
SECTION 6.07 Rights Under Loan Documents 47
ARTICLE VII -- GUARANTY 48
SECTION 7.01 The Guaranteed Obligations 48
SECTION 7.02 Further Undertakings 48
SECTION 7.03 Liabilities Not Affected 51
SECTION 7.04 SUBROGATION AND CONTRIBUTION 52
ARTICLE VIII -- AGENT 53
SECTION 8.01 Appointment and Authorization 53
SECTION 8.02 General Immunity 53
SECTION 8.03 Delegation of Duties; Consultation
with Counsel 53
SECTION 8.04 Documents 53
SECTION 8.05 Rights as a Bank 53
SECTION 8.06 Responsibility of Agent 54
SECTION 8.07 Action by Agent 54
SECTION 8.08 Notices of Event of Default, Etc 54
SECTION 8.09 Indemnification 54
SECTION 8.10 Non-Reliance on Agent and Other Banks 55
SECTION 8.11 Successor Agent 55
SECTION 8.12 No Benefit 56
ARTICLE IX -- MISCELLANEOUS 57
SECTION 9.01 Amendment or Waiver 57
SECTION 9.02 Indemnification 58
SECTION 9.03 Notices 58
SECTION 9.04 Costs and Expenses 59
SECTION 9.05 Obligations Several 59
SECTION 9.06 Counterparts 59
SECTION 9.07 Assignments 59
SECTION 9.08 Participations 60
SECTION 9.09 Disproportionate Payments 60
SECTION 9.10 Waiver of Right to Punitive Damages 61
SECTION 9.11 Governing Law 61
SECTION 9.12 Headings 61
SECTION 9.13 Severability 61
SECTION 9.14 Confidential Information 61
SECTION 9.15 WAIVER OF TRIAL BY JURY 62
SCHEUDLES AND EXHIBITS
SCHEDULE A CERTAIN LIENS 64
SCHEDULE 3.05 LITIGATION 64
SCHEDULE 3.06 INDEBTEDNESS AND CONTINGENT LIABILITIES 64
SCHEDULE 3.16 ENVIRONMENTAL MATTERS 64
SCHEDULE 3.17 BURDENSOME RESTRICTIONS 64
SCHEDULE 3.21A LABOR CONTRACTS 65
SCHEDULE 3.21B LABOR DISPUTES 65
SCHEDULE 3.25 RESTRICTED PAYMENTS 65
SCHEDULE 5.06 SUBSIDIARIES 66
SCHEDULE 5.09 TRANSACTIONS WITH AFFILIATES 66
SCHEDULE 5.10 LONG TERM LEASES 66
Exhibit 2.02(a) Form of Borrowing Notification 67
Exhibit 2.03(a) Form of Tranche A Note 68
Exhibit 2.03(b) Form of Tranche B Note 70
Exhibit 4.04(c)-1 Form of Accountant's
compliance certificate 72
Exhibit 4.04(c)-2 Form of Accountant's reliance letter 73
Exhibit 4.04(e) Form of Quarterly Compliance Certificate75
SECTION 4.01 CONSOLIDATED NET WORTH 76
SECTION 4.02 CONSOLIDATED INTEREST COVERAGE RATIO 76
SECTION 4.03 CONSOLIDATED FUNDED DEBT RATIO 76
MODIFICATION OF
MORTGAGE AND ASSIGNMENT OF LEASES
THIS MODIFICATION OF MORTGAGE AND ASSIGNMENT OF LEASES ("this
Agreement") made as of February 27, 1996, by and among Bally's Park Place,
Inc., a New Jersey corporation, having an office at Park Place and the
Boardwalk, Atlantic City, New Jersey, 08401, as leasehold and fee mortgagor
("Mortgagor"), and Bally's Park Place Realty Co., a New Jersey corporation,
having an office at Park Place and the Boardwalk, Atlantic City, New Jersey,
08401, as fee mortgagor ("Bally's" and, together with Mortgagor,
"Mortgagors") and First Union National Bank as collateral agent (formerly
known as First Fidelity Bank, National Association and in such capacity,
hereinafter the "Mortgagee") for itself, Midlantic Bank, N.A. (formerly
known as Midlantic National Bank and hereinafter "Midlantic") and LaSalle
National Bank (hereinafter "LaSalle"), dated as of the date hereof.
W I T N E S S E T H :
WHEREAS, Mortgagee is the holder of that certain Mortgage and Security
Agreement with Assignment of Rents (the "Mortgage") dated as of March 8,
1994, which Mortgage was recorded on March 9, 1994 in the Office of the
Clerk of Atlantic County, New Jersey in Mortgage Book 5302 at page 150 et
seq. to secure the obligations described therein, and which Mortgage is a
lien on the property described therein (the "Encumbered Property"); and
WHEREAS, the Mortgage was given as security for certain financial
accommodations to Mortgagors pursuant to that certain Credit and Guaranty
Agreement (the "Credit Agreement") dated March 8, 1994, by and among
Mortgagor as borrower, Realty and Bally's Park Place, Inc., a Delaware
corporation ("Park Place - Delaware") as guarantors, Mortgagee, as agent and
lender, and Midlantic; and
WHEREAS, the Mortgage secures, among other things, the obligations of
the Mortgagors under the Credit Agreement and the notes issues pursuant
thereto in the maximum aggregate principal amount of $50,000,000; and
WHEREAS, Mortgagors gave to Mortgagee as additional security for the
loan an Assignment of Leases and Rents (the "Assignment") dated March 8,
1994 which Assignment was recorded on March 9, 1994 in the Office of the
Clerk of Atlantic County in Mortgage Book 5302, at page 228 et. seq.; and
WHEREAS, Mortgagor, Bally's, Bally's Park Place Funding, Inc., a
Delaware corporation ("Funding") as obligor, Bally's Park Place - Delaware
as guarantor, and First Bank, National Association as trustee ("Trustee"),
entered into an Indenture (the "Indenture"), dated as of March 8, 1994,
pursuant to which Funding executed and delivered its First Mortgage Notes
due 2004 (the "Notes") in the principal amount of up to $425,000,000; and
WHEREAS, to secure the Indenture and the Notes, the Mortgagor, Bally's
and Funding executed and delivered to the Trustee a Mortgage and Security
Agreement with Assignment of Rents covering the Property (the "Trustee's
Mortgage"); and
WHEREAS, to further secure the Indenture and the Notes, the Mortgagor
and Bally's executed and delivered to the Trustee an Assignment of Leases
and Rents covering the Property (the "Trustee's Assignment"); and
WHEREAS, Mortgagee, Midlantic, Mortgagors, Funding and the Trustee
entered into an agreement (the "Intercreditor Agreement"), dated as of March
8, 1994, governing the exercise of remedies under the Trustee's Mortgage,
the Mortgage, the Trustee's Assignment and the Assignment and governing the
disposition of any proceeds received from the Encumbered Property; and
WHEREAS, Mortgagors, Park Place - Delaware, Mortgagee, Midlantic and
LaSalle have this day executed an Amended and Restated Credit and Guaranty
Agreement ("Amended and Restated Credit Agreement"), which among other
things, extends the maturity date of the existing $50,000,000 revolving
credit facility and provides a $15,000,000 additional credit facility; and
WHEREAS, pursuant to the Amended and Restated Credit Agreement
Mortgagor has this day executed new revolving credit notes in the maximum
aggregate principal amount of (1) $50,000,000 (the "Tranche A Notes"), and
(2) $15,000,000 (the "Tranche B Notes"; collectively the Tranche A Notes and
the Tranche B Notes are referred to herein as the "New Revolving Credit
Notes") evidencing the Mortgagor's obligations to the Mortgagee, Midlantic
and LaSalle under the Amended and Restated Credit Agreement; and
WHEREAS, the parties hereto have agreed to modify the Mortgage and the
Assignment to, inter alia, reflect the fact that they continue to secure the
obligations of the Mortgagors to the Mortgagee as those obligations have
been modified by the Amended and Restated Credit Agreement and the New
Revolving Credit Notes; and
WHEREAS, the Trustee, the Mortgagors, Funding, Mortgagee, Midlantic and
LaSalle (Mortgagee, Midlantic and LaSalle being referred to herein as the
"Lender") have this day executed a Modification to Intercreditor Agreement
(the "Modification to Intercreditor Agreement"; the Intercreditor Agreement
as revised by the Modification to Intercreditor Agreement hereinafter
referred to as the "Revised Intercreditor Agreement"), in order to set forth
the understanding between the Trustee and the Lender, among other things,
with respect to (i) their rights and priorities regarding the Encumbered
Property; and (ii) the order of priority that shall govern the allocation
and application of proceeds from the Encumbered Property for the redemption
of repayment of the Notes and the New Revolving Credit Notes.
NOW, THEREFORE, incorporating the foregoing herein by reference and in
consideration of the mutual covenants herein contained, the parties hereto
do mutually covenant and agree, as follows:
11. The foregoing recitals are incorporated into this Agreement by
this reference.
12. The term "Credit Agreement" as it is used in the Mortgage, as
modified hereby, shall be deemed to refer to the Amended and Restated Credit
Agreement.
13. The term "Credit Agreement" as it is used in the Assignment,
as modified hereby, shall be deemed to refer to the Amended and Restated
Credit Agreement.
14. The term "Revolving Credit Notes" as used in the Mortgage, as
modified hereby, shall be deemed to refer to the New Revolving Credit Notes.
15. The term "Revolving Credit Notes" as used in the Assignment,
as modified hereby, shall be deemed to refer to the New Revolving Credit
Notes.
16. The term "Mortgage" as used in the Assignment, as modified
hereby, shall be deemed to refer to the Mortgage, as modified hereby.
17. The term "Intercreditor Agreement" as it is used in the
Mortgage, as modified hereby, shall be deemed to refer to the Revised
Intercreditor Agreement.
18. The term "Intercreditor Agreement" as it is used in the
Assignment, as modified hereby, shall be deemed to refer to the Revised
Intercreditor Agreement.
19. Section 25(a) of the Mortgage is amended to add at the end the
following language:
With a copy to
LaSalle National Bank
120 S. LaSalle Street
Room 205
Chicago, Illinois 60603
Attn: Kristen L. Simko
20. The Encumbered Property described in the Mortgage, as modified
hereby, shall remain in all respects subject to the lien, charge, or
encumbrance of the Mortgage as modified hereby, and nothing herein contained
and nothing done pursuant hereto, shall affect the lien, charge or
encumbrance of or warranty of title in, or conveyance effected by the
Mortgage, or the priority thereof over other liens, charges, encumbrances
or conveyances; nor shall anything herein contained or done in pursuance
hereof affect or be construed to affect any other security or instrument,
if any, held by Mortgagee as security for or evidence of the aforesaid
indebtedness.
21. Pursuant to N.J.S.A. 46:9-8.1, the Mortgage, as modified
hereby, and the obligations secured hereunder and all other obligations of
the Mortgagors are subject to modification. To the extent permitted by law,
the Mortgage, as modified hereby, secures all modifications from the date
upon which the Mortgage was originally recorded, including future loans and
extensions of credit and changes in the interest rate, due date, amount or
other terms and conditions of any obligations. The Mortgage, as modified
hereby, may be modified from time to time without affecting the priority of
the lien created thereby.
22. Except as modified herein, all of the terms, provisions and
covenants of the Mortgage and Assignment are in all other respects hereby
ratified and confirmed and shall remain in full force and effect.
23. This Agreement is to be construed according to the laws of the
State of New Jersey.
24. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns.
25. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument,
and any of the parties hereto may execute this Agreement by signing any such
counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
BALLY'S PARK PLACE, INC.,
a New Jersey corporation
By: _______________________
Joseph A. D'Amato
Vice President
BALLY'S PARK PLACE REALTY CO.
By: _______________________
Joseph A. D'Amato
Vice President
First Union National Bank
as collateral agent
By: _________________________
Patrick McGovern
Vice President
<PAGE>
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On the 27th day of February, 1996, before me personally came Joseph A.
D'Amato, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of Bally's Park Place, Inc., a New Jersey
corporation, the corporation described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
by order of the board of directors of said corporation; and that he signed
his name thereto by like order.
Notary Public
__________________________________
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On the 27th day of February, 1996, before me personally came Joseph A.
D'Amato, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of Bally's Park Place Realty Co., the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the board of directors
of said corporation; and that he signed his name thereto by like order.
Notary Public
_________________________________
<PAGE>
STATE OF PENNSYLVANIA )
) SS:
COUNTY OF )
On the _____ day of February, 1996, before me personally came Patrick
McGovern, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of First Union National Bank, the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the board of directors
of said corporation; and that he signed his name thereto by like order.
Notary Public
__________________________________
MORTGAGE AND SECURITY AGREEMENT
WITH ASSIGNMENT OF RENTS
THIS MORTGAGE AND SECURITY AGREEMENT WITH
ASSIGNMENT OF RENTS, made as of the 27th day of February 1996, by and
between Bally's Park Place, Inc., a New Jersey corporation, having an office
at Park Place and the Boardwalk, Atlantic City, New Jersey, 08401, as fee
mortgagor ("Mortgagor") and First Union National Bank ("First Union") as
collateral agent (in such capacity, the "Mortgagee") for the several banks
and other financial institutions from time to time parties to the Credit
Agreement (hereinafter defined), dated as of the date hereof. All
capitalized terms that are not otherwise defined herein shall have the
meaning given to such term in the Credit Agreement.
WITNESSETH:
To secure the following obligations and liabilities: (a) the payment
to the holders of the Tranche A Notes and the Tranche B Notes (the "Notes"),
issued pursuant to the provisions of the Amended and Restated Credit and
Guaranty Agreement dated as of February 27, 1996 (the "Credit Agreement"),
between the Mortgagor, Bally's Park Place, Inc., a Delaware corporation,
Bally's Park Place Realty Co., a New Jersey corporation ("Realty"), First
Union, Midlantic Bank, National Association ("Midlantic"), LaSalle National
Bank ("LaSalle") and Mortgagee as agent, of (i) the aggregate principal
amount of an indebtedness of up to Sixty-five Million Dollars ($65,000,000),
evidenced by the Notes to be issued pursuant to the provisions of the Credit
Agreement, (ii) any and all interest due or to become due on the Notes in
accordance with the provisions of the Credit Agreement and the Notes, (iii)
any amounts that are due or will become due under the reimbursement
obligation arising with respect to the letters of credit issued pursuant to
the Credit Agreement, and (iv) and all other sums due or to become due under
the Credit Agreement, the Notes, this Mortgage or any of the Loan Documents
(hereinafter defined) and further or subsequent advances or expenditures
made under any other Loan Document by Mortgagee pursuant to the provisions
hereof (the items set forth in clauses (i) to (iv) above being hereinafter
collectively referred to as the "Indebtedness"), and (b) the performance of
all of the terms, covenants, conditions, agreements, obligations, and
liabilities of Mortgagor (collectively, the "Obligations") under (i) this
Mortgage, (ii) the Credit Agreement, (iii) the Notes, (iv) the Assignment
of Leases and Rents (the "Assignment"), dated as of the date hereof, by
Mortgagor for the benefit of Mortgagee, (v) all of the other Loan Documents,
and (vi) any extensions, renewals, replacements or modifications of any of
the foregoing (this Mortgage, the Credit Agreement, the Assignment, the
Notes, and all other documents executed in connection with the foregoing
being hereinafter collectively referred to as the "Loan Documents" and,
individually, as a "Loan Document"), and in consideration of the agreements
of First Union, Midlantic and LaSalle contained in the Credit Agreement the
legal sufficiency of which are hereby acknowledged.
Mortgagor does hereby encumber, give, grant, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, hypothecate, deposit,
pledge, set over, create and grant a security interest in and confirm to
Mortgagee the following described real property, tangible personal property,
rights, collateral and all substitutions for and all replacements,
reversions and remainders of such tangible personal property, whether now
owned or held or hereafter acquired by Mortgagor, (the "Encumbered
Property"):
The Mortgagor's fee interest in all those plots, pieces or parcels of
land more particularly described in Exhibit A annexed hereto and made a part
hereof, together with the right, title and interest of Mortgagor, if any,
in and to the streets and in and to the land lying in the bed of any
streets, roads or avenues, open or proposed, public or private, in front of,
adjoining or abutting said land to the center line thereof, the air space
and development rights pertaining to said land and the right to use such air
space and development rights, all rights of way, privileges, liberties,
tenements, hereditament and appurtenances belonging, or in any way
appertaining thereto, all easements now or hereafter benefiting said land
and all royalties and rights appertaining to the use and enjoyment of said
land, including, but without limiting the generality of the foregoing, all
alley, vault, drainage, mineral, water, oil, coal, gas and other similar
rights (all of the foregoing being hereinafter collectively referred to as
the "Land") (the "Fee Estate");
TOGETHER with Mortgagor's fee interest, right and title in and to the
buildings and other improvements now or hereafter erected on the Fee (such
buildings and other improvements being hereinafter collectively referred to
as the "Buildings");
(the Fee Estate together with the Buildings and the Personal Property
located on or used in connection with the Fee Estate, being hereinafter
collectively referred to as the "Real Estate");
TOGETHER with all and singular the reversion or reversions, remainder
or remainders, rents and revenues produced in connection with the Fee Estate
and all of the estate, right, title, interest, property, possession, claim
and demand whatsoever, both in law and at equity, of Mortgagor of, in and
to the Real Estate and of, in and to every part and parcel thereof, with the
appurtenances, at any time belonging or in any way appertaining thereto;
TOGETHER with Mortgagor's right, title and interest in and to all
chattels, furnishings, goods, equipment, fixtures, tangible personal
property, materials, and all other contents of every kind and nature,
including, without limitation, all tangible personal property used in
connection with the hotel and restaurant facilities located on the Real
Estate and all gaming equipment, tables and slots that shall be owned or
hereafter acquired, used in connection with or placed prior to the
satisfaction of the Indebtedness and Obligations on the Real Estate,
including machinery, fixtures, systems, apparatus, fittings, materials and
equipment now or which may hereafter be used in the operation of the Real
Estate, including, but without limiting the generality of the foregoing, all
heating, electrical, mechanical, lighting, lifting, plumbing, ventilating,
air conditioning and air-cooling fixtures, systems, machinery, apparatus and
equipment, refrigerating, incinerating and power fixtures, systems,
machinery, apparatus and equipment, loading and unloading fixtures, systems,
machinery, apparatus and equipment, escalators, elevators, boilers,
communication systems, casino gambling equipment, switchboards, sprinkler
systems and other fire prevention and extinguishing fixtures, systems,
machinery, apparatus and equipment, and all engines, motors, dynamos,
machinery, wiring, pipes, pumps, tanks, conduits and ducts constituting a
part of any of the foregoing, and all additions to, substitutions for,
renewals and proceeds of any of the foregoing, together with all
attachments, substituted parts, accessories, accessions, improvements and
replacements thereof, including the equity of Mortgagor in any such item
that is subject to a purchase money or other prior security interest (all
such tangible personal property, fixtures, additions, substitutions and
proceeds being sometimes hereinafter collectively referred to as the
"Personal Property");
TOGETHER with Mortgagor's right, title and interest to and under all
leases, subleases, underlettings, licenses and other occupancy agreements
which now or hereafter may affect the Real Estate or any portion thereof and
under any and all guarantees, modifications, renewals and extensions thereof
(collectively, the "Leases"), and in and to any and all deposits made or
hereafter made as security under the Leases (excluding, however, any sums
paid as "key money" in connection with the execution or renewal thereof or
any sums paid in connection with the execution or renewal of a Lease as
advance rental, to the extent the same has been paid prior to the occurrence
of an Event of Default), subject to the legal rights under the Leases of the
persons or entities making such deposits, together with any and all of the
benefits, rentals, revenues, issues, profits, income and rents due or to
become due or to which Mortgagor is now or hereafter may become entitled
arising out of the Leases (collectively, the "Rents") to which Mortgagor is
now or hereafter may become entitled;
TOGETHER with all plans, specifications, engineering reports, land
planning maps, surveys, and any other reports, exhibits or plans used or to
be used in connection with the operation or maintenance of the Real Estate,
together with all amendments and modifications thereof;
TOGETHER with (a) subject to the provisions of Article 6 hereof,
Mortgagor's interest in and to all proceeds which now or hereafter may be
paid under any insurance policies now or hereafter obtained by Mortgagor in
connection with the conversion of the Encumbered Property or any portion
thereof into cash or liquidated claims, together with the interest payable
thereon and the right to collect and receive the same, including, but
without limiting the generality of the foregoing, proceeds of casualty
insurance, title insurance, business interruption insurance and any other
insurance now or hereafter maintained with respect to the Real Estate or in
connection with the use or operation thereof (collectively, the "Insurance
Proceeds"), and (b) subject to the provisions of Article 7 hereof, all of
Mortgagor's right, title and interest in and to all awards, payments and/or
other compensation, together with the interest payable thereon and the right
to collect and receive the same, which now or hereafter may be made with
respect to the Encumbered Property as a result of (i) a taking by eminent
domain, condemnation or otherwise, (ii) the change of grade of any street,
road or avenue or the widening of any streets, roads or avenues adjoining
or abutting the Land, or (iii) any other injury to or decrease in the value
of the Encumbered Property or any portion thereof (collectively, the
"Awards"), in any of the foregoing circumstances described in clauses (a)
or (b) above to the extent of the entire amount of the Indebtedness
outstanding as of the date of Depositary's (hereinafter defined) receipt of
any such Insurance Proceeds or Awards, notwithstanding that the entire
amount of the Indebtedness may not then be due and payable, and also to the
extent of reasonable attorneys' fees, costs and disbursements incurred by
Depositary or Mortgagee in connection with the collection of any such
Insurance Proceeds or Awards. Subject to the provisions of Articles 6 and
7 hereof, Mortgagor hereby assigns to Mortgagee, and Depositary is hereby
authorized to collect and receive, all Insurance Proceeds and Awards and to
give proper receipts and acquittances therefor and to apply the same in
accordance with the provisions of this Mortgage. Mortgagor hereby agrees
to make, execute and deliver, from time to time, upon demand, further
documents, instruments or assurances to confirm the assignment of the
Insurance Proceeds and the Awards to Depositary and Mortgagee, free and
clear of any interest of Mortgagor whatsoever therein, except as
specifically permitted in this Mortgage, and free and clear of any other
liens, claims or encumbrances of any kind or nature whatsoever;
TOGETHER with all right, title and interest of Mortgagor in and to all
improvements, betterments, renewals and all substitutes and replacements of,
and all additions and appurtenances to, the Real Estate, and in each such
case, the foregoing shall be deemed a part of the Real Estate and shall
become subject to the lien of this Mortgage as fully and completely, and
with the same priority and effect, as though now owned by Mortgagor and
specifically described herein, without any further mortgage, conveyance,
assignment or other act by Mortgagor.
TO HAVE AND TO HOLD the Encumbered Property and the rights and
privileges hereby encumbered or intended so to be unto Mortgagee and its
successors and assigns for the uses and purposes herein set forth.
Mortgagor, for itself and its successors and assigns, further
represents, warrants, covenants and agrees with Mortgagee as follows:
26. Warranty of Title.
Mortgagor warrants to Mortgagee that (i) it has good and marketable
title to its interest in the Real Estate, (ii) it has good and marketable
fee simple title to its interest in the Buildings located on the Real Estate
and good title to its interest in the Personal Property located on or used
in connection with the Real Estate, (iii) it has the right to mortgage the
Real Estate in accordance with the provisions set forth in this Mortgage,
and (iv) this Mortgage is a valid and enforceable lien on the Encumbered
Property, subject only to the exceptions to title more particularly
described in Exhibit B annexed hereto and made a part hereof (collectively,
the "Permitted Encumbrances"). Mortgagor shall (i) preserve such title and
the validity and priority of the lien of this Mortgage and shall forever
warrant and defend the same, subject to the Permitted Encumbrances unto
Mortgagee, against the claims of all and every person or persons,
corporation or corporations and parties whomsoever, and (ii) make, execute,
acknowledge and deliver all such further or other deeds, documents,
instruments or assurances and cause to be done all such further acts and
things as may at any time hereafter be reasonably required to confirm and
fully protect the lien and priority of this Mortgage.
27. Payment of Indebtedness.
(a) Mortgagor shall pay the Indebtedness at the times and places
and in the manner specified in the Loan Documents and shall perform all of
the Obligations in accordance with the provisions set forth herein and in
the other Loan Documents.
(b) Any payment made in accordance with the terms of this
Mortgage by any person at any time liable for the payment of the whole or
any part of the Indebtedness, or by any subsequent owner of the Encumbered
Property, or by any other person whose interest in the Encumbered Property
might be prejudiced in the event of a failure to make such payment, or by
any stockholder, officer or director of a corporation or by any partner of
a partnership which at any time may be liable for such payment or may own
or have such an interest in the Encumbered Property, shall be deemed, as
between Mortgagee and all persons who at any time may be liable as aforesaid
or may own the Encumbered Property, to have been made on behalf of all such
persons.
28. Requirements; Proper Care and Use.
(a) Subject to the right of Mortgagor to contest a Legal
Requirement (hereinafter defined) as provided in Article 10 hereof,
Mortgagor promptly shall comply with, or cause to be complied with, in all
material respects, all present and future laws, statutes, codes, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, restrictions
and requirements (collectively, "Legal Requirements") of every Governmental
Authority (hereinafter defined) having jurisdiction over Mortgagor or the
Encumbered Property or the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or Restoration (hereinafter
defined) of the Encumbered Property, without regard to the nature of the
work to be done or the cost of performing the same, whether foreseen or
unforeseen, ordinary or extraordinary, and shall perform, or cause to be
performed, in all material respects, all obligations, agreements, covenants,
restrictions and conditions now or hereafter of record which may be
applicable to Mortgagor or to the Encumbered Property or to the use, manner
of use, occupancy, possession, operation, maintenance, alteration, repair
or Restoration of the Encumbered Property; provided, however, that Mortgagor
shall not be required to comply with any Legal Requirement which, by its
terms, does not require that the Encumbered Property so comply, or if such
failure would not have material adverse effect on Mortgagor and its
subsidiaries taken as a whole or the Encumbered Property or be
disadvantageous in any material respect to the Mortgagee.
