<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 15, 1998
HOLLYWOOD PARK, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-10619 95-3667491
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1050 South Prairie Avenue, Inglewood, California 90301
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (310) 419-1500
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On October 15, 1998, pursuant to the Agreement and Plan of Merger dated as
of February 19, 1998, by and among Hollywood Park, Inc. ("Hollywood Park"), HP
Acquisition II, Inc., a wholly-owned subsidiary of Hollywood Park, and Casino
Magic Corp. ("Casino Magic"), HP Acquisition II, Inc. was merged with and into
Casino Magic (the "Merger"). As a result of the Merger, Casino Magic became a
wholly-owned subsidiary of Hollywood Park and each share of Casino Magic common
stock, par value $0.01 per share, was converted into the right to receive two
dollars twenty-seven cents ($2.27) in cash.
Item 5. Other Events.
On October 14, 1998, the registrant executed an Amended and Restated
Reducing Revolving Loan Agreement (the "Restatement") with the banks named
therein, Societe Generale and Bank of Scotland (as Managing Agents), First
National Bank of Commerce (as Co-Agent) and Bank of America National Trust and
Savings Association (as Administrative Agent). A copy of the Restatement is
included as Exhibit 10.1 hereto. Among other things, the Restatement amended the
registrant's existing Reducing Revolving Loan Agreement with the banks so as to
increase the registrant's available credit under the existing facility to
$300,000,000, with an additional $75 million green shoe option which may be
exercised by the registrant under circumstances set forth therein. On October
15, 1998, the registrant borrowed $225 Million under the facility, raising total
borrowings thereunder to approximately $270 Million. Approximately $222 Million
of the aforementioned $225 million was used to fund the Merger described in Item
2 above and the concurrent redemption and discharge of all of the outstanding
11.5% First Mortgage Notes due 2001 of Casino Magic Finance Corp., with the
remainder to be used for general working capital.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
See Exhibit 99.1.
(b) Pro Forma Financial Information.
See Exhibit 99.2.
(c) Exhibits.
2 Agreement and Plan of Merger dated as of February 19, 1998, by and
among Hollywood Park, Inc., HP Acquisition II, Inc. and Casino Magic
Corp.*
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<PAGE>
10.1 Amended and Restated Reducing Revolving Loan Agreement, dated as of
October 14, 1998, among Hollywood Park, Inc., the banks named therein,
Societe Generale and Bank of Scotland (as Managing Agents), First
National Bank of Commerce (as Co-Agent) and Bank of America National
Trust and Savings Association (as Administrative Agent).
23.1 Consent of Arthur Andersen LLP, Independent Auditors
99.1 Financial Statements of business acquired as required by Item 7(a)(1)
of the Current Report on Form 8-K.
A. Consolidated Financial Statements of Casino Magic Corp. as of
December 31, 1996 and 1997 and for the years ended December 31,
1995, 1996 and 1997 with report of Independent Auditors.
B. Unaudited Consolidated Financial Statements of Casino Magic Corp.
as of June 30, 1998 and for the six and three month periods ended
June 30, 1997 and 1998.
99.2 Pro Forma financial information required by Item 7(b)(1) of the
Current Report on Form 8-K.
A. Hollywood Park, Inc. and Subsidiaries Unaudited Pro Forma
Condensed Combined Balance Sheet as of June 30, 1998.
B. Hollywood Park, Inc. and Subsidiaries Unaudited Pro Forma
Condensed Combined Statement of Operations for the year ended
December 31, 1997 and for the six month period ended June 30,
1998.
* Incorporated by reference to the Company's Current Report on Form 8-K
dated February 26, 1998.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOLLYWOOD PARK, INC.
Date: October 29, 1998 By: /s/ G. Michael Finnigan
---------------------------------------
G. Michael Finnigan
President, Sports and Entertainment,
Executive Vice President, Treasurer and
Chief Financial Officer
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<PAGE>
Exhibit Index
-------------
No. Document
- --- --------
2 Agreement and Plan of Merger dated as of February 19, 1998, by and
among Hollywood Park, Inc., HP Acquisition II, Inc. and Casino
Magic Corp.*
10.1 Amended and Restated Reducing Revolving Loan Agreement, dated as of
October 14, 1998, among Hollywood Park, Inc., the banks named
therein, Societe Generale and Bank of Scotland (as Managing
Agents), First National Bank of Commerce (as Co-Agent) and Bank of
America National Trust and Savings Association (as Administrative
Agent).
23.1 Consent of Arthur Andersen LLP
99.1 Financial Statements of business acquired as required by Item
7(a)(1) of the Current Report on Form 8-K.
A. Consolidated Financial Statements of Casino Magic Corp. as of
December 31, 1996 and 1997 and for the years ended December 31,
1995, 1996 and 1997 with report of Independent Auditors.
B. Unaudited Consolidated Financial Statements of Casino Magic Corp. as
of June 30, 1998 and for the six and three month periods ended
June 30, 1997 and 1998.
99.2 Pro Forma financial information required by Item 7(b)(1) of the
Current Report on Form 8-K.
A. Hollywood Park, Inc. and Subsidiaries Unaudited Pro Forma Condensed
Combined Balance Sheet as of June 30, 1998.
B. Hollywood Park, Inc. and Subsidiaries Unaudited Pro Forma Condensed
Combined Statement of Operations for the year ended December 31,
1997 and for the six month period ended June 30, 1998.
- ------------------
* Incorporated by reference to the Company's Current Report on Form 8-K dated
February 26, 1998.
<PAGE>
EXHIBIT 10.1
------------
AMENDED AND RESTATED REDUCING REVOLVING LOAN AGREEMENT
Dated as of October 14, 1998
among
HOLLYWOOD PARK, INC.
THE BANKS HEREIN NAMED
SOCIETE GENERALE
BANK OF SCOTLAND
as Managing Agents
FIRST NATIONAL BANK OF COMMERCE
as Co-Agent
and
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Administrative Agent
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS.......................................... 2
1.1 Defined Terms............................................................ 2
1.2 Use of Defined Terms..................................................... 43
1.3 Accounting Terms......................................................... 43
1.4 Rounding................................................................. 43
1.5 Exhibits and Schedules................................................... 44
1.6 References to "Borrower and its Subsidiaries"............................ 44
1.7 Miscellaneous Terms...................................................... 44
ARTICLE 2 LOANS AND LETTERS OF CREDIT............................................... 45
2.1 Loans-General............................................................ 45
2.2 Alternate Base Rate Loans................................................ 46
2.3 Eurodollar Rate Loans.................................................... 47
2.4 Letters of Credit........................................................ 47
2.5 Voluntary Reduction of Commitment........................................ 51
2.6 Scheduled Reduction of Commitment........................................ 52
2.7 Automatic Reduction of Commitment........................................ 52
2.8 Optional Termination of Commitment....................................... 52
2.9 Administrative Agent's Right to Assume Funds Available for Advances...... 52
2.10 Swing Line............................................................... 53
2.11 Facility Increase........................................................ 55
2.12 Collateral and Guaranty.................................................. 57
2.13 Release of Certain Collateral............................................ 57
ARTICLE 3 PAYMENTS AND FEES......................................................... 58
3.1 Principal and Interest................................................... 58
3.2 Upfront Fees............................................................. 59
3.3 Ticking Fee.............................................................. 59
3.4 Commitment Fees.......................................................... 60
3.5 Letter of Credit Fees.................................................... 60
3.6 Agency Fees.............................................................. 61
3.7 Increased Commitment Costs............................................... 61
3.8 Eurodollar Costs and Related Matters..................................... 61
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
3.9 Late Payments............................................................ 65
3.10 Computation of Interest and Fees......................................... 65
3.11 Non-Banking Days......................................................... 66
3.12 Manner and Treatment of Payments......................................... 66
3.13 Funding Sources.......................................................... 67
3.14 Failure to Charge Not Subsequent Waiver.................................. 68
3.15 Administrative Agent's Right to Assume Payments Will be Made by
Borrower................................................................ 68
3.16 Fee Determination Detail................................................. 68
3.17 Survivability............................................................ 68
ARTICLE 4 REPRESENTATIONS AND WARRANTIES............................................ 69
4.1 Existence and Qualification; Power; Compliance With Laws................. 69
4.2 Authority; Compliance With Other Agreements and Instruments and
Government Regulations.................................................. 69
4.3 No Governmental Approvals Required....................................... 70
4.4 Subsidiaries............................................................. 70
4.5 Financial Statements..................................................... 71
4.6 No Other Liabilities; No Material Adverse Changes........................ 72
4.7 Title to Property........................................................ 72
4.8 Intangible Assets........................................................ 72
4.9 Public Utility Holding Company Act....................................... 73
4.10 Litigation............................................................... 73
4.11 Binding Obligations...................................................... 73
4.12 No Default............................................................... 73
4.13 ERISA.................................................................... 73
4.14 Regulation U; Investment Company Act..................................... 74
4.15 Disclosure............................................................... 74
4.16 Tax Liability............................................................ 74
4.17 Projections.............................................................. 74
4.18 Hazardous Materials...................................................... 75
4.19 Gaming Laws.............................................................. 75
4.20 Security Interests....................................................... 75
ARTICLE 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING
REQUIREMENTS).................................................................. 78
5.1 Payment of Taxes and Other Potential Liens............................... 78
5.2 Preservation of Existence................................................ 78
</TABLE>
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<TABLE>
<S> <C>
5.3 Maintenance of Properties................................................ 78
5.4 Maintenance of Insurance................................................. 79
5.5 Compliance With Laws..................................................... 79
5.6 Inspection Rights........................................................ 79
5.7 Keeping of Records and Books of Account.................................. 79
5.8 Compliance With Agreements............................................... 79
5.9 Use of Proceeds.......................................................... 80
5.10 Future Collateral........................................................ 80
5.11 New Subsidiary Guarantors................................................ 80
5.12 Hazardous Materials Laws................................................. 81
5.13 Intercompany Notes....................................................... 81
5.14 Year 2000 Compliance..................................................... 81
5.15 Certain Notifications.................................................... 81
ARTICLE 6 NEGATIVE COVENANTS........................................................ 83
6.1 Payment of Subordinated Obligations...................................... 83
6.2 Disposition of Property.................................................. 83
6.3 Mergers.................................................................. 84
6.4 Hostile Acquisitions..................................................... 84
6.5 Distributions............................................................ 84
6.6 ERISA.................................................................... 85
6.7 Change in Nature of Business............................................. 85
6.8 Liens and Negative Pledges............................................... 86
6.9 Indebtedness and Guaranty Obligations.................................... 87
6.10 Transactions with Affiliates............................................. 88
6.11 Interest Coverage Ratio.................................................. 88
6.12 Senior Funded Debt Ratio................................................. 89
6.13 Funded Debt Ratio........................................................ 90
6.14 Capital Expenditures..................................................... 90
6.15 Investments.............................................................. 91
6.16 Subsidiary Indebtedness.................................................. 92
6.17 Amendments to Subordinated Obligations................................... 93
6.18 Redemption or Repurchase of Louisiana First Mortgage Notes............... 93
ARTICLE 7 INFORMATION AND REPORTING REQUIREMENTS.................................... 94
7.1 Financial and Business Information....................................... 94
7.2 Compliance Certificates.................................................. 97
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
ARTICLE 8 CONDITIONS................................................................ 98
8.1 Initial Advances, Etc.................................................... 98
8.2 Acquisition of Future Collateral......................................... 103
8.3 Any Advance, Etc......................................................... 104
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT...................... 105
9.1 Events of Default........................................................ 105
9.2 Remedies Upon Event of Default........................................... 107
ARTICLE 10 THE ADMINISTRATIVE AGENT................................................. 111
10.1 Appointment and Authorization............................................ 111
10.2 Administrative Agent and Affiliates...................................... 111
10.3 Proportionate Interest in any Collateral................................. 111
10.4 Banks' Credit Decisions.................................................. 112
10.5 Action by Administrative Agent........................................... 112
10.6 Liability of Administrative Agent........................................ 113
10.7 Indemnification.......................................................... 114
10.8 Successor Administrative Agent........................................... 115
10.9 Foreclosure on Collateral................................................ 116
10.10 No Obligations of Borrower............................................... 116
ARTICLE 11 MISCELLANEOUS............................................................ 117
11.1 Cumulative Remedies; No Waiver........................................... 117
11.2 Amendments; Consents..................................................... 117
11.3 Costs, Expenses and Taxes................................................ 118
11.4 Nature of Banks' Obligations............................................. 119
11.5 Survival of Representations and Warranties............................... 119
11.6 Notices.................................................................. 120
11.7 Execution of Loan Documents.............................................. 120
11.8 Binding Effect; Assignment............................................... 120
11.9 Right of Setoff.......................................................... 123
11.10 Sharing of Setoffs....................................................... 124
11.11 Indemnity by Borrower.................................................... 124
11.12 Nonliability of the Banks................................................ 126
11.13 No Third Parties Benefited............................................... 127
11.14 Confidentiality.......................................................... 127
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
11.15 Further Assurances...................................................... 127
11.16 Integration............................................................. 128
11.17 Governing Law........................................................... 128
11.18 Severability of Provisions.............................................. 128
11.19 Headings................................................................ 128
11.20 Time of the Essence..................................................... 128
11.21 Foreign Banks and Participants.......................................... 128
11.22 Hazardous Material Indemnity............................................ 129
11.23 Gaming Boards........................................................... 130
11.24 Waiver of Right to Trial by Jury........................................ 130
11.25 Purported Oral Amendments............................................... 131
</TABLE>
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<PAGE>
Exhibits
- --------
A - Commitment Assignment and Acceptance
B - Compliance Certificate
C - Global Assignment and Release
D - Memorandum of Amendment (Preferred Ship's Mortgage)
E - Memorandum of Amendment (Trademark Collateral Assignment)
F - Model Deed of Trust Amendment
G - Note
H - Omnibus Ancillary Documents Amendment
I-1 Opinion of Counsel
I-2 Opinion of Counsel
I-3 Opinion of Counsel
I-4 Opinion of Counsel
I-5 Opinion of Counsel
I-6 Opinion of Counsel
J - Pricing Certificate
K - Request for Letter of Credit
L - Request for Loan
Schedules
- ---------
1.1 Bank Commitments
4.3 Governmental Approvals
4.4 Subsidiaries
4.7 Existing Liens, Negative Pledges and Rights of Others
4.8 Trademarks and Trade Names
4.10 Material Litigation
4.18 Environmental Matters
6.9 Existing Indebtedness
6.15 Existing Investments
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<PAGE>
AMENDED AND RESTATED REDUCING REVOLVING LOAN AGREEMENT
------------------------------------------------------
Dated as of October 14, 1998
This AMENDED AND RESTATED REDUCING REVOLVING LOAN AGREEMENT
("Agreement") is entered into by and among Hollywood Park, Inc., a Delaware
corporation ("Borrower"), each bank whose name is set forth on the signature
pages of this Agreement and each lender which may hereafter become a party to
this Agreement pursuant to Section 11.8 (collectively, the "Banks" and
----
individually, a "Bank"), Societe Generale and Bank of Scotland, as Managing
Agents, First National Bank of Commerce, as Co-Agent, and Bank of America
National Trust and Savings Association, as Administrative Agent.
RECITALS
--------
A. Borrower has heretofore entered that certain Reducing Revolving
Loan Agreement dated as of March 27, 1997 (as amended, the "Prior Loan
Agreement") with the Administrative Agent as the "Managing Agent"
thereunder and the banks (the "Prior Banks") party thereto. The
obligations of Borrower are guaranteed by all Significant Subsidiaries of
Borrower pursuant to a Subsidiary Guaranty (as defined in the Prior Loan
Agreement) and secured by the Collateral Documents (as defined in the Prior
Loan Agreement).
B. Borrower has entered into the Merger Agreement (defined below)
with Casino Magic Corp. ("CMC") pursuant to which CMC and its Subsidiaries
will become Subsidiaries of Borrower. Upon consummation of the Merger,
which will occur on the Closing Date (as defined below), CMC and its
Subsidiaries (other than the CMC Louisiana Subsidiaries and the Foreign
----- ----
Subsidiaries, each defined below) will join the Subsidiary Guaranty and
Collateral Documents.
C. Borrower has requested that the Prior Loan Agreement be amended
to increase the Commitment, extend the Maturity Date and make certain other
revisions, all as hereinafter set forth, to accommodate the Merger, the
Redemption (as defined below) and future operations of Borrower and its
Subsidiaries.
D. Certain of the Prior Banks will not be a party to this Agreement,
certain Banks were not a party to the Prior Loan Agreement and, with
respect to certain of those Banks who are also Prior Banks, the Pro Rata
Share of such Banks is different under this Agreement from that under the
Prior Loan Agreement.
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<PAGE>
E. Concurrently herewith, pursuant to the Global Assignment and
Release (defined below), the Prior Banks have assigned, with the consent of
Borrower, their rights and obligations under the Prior Loan Agreement to
the Banks under this Agreement, and the Banks have assumed such rights and
obligations as evidenced by this Agreement. Pursuant to the Global
Assignment and Release, those Prior Banks which are not Banks under this
Agreement are released from all further right and obligation under the
Prior Loan Agreement.
F. This Agreement gives effect to the Global Assignment and Release
and amends and restates the Prior Loan Agreement in its entirety as
requested by Borrower. Accordingly, the obligations of the parties under
the Prior Loan Agreement, and under the Loan Documents referred to therein,
are now obligations of the parties under this Agreement, and under the Loan
Documents referred to herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the meanings set forth below:
"Adjusted EBITDA" means, with respect to any fiscal period, EBITDA for
---------------
that fiscal period plus (a) any pre-opening and related promotional
----
expenses recorded during that fiscal period for a new Gaming Property, plus
----
(b) any transactional expenses incurred in connection with the acquisition
of a new Gaming Property plus (c) the amount by which EBITDA for such
----
fiscal period would have been increased if the Merger had occurred on the
first day of the fiscal period, but excluding (i) so long as the Louisiana
---------
First Mortgage Notes are outstanding, EBITDA attributable to the CMC
Louisiana Subsidiaries and (ii) EBITDA attributable to any Foreign
Subsidiary except to the extent actually received in Dollars in the United
------
States of America by Borrower, net of all taxes thereon imposed by the Laws
of a jurisdiction other than the United States of America or a State
----------
thereof. EBITDA of a Foreign Subsidiary shall be deemed "received" by
Borrower (y) to the extent a dividend is paid to Borrower by the Foreign
Subsidiary, when such dividend is received in Dollars in the United States
-2-
<PAGE>
of America by Borrower and (z) to the extent that amounts are advanced as a
loan to Borrower by the Foreign Subsidiary, when such advance is received
in Dollars in the United States of America by Borrower provided that (A)
--------
the aggregate outstanding amount of such advances shall at no time exceed
the aggregate EBITDA of the Foreign Subsidiary attributable to Borrower's
proportionate ownership of such Foreign Subsidiary which has not previously
been dividended to Borrower and (B) the Indebtedness of Borrower to the
Foreign Subsidiary arising from such advances is cancelled and offset by a
dividend (which dividend shall not be deemed "received" for purposes of
clause (y) above) paid by the Foreign Subsidiary to Borrower with respect
to each Fiscal Year within three (3) months following the end of that
Fiscal Year. If at any date the Louisiana First Mortgage Notes are not
outstanding, EBITDA of the CMC Louisiana Subsidiaries shall be included in
Adjusted EBITDA for the entire four (4) Fiscal Quarter period ended on that
date.
"Administrative Agent" means Bank of America National Trust and
--------------------
Savings Association, when acting in its capacity as the Administrative
Agent under any of the Loan Documents, or any successor Administrative
Agent.
"Administrative Agent's Office" means the Administrative Agent's
-----------------------------
address as set forth on the signature pages of this Agreement, or such
other address as the Administrative Agent hereafter may designate by
written notice to Borrower and the Banks.
"Advance" means any advance made or to be made by any Bank to Borrower
-------
as provided in Article 2, and includes each Alternate Base Rate Advance and
--------- --------
Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person which directly
---------
or indirectly controls, or is under common control with, or is controlled
by, such Person. As used in this definition, "control" (and the
correlative terms, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns, directly or
--------
indirectly, 10% or more of the securities having ordinary voting power for
the election of directors or other governing body of a corporation that has
more than 100 record holders of such securities, or 10% or more of the
partnership or other ownership interests of any other Person that has more
than 100
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<PAGE>
record holders of such interests, will be deemed to control such
corporation, partnership or other Person.
"Aggregate Effective Amount" means (a) as of any date of determination
--------------------------
and with respect to all Letters of Credit then outstanding, the sum of (i)
---
the aggregate effective face amounts of all such Letters of Credit not then
paid by the Issuing Bank plus (ii) the aggregate amounts paid by the
----
Issuing Bank under such Letters of Credit not then reimbursed to the
Issuing Bank by Borrower pursuant to Section 2.4(d) and not the subject of
------
Advances made pursuant to Sections 2.4(e) and 2.4(f) as of any date of
------ ------
determination and with respect to all Outside Letters of Credit then
outstanding, the sum of (i) the aggregate effective face amounts of all
---
such Outside Letters of Credit not then paid by the issuing banks therefor
plus (ii) the aggregate amounts paid by such issuing banks under such
Outside Letters of Credit not then reimbursed to such issuing banks by
Borrower.
"Agreement" means this Amended and Restated Reducing Revolving Loan
---------
Agreement, either as originally executed or as it may from time to time be
supplemented, modified, amended, restated or extended.
"Alternate Base Rate" means, as of any date of determination, the rate
-------------------
per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to
the higher of (a) the Reference Rate in effect on such date and (b) the
---------
Federal Funds Rate in effect on such date plus 1/2 of 1% (50 basis points).
"Alternate Base Rate Advance" means an Advance made hereunder and
---------------------------
specified to be an Alternate Base Rate Advance in accordance with Article
-------
2.
-
"Alternate Base Rate Loan" means a Loan made hereunder and specified
------------------------
to be an Alternate Base Rate Loan in accordance with Article 2.
---------
"Applicable Alternate Base Rate Margin" means, for each Pricing
-------------------------------------
Period, the interest rate margin set forth below (expressed in basis points
per annum) opposite the Applicable Pricing Level for that Pricing Period:
-4-
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<TABLE>
<CAPTION>
Applicable
Pricing Level Margin
------------- ------
<S> <C>
I 0.0
II 12.50
III 37.50
IV 62.50
V 87.50
VI 112.50
</TABLE>
"Applicable Commitment Fee Rate" means, for each Pricing Period, the
------------------------------
rate set forth below (expressed in basis points per annum) opposite the
Applicable Pricing Level for that Pricing Period:
<TABLE>
<CAPTION>
Applicable
Pricing Level Commitment Fee
------------- --------------
<S> <C>
I 25.00
II 31.25
III 37.50
IV 37.50
V 43.75
VI 50.00
</TABLE>
"Applicable Eurodollar Rate Margin" means, for each Pricing Period,
---------------------------------
the interest rate margin set forth below (expressed in basis points per
annum) opposite the Applicable Pricing Level for that Pricing Period:
-5-
<PAGE>
<TABLE>
<CAPTION>
Applicable
Pricing Level Margin
------------- ------
<S> <C>
I 100.00
II 125.00
III 150.00
IV 175.00
V 200.00
VI 225.00
</TABLE>
"Applicable Pricing Level" means (a) for the Pricing Period from the
------------------------
Closing Date through November 30, 1998, Pricing Level V and (b) for each
Pricing Period thereafter, the pricing level set forth below opposite the
Funded Debt Ratio as of the last day of the Fiscal Quarter most recently
ended prior to the commencement of that Pricing Period:
<TABLE>
<CAPTION>
Pricing Level Funded Debt Ratio
------------- -----------------
<S> <C>
I Less than 2.00 to 1.00
II Equal to or greater than 2.00 to 1.00 but
less than 2.50 to 1.00
III Equal to or greater than 2.50 to 1.00 but
less than 3.00 to 1.00
IV Equal to or greater than 3.00 to 1.00 but
less than 3.50 to 1.00
V Equal to or greater than 3.50 to 1.00 but
equal to or less than 4.00 to 1.00
VI Greater than 4.00 to 1.00;
</TABLE>
provided that (i) in the event that Borrower does not deliver a Pricing
- --------
Certificate with respect to any Pricing Period prior to the commencement of such
Pricing Period, then until (but only until) such Pricing Certificate is
delivered the Applicable Pricing Level for that Pricing Period shall be Pricing
Level VI and (ii) in the event of any error in a Pricing Certificate, any
resulting change to the
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<PAGE>
Applicable Pricing Level shall be made retroactively (provided, that any
--------
resulting decrease in the Applicable Alternate Base Rate Margin, Applicable
Commitment Fee Rate and Applicable Eurodollar Rate Margin shall be recouped
only as a credit against interest or commitment fees payable thereafter).
"Applicable Standby Letter of Credit Fee" means, for each Pricing
---------------------------------------
Period, the per annum rate set forth as the interest rate margin in the
definition of "Applicable Eurodollar Rate Margin" opposite the Applicable
Pricing Level for that Pricing Period.
"Average Quarterly Funded Debt" means, as of the last day of each
-----------------------------
Fiscal Quarter, the average principal amount of all Funded Debt outstanding
on the last day of each of the three fiscal months comprising such Fiscal
Quarter.
"Average Quarterly Senior Funded Debt" means, as of the last day of
------------------------------------
each Fiscal Quarter, the average principal amount of all Senior Funded Debt
outstanding on the last day of each of the three fiscal months comprising
such Fiscal Quarter.
"Bank" means each bank whose name is set forth in the signature pages
----
of this Agreement and each lender which may hereafter become a party to
this Agreement pursuant to Section 11.8.
----
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday or
-----------
Friday, other than a day on which banks are authorized or required to be
----------
closed in California or New York.