(b) Mortgagor, with respect to the Real Estate, shall (i)
not abandon the Real Estate or any portion thereof, (ii) maintain, in all
material respects, the Real Estate in good repair, order and condition,
reasonable wear and tear excepted, and supplied with all necessary
equipment, (iii) promptly make all necessary repairs, renewals,
replacements, additions and improvements to the Real Estate which, in the
reasonable judgment of Mortgagor, may be necessary so that the business
carried on in connection therewith may be properly and advantageously
conducted at all times, (iv) refrain from impairing or diminishing in any
material manner the value of the Encumbered Property or the priority or
security of the lien of this Mortgage, (v) not remove or demolish any of the
Real Estate if such removal or demolition might materially impair the value
of the Real Estate, except that Mortgagor shall have the right to remove and
dispose of, free of the lien of this Mortgage, such Personal Property as
may, from time to time, become worn out or obsolete or which, in accordance
with good business practices, should be removed or disposed of, provided
that if such removal shall materially adversely affect the value of the
Encumbered Property, simultaneously with, or prior to, such removal, any
such Personal Property shall be replaced with other Personal Property which
shall have a value and utility at least equal to that of the replaced
Personal Property and which shall be free of any security agreements or
other liens or encumbrances of any kind or nature whatsoever except as
otherwise permitted in the Credit Agreement and/or this Mortgage; (vi) not
make, install or permit to be made or installed any alterations or additions
to the Real Estate if doing so would materially impair the value of the
Encumbered Property; (vii) not make, suffer or permit any nuisance (it being
acknowledged that casino use shall not be deemed to be a nuisance) to exist
on the Real Estate or any portion thereof, and (viii) subject to the rights
of tenants and other persons or entities in possession, permit Mortgagee and
its agents, at all reasonable times and with reasonable prior notice (except
in the case of an emergency), to enter upon the Real Estate for the purpose
of inspecting and appraising the Real Estate or any portion thereof.
(c) Mortgagor shall not, by any act or omission, permit any
building or other improvement located on any property which is not subject
to the lien of this Mortgage to rely upon the Real Estate or any portion
thereof or any interest therein to fulfill any Legal Requirement, except to
the extent that such reliance exists as of the date hereof, and Mortgagor
hereby assigns to Mortgagee any and all rights to give consent for all or
any portion of the Real Estate or any interest therein to be so used.
Mortgagor shall not, by any act or omission, impair the integrity of the
Real Estate, as it exists today, as a single or multiple zoning lot or lots,
as the case may be, separate and apart from all other premises. Any act or
omission by Mortgagor which would result in a violation of any of the
provisions of this Article 3 shall be null and void.
(d) Mortgagor has and will maintain in effect at all times
until the Obligations are satisfied in full, all necessary licenses
(including without limitation all licenses necessary under the Act
(hereinafter defined) or otherwise to operate the casino portion of the
Encumbered Property as a casino), authorizations, registrations and
approvals to own, use, occupy and operate the Real Estate, and Mortgagor has
full power and authority to carry on its business at the Real Estate as
currently conducted and have not received any notice of any violation of any
Legal Requirement that materially impairs the value of the Real Estate.
(e) During the term of this Mortgage and any renewals or
extensions hereof, as to any (i) "license," as such term is defined in
N.J.S.A. 5:12-30, issued pursuant to the New Jersey Casino Control Act and
regulations promulgated thereunder (collectively being referred to herein
as the "Act") which is material to the continued lawful operation of
Mortgagor as a casino licensed pursuant to the provisions of the Act, and
(ii) any material requirements of the "Operation Certificate," as such term
is defined in N.J.S.A. 5:12-35, issued with regard to the Encumbered
Property (the foregoing subparagraphs (i) and (ii) are herein collectively
referred to as the "Operational Requirements"):
(1) The Operational Requirements are to the best of
Mortgagor's knowledge in good standing, free of material violations, and all
conditions under which they have been issued or renewed have been or are
being satisfied and fulfilled.
(2) Mortgagor will keep, maintain and preserve the
Operational Requirements in full force and effect and in good standing.
(3) Mortgagor will not knowingly violate, nor will it
knowingly suffer any violation of, the Operational Requirements.
(4) In the event Mortgagor knows of any fact,
circumstances, or occurrence which may result in a violation of the
Operational Requirements, Mortgagor shall promptly give Mortgagee written
notice thereof.
29. Taxes on Mortgagee.
(a) If the United States of America, the State of New
Jersey or any political subdivision thereof or any city, town, county or
municipality in which the Real Estate is located or any agency, department,
bureau, board, commission or instrumentality of any of the foregoing now
existing or hereafter created (collectively, "Governmental Authorities" and,
individually, a "Governmental Authority") shall, at any time after the date
hereof (whether or not the lien of this Mortgage shall have been released),
levy, assess or charge any tax, assessment or imposition upon this Mortgage
or any other Loan Document, the Indebtedness, the Obligations or the
interest of Mortgagee in the Encumbered Property by reason of this Mortgage
or any other Loan Document, the Indebtedness or the Obligations (excepting
therefrom any income tax on payments made under the Credit Agreement and any
franchise tax), Mortgagor shall pay all such taxes, assessments and
impositions to, for, or on account of, Mortgagee, as they become due and
payable and, on demand, shall furnish proof of such payment to Mortgagee.
If Mortgagor shall fail to pay any such tax, assessment or imposition, then
Mortgagee, at its option (but without any obligation to do so), upon thirty
(30) days' notice to Mortgagor (or such shorter period as Mortgagee may deem
reasonable if Mortgagee believes that failure to pay any such tax,
assessment or imposition promptly may subject the Encumbered Property (or
any portion thereof) to loss, forfeiture or a material diminution in value),
may pay such tax, assessment or imposition and, in such event, the amount
so paid (i) shall be deemed to be Indebtedness, (ii) shall be a lien on the
Encumbered Property prior to any right or title to, interest in, or claim
upon, the Encumbered Property subordinate to the lien of this Mortgage and
(iii) immediately shall be due and payable, on demand, together with
interest thereon at the rate of interest then payable under the Credit
Agreement, including, in calculating such rate of interest, any additional
interest which may be imposed under the Credit Agreement by reason of any
default thereunder (such rate of interest being hereinafter referred to as
the "Interest Rate"), from the date of any such payment by Mortgagee to the
date of repayment to Mortgagee. In the event of the passage of any law or
regulation permitting, authorizing or requiring any such tax, assessment or
imposition to be levied, assessed or charged, which law or regulation, may
prohibit Mortgagor from paying the tax, assessment or imposition to, for,
or on account of, Mortgagee, then Mortgagee, upon written notice, may
declare the entire amount of Indebtedness due and payable one hundred eighty
(180) days after such notice.
(b) If any Governmental Authority shall at any time require
revenue, documentary or similar stamps to be affixed to this Mortgage or any
other Loan Document or shall require the payment of any tax with respect to
the ownership or recording of this Mortgage or any other Loan Document,
Mortgagor, upon demand, shall pay for such stamps in the required amount and
shall deliver the same to Mortgagee, together with a copy of the receipted
bill therefor. If Mortgagor shall fail to pay for any such stamps, then
Mortgagee, at its option (but without any obligation to do so), upon thirty
(30) days' notice to Mortgagor (or such shorter period as Mortgagee may deem
reasonable if Mortgagee believes that failure to pay for any such stamps
promptly may subject the Encumbered Property (or any portion thereof) to
loss, forfeiture or a material diminution in value), may pay for the same
and, in such event, the amount so paid (i) shall be deemed to be
Indebtedness, (ii) shall be a lien on the Encumbered Property prior to any
right or title to, or interest in, or claim upon, the Encumbered Property
subordinate to the lien of this Mortgage and (iii) immediately shall be due
and payable, on demand, together with interest thereon at the Interest Rate,
from the date of any such payment by Mortgagee to the date of repayment to
Mortgagee.
(c) In the event of the passage, after the date of this
Mortgage, of any law of the jurisdiction in which the Real Estate is located
which shall deduct from the value of the Encumbered Property, for purposes
of taxation, any lien thereon or shall change in any way the laws for the
taxation of mortgages or debts secured by mortgages for state or local
purposes or the manner of the collection of any such taxes and shall impose
a tax, either directly or indirectly, on this Mortgage or any other Loan
Document, then, so long as Mortgagor, Mortgagee, this Mortgage or the Credit
Agreement is not exempt from payment of such tax and if Mortgagor shall be
permitted by law to pay the whole of such tax in addition to all other
payments required hereunder and under the other Loan Documents, Mortgagor
shall pay such tax when the same shall be due and payable and shall agree
in writing to pay such tax when thereafter levied or assessed against the
Encumbered Property. In the event that any law or regulation may prohibit
Mortgagor from paying such tax, then Mortgagee, upon written notice, may
declare the entire amount of Indebtedness due and payable one hundred eighty
(180) days after such notice.
30. Payment of Impositions.
(a) Subject to the provisions of Article 10 hereof, not
later than the date on which payment of the same shall be due, that is, the
day before the date on which any fine, penalty, interest, late charge or
loss may be added thereto or imposed by reason of the nonpayment thereof,
Mortgagor shall pay and discharge all taxes (including, but without limiting
the generality of the foregoing, all real property taxes and assessments and
personal property taxes), charges for any easement or agreement maintained
for the benefit of the Encumbered Property or any portion thereof, general
and special assessments and levies, permit, inspection and license fees,
water and sewer rents and charges and any other charges of every kind and
nature whatsoever, foreseen or unforeseen, ordinary or extraordinary, public
or private, which, at any time, are imposed upon or levied or assessed in
connection with the Encumbered Property or any portion thereof, or which
arise with respect to, or in connection with, the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair or
Restoration of the Encumbered Property or any portion thereof, together with
any penalties, interest or late charges which may be imposed in connection
with any of the foregoing (all of the foregoing taxes, assessments, levies
and other charges, together with such interest, penalties and late charges,
being hereinafter collectively referred to as "Impositions" and,
individually, as an "Imposition"); provided, however, that Mortgagor shall
have the right to file for an extension in connection with the payment of
any Imposition and, if granted, to pay the Imposition on or before the date
specified in the extension, together with any interest or penalty which may
be imposed as a result of such extension. If, however, any Legal
Requirement shall allow that any Imposition may, at Mortgagor's option, be
paid in installments (whether or not interest shall accrue on the unpaid
balance of such Imposition), Mortgagor may exercise the option to pay such
Imposition in such installments, and, in such event, Mortgagor shall be
responsible for the payment of all such installments, together with the
interest, if any, thereon, in accordance with the provisions of the
applicable Legal Requirement. Not later than thirty (30) days after request
therefor by Mortgagee, Mortgagor shall deliver to Mortgagee evidence
reasonably acceptable to Mortgagee showing the payment of such Imposition.
Mortgagor also shall deliver to Mortgagee, within thirty (30) days after
request therefor, copies of all settlements and notices pertaining to any
Imposition which may be issued by any Governmental Authority.
(b) Upon the occurrence of an Event of Default or in the
event that Mortgagor shall fail, for two consecutive quarters, to make
payments on real property taxes and assessments on a timely basis, Mortgagee
may, but shall not be obligated to, require Mortgagor to deposit with
Mortgagee, monthly, one-twelfth (1/12th) of the annual charges for real
property taxes and assessments and other charges which might become a lien
upon the Encumbered Property or any portion thereof (each, an "Escrow
Deposit"). If the amounts so required to be deposited are estimated, based
upon charges for the preceding year, and Mortgagee determines, in its
reasonable good faith judgment, that the aggregate of the sums to be
deposited in escrow as aforesaid will be insufficient to make each of the
payments aforementioned, Mortgagor shall, on demand by Mortgagee,
simultaneously therewith deposit or cause to be deposited with Mortgagee,
a sum of money which, together with the monthly installments aforementioned,
due subsequent to the date of such demand, will be sufficient to make such
payments at least ten (10) days prior to the date such payments are due.
Should said charges not be ascertainable at the time any Escrow Deposit is
required to be made with Mortgagee, the Escrow Deposit shall be made on the
basis of the charges for the prior year, and when the charges are fixed for
the then current year, Mortgagor shall deposit any deficiency with
Mortgagee. All funds so deposited with Mortgagee shall be deposited in a
federally insured interest bearing account or liquid assets account in any
state in the United States or the District of Columbia, may be commingled
by Mortgagee with its general funds and, provided that Mortgagee shall not
otherwise have used a portion of such funds in accordance with the
provisions of this Mortgage, such funds (less the amounts, if any, which are
payable into the escrow fund to be used to pay real property taxes and
assessments not yet due and payable) shall be applied in payment of the
aforementioned charges when and as payable, to the extent Mortgagee shall
have such funds on hand. In the event that there shall occur an Event of
Default, the funds deposited with Mortgagee, as aforementioned, may be
applied in payment of the charges for which such funds shall have been
deposited or the payment of the Indebtedness or any other charges affecting
the security of this Mortgage, as Mortgagee determines, in its sole
discretion, but no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Mortgagee as herein
provided. If Escrow Deposits are being made with Mortgagee as aforesaid,
Mortgagor shall furnish Mortgagee with bills for the charges for which such
deposits are required to be made hereunder and/or such other documents
necessary for the payment of same, on the later to occur of (i) fifteen (15)
days prior to the date on which the charges first become due and payable and
(ii) the date on which such bills are received by Mortgagor.
(c) Nothing contained in this Mortgage shall affect any
right or remedy of Mortgagee under this Mortgage or otherwise to pay, upon
thirty (30) days' notice to Mortgagor (or such shorter period as Mortgagee
may deem reasonable if Mortgagee believes that the failure to pay any such
Imposition promptly may subject the Encumbered Property (or any portion
thereof) to loss, forfeiture or a material diminution in value), any
Imposition from and after the date on which such Imposition shall have
become due and payable and, in such event and provided Mortgagee shall not
have paid such Imposition with sums being held by Mortgagee pursuant to
subparagraph (b) of this Article 5 (provided, however, that Mortgagee shall
have no right to pay such Imposition while Mortgagor is contesting the
validity, enforceability or application of the same pursuant to the
provisions of Article 10 hereof or are otherwise paying such Imposition in
installments in accordance with the provisions hereof), the amount so paid
(i) shall be deemed to be Indebtedness, (ii) shall be a lien on the
Encumbered Property prior to any right or title to, interest in, or claim
upon, the Encumbered Property subordinate to the lien of this Mortgage and
(iii) shall be immediately due and payable, on demand, together with
interest thereon at the Interest Rate, from the date of any such payment by
Mortgagee to the date of repayment to Mortgagee.
31. Insurance.
(a) Mortgagor shall provide and keep in full force and
effect, or require to be provided and kept in full force and effect, for the
benefit of Mortgagee as hereinafter provided:
(I) insurance for the Buildings and the Personal Property
(t) against loss or damage by fire, lightning, windstorm, tornado, hail and
such other further and additional hazards of whatever kind or nature as are
now or hereafter may be covered by standard extended coverage, (u) with "all
risk" endorsements (including, but without limiting the generality of the
foregoing, vandalism, malicious mischief and damage by water), (v) against
war risks as, when and to the extent such insurance is obtainable from the
United States of America or an agency thereof, (w) against flood disaster
pursuant to the Flood Disaster Protection Act of 1973, 84 Stat. 572, 42
U.S.C. 4001, if the Real Estate is located in an area identified by the
United States Department of Housing and Urban Development as a flood hazard
area (it being understood and agreed that Mortgagor may obtain such
insurance from a private carrier satisfactory to the Mortgagee), (x) against
earthquakes (including subsidence), (y) against loss of rentals and business
interruption due to any of the foregoing causes for a minimum period of nine
(9) months, and (z) against any other risk commonly insured against by
persons operating properties similar to the Encumbered Property and located
in the vicinity of the Encumbered Property or conducting operations similar
to the operations conducted at the Real Estate;
(ii) demolition and increased cost of construction
coverage;
(iii) if a sprinkler system shall be located in the
Buildings, sprinkler leakage insurance;
(iv) commercial general liability insurance in
respect to the operation of the Real Estate with limits of not less than
$100,000,000 combined single limit for bodily injury per occurrence and/or
property damage liability per occurrence (collectively, the "Minimum
Liability Coverage"); provided, however, that the Minimum Liability Coverage
may be reduced from time to time, but in no event to limits of less than
$25,000,000 on a "claims made" basis, provided that Mortgagor shall deliver
to Mortgagee, within thirty (30) days after the expiration of the policy or
policies containing the Minimum Liability Coverage and thereafter within
thirty (30) days after the end of each fiscal year of Mortgagor until the
Minimum Liability Coverage shall be reinstated, an Officer's Certificate
stating that Mortgagor was unable to obtain commercial general liability
insurance coverage in excess of the amount actually obtained or on other
than a "claims made" basis; and
(v) such other insurance in such amounts as may
from time to time be commonly insured against in the case of properties
similar to the Encumbered Property and located in the vicinity of the Real
Estate or conducting operations similar to the operations conducted at the
Real Estate.
All insurance provided hereunder shall be in such form as is commonly
obtained by owners of property similar to the Real Estate and located in the
vicinity of the Real Estate or conducting operations similar to the
operations conducted at the Real Estate, shall not contain a coinsurance
provision whereby Mortgagor in the event of loss become a co-insurer, shall,
in the case of casualty insurance, name Mortgagee as a named insured under
a standard New York mortgagee endorsement or its equivalent, which shall be
acceptable to Mortgagee, shall name Mortgagee as a named insured in the case
of insurance other than casualty insurance, shall provide for loss payable
to Mortgagee, except policies insuring against damage by fire or other
casualty, which shall provide for loss payable as more particularly set
forth in Paragraph 6(j) hereof, shall be provided by insurance companies
which have a then current Alfred M. Best Company, Inc., general
policyholder's rating of at least "A-12" or a financial rating reasonably
acceptable to Mortgagee or by such other insurance companies as are
reasonably acceptable to Mortgagee, shall be cancelable only upon thirty
(30) days' prior written notice to Mortgagee, may provide for a standard
deduction not to exceed $500,000 in the case of all insurance other than
commercial general liability insurance, and $1,000,000 in the case of
commercial general liability insurance, and otherwise shall be acceptable
to Mortgagee in its reasonable discretion. For purposes hereof,
"Depositary" shall mean a bank, trust company, insurance company, savings
bank or governmental pension, retirement or welfare fund, reasonably
acceptable to Mortgagor and designated by Mortgagee to serve as Depositary
pursuant to this Mortgage. Anything contained herein to the contrary
notwithstanding, in no event shall the insurance provided under clause (t)
of Paragraph 6(a) (i) hereof be in an amount which is less than One Hundred
Percent (100%) of the full replacement cost of the Buildings and the
Personal Property, including the cost of debris removal, but excluding the
value of foundations and excavations, as determined from time to time by
Mortgagee. Mortgagor shall assign and deliver to Mortgagee all such
certificates, policies of insurance or duplicate originals thereof, as
collateral and further security for payment of the Indebtedness and
performance of the Obligations. If any insurance required to be provided
hereunder shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of the Real Estate or any portion
thereof, or become void or questionable by reason of the failure or
impairment of the capital of any insurer, or if for any other reason
whatsoever any such insurance shall become unsatisfactory to Mortgagee, as
determined in its reasonable judgment, Mortgagor immediately shall obtain
new or additional insurance which shall be satisfactory to Mortgagee in its
reasonable discretion. If any insurance required to be provided hereunder
shall become unavailable to property owners in the area in which the
Encumbered Property is located, then Mortgagor shall, within thirty (30)
days after demand by Mortgagee, obtain such other types of insurance, in
such amounts as may be reasonably required by Mortgagee. Mortgagor shall
not take out any separate or additional insurance which is contributing in
the event of loss unless it is properly endorsed and otherwise reasonably
satisfactory to Mortgagee in all respects.
(b) Mortgagor shall (i) pay as they become due all premiums
for the insurance required hereunder (it being understood that Mortgagor may
pay all such premiums in installments), and (ii) not later than thirty (30)
days prior to the expiration of each such policy, deliver to Mortgagee a
renewal policy or a duplicate original thereof or a certificate evidencing
the insurance required to be provided hereunder, accompanied by such
evidence of payment of the initial installment as shall be satisfactory to
Mortgagee in its reasonable discretion.
(c) If Mortgagor shall be in default of its obligation to so
insure or deliver any such prepaid policy or policies or certificate or
certificates of insurance to Mortgagee in accordance with the provisions
hereof, Mortgagee, at its option (but without any obligation to do so) and
upon twenty-four (24) hours' notice, may effect such insurance from year to
year, and pay the premium or premiums therefor, and, in such event, the
amount of all such premium or premiums (i) shall be deemed to be
Indebtedness, (ii) shall be a lien on the Encumbered Property prior to any
right or title to, or interest in, or claim upon, the Encumbered Property
subordinate to the lien of this Mortgage and (iii) shall be immediately due
and payable, on demand, together with interest thereon at the Interest Rate,
from the date of any such payment by Mortgagee to the date of repayment to
Mortgagee.
(d) Mortgagor shall adjust the amount of insurance required
to be provided pursuant to the provisions of clause (t) of Paragraph 6(a)
(i) hereof at the time that each such policy of insurance is renewed (but,
in no event, less frequently than once during each twelve (12) month period)
by using the F. W. Dodge Building Index to determine whether there shall
have been an increase in the replacement cost of the Buildings and the
Personal Property since the most recent adjustment to any such policy and,
if there shall have been any such increase, the amount of insurance required
to be provided hereunder shall be adjusted accordingly.
(e) Mortgagor promptly shall comply with, and shall cause
the Buildings and the Personal Property to comply with, (i) all of the
provisions of each such insurance policy, and (ii) all of the requirements
of the insurers thereunder applicable to Mortgagor or to any of the
Buildings or the Personal Property or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or Restoration of any
of the Buildings or Personal Property, even if such compliance would
necessitate structural changes or improvements or would result in
interference with the use or enjoyment of the Encumbered Property or any
portion thereof. If Mortgagor shall use the Encumbered Property or any
portion thereof in any manner which would permit the insurer to cancel any
insurance required to be provided hereunder, Mortgagor immediately shall
obtain a substitute policy which shall be reasonably satisfactory to
Mortgagee and which shall be effective on or prior to the date on which any
such other insurance policy shall be canceled.
(f) If the Buildings or the Personal Property or any portion
thereof shall be damaged, destroyed or injured by fire or any other
casualty, Mortgagor shall give immediate notice thereof to Mortgagee and
Mortgagor promptly shall commence and diligently shall continue and complete
the repair, restoration, replacement or rebuilding of the Buildings
("Restoration") and the Personal Property so damaged, destroyed or injured
substantially to their value, condition and character immediately prior to
such damage, destruction or injury, in full compliance with all Legal
Requirements. In addition, if the Restoration to be done may materially
impair the structural integrity of a material portion of the Buildings or
if the cost of the Restoration as estimated by Mortgagee shall exceed the
sum of Ten Million Dollars ($10,000,000) (in either case, "Major
Restoration"), then Mortgagor shall, prior to the commencement of the Major
Restoration, furnish or cause to be furnished to Mortgagee: (l) complete
plans and specifications for the Major Restoration, bearing the signed
approval thereof by an architect reasonably satisfactory to Mortgagee (the
"Architect") and accompanied by the Architect's signed estimate, bearing the
Architect's seal, of the entire cost of completing the work (the "Plans"),
which Plans shall be submitted to Mortgagee for approval, which approval
shall be granted or denied within twenty-one (21) days of Mortgagee's
receipt thereof (it being understood that if Mortgagee shall fail to respond
within such twenty-one (21)-day period, Mortgagee shall be deemed to have
granted its approval) and which approval shall not be unreasonably withheld;
provided, however, that Mortgagee's approval of the Plans shall not be
required in the case of (i) Major Restoration consisting primarily of
demolition or construction of the Buildings for safety purposes, (ii) Major
Restoration for which no permits or approvals by Governmental Authorities
are required by law, (iii) Major Restoration consisting primarily of
temporary, non-permanent construction, or (iv) Major Restoration consisting
primarily of painting or other items of decorative work; (2) certified or
photostatic copies of all permits and approvals required by law in
connection with the commencement and conduct of the Major Restoration; and
(3) either (x) a payment and performance bond for, and/or guaranty of the
payment for and completion of, the Major Restoration, which bond or guaranty
shall be in form reasonably satisfactory to Mortgagee, and shall be signed
by a surety or sureties, or guarantor or guarantors, as the case may be, who
are reasonably acceptable to Mortgagee, and shall be in an amount not less
than One Hundred Ten Percent (110%) of the Architect's estimate of the
entire cost of completing the Major Restoration, less the amount of
Insurance Proceeds, if any, then held by Depositary for application toward
the cost of the Major Restoration, or, at Mortgagor's option, (y) such other
security as may be reasonably satisfactory to Mortgagee. Notwithstanding
anything to the contrary contained herein, Mortgagee acknowledges that Major
Restoration may be performed on a "fast track" basis and, in such event,
Mortgagor shall not be required to submit full and complete Plans for
approval prior to the commencement of the Major Restoration, but shall
submit such Plans as and when they are prepared and submitted for approval
to the applicable Governmental Authorities.
(g) Mortgagor shall not commence any of the Major
Restoration until Mortgagor shall have complied with the applicable
requirements referred to in clause (f) above, and after commencing Major
Restoration, Mortgagor shall perform the Major Restoration diligently in a
good and workmanlike manner and in good faith substantially in accordance
with the Plans, if applicable, and in compliance with all applicable laws.
(h) Any Insurance Proceeds received by Depositary
attributable to business interruption insurance shall be promptly paid over
to Mortgagor upon receipt of the same by Depositary. All Insurance Proceeds
delivered to Depositary as aforesaid, other than proceeds attributable to
business interruption insurance, together with all Insurance Proceeds or
portions thereof paid directly to Depositary on account of damage or
destruction to the Buildings and/or the Personal Property (all of which
Insurance Proceeds or portions thereof, other than proceeds attributable to
business interruption insurance, shall be deposited by Depositary in an
interest-bearing account), together with any interest thereon, less the
cost, if any, to Mortgagee and Depositary of such recovery and of paying out
such Insurance Proceeds (including reasonable attorneys' fees and costs
allocable to inspecting the work and reviewing the Plans therefor), upon the
written request of Mortgagor and subject to compliance with the provisions
of this Article 6, shall be made available for application by Depositary to
the payment of the cost of the Major Restoration referred to in clause (f)
above and shall be paid out from time to time to Mortgagor and/or, at
Mortgagee's or Depositary's option, exercisable from time to time, directly
to the contractor, subcontractors, materialmen, laborers, engineers,
architects and other persons rendering services or materials in connection
with the Major Restoration, as said Major Restoration progresses, except as
otherwise hereinafter provided, but subject to the following conditions, any
of which Mortgagee and Depositary may waive:
(i) If the Restoration to be done is Major Restoration, as
determined by Mortgagee, the Architect shall be in charge of the
Restoration.
(ii) Each request for payment shall be made at least ten
(10) days prior to the requested date of disbursement and shall be
accompanied by a certificate of the Architect stating (l) that all of the
Major Restoration completed has been done in a good and workman-like manner
and in substantial compliance with the approved Plans, if any be required
under clause (f) hereof, and in accordance with the provisions of all
applicable laws; (2) the sum requested is justly required to reimburse
Mortgagor for payments by Mortgagor to, or is justly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or other
persons rendering services or materials in connection with the Major
Restoration (giving a brief description of such services and materials), and
that when added to all sums previously paid out by Depositary, if any, does
not exceed the value of the Major Restoration (including the value of any
"soft costs", such as engineers' or architects' fees incurred in connection
therewith) done to the date of such certificate; and (3) that the amount of
Insurance Proceeds remaining in the hands of Depositary, together with other
funds otherwise available to Mortgagor, provided that Mortgagor certifies
to the Architect that such funds are available, will be sufficient on
completion of the Major Restoration to pay for the same in full (giving in
such reasonable detail as Mortgagee or Depositary may require an estimate
of the cost of such completion and if such other funds are required,
including a certificate of an officer of Mortgagor, as to the sources of
such funds).