"Basket Expenditures" means (a) Capital Expenditures other than those
------------------- ----- ----
permitted by clauses (a) through (d) of Section 6.14, (b) Investments
--- ----
other than those permitted by clauses (a) through (m) of Section 6.15 and
----- ---- --- ----
(c) Distributions permitted by Section 6.5(e).
------
"Bay St. Louis Deeds of Trust" means the Deeds of Trust to be executed
----------------------------
and delivered pursuant to Section 8.1 by Mardi Gras Casino Corp. and Bay
---
St. Louis Casino Corp. covering the Bay St. Louis Property, substantially
in the form of the Model Deed of Trust, either as originally executed or as
it may, from time to time be supplemented, modified, amended, extended or
supplanted.
"Bay St. Louis Property" means (a) the real property and improvements
----------------------
thereon known as "Casino Magic - Bay St. Louis" located in Bay St. Louis,
-7-
<PAGE>
Mississippi, comprised of approximately 590 acres of fee simple and 8.8
acres in various leasehold estates and related easements and appurtenances
and (b) the real property located in Bay St. Louis, Mississippi adjacent to
the foregoing comprised of approximately 25.6 acres in fee simple estate,
excluding, however, the Property Held for Sale.
---------
"Biloxi BT Deed of Trust" means the Deed of Trust executed and
-----------------------
delivered by Mississippi-I Gaming, L.P. covering the Biloxi BT Property,
substantially in the form of the Model Deed of Trust, as amended by the
Existing Deed of Trust Amendment, either as originally executed or as it
may, from time to time be supplemented, modified, amended, extended or
supplanted.
"Biloxi BT Preferred Ship's Mortgage" means the preferred ship's
-----------------------------------
mortgage executed and delivered by Mississippi-I Gaming, L.P. covering the
Biloxi BT Vessel, substantially in the form of the Model Preferred Ship's
Mortgage, either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Biloxi BT Property" means the real property and improvements thereon
------------------
known as "Boomtown Biloxi Casino" located in Biloxi, Mississippi, comprised
of approximately 9 acres in various leasehold estates and related easements
and appurtenances.
"Biloxi BT Vessel" means Boomtown I, a vessel documented under the
----------------
Laws of the United States of America.
"Biloxi CM Deeds of Trust" means the Deeds of Trust to be executed and
------------------------
delivered pursuant to Section 8.1 by Biloxi Casino Corp. and Casino One
---
Corporation covering the Biloxi CM Property, substantially in the form of
the Model Deed of Trust, either as originally executed or as it may, from
time to time be supplemented, modified, amended, extended or supplanted.
"Biloxi CM Property" means the real property and improvements thereon
------------------
known as "Casino Magic-Biloxi" located in Biloxi, Mississippi, comprised of
approximately 5.4 acres of fee simple and 12.25 acres in various leasehold
estates and related easements and appurtenances.
"Capital Expenditure" means any expenditure by Borrower or the
-------------------
Restricted Subsidiaries for or related to fixed assets or purchased
intangibles that is treated as a capital expenditure under Generally
Accepted Accounting Principles, including
---------
-8-
<PAGE>
any amount which is required to be treated as an asset subject to a Capital
Lease Obligation. The amount of Capital Expenditures in respect of fixed
assets purchased or constructed by Borrower or any Restricted Subsidiary in
any fiscal period shall be net of (a) the net sales proceeds received
------
during such fiscal period by Borrower or such Restricted Subsidiary for
fixed assets sold by Borrower or such Restricted Subsidiary and (b) the
casualty insurance proceeds received during such fiscal period by Borrower
or such Restricted Subsidiary for casualties to fixed assets.
"Capital Lease Obligations" means all monetary obligations of a Person
-------------------------
under any leasing or similar arrangement which, in accordance with
Generally Accepted Accounting Principles, is classified as a capital lease.
"Cash" means, when used in connection with any Person, all monetary
----
and non-monetary items owned by that Person that are treated as cash in
accordance with Generally Accepted Accounting Principles, consistently
applied.
"Cash Equivalents" means, when used in connection with any Person,
----------------
that Person's Investments in:
(a) Government Securities due within one year after the date of
the making of the Investment;
(b) readily marketable direct obligations of any State of the
United States of America or any political subdivision of any such
State or any public agency or instrumentality thereof given on the
date of such Investment a credit rating of at least Aa by Moody's
Investors Service, Inc. or AA by Standard & Poor's Rating Group (a
division of McGraw-Hill, Inc.), in each case due within one year from
the making of the Investment;
(c) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements cov ering Government Securities executed by any Bank or
any bank incorporated under the Laws of the United States of America,
any State thereof or the District of Columbia and having on the date
of such Investment combined capital, surplus and undivided profits of
at least $250,000,000, or total assets of at least $5,000,000,000, in
each case due within one year after the date of the making of the
Investment;
-9-
<PAGE>
(d) certificates of deposit issued by, bank deposits in,
eurodollar deposits through, bankers' acceptances of, and repurchase
agreements cov ering Government Securities executed by any Bank or
any branch or office located in the United States of America of a bank
incorporated under the Laws of any jurisdiction outside the United
States of America having on the date of such Investment combined
capital, surplus and undivided profits of at least $500,000,000, or
total assets of at least $15,000,000,000, in each case due within one
year after the date of the making of the Investment;
(e) repurchase agreements covering Government Securities
executed by a broker or dealer registered under Section 15(b) of the
Securities Exchange Act of 1934, as amended, having on the date of the
Investment capital of at least $50,000,000, due within 90 days after
the date of the making of the Investment; provided that the maker of
--------
the Investment receives written confirmation of the transfer to it of
record ownership of the Government Securities on the books of a
"primary dealer" in such Government Securities or on the books of such
registered broker or dealer, as soon as practicable after the making
of the Investment;
(f) readily marketable commercial paper or other debt securities
issued by corporations doing business in and incorporated under the
Laws of the United States of America or any State thereof or of any
corporation that is the holding company for a bank described in clause
(c) or (d) above given on the date of such Investment a credit rating
- -
of at least P-1 by Moody's Investors Service, Inc. or A-1 by Standard
& Poor's Rating Group (a division of McGraw-Hill, Inc.), in each case
due within one year after the date of the making of the Investment;
(g) "money market preferred stock" issued by a corporation
incorporated under the Laws of the United States of America or any
State thereof (i) given on the date of such Investment a credit rating
of at least Aa by Moody's Investors Service, Inc. and AA by Standard &
Poor's Rating Group (a division of McGraw-Hill, Inc.), in each case
having an investment period not exceeding 50 days or (ii) to the
extent that investors therein have the benefit of a standby letter of
credit issued by a Bank or a bank described in clauses (c) or (d)
- -
above; provided that (y) the amount of all such Investments issued by
--------
the same issuer does not exceed $5,000,000 and (z) the aggregate
amount of all such Investments does not exceed $15,000,000;
-10-
<PAGE>
(h) a readily redeemable "money market mutual fund" sponsored by
a bank described in clause (c) or (d) hereof, or a registered broker
- -
or dealer described in clause (e) hereof, that has and maintains an
-
investment policy limiting its investments primarily to instruments of
the types described in clauses (a) through (g) hereof and given on the
date of such Investment a credit rating of at least Aa by Moody's
Investors Service, Inc. and AA by Standard & Poor's Rating Group (a
division of McGraw-Hill, Inc.); and
(i) corporate notes or bonds having an original term to maturity
of not more than one year issued by a corporation incorporated under
the Laws of the United States of America, or a participation interest
therein; provided that (i) commercial paper issued by such corporation
--------
is given on the date of such Investment a credit rating of at least Aa
by Moody's Investors Service, Inc. and AA by Standard & Poor's Rating
Group (a division of McGraw-Hill, Inc.), (ii) the amount of all such
Investments issued by the same issuer does not exceed $5,000,000 and
(iii) the aggregate amount of all such Investments does not exceed
$15,000,000.
"Cash Income Taxes" means, with respect to any fiscal period, taxes on
-----------------
or measured by income that are paid or currently payable in Cash in respect
of that fiscal period.
"Cash Interest Expense" means Interest Expense that is paid or
---------------------
currently payable in Cash.
"Certificate of a Responsible Official" means a certificate signed by
-------------------------------------
a Responsible Official of the Person providing the certificate.
"Change in Control" means (a) any transaction or series of related
-----------------
transactions in which any Unrelated Person or two or more Unrelated Persons
acting in concert acquire beneficial ownership (within the meaning of Rule
13d-3(a)(1) under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of 25% or more of the outstanding Common Stock, or
(b) Borrower consolidates with or merges into another Person or transfers
or leases its Properties and assets substantially as an entirety to any
Person or any Person consolidates with or merges into Borrower, in either
event pursuant to a transaction in which the outstanding Common Stock is
converted into or exchanged for Cash, securities or other Property, with
the effect that any Unrelated Person becomes the beneficial owner, directly
or indirectly, of 25% or more of the outstanding Common Stock,
-11-
<PAGE>
(c) during any period of 24 consecutive months, individuals who at the
beginning of such period constituted the board of directors of Borrower
(together with any new or replacement directors whose election by the board
of directors, or whose nomination for election, was approved by a vote of
at least a majority of the directors at the beginning of such period or
whose election or nomination for reelection was previously so approved)
cease for any reason to constitute a majority of the directors then in
office or (d) any event or circumstance constituting a "change in control"
or other similar occurrence under documentation evidencing or governing any
Indebtedness of Borrower of $25,000,000 or more which results in an
obligation of Borrower to prepay, purchase, offer to purchase, redeem or
defease all or a portion of such Indebtedness. For purposes of the
foregoing, the term "Unrelated Person" means any Person other than (i) a
---------------- ----------
Subsidiary of Borrower or (ii) an employee stock ownership plan or other
employee benefit plan covering the employees of Borrower and its
Subsidiaries.
"Closing Date" means the time and Banking Day on which the conditions
------------
set forth in Section 8.1 are satisfied or waived. The Administrative Agent
---
shall notify Borrower and the Banks of the date that is the Closing Date.
"CMC" means Casino Magic Corp., a Minnesota corporation.
---
"CMC Louisiana Assets" means all of the assets of the CMC Louisiana
--------------------
Subsidiaries, including the "Casino Magic-Bossier City" dockside casino in
---------
Bossier City, Louisiana.
"CMC Louisiana Subsidiaries" means (a) Jefferson Casino Corporation, a
--------------------------
Louisiana corporation, (b) Casino Magic of Louisiana Corp., a Louisiana
corporation, and (c) any Subsidiary of either of the foregoing.
"Co-Agent" means First National Bank of Commerce. The Co-Agent shall
--------
have no rights, duties or responsibilities under the Loan Documents beyond
those of a Bank.
"Code" means the Internal Revenue Code of 1986, as amended or replaced
----
and as in effect from time to time.
"Collateral" means all of the collateral covered by the Collateral
----------
Documents. The Collateral shall not include the Property Held For Sale or
any Foreign Assets.
-12-
<PAGE>
"Collateral Documents" means, collectively, the Security Agreement,
--------------------
the Trademark Collateral Assignment, the Pledge Agreement (Gaming
Regulated), the Pledge Agreement (General), the Deeds of Trust, the
Preferred Ship's Mortgages and any other security agreement, pledge
agreement, deed of trust, mortgage, notice to or acknowledgment of a
registrar or depositary institution, control agreement or other collateral
security agreement executed and delivered by Borrower or any Subsidiary
Guarantor (and executed by any third party whose signature is necessary) to
secure the Obligations.
"Commercial Letter of Credit" means each Letter of Credit issued to
---------------------------
support the purchase of goods by Borrower which is determined to be a
commercial letter of credit by the Issuing Bank.
"Commitment" means, subject to Sections 2.5, 2.6, 2.7 and 2.11,
---------- --- --- --- ----
$300,000,000. As of the Closing Date, the respective Pro Rata Shares of
the Banks with respect to the Commitment are set forth in Schedule 1.1.
------------
From and after the Closing Date, the Pro Rata Shares set forth in Schedule
--------
1.1 may be subject to assignment pursuant to Section 11.8, with the portion
--- ----
of any Pro Rata Share so assigned being reflected in the applicable
Commitment Assignment and Acceptance.
"Commitment Assignment and Acceptance" means a commitment assignment
------------------------------------
and acceptance substantially in the form of Exhibit A.
---------
"Common Stock" means the common stock of Borrower or its successor by
------------
merger.
"Compliance Certificate" means a certificate in the form of Exhibit B,
---------------------- ---------
properly completed and signed by a Senior Officer of Borrower.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
outstanding security issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or
any of its Property is bound.
"Crystal Park Deed of Trust" means the Deed of Trust executed and
--------------------------
delivered by Crystal Park Hotel & Casino Development Co., LLC covering the
Crystal Park Property, substantially in the form of the Model Deed of
Trust, as amended by the Existing Deed of Trust Amendment, either as
originally executed
-13-
<PAGE>
or as it may from time to time be supplemented, modified, amended, extended
or supplanted.
"Crystal Park Property" means the real property and improvements
---------------------
thereon known as the "Crystal Park Hotel & Casino" located in Compton,
California, comprised of approximately 1/2 acre in a fee simple estate, a
leasehold estate in a portion of the air rights over that fee simple estate
and approximately 40 acres in a leasehold estate and related easements and
appurtenances.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
------------------
America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"Deeds of Trust" means, collectively, (a) the Existing Deeds of Trust,
--------------
(b) the Bay St. Louis Deeds of Trust and (c) the Biloxi CM Deeds of Trust.
"Default" means any event that, with the giving of any applicable
-------
notice or passage of time specified in Section 9.1, or both, would be an
---
Event of Default.
"Default Rate" means the interest rate prescribed in Section 3.9.
------------ ---
"Designated Default" means (a) an Event of Default described in
------------------
Sections 9.1(a) or 9.1(b) or (b) an Event of Default arising out of a
--- ---
breach of Sections 6.11, 6.12 or 6.13.
---- ---- ----
"Designated Deposit Account" means a deposit account to be maintained
--------------------------
by Borrower with Bank of America National Trust and Savings Association, as
from time to time designated by Borrower by written notification to the
Administrative Agent.
"Designated Eurodollar Market" means, with respect to any Eurodollar
----------------------------
Rate Loan, (a) the London Eurodollar Market, (b) if prime banks in the
London Eurodollar Market are at the relevant time not accepting deposits of
Dollars or if the Administrative Agent determines in good faith that the
London Eurodollar Market does not represent at the relevant time the
effective pricing to the Banks for deposits of Dollars in the London
Eurodollar Market, the Cayman Islands Eurodollar Market or (c) if prime
banks in the Cayman Islands Eurodollar Market are at the relevant time not
accepting deposits of Dollars or if the Administrative
-14-
<PAGE>
Agent determines in good faith that the Cayman Islands Eurodollar Market
does not represent at the relevant time the effective pricing to the Banks
for deposits of Dollars in the Cayman Islands Eurodollar Market, such other
Eurodollar Market as may from time to time be selected by the
Administrative Agent with the approval of Borrower and the Requisite Banks.
"Disposition" means the voluntary sale, transfer or other disposition
-----------
of any asset of Borrower or any of the Restricted Subsidiaries other than
----- ----
(a) Cash, Cash Equivalents, Investments (other than Investments in any
----- ----
Subsidiary of Borrower), inventory or other assets sold, leased or
otherwise disposed of in the ordinary course of business of Borrower or a
Restricted Subsidiary and (b) equipment sold or otherwise disposed of,
where (i) substantially similar equipment in replacement thereof has
theretofore been acquired, or as soon as is practicable under the
circumstances thereafter is acquired, by Borrower or a Restricted
Subsidiary, or (ii) Borrower or the Restricted Subsidiary determines in
good faith that the failure to replace such equipment will not be
detrimental to the business of Borrower or the Restricted Subsidiary.
"Disqualified Stock" means any capital stock, warrants, options or
------------------
other rights to acquire capital stock (but excluding any debt security
which is convertible into, or exchangeable for, capital stock), which, by
its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole
or in part, on or prior to the Maturity Date; provided that the
--------
aforementioned interests shall not be Disqualified Stock if they are
redeemable prior to the Maturity Date only if the board of directors of
Borrower determines in its judgment that as a result of a holder or
beneficial owner owning such interests (i) Borrower or a Subsidiary of
Borrower has lost or may lose any license or franchise from any Gaming
Board held by Borrower or any Subsidiary of Borrower necessary to conduct
any portion of the business of Borrower or such Subsidiary of Borrower or
(ii) any Gaming Board has taken or may take action to materially restrict
or impair the operations of Borrower or its Subsidiaries, which license,
franchise or action is conditioned upon some or all of the holders or
beneficial owners of such interests being licensed or found qualified or
suitable to own such interests.
"Distribution" means, with respect to any shares of capital stock or
------------
any warrant or option to purchase an equity security or other equity
security issued by a Person, (a) the retirement, redemption, purchase or
other acquisition for Cash or
-15-
<PAGE>
for Property by such Person of any such security, (b) the declaration or
(without duplication) payment by such Person of any dividend in Cash or in
Property on or with respect to any such security, (c) any Investment by
such Person in the holder of 5% or more of any such security if a purpose
of such Investment is to avoid characterization of the transaction as a
Distribution and (d) any other payment in Cash or Property by such Person
constituting a distribution under applicable Laws with respect to such
security.
"Dollars" or "$" means United States dollars.
------- -
"Domestic Reference Bank" means Bank of America National Trust and
-----------------------
Savings Association.
"EBITDA" means, with respect to any fiscal period, the sum of (a) Net
------ --- --
Income for that fiscal period, plus (b) any extraordinary loss reflected in
----
such Net Income, minus (c) any extraordinary gain reflected in such Net
-----
Income, plus (d) Interest Expense for that fiscal period, plus (e) the
---- ----
aggregate amount of federal and state taxes on or measured by income for
that fiscal period (whether or not payable during that fiscal period), plus
----
(f) depreciation, amortization and all other non-cash expenses for that
fiscal period, in each case as determined in accordance with Generally
Accepted Accounting Principles and, in the case of items (d), (e) and (f),
--- --- ---
only to the extent reflected in the determination of Net Income for that
fiscal period.
"Eligible Assignee" means (a) another Bank, (b) with respect to any
-----------------
Bank, any Affiliate of that Bank, (c) any commercial bank having a combined
capital and surplus of $100,000,000 or more, (d) any (i) savings bank,
savings and loan association or similar financial institution or (ii)
insurance company engaged in the business of writing insurance which, in
either case (A) has a net worth of $200,000,000 or more, (B) is engaged in
the business of lending money and extending credit under credit facilities
substantially similar to those extended under this Agreement and (C) is
operationally and procedurally able to meet the obligations of a Bank
hereunder to the same degree as a commercial bank and (e) any other
financial institution (including a mutual fund or other fund) having total
---------
assets of $100,000,000 or more which meets the requirements set forth in
subclauses (B) and (C) of clause (d) above; provided that (I) each Eligible
--------
Assignee must either (a) be organized under the Laws of the United States
of America, any State thereof or the District of Columbia or (b) be
organized under the Laws of the Cayman Islands or any country which is a
member of the Organization for Economic Cooperation and Development, or a
political
-16-
<PAGE>
subdivision of such a country and (i) act hereunder through a branch,
agency or funding office located in the United States of America and (ii)
be exempt from withholding of tax on interest and deliver the documents
related thereto pursuant to Section 11.21 and (II) to the extent
-----
required under applicable Gaming Laws, each Eligible Assignee must be
registered with, approved by, or not disapproved by (whichever may be
required under applicable Gaming Laws), all applicable Gaming Boards.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
-----
any regulations issued pursuant thereto, as amended or replaced and as in
effect from time to time.
"ERISA Affiliate" means each Person (whether or not incorporated)
---------------
which is required to be aggregated with Borrower pursuant to Section 414 of
the Code.
"Eurodollar Banking Day" means any Banking Day on which dealings in
----------------------
Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"Eurodollar Lending Office" means, as to each Bank, its office or
-------------------------
branch so designated by written notice to Borrower and the Administrative
Agent as its Eurodollar Lending Office. If no Eurodollar Lending Office
is designated by a Bank, its Eurodollar Lending Office shall be its office
at its address for purposes of notices hereunder.
"Eurodollar Market" means a regular established market located outside
-----------------
the United States of America by and among banks for the solicitation, offer
and acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
----------------------
Regulation D or any comparable regulation of any Governmental Agency having
jurisdiction over any Bank.
"Eurodollar Period" means, as to each Eurodollar Rate Loan, the period
-----------------
commencing on the date specified by Borrower pursuant to Section 2.1(b) and
---
ending 1, 2, 3 or 6 months (or, with the written consent of all of the
Banks, any other period) thereafter, as specified by Borrower in the
applicable Request for Loan; provided that:
--------
-17-
<PAGE>
(a) The first day of any Eurodollar Period shall be a Eurodollar
Banking Day;
(b) Any Eurodollar Period that would otherwise end on a day that
is not a Eurodollar Banking Day shall be extended to the next
succeeding Eurodollar Banking Day unless such Eurodollar Banking Day
falls in another calendar month, in which case such Eurodollar Period
shall end on the next preceding Eurodollar Banking Day;
(c) Borrower may not specify a Eurodollar Period that extends
beyond the next Reduction Date unless the sum of (i) the aggregate
---
principal amount of the Eurodollar Loans having a Eurodollar Period
ending after such Reduction Date plus (ii) the Aggregate Effective
----
Amount under Letters of Credit for which the expiry date is after such
Reduction Date, does not exceed the Commitment (after giving effect to
any reduction thereto scheduled to be made on such Reduction Date
pursuant to Section 2.6); and
---
(d) No Eurodollar Period shall extend beyond the Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan, the
---------------
interest rate per annum (rounded upward, if necessary, to the next 1/100 of
1%) at which deposits in Dollars are offered by the Eurodollar Reference
Bank to prime banks in the Designated Eurodollar Market at or about 11:00
a.m. local time in the Designated Eurodollar Market, two (2) Eurodollar
Banking Days before the first day of the applicable Eurodollar Period in an
aggregate amount approximately equal to the amount of the Advance made by
the Eurodollar Reference Bank with respect to such Eurodollar Rate Loan and
for a period of time comparable to the number of days in the applicable
Eurodollar Period.
"Eurodollar Rate Advance" means an Advance made hereunder and
-----------------------
specified to be a Eurodollar Rate Advance in accordance with Article 2.
---------
"Eurodollar Rate Loan" means a Loan made hereunder and specified to be
--------------------
a Eurodollar Rate Loan in accordance with Article 2.
---------
"Eurodollar Reference Bank" means Bank of America National Trust and
-------------------------
Savings Association.
"Event of Default" shall have the meaning provided in Section 9.1.
---------------- ---
-18-
<PAGE>
"Excess Property" means, collectively, the Hollywood Park Excess
---------------
Property and the Phoenix Excess Property.
"Existing Deeds of Trust" means (a) the Hollywood Park Deed of Trust,
-----------------------
(b) the Crystal Park Deed of Trust, (c) the Phoenix Deed of Trust, (d) the
Reno Deed of Trust, (e) the Biloxi BT Deed of Trust and (f) the New Orleans
Deed of Trust.
"Existing Deed of Trust Amendment" means, with respect to each of the
--------------------------------
Existing Deeds of Trust, the Existing Deed of Trust Amendment to be
executed and delivered pursuant to Section 8.1 by the appropriate trustor
---
under the Existing Deeds of Trust substantially in the form of the Model
Deed of Trust Amendment.
"Existing Subordinated Notes" means the Series B 9.5% Senior
---------------------------
Subordinated Notes due 2007 of Borrower and Hollywood Park Operating
Company.
"Facility Increase" means an increase in the Commitment pursuant to
-----------------
Section 2.11.
----
"Facility Increase Amount" means the amount by which the Commitment is
------------------------
increased pursuant to a Facility Increase.
"Federal Funds Rate" means, as of any date of determination, the rate
------------------
set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including
any such successor, "H.15(519)") for such date opposite the caption
"Federal Funds (Effective)". If for any relevant date such rate is not yet
published in H.15(519), the rate for such date will be the rate set forth
in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such
successor, the "Composite 3:30 p.m. Quotation") for such date under the
caption "Federal Funds Effective Rate". If on any relevant date the
appropriate rate for such date is not yet published in either H.15(519) or
the Composite 3:30 p.m. Quotations, the rate for such date will be the
arithmetic mean of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that date by each
of three leading brokers of Federal funds transactions in New York City
selected by the Administrative Agent. For purposes of this Agreement, any
change in the Alternate Base Rate due to a change in the Federal Funds Rate
shall be effective as of the opening of business on the effective date of
such change.
-19-
<PAGE>
"FIRREA" means the Financial Institutions Reform, Recovery and
------
Enforcement Act of 1989, as it may be amended from time to time.
"Fiscal Quarter" means the fiscal quarter of Borrower ending on each
--------------
March 31, June 30, September 30 and December 31.
"fiscal period" refers to a Fiscal Quarter, Fiscal Year or such other
-------------
measurement period as the context of such reference requires.
"Fiscal Year" means the fiscal year of Borrower ending on each
-----------
December 31.
"Foreign Assets" means assets of Borrower and its Subsidiaries that
--------------
are located outside the United States of America.
"Foreign Subsidiaries" means (a) Casino Magic Neuquen, S.A., an
--------------------
Argentina corporation, (b) Casino Magic Support Services, S.A., an
Argentina corporation and (c) any other Subsidiary of Borrower that is
organized under the Laws of a jurisdiction outside the United States of
America and substantially all of the assets of which are located outside
the United States of America.