(iii) Each request shall be accompanied by waivers or
releases of liens, satisfactory to Mortgagee and Depositary, covering that
part of the Major Restoration previously paid for, if any, and by a search
prepared by a title company or by other evidence reasonably satisfactory to
Mortgagee and Depositary that there has not been filed with respect to the
Encumbered Property, or any part thereof, any mechanic's lien or other lien
or instrument for the retention of title not discharged of record (by
bonding or otherwise) in respect of any part of the work and that there
exist no encumbrances on or affecting the Encumbered Property, or any part
thereof, other than Permitted Encumbrances and those which may have been
approved by Mortgagee.
(iv) There shall be no Event of Default under this Mortgage
or the Credit Agreement or any other Loan Document.
(v) The request for any payment after the Major Restoration
has been completed shall be accompanied by a copy of any certificate or
certificates required by law to render occupancy and operation of the
Encumbered Property legal.
Any Insurance Proceeds remaining after completion of such Restoration
shall be paid to Mortgagor, provided that there shall not then be continuing
any Event of Default hereunder. Upon failure on the part of Mortgagor
promptly to commence or diligently to continue the Restoration, and upon
twenty-four (24) hours' notice by Mortgagee to Mortgagor, Mortgagee may
apply the amount of any Insurance Proceeds (together with any interest
earned thereon) then or thereafter in the hands of Depositary to the payment
of the Indebtedness; provided, however, that nothing herein contained shall
prevent Mortgagee from applying at any time the whole or any part of such
Insurance Proceeds (together with any interest earned thereon), and
Mortgagee may so apply such Insurance Proceeds (together with any interest
earned thereon), to the curing of any Event of Default under this Mortgage
or the Credit Agreement or any other Loan Document.
(i) If within one (1) year after the occurrence of any
damage or destruction to the Buildings and Personal Property or any portion
of either thereof requiring Major Restoration in order to restore the
Buildings and Personal Property, Mortgagor shall not have submitted to
Mortgagee and received Mortgagee's approval, which approval shall not be
unreasonably withheld or delayed, as set forth above, of Plans for the Major
Restoration of the Buildings and the Personal Property so damaged or
destroyed, or if, after such Plans are approved by all necessary
Governmental Authorities and Mortgagee, Mortgagor shall fail to commence
promptly such Major Restoration, or if thereafter Mortgagor fails diligently
to continue such Major Restoration or is delinquent in the payment to
mechanics, materialmen or others of the costs incurred in connection with
such Major Restoration (other than those costs which Mortgagor is, in good
faith, disputing), or, in the case of any damage or destruction to the
Buildings and/or the Personal Property or any part of either thereof not
requiring Major Restoration, as reasonably determined by Mortgagee, in order
to restore the Encumbered Property, if Mortgagor shall fail to repair,
restore and rebuild promptly the Buildings and Personal Property so damaged
or destroyed, or in any other respect fails to comply with its obligations
under this Article 6, then, in addition to all other rights herein set
forth, and after giving Mortgagor thirty (30) days' written notice of the
nonfulfillment of one or more of the foregoing conditions, and provided that
such non-fulfillment shall not be cured within said thirty (30)-day period,
Mortgagee, or any lawfully appointed receiver of the Buildings and Personal
Property may, at their respective options (but without any obligation to do
so), perform or cause to be performed such Major Restoration and may take
such other steps as they deem advisable to perform such work; provided,
however, that Mortgagee shall be permitted to give such shorter notice (and
in such manner) as is reasonably practical in case of emergency or other
special circumstances. In such event, Depositary shall pay over the
Insurance Proceeds (together with any interest earned thereon) held by it
to Mortgagee or such receiver, as the case may be, upon request, to the
extent not previously paid to Mortgagor hereunder. Mortgagor hereby waives,
for itself and all others holding under it, any claim against Mortgagee and
such receiver arising out of anything done by Mortgagee or such receiver
pursuant hereto, other than due to the negligence or wilful misconduct of,
Mortgagee or such receiver, and Mortgagee may apply all or a portion of the
Insurance Proceeds (without the need to fulfill any other requirements of
this Article 6) to reimburse Mortgagee and/or such receiver, for all amounts
reasonably expended or incurred by them, respectively, in connection with
the performance of such Major Restoration, and any excess costs shall be
paid by Mortgagor to Mortgagee upon demand.
(j) Insurance Proceeds which are payable in connection with
any damage to, or destruction of, or injury to, the Buildings or the
Personal Property (i) in the case of a loss equal to or in excess of Twelve
Million Dollars ($12,000,000), shall all be paid to Depositary and disbursed
in accordance with the provisions hereof; (ii) in the case of a loss in
excess of Ten Million Dollars ($10,000,000), but less than Twelve Million
Dollars ($12,000,000), the first Ten Million Dollars ($10,000,000) shall be
paid to Mortgagor and the remaining Insurance Proceeds shall be paid to
Depositary and disbursed in accordance with the provisions hereof; and (iii)
in the case of a loss of Ten Million Dollars ($10,000,000) or less, shall
be paid directly to Mortgagor. Mortgagor is hereby authorized to settle all
claims under all policies of insurance and to execute and deliver all
necessary proofs of loss, receipts, vouchers and releases required by the
insurers, however, Mortgagee shall have the right, but not the obligation,
to join with Mortgagor in settling, and approving the settlement of, any
such claims except in the event of a claim where the amount of insurance
reasonably anticipated to be received with respect to such claim is less
than Ten Million Dollars ($10,000,000). Each insurer is hereby authorized
and directed to make payment of any Insurance Proceeds or the portion
thereof, as described in this Paragraph 6 (j), under any policies of
insurance in connection with a loss in excess of Twelve Million Dollars
($12,000,000) directly to Depositary instead of to Mortgagor and Depositary
jointly, and Depositary is hereby authorized to endorse any draft therefor
as Mortgagor's attorney-in-fact if Mortgagor shall fail to do so for ten
(10) days (or such lesser period of time as Mortgagee may reasonably believe
to be required) after request therefor by Mortgagee or Depositary. If,
prior to the receipt by Depositary or Mortgagor, as the case may be, of any
Insurance Proceeds or portion thereof, the Encumbered Property or any
portion thereof shall have been sold by Mortgagee pursuant to the power of
sale provided herein, Mortgagee shall have the right to receive the
Insurance Proceeds to the extent of any deficiency found to be due upon such
sale, whether or not a deficiency judgment on this Mortgage shall have been
sought or recovered or denied, together with interest thereon at the
Interest Rate, and the reasonable attorneys' fees, costs and disbursements
incurred by Mortgagee in connection with the collection of the Insurance
Proceeds.
(k) The insurance required by this Mortgage may, at the
option of Mortgagor, be effected by blanket and/or umbrella policies issued
to Mortgagor covering the Buildings and the Personal Property as well as
other properties (real and personal) which are owned or leased by Mortgagor,
provided that, in each case, the policies otherwise comply with the
provisions of this Mortgage and allocate to the Buildings and the Personal
Property, from time to time, the coverage specified by Mortgagee, without
possibility of reduction or coinsurance by reason of, or damage to, any
other property (real or personal) named therein. If the insurance required
by this Mortgage shall be effected by any such blanket or umbrella policies,
Mortgagor shall furnish to Mortgagee original policies or duplicate
originals thereof or certificates, with schedules attached thereto showing
the amount of the insurance provided under such policies which is applicable
to the Buildings and the Personal Property.
(l) Any conveyance or foreclosure of the Encumbered Property
pursuant to the Mortgagee's rights in accordance with the provisions hereof
shall transfer therewith all of Mortgagor's interest in all insurance
policies then covering the Buildings and the Personal Property or the
operations conducted at the Real Estate.
(m) Mortgagor hereby acknowledges that in the event
Mortgagee is permitted or required to exercise any discretion under this
Article, Mortgagee shall not be deemed to have abused such discretion
provided that Mortgagee shall have relied, at the expense of Mortgagor, on
a recognized insurance consultant with regard to insurance matters, a
recognized construction consultant with regard to restoration matters or
such other recognized consultants as may be appropriate or necessary to
fulfill its obligation hereunder. Any consultants referred to herein shall
have not less than 10 years' experience.
32. Condemnation/Eminent Domain.
(a) Notwithstanding (i) any taking by eminent domain,
condemnation or otherwise of all or any portion of the Encumbered Property,
or (ii) the change of grade of any street or the widening of streets, roads
or avenues adjoining or abutting the Land, or (iii) any other injury to or
decrease in value of the Encumbered Property by any Governmental Authority
(any of the foregoing events being hereinafter referred to as a "Taking"),
Mortgagor shall continue to make all payments due under this Mortgage and
under the Credit Agreement and the other Loan Documents in accordance with
the provisions of this Mortgage, the Credit Agreement and the applicable
provisions of the other Loan Documents. Mortgagor shall notify Mortgagee
immediately upon obtaining knowledge of the institution of any proceedings
for any Taking or of any contemplated Taking of which Mortgagor is aware.
No such proceeding with respect to any Taking shall be settled without the
express written prior consent of Mortgagee, which consent shall not be
unreasonably withheld or delayed, it being agreed that if Mortgagee shall
have failed to have either granted or denied its consent thereto within
twenty-one (21) days after request therefor, the same shall be deemed to
have been given; provided, however, that a proceeding where the amount
reasonably anticipated to be received by the Mortgagor collectively is less
than Ten Million Dollars ($10,000,000) shall not require such consent.
Mortgagor is hereby authorized to execute and deliver all necessary proofs
of loss, receipts, vouchers and releases required in connection with any
Taking. Each Governmental Authority is hereby authorized and directed to
make payment of any Award made in connection with any Taking directly to
Mortgagor or Depositary in accordance with the provisions of the next
succeeding sentence and paragraph 7(b) hereof instead of to Mortgagor and
Depositary jointly, and Depositary is hereby authorized to endorse any draft
therefor as Mortgagor's attorney-in-fact if Mortgagor shall fail to endorse
any such draft for ten (10) days after request therefor by Mortgagee or
Depositary. Anything contained in any Legal Requirement or this Mortgage
to the contrary notwithstanding, if there shall be a Taking of less than the
entire Encumbered Property and if there shall remain a sufficient portion
of the Encumbered Property so that it shall be possible for Mortgagor to
continue to conduct their business at such remaining Encumbered Property (a
"Partial Taking"), (i) in the event that the Award is less than Ten Million
Dollars ($10,000,000), the same shall be paid to Mortgagor, (ii) in the
event that the Award shall be equal to or be in excess of Ten Million
Dollars ($10,000,000), but shall be less than Twelve Million Dollars
($12,000,000), the first Ten Million Dollars ($10,000,000) of such Award
shall be paid to Mortgagor and the remaining portion of the Award shall be
paid to Depositary, or (iii) in the event that the Award shall be equal to
or greater than Twelve Million Dollars ($12,000,000), the entire Award shall
be paid to Depositary and, in the case of (i) and (ii) above, Depositary
shall pay the Award or portion thereof received (after deducting therefrom
all costs and expenses, including, but without limiting the generality of
the foregoing, reasonable attorneys' fees, costs and disbursements incurred
by Mortgagee in connection with the collection thereof and any expenses of
Depositary) to Mortgagor, in accordance, and upon there being compliance,
with the provisions of Article 6 hereof, for the sole purpose of Mortgagor's
Restoration of the Buildings and the Personal Property remaining after any
such Partial Taking, it being understood and agreed, however, that neither
Mortgagee nor Depositary shall have any obligation whatsoever to see to the
proper application of any Award so paid to Mortgagor. Mortgagor promptly
shall commence and diligently shall continue and complete the Restoration
of the Buildings and the Personal Property remaining after such Partial
Taking substantially to their value, condition and character immediately
prior to such Partial Taking, in accordance with the provisions of Article
6 hereof, as if such Partial Taking had resulted in "damage or destruction
to the Buildings or Personal Property" (within the meaning of Paragraph 6
(f) hereof), with Mortgagor, Mortgagee and Depositary each having the same
rights and obligations with respect to the Award and Restoration as are set
forth in Paragraphs 6(f) through 6(j) hereof with respect to Insurance
Proceeds, except that, notwithstanding the provisions of Paragraph 6(f)
hereof, Mortgagor shall restore the Buildings and the Personal Property
substantially to their value, condition and character immediately prior to
such Partial Taking, only to the extent practicable, but otherwise in
accordance with the provisions of Paragraph 6(f). Any Award remaining after
completion of such Restoration shall be paid to Mortgagor, provided that
there shall not then be continuing any Event of Default hereunder. If there
shall then be continuing an Event of Default hereunder, any such Award shall
be paid to the Mortgagee, and shall be applied to the payment of the
Indebtedness then outstanding.
(b) Notwithstanding anything contained herein to the
contrary, in the event of a total Taking or a Taking other than a Partial
Taking, each Governmental Authority is hereby authorized and directed to
make payment of any Award made in connection with any such Taking to
Mortgagee.
(c) Reduction of the outstanding amount of the Indebtedness
resulting from the application of any such Award by Mortgagee in accordance
with the provisions hereof shall be deemed to take effect only on the date
of Mortgagee's receipt of such Award in accordance with the terms of this
Mortgage and in such order of priority as Mortgagee may elect. If, prior
to the receipt by Mortgagee of any Award, the Encumbered Property or any
portion thereof shall have been sold by Mortgagee pursuant to the power of
sale provided herein, Mortgagee shall have the right to receive the Award
to the extent of any deficiency found to be due upon such sale, whether or
not a deficiency judgment on this Mortgage shall have been sought or
recovered or denied, together with interest thereon at the Interest Rate and
the reasonable attorneys' fees, costs and disbursements incurred by
Mortgagee in connection with the collection of the Award.
(d) Mortgagor hereby acknowledges that in the event
Mortgagee is permitted or required to exercise any discretion under this
Article, Mortgagee shall not be deemed to have abused such discretion
provided that Mortgagee shall have relied, at the expense of Mortgagor, on
a recognized construction consultant, an appraiser who is a member of the
American Institute of Real Estate Appraisers and who has been designated a
"Member American Institute", or such other recognized consultants as may be
appropriate or necessary to fulfill its obligations hereunder. Any
consultants referred to herein shall have not less than 10 years'
experience.
33. Sale of Encumbered Property; Additional Financing. Except
as permitted under the terms of the Credit Agreement Mortgagor shall not,
at any time, assign, transfer or convey all or any part of the Encumbered
Property or any interest therein.
34. Discharge of Liens. Subject to the provisions of Article 10
hereof and except as permitted by the Credit Agreement or this Mortgage,
Mortgagor at all times shall keep the Encumbered Property free from the
liens of mechanics, laborers, contractors, subcontractors and materialmen
and, except for the Permitted Encumbrances and any new or additional
mortgages which may be made to Mortgagee, free from any and all other liens,
claims, charges or encumbrances of any kind or nature whatsoever. If any
such liens, claims, charges or encumbrances shall be recorded, Mortgagor
shall forthwith deliver copies thereof to Mortgagee and Mortgagor shall,
within thirty (30) days after request therefor by Mortgagee, cause the same
to be discharged of record by payment or bonding.
35. Right of Contest. Mortgagor, at its sole cost and expense,
may, in good faith, contest, by proper legal actions or proceedings, the
validity of any Legal Requirement or the application thereof to Mortgagor
or the Encumbered Property, or the validity or amount of any Imposition or
the validity of the claims of any mechanics, laborers, subcontractors,
contractors or materialmen ("Contractor's Claims"). During the pendency of
any such action or proceeding, compliance with such contested Legal
Requirement or payment of such contested Imposition or payment of such
contested Contractor's Claim may be deferred, provided that, in each case,
at the time of the commencement of any such action or proceeding, and during
the pendency of such action or proceeding, (a) no Event of Default shall
exist hereunder and no other event shall have occurred which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default hereunder, (b) adequate reserves with respect thereto are maintained
on Mortgagor's books in accordance with generally accepted accounting
principles and the applicable provisions of the Credit Agreement, and (c)
Mortgagor reasonably believes that noncompliance with the contested Legal
Requirement or non-payment of the contested Imposition or non-payment of
such contested Contractor's Claim would not have a material adverse effect
upon the business of Mortgagor, the Encumbered Property or the operation
thereof or the Mortgagee. Notwithstanding any such reserves or the
furnishing of any bond or other security, thirty (30) days after notice from
Mortgagee, Mortgagor shall comply with any contested Legal Requirement or
shall pay any contested Imposition or Contractor's Claim, and compliance
therewith or payment thereof shall not be deferred, if, at any time, such
deferral would have a material adverse effect on Mortgagor and their
subsidiaries taken as a whole or be disadvantageous in any material respect
to the Mortgagee. If such action or proceeding is terminated or discontinued
adversely to Mortgagor and is not subject to appeal, Mortgagor shall, within
thirty (30) days of receiving request therefor, deliver to Mortgagee
evidence reasonably satisfactory to Mortgagee of Mortgagor's compliance with
such contested Legal Requirement or payment of such contested Imposition or
Contractor's Claim, as the case may be. Notwithstanding the foregoing,
Mortgagee shall have no obligation to request any matters referred to herein
and shall request such matters in Mortgagee's reasonable discretion.
36. Leases.
(a) Each Lease entered into from and after the date hereof
including, without limitation, all Leases which provide for an annual "base"
or "minimum" rent in excess of - $100,000 (a "Major Lease") shall (i) not
permit the lessee thereunder to terminate or invalidate the terms thereof
as a result of any action taken by Mortgagee to enforce this Mortgage,
including, without limitation, any sale of the Encumbered Property or any
portion thereof by Mortgagee pursuant to the power of sale provided herein
or otherwise, (ii) include a subordination clause providing that the Lease
and the interest of the lessee in the Encumbered Property are in all
respects subject and subordinate to this Mortgage, (iii) provide that, at
the option of Mortgagee or the purchaser at a sale by Mortgagee pursuant to
the power of sale provided herein or otherwise or the grantee in a voluntary
conveyance in lieu of such Mortgagee's sale, the lessee thereunder shall
attorn to Mortgagee or to such purchaser or grantee under all of the terms
of the Lease and recognize such entity as the lessor under the Lease for the
balance of the term of the Lease, and (iv) provide that, in the event of the
enforcement by Mortgagee of the remedies provided by law or in equity or by
this Mortgage, any person succeeding to the interest of Mortgagee as a
result of such enforcement shall not be bound by or liable for any (A)
prepayment of installments of Rent for more than thirty (30) days in advance
of the time when the same shall become due (excluding, however, any payments
of "key money" made by any lessee in connection with the execution or
renewal of its Lease or any other sums paid in connection with the execution
or renewal of a Lease as advance rental, to the extent the same has been
paid prior to the occurrence of an Event of Default) or (B) prior act or
omission of any prior landlord.
(b) Mortgagor shall (i) promptly perform all of the
provisions of the Leases on the part of the lessor thereunder to be
performed, (ii) appear in and defend any action or proceeding arising under,
growing out of, or in any manner connected with, the Leases or the
obligations of the lessor or the lessees thereunder, (iii) exercise, within
thirty (30) days after demand by Mortgagee, any right to request from the
lessee under any Major Lease a certificate with respect to the status
thereof, (iv) deliver to Mortgagee, within thirty (30) days after demand by
Mortgagee, a written statement containing the names of all lessees, the
terms of all Leases and the spaces occupied and rentals payable thereunder
and a statement of all Leases which are then in default of any monetary
obligation, including the magnitude of any such monetary default and, in the
case of any non-monetary default, a statement of all Leases which, to the
best of Mortgagor's knowledge, are then in default of any non-monetary
obligation, including the nature and magnitude of any such non-monetary
default, (v) promptly deliver to Mortgagee, a fully executed copy of each
Lease upon the execution of the same. Notwithstanding the foregoing,
Mortgagee shall have no obligation to request any matters referred to herein
and shall request such matters in Mortgagee's reasonable discretion.
(c) Mortgagor hereby assigns to Mortgagee, from and after
the date hereof, primarily on a parity with the Encumbered Property, and not
secondarily, as further security for the payment of the Indebtedness and the
performance of the Obligations, the Leases and the Rents. Nothing contained
in this Article 11 shall be construed to bind Mortgagee to the performance
of any of the terms, covenants, conditions or agreements contained in any
Lease or otherwise impose any obligation on Mortgagee (including, but
without limiting the generality of the foregoing, any liability under the
covenant of quiet enjoyment contained in any Lease in the event that any
lessee shall have been joined as a party defendant in any action commenced
by reason of an Event of Default hereunder or in the event of the sale of
the Encumbered Property by Mortgagee pursuant to the power of sale contained
herein or otherwise or in the event lessee shall have been barred and
foreclosed of any or all right, title and interest and equity of redemption
in the Encumbered Property), except that Mortgagee shall be accountable for
any money actually received pursuant to the aforesaid assignment. Mortgagor
hereby further grants to Mortgagee the right, but not the obligation, (i)
to enter upon and take possession of the Encumbered Property for the purpose
of collecting the Rents, (ii) to dispossess by the usual summary proceedings
any lessee defaulting in making any payment due under any Lease to Mortgagee
or defaulting in the performance of any of its other obligations under its
Lease, (iii) to let the Encumbered Property or any portion thereof, (iv) to
apply the Rents on account of the Indebtedness, it being understood that the
excess Rents, if any, remaining after all such payments shall have been made
shall be the property of and paid to Mortgagor, provided there exists no
Event of Default, and (v) to perform such other acts as Mortgagee is
entitled to perform pursuant to this Article 11. Such assignment and grant
shall continue in effect until the entire amount of the Indebtedness shall
have been fully paid pursuant to the terms hereof and the other Loan
Documents, and all Obligations shall have been fully performed in accordance
with all provisions hereof and the other Loan Documents, the execution of
this Mortgage constituting and evidencing the irrevocable consent of
Mortgagor to the entry upon and taking possession of the Encumbered Property
by Mortgagee pursuant to such grant, subject, however, to the rights of any
and all parties in possession thereof, whether or not the Encumbered
Property shall have been sold by Mortgagee pursuant to the power of sale
contained herein or otherwise and without applying for a receiver.
Mortgagee, however, grants to Mortgagor, not as a limitation or condition
hereof, but as a personal covenant available only to Mortgagor and its
successors and not to any lessee or other person, a license, revocable upon
the occurrence of an Event of Default upon five (5) days' written notice to
Mortgagor, to collect all of the Rents and to retain, use and enjoy the same
and to do all acts and perform such Obligations as Mortgagor is required to
perform under the Leases.
(d) Upon notice and demand, Mortgagor shall, from time to
time, execute, acknowledge and deliver to Mortgagee, or shall cause to be
executed, acknowledged and delivered to Mortgagee, in form reasonably
satisfactory to Mortgagee, one or more separate assignments (confirmatory
of the general assignment provided in this Article 11, subject to
Mortgagor's license) of the lessor's interest in any Lease. Mortgagor shall
pay to Mortgagee the reasonable expenses incurred by Mortgagee in connection
with the preparation and recording of any such instrument.
37. Estoppel Certificates. Mortgagor and Mortgagee, within
thirty (30) business days after request by the other, shall deliver, in form
reasonably satisfactory to the other, a written statement, duly executed and
acknowledged, setting forth the amount of the Indebtedness then outstanding
and whether, to the best knowledge of the affiant, any offsets, claims,
counterclaims or defenses exist against the Indebtedness secured by this
Mortgage.
38. Loan Document Expenses. Mortgagor shall pay, together with
any interest or penalties imposed in connection therewith, all reasonable
expenses of Mortgagee incident to the preparation, execution,
acknowledgement, delivery and/or recording of this Mortgage, the Assignment
and UCC-1 financing statements executed in connection with this Mortgage,
including, but without limiting the generality of the foregoing, all filing,
registration and recording fees and charges, documentary stamps, intangible
taxes and all federal, state, county and municipal taxes, duties, imposts,
assessments and charges now or hereafter required by reason of, or in
connection with, this Mortgage, the Assignment, such UCC-1 financing
statements and UCC-3 continuation statements, and, in any event, otherwise
shall comply with the provisions set forth in Article 4 hereof.
39. Mortgagee's Right to Perform. In the event of any Event of
Default hereunder, Mortgagee may (but shall be under no obligation to), at
any time, without waiving or releasing Mortgagor from any Obligations or any
Event of Default under this Mortgage, perform the Obligations and, in such
event, the cost thereof, including, but without limiting the generality of
the foregoing, reasonable attorneys' fees, costs and disbursements incurred
in connection therewith, (a) shall be deemed to be Indebtedness secured by
this Mortgage, (b) shall be a lien on the Encumbered Property prior to any
right or title to, interest in, or claim upon, the Encumbered Property
subordinate to the lien of this Mortgage, and (c) shall be payable, on
demand, together with interest thereon at the Interest Rate, from the date
of any such payment by Mortgagee to the date of repayment to Mortgagee. No
payment or advance of money by Mortgagee pursuant to the provisions of this
Article 14 shall cure, or shall be deemed or construed to cure, any such
Event of Default by Mortgagor hereunder or waive any rights or remedies of
Mortgagee hereunder or at law or in equity by reason of any such Event of
Default.
40. Mortgagee's Costs and Expenses. If (a) Mortgagor shall fail
to perform any of the Obligations under this Mortgage, beyond applicable
grace periods, if any, or any other Loan Document, including the Credit
Agreement, beyond any applicable grace period, or (b) Mortgagee shall
exercise any of its rights or remedies hereunder, or (c) any action or
proceeding is commenced in which it becomes necessary to defend or uphold
the lien or priority of this Mortgage or any action or proceeding relating
to this Mortgage or any other Loan Document is commenced to which Mortgagee
is or becomes a party, or (d) the taking, holding or servicing of this
Mortgage by or on behalf of Mortgagee is alleged to subject Mortgagee to any
civil or criminal fine or penalty, or (e) Mortgagee's review and approval
of any document, including, but without limiting the generality of the
foregoing, any Major Lease (but excluding Leases that are not Major Leases),
is requested by Mortgagor or required by Mortgagee, then, in any such event,
all such reasonable costs, expenses and fees incurred by Mortgagee in
connection therewith (including, but without limiting the generality of the
foregoing, any civil or criminal fines or penalties and attorneys' fees,
costs and disbursements) (i) shall be deemed to be Indebtedness secured by
this Mortgage, (ii) shall be a lien on the Encumbered Property prior to any
right or title to, interest in, or claim upon, the Encumbered Property
subordinate to the lien of this Mortgage, and (iii) shall be payable, on
demand, together with interest thereon at the Interest Rate, from the date
of any such payment by Mortgagee to the date of repayment to Mortgagee. In
any action to enforce any remedy under this Mortgage, including, but without
limiting the generality of the foregoing, sale of the Encumbered Property
by Mortgagee pursuant to the power of sale contained herein or otherwise,
or to recover or collect the Indebtedness or any portion thereof, the
provisions of this Article 16 with respect to the recovery of costs,
expenses, disbursements and penalties shall prevail unaffected by the
provisions of any Legal Requirement with respect to the same to the extent
that the provisions of this Article 15 are not inconsistent therewith or
violative thereof.