"Funded Debt" means, as of any date of determination (without
-----------
duplication and on a consolidated basis), the sum of (a) all principal
---
Indebtedness of Borrower and the Restricted Subsidiaries for borrowed money
(including debt securities issued by Borrower and the Restricted
---------
Subsidiaries) on that date plus (b) the aggregate amount of the principal
----
portion of all Capital Lease Obligations of Borrower and the Restricted
Subsidiaries on that date, but excluding (y) so long as the Louisiana First
---------
Mortgage Notes are outstanding, any Funded Debt of the CMC Louisiana
Subsidiaries and (z) any Funded Debt of Foreign Subsidiaries.
"Funded Debt Ratio" means, as of the last day of each Fiscal Quarter,
-----------------
the ratio of (a) Average Quarterly Funded Debt to (b) Adjusted EBITDA for
----- -- --
the fiscal period consisting of that Fiscal Quarter and the three
immediately preceding Fiscal Quarters.
"Gaming Board" means, collectively, (a) the California Horse Racing
------------
Board, (b) the California Attorney General (acting pursuant to the
California Gambling Control Act), (c) the Nevada Gaming Commission, (d) the
Nevada State Gaming Control Board, (e) the Arizona Racing Commission, (f)
the Mississippi Gaming Commission, (g) the Mississippi State Tax
Commission, (h) the
-20-
<PAGE>
Louisiana Gaming Control Board, (i) the Washington Gambling Commission and
(j) any other Governmental Agency that holds regulatory, licensing or
permit authority over gambling, gaming or casino activities conducted by
Borrower and the Restricted Subsidiaries within its jurisdiction.
"Gaming Laws" means all Laws pursuant to which any Gaming Board
-----------
possesses regulatory, licensing or permit authority over gambling, gaming
or casino activities conducted by Borrower and the Restricted Subsidiaries
within its jurisdiction.
"Gaming Properties" means, collectively, (a) Hollywood Park Race Track
-----------------
and Hollywood Park-Casino, (b) Crystal Park Hotel & Casino, (c) Turf
Paradise Race Track, (d) Boomtown Hotel & Casino in Verdi, Nevada, (e)
Boomtown New Orleans Casino near New Orleans, Louisiana, (f) Boomtown
Casino in Biloxi, Mississippi, (g) Legends Casino in Toppenish, Washington,
(h) Casino Magic Casino in Biloxi, Mississippi, (i) Casino Magic Casino in
Bay St. Louis, Mississippi, (j) Casino Magic Casino in Bossier City,
Louisiana and (k) any other gaming or entertainment facility hereafter
owned by Borrower or any Restricted Subsidiary.
"Generally Accepted Accounting Principles" means, as of any date of
----------------------------------------
determination, accounting principles (a) set forth as generally accepted in
then currently effective Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) set forth as
generally accepted in then currently effective Statements of the Financial
Accounting Standards Board or (c) that are then approved by such other
entity as may be approved by a significant segment of the accounting
profession in the United States of America. The term "consistently
------------
applied," as used in connection therewith, means that the accounting
principles applied are consistent in all material respects with those
applied at prior dates or for prior periods.
"Global Assignment and Release" means the global assignment and
------------------------------
release to be executed and delivered by the Prior Banks, the Banks and
Borrower as of the Closing Date, in the form of Exhibit C.
---------
"Government Securities" means readily marketable (a) direct full faith
---------------------
and credit obligations of the United States of America or obligations
guaranteed by the full faith and credit of the United States of America and
(b) obligations of an agency or instrumentality of, or corporation owned,
controlled or sponsored by, the
-21-
<PAGE>
United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.
"Governmental Agency" means (a) any international, foreign, federal,
-------------------
state, county or municipal government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality or public body, or (c) any
court or administrative tribunal of competent jurisdiction.
"Guaranty Obligation" means, as to any Person, any (a) guarantee by
-------------------
that Person of Indebtedness of, or other obligation performable by, any
other Person or (b) assurance given by that Person to an obligee of any
other Person with respect to the performance of an obligation by, or the
financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
---------
obligation or any collateral security therefor, any agreement to provide
funds (by means of loans, capital contributions or otherwise) to such other
Person, any agreement to support the solvency or level of any balance sheet
item of such other Person or any "keep-well" or other arrangement of
whatever nature given for the purpose of assuring or holding harmless such
obligee against loss with respect to any obligation of such other Person;
provided, however, that the term Guaranty Obligation shall not include
-----------------
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guaranty Obligation in respect of
Indebtedness shall be deemed to be an amount equal to the stated or
determinable amount of the related Indebtedness (unless the Guaranty
Obligation is limited by its terms to a lesser amount, in which case to the
extent of such amount) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
Person in good faith. The amount of any other Guaranty Obligation shall be
deemed to be zero unless and until the amount thereof has been (or in
accordance with Financial Accounting Standards Board Statement No. 5 should
be) quantified and reflected or disclosed in the consolidated financial
statements (or notes thereto) of Borrower and the Restricted Subsidiaries.
"Hazardous Materials" means substances defined as "hazardous
-------------------
substances" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., or as
"hazardous", "toxic" or "pollutant" substances or as "solid waste" pursuant
to the Hazardous Materials Transportation Act, 49 U.S.C. (S) 1801, et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. (S) 6901, et seq., or
as "friable asbestos" pursuant to the Toxic Substances Control Act, 15
U.S.C. (S) 2601 et seq. or any other applicable
-22-
<PAGE>
Hazardous Materials Law, in each case as such Laws are amended from time to
time.
"Hazardous Materials Laws" means all Laws governing the treatment,
------------------------
transportation or disposal of Hazardous Materials applicable to any of the
Real Property.
"Hollywood Park Deed of Trust" means the Deed of Trust executed and
----------------------------
delivered by Borrower covering the Hollywood Park Property, substantially
in the form of the Model Deed of Trust, as amended by the Existing Deed of
Trust Amendment, either as originally executed or as it may from time to
time be supplemented, modified, amended, extended or supplanted.
"Hollywood Park Excess Property" means up to 110 undeveloped acres of
------------------------------
the Hollywood Park Property (excluding the Hollywood Park Stadium Property)
---------
that may, upon request of Borrower, be released from the Lien of the
Hollywood Park Deed of Trust in connection with the sale thereof to a
Person that is not an Affiliate of Borrower, subject to the conditions
therein set forth and to compliance with Section 2.13.
----
"Hollywood Park Property" means the real property and improvements
-----------------------
thereon known as the "Hollywood Park Race Track" and the "Hollywood Park
Casino" located in Inglewood, California, comprised of approximately 378
acres in a fee simple estate and related easements and appurtenances.
"Hollywood Park Stadium Property" means up to 50 undeveloped acres of
-------------------------------
the Hollywood Park Property (excluding the Hollywood Park Excess Property)
---------
that may, upon request of Borrower, be released from the Lien of the
Hollywood Park Deed of Trust in connection with the construction of a new
sports/ entertainment stadium or facility, subject to the conditions
therein set forth and to compliance with Section 2.13.
----
"Indebtedness" means, as to any Person (without duplication), (a)
------------
indebtedness of such Person for borrowed money or for the deferred
purchase price of Property (excluding trade and other accounts payable in
the ordinary course of business in accordance with ordinary trade terms),
including any Guaranty Obligation for any such indebtedness, (b)
---------
indebtedness of such Person of the nature described in clause (a) that is
non-recourse to the credit of such Person but is secured by assets of such
Person, to the extent of the value of such assets, (c) Capital Lease
Obligations of such Person, (d) indebtedness of such Person
-23-
<PAGE>
arising under bankers' acceptance facilities or under facilities for the
discount of accounts receivable of such Person, (e) any direct or
contingent obligations of such Person under letters of credit issued for
the account of such Person and (f) any net obligations of such Person under
Swap Agreements.
"Indiana Project" means the acquisition or construction of a riverboat
---------------
and the construction of appropriate dockside facilities (including a hotel
---------
and entertainment complex) in Switzerland County, Indiana.
"Intangible Assets" means assets that are considered intangible assets
-----------------
under Generally Accepted Accounting Principles, including customer lists,
---------
goodwill, computer software, copyrights, trade names, trademarks and
patents.
"Intercompany Notes" means the intercompany promissory notes required
------------------
pursuant to Section 5.13.
----
"Interest Charges" means, as of the last day of any fiscal period, the
----------------
sum of (a) Cash Interest Expense for that fiscal period plus (b) all
--- -- ----
interest currently payable in Cash (other than the arrangement fee and
----- ----
upfront fees payable pursuant to Sections 3.2 and 3.3) incurred during that
--- ----
fiscal period which is capitalized under Generally Accepted Accounting
Principles, but excluding (i) so long as the Louisiana First Mortgage Notes
---------
are outstanding, Interest Charges attributable to the CMC Louisiana
Subsidiaries and (ii) Interest Charges attributable to any Foreign
Subsidiary except to the extent that EBITDA attributable to that Foreign
Subsidiary is included within Adjusted EBITDA.
"Interest Coverage Ratio" means, as of the last day of each Fiscal
-----------------------
Quarter, the ratio of (a) Adjusted EBITDA for the fiscal period consisting
----- --
of that Fiscal Quarter and the three immediately preceding Fiscal Quarters
minus (i) the aggregate Maintenance Capital Expenditures made in that
-----
fiscal period and minus (ii) Cash Income Taxes paid in that fiscal period
-----
and minus (iii) Distributions consisting of dividends on capital stock of
-----
Borrower made in Cash during that fiscal period to (b) Interest Charges for
--
that fiscal period.
"Interest Differential" means, with respect to any prepayment of a
---------------------
Eurodollar Rate Loan on a day other than the last day of the applicable
Interest Period and with respect to any failure to borrow a Eurodollar Rate
Loan on the date or in the amount specified in any Request for Loan, (a)
the Eurodollar Rate payable (or, with respect to a failure to borrow, the
Eurodollar Rate which would have been payable) with respect to the
Eurodollar Rate Loan minus (b) the
-----
-24-
<PAGE>
Eurodollar Rate on, or as near as practicable to the date of the prepayment
or failure to borrow for a Eurodollar Rate Loan with an Interest Period
commencing on such date and ending on the last day of the Interest Period
of the Eurodollar Rate Loan so prepaid or which would have been borrowed on
such date.
"Interest Expense" means, as of the last day of any fiscal period, the
----------------
sum of (a) all interest, fees and finance charges paid or payable (without
------
duplication, on a consolidated basis) for that fiscal period by Borrower
and the Restricted Subsidiaries to a lender for money borrowed (including
---------
any obligations for fees and finance charges payable to the issuer of any
letter of credit) or the deferred purchase price of assets that are
considered "interest expense" under Generally Accepted Accounting
Principles, plus (b) the portion of rent paid or payable (without
----
duplication, on a consolidated basis) for that fiscal period by Borrower
and the Restricted Subsidiaries under Capital Lease Obligations that should
be treated as interest in accordance with Financial Accounting Standards
Board Statement No. 13.
"Interest Period" means, with respect to any Eurodollar Rate Loan, the
---------------
related Eurodollar Period.
"Investment" means, when used in connection with any Person, any
----------
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of
a loan, advance creating a debt, capital contribution, guaranty or other
debt or equity participation or interest in any other Person, including any
---------
partnership and joint venture interests of such Person. The amount of any
Investment shall be the amount actually invested (minus any return of
-----
capital with respect to such Investment which has actually been received in
Cash or Cash Equivalents or has been converted into Cash or Cash
Equivalents), without adjustment for subsequent increases or decreases in
the value of such Investment.
"Issuing Bank" means Bank of America National Trust and Savings
------------
Association.
"Joining Subsidiary Guarantors" means (a) CMC and (b) all Significant
-----------------------------
Subsidiaries of CMC other than (i) the CMC Louisiana Subsidiaries and (ii)
----------
the Foreign Subsidiaries.
-25-
<PAGE>
"Laws" means, collectively, all international, foreign, federal, state
----
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents, including, without limitation,
Gaming Laws.
"Lead Arranger" means BancAmerica Securities, Inc. and its successors.
-------------
"Letters of Credit" means any of the Commercial Letters of Credit or
-----------------
Standby Letters of Credit issued by the Issuing Bank under the Commitment
pursuant to Section 2.4, either as originally issued or as the same may be
---
supplemented, modified, amended, renewed, extended or supplanted.
"License Revocation" means the revocation, failure to renew or
------------------
suspension of, or the appointment of a receiver, supervisor or similar
official with respect to, any casino, gambling or gaming license issued by
any Gaming Board covering any casino or gaming facility of Borrower or any
Restricted Subsidiary.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment for security, security interest, encumbrance, lien or charge of
any kind, whether voluntarily incurred or arising by operation of Law or
otherwise, affecting any Property, including any agreement to grant any of
---------
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature of a security interest, and/or the filing of or
agreement to give any financing statement (other than a precautionary
----- ----
financing statement with respect to a lease that is not in the nature of a
security interest) under the Uniform Commercial Code or comparable Law of
any jurisdiction with respect to any Property.
"Loan" means the aggregate of the Advances made at any one time by the
----
Banks pursuant to Article 2.
---------
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Subsidiary Guaranty (General), the Subsidiary Guaranty (Crystal Park), the
Swing Line Documents, the Collateral Documents, any Secured Swap Agreement,
the Global Assignment and Release, the Omnibus Ancillary Documents
Amendment and any other agreements of any type or nature hereafter executed
and delivered by Borrower or any of the Subsidiary Guarantors to the
Administrative Agent or to any Bank in any way relating to or in
furtherance of this Agreement, in each case either as originally executed
or as the same may from time to time be supplemented, modified, amended,
restated, extended or supplanted.
-26-
<PAGE>
"Louisiana First Mortgage Notes" means the $115,000,000 First Mortgage
------------------------------
Notes of Casino Magic of Louisiana Corp., secured by a first mortgage and
security interest in the CMC Louisiana Assets.
"Louisiana First Mortgage Note Indenture" means the Indenture dated as
---------------------------------------
of August 22, 1996 governing the Louisiana First Mortgage Notes.
"Maintenance Capital Expenditure" means a Capital Expenditure for the
-------------------------------
maintenance, repair, restoration or refurbishment of any Gaming Property of
Borrower or any of the Restricted Subsidiaries, but excluding any Capital
---------
Expenditure which materially adds to and improves such Gaming Property.
"Managing Agents" means Societe Generale and Bank of Scotland. The
---------------
Managing Agents shall have no rights, duties or responsibilities under the
Loan Documents beyond those of a Bank.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation G or U.
"Material Adverse Effect" means any set of circumstances or events
-----------------------
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
business or condition (financial or otherwise) of Borrower and the
Restricted Subsidiaries, taken as a whole or (c) materially impairs or
could reasonably be expected to materially impair the ability of Borrower
and the Significant Subsidiaries, taken as a whole, to perform the
Obligations.
"Maturity Date" means December 31, 2003.
-------------
"Memorandum of Amendment (Preferred Ship's Mortgage)" means a
---------------------------------------------------
Memorandum of Amendment (Preferred Ship's Mortgage) in the form of Exhibit
D.
-
"Memorandum of Amendment (Trademark Collateral Assignment)" means a
---------------------------------------------------------
Memorandum of Amendment (Trademark Collateral Assignment) in the form of
Exhibit E.
-
"Merger" means the merger of Merger Sub with and into CMC pursuant to
------
the Merger Agreement.
-27-
<PAGE>
"Merger Agreement" means the Agreement and Plan of Merger dated as of
----------------
February 19, 1998 among Borrower, Merger Sub and CMC, as amended through
the Closing Date.
"Merger Sub" means HP Acquisition II, Inc., a wholly-owned Subsidiary
----------
of Borrower.
"Mississippi First Mortgage Notes" means the $135,000,000 First
--------------------------------
Mortgage Notes of CMC secured by a first mortgage on substantially all of
the Biloxi CM Property and the Bay St. Louis Property.
"Mississippi First Mortgage Note Indenture" means the Indenture dated
-----------------------------------------
October 14, 1993 governing the Mississippi First Mortgage Notes.
"Model Deed of Trust" means the deed of trust in the form of Exhibit C
------------------- ---------
to the Prior Loan Agreement.
"Model Deed of Trust Amendment" means a Deed of Trust Amendment in the
-----------------------------
form of Exhibit F.
---------
" Model Landlord Consent and Agreement" means the landlord consent and
------------------------------------
agreement in the form of Exhibit D to the Prior Loan Agreement..
---------
"Model Preferred Ship's Mortgage" means the preferred ship's mortgage
-------------------------------
in the form of Exhibit E to the Prior Loan Agreement.
---------
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA to which Borrower or any of its
ERISA Affiliates contribute or are obligated to contribute.
"Negative Pledge" means a Contractual Obligation which contains a
---------------
covenant binding on Borrower or any of the Restricted Subsidiaries that
prohibits Liens on any of its or their Property, other than (a) any such
----- ----
covenant contained in a Contractual Obligation granting a Lien permitted
under Section 6.8 which affects only the Property that is the subject of
---
such permitted Lien and (b) any such covenant that by its terms does not
apply to Liens securing the Obligations.
"Net Cash Proceeds" means, with respect to any Disposition, the sum of
----------------- ------
(a) the Cash proceeds received by or for the account of Borrower and its
Subsidiaries from such Disposition plus (b) the amount of Cash received by
----
or for
-29-
<PAGE>
the account of Borrower and its Subsidiaries upon the sale, collection or
other liquidation of any proceeds that are not Cash from such Disposition,
in each case net of (i) any amount required to be paid to any Person
------
owning an interest in the assets disposed of, (ii) any amount applied to
the repayment of Indebtedness secured by a Lien permitted under Section 6.8
---
on the asset disposed of, (iii) any transfer, income or other taxes payable
as a result of such Disposition, (iv) professional fees and expenses, fees
due to any Governmental Agency, broker's commissions and other out-of-
pocket costs of sale actually paid to any Person that is not an Affiliate
of Borrower attributable to such Disposition and (v) any reserves
established in accordance with Generally Accepted Accounting Principles in
connection with such Disposition.
"Net Income" means, with respect to any fiscal period, the
----------
consolidated net income of Borrower and the Restricted Subsidiaries for
that period, determined in accordance with Generally Accepted Accounting
Principles, consistently applied.
"New Orleans Deed of Trust" means the Deed of Trust executed and
-------------------------
delivered by Louisiana-I Gaming, L.P. covering the New Orleans Property,
substantially in the form of the Model Deed of Trust, as amended by the
Existing Deed of Trust Amendment, either as originally executed or as it
may from time to time be supplemented, modified, amended, extended or
supplanted.
"New Orleans Preferred Ship's Mortgages" means the preferred ship's
--------------------------------------
mortgages executed and delivered by Louisiana-I Gaming, L.P. covering the
New Orleans Vessels, substantially in the form of the Model Preferred
Ship's Mortgage, either as originally executed or as it may from time to
time be supplemented, modified, amended, extended or supplanted.
"New Orleans Property" means the real property and improvements
--------------------
thereon known as the "Boomtown New Orleans Casino" located just outside New
Orleans, Louisiana, comprised of approximately 50 acres in a fee simple
estate and related easements and appurtenances.
"New Orleans Vessels" means (a) "Boomtown Belle", a vessel documented
-------------------
under the Laws of the United States of America and (b) "Boomtown Belle II",
a vessel documented under the Laws of the United States of America.
"New Subordinated Debt" means Indebtedness of Borrower that (a) does
---------------------
not have any scheduled principal payment, mandatory principal prepayment or
sinking fund payment due prior to December 31, 2004, (b) is not secured by
any
-29-
<PAGE>
Lien on any Property of Borrower or any of the Restricted Subsidiaries, (c)
is subordinated by its terms in right of payment to the Obligations
pursuant to provisions acceptable to the Requisite Banks, (d) is subject to
such financial and other covenants and events of defaults as may be
acceptable to the Requisite Banks and (e) is subject to customary interest
blockage and delayed acceleration provisions as may be acceptable to the
Requisite Banks; provided that subordination provisions, financial and
--------
other covenants, events of defaults, interest blockage and delayed
acceleration provisions identical in all material respects to those
applicable to the Existing Subordinated Notes shall be deemed acceptable to
the Requisite Banks for purposes of clauses (c), (d) and (e) of this
--- --- ---
definition.
"Note" means the promissory note made by Borrower to a Bank evidencing
----
the Advances under that Bank's Pro Rata Share of the Commitment,
substantially in the form of Exhibit G, either as originally executed or as
---------
the same may from time to time be supplemented, modified, amended, renewed,
extended or supplanted.
"Obligations" means all present and future obligations of every kind
-----------
or nature of Borrower or any Significant Subsidiary at any time and from
time to time owed to the Administrative Agent, the Issuing Bank, the Swing
Line Bank or the Banks or any one or more of them, under any one or more of
the Loan Documents, whether due or to become due, matured or unmatured,
liquidated or unliquidated, or contingent or noncontingent, including
---------
obligations of performance as well as obligations of payment, and including
---------
interest that accrues after the commencement of any proceeding under any
Debtor Relief Law by or against Borrower or any Subsidiary or Affiliate of
Borrower.
"Omnibus Ancillary Documents Amendment" means the Omnibus Ancillary
-------------------------------------
Documents Amendment amending various of the Loan Documents to be executed
by Borrower and the Subsidiary Guarantors, in the form of Exhibit H,
---------
together with all ancillary amendments to the Loan Documents referred to
therein.
"Opinions of Counsel" means the favorable written legal opinions of
-------------------
(a) Irell & Manella, special counsel to Borrower and the Restricted
Subsidiaries, (b) Schreck Morris, special Nevada counsel to Borrower and
the Restricted Subsidiaries, (c) Jennings, Strouss and Salmon, P.L.C.,
special Arizona counsel to Borrower and the Restricted Subsidiaries, (d)
Watkins Ludlam Winter & Stennis, P.A., special Mississippi counsel to
Borrower and the Restricted Subsidiaries and (e) Smith Martin, special
Louisiana counsel to Borrower and the Restricted Subsidiaries, (f) Leonard,
Street & Deinard, special Minnesota counsel to
-30-
<PAGE>
Borrower and the Restricted Subsidiaries, in the form, respectively of
Exhibits I-1, I-2, I-3, I-4, I-5 and I-6, and in each case together with
------------ --- --- --- --- ---
copies of all factual certificates and legal opinions upon which such
counsel has relied.
"Outside Letters of Credit" means letters of credit issued for the
-------------------------
account of Borrower which are not Letters of Credit issued pursuant to
Section 2.4.
---
"Party" means any Person other than the Administrative Agent, the
----- ----- ----
Issuing Bank, the Swing Line Bank, the Co-Agents and the Banks, which now
or hereafter is a party to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
----
thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such term
------------
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan,
----------
which is subject to Title IV of ERISA and is maintained by Borrower or any
of its Subsidiaries or to which Borrower or any of its Subsidiaries
contributes or has an obligation to contribute.
"Permitted Encumbrances" means:
----------------------
(a) Inchoate Liens incident to construction on or maintenance of
Property; or Liens incident to construction on or maintenance of Property
now or hereafter filed of record for which adequate reserves have been set
aside (or deposits made pursuant to applicable Law) and which are being
contested in good faith by appropriate proceedings and have not proceeded
to judgment, provided that, by reason of nonpayment of the obligations
--------
secured by such Liens, no such Property is subject to a material risk of
loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not
yet past due; or Liens for taxes and assessments on Property for which
adequate reserves have been set aside and are being contested in good faith
by appropriate proceedings and have not proceeded to judgment, provided
--------
that, by reason of nonpayment of the obligations secured by such Liens, no
such Property is subject to a material risk of loss or forfeiture;
(c) minor defects and irregularities in title to any Property
which in the aggregate do not materially impair the fair market value or
use of the Prop erty for the purposes for which it is or may reasonably be
expected to be held;
-31-
<PAGE>
(d) easements, exceptions, reservations, or other agreements for
the purpose of pipelines, conduits, cables, wire communication lines, power
lines and substations, streets, trails, walkways, drainage, irrigation,
water, and sewerage purposes, dikes, canals, ditches, the removal of oil,
gas, coal, or other minerals, and other like purposes affecting Property,
facilities, or equipment which in the aggregate do not materially burden or
impair the fair market value or use of such Property for the purposes for
which it is or may reasonably be expected to be held;
(e) easements, exceptions, reservations, or other agreements for
the purpose of facilitating the joint or common use of Property in or
adjacent to a shopping center or similar project affecting Property which
in the aggregate do not materially burden or impair the fair market value
or use of such Property for the purposes for which it is or may reasonably
be expected to be held;
(f) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental Agency
with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental Agency
with respect to, any right, power, franchise, grant, license, or permit;
(h) present or future zoning laws and ordinances or other laws
and ordinances restricting the occupancy, use, or enjoyment of Property;
(i) statutory Liens, other than those described in clauses (a)
or (b) above, arising in the ordinary course of business with respect to
obligations which are not delinquent or are being contested in good faith,
provided that, if delinquent, adequate reserves have been set aside with
--------
respect thereto and, by reason of nonpayment, no Property is subject to a
material risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of
Property which in the aggregate do not materially impair the fair market
value or use of the Property for the purposes for which it is or may
reasonably be expected to be held;
-32-
<PAGE>
(k) rights of tenants under leases and rental agreements
covering Property entered into in the ordinary course of business of the
Person owning such Property;
(l) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar legislation,
including Liens of judgments thereunder which are not currently
---------
dischargeable;
(m) Liens consisting of pledges or deposits of Property to
secure performance in connection with operating leases made in the ordinary
course of business to which Borrower or a Subsidiary of Borrower is a party
as lessee, provided the aggregate value of all such pledges and deposits in
--------
connection with any such lease does not at any time exceed 20% of the
annual fixed rentals payable under such lease;
(n) Liens consisting of deposits of Property to secure bids made
with respect to, or performance of, contracts (other than contracts
----- ----
creating or evidencing an extension of credit to the depositor);
(o) Liens consisting of any right of offset, or statutory
bankers' lien, on bank deposit accounts maintained in the ordinary course
of business so long as such bank deposit accounts are not established or
maintained for the purpose of providing such right of offset or bankers'
lien;
(p) Liens consisting of deposits of Property to secure statutory
obligations of Borrower or a Subsidiary of Borrower;
(q) Liens consisting of deposits of Property to secure (or in
lieu of) surety, appeal or customs bonds in proceedings to which Borrower
or a Subsidiary of Borrower is a party;
(r) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or a Subsidiary of Borrower in the ordinary
course of its business which is currently being contested in good faith by
appropriate proceedings, provided that such Lien is junior to the Lien of
--------
the Collateral Documents, adequate reserves have been set aside and no
material Property is subject to a material risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the ordinary course
of business but not in connection with an extension of credit, which do not
in the
<PAGE>
aggregate, when taken together with all other Liens, materially impair
the value or use of the Property of the Borrower and the Subsidiaries of
Borrower, taken as a whole.