41. Events of Defaults. The occurrence of an "Event of Default"
under the terms of the Credit Agreement shall be an Event of Default
hereunder.
42. Remedies.
(a) Upon the occurrence of any Event of Default hereunder,
Mortgagee may, without further notice, presentment, demand or protest, all
of which are hereby expressly waived by Mortgagor, take such action as
Mortgagee deems advisable, in its sole discretion, to protect and enforce
the rights of Mortgagee against the Mortgagor and in and to the Encumbered
Property or any part thereof, including, but without limiting the generality
of the foregoing, the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such manner as Mortgagee may
determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee hereunder or at law or in equity:
(i) Mortgagee may elect to cause the Encumbered
Property or any portion thereof to be sold in accordance with the provisions
hereof and applicable law.
(ii) Mortgagee may, without releasing Mortgagor from
any Obligation under this Mortgage or any other obligation under any other
Loan Document and without waiving any Event of Default, exercise any of its
rights and remedies under Article 14 hereof.
(iii) If the Indebtedness shall have been declared
due and payable in accordance with the provisions of the Credit Agreement,
then Mortgagee may (x) institute and maintain an action with respect to the
Encumbered Property under any other Loan Document, or (y) take such other
action as may be allowed at law or in equity for the enforcement of this
Mortgage and the other Loan Documents. Mortgagee may proceed in any such
action to final judgment and execution thereon for the whole of the
Indebtedness, together with interest thereon at the Interest Rate, from the
date on which Mortgagee shall declare the same to be due and payable to the
date of repayment to Mortgagee, and all costs of any such action, including,
but without limiting the generality of the foregoing, reasonable attorneys'
fees, costs and disbursements.
(iv) Mortgagee, if it has not already revoked the
license granted pursuant to Article 11 hereof, may revoke the license and
may, without releasing Mortgagor from any Obligation under this Mortgage,
and without waiving any Event of Default, enter upon and take possession of
the Encumbered Property or any portion thereof, either personally or by its
agents, nominees or attorneys, and dispossess Mortgagor and its agents and
servants therefrom and, thereupon, Mortgagee may (w) use, manage, operate,
control, insure, maintain, repair, restore and otherwise deal with all and
every part of the Encumbered Property, (x) complete any construction on the
Real Estate, in such manner and form as Mortgagee deems advisable, (y) make
alterations, additions, renewals, replacements and improvements to or on the
Encumbered Property and (z) exercise all rights and powers of Mortgagor with
respect to the Encumbered Property, either in the name of Mortgagor or
otherwise, including, but without limiting the generality of the foregoing,
the right to make, cancel, enforce or modify Leases, obtain and evict
lessees, establish or change the amount of any Rents and the manner of
collection thereof and perform any acts which Mortgagee deems proper, in its
sole discretion, to protect the security of this Mortgage. Mortgagee may,
but shall not be obligated to, take any action pursuant to the Laws of the
State of New Jersey to enforce the provisions of any Operational
Requirements and to secure continued operation of the Encumbered Property
as a licensed casino operation. After deduction of all reasonable costs and
expenses of operating and managing the Encumbered Property, including, but
without limiting the generality of the foregoing, attorneys' fees, costs and
disbursements, administration expenses, management fees and brokers'
commissions, satisfaction of liens on any of the Encumbered Property,
payment of Impositions, claims and insurance premiums, invoices of persons
who may have supplied goods and services to or for the benefit of any of the
Encumbered Property and all costs and expenses of the maintenance, repair,
Restoration, alteration or improvement of any of the Encumbered Property,
Mortgagee may apply the Rents received by Mortgagee to payment of the
Indebtedness or performance of the Obligations. Mortgagee may apply the
Rents received by Mortgagee to the payment of any or all of the foregoing
in such order and amounts as Mortgagee, in its sole discretion, may elect.
Mortgagee may, in its sole discretion, determine the method by which, and
extent to which, the Rents will be collected and the obligations of the
lessees under the Leases enforced and Mortgagee may waive or fail to enforce
any right or remedy of the lessor under any Lease.
(v) Mortgagee may disaffirm and cancel any Lease
affecting the Encumbered Property or any portion thereof at any time during
the period that it is exercising its remedies under this Article 17, even
though Mortgagee shall have enforced such Lease, collected Rents thereunder
or taken any action that might be deemed by law to constitute an affirmance
of such Lease. Such disaffirmance shall be made by notice addressed to the
lessee at the Real Estate or, at Mortgagee's option, such other address of
the lessee as may be set forth in such Lease.
(i) Mortgagee may declare the entire unpaid Indebtedness to
be immediately due and payable.
(vii) Mortgagee may institute proceedings for the
complete foreclosure of this Mortgage in which case the Encumbered Property
or the Mortgagor's interest therein may be sold for cash or upon credit in
one or more portions.
(viii) Mortgagee may, with or without entry, to the
extent permitted and pursuant to the procedures provided by applicable law,
institute proceedings for the partial foreclosure of this Mortgage for the
portion of the Indebtedness then due and payable, subject to the continuing
lien of this Mortgage for the balance of the Indebtedness not then due.
(ix) Mortgagee may sell for cash or upon credit the
Encumbered Property or any part thereof and all estate, claim, demand,
right, title and interest of Mortgagor therein and rights of redemption
thereof, pursuant to power of sale or otherwise, at one or more sales, in
its entirety or in portions, at such time and place, upon such terms and
after such notice thereof as may be required or permitted by law, and in the
event of a sale, by foreclosure or otherwise, of less than all of the
Encumbered Property this Mortgage shall continue as a lien on the remaining
portion of the Encumbered Property.
(x) Mortgagee may institute an action, suit or proceeding
in equity for the specific performance of any covenant, condition or
agreement contained herein or in the Notes or in the Assignment or in any
other Loan Document or Document.
(xi) Mortgagee may recover judgment on the Notes either
before, during or after any proceedings for the enforcement of this
Mortgage.
(xii) Mortgagee shall be entitled to the appointment of a
trustee, receiver, liquidator or conservator of the Encumbered Property,
without regard for the adequacy of the security for the Indebtedness and
without regard for the solvency of the Mortgagor, any guarantor or of any
person, firm or the entity liable for the payment of the Indebtedness.
(xiii) Mortgagee may cure such Event of Default, without
relieving Mortgagor of any liability in connection with such Event of
Default, and (1) Mortgagor, on demand, shall reimburse Mortgagee for any and
all costs and expenses incurred by Mortgagee in connection with the curing
of any Event of Default, together with interest thereon at the Interest Rate
from the date such costs and expenses are incurred to the date of repayment
to Mortgagee, and (2) Mortgagee shall be entitled to apply any sums then
held by Mortgagee pursuant to the provisions of this Mortgage to the curing
of such Event of Default or to reimburse the Mortgagee for costs and
expenses incurred in connection therewith; and/or
(xiv) Mortgagee may pursue such other remedies as the
Mortgagee may have under any applicable law.
(b) The purchase money proceeds or avails of any sale made
under or by virtue of this Article 17, together with any other sums which
then may be held by Mortgagee under this Mortgage, whether under the
provisions of this Article 17 or otherwise, shall be applied as follows:
First: To the payment of the costs and expenses of any such sale,
including reasonable compensation to Mortgagee's agents and counsel, and of
any judicial proceedings wherein the same may be made, and of all expenses,
liabilities and advances made or incurred by Mortgagee under this Mortgage
and together with interest as provided herein on all advances made by
Mortgagee and all taxes or assessments, except any taxes, assessments or
other charges subject to which the Encumbered Property shall have been sold.
Second: To the payment of amounts then due and unpaid for principal
and interest on the Notes.
Third: To the payment of the amount of Indebtedness then outstanding
and performance of all of the other Obligations, in such a manner and order
of priority or preference as Mortgagee may, in its sole discretion,
determine.
Fourth: To the payment of outstanding Impositions.
Fifth: To the payment of the surplus, if any, to whomsoever may
lawfully be entitled to receive the same, including, without limitation,
Mortgagor. Mortgagee and any receiver of the Encumbered Property, or any
part thereof, shall be liable to account for only those rents, issues and
profits actually received by it.
(c) Mortgagee, in any action to enforce this Mortgage, shall
be entitled to the appointment of a receiver by a court of competent
jurisdiction or may, in connection with any foreclosure proceeding
hereunder, request the Casino Control Commission, to petition a court of the
State of New Jersey for the appointment of a supervisor to conduct the
normal gaming activities on the Real Estate following such foreclosure
proceeding. If it shall become necessary, or in the opinion of Mortgagee
advisable, for Mortgagee or an agent or representative of Mortgagee to
become licensed under the provisions of the laws of the State of New Jersey,
or rules and regulations adopted pursuant thereto, as a condition to
receiving the benefit of the Real Estate, the Personal Property or other
collateral hereby encumbered for the benefit of Mortgagee, Mortgagor does
hereby give its consent to the granting of such license or licenses and
agrees to execute such further documents as may be reasonably required in
connection with the evidencing of such consent.
(d) The remedies and rights granted to Mortgagee hereunder
are cumulative and are not in lieu of, but are in addition to, and shall not
be affected by the exercise of, any other remedy or right available to
Mortgagee whether now or hereafter existing either at law or in equity or
under this Mortgage or any other Loan Document.
(e) Mortgagee may adjourn from time to time any sale by it
to be made under or by virtue of this Mortgage by announcement at the time
and place appointed for such sale or for such adjourned sale or sales; and,
except as otherwise provided by any applicable provision of law, Mortgagee,
without further notice or publication, may make such sale at the time and
place to which the same shall be so adjourned.
(f) Upon the completion of any sale or sales made by
Mortgagee under or by virtue of this Article 17, Mortgagee, or an officer
of any court empowered to do so, shall execute and deliver to the accepted
purchaser or purchasers a good and sufficient instrument, or good and
sufficient instruments, conveying, assigning and transferring all estate,
right, title and interest in and to the property and rights sold. Mortgagee
is hereby irrevocably appointed the true and lawful attorney of Mortgagor,
in its name and stead, to make all necessary conveyances, assignments,
transfers and deliveries of the Encumbered Property and rights so sold and
for that purpose Mortgagee may execute all necessary instruments of
conveyance, assignment and transfer, and may substitute one or more persons
with like power, Mortgagor hereby ratifying and confirming all that its said
attorney or such substitute or substitutes shall lawfully do by virtue
hereof. Any such sale or sales made under or by virtue of this Article 17,
whether made under the power of sale herein granted or under or by virtue
of judicial proceedings or of a judgment or decree of foreclosure and sale,
shall operate to divest all the estate, rights, title, interest, claim and
demand whatsoever, whether at law or in equity, of Mortgagor in and to the
properties and rights so sold, and shall be a perpetual bar both at law and
in equity against Mortgagor and against any and all persons claiming or who
may claim the same, or any part thereof from, through or under Mortgagor.
(g) Anything contained in the Credit Agreement or in this
Mortgage to the contrary notwithstanding, in the event of any sale made
under or by virtue of this Article 17 (whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale) the entire Indebtedness, if not
previously due and payable, immediately thereupon shall become due and
payable.
(h) Upon any sale made under or by virtue of this Article
17 (whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale), Mortgagee may bid for and acquire the Encumbered Property or any part
thereof and in lieu of paying cash therefor may make settlement for the
purchase price by crediting against the sales price the Indebtedness and the
expenses of the sale, and the costs of the action and any other sums which
Mortgagee is authorized to deduct under this Mortgage.
(i) No recovery of any judgment by Mortgagee and no levy of
an execution under any judgment upon the encumbered Property or upon any
property of Mortgagor shall affect in any manner or to any extent, the lien
of this Mortgage upon the Encumbered Property or any part thereof, or any
liens, rights, powers or remedies of Mortgagee hereunder, but such liens,
rights, powers and remedies of Mortgagee shall continue unimpaired as
before.
(j) Upon the occurrence of any Event of Default and the
acceleration of the maturity hereof, if, at any time prior to the
foreclosure sale, Mortgagor or any other person tenders payment of the
amount necessary to satisfy the Indebtedness, the same shall constitute an
evasion of the payment terms hereof and shall be deemed to be a voluntary
prepayment hereunder, in which case such payment must include the premium
required under the prepayment provisions, if any.
(k) Upon the occurrence of any Event of Default hereunder,
it is agreed that Mortgagor, if it is an occupant of the Real Estate or any
part thereof, shall immediately surrender possession of the Real Estate so
occupied to the Mortgagee, and if such occupant is permitted to remain in
possession, the possession shall be as tenant of Mortgagee and, on demand
such occupant, subject to applicable law (a) shall pay to Mortgagee,
monthly, in advance, a reasonable rental for the space occupied and (b) in
default thereof may be dispossessed by the usual summary proceedings. The
covenants herein contained may be enforced by a receiver of the Encumbered
Property or any part thereof.
(l) If any payment due hereunder or under the Credit
Agreement and the Notes is not paid when due after any applicable grace
period, either at stated or accelerated maturity or pursuant to any of the
terms hereof, then and in such event, the Mortgagor shall pay or shall cause
to be paid interest thereon at the Interest Rate from and after the date on
which such payment first becomes due and such interest shall be due and
payable, on demand, at the Interest Rate until the entire amount due is paid
to Mortgagee, whether or not any action shall have been taken or proceeding
commenced to recover the same or to foreclose this Mortgage. Nothing in
this Section or in any other provision of this Mortgage shall constitute an
extension of the time of payment of the Indebtedness.
(m) After the happening of any Event of Default and
immediately upon the commencement of any action, suit or other legal
proceedings by Mortgagee to obtain judgment for the Indebtedness, or of any
other nature in aid of the enforcement of the Credit Agreement, the Notes
or of this Mortgage, Mortgagor shall (a) waive the issuance and service of
process and enter their voluntary appearance in such action, suit or
proceeding, and (b) if required by Mortgagee, consent to the appointment of
a receiver or receivers of the Encumbered Property and of all the profits
thereof.
(n) Notwithstanding the appointment of any receiver,
liquidator or trustee of Mortgagor, or of any of its property, or of the
Encumbered Property or any part thereof, Mortgagee shall be entitled to
retain possession and control of all property now and hereafter covered by
this Mortgage.
43. Security Agreement under Uniform Commercial Code. It is the
intention of Mortgagor and Mortgagee that this Mortgage shall constitute and
this Mortgage does hereby constitute a Security Agreement among Mortgagor
and Mortgagee within the meaning of the Uniform Commercial Code of the State
of New Jersey. Notwithstanding the filing of a financing statement covering
any of the Encumbered Property in the records normally pertaining to
personal property, all of the Encumbered Property, for all purposes and in
all proceedings, legal or equitable, shall be regarded, at Mortgagee's
option (to the extent permitted by law), as part of the Encumbered Property
whether or not any such item is physically attached to the Real Estate or
serial numbers are used for the better identification of certain items. The
mention in any such financing statement of any of the Encumbered Property
shall never be construed in any way as derogating from or impairing this
declaration and hereby stated intention of Mortgagor and Mortgagee that such
mention in the financing statement is hereby declared to be for the
protection of Mortgagee in the event any court shall at any time hold that
notice of Mortgagee's priority of this Mortgage, to be effective against any
third party, including the Federal government or any authority or agency
thereof, must be filed in the Uniform Commercial Code records. Pursuant to
the provisions of the Uniform Commercial Code, if Mortgagor shall fail to
execute any such financing or continuation statements for twenty (20) days
after request therefor is made by Mortgagee, Mortgagor hereby authorizes
Mortgagee, without the signature of Mortgagor, to execute and file financing
and continuation statements if Mortgagee shall determine, in its sole
discretion, that such financing or continuation statements are necessary or
advisable in order to preserve or perfect its security interest in the
Personal Property covered by this Mortgage, and Mortgagor shall pay to
Mortgagee, on demand, any reasonable expenses incurred by Mortgagee in
connection with the preparation, execution and filing of such statements
that may be filed by Mortgagee.
44. No Waivers, Etc. No failure by Mortgagee to insist upon the
strict performance by the Mortgagor of any of the terms and provisions of
this Mortgage shall be deemed to be a waiver of any of the terms, covenants,
conditions and provisions hereof and Mortgagee, notwithstanding any such
failure, shall have the right thereafter to insist upon the strict
performance by the Mortgagor of any and all of the terms, covenants,
conditions and provisions of this Mortgage to be performed by such
Mortgagor. Mortgagee may release, regardless of consideration and without
the necessity for any notice to or consent by the holder of any subordinate
lien on the Encumbered Property, any part of the security held for payment
of the Indebtedness or any portion thereof or for the performance of the
Obligations secured by this Mortgage without, as to the remainder of the
security, in any manner whatsoever, impairing or affecting the lien of this
Mortgage or the priority of the lien of this Mortgage over any subordinate
lien. In the event of an occurrence of an Event of Default hereunder,
Mortgagee may resort for the payment of the Indebtedness secured by this
Mortgage to any other security therefor held by Mortgagee in such order and
manner as Mortgagee may elect.
45. Brokerage. Mortgagor and Mortgagee each hereby represent and
warrant that they have dealt with no broker, finder or like agent in
connection with the Credit Agreement or the Notes or this Mortgage.
46. Mortgage Subject to the Provisions of the Act. Each
provision of this Mortgage is subject to the provisions of the Act, as
defined in Section 3, paragraph (e).
47. Environmental Matters.
(a) Mortgagor represents and warrants that, to the best of
Mortgagor's knowledge:
(i) Environmental Matters. (i) The Mortgagor and all
real property owned and/or occupied by the Mortgagor in the state of New
Jersey, including, but not limited to, the Encumbered Property, are and have
been in compliance with, and there are no outstanding allegations by any
person or entity that any of them is or has not been in compliance with, all
applicable federal, state and local laws, regulations and rules (including
common law relating to personal injury and damage to, or interference with,
property), permits, licenses, registrations and other governmental
authorizations, judgments, decrees and orders relating to pollution, the
preservation of the environment (including historical preservation and
endangered species) and the release or disposal of, or exposure to,
materials (including noise, radiation and odors) in the environment or work
place ("Environmental Laws"), except for failures to be in compliance and
allegations of noncompliance which would not have a material adverse effect
on Mortgagor and its subsidiaries taken as a whole or the Encumbered
Property or be disadvantageous in any material respect to the Mortgagee.
(ii) To the actual knowledge of Mortgagor, there are
no past or present actions, conditions or occurrences that could form the
basis of any claim under Environmental Laws against, or liability or
obligation under such laws of, the Mortgagor or any real property owned
and/or occupied by the Mortgagor in the state of New Jersey, including, but
not limited to, the Encumbered Property, or, to the knowledge of Mortgagor,
against or of any person or entity whose liability for such claim, liability
or obligation may have been retained or assumed by the Mortgagor under
contract or law except for such claim, liability or obligation which would
not have a material adverse effect on Mortgagor and its subsidiaries taken
as a whole or the Encumbered Property or be disadvantageous in any material
respect to the Mortgagee. Without limiting the foregoing:
(A) To the actual knowledge of Mortgagor, none of the real
property owned and/or occupied by the Mortgagor and located in the State of
New Jersey, including, but not limited to, the Encumbered Property, has ever
been used by previous owners and/or operators as a "Major Facility," as such
term is defined in N.J.S.A. 58:10-23.11b(l), and said real property,
including, but not limited to, the Encumbered Property, is not now and will
not be used in the future as a "Major Facility."
(B) To the actual knowledge of Mortgagor, there are and have
been no underground storage tanks located upon the Real Estate other than
the two underground banks which were used to store heating oil. To the
actual knowledge of Mortgagor, there is no friable, or damaged non-friable,
asbestos-containing material, urea formaldehyde foam insulation,
polychlorinated biphenyls or lead-exposed water pipes in or on the Real
Estate.
(iii) The Mortgagor has provided Mortgagee copies of all
environmental reports, investigations and studies in its possession or
control relating to the Real Estate, and has identified to Mortgagee all
other such environmental reports, investigations and studies not in its
possession or control of which it has knowledge.
(b) Mortgagor covenants and agrees that:
(i) In the event that there shall be filed a lien
against the Encumbered Property by the New Jersey Department of
Environmental Protection, pursuant to and in accordance with the provisions
of N.J.S.A. 58:10-23.11f(f), or by any other person or entity arising from
an intentional or unintentional action or omission of Mortgagor, resulting
in the releasing, spilling, pumping, pouring, emitting, emptying or dumping
of materials regulated under Environmental Laws, then Mortgagor shall,
within thirty (30) days from the date that Mortgagor is given notice that
the lien has been placed against the Encumbered Property or within such
shorter period of time in the event that the State of New Jersey or any
other person or entity has commenced steps to cause the Encumbered Property
to be sold pursuant to the lien, either (l) pay the claim and remove the
lien from the Encumbered Property, or (2) furnish (x) a bond satisfactory
to Mortgagee in the amount of the claim out of which the lien arises, (y)
a cash deposit in the amount of the claim out of which the lien arises, or
(z) other security reasonably satisfactory to Mortgagee in an amount
sufficient to discharge the claim out of which the lien arises.
(ii) The Mortgagor shall comply fully with all
applicable Environmental Laws including without limitation by promptly,
diligently and expeditiously containing, reporting (as required by
Environmental Laws) and cleaning up any spill, leak, pumping, pour,
emission, emptying or dumping of materials regulated under Environmental
Laws for which the Mortgagor is responsible.
(iii) If the Mortgagor shall fail to take any action
required by this Section 22(b), upon notice to the Mortgagor (which may be
telephonic or by any other means of communication), Mortgagee may make
advances or payments towards performance or satisfaction of the same but
shall be under no obligation to do so; and all sums so advanced or paid,
including, without limitation, reasonable counsel fees, fines, penalties,
payments or sums advanced or paid in connection with any judicial or
administrative investigation or proceeding relating thereto (1) shall be
deemed to be Indebtedness, (2) shall be a lien on the Encumbered Property
pari passu with the Indebtedness and (3) immediately shall be due and
payable, on demand. Mortgagor shall execute and deliver promptly after
request, such instruments as Mortgagee may deem useful or required to permit
Mortgagee to take any such action.
(iv) The Mortgagor absolutely and unconditionally
agrees to indemnify and to hold Mortgagee harmless from and against any and
all loss, liability, cost or expense incurred by Mortgagee as a result of
or arising in connection with: (A) such Mortgagor's breach of any
representation, warranty or covenant contained herein; (B) such Mortgagor's
failure to comply with Environmental Laws, including, without limitation,
those related to the presence of asbestos affecting the Encumbered Property;
and (C) any liability under Environmental Laws in any way related to the
operations, acts or omission to act of the Mortgagor or the Real Estate,
which indemnification, notwithstanding the provisions of this Mortgage or
the Loan Documents, shall survive the release and discharge of this Mortgage
of record, and foreclosure or sale of the Encumbered Property under this
Mortgage, payment of the Notes, the Credit Agreement, or any other discharge
of the Indebtedness by operation of law or otherwise.
48. Waivers by Mortgagor.
(a) Mortgagor hereby waives all error and imperfections, to
the extent permitted by law, in any proceedings instituted by Mortgagee
under this Mortgage, the Credit Agreement or any other Loan Document and all
benefit of any present or future statute of limitations or any other present
or future statute, law, stay, moratorium, appraisal or valuation law,
regulation or judicial decision, nor shall Mortgagor at any time insist upon
or plead, or in any manner whatsoever, claim or take any benefit or
advantage of any such statute, law, stay, moratorium, regulation or judicial
decision which (i) provides for the valuation or appraisal of the Encumbered
Property prior to any sale or sales thereof which may be made pursuant to
any provision herein or pursuant to any decree, judgment or order of any
court of competent jurisdiction, (ii) exempts any of the Encumbered Property
or any other property, real or personal, or any part of the proceeds arising
from any sale thereof, from attachment, levy or sale under execution, (iii)
provides for any stay of execution, moratorium, marshalling of assets,
exemption from civil process, redemption or extension of time for payment,
(iv) requires Mortgagee to institute proceedings in foreclosure against the
Encumbered Property before exercising any other remedy afforded Mortgagee
hereunder in the event of an Event of Default, (v) affects any of the terms,
covenants, conditions or provisions of this Mortgage or (vi) conflicts with
or may affect, in a manner which may be adverse to Mortgagee, any provision,
covenant, condition or term of this Mortgage, the Credit Agreement or any
other Loan Document, nor shall Mortgagor at any time after any sale or sales
of the Encumbered Property pursuant to any provision herein, claim or
exercise any right under any present or future statute, law, stay,
moratorium, regulation or judicial decision to redeem the Encumbered
Property or the portion thereof so sold.
(b) Mortgagor hereby waives the right, if any, to require
any sale to be made in parcels, or the right, if any, to select parcels to
be sold, and there shall be no requirement for marshalling of assets.
49. Notices. Whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall
or may be given to or served upon Mortgagor or Mortgagee, or whenever
Mortgagor or Mortgagee shall desire to give or serve upon the other any such
communication with respect to this Mortgage or the Encumbered Property, each
such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person
with receipt acknowledged or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
(a) If to Mortgagee,
First Union National Bank
550 Broad Street - NJ1511
Newark, New Jersey 07102
Attn: Robert K. Strunk
With a copy to
Midlantic Bank, N.A.
6000 Midlantic Drive
Post Office Box 6000
Mt. Laurel, N.J. 08504-6000
Attn: Denise D. Killen
With a copy to
LaSalle National Bank
120 S. LaSalle Street
Room 205
Chicago, Illinois 60603
Attn: Kristen L. Simko
(b) If to Mortgagor
Park Place and the Boardwalk,
Atlantic City, New Jersey 08401
Attn: Joseph A. D'Amato
With a copy to
Benesch, Friedlander, Coplan &
Aronoff
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2378
Attention: Chairperson,
Real Estate Department
(c) or to such other address as Mortgagor or Mortgagee may
substitute by notice given as herein provided. Every notice, demand,
request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which
personally delivered, with receipt acknowledged, or on the date of actual
receipt or the date on which the same shall be returned to the sender by the
Post Office as unclaimed. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other
communication to the persons designated herein to receive copies shall in
no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
50. Conflict with Credit Agreement. If there shall be any
inconsistencies between the terms, covenants, conditions and provisions set
forth in this Mortgage and the terms, covenants, conditions and provisions
set forth in the Credit Agreement, then, unless this Mortgage expressly
provides otherwise by specific reference to the Credit Agreement, the terms,
covenants, conditions and provisions of the Credit Agreement shall prevail.
51. No Modification; Binding Obligations. This Mortgage may not
be modified, amended, discharged or waived in whole or in part except by an
agreement in writing signed by Mortgagor and Mortgagee. The covenants of
this Mortgage shall run with the Land and shall bind Mortgagor and its
successors and assigns and all present and subsequent encumbrancers, lessees
and sublessees of any of the Encumbered Property and shall inure to the
benefit of Mortgagee and its respective successors, assigns and endorsees.