"Permitted Right of Others" means a Right of Others consisting of (a)
-------------------------
an interest (other than a legal or equitable co-ownership interest, an
----------
option, warrant or other right to acquire a legal or equitable co-ownership
interest and any interest of a ground lessor under a ground lease) that
does not materially impair the value or use of Property for the purposes
for which it is or may reasonably be expected to be held, (b) an option or
right to acquire a Lien that would be a Permitted Encumbrance, (c) the
subordination of a lease or sublease in favor of a financing entity holding
an obligation not otherwise prohibited hereunder, and (d) a license, or
similar right, of or to Intangible Assets granted in the ordinary course of
business.
"Person" means any individual or entity, including a trustee,
------ ---------
corporation, limited liability company, general partnership, limited
partnership, joint stock company, trust, estate, unincorporated
organization, business association, firm, joint venture, Governmental
Agency, or other entity.
"Phoenix Deed of Trust" means the Deed of Trust executed and delivered
---------------------
by Turf Paradise, Inc. covering the Phoenix Property, substantially in the
form of the Model Deed of Trust, as amended by the Existing Deed of Trust
Amendment, either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Phoenix Eagle Property" means approximately 12 undeveloped acres of
----------------------
the Phoenix Property (excluding the Phoenix Excess Property) that may, upon
---------
request of Borrower, be released from the Lien of the Phoenix Deed of Trust
in connection with the sale to Eagle Hardware & Garden, Inc., subject to
the conditions therein set forth and to compliance with Section 2.13.
----
"Phoenix Excess Property" means up to 88 undeveloped acres of the
-----------------------
Phoenix Property (excluding the Phoenix Eagle Property) that may, upon
---------
request of Borrower, be released from the Lien of the Phoenix Deed of Trust
in connection with the sale thereof to a Person that is not an Affiliate of
Borrower, subject to the conditions set forth therein and to compliance
with Section 2.13.
----
"Phoenix Property" means the real property and improvements thereon
----------------
known as the "Turf Paradise Race Track" located in Phoenix, Arizona,
comprised
-34-
<PAGE>
of approximately 275 acres in a fee simple estate and related easements and
appurtenances.
"Pledge Agreement (Gaming Regulated)" means each pledge agreement
-----------------------------------
executed and delivered by Borrower and the Subsidiary Guarantors in the
form of Exhibit H to the Prior Loan Agreement covering the Pledged
---------
Collateral (Gaming Regulated), either as originally executed or as it may
from time to time be supplemented, modified, amended, extended or
supplanted.
"Pledge Agreement (General)" means the pledge agreement executed and
--------------------------
delivered by Borrower and the Subsidiary Guarantors in the form of Exhibit
-------
I to the Prior Loan Agreement covering the Pledged Collateral (General),
-
either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Pledged Collateral (Gaming Regulated)" means (a) the certificates
-------------------------------------
evidencing all of the shares of capital stock (or other equity interests,
as applicable) owned by Borrower or any Subsidiary thereof in (i) Boomtown
Hotel & Casino, Inc., (ii) Bayview Yacht Club, Inc., (iii) Louisiana Gaming
Enterprises, Inc., (iv) Mississippi-I Gaming, L.P., (v) Louisiana-I Gaming,
L.P., (vi) Boomtown, Inc., (vii) Turf Paradise, Inc., (viii) Mardi Gras
Casino Corp., (ix) Jefferson Casino Corp. and (x) Biloxi Casino Corp and
(b) the certificates (if any) evidencing all of the shares of capital stock
and other equity interests directly held by Borrower or any of the
Subsidiary Guarantors in Foreign Subsidiaries (but not in excess of 65% of
the outstanding shares of capital stock or other equity interests of any
Foreign Subsidiary).
"Pledged Collateral (General)" means (a) the certificates evidencing
----------------------------
all of the shares of capital stock and other equity interests held by
Borrower or any of the Significant Subsidiaries in all Subsidiaries of
Borrower (other than (i) the Pledged Collateral (Gaming Regulated) and (ii)
----------
Casino Magic of Louisiana Corp. and (b) the Intercompany Notes.
"Preferred Ship's Mortgages" means (a) the Biloxi BT Preferred Ship's
--------------------------
Mortgage and (b) the New Orleans Preferred Ship's Mortgages.
"Pricing Certificate" means a certificate in the form of Exhibit J,
------------------- ---------
properly completed and signed by a Senior Officer of Borrower.
-35-
<PAGE>
"Pricing Period" means (a) the period commencing on the Closing Date
--------------
and ending on November 30, 1998, (b) the period commencing on each December
1 and ending on the next following February 28 (or 29, if a leap year), (c)
the period commencing on each March 1 and ending on the next following May
31, (d) the period commencing on each June 1 and ending on the next
following August 31, and (e) the period commencing on each September 1 and
ending on the next following November 30.
"Prior Loan Agreement" means that certain Reducing Revolving Loan
--------------------
Agreement dated as of March 27, 1997 among Borrower, the Banks party
thereto and Bank of America National Trust and Savings Association, as
heretofore amended.
"Projections" means the financial projections dated July 27, 1998
-----------
distributed by or on behalf of Borrower to the Banks.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Property Held For Sale" means (a) the unimproved real property
----------------------
located on U.S. Highway 90 near Bay St. Louis, Mississippi comprised of
approximately 9 acres of fee simple estate and (b) the unimproved real
property located in St. Louis, Missouri comprised of two parcels
aggregating approximately 3.7 acres in fee simple estate.
"Pro Rata Share" means, with respect to each Bank, the percentage of
--------------
the Commitment set forth opposite the name of that Bank on Schedule 1.1, as
------------
such percentage may be increased or decreased pursuant to a Commitment
Assignment and Acceptance executed in accordance with Section 11.8.
----
"Quarterly Payment Date" means each June 30, September 30, December 31
----------------------
and March 31.
"Real Property" means, as of any date of determination, all real
-------------
Property then or theretofore owned, leased or occupied by Borrower or any
of the Restricted Subsidiaries.
"Real Property Collateral" means (a) the Hollywood Park Property, (b)
------------------------
the Crystal Park Property, (c) the Phoenix Property, (d) the Reno Property,
(e) the
-36-
<PAGE>
Biloxi BT Property, (f) the New Orleans Property, (g) the Biloxi CM
Property and (h) the Bay St. Louis Property.
"Redemption" means the complete redemption of all of the Mississippi
----------
First Mortgage Notes pursuant to the notice of redemption issued by CMC on
the Closing Date.
"Reduction Amount" means, with respect to each Reduction Date, (a) if
----------------
the Facility Increase has not occurred, the amount set forth below opposite
the period in which that Reduction Date occurs (subject to the last
sentence of Sections 2.5 and 2.7):
--- ---
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
March 31, 2001
through December 31, 2002 $15,000,000
March 31, 2003
through September 30, 2003 $25,000,000
</TABLE>
and (b) if the Facility Increase has occurred, the Reduction Amount for the
period (i) March 31, 2001 through December 31, 2002 shall be the sum of
------
$15,000,000 plus 5% of the Facility Increase Amount and (ii) March 31, 2003
----
through September 30, 2003 shall be the sum of $25,000,000 plus 8.333% of
------
the Facility Increase Amount.
"Reduction Date" means March 31, 2001 and each Quarterly Payment Date
--------------
thereafter through September 30, 2003.
"Reference Rate" means the rate of interest publicly announced from
--------------
time to time by the Domestic Reference Bank in San Francisco, California
(or other headquarters city of the Domestic Reference Bank), as its
"reference rate." It is a rate set by the Domestic Reference Bank based
upon various factors including the Domestic Reference Bank's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in the Reference Rate announced
by the Domestic Reference Bank shall take effect at the opening of business
on the day specified in the public announcement of such change.
-37-
<PAGE>
"Regulation D" means Regulation D, as at any time amended, of the
------------
Board of Governors of the Federal Reserve System, or any other regulation
in substance substituted therefor.
"Regulation U" means Regulation U, as at any time amended, of the
------------
Board of Governors of the Federal Reserve System, or any other regulation
in substance substituted therefor.
"Reno Deed of Trust" means the Deed of Trust executed and delivered by
------------------
Boomtown Hotel & Casino, Inc. covering the Reno Property, substantially in
the form of the Model Deed of Trust, as amended by the Existing Deed of
Trust Amendment, either as originally executed or as it may from time to
time be supplemented, modified, amended, extended or supplanted.
"Reno Project" means construction of additional hotel rooms, a
------------
restaurant, an entertainment lounge, meeting rooms, retail space and
parking facilities at the Reno Property.
"Reno Property" means the real property and improvements thereon known
-------------
as the "Boomtown Hotel & Casino" located just outside Reno, Nevada,
comprised of approximately 865 acres in a fee simple estate and related
easements and appurtenances.
"Request for Letter of Credit" means a written request for a Letter of
----------------------------
Credit substantially in the form of Exhibit K, signed by a Responsible
---------
Official of Borrower and properly completed to provide all information
required to be included therein.
"Request for Loan" means a written request for a Loan substantially in
----------------
the form of Exhibit L, signed by a Responsible Official of Borrower and
---------
properly completed to provide all information required to be included
therein.
"Requirement of Law" means, as to any Person, the articles or
------------------
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, 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.
"Requisite Banks" means (a) as of any date of determination if the
---------------
Commitment is then in effect, Banks having in the aggregate 66 2/3% or more
of
-38-
<PAGE>
the Commitment then in effect and (b) as of any date of determination if
the Commitment has then been terminated and there is then any Indebtedness
evidenced by the Notes, Banks holding Notes evidencing in the aggregate 66
2/3% or more of the aggregate Indebtedness then evidenced by the Notes.
"Responsible Official" means (a) when used with reference to a Person
--------------------
other than an individual, any corporate officer of such Person, general
partner of such Person, corporate officer of a corporate general partner of
such Person, or corporate officer of a corporate general partner of a
partnership that is a general partner of such Person, or any other
responsible official thereof duly acting on behalf thereof, and (b) when
used with reference to a Person who is an individual, such Person. The
Banks shall be entitled to conclusively rely upon any document or
certificate that is signed or executed by a Responsible Official of
Borrower or any of its Subsidiaries as having been authorized by all
necessary corporate partnership and/or other action on the part of Borrower
or such Subsidiary.
"Restricted Subsidiary" means, as of any date of determination, all
---------------------
Subsidiaries of Borrower other than the Unrestricted Subsidiaries.
----- ----
"Right of Others" means, as to any Property in which a Person has an
---------------
interest, any legal or equitable right, title or other interest (other than
a Lien) held by any other Person in that Property, and any option, warrant
or other right held by any other Person to acquire any such right, title or
other interest in that Property, including any option or right to acquire a
---------
Lien; provided, however, that (a) any covenant restricting the use or
--------
disposition of Property of such Person contained in any Contractual
Obligation of such Person and (b) any provision contained in a contract
creating a right of payment or performance in favor of a Person that
conditions, limits, restricts, diminishes, transfers or terminates such
right, shall not be deemed to constitute a Right of Others.
"Schedule Date" means, with respect to any Schedule to this Agreement,
-------------
the date as of which the representations made in such Schedule are
initially made, which shall in each case be indicated in the title thereof.
However, a Schedule Date shall not qualify any subsequent representation or
warranty by the Borrower that the statements made in such Schedule continue
to be accurate as of any later date.
"Secured Swap Agreement" means a Swap Agreement between Borrower and a
----------------------
Bank (or an Affiliate of a Bank).
-39-
<PAGE>
"Security Agreement" means each security agreement executed and
------------------
delivered by Borrower and the Subsidiary Guarantors, in the form of Exhibit
-------
M to the Prior Loan Agreement, either as originally executed or as it may
-
from time to time be supplemented, modified, amended, extended or
supplanted.
"Senior Funded Debt" means Funded Debt that is not a Subordinated
------------------
Obligation.