52. Miscellaneous.
(a) The Article headings in this Mortgage are used only for
convenience and are not part of this Mortgage and are not to be used in
determining the intent of the parties or otherwise in interpreting this
Mortgage. As used in this Mortgage, the singular shall include the plural
as the context requires and the following words and phrases shall have the
following meanings:(a) "provisions" shall mean "provisions, terms, covenants
and/or conditions"; (b) "lien" shall mean "lien, charge, pledge, security
interest, mortgage, deed of trust or other
encumbrance of any kind"; (c) "obligation" shall mean "obligation, duty,
covenant and/or condition"; (d) "any of the Encumbered Property" shall mean
"the Encumbered Property or any portion thereof or interest therein", and
"any of the Encumbered Property" shall mean "the Encumbered Property or any
portion thereof or interest therein"; and (e) "the Real Estate" shall mean
"the Real Estate or any portion thereof or interest therein." Any act which
Mortgagee is permitted to perform under this Mortgage, the Credit Agreement
or any other Loan Document may be performed at any time and from time to
time by Mortgagee or by any person or entity designated by Mortgagee. Each
appointment of Mortgagee as attorney-in-fact for Mortgagor under this
Mortgage, the Credit Agreement or any other Loan Document shall be
irrevocable and coupled with an interest. If Mortgagee shall fail or refuse
to consent, approve, accept or indicate its satisfaction, Mortgagor shall
not be entitled to any damages for any withholding or delay of such consent,
approval, acceptance or indication of satisfaction by Mortgagee, it being
intended that Mortgagor's sole remedy shall be to bring an action for an
injunction or specific performance, which remedy of an injunction or
specific performance shall be available only in those cases where Mortgagee
has expressly agreed hereunder or under any other Loan Document not to
unreasonably withhold or delay its consent, approval, acceptance or
indication of satisfaction.
(b) No director, officer, employee, stockholder or
incorporator, as such, past, present or future, of Mortgagor or any
successor corporation shall have any liability for any obligations of
Mortgagor hereunder or for any claim based on, in respect of or by reason
of such obligations or their creation. Mortgagee, by accepting this
Mortgage, waives and releases all such liability.
(c) This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Mortgage by
signing any such counterpart.
53. Enforceability. This Mortgage shall be construed,
interpreted, enforced and governed by and in accordance with the laws of the
State of New Jersey. Nothing contained in this Mortgage or in any other
Loan Documents shall require the Mortgagor to pay, or Mortgagee to accept,
interest in an amount which would subject Mortgagee to penalty under
applicable law. In the event that the payment of any interest due hereunder
or under the Credit Agreement or any other Loan Document would subject
Mortgagee to penalty under applicable law, then, ipso facto, the obligation
of such Mortgagor to make such payment shall be reduced to the highest rate
then permitted under applicable law without penalty.
54. Satisfaction/Defeasance. At such time as the entire amount
of the Indebtedness shall have been fully paid pursuant to the terms hereof
and the other Loan Documents, and all Obligations shall have been fully
performed in accordance with all provisions hereof and the other Loan
Documents, then <PAGE>
Mortgagee shall deliver to Mortgagor a satisfaction of this
Mortgage in recordable form.
55. Receipt of Copy. Mortgagor acknowledges that it has true
copy of this Mortgage.
IN WITNESS WHEREOF, the parties have caused this Mortgage to be
duly executed and acknowledged under seal as of the day and year first above
written.
Mortgagor: BALLY'S PARK PLACE,
INC., a New Jersey corporation
By: _______________________
Joseph A. D'Amato
Vice President
Mortgagee:
First Union National Bank
as collateral agent
By: _________________________
Patrick McGovern
Vice President
<PAGE>
STATE OF NEW YORK
SS:
COUNTY OF NEW YORK
On the 27th day of February, 1996, before me personally came Joseph A.
D'Amato, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of Bally's Park Place, Inc., a New Jersey
corporation, the corporation described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
by order of the board of directors of said corporation; and that he signed
his name thereto by like order.
Notary Public
___________________________
<PAGE>
STATE OF PENNSYLVANIA
SS:
COUNTY OF ____________
On the _____ day of February, 1996, before me personally came Patrick
McGovern, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of First Union National Bank, the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the board of directors
of said corporation; and that he signed his name thereto by like order.
Notary Public
_____________________________
<PAGE>
MORTGAGE AND SECURITY AGREEMENT
WITH ASSIGNMENT OF RENTS
by and between
Bally's Park Place, Inc., a New Jersey corporation,
Mortgagor
and
First Union National Bank, as collateral agent
Mortgagee
Dated as of February 27, 1996
Record and Return to:
Curtis A. Johnson, Esq.
McCarter & English
Gateway 4
100 Mulberry Street
Newark, New Jersey 07102
<PAGE>
TABLE OF CONTENTS
Page
1. Warranty of Title 6
2. Payment of Indebtedness 6
3. Requirements; Proper Care and Use 6
4. Taxes on Mortgaged 9
5. Payment of Impositions 11
6. Insurance 13
7. Condemnation/Eminent Domain 22
8. Sale of Encumbered Property; Additional Financing 25
9. Discharge of Liens 25
10. Right of Contest 25
11. Leases 26
12. Estoppel Certificates 28
13. Loan Document Expenses 28
14. Mortgagee's Right to Perform 29
15. Mortgagee's Costs and Expenses 29
16. Events of Defaults 30
17. Remedies 30
18. Security Agreement Under Uniform Commercial Code 37
19. No Waivers, Etc. 37
20. Brokerage 38
21. Mortgage Subject to the Provisions of the Act 38
22. Environmental Matters 38
23. Waivers by Mortgagor 41
24. Notices 42
25. Conflict with Credit Agreement 43
26. No Modification; Binding Obligations 43
27. Miscellaneous 43
28. Enforceability 44
29. Satisfaction/Defeasance 45
30. Receipt of Copy 45
ASSIGNMENT OF LEASES AND RENTS
This Agreement (hereinafter referred to as this ("Assignment"), made
as of the 27th day of February, 1996, between Bally's Park Place, Inc., a
New Jersey corporation, having an office at Park Place and the Boardwalk,
Atlantic City, New Jersey 08401, as assignor, ("Assignor") and First Union
National Bank, as collateral agent, having an office at 550 Broad Street,
Newark, New Jersey 07102 ("Assignee").
W I T N E S S E T H:
Whereas, Assignor is the owner of certain real property situated in
Atlantic City, New Jersey, more particularly described on Exhibit "A"
annexed hereto and made a part hereof (the "Land"); and
WHEREAS, Assignor is the owner of the buildings and other improvements
now or hereafter erected on the Land (such buildings and other improvements
being hereinafter collectively referred to as the "Buildings", and the Land,
together with the Buildings being hereinafter collectively referred to as
the "Property"); and
WHEREAS, Assignor, Bally's Park Place Inc., a Delaware corporation
("Park Place-Delaware"), Bally's Park Place Realty Co., a New Jersey
corporation ("Realty") have entered into an amended and restated credit and
guaranty agreement (the "Loan Agreement") dated as of February 27, 1996, in
which the Assignee, as Agent for First Union National Bank, Midlantic Bank,
National Association, and LaSalle National Bank has agreed to lend up to
$65,000,000 and under which Assignor has issued notes evidencing their
obligations to the Assignee (the "Revolving Credit Notes"); and
WHEREAS, to secure the obligations of the Assignor, Park Place-Delaware
and Realty under the Loan Agreement and Revolving Credit Notes, Assignor has
executed and delivered to the Assignee a Mortgage and Security Agreement
with Assignment of Rents dated February 27, 1996, covering the Property (the
"Mortgage"); and
WHEREAS, Assignee is unwilling to enter into the Loan Agreement and
accept the Revolving Credit Notes unless Assignor makes, executes and
delivers this Assignment.
NOW THEREFORE, in consideration of the premises and in consideration
of the sum of Ten Dollars ($10.00) and other good and valuable consideration
paid by Assignee to Assignor the receipt and sufficiency of which are hereby
acknowledged, and to better secure the payment to Assignee of (i) all monies
that may be due and Payable under the Loan Agreement, the Revolving Credit
Notes and the Mortgage and (ii) all monies which may be advanced by Assignee
on behalf of Assignor under the terms of the Mortgage, Assignor hereby
agrees as follows:
1. Assignor hereby grants, transfers, bargains, sells, assigns,
conveys, and sets over unto Assignee, its successors and assigns, from and
after the date hereof (including any period allowed by law for redemption
after any sale), all right, title and interest of Assignor in and to (i) all
leases, subleases, licenses and other occupancy agreements which now or
hereafter affect the Property or any part or parts thereof and all
guarantees, modifications, renewals and extensions thereof (collectively,
the "Leases"), and (ii) all documents and instruments made or hereafter made
in respect of the Leases, together with all of the rents and issues and
profits, due and to become due or to which Assignor is now or may hereafter
become entitled, arising out of the Leases and any of the Property covered
by the Leases (the "Leased Property"), excluding, however, any sums paid as
"key money" in connection with the execution or renewal of Leases or any
sums paid in connection with the execution or renewal of a Lease as advance
rental ("Advance Rental") to the extent the same has been paid prior to the
occurrence of an Event of Default (as defined in the Mortgage)
(collectively, the "Rents").
2. Assignor further gives and grants Assignee the power and
authority to:
(i) enter upon and take possession of the Leased Property
and manage the same, subject to the rights of any and all parties in
possession thereof;
(ii) enforce, modify, cancel or accept a surrender of any
or all of the Leases;
(iii) (A) subject to and in accordance with the terms of the
Leases, demand, collect, sue for, attach, levy, recover, receive,
compromise, and (B) adjust and make, execute, and deliver receipts and
releases for, Rents which may be or may hereafter become due, owing or
payable from any present or future lessees, sublessees, licensees or other
occupants of the Leased Property or any part thereof (the "Lessees");
(iv) receive, endorse and deposit for collection in the
name of Assignor or Assignee any checks, promissory notes or other evidences
of indebtedness, whether made payable to Assignor or Assignee, which are
given in payment or on account of Rent for the Leased Property or any part
or parts thereof, or by way of compromise or settlement of any indebtedness
for such Rents;
(v) give acquittances for Rents received;
(vi) institute, prosecute, settle or compromise any summary
or other proceedings for the recovery of Rents or for removing any and all
of the Lessees upon their default under their respective Leases;
(vii) subject to and in accordance with the Leases,
institute, prosecute, intervene in, settle or compromise any proceedings for
the protection of the Leased Property, for the recovery of any damage done
to the Leased Property or for the abatement of any nuisance, including
Hazardous Waste (as defined in the Mortgage), thereon or thereabouts;
(viii) defend, settle or compromise any legal proceedings
brought, or claims made against, Assignee or its agents, employees or
servants which may affect the Leased Property, and, at the option of
Assignee, defend, settle or compromise any claims made or legal proceedings
brought against Assignor which may affect the Leased Property or any part
thereof;
(ix) lease or rent the Leased Property or any part thereof
for such time and at such rentals as Assignee, in its reasonable discretion,
may deem advisable;
(x) make any changes or improvements, structural or
otherwise, on, in or to the Leased Property or any part thereof which
Assignee may deem reasonably necessary or expedient for the leasing, renting
or preservation thereof;
(xi) keep and maintain the Leased Property in tenantable
and rentable condition and in a good state of repair;
(xii) purchase such equipment and supplies as may be
reasonably necessary or desirable in the opinion of Assignee for use in
connection with the operation of the Leased Property;
(xiii) pay, from and out of the Rents collected by Assignee
hereunder, or from or out of any other funds, all taxes, assessments, water
charges, sewer rents and other governmental charges levied, assessed or
imposed against the Property or any part thereof, and any and all other
charges, costs and expenses which Assignee may deem necessary or advisable
to pay in connection with the management and operation of the Property
(including, without limitation, brokers' fees and any accrued and unpaid
interest, principal and other payments due on any and all loans secured by
mortgages or deeds of trust on the Property, including the Mortgage, the
Loan Agreement, the Revolving Credit Notes, and Additional Mortgages (as
defined in the Mortgage)), it being understood that the excess Rents, if
any, remaining after all such payments shall have been made shall be the
property of and paid to Assignor, provided there exists no Event of Default;
(xiv) contract for and purchase such insurance as Assignee
may deem advisable or necessary for the protection of Assignee and the
Leased Property and as required to be maintained under the Mortgage,
including, without limitation, fire, general liability, boiler, plate glass,
rent, demolition and workers' compensation insurance;
(xv) execute and comply with all laws, rules, orders,
ordinances and requirements of the United States, the state in which the
Property is located and any political subdivision thereof, and any agency,
department, bureau, board, commission or instrumentality of any of them
(collectively, "Governmental Authorities"), and remove any and all
violations which may be filed against the Leased Property;
(xvi) enforce, enjoin or restrain the violation of any of
the terms, provisions and conditions of the Leases; and
(xvii) do or perform such other acts as may be reasonably
necessary to increase the Rents or to diminish the expense of operating the
Leased Property, whether herein expressly authorized or not, and in all
respects act in the place and stead of Assignor and have all of the powers
as owner as possessed by Assignor for the purposes aforesaid.
All of the foregoing powers and rights may be executed by
Assignee or by its agents, servants or attorneys, in the name of Assignee
or in the name of Assignor, and in such manner as Assignee, its agents,
servants, or attorneys consider to be necessary, desirable, expedient, or
appropriate; provided, however, that under no circumstances shall Assignee
be under any obligation to exercise any of the foregoing powers or rights
and Assignee shall not, except in the case of negligence and/or wilful
misconduct of Assignee, be liable to Assignor or any other party for failure
to exercise such powers and rights.
3. Assignee shall have the unqualified right, subject to the
provisions of applicable law, to receive, use and apply the Rents collected
and received by it under this Agreement (a) for the payment of any and all
costs and expenses incurred in connection with (i) enforcing the terms of
this Assignment, (ii) upholding and defending the rights of Assignee
hereunder, and (iii) collecting Rents due under the Leases; and (b) for the
operation and maintenance of the Property and the payment of all costs and
expenses in connection therewith, including, without limitation, the payment
of (i) accrued and unpaid interest and principal due on any and all loans
secured by mortgages or deeds of trust on the Property including the
Mortgage, the Loan Agreement, and the Revolving Credit Notes, (ii) taxes,
assessments, water charges and sewer rents and other governmental charges
levied, assessed or imposed against the Property or any part thereof, which
may then be due and payable, (iii) insurance premiums, (iv) costs and
expenses in prosecuting or defending any litigation referred to herein, and
(v) wages and salaries of employees, commissions of agents and attorneys'
fees. After the payment of all such costs and expenses and after Assignee
shall have set up such reserves necessary for the proper management of the
Leased Property, Assignee, subject to the provisions of Subsections 2 (xiii)
hereof, shall apply all remaining Rents collected and received by it to the
reduction of the indebtedness secured by the Mortgage.
4. Assignor hereby irrevocably constitutes and appoints Assignee
its true and lawful attorney, to undertake and execute any or all of the
powers described herein with the same force and effect as if undertaken or
executed by Assignor, and Assignor hereby ratifies and confirms any and all
things done or omitted to be done, other than those things done or omitted
to be done with negligence or wilful misconduct, by Assignee, its agents,
servants, employees or attorneys in, to or about the Property. The
appointment contained herein shall be effective only upon the termination
by Assignee of the license granted to Assignor pursuant to Article 13
hereof.
5. Assignee shall not in any way be liable to Assignor for any
act done or anything omitted to be done by it in good faith in connection
with the management of the Property, except for the consequences of its own
negligence or wilful misconduct, nor shall Assignee be liable for any act
or omission of its agents, servants, employees or attorneys, provided that
due care is used by Assignee in the selection of such agents, servants,
employees and attorneys. Assignee shall be accountable to Assignor only for
monies actually received by it pursuant to this Assignment.
6. Assignor hereby covenants and agrees:
(i) to perform faithfully every obligation which Assignor
is required to perform under the Leases within the applicable grace periods,
if any, set forth therein;
(ii) to exercise its reasonable business judgment in
determining whether to enforce, or to secure the performance of, any
material obligation to be performed by any Lessee under any Lease requiring
a "minimum" or "base" rent of - $100,000 or more per annum (a "Major
Lease");
(iii) except in connection with the initial execution or
renewal of a Lease, not to collect any Rent under the Leases for more than
thirty (30) days in advance of the time when the same shall become due, or
anticipate the rents thereunder, except for security deposits, "key money"
and Advance Rental;
(iv) subject to the right of Assignor to contest and to not
comply with a Legal Requirement (as defined in and as provided in the
Mortgage), to comply with, in all material respects, all present and future
laws, rules, orders, ordinances, restrictions and requirements of all
Governmental Authorities;
(v) to deliver to Assignee, upon request, copies of all
existing Leases and all Leases entered into after the date hereof;
(vi) to appear in and defend, at Assignor's sole cost and
expense, any action or proceeding arising under, growing out of, or in any
manner connected with, the Leases or the obligations, duties or liabilities
of the lessor, Lessees or guarantors thereunder; and
(vii) to comply with all of the provisions of the Loan
Agreement, the Revolving Credit Notes, the Mortgage and any other Loan
Documents (as such term is defined in the Mortgage).
7. Except as otherwise set forth in Schedule I annexed hereto and
made a part hereof, Assignor hereby represents and warrants the following
to Assignee:
(i) there are no Major Leases presently affecting the
Leased Property;
(ii) Assignor has not executed, and will not execute, an
assignment of any of the Leases or of its right, title and interest therein
or the Rents to accrue thereunder, except as provided in the Mortgage.
8. It is understood and agreed that nothing contained in this
Assignment shall prejudice or be construed to prejudice the right of
Assignee under any of the other Loan Documents, without notice, to
institute, prosecute and compromise any action which it would deem advisable
to protect its interest in the Property, including any sale by the Assignee,
as trustee, pursuant to the power of sale contained in the Mortgage or
otherwise, and in such sale or action, to move for the appointment of a
receiver of the Rents, or prejudice any rights which Assignee shall have by
virtue of any default under the Loan Agreement, the Revolving Credit Notes
or the Mortgage. Assignee, however, hereby agrees that it will use
reasonable efforts to promptly give notice (the "Informational Notice", to
Assignor, provided that failure to give such notice or any defects in the
manner in which such notice is given shall not preclude Assignee from
exercising any of its rights hereunder. This Assignment shall survive,
however, the commencement of any such action or sale.
9. Assignor agrees to indemnify and hold Assignee harmless from
and against any and all liability, loss, damage, cost and expense, including
reasonable attorneys' fees and disbursements, other than those which arise
as a result of the negligence or wilful misconduct of Assignee, which
Assignee may or shall incur under any of the Leases, or by reason of this
Assignment, or by reason of any action taken by Assignee hereunder, and from
and against any and all claims and demands whatsoever, other than those
arising from the negligence or wilful misconduct of Assignee, which may be
asserted against Assignee by reason of any alleged obligation or undertaking
on its part to perform or discharge any of the terms, covenants and
conditions contained in any of the Leases. Should Assignee incur any such
liability, loss, damage, cost or expense, the amount thereof, together with
interest thereon at a rate equal to the Prime Rate plus three percent (3%).
The Prime Rate means the rate of interest announced by First Union National
Bank from time to time as its interest rate in making loans, which is not
necessarily the rate of interest that it charges any particular class of
customers (such rate of interest being hereinafter referred to as the
"Interest Rate"), from the date such amount was suffered or incurred by
Assignee until the same is paid by Assignor to Assignee, shall be payable
by Assignor to Assignee immediately upon demand, or, at the option of
Assignee, Assignee may reimburse itself therefor out of any Rents collected
by Assignee. Nothing contained herein shall operate or be construed to
obligate Assignee to perform any of the terms, covenants or conditions
contained in the Leases or otherwise to impose any obligation upon Assignee
with respect to any of the Leases.
10. Upon request of Assignee, Assignor shall execute and deliver
to Assignee such further instruments as Assignee may deem reasonably
necessary to effect this Assignment and the covenants of Assignor contained
herein. Assignor, at its sole cost and expense, shall cause such further
instruments to be recorded in such manner and in such places as may be
required by Assignee. Notwithstanding the foregoing, Assignee shall have
no obligation to request any matters referred to herein and shall request
such matters in Assignee's reasonable discretion.
11. Assignor shall, upon thirty (30) days' notice thereof, pay
all required recording and filing fees in connection with this Assignment
and any agreements, instruments and documents made pursuant to the terms
hereof or ancillary hereto, as well as any and all taxes which may be due
and payable on the recording of this Assignment and any taxes hereafter
imposed on this Assignment. Should Assignor fail to pay the same within
said thirty (30) day notice period, all such recording and filing fees and
taxes may be paid by Assignee on behalf of Assignor and the amount thereof,
together with interest at the Interest Rate, shall be payable by Assignor
to Assignee immediately upon demand, or, at the option of Assignee, Assignee
may reimburse itself therefor out of the Rents collected by Assignee.
12. Failure of Assignee to avail itself of any of the terms,
covenants and conditions of this Assignment shall not be construed or deemed
to be a waiver of any of its rights hereunder. The rights and remedies of
Assignee under this Assignment are cumulative and are not in lieu of but are
in addition to, and shall not be affected by the exercise of, any other
rights and remedies which Assignee shall have under or by virtue of law or
equity, the Loan Agreement, the Revolving Credit Notes, the Mortgage or the
Loan Documents (collectively, the "Other Rights"). The rights and remedies
of Assignee hereunder may be exercised concurrently with any of the Other
Rights.
13. Assignee hereby gives Assignor a license to collect all the
Rents, to retain, use and enjoy the same and to do all acts and perform such
obligations as Assignor is required to perform under the Leases, including,
without limitation, all items listed in paragraph 2 hereof. Assignor agrees
to collect and receive said Rents and to use said Rents in payment of
principal and interest becoming due under the Loan Agreement, the Revolving
Credit Notes, the Mortgage and any Additional Mortgages (as defined in the
Mortgage). Subject to the provisions of Subsection 2(xiii) hereof, the
balance of Rents, if any, remaining after all such payments shall have been
made shall belong to and be the property of Assignor. Such license hereby
granted to Assignor to collect and receive said Rents and to retain, use and
enjoy the same and to do all acts and perform such obligations as Assignor
is required to perform under the Leases shall be revoked automatically upon
the occurrence of any Event of Default (as such term is defined under the
Mortgage) without any required action by Assignee. This Assignment shall
continue in full force and effect until (a) all sums due and payable under
the Loan Agreement, the Revolving Credit Notes and the Mortgage shall have
been fully paid and satisfied, together with any and all other sums which
may become due and owing under this Assignment, and (b) all other
obligations of Assignor under the Loan Agreement, the Revolving Credit
Notes, the Mortgage, this Assignment and the Loan Documents are satisfied.
Upon termination of this Assignment as hereinbefore provided, this
Assignment and the authority and powers herein granted by Assignor to
Assignee shall cease and terminate, and, in that event, Assignee shall (i)
execute and deliver to Assignor such instrument or instruments effective to
evidence the termination of this Assignment and the reassignment to Assignor
of the rights, powers and authorities granted herein, and (ii) deliver to
Assignor all monies held by Assignee for the benefit of Assignor. Assignor
agrees that upon termination of this Assignment it shall assume payment of
all reasonable unmatured or unpaid charges, expenses or obligations
(including reasonable attorney's fees) incurred or undertaken by Assignee
in connection with the management of the Property.
14. All of the representations, warranties, covenants, agreements
and provisions in this Assignment by or for the benefit of Assignee shall
bind and inure to the benefit of its successors and assigns.
15. Nothing in this Assignment shall be construed to give to any
person other than Assignee and its successors and assigns any legal or
equitable right, remedy or claim under this Assignment and this Assignment
shall be held to be for the sole and exclusive benefit of Assignee and its
successors and assigns.
16. If there shall be any conflict between the terms, covenants,
conditions and provisions set forth herein and the terms, covenants,
conditions and provisions set forth in the Credit Agreement, then, unless
this Assignment specifically provides otherwise by specific reference to the
Loan Agreement, the terms, covenants, conditions and provisions of the Loan
Agreement shall prevail.
17. All notices, demands or requests made pursuant to this
Assignment must be in writing and personally delivered or mailed to the
party to which the notice, demand or request is being given by certified or
registered mail, return receipt requested, as follows, and shall be deemed
given on the date of actual receipt or the date on which the same shall be
returned to the sender by the Post Office as unclaimed, or upon personal
delivery with receipt acknowledged:
if to Assignee, at the address set forth above, to the attention
of: Robert K. Strunk, II
With a copy to
Midlantic Bank, N.A.
6000 Midlantic Drive
Post Office Box 6000
Mt. Laurel, N.J. 08504-6000
Attn: Denise D. Killen
With a copy to
LaSalle National Bank
120 S. LaSalle Street
Room 205
Chicago, Illinois 60603
Attn: Kristen L. Simko
if to Assignor, at the address set forth above, to the
attention of: Corporate Secretary
with a copy to:
Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2378
Attention: Chairperson, Real Estate Department
or at such different address as Assignor or Assignee shall hereafter specify
by written notice as provided herein.
18. This Assignment may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
19. Assignee acknowledges and agrees that it will not assign this
Assignment separate and apart from a sale or assignment of the Revolving
Credit Notes and the Mortgage.
20. No director, officer, employee, stockholder or incorporator,
as such, past, present or future, of Assignor or any successor corporation,
shall have any liability for any obligations of Assignor, under this
Assignment or for any claim based on, in respect of or by reason of such
obligations or their creation. Assignee, by accepting this Assignment,
waives and releases all such liability.
21. This Assignment shall be construed, interpreted, enforced and
governed by and in accordance with the laws of the State of New Jersey.
Whenever possible, each provision of this Assignment shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Assignment shall be prohibited by, or invalid under,
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remaining provisions of
this Assignment.
22. Each provision of this Assignment of Leases and Rents is
subject to the provisions of the New Jersey Casino Control Act and
regulations promulgated thereunder.
23. This Assignment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Assignment by
signing any such counterpart.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
day and year first above written.
Bally's Park Place, Inc.
By:________________________
Joseph A. D'Amato
Vice President
First Union National Bank
as collateral agent
By:________________________
Patrick McGovern
Vice President
<PAGE>
STATE OF NEW YORK )
SS.:
COUNTY OF NEW YORK)
On the 27th day of February, 1996, before me personally came Joseph A.
D'Amato, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of Bally's Park Place, Inc., the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the board of directors
of said corporation; and that he signed his name thereto by like order.
_______________________
Notary Public
<PAGE>
STATE OF PENNSYLVANIA)
)SS.:
COUNTY OF )
On the ____ day of February, 1996, before me personally came Patrick
McGovern to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of First Union National Bank, the national
association described in and which executed the foregoing instrument; that
he knows the seal of said national association; that the seal affixed to
said instrument is such seal; that it was so affixed by order of the board
of directors of said national association; and that he signed his name
thereto by like order.
___________________________
Notary Public
<PAGE>
ASSIGNMENT OF LEASES AND RENTS
by and between
Bally's Park Place, Inc., a New Jersey corporation,
Assignor
and
First Union National Bank, as collateral agent,
Assignee
Dated as of February 27, 1996
Record and Return to:
Curtis A. Johnson, Esq.
McCarter & English
Gateway 4
100 Mulberry Street
Newark, New Jersey 07102
Form of Tranche A Note
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION OF ANY
INTEREST IN THIS NOTE OR OF ANY PARTICIPATION IN THE LOANS THIS NOTE
EVIDENCES IS CONDITIONAL AND SHALL BE INEFFECTIVE IF THE NEW JERSEY CASINO
CONTROL COMMISSION DISAPPROVES.
TRANCHE A NOTE
$amount date
Bally's Park Place, Inc., a corporation organized under the laws of the
State of New Jersey (the "Borrower"), for value received, hereby promises
to pay to the order of ________ (the "Bank") on December 31, 1998, in lawful
money of the United States of America and in immediately available funds,
the principal sum of ____ or such lesser unpaid principal amount as shall
be outstanding hereunder, together with interest from the date hereof on the
unpaid principal balance of this Tranche A Note, payable on the dates and
at the rate provided for in the Amended and Restated Credit and Guaranty
Agreement of even date by and among the Borrower, First Union National Bank,
Midlantic Bank, National Association, LaSalle National Bank, Bally's Park
Place, Inc., a Delaware Corporation, and Bally's Park Place Realty Corp.,
a New Jersey Corporation, as the same may be amended from time to time (the
"Agreement"). In no event shall the interest rate payable hereon exceed the
maximum rate of interest permitted by law. Capitalized terms used herein
which are defined in the Agreement shall have the meanings therein defined.
The holder of this Tranche A Note is authorized to record in its books
and records, pursuant to Section 2.03 of the Agreement, the date and
principal amount of each Tranche A Loan made by the Bank, the date and
amount of each payment or prepayment of principal thereof and the interest
rate with respect thereto. Such recordation shall constitute prima facie
evidence of the accuracy of the information endorsed, provided that the
failure of the Bank to make such recordation shall not affect the
obligations of the Borrower hereunder or under the Agreement. The aggregate
unpaid principal amount of all Tranche A Loans set forth in such schedule
shall be presumptive evidence of the principal amount owing and unpaid on
this Tranche A Note.
This Tranche A Note is one of the Tranche A Notes referred to in the
Agreement, and is entitled to the benefits and is subject to the terms of
the Agreement. This Tranche A Note is repayable in the amounts and under
the circumstances, and its maturity is subject to acceleration upon the
terms, set forth in the Agreement.
Presentment for payment, demand, notice of dishonor, protest, notice
of protest and all other demands and notices in connection with the
delivery, performance and enforcement of this Tranche A Note are hereby
waived.
Upon the occurrence of any Event of Default specified in the Agreement,
all amounts then remaining unpaid on this Tranche A Note may, pursuant to
Section 6.03 of the Agreement, be declared to be immediately due and
payable, all as provided in the Agreement.
This Tranche A Note shall be construed and enforceable in accordance
with, and be governed by the internal laws of, the State of New Jersey.
This Tranche A Note may not be changed orally, but only by an
instrument in writing executed pursuant to the provisions of Section 9.01
of the Agreement.
Bally's Park Place, Inc.,
a New Jersey corporation
By:Exhibit - do not sign
Joseph A. D'Amato
Vice President
Form of Tranche B Note
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION OF ANY
INTEREST IN THIS NOTE OR OF ANY PARTICIPATION IN THE LOANS THIS NOTE
EVIDENCES IS CONDITIONAL AND SHALL BE INEFFECTIVE IF THE NEW JERSEY CASINO
CONTROL COMMISSION DISAPPROVES.
TRANCHE B NOTE
$amount date
Bally's Park Place, Inc., a corporation organized under the laws of the
State of New Jersey (the "Borrower"), for value received, hereby promises
to pay to the order of _____ (the "Bank") on December 31, 1998, in lawful
money of the United States of America and in immediately available funds,
the principal sum of ______ or such lesser unpaid principal amount as shall
be outstanding hereunder, together with interest from the date hereof on the
unpaid principal balance of this Tranche B Note, payable on the dates and
at the rate provided for in the Amended and Restated Credit and Guaranty
Agreement of even date by and among the Borrower, First Union National Bank,
Midlantic Bank, National Association, LaSalle National Bank, Bally's Park
Place, Inc., a Delaware Corporation, and Bally's Park Place Realty Corp.,
a New Jersey Corporation, as the same may be amended from time to time (the
"Agreement"). In no event shall the interest rate payable hereon exceed the
maximum rate of interest permitted by law. Capitalized terms used herein
which are defined in the Agreement shall have the meanings therein defined.
The holder of this Tranche B Note is authorized to record in its books
and records, pursuant to Section 2.03 of the Agreement, the date and
principal amount of each Tranche B Loan made by the Bank, the date and
amount of each payment or prepayment of principal thereof and the interest
rate with respect thereto. Such recordation shall constitute prima facie
evidence of the accuracy of the information endorsed, provided that the
failure of the Bank to make such recordation shall not affect the
obligations of the Borrower hereunder or under the Agreement. The aggregate
unpaid principal amount of all Tranche B Loans set forth in such schedule
shall be presumptive evidence of the principal amount owing and unpaid on
this Tranche B Note.
This Tranche B Note is one of the Tranche B Notes referred to in the
Agreement, and is entitled to the benefits and is subject to the terms of
the Agreement. This Tranche B Note is repayable in the amounts and under
the circumstances, and its maturity is subject to acceleration upon the
terms, set forth in the Agreement.
Presentment for payment, demand, notice of dishonor, protest, notice
of protest and all other demands and notices in connection with the
delivery, performance and enforcement of this Tranche B Note are hereby
waived.
Upon the occurrence of any Event of Default specified in the Agreement,
all amounts then remaining unpaid on this Tranche B Note may, pursuant to
Section 6.03 of the Agreement, be declared to be immediately due and
payable, all as provided in the Agreement.
This Tranche B Note shall be construed and enforceable in accordance
with, and be governed by the internal laws of, the State of New Jersey.
This Tranche B Note may not be changed orally, but only by an
instrument in writing executed pursuant to the provisions of Section 9.01
of the Agreement.
Bally's Park Place, Inc.,
a New Jersey corporation
By:Exhibit - do not sign
Joseph A. D'Amato
Vice President
MODIFICATION TO INTERCREDITOR AGREEMENT
MODIFICATION TO INTERCREDITOR AGREEMENT (this "Modification"), dated
as of February 27, 1996, among First Union National Bank formerly known as
Fidelity Bank, National Association ("First Union") Midlantic Bank, National
Association formerly known as Midlantic National Bank ("Midlantic") and
LaSalle National Bank ("LaSalle" and together with First Union and
Midlantic, collectively, the "Lender"), Bally's Park Place, Inc., a New
Jersey corporation ("Park Place"), and Bally's Park Place Realty Co., a New
Jersey corporation ("Realty"), and Bally's Park Place Funding Inc., a
Delaware corporation ("Funding" and together with Park Place and Realty,
collectively, the "Mortgagor"), and, First Bank National Association as
Trustee ("Trustee") on behalf of itself and the holders (the "Mortgage Note
Holders") of the 91/4% First Mortgage Notes due 2004 (the "Securities") issued
pursuant to a registration statement (the "Registration Statement") filed
with the Securities and Exchange Commission (the "SEC") and under the
Indenture dated as of March 8, 1994 (as amended, modified or supplemented
through the date hereof and as the same may be amended, modified or
supplemented from time to time, the "Indenture"). Capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed
thereto in the Indenture.
W I T N E S S E T H
WHEREAS, Trustee has entered into the Indenture, pursuant to which the
Securities were issued; and
WHEREAS, the Securities are secured by a Mortgage and Security
Agreement with Assignment of Rents, dated as of March 8, 1994 (as amended,
modified or supplemented through the date hereof and as the same may
hereafter be amended, modified or supplemented from time to time, the
"Mortgage" given by Mortgagor, as grantor, to Trustee, as trustee, covering
certain real property, as well as all furniture, furnishings, fixtures,
machinery, equipment, supplies and certain other tangible personal property
contained thereon as more particularly described in the Mortgage (the
"Secured Property"); and
WHEREAS, as contemplated under the terms of the Indenture, First Union,
Midlantic, Park Place and Realty, Funding and Trustee are party to an
intercreditor agreement dated as of March 8, 1994 (the "Intercreditor
Agreement"); and
WHEREAS, as contemplated under the terms of the Indenture, First Union,
Midlantic, Park Place, Realty and Bally's Park Place, Inc., a Delaware
corporation, entered into a credit and guaranty agreement dated March 8,
1994 (the "Original Additional Loan Agreement") the obligations under which
were secured by a mortgage, security agreement and assignment of rents and
an assignment of leases and rents granting a lien on the Secured Property;
and
WHEREAS, Lender and Mortgagor have entered into an amended and restated
credit and guaranty agreement dated as of February 27, 1996 (the "New
Additional Loan Agreement"), superseding the Original Additional Loan
Agreement and providing for the making of loans to Mortgagor in the
aggregate amount of up to $65,000,000 (the "New Additional Loan") for the
purpose and on the terms of Section 1010 of the Indenture (including,
without limitation, the execution hereof), which New Additional Loan (i)
will be evidenced by Mortgagor's promissory notes (the "New Additional
Note") payable to Lender and (ii) may be secured by that certain mortgage,
security agreement and assignment of rents dated March 8, 1994 as modified
by the modification of mortgage and assignment of leases dated February 27,
1996 (the "Modification Agreement"; which mortgage as further amended,
modified or supplemented from time to time is referred to as the "New
Additional Mortgage") covering all or a portion of the Secured Property (the
"Additional Loan Secured Property"); and
WHEREAS, the Trustee and the Lender enter into this modification to the
Intercreditor Agreement in order to set forth the understanding between
Trustee and Lender, among other things, with respect to (i) their rights and
priorities regarding the Secured Property; and (ii) the order of priority
that shall govern the allocation and application of proceeds from the
Secured Property for the redemption of repayment of the Securities and the
New Additional Note.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreement contained herein, the parties hereto agree as
follows:
56. The foregoing recitals are incorporated into this modification by
reference.
57. The Intercreditor Agreement is hereby modified as follow:
a. All references in the Intercreditor Agreement to "Lender"
shall be deemed to refer to First Union, Midlantic and LaSalle.
b. All references in the Intercreditor Agreement to the
"Additional Loan Agreement" shall be deemed to refer to the
"New Additional Loan Agreement" as defined in the recitals to this
modification.
c. All references in the Intercreditor Agreement to the
"Additional Loan" shall be deemed to refer to the
"New Additional Loan" as defined in the recitals to this modification.
d. All references in the Intercreditor Agreement to the
"Additional Note" shall be deemed to refer to the
"New Additional Note" as defined in the recitals to this modification.
e. All references in the Intercreditor Agreement to the
"Additional Mortgage" shall be deemed to refer to the
"New Additional Mortgage" as defined in the recitals to this modification.
f. All references in the Intercreditor Agreement to the
"Additional Assignment of Leases and Rents" shall be deemed to refer to the
Assignment of Leases and Rents dated March 8, 1994 as modified by the
Modification Agreement.
58. Paragraph 1 and 2 of the Intercreditor Agreement are hereby
restated as follows:
a. Lender: (a) acknowledges receipt of each of the Note
Documents (as hereinafter defined); and (b) agrees that Trustee shall have
and may exercise, with or without the knowledge or consent of Lender, except
as otherwise provided herein, such rights and perform such duties as are
provided for in the Indenture, the Securities, the Mortgage and any and all
other documents executed in connection therewith (collectively, the "Note
Documents") including, but not limited to, rights and duties affecting or
relating to the Note Documents, the Secured Property and the indebtedness
evidenced by the Securities. Subject to the provisions of this
Intercreditor Agreement, Lender further agrees to promptly take such action
and to execute such documents and agreements as Trustee shall reasonably
request to permit Trustee to exercise its rights and perform its duties
hereunder and under the Mortgage and any assignment of leases and rents
executed in connection therewith (the "Assignment of Leases and Rents," and
together with the Mortgage, the "Mortgage Documents").
b. Trustee: (a) acknowledges receipt of the Additional Loan
Documents (as hereinafter defined); and (b) agrees that Lender shall have
and may exercise, with or without the knowledge or consent of Trustee,
except as otherwise provided herein, such rights and perform such duties as
are provided for in the Additional Loan Agreement, the Additional Note, the
Additional Mortgage and any and all other documents executed in connection
therewith (collectively, the "Additional Loan Documents"), including, but
not limited to, rights and duties affecting or relating to the Additional
Loan Documents, the Additional Loan Secured Property and the indebtedness
evidenced by the Additional Note. Subject to the provisions of this
Intercreditor Agreement, Trustee further agrees to promptly take such action
and execute such documents and agreements as Lender shall reasonably request
to permit Lender to exercise its rights and perform its duties hereunder and
under the Additional Mortgage and any assignment of leases and rents
executed in connection therewith (the "Additional Mortgage Assignment of
Leases and Rents," and together with the Additional Mortgage, collectively,
the "Additional Mortgage Documents").
59. Except as modified herein, all of the terms, provisions and
covenants of the Intercreditor Agreement are in all other respects hereby
ratified and confirmed and shall remain in full force and effect.
60. This modification agreement is to be construed according to the
laws of the State of New Jersey.
61. This modification agreement shall be binding upon the parties
hereto and their respective successors and assigns.
62. This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument, and
any of the parties hereto may execute this Agreement by signing any such
counterpart.
IN WITNESS WHEREOF, the parties have caused this modification agreement
to be executed as of the date first set forth above.
FIRST BANK NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
By:____________________________
Kathe Barrett
Title:
BALLY'S PARK PLACE, INC.
Park Place and the Boardwalk
Atlantic City, New Jersey 08401
By:_____________________________
Joseph A. D'Amato
Vice President
BALLY'S PARK PLACE REALTY CO.
Park Place and the Boardwalk
Atlantic City, New Jersey 08401
By:_____________________________
Joseph A. D'Amato
Vice President
BALLY'S PARK PLACE FUNDING, INC.
Park Place and the Boardwalk
Atlantic City, New Jersey 08401
By:_____________________________
Joseph A. D'Amato
Vice President
FIRST UNION NATIONAL BANK
550 Broad Street
Newark, New Jersey 07102
Attn: Robert K. Strunk, II
By:____________________________
Patrick McGovern
Vice President
MIDLANTIC BANK, N.A.
600 Midlantic Drive
PO Box 6000
Mt. Laurel, New Jersey 08504-6000
Attn: Denise D. Killen
By:_____________________________
Peter J. Cahill
Senior Vice President
LASALLE NATIONAL BANK
120 S. LaSalle Street
Room 205
Chicago, Illinois 60603
Attn: Kristen L. Simko
By:___________________________
Kristen L. Simko
Commercial Banking Officer
STATE OF )
) SS:
COUNTY OF )
On the ___th day of February, 1996, before me personally came Kathe
Barrett, to me known, who, being by me duly sworn, did depose and say that
she is a _________________________ of First Bank National Association, the
national banking association described in and which executed the foregoing
instrument; that she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
by order of the board of directors of said corporation; and that she signed
her name thereto by like order.
Notary Public
___________________________________
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK)
On the 27th day of February, 1996, before me personally came Joseph A.
D'Amato, to me known, who, being by me duly sworn, did depose and say that
he is the Vice President of Bally's Park Place, Inc., the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the board of directors
of said corporation; and that he signed his name thereto by like order.
Notary Public
___________________________________
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK)
On the 27th day of February, 1996, before me personally came Joseph A.
D'Amato, to me known, who, being by me duly sworn, did depose and say that
he is the Vice President of Bally's Park Place Realty Co., the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the board of directors
of said corporation; and that he signed his name thereto by like order.
Notary Public
________________________
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK)
On the 27th day of February, 1996, before me personally came Joseph A.
D'Amato, to me known, who, being by me duly sworn, did depose and say that
he is the Vice President of Bally's Park Place Funding, Inc., the
corporation described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation; and that he signed his name thereto
by like order.
Notary Public
___________________________________
STATE OF PENNSYLVANIA)
) SS:
COUNTY OF PHILADELPHIA )
On the 15th day of February, 1996, before me personally came Patrick
McGovern, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of First Union National Bank, the national banking
association described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation; and that he signed his name thereto
by like order.
Notary Public
___________________________________
STATE OF )
) SS:
COUNTY OF )
On the 15th day of February, 1996, before me personally came Peter J.
Cahill, to me known, who, being by me duly sworn, did depose and say that
he is a Senior Vice President of Midlantic Bank, N.A., the national banking
association described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation; and that he signed his name thereto
by like order.
Notary Public
___________________________________
STATE OF ILLINOIS)
) SS:
COUNTY OF COOK)
On the 15th day of February, 1996, before me personally came Kristen
L. Simko, to me known, who, being by me duly sworn, did depose and say that
she is a Commercial Banking Officer of LaSalle National Bank, the national
banking association described in and which executed the foregoing
instrument; that she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
by order of the board of directors of said corporation; and that she signed
her name thereto by like order.
Notary Public
__________________________________
EMPLOYMENT AGREEMENT
THE EMPLOYMENT AGREEMENT made and entered into the 20th day of July,
1995, and effective as of January 1, 1995, by and between Bally
Entertainment Corporation, a Delaware corporation, ("Bally"), Bally's Park
Place, Inc., a New Jersey corporation ("Park Place") (Bally and Park Place
shall be referred to jointly herein as "Employer" and shall jointly and
severably be obligated hereunder) and Wallace R. Barr ("Employee").
WHEREAS, Employer and Employee desire to terminate that Employment
Agreement effective as of January 1, 1993 (the "Old Agreement") and enter
into this Employment Agreement to set forth the rights and duties of the
parties herein;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements herein contained, the parties agree as follows:
1. Employment
(a) Employer hereby employs Employee in the capacities of Chief
Operating Officer with the title of President of Park Place and GNOC, CORP.,
t/a Bally's Grand Casino Hotel ("GNOC") and such other capacity or
capacities of equal status and responsibility as the Chairman of the Board
and Chief Executive Officer of Bally, or his designated representative,
shall determine, and Employee hereby accepts such employment upon the terms
and conditions herein set forth.
(b) During the term of his employment, Employee will devote his
best efforts to his employment and perform such duties consistent with his
capacities as Chief Operating Officer with the title of President of Park
Place and GNOC, and such other capacity or capacities as the Chairman of the
Board and Chief Executive Officer of Bally shall determine, as are
reasonably assigned to him by Employer. While it is understood and agreed
that Employee's job capacities may change at Employer's discretion during
the term of this Employment Agreement, his level of responsibility shall not
be substantially reduced at any time. The Employee, however, agrees that
the sale of one of the casino properties in Atlantic City shall not be
deemed to be a substantial reduction of his responsibility, provided
Employer continues to honor all obligations to the Employee hereunder
without any reduction. Employee will devote his entire working time and
attention to the business and related interests of, and will be loyal to,
Employer, and Employee agrees to render service on behalf of Employer or on
behalf of its subsidiaries or affiliates.
(c) Except for the inherent travel requirements of his positions,
Employee shall not be required to perform his duties outside of Atlantic
City, New Jersey or to relocate his present residence.
(d) Employee shall not, without prior written consent of
Employer, directly or indirectly, during the term of this Employment
Agreement:
(i) Other than in the performance of duties naturally
inherent to Employer's business and in furtherance thereof, render services
of a business, professional or commercial nature to any other person or
firm, whether for compensation or otherwise, but this shall not be construed
as preventing the Employee from investing his assets in such form or manner
as will not require any services on the part of the Employee in the
operation of the affairs of the companies in which such investments are made
and which are not in violation of subparagraph (ii) below or from engaging
in charitable activities so long as such activities do not interfere with
the performance of Employee's duties hereunder;
(ii) Engage in any activity competitive with or adverse to
Employer's business or welfare, whether alone, as a partner, or as an
officer, director, employee or shareholder of any other corporation, or
otherwise, directly or indirectly, except that the ownership of not more
than one percent (1%) of the stock of any publicly traded corporation shall
not be deemed violative of this subparagraph (ii);
(iii) Be engaged by any entity which conducts business with
or acts as consultant or advisor to Employer, whether alone, as a partner,
or as an officer, director, employee or shareholder, or otherwise, directly
or indirectly, except that ownership of not more than one percent (1%) of
the stock of any publicly traded corporation shall not be deemed violative
of this subparagraph (iii).
2. Term
The term of this Employment Agreement shall begin on the effective
date stated above ("commencement date") and shall continue for four (4)
years from such date, and unless the term is extended by mutual agreement,
the term shall continue thereafter from month-to-month until termination by
either party in his or its sole discretion upon thirty (30) days written
notice.
3. Compensation
(a) In consideration of the services to be rendered by the
Employee hereunder, the Employer agrees to pay to the Employee, and the
Employee agrees to accept, as compensation, the sum of Nine Hundred
Thousand Dollars ($900,000.00) (the "Base Salary") for each twelve month
period following the effective date of this Employment Agreement, which
shall be paid on the regularly recurring pay periods established by
Employer. The Base Salary shall be subject to periodic review by Employer,
although any determination to increase the Base Salary shall be within
Employer's sole discretion.
(b) It is further understood by both parties that, pursuant to
the policies of Employer, a discretionary bonus payment may be made in
addition to the Base Salary above provided.
4. Vacation and Other Benefits
(a) Employee shall be entitled to a reasonable vacation each year
of his employment with Employer as well as other employment benefits,
including hospitalization, life insurance, long-term disability, death and
retirement plans, an automobile allowance or the use of an automobile, and
the like, afforded to senior executives of Employer of comparable status and
tenure and consistent with that afforded under Employer's policies.
(b) In addition, Employer shall maintain in full force and effect
so long as Employee is employed hereunder, a policy of term insurance on the
life of the Employee in the amount of twice his Base Salary. Employee shall
promptly advise Employer of the designated beneficiary or beneficiaries of
such policies. The term life insurance benefits herein referenced shall be
supplemental to the group life insurance provided to Employee at the time
this Employment Agreement commenced or any subsequent improvement thereof.
(c) Notwithstanding the third paragraph of Section 4 of the Old
Agreement, the grant of 50,000 options to purchase Bally common stock
referred to therein shall not terminate within ninety (90) days of the date
of this Agreement but shall be governed exclusively by the terms of the
Award Agreement dated March 16, 1993 between Bally and Employee.
(d) In the event that the equity interest of one or both of the
casino companies in Atlantic City is the subject of a public offering during
the term of the Employment Agreement, Employee shall receive stock options
and/or stock awards in connection therewith in an amount or amounts
consistent with the highest of any such grants of options and/or stock
awards to other individuals employed by the Employer or its subsidiaries,
other than the Chairman of the Board or President of the Employer.
5. Expenses
Employer shall pay all reasonable expenses incurred by Employee
in the performance of his responsibilities and duties for Employer as well
as the promotion of Employer's business. Employee shall submit to Employer
periodic statements of all expenses so incurred. Subject to such audits as
Employer may deem necessary, Employer shall reimburse Employee the full
amount of any such expenses advanced by Employee promptly in the ordinary
course.
6. Covenants and Confidential Information
(a) Employee agrees that, for the applicable period specified
below, he will not, directly or indirectly, do any of the following:
(i) Be engaged by any entity as a partner, officer,
director, employee, shareholder or consultant which directly owns or
operates a casino hotel within the State of New Jersey, except that the
ownership of not more than one percent (1%) of the stock of any publicly
traded corporation shall not be deemed violative of this subparagraph (i);
(ii) Induce any person who is an employee, officer or agent
of Employer, or a subsidiary or affiliate of Bally, to terminate said
relationship;
(iii) Other than to the Employer, disclose, divulge,
discuss, copy or otherwise use or suffer to be used in any manner, in
competition with, or contrary to the interests of Employer, the customer
lists, and proprietary and confidential inventions, ideas, discoveries,
manufacturing methods, product research or engineering data or other trade
secrets of Employer, it being acknowledged by Employee that all such
information is the exclusive property of Employer. The information listed
in this subparagraph shall be referred to herein as "Trade Secrets".
(b) The provisions of 6(a)(i) and (ii) shall be operative during
the Term hereof except as provided in the following sentence. In the event
of a "Change in Control", the provisions of 6(a)(i) and (ii) shall be
operative only so long as Employee remains an Employee. In the event
Employee is terminated for "Cause" (as defined in paragraph 8) the
provisions of 6(a)(i) and (ii) shall be operative for the balance of the
Term. The provisions of 6(a)(iii) are of a continuing nature and shall
remain in full effect at all times during and beyond Employee's period of
employment. If at any time following the termination of this Employment
Agreement, any Trade Secrets shall become part of the public domain through
no fault of Employee, then the restrictions and limitations of this
paragraph shall not apply to such information.
(c) Employee expressly agrees and understands that the remedy at
law for any breach by him of this paragraph 6 will be inadequate and that
the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that Employer
shall be entitled to immediate injunctive relief, and if the court so
permits, may obtain a temporary order restraining any threatened or further
breach. Nothing contained in this paragraph 6 shall be deemed to limit
Employer's remedies at law or in equity for any breach by Employee of the
provisions of this paragraph 6 which may be pursued or availed of by
Employer. Any covenant on Employee's part contained hereinabove which may
not be specifically enforceable shall nevertheless, if breached, give rise
to a cause of action for monetary damages.
(d) Employee has carefully considered the nature and extent of
the restrictions upon him and the rights and remedies conferred upon
Employer under this paragraph 6 and hereby acknowledges and agrees that the
same are reasonable, are designed to eliminate competition which otherwise
would be unfair to Employer, do not stifle the inherent skill and experience
of Employee, would not operate as a bar to Employee's sole means of support,
are fully required to protect the legitimate interests of Employer and do
not confer a benefit upon Employer disproportionate to the detriment to
Employee.
(e) For the purpose of this paragraph, the term "Employer" shall
be deemed to include Bally, Park Place, GNOC, and/or any other subsidiaries
or affiliates of Bally, together with their respective successors or
assigns.
7. Illness, Incapacity or Death During Employment
(a) If the Employee is unable to perform his services by reason
of illness or incapacity resulting in a failure to discharge his duties
under this Employment Agreement for six (6) or more consecutive months, then
upon thirty (30) days notice, Employer may terminate the employment of
Employee under this Employment Agreement and Employee, upon such
termination, shall be paid his Base Salary on a pro-rata basis to the date
of termination through the thirty (30) day notice period.
In the event of such termination, the Employee shall have the
right to the assignment of any and all insurance policies or health
protection plans if said policies and plans permit assignment out of the
group to the individual Employee.
(b) In the event that Employer elects to terminate this
Employment Agreement by reason of illness or incapacity, then Employee shall
be entitled to all Long-Term Disability ("LTD") benefits provided to
personnel at a senior officer status of Park Place or at Bally, if Park
Place is no longer a subsidiary. In addition, the benefit amount to which
Employee shall be entitled shall be 60% of Base Salary as of the date of
termination, without reference to set-offs or caps existing in any LTD plan.
(c) In the event of Employee's death, all obligations of Employer
under this Employment Agreement under paragraph 3 hereof shall terminate
other than the payment of that portion of his Base Salary on a pro-rata
basis accrued to the date of death, plus reimbursement of all expenses
reasonably incurred by Employee in performing his responsibilities and
duties for Employer prior to and including such date.
8. Termination for Cause and Severance Compensation
(a) The employment of Employee under this Employment Agreement,
and the term hereof, may be terminated by Employer for cause at any time.
For purposes hereof, the term "cause" means:
(i) Employee's fraud, dishonesty, willful misconduct or
gross negligence in the performance of his duties hereunder, including
willful failure to perform such duties as may properly be assigned him
hereunder;
(ii) Employee's material breach of any provision of this
Employment Agreement; or
(iii) Employee's failure to qualify (or having so qualified
being thereafter disqualified) under any suitability or licensing
requirement to which Employee may be subject by reason of his position with
Employer and its parents, affiliates or subsidiaries, under the laws of New
Jersey.
(b) Any termination by reason of the foregoing shall not be in
limitation of any other right or remedy Employer may have under this
Employment Agreement or otherwise.
In the event Employer exercises its right under this
paragraph 8 to terminate this Employment Agreement for cause, Employee shall
have the right to challenge this action by seeking arbitration. Said
arbitration proceedings shall commence with Employee filing a written demand
therefor with the American Arbitration Association ("AAA"), Philadelphia
office, within twenty (20) days after receipt of notice of termination.
Except as provided herein in paragraph 12, arbitration shall be governed by
AAA Labor Arbitration Rules.
9. Optional Termination Upon Change of Control
(a) In the event that there is a change in control of Bally,
Employee may, at his option, terminate this Employment Agreement at any time
thereafter upon thirty (30) days written notice to Employer. If Employee
exercises this right to terminate, no later than his last day of employment,
he shall be paid in lump sum the amount of six (6) months Base Salary.
Furthermore, in the event that there is a change in control of
Bally and the successor in control, without cause, terminates this
Employment Agreement, Employee shall be paid in lump sum twenty-four (24)
months Base Salary or an amount equal to his Base Salary for the balance of
the forty-eight (48) month term, whichever is greater, and the greater of
the average of the bonuses, if any, paid to Employee by Employer for the
three (3) prior years or the bonus, if any, for the prior year. If the
successor in control changes Employee's title or substantially changes his
duties or functions from those which he previously performed hereunder, the
successor in control shall be deemed to have constructively terminated
Employee's services without cause.
A "Change in Control" shall mean a change in control of Bally of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act
of 1934 (as in effect on the effective date of this Employment Agreement,
the "Exchange Act"), whether or not Bally is then subject to such reporting
requirement; provided that, without limitation, such a Change in Control
shall be deemed to have occurred if:
(i) any "person" (as defined in subsections 13(d) and 14(d) of
the Exchange Act), other than a person with which Arthur Goldberg is
affiliated or of which he is a part, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of Bally representing 20% or more of the combined voting power
of Bally's then outstanding securities;
(ii) during any period of two (2) consecutive years or less
(not including any period prior to the effective date of this Employment
Agreement) there shall cease to be a majority of the Board of Directors of
Bally comprised of Continuing Directors (as defined below); or
(iii) the stockholders of Bally approve (1) a merger or
consolidation of Bally with any other corporation, other than a merger or
consolidation that would result in the voting securities of Bally
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of Bally or such surviving entity outstanding immediately after
such merger or consolidation, or (2) a plan of complete liquidation of Bally
or an agreement for the sale or disposition by Bally of all or substantially
all of its assets.
The term "Continuing Directors" shall mean individuals who
constitute the Board of Directors of Bally as of the effective date of this
Employment Agreement and any new director(s) whose election by such Board
or nomination for election by Bally's stockholders was approved by a vote
of at least two-thirds of the directors then in office who either were
directors as of the effective date of this Employment Agreement or whose
election or nomination for election was previously so approved.
(b) If it shall be determined that any payment or distribution
to or for the benefit of Employee pursuant to this Section 9 ("Severance
Payments") would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code (the "Excise Tax"), then Employee shall be entitled
to receive from Employer an additional payment (the "Excise Tax Gross-Up
Payment") in an amount such that the net amount retained by Employee, after
the calculation and deduction of any Excise Tax on the Severance Payments
and any federal, state and local income taxes and Excise Tax on the Gross-Up
Payment provided for in this Section 9, shall be equal to the Severance
Payments. In determining this amount, the amount of the Excise Tax Gross-Up
Payment attributable to federal income taxes shall be reduced by the maximum
reduction in federal income taxes that could be obtained by the deduction
of the portion of the Excise Tax Gross-Up Payment attributable to state and
local income taxes. Finally, the Excise Tax Gross-Up Payment shall be
reduced by income or excise tax withholding payments made by Employer to any
federal, state or local taxing authority with respect to the Excise Tax
Gross-Up Payment that was not deducted from compensation payable to
Employee.
10. Severable Provisions
The provisions of this Employment Agreement are severable, and
if any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any
partially unenforceable provision to the extent enforceable in any
jurisdiction, shall nevertheless be binding and enforceable.
11. Binding Agreement
The rights and obligations of Employer under this Employment
Agreement shall inure to the benefit of and shall be binding upon the
respective successors and assigns of Employer.
12. Attorneys' Fees
In the event Employee is required to commence legal action
to enforce the provisions of this Employment Agreement and Employee prevails
in such action, Employer shall pay Employee's costs and expenses, including
reasonable attorneys' fees, incurred in such action.
13. Notices
Any notice to be given to Employer under the terms of this
Employment Agreement shall be addressed to Employer at the address of its
principal place of business, and any notice to be given to Employee shall
be addressed to him at his home address last shown on the records of the
Employer, or at such other address as either party may hereafter designate
in writing to the other. Any such notice shall have been duly given when
enclosed in a properly sealed envelope addressed as aforesaid, postage
prepaid, registered or certified, return receipt requested, and deposited
in a post office or branch post office regularly maintained by the United
States Government.
14. Waiver
Either party's failure to enforce any provision or provisions of
this Employment Agreement shall not in any way be construed as a waiver of
any such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision
of this Employment Agreement. The rights granted the parties herein are
cumulative and the waiver by a party of any single remedy shall not
constitute a waiver of such party's right to assert all other legal remedies
available to him or it under the circumstances.
15. Governing Law
This Employment Agreement shall be governed by and construed and
interpreted according to the internal laws of the State of New Jersey,
without reference to principles of conflict of laws.
16. Captions and Paragraph Headings
Captions and paragraph headings used herein are for convenience
only and are not a part of this Employment Agreement and shall not be used
in construing it.
17. Entire Agreement
This Employment Agreement constitutes the entire agreement between
Employer and Employee with respect to the subject matter hereof and may not
be modified or terminated orally. No modification, termination or attempted
waiver of this Employment Agreement shall be valid unless in writing and
signed by the party against whom the same is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be duly executed as of the day and year first above written.
BALLY'S PARK PLACE, INC.
ATTEST: By:
"Park Place"
BALLY ENTERTAINMENT CORPORATION
ATTEST: By:
"Bally"
Wallace R. Barr "Employee"
Approved by the Compensation and Stock Option Committee on January 18, 1995.
Secretary, Compensation and Stock
Option Committee
EMPLOYMENT AGREEMENT
THE EMPLOYMENT AGREEMENT made and entered into the 20th day of July,
1995, and effective as of January 1, 1995, by and between Bally
Entertainment Corporation, a Delaware corporation ("Bally"), Bally's Park
Place, Inc., a New Jersey corporation ("Park Place") (Bally and Park Place
shall be referred to jointly herein as "Employer" and shall jointly and
severably be obligated hereunder) and Robert G. Conover ("Employee").
WHEREAS, Employer and Employee desire to terminate that Employment
Agreement effective as of January 1, 1993 and enter into this Employment
Agreement to set forth the rights and duties of the parties herein;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements herein contained, the parties agree as follows:
1. Employment
(a) Employer hereby employs Employee in the capacities of Chief
Information Officer with the title of Vice President - Management
Information Systems at Bally and Senior Vice President of Park Place and
such other capacity or capacities of equal status and responsibility as the
Chairman of the Board and Chief Executive Officer of Bally, or his
designated representative, shall determine, and Employee hereby accepts such
employment upon the terms and conditions herein set forth.
(b) During the term of his employment, Employee will devote his
best efforts to his employment and perform such duties consistent with his
capacities as Chief Information Officer with the title of Senior Vice
President of Park Place and GNOC, CORP., and such other capacity or
capacities as the Chairman of the Board and Chief Executive Officer of Bally
shall determine, as are reasonably assigned to him by Employer. Employee
will devote his entire working time and attention to the business and
related interests of, and will be loyal to, Employer, and Employee agrees
to render service on behalf of Employer or on behalf of its subsidiaries or
affiliates. Notwithstanding the foregoing, Employee may continue to perform
services on behalf of Bally Gaming International, Inc. ("BGII"), including
performing the duties of President of the Bally Systems Division of BGII,
as provided herein.
(c) Except for the inherent travel requirements of his positions,
Employee shall not be required to perform his duties outside of Atlantic
City, New Jersey or to relocate his present residence.
(d) Employee shall not, without prior written consent of
Employer, directly or indirectly, during the term of this Employment
Agreement:
(i) Other than in the performance of duties naturally inherent
to Employer's business and in furtherance thereof, render services of a
business, professional or commercial nature to any other person or firm,
whether for compensation or otherwise, but this shall not be construed as
preventing the Employee from investing his assets in such form or manner as
will not require any services on the part of the Employee in the operation
of the affairs of the companies in which such investments are made and which
are not in violation of subparagraph (ii) below or from engaging in
charitable activities so long as such activities do not interfere with the
performance of Employee's duties hereunder;
(ii) Engage in any activity competitive with or adverse to
Employer's business or welfare, whether alone, as a partner, or as an
officer, director, employee or shareholder of any other corporation, or
otherwise, directly or indirectly, except that the ownership of not more
than one percent (1%) of the stock of any publicly traded corporation shall
not be deemed violative of this subparagraph (ii);
(iii) Be engaged by any entity which conducts business with
or acts as consultant or advisor to Employer, whether alone, as a partner,
or as an officer, director, employee or shareholder, or otherwise, directly
or indirectly, except that ownership of not more than one percent (1%) of
the stock of any publicly traded corporation shall not be deemed violative
of this subparagraph (iii).
2. Term
Subject to Employer's right to earlier terminate this Employment
Agreement as provided below, the term hereof shall begin on January 1, 1995
and shall terminate on July 16, 1997.
On or before January 1, 1997, Employee shall declare his
intentions with respect to remaining exclusively with Employer at the
conclusion of the term of this Employment Agreement. If he elects to so
remain with Employer, Employee will execute a new agreement in form mutually
satisfactory to the parties. If he declines, Employer shall have the right
to terminate the Employee's employment hereunder at any time prior to July
16, 1997, upon thirty (30) days advance written notice, and Employer's sole
obligation to Employee shall be the payment of salary earned through the
date of said earlier termination and the continuation of benefits through
said period.
3. Compensation
(a) In consideration of the services to be rendered by the
Employee hereunder, the Employer agrees to pay to the Employee, and the
Employee agrees to accept, as compensation, the sum of Three Hundred
Twenty-Five Thousand Dollars ($325,000.00) (the "Base Salary") for each
twelve month period following the effective date of this Employment
Agreement, which shall be paid on the regularly recurring pay periods
established by Employer. The Base Salary shall be subject to periodic
review by Employer, although any determination to increase the Base Salary
shall be within Employer's sole discretion.
(b) It is further understood by both parties that, pursuant to
the policies of Employer, a discretionary bonus payment may be made, in
addition to the Base Salary above provided, by Bally, Park Place, another
Bally subsidiary and/or BGII.
4. Vacation and Other Benefits
Employee shall be entitled to a reasonable vacation each year of
his employment with Employer as well as other employment benefits, including
hospitalization, life insurance, long-term disability, death and retirement
plans, an automobile allowance or the use of an automobile, and the like,
afforded to senior executives of Employer of comparable status and tenure
and consistent with that afforded under Employer's policies. Employer may,
at its sole discretion, change such policies.
5. Expenses
Employer shall pay all reasonable expenses incurred by Employee
in the performance of his responsibilities and duties for Employer as well
as the promotion of Employer's business. Employee shall submit to Employer
periodic statements of all expenses so incurred. Subject to such audits as
Employer may deem necessary, Employer shall reimburse Employee the full
amount of any such expenses advanced by Employee promptly in the ordinary
course.
6. Covenants and Confidential Information
(a) Employee agrees that for the applicable period specified
below, he will not, directly or indirectly, do any of the following:
(i) Own, manage, control, or participate in the ownership,
management, or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise, with any other corporation, partnership, proprietorship, firm,
association or other business entity, or otherwise engage in any business
which is engaged in any manner in, the operation of gaming ventures
including, but not limited to, casinos, Indian gaming or riverboat gaming,
within five (5) miles of any gaming facility ("Facility") owned, managed or
under development to be owned or managed by Employer (as conducted on the
date Employee ceases to be employed hereunder); provided, however, that the
ownership of not more than one percent (1%) of the stock of any publicly
traded corporation shall not be deemed a violation of this covenant;
(ii) Induce any person who is an employee, officer, or agent
of Employer to terminate said relationship.
(iii) Employ, assist in employing or otherwise associate in
business with any present, former or future employee or officer of Employer.
(iv) Disclose, divulge, discuss, copy or otherwise use or
suffer to be used in any manner, in competition with, or contrary to the
interests of Employer, the customer lists, inventions, ideas, discoveries,
manufacturing methods, product research or engineering data or other trade
secrets of Employer, it being acknowledged by Employee that all such
information regarding the business of Employer compiled or obtained by, or
furnished to, Employee while he shall have been employed by or associated
with Employer is confidential information and the exclusive property of
Employer.
(b) The provisions of subparagraphs 6(a)(i) - 6(a)(iii) shall be
operative during the Term hereof except as provided in the following
sentence. In the event (y) of a "Change of Control" the provisions of
subparagraphs 6(a)(i)-(iii) shall be operative only so long as Employee
remains an employee of Employer and (z) Employee is terminated for "Cause"
(as defined in paragraph 8 hereof), the provisions of subparagraphs 6(a)(i)-
(iii) shall be operative during the Term and for one (1) additional year.
All other obligations created by the terms of this paragraph 6 are of a
continuing nature and shall remain in full effect at all times during and
beyond Employee's period of employment.
(c) Employee expressly agrees and understands that the remedy at
law for any breach by him of this paragraph 6 will be inadequate and that
the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that Employer
shall be entitled to immediate injunctive relief and if the court so
permits, may obtain a temporary order restraining any threatened or further
breach. Nothing contained in this paragraph 6 shall be deemed to limit
Employer's remedies at law or in equity for any breach by Employee of the
provisions of this paragraph 6 which may be pursued or availed of by
Employer. Any covenant on Employee's part contained hereinabove, which may
not be specifically enforceable, shall nevertheless, if breached, give rise
to a cause of action for monetary damages.
(d) Employee has carefully considered the nature and extent of
the restrictions upon him and the rights and remedies conferred upon
Employer under this paragraph 6, and hereby acknowledges and agrees that the
same are reasonable in time and territory, are designed to eliminate
competition which otherwise would be unfair to Employer, do not stifle the
inherent skill and experience of Employee, would not operate as a bar to
Employee's sole means of support, are fully required to protect the
legitimate interests of Employer and do not confer a benefit upon Employer
disproportionate to the detriment to Employee.
(e) For the purposes of this paragraph 6, the term "Employer"
shall be deemed to include Bally Entertainment Corporation and any of its
affiliates or subsidiaries and BGII, together with their respective
successors or assigns, on a specific basis so as to prohibit Employee from
use of the trade secrets of Bally and its affiliates for the benefit of BGII
or vice versa unless consistent with the interest of the party having rights
to the trade secrets.
(f) The covenants contained in this paragraph 6 shall be
construed to extend to separate counties and adjacent counties, if
applicable, of the states of the United States in which Employer has a
Facility, and to the extent that any such covenant shall be illegal and/or
unenforceable with respect to any one of said counties, said covenants shall
not be affected thereby with respect to each other county, such covenants
with respect to each county being construed as severable and independent.
7. Illness, Incapacity or Death During Employment
(a) If the Employee is unable to perform his services by reason
of illness or incapacity resulting in a failure to discharge his duties
under this Employment Agreement for six (6) or more consecutive months, then
upon thirty (30) days notice, Employer may terminate the employment of
Employee under this Employment Agreement and Employee, upon such
termination, shall be paid his Base Salary on a pro-rata basis to the date
of termination through the thirty (30) day notice period.
In the event of such termination, the Employee shall have the
right to the assignment of any and all insurance policies or health
protection plans if said policies and plans permit assignment out of the
group to the individual Employee.
(b) In the event of Employee's death, all obligations of Employer
under this Employment Agreement shall terminate other than the payment of
that portion of his Base Salary on a pro-rata basis accrued to the date of
death, plus reimbursement of all expenses reasonably incurred by Employee
in performing his responsibilities and duties for Employer prior to and
including such date.
8. Termination for Cause and Severance Compensation
(a) The employment of Employee under this Employment Agreement,
and the term hereof, may be terminated by Employer for cause at any time.
For purposes hereof, the term "cause" means:
(i) Employee's fraud, dishonesty, willful misconduct or
gross negligence in the performance of his duties hereunder, including
willful failure to perform such duties as may properly be assigned him
hereunder;
(ii) Employee's material breach of any provision of this
Employment Agreement; or
(iii) Employee's failure to qualify (or having so qualified
being thereafter disqualified) under any suitability or licensing
requirement to which Employee may be subject by reason of his position with
Employer and its parents, affiliates or subsidiaries, whether under the laws
of Nevada, New Jersey or otherwise.
(b) Any termination by reason of the foregoing shall not be in
limitation of any other right or remedy Employer may have under this
Employment Agreement or otherwise.
In the event Employer exercises its right under this
paragraph 8 to terminate this Employment Agreement for cause, Employee shall
have the right to challenge this action by seeking arbitration. Said
arbitration proceedings shall commence with Employee filing a written demand
therefor with the American Arbitration Association ("AAA"), Philadelphia
office, within twenty (20) days after receipt of notice of termination.
Except as provided herein in paragraph 12, arbitration shall be governed by
AAA Labor Arbitration Rules.
9. Optional Termination Upon Change of Control
(a) In the event that there is a change in control of Bally and
the successor in control, without cause, terminates this Employment
Agreement, Employee shall be paid in lump sum twenty-four (24) months Base
Salary or an amount equal to his Base Salary for the balance of the thirty-six
(36) month term, whichever is greater, and the greater of the average
of the bonuses, if any, paid to Employee by Employer for the three (3) prior
years and the bonus, if any, for the prior year. If the successor in
control changes Employee's title or substantially changes his duties or
functions from those which he previously performed hereunder, the successor
in control shall be deemed to have constructively terminated Employee's
services without cause.
A "Change in Control" shall mean a change in control of Bally
of a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 (as in effect on the effective date of this Employment
Agreement, the "Exchange Act"), whether or not Bally is then subject to such
reporting requirement; provided that, without limitation, such a Change in
Control shall be deemed to have occurred if:
(i) any "person" (as defined in subsections 13(d) and 14(d)
of the Exchange Act), other than a person with which Arthur Goldberg is
affiliated or of which he is a part, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of Bally representing 25% or more of the combined voting power
of Bally's then outstanding securities;
(ii) during any period of two (2) consecutive years or less
(not including any period prior to the effective date of this Employment
Agreement) there shall cease to be a majority of the Board of Directors of
Bally comprised of Continuing Directors (as defined below); or
(iii) the stockholders of Bally approve (1) a merger or
consolidation of Bally with any other corporation, other than a merger or
consolidation that would result in the voting securities of Bally
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of Bally or such surviving entity outstanding immediately after
such merger or consolidation, or (2) a plan of complete liquidation of Bally
or an agreement for the sale or disposition by Bally of all or substantially
all of its assets.
The term "Continuing Directors" shall mean individuals who
constitute the Board of Directors of Bally as of the effective date of this
Employment Agreement and any new director(s) whose election by such Board
or nomination for election by Bally's stockholders was approved by a vote
of at least two-thirds of the directors then in office who either were
directors as of the effective date of this Employment Agreement or whose
election or nomination for election was previously so approved.
(c) If it shall be determined that any payment or distribution
to or for the benefit of Employee pursuant to this Section 9 ("Severance
Payments") would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code (the "Excise Tax"), then Employee shall be entitled
to receive from Employer an additional payment (the "Excise Tax Gross-Up
Payment") in an amount such that the net amount retained by Employee, after
the calculation and deduction of any Excise Tax on the Severance Payments
and any federal, state and local income taxes and Excise Tax on the Gross-Up
Payment provided for in this Section 9, shall be equal to the Severance
Payments. In determining this amount, the amount of the Excise Tax Gross-Up
Payment attributable to federal income taxes shall be reduced by the maximum
reduction in federal income taxes that could be obtained by the deduction
of the portion of the Excise Tax Gross-Up Payment attributable to state and
local income taxes. Finally, the Excise Tax Gross-Up Payment shall be
reduced by income or excise tax withholding payments made by Employer to any
federal, state or local taxing authority with respect to the Excise Tax
Gross-Up Payment that was not deducted from compensation payable to
Employee.
<PAGE>
10. Severable Provisions
The provisions of this Employment Agreement are severable, and
if any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any
partially unenforceable provision to the extent enforceable in any
jurisdiction, shall nevertheless be binding and enforceable.
11. Binding Agreement
The rights and obligations of Employer under this Employment
Agreement shall inure to the benefit of and shall be binding upon the
respective successors and assigns of Employer.
12. Attorneys' Fees
In the event Employee is required to commence legal action to
enforce the provisions of this Employment Agreement and Employee prevails
in such action, Employer shall pay Employee's costs and expenses, including
reasonable attorneys' fees, incurred in such action.
13. Notices
Any notice to be given to Employer under the terms of this
Employment Agreement shall be addressed to Employer at the address of its
principal place of business, and any notice to be given to Employee shall
be addressed to him at his home address last shown on the records of the
Employer, or at such other address as either party may hereafter designate
in writing to the other. Any such notice shall have been duly given when
enclosed in a properly sealed envelope addressed as aforesaid, postage
prepaid, registered or certified, return receipt requested, and deposited
in a post office or branch post office regularly maintained by the United
States Government.
14. Waiver
Either party's failure to enforce any provision or provisions of
this Employment Agreement shall not in any way be construed as a waiver of
any such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision
of this Employment Agreement. The rights granted the parties herein are
cumulative and the waiver by a party of any single remedy shall not
constitute a waiver of such party's right to assert all other legal remedies
available to him or it under the circumstances.
15. Governing Law
This Employment Agreement shall be governed by and construed and
interpreted according to the internal laws of the State of New Jersey,
without reference to principles of conflict of laws.
16. Captions and Paragraph Headings
Captions and paragraph headings used herein are for convenience
only and are not a part of this Employment Agreement and shall not be used
in construing it.
17. Entire Agreement
This Employment Agreement constitutes the entire agreement between
Employer and Employee with respect to the subject matter hereof and may not
be modified or terminated orally. No modification, termination or attempted
waiver of this Employment Agreement shall be valid unless in writing and
signed by the party against whom the same is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be duly executed as of the day and year first above written.
BALLY'S PARK PLACE, INC.
ATTEST: By:
Vice President "Park Place"
BALLY ENTERTAINMENT CORPORATION
ATTEST: By:
Vice President "Bally"
Robert G. Conover "Employee"
Approved by the Compensation and Stock Option Committee on January 18, 1995.
Secretary, Compensation and Stock
Option Committee
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into this 27th day of
December, 1995, but effective as of January 1, 1996, by and between Bally's
Park Place, Inc., a New Jersey Corporation, ("Employer" or "Park Place") and
C. Patrick McKoy ("Employee"):
In consideration of the premises and of the covenants and agreements
herein contained, the parties agree as follows:
1. Prior Agreement.
The Severance Agreement between the parties dated March 15, 1993, shall
terminate effective December 31, 1995.
2. Employment.
A. Employer hereby employs Employee in the capacity of Executive
Vice President at Park Place and such other capacity or capacities as the
President of Employer, or his designated representative, shall determine,
and Employee hereby accepts such employment upon the terms and conditions
herein set forth.
B. During the term of his employment, Employee will devote his
best efforts to his employment and perform such duties consistent with his
position at Park Place and such other related capacity or capacities as the
President of Employer shall determine, as are reasonably assigned to him by
Employer. While it is understood and agreed that Employee's job capacities
may change at Employer's discretion during the term of this Agreement, his
general level of responsibility shall not be substantially reduced at any
time. Furthermore, the Employee agrees that the Employer may direct him to
perform some or all of his duties hereunder for the benefit of GNOC, Corp.
t/a The Grand, in Atlantic City ("Grand") and may assign its obligations
hereunder in part or in their entirety to the Grand and no such event shall
be deemed a breach of this Agreement provided Employer and/or the Grand
continue to honor all obligations to the Employee hereunder without any
reduction. Employee will devote his entire working time and attention to
the business and related interests of, and will be loyal to, Employer, and
Employee agrees to render service on behalf of Employer.
<PAGE>
C. Employee shall not, without prior written consent of
Employer, directly or indirectly, during the term of this Employment
Agreement:
(I) Other than in the performance of duties naturally
inherent of Employer's business and related interests, and in furtherance
thereof as otherwise provided in this Agreement, render services of
business, professional or commercial nature to any other person or firm,
whether for compensation or otherwise, but this shall not be construed as
preventing the Employee from investing his assets in such form or manner as
will not require any services on the part of the Employee in the operation
of the affairs of the companies in which such investments are made and which
are not in violation of subparagraph (ii) below;
(ii) Engage in any activity competitive with or adverse to
Employer's business or related interests, whether alone, as a partner, or
as an officer, director, employee or shareholder of any other corporation,
or otherwise, directly or indirectly except that the ownership of not more
than one percent (1%) of the stock of any publicly traded corporation shall
not be deemed violative of this subparagraph (ii);
(iii) Be engaged by any entity which conducts business with
or acts as consultant or advisor to Employer, whether alone, as a partner,
or as an officer, director, employee or shareholder, or otherwise, directly
or indirectly, except that ownership of not more than one percent (1%) of
the stock of any publicly traded corporation shall not be deemed violative
of this subparagraph (iii).
3. Term.
The term of this Employment Agreement shall begin on January 1, 1996
("commencement date") and shall continue for three (3) years from such date
and shall terminate on December 31, 1998.
4. Compensation.
A. In consideration of the services to be rendered by the
Employee hereunder, the Employer agrees to pay or cause to be paid to the
Employee, and the Employee agrees to accept, as compensation, the sum of
$275,000 (the "Base Salary") for each twelve month period following the
effective date of this Employment Agreement, which shall be paid on the
regularly recurring pay periods established by Employer. The Base Salary
shall be subject to periodic review by Employer, although any determination
to increase the Base Salary shall be within Employer's sole discretion.
B. It is further understood by both parties that, pursuant to the
policies of Employer, a bonus payment will be made in addition to the Base
Salary on an annual basis in such amount as is determined by the Employer
in its sole discretion.
5. Vacation and Other Benefits.
Employee shall be entitled to a reasonable vacation each year of his
employment with Employer as well as other employment benefits, including a
car allowance, medical and hospitalization, life insurance, long term
disability, death and retirement plans, and the like, afforded in general
to officers at Park Place. Employer may, at its sole discretion, change
such policies.
6. Expenses.
Employer shall pay or cause to be paid all reasonable expenses incurred
by Employee in the performance of his responsibilities and duties for
Employer as well as the promotion of Employer's business. Employee shall
submit to Employer periodic statements of all expenses so incurred. Subject
to such audits as Employer may deem necessary, Employer shall reimburse
Employee the full amount of any such expenses advanced by the Employee
promptly in the ordinary course.
7. Covenants and Confidential Information.
A. Employee agrees that, for the applicable period specified
below, he will not directly or indirectly, do any of the following:
(i) Own, manage, control, or participate in the ownership,
management, or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise, with any other corporation, partnership, proprietorship, firm,
association or other business entity, or otherwise engage in any business
which is engaged in any manner in the operation of gaming ventures
including, but not limited to, casinos, Indian gaming or riverboat gaming,
within five (5) miles of any gaming facility ("Facility") owned, managed or
under development to be owned or managed by Employer (as of the date
Employee ceases to be employed hereunder); provided, however, that the
ownership of not more than one percent (1%) of the stock of any publicly
traded corporation shall not be deemed a violation of this covenant;
<PAGE>
(ii) Induce any person who is an employee, officer or agent
of Employer, or a subsidiary or affiliate of Bally Entertainment Corporation
("Bally"), to terminate said relationship.
(iii) Employ, assist in employing or otherwise associate in
business with any present, former or future employee or officer of Employer.
(iv) Disclose, divulge, discuss, copy or otherwise use or
suffer to be used in any manner, in competition with, or contrary to the
interests of Employer, the customer lists, and proprietary and confidential
inventions, ideas, discoveries, manufacturing methods, product research or
engineering data or other trade secrets of Employer, it being acknowledged
by Employee that all such information regarding the business of Employer
compiled or obtained by, or furnished to, Employee while he shall have been
employed by or associated with Employer is confidential information and is
the exclusive property of Employer.
B. The provisions of subparagraphs 7(A)(i) - 7(A)(iii) shall be
operative during the Term hereof except as provided in the following
sentence. In the event (y) of a "Change of Control" the provisions of
subparagraphs 7(A)(i) - (iii) shall be operative only so long as Employee
remains an employee of Employer and (z) Employee is terminated for "Cause"
(as defined in paragraph 9 hereof), the provisions of subparagraphs 7(A)(i)
- (iii) shall be operative during the Term and for one (1) additional year.
All other obligations created by the terms of this paragraph 7 are of a
continuing nature and shall remain in full effect at all times during and
beyond Employee's period of employment.
C. Employee expressly agrees and understands that the remedy at
law for any breach by him of this paragraph 7 will be inadequate and that
the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that Employer
shall be entitled to immediate injunctive relief and if the court so
permits, may obtain a temporary order restraining any threatened or further
breach. Nothing contained in this paragraph 7 shall be deemed to limit
Employer's remedies at law or in equity for any breach by Employee of the
provisions of this paragraph 7 which may be pursued or availed of by
Employer. Any covenant on Employee's part contained hereinabove, which may
not be specifically enforceable, shall nevertheless, if breached, give rise
to a cause of action for monetary damages.<PAGE>
D. Employee has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon Employer
under this paragraph 7, and hereby acknowledges and agrees that the same are
reasonable in time and territory, are designed to eliminate competition
which otherwise would be unfair to Employer, do not stifle the inherent
skill and experience of Employee, would not operate as a bar to Employee's
sole means of support, are fully required to protect the legitimate
interests of Employer and do not confer a benefit upon Employer
disproportionate to the detriment to Employee.
E. For the purposes of this paragraph 7, the term "Employer"
shall be deemed to include Park Place, Bally Entertainment Corporation,
and/or any other subsidiaries or affiliates of Bally, together with their
respective successors or assigns, involved in the operation or management
of gaming facilities.
F. The covenants contained in this paragraph 7 shall be construed
to extend to separate counties and adjacent counties, if applicable, of the
states of the United States in which Employer has a Facility, and to the
extent that any such covenant shall be illegal and/or unenforceable with
respect to any one of said counties, said covenants shall not be affected
thereby with respect to each other county, such covenants with respect to
each county being construed as severable and independent.
8. Illness, Incapacity or Death During Employment.
A. If the Employee is unable to perform his services by reason
of illness or incapacity resulting in a failure to discharge his duties
under this Employment Agreement for six (6) or more consecutive months, then
upon thirty (30) days notice, Employer may terminate the employment of
Employee under this Employment Agreement and Employee, upon such
termination, shall be paid his salary on a pro-rata basis to the date of
termination through the thirty (30) day notice period.
In the event of such termination, the Employee shall have the
right to the assignment of any and all insurance policies or health
protection plans if said policies and plans permit assignment out of the
group to the individual Employee.<PAGE>
B. In the event of Employee's death, all obligations of Employer
under this Employment Agreement shall terminate other than the payment of
that portion of his Base Salary on a pro-rata basis accrued to the date of
death, plus reimbursement of all expenses reasonably incurred by Employee
in performing his responsibilities and duties for Employer prior to and
including such date and the payment of applicable insurance proceeds.
9. Termination for Cause.
A. The employment of Employee under this Employment Agreement,
and the term hereof, may be terminated by Employer for cause at any time.
For purposes hereof, the term "cause" includes:
(i) Employee's material fraud, dishonesty, willful
misconduct or gross negligence in the performance of his duties hereunder,
including willful failure to perform such duties as may properly be
assigned him hereunder;
(ii) Employee's material breach of any provision of this
Employment Agreement; or
(iii) Employee's failure to qualify (or having so qualified
being thereafter disqualified) under any suitability or licensing
requirement to which Employee may be subject by reason of his position with
Employer and its parent, affiliates or subsidiaries, whether under the laws
of Nevada, New Jersey or otherwise.
B. Any termination by reason of the foregoing shall not be in
limitation of any other right or remedy Employer may have under this
Employment Agreement or otherwise.
10. Optional Termination Upon Change of Control.
A. In the event that there is a change in control of Bally and
the successor in control, without cause, terminates this Employment
Agreement, Employee shall be paid in lump sum twenty-four (24) months Base
Salary or an amount equal to his Base Salary for the balance of the thirty-six
(36) month term, whichever is greater, and the greater of the average
of the bonuses, if any, paid to Employee by Employer for the three (3) prior
years or the bonus, if any, for the prior year. If the successor in control
changes Employee's title or substantially changes his<PAGE>
duties or functions from those which he previously performed hereunder, the
successor in control shall be deemed to have constructively terminated
Employee's services without cause.
A "Change in Control" shall mean a change in control of Bally
of a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 (as in effect on the effective date of this Employment
Agreement, the "Exchange Act"), whether or not Bally is then subject to such
reporting requirement; provided that, without limitation, such a Change in
Control shall be deemed to have occurred if:
(i) any "person" (as defined in subsections 13(d) and 14(d)
of the Exchange Act), other than a person with which Arthur Goldberg is
affiliated or of which he is a part, is or becomes the "beneficial owner"
(as defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly,
of securities of Bally representing 25% or more of the combined voting power
of Bally's then outstanding securities;
(ii) during any period of two (2) consecutive years or less
(not including any period prior to the effective date of this Employment
Agreement) there shall cease to be a majority of the Board of Directors of
Bally comprised of Continuing Directors (as defined below); or
(iii) the stockholders of Bally approve (1) a merger or
consolidation of Bally with any other corporation, other than a merger or
consolidation that would result in the voting securities of Bally
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of Bally or such surviving entity outstanding immediately after
such merger or consolidation, or (2) a plan of complete liquidation of Bally
or an agreement for the sale or disposition by Bally of all or substantially
all of its assets.
The term "Continuing Directors" shall mean individuals
who constitute the Board of Directors of Bally as of the effective date of
this Employment Agreement and any new director(s) whose election by such
Board or nomination for election by Bally's stockholders was approved by a
vote of at least two-thirds of the directors then in office who either were
directors as of the effective date of this Employment Agreement or whose
election or nomination for election was previously so approved.
<PAGE>
B. If it shall be determined that any payment or
distribution to or for the benefit of Employee pursuant to this Section 10
("Severance Payments") would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code (the "Excise Tax"), then Employee shall
be entitled to receive from Employer an additional payment (the "Excise Tax
Gross-Up Payment") in an amount such that the net amount retained by
Employee, after the calculation and deduction of any Excise Tax on the
Severance Payments and any federal, state and local income taxes and Excise
Tax on the Excise Tax Gross-Up Payment provided for in this Section 10,
shall be equal to the Severance Payments. In determining this amount, the
amount of the Excise Tax Gross-Up Payment attributable to federal income
taxes shall be reduced by the maximum reduction in federal income taxes that
could be obtained by the deduction of the portion of the Excise Tax Gross-Up
Payment attributable to state and local income taxes. Finally, the Excise
Tax Gross-Up Payment shall be reduced by income or excise tax withholding
payments made by Employer to any federal, state or local taxing authority
with respect to the Excise Tax Gross-Up Payment that was not deducted from
compensation payable to Employee.
11. Severable Provisions.
The provisions of this Employment Agreement are severable, and if any
one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any
partially unenforceable provision to the extent enforceable in any
jurisdiction, shall nevertheless be binding and enforceable.
12. Binding Agreement.
The rights and obligations of Employer under this Employment Agreement
shall inure to the benefit of and shall be binding upon the respective
successors and assigns of Employer.
13. Attorneys' Fees.
In the event Employee is required to commence legal action to enforce
the provisions of this Employment Agreement and Employee prevails in such
action, Employer shall pay Employee's costs and expenses, including
reasonable attorneys' fees, incurred in such action.
<PAGE>
14. Notices.
Any notice to be given to Employer under the terms of this Employment
Agreement shall be addressed to Employer at the address of its principal
place of business, and any notice to be given to Employee shall be addressed
to him at his home address as last shown on the records of the Employer, or
at such other address as either party may hereafter designate in writing to
the other. Any such notice shall have been duly given when enclosed in a
properly sealed envelope addressed as aforesaid, postage prepaid, registered
or certified, return receipt requested, and deposited in a post office or
branch post office regularly maintained by the United States government.
15. Waiver.
Either party's failure to enforce any provision or provisions of this
Employment Agreement shall not in any way be construed as a waiver of any
such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision
of this Employment Agreement. The rights granted the parties herein are
cumulative and the waiver by a party of any single remedy shall not
constitute a waiver of such party's right to assert all other legal remedies
available to him or it under the circumstances.
16. Governing Law.
This Employment Agreement shall be governed by and construed and
interpreted according to the internal laws of the State of New Jersey,
without reference to principles of conflict of laws.
17. Captions and Paragraph Headings.
Captions and paragraph headings used herein are for convenience only
and are not a part of this Employment Agreement and shall not be used in
construing it.
18. Entire Agreement.
This Employment Agreement constitutes the entire agreement between
Employer and Employee with respect to the subject matter hereof and may not
be modified or terminated orally. No modification, termination or attempted
waiver of this Employment Agreement shall be<PAGE>
valid unless in writing and signed by the party against whom the same is
sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be duly executed as of the day and year first above written.
Bally's Park Place, Inc.
("Employer")
By:_________________________
Wallace R. Barr,
President
_________________________
C. Patrick McKoy
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into this 27th day of
December, 1995, but effective as of January 1, 1996, by and between Bally's
Park Place, Inc., a New Jersey Corporation, ("Employer" or "Park Place") and
Kenneth C. Condon ("Employee"):
In consideration of the premises and of the covenants and agreements
herein contained, the parties agree as follows:
1. Prior Agreement.
The Employment Agreement between the parties dated December 19, 1994,
shall terminate effective December 31, 1995.
2. Employment.
A. Employer hereby employs Employee in the capacity of Senior
Vice President at Park Place and such other capacity or capacities as the
President of Employer, or his designated representative, shall determine,
and Employee hereby accepts such employment upon the terms and conditions
herein set forth.
B. During the term of his employment, Employee will devote his
best efforts to his employment and perform such duties consistent with his
position at Park Place and such other related capacity or capacities as the
President of Employer shall determine, as are reasonably assigned to him by
Employer. While it is understood and agreed that Employee's job capacities
may change at Employer's discretion during the term of this Agreement, his
general level of responsibility shall not be substantially reduced at any
time. Employee will devote his entire working time and attention to the
business and related interests of, and will be loyal to, Employer, and
Employee agrees to render service on behalf of Employer.
C. Except for the inherent travel requirements of his position,
employee shall not be required to perform his duties outside of Atlantic
City, New Jersey or to relocate his present residence.
D. Employee shall not, without prior written consent of Employer,
directly or indirectly, during the term of this Employment Agreement:
<PAGE>
(i) Other than in the performance of duties naturally
inherent of Employer's business and related interests, and in furtherance
thereof as otherwise provided in this Agreement, render services of
business, professional or commercial nature to any other person or firm,
whether for compensation or otherwise, but this shall not be construed as
preventing the Employee from investing his assets in such form or manner as
will not require any services on the part of the Employee in the operation
of the affairs of the companies in which such investments are made and which
are not in violation of subparagraph (ii) below;
(ii) Engage in any activity competitive with or adverse to
Employer's business or related interests, whether alone, as a partner, or
as an officer, director, employee or shareholder of any other corporation,
or otherwise, directly or indirectly except that the ownership of not more
than one percent (1%) of the stock of any publicly traded corporation shall
not be deemed violative of this subparagraph (ii);
(iii) Be engaged by any entity which conducts business with
or acts as consultant or advisor to Employer, whether alone, as a partner,
or as an officer, director, employee or shareholder, or otherwise, directly
or indirectly, except that ownership of not more than one percent (1%) of
the stock of any publicly traded corporation shall not be deemed violative
of this subparagraph (iii).
3. Term.
The term of this Employment Agreement shall begin on January 1, 1996
("commencement date") and shall continue for three (3) years from such date
and shall terminate on December 31, 1998.
4. Compensation.
A. In consideration of the services to be rendered by the
Employee hereunder, the Employer agrees to pay or cause to be paid to the
Employee, and the Employee agrees to accept, as compensation, the sum of
$240,000 (the "Base Salary") for each twelve month period following the
effective date of this Employment Agreement, which shall be paid on the
regularly recurring pay periods established by Employer. The Base Salary
shall be subject to periodic review by Employer, although any determination
to increase the Base Salary shall be within Employer's sole discretion.
<PAGE>
B. It is further understood by both parties that, pursuant to the
policies of Employer, a bonus payment will be made in addition to the Base
Salary on an annual basis in such amount as is determined by the Employer
in its sole discretion, but in no event shall a bonus not be paid for any
full calendar year hereunder in an amount of less than $25,000.
5. Vacation and Other Benefits.
Employee shall be entitled to a reasonable vacation each year of his
employment with Employer as well as other employment benefits, including a
car allowance, medical and hospitalization, life insurance, long term
disability, death and retirement plans, and the like, afforded in general
to officers at Park Place. Employer may, at its sole discretion, change
such policies.
6. Expenses.
Employer shall pay or cause to be paid all reasonable expenses incurred
by Employee in the performance of his responsibilities and duties for
Employer as well as the promotion of Employer's business. Employee shall
submit to Employer periodic statements of all expenses so incurred. Subject
to such audits as Employer may deem necessary, Employer shall reimburse
Employee the full amount of any such expenses advanced by the Employee
promptly in the ordinary course.
7. Covenants and Confidential Information.
A. Employee agrees that, for the applicable period specified
below, he will not directly or indirectly, do any of the following:
(i) Own, manage, control, or participate in the ownership,
management, or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise, with any other corporation, partnership, proprietorship, firm,
association or other business entity, or otherwise engage in any business
which is engaged in any manner in the operation of gaming ventures
including, but not limited to, casinos, Indian gaming or riverboat gaming,
within five (5) miles of any gaming facility ("Facility") owned, managed or
under development to be owned or managed by Employer (as of the date
Employee ceases to be employed hereunder); provided, however, that the
ownership of not more than one percent (1%) of the stock of any publicly
traded corporation shall not be deemed a violation of this covenant;
(ii) Induce any person who is an employee, officer or agent
of Employer, or a subsidiary or affiliate of Bally Entertainment Corporation
("Bally"), to terminate said relationship.
(iii) Employ, assist in employing or otherwise associate in
business with any present, former or future employee or officer of Employer.
(iv) Disclose, divulge, discuss, copy or otherwise use or
suffer to be used in any manner, in competition with, or contrary to the
interests of Employer, the customer lists, and proprietary and confidential
inventions, ideas, discoveries, manufacturing methods, product research or
engineering data or other trade secrets of Employer, it being acknowledged
by Employee that all such information regarding the business of Employer
compiled or obtained by, or furnished to, Employee while he shall have been
employed by or associated with Employer is confidential information and is
the exclusive property of Employer.
B. The provisions of subparagraphs 7(A)(i) - 7(A)(iii) shall be
operative during the Term hereof except as provided in the following
sentence. In the event (y) of a "Change of Control" the provisions of
subparagraphs 7(A)(i) - (iii) shall be operative only so long as Employee
remains an employee of Employer and (z) Employee is terminated for "Cause"
(as defined in paragraph 9 hereof), the provisions of subparagraphs 7(A)(i)
- (iii) shall be operative for ninety (90) days subsequent to his
termination. All other obligations created by the terms of this paragraph
7 are of a continuing nature and shall remain in full effect at all times
during and beyond Employee's period of employment.
C. Employee expressly agrees and understands that the remedy at
law for any breach by him of this paragraph 7 will be inadequate and that
the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that Employer
shall be entitled to immediate injunctive relief and if the court so
permits, may obtain a temporary order restraining any threatened or further
breach. Nothing contained in this paragraph 7 shall be deemed to limit
Employer's remedies at law or in equity for any breach by Employee of the
provisions of this paragraph 7 which may be pursued or availed of by
Employer. Any covenant on Employee's part contained hereinabove, which may
not be specifically enforceable, shall nevertheless, if breached, give rise
to a cause of action for monetary damages.<PAGE>
D. Employee has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon Employer
under this paragraph 7, and hereby acknowledges and agrees that the same are
reasonable in time and territory, are designed to eliminate competition
which otherwise would be unfair to Employer, do not stifle the inherent
skill and experience of Employee, would not operate as a bar to Employee's
sole means of support, are fully required to protect the legitimate
interests of Employer and do not confer a benefit upon Employer
disproportionate to the detriment to Employee.
E. For the purposes of this paragraph 7, the term "Employer"
shall be deemed to include Park Place, Bally Entertainment Corporation,
and/or any other subsidiaries or affiliates of Bally, together with their
respective successors or assigns, involved in the operation or management
of gaming facilities.
F. The covenants contained in this paragraph 7 shall be construed
to extend to separate counties and adjacent counties, if applicable, of the
states of the United States in which Employer has a Facility, and to the
extent that any such covenant shall be illegal and/or unenforceable with
respect to any one of said counties, said covenants shall not be affected
thereby with respect to each other county, such covenants with respect to
each county being construed as severable and independent.
8. Illness, Incapacity or Death During Employment.
A. If the Employee is unable to perform his services by reason
of illness or incapacity resulting in a failure to discharge his duties
under this Employment Agreement for six (6) or more consecutive months, then
upon thirty (30) days notice, Employer may terminate the employment of
Employee under this Employment Agreement and Employee, upon such
termination, shall be paid his salary on a pro-rata basis to the date of
termination through the thirty (30) day notice period.
In the event of such termination, the Employee shall have the
right to the assignment of any and all insurance policies or health
protection plans if said policies and plans permit assignment out of the
group to the individual Employee.
<PAGE>
B. In the event of Employee's death, all obligations of Employer
under this Employment Agreement shall terminate other than the payment of
that portion of his Base Salary on a pro-rata basis accrued to the date of
death, plus reimbursement of all expenses reasonably incurred by Employee
in performing his responsibilities and duties for Employer prior to and
including such date and the payment of applicable insurance proceeds.
9. Termination for Cause.
A. The employment of Employee under this Employment Agreement,
and the term hereof, may be terminated by Employer for cause at any time.
For purposes hereof, the term "cause" includes:
(i) Employee's material fraud, dishonesty or willful
misconduct;
(ii) Employee's willful or grossly negligent failure to
perform such duties as may reasonably be assigned him hereunder, after being
given reasonable written notice of his failure and a reasonable opportunity
to cure;
(iii) Employee's material breach of any provision of this
Employment Agreement, after being given reasonable written notice of breach
and a reasonable opportunity to cure if the nature of the breach is such
that a cure is practical under the circumstances; or
(iv) Employee's failure to qualify (or having so qualified
being thereafter disqualified) under any suitability or licensing
requirement to which Employee may be subject by reason of his position with
Employer and its parent, affiliates or subsidiaries, whether under the laws
of Nevada, New Jersey or otherwise.
B. Any termination by reason of the foregoing shall not be in
limitation of any other right or remedy Employer may have under this
Employment Agreement or otherwise.
10. Optional Termination Upon Change of Control.
A. In the event that there is a change in control of Bally and
the successor in control, without cause, terminates this Employment
Agreement, Employee shall be paid in lump sum twenty-four (24) months Base
Salary or an amount equal to his Base Salary for the balance of the thirty-six
(36) month term, whichever is greater, and the greater of the average
of the bonuses, if any, paid to Employee by Employer for the three (3) prior
years or the bonus, if any, for the prior year. If the
<PAGE>
successor in control changes Employee's title or substantially changes his
duties or functions from those which he previously performed hereunder, the
successor in control shall be deemed to have constructively terminated
Employee's services without cause.
A "Change in Control" shall mean a change in control of Bally
of a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 (as in effect on the effective date of this Employment
Agreement, the "Exchange Act"), whether or not Bally is then subject to such
reporting requirement; provided that, without limitation, such a Change in
Control shall be deemed to have occurred if:
(i) any "person" (as defined in subsections 13(d) and 14(d)
of the Exchange Act), other than a person with which Arthur Goldberg is
affiliated or of which he is a part, is or becomes the "beneficial owner"
(as defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly,
of securities of Bally representing 25% or more of the combined voting power
of Bally's then outstanding securities;
(ii) during any period of two (2) consecutive years or less
(not including any period prior to the effective date of this Employment
Agreement) there shall cease to be a majority of the Board of Directors of
Bally comprised of Continuing Directors (as defined below); or
(iii) the stockholders of Bally approve (1) a merger or
consolidation of Bally with any other corporation, other than a merger or
consolidation that would result in the voting securities of Bally
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of Bally or such surviving entity outstanding immediately after
such merger or consolidation, or (2) a plan of complete liquidation of Bally
or an agreement for the sale or disposition by Bally of all or substantially
all of its assets.
The term "Continuing Directors" shall mean individuals
who constitute the Board of Directors of Bally as of the effective date of
this Employment Agreement and any new director(s) whose election by such
Board or nomination for election by Bally's stockholders was approved by a
vote of at least two-thirds of the directors then in office who either were
directors as of the effective date of this Employment Agreement or whose
election or nomination for election was previously so approved.
<PAGE>
B. If it shall be determined that any payment or distribution to
or for the benefit of Employee pursuant to this Section 10 ("Severance
Payments") would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code (the "Excise Tax"), then Employee shall be entitled
to receive from Employer an additional payment (the "Excise Tax Gross-Up
Payment") in an amount such that the net amount retained by Employee, after
the calculation and deduction of any Excise Tax on the Severance Payments
and any federal, state and local income taxes and Excise Tax on the Excise
Tax Gross-Up Payment provided for in this Section 10, shall be equal to the
Severance Payments. In determining this amount, the amount of the Excise
Tax Gross-Up Payment attributable to federal income taxes shall be reduced
by the maximum reduction in federal income taxes that could be obtained by
the deduction of the portion of the Excise Tax Gross-Up Payment attributable
to state and local income taxes. Finally, the Excise Tax Gross-Up Payment
shall be reduced by income or excise tax withholding payments made by
Employer to any federal, state or local taxing authority with respect to the
Excise Tax Gross-Up Payment that was not deducted from compensation payable
to Employee.
11. Severable Provisions.
The provisions of this Employment Agreement are severable, and if any
one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any
partially unenforceable provision to the extent enforceable in any
jurisdiction, shall nevertheless be binding and enforceable.
12. Binding Agreement.
The rights and obligations of Employer under this Employment Agreement
shall inure to the benefit of and shall be binding upon the respective
successors and assigns of Employer.
13. Attorneys' Fees.
In the event Employee is required to commence legal action to enforce
the provisions of this Employment Agreement and Employee prevails in such
action, Employer shall pay Employee's costs and expenses, including
reasonable attorneys' fees, incurred in such action.
<PAGE>
14. Notices.
Any notice to be given to Employer under the terms of this Employment
Agreement shall be addressed to Employer at the address of its principal
place of business, and any notice to be given to Employee shall be addressed
to him at his home address as last shown on the records of the Employer, or
at such other address as either party may hereafter designate in writing to
the other. Any such notice shall have been duly given when enclosed in a
properly sealed envelope addressed as aforesaid, postage prepaid, registered
or certified, return receipt requested, and deposited in a post office or
branch post office regularly maintained by the United States government.
15. Waiver.
Either party's failure to enforce any provision or provisions of this
Employment Agreement shall not in any way be construed as a waiver of any
such provision or provisions as to any future violations thereof, nor
prevent that party thereafter from enforcing each and every other provision
of this Employment Agreement. The rights granted the parties herein are
cumulative and the waiver by a party of any single remedy shall not
constitute a waiver of such party's right to assert all other legal remedies
available to him or it under the circumstances.
16. Governing Law.
This Employment Agreement shall be governed by and construed and
interpreted according to the internal laws of the State of New Jersey,
without reference to principles of conflict of laws.
17. Captions and Paragraph Headings.
Captions and paragraph headings used herein are for convenience only
and are not a part of this Employment Agreement and shall not be used in
construing it.
18. Entire Agreement.
This Employment Agreement constitutes the entire agreement between
Employer and Employee with respect to the subject matter hereof and may not
be modified or terminated orally. No modification, termination or attempted
waiver of this Employment Agreement shall be<PAGE>
valid unless in writing and signed by the party against whom the same is
sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be duly executed as of the day and year first above written.
Bally's Park Place, Inc.
("Employer")
By:_________________________
Wallace R. Barr, President
_________________________
Kenneth C. Condon