"Senior Funded Debt Ratio" means, as of the last day of each Fiscal
------------------------
Quarter, the ratio of (a) Average Quarterly Senior Funded Debt to (b)
----- -- --
Adjusted EBITDA for the fiscal period consisting of that Fiscal Quarter and
the three immediately preceding Fiscal Quarters.
"Senior Officer" means the (a) chief executive officer, (b) president,
--------------
(c) executive vice president, (d) senior vice president, (e) chief
financial officer or (f) treasurer of Borrower.
"Significant Subsidiary" means (a) each Restricted Subsidiary that
----------------------
holds title to any portion of the Real Property Collateral, (b) each
Restricted Subsidiary that holds title to any Property acquired after the
Closing Date which is required to be pledged as future Collateral pursuant
to Section 5.10 and (c) as of any date of determination, each other
----
Restricted Subsidiary that had, on the last day of the Fiscal Quarter then
most recently ended, total assets with a book value or fair market value of
$500,000 or more.
"Special Eurodollar Circumstance" means the application or adoption
-------------------------------
after the Closing Date of any Law or interpretation, or any change therein
or thereof, or any change in the interpretation or administration thereof
by any Governmental Agency, central bank or comparable authority charged
with the interpretation or administration thereof, or compliance by any
Bank or its Eurodollar Lending Office with any request or directive
(whether or not having the force of Law) of any such Governmental Agency,
central bank or comparable authority, or the existence or occurrence of
circumstances affecting the Designated Eurodollar Market generally that are
beyond the reasonable control of the Banks.
"Standby Letter of Credit" means each Letter of Credit that is not a
------------------------
Commercial Letter of Credit.
"Stockholders' Equity" means, as of any date of determination and with
--------------------
respect to any Person, the consolidated stockholders' equity of the Person
as of that
-40-
<PAGE>
date determined in accordance with Generally Accepted Accounting
Principles; provided that there shall be excluded from Stockholders' Equity
--------
any amount attributable to Disqualified Stock.
"Subordinated Obligations" means (a) the Existing Subordinated Notes,
------------------------
(b) any New Subordinated Debt and (c) any other Indebtedness of Borrower
which is subordinated in right of payment to the Obligations in form and
substance acceptable to the Requisite Banks.
"Subsidiary" means, as of any date of determination and with respect
----------
to any Person, any corporation, limited liability company or partnership
(whether or not, in any case, characterized as such or as a "joint
venture"), whether now existing or hereafter organized or acquired: (a) in
the case of a corporation or limited liability company, of which a majority
of the securities having ordinary voting power for the election of
directors or other governing body (other than securities having such power
only by reason of the happening of a contingency) are at the time
beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (b) in the case of a partnership, of which a majority of the
partnership or other ownership interests are at the time beneficially owned
by such Person and/or one or more of its Subsidiaries.
"Subsidiary Guarantors" means the Significant Subsidiaries other than
--------------------- ----------
(a) so long as the Louisiana First Mortgage Notes are outstanding, the CMC
Louisiana Subsidiaries and (b) the Foreign Subsidiaries.
"Subsidiary Guaranty (Crystal Park)" means the continuing limited
----------------------------------
guaranty of the Obligations executed and delivered by Crystal Park Hotel &
Casino Development Co., LLC, in the form of Exhibit N to the Prior Loan
---------
Agreement, either as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Subsidiary Guaranty (General)" means the continuing guaranty of the
-----------------------------
Obligations executed and delivered by the Subsidiary Guarantors (other than
----- ----
Crystal Park Hotel & Casino Development Co., LLC), in the form of Exhibit O
---------
to the Prior Loan Agreement, either as originally executed or as it may
from time to time be supplemented, modified, amended, extended or
supplanted.
"Swap Agreement" means a written agreement between Borrower and one or
--------------
more financial institutions providing for "swap", "cap", "collar" or other
interest rate protection with respect to any Indebtedness.
-41-
<PAGE>
"Swing Line" means the revolving line of credit established by the
----------
Swing Line Bank in favor of Borrower pursuant to Section 2.10.
----
"Swing Line Bank" means Bank of America National Trust and Savings
---------------
Association.
"Swing Line Documents" means the promissory note and any other
--------------------
documents executed by Borrower in favor of the Swing Line Bank in
connection with the Swing Line.
"Swing Line Loans" means loans made by the Swing Line Bank to Borrower
----------------
pursuant to Section 2.10.
----
"Swing Line Outstandings" means, as of any date of determination, the
-----------------------
aggregate principal Indebtedness of Borrower on all Swing Line Loans then
outstanding.
"Title Company" means First American Title Insurance Company or such
-------------
other title insurance company as is reasonably acceptable to the
Administrative Agent.
"to the best knowledge of" means, when modifying a representation,
------------------------
warranty or other statement of any Person, that the fact or situation
described therein is known by the Person (or, in the case of a Person other
than a natural Person, known by a Responsible Official of that Person)
making the representation, warranty or other statement, or with the
exercise of reasonable due diligence under the circumstances (in accordance
with the standard of what a reasonable Person in similar circumstances
would have done) would have been known by the Person (or, in the case of a
Person other than a natural Person, would have been known by a Responsible
Official of that Person).
"Trademark Collateral Assignment" means the trademark collateral
-------------------------------
assignment executed and delivered by Borrower and the Subsidiary Guarantors
in the form of Exhibit P to the Prior Loan Agreement, either as originally
---------
executed or as it may from time to time be supplemented, modified, amended,
extended or supplanted.
"type", when used with respect to any Loan or Advance, means the
----
designation of whether such Loan or Advance is an Alternate Base Rate Loan
or Advance, or a Eurodollar Rate Loan or Advance.
-42-
<PAGE>
"Unrestricted Subsidiary" means each of (a) Sunflower Racing, Inc.,
-----------------------
(b) any Subsidiary of Sunflower Racing, Inc., (c) so long as the aggregate
----------
net Investments made by Borrower in the CMC Louisiana Subsidiaries
subsequent to the Closing Date are less than $10,000,000, the CMC Louisiana
Subsidiaries, (d) so long as (i) it does not engage in any business
----------
activity other than the provision of management services to the CMC
Louisiana Subsidiaries, (ii) it does not have any assets other than assets
----- ----
necessary for the conduct of such business activity and (iii) the CMC
Louisiana Subsidiaries remain Unrestricted Subsidiaries under clause (c) of
---
this definition, Casino Magic Management Services, Inc. and (e) a
Subsidiary of Borrower to which the Hollywood Park Stadium Property is
transferred following release from the Hollywood Park Deed of Trust
pursuant to Section 2.13.
----
1.2 Use of Defined Terms. Any defined term used in the plural
--------------------
shall refer to all members of the relevant class, and any defined term used in
the singular shall refer to any one or more of the members of the relevant
class.
1.3 Accounting Terms. All accounting terms not specifically
----------------
defined in this Agreement shall be construed in conformity with, and all
financial data required to be submitted by this Agreement shall be prepared in
conformity with, Generally Accepted Accounting Principles applied on a
consistent basis, except as otherwise specifically prescribed herein. In the
------
event that Generally Accepted Accounting Principles change during the term of
this Agreement such that the covenants contained in Sections 6.11 through 6.14
---- ----
would then be calculated in a different manner or with different components, (a)
Borrower and the Banks agree to amend this Agreement in such respects as are
necessary to conform those covenants as criteria for evaluating Borrower's
financial condition to substantially the same criteria as were effective prior
to such change in Generally Accepted Accounting Principles and (b) Borrower
shall be deemed to be in compliance with the covenants contained in the
aforesaid Sections if and to the extent that Borrower would have been in
compliance therewith under Generally Accepted Accounting Principles as in effect
immediately prior to such change, but shall have the obligation to deliver each
of the materials described in Article 7 to the Administrative Agent and the
---------
Banks, on the dates therein specified, with financial data presented in a manner
which conforms with Generally Accepted Accounting Principles as in effect
immediately prior to such change.
1.4 Rounding. Any financial ratios required to be maintained by
--------
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or
-43-
<PAGE>
down to the nearest number (with a round-up if there is no nearest number) to
the number of places by which such ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
----------------------
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 References to "Borrower and its Subsidiaries". Any reference
--------------------------------------------
herein to "Borrower and its Subsidiaries" or the like shall refer solely to
Borrower during such times, if any, as Borrower shall have no Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is disjunctive; the term
-------------------
"and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also apply to
males. The term "including" is by way of example and not limitation.
-44-
<PAGE>
ARTICLE 2
LOANS AND LETTERS OF CREDIT
---------------------------
2.1 Loans-General.
-------------
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through
the Maturity Date, each Bank shall, pro rata according to that Bank's Pro
Rata Share of the then applicable Commitment, make Advances to Borrower
under the Commitment in such amounts as Borrower may request that do not
result in the sum of (i) the aggregate principal amount outstanding under
------
the Notes, plus (ii) the Aggregate Effective Amount of all outstanding
----
Letters of Credit, plus (iii) the Aggregate Effective Amount of all
----
outstanding Outside Letters of Credit, plus (iv) the Swing Line
----
Outstandings exceeding the then applicable Commitment. Subject to the
limitations set forth herein, Borrower may borrow, repay and reborrow under
the Commitment without premium or penalty.
(b) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i) date
of such Loan, (ii) type of Loan, (iii) amount of such Loan, and (iv) in the
case of a Eurodollar Rate Loan, the Interest Period for such Loan. Unless
the Administrative Agent has notified, in its sole and absolute discretion,
Borrower to the contrary, a Loan may be requested by telephone by a
Responsible Official of Borrower, in which case Borrower shall confirm such
request by promptly delivering a Request for Loan in person or by
telecopier conforming to the preceding sentence to the Administrative
Agent. Administrative Agent shall incur no liability whatsoever hereunder
in acting upon any telephonic request for Loan purportedly made by a
Responsible Official of Borrower, and Borrower hereby agrees to indemnify
the Administrative Agent from any loss, cost, expense or liability as a
result of so acting. In the case of the initial Loan and Letters of Credit
to be made and issued on the Closing Date, the related Request for Loan and
Request for Letter of Credit to be delivered by the Borrower shall be
delivered to the Administrative Agent no later than 12:00 noon (California
time), one day before the Closing Date, and such Loan shall be an Alternate
Base Rate Loan.
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Bank by telephone or telecopier (and
if by telephone, promptly confirmed by telecopier) of the date and type of
the Loan, the applicable Interest Period, and that Bank's Pro Rata Share of
the Loan. Not later
-45-
<PAGE>
than 11:00 a.m., California time, on the date specified for any Loan (which
must be a Banking Day), each Bank shall make its Pro Rata Share of the Loan
in immediately available funds available to the Administrative Agent at the
Administrative Agent's Office. Upon satisfaction or waiver of the
applicable conditions set forth in Article 8, all Advances shall be
---------
credited on that date in immediately available funds to the Designated
Deposit Account.
(d) Unless the Requisite Banks otherwise consent, each Loan shall
be not less than $5,000,000.
(e) The Advances made by each Bank shall be evidenced by that
Bank's Note.
(f) A Request for Loan shall be irrevocable upon the
Administrative Agent's first notification thereof.
(g) If no Request for Loan (or telephonic request for Loan
referred to in the second sentence of Section 2.1(b), if applicable) has
------
been made within the requisite notice periods set forth in Section 2.2 or
---
2.3 prior to the end of the Interest Period for any Eurodollar Rate Loan,
---
then on the last day of such Interest Period, such Eurodollar Rate Loan
shall be automatically converted into an Alternate Base Rate Loan in the
same amount.
(h) If a Loan is to be made on the same date that another Loan is
due and payable, Borrower or the Banks, as the case may be, shall make
available to the Administrative Agent the net amount of funds giving effect
to both such Loans and the effect for purposes of this Agreement shall be
the same as if separate transfers of funds had been made with respect to
each such Loan.
2.2 Alternate Base Rate Loans. Each request by Borrower for an
-------------------------
Alternate Base Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for loan referred to in the second sentence of
Section 2.1(b), if applicable) received by the Administrative Agent, at the
------
Administrative Agent's Office, not later than 9:00 a.m. California time, on the
date (which must be a Banking Day) of the requested Alternate Base Rate Loan.
All Loans shall constitute Alternate Base Rate Loans unless properly designated
as a Eurodollar Rate Loan pursuant to Section 2.3.
---
-46-
<PAGE>
2.3 Eurodollar Rate Loans.
---------------------
(a) Each request by Borrower for a Eurodollar Rate Loan shall
be made pursuant to a Request for Loan (or telephonic or other request for
Loan referred to in the second sentence of Section 2.1(b), if applicable)
------
received by the Administrative Agent, at the Administrative Agent's Office,
not later than 9:00 a.m., California time, at least three (3) Eurodollar
Banking Days before the first day of the applicable Eurodollar Period.
(b) On the date which is two (2) Eurodollar Banking Days before
the first day of the applicable Eurodollar Period, the Administrative Agent
shall confirm its determination of the applicable Eurodollar Rate (which
determination shall be conclusive in the absence of manifest error) and
promptly shall give notice of the same to Borrower and the Banks by
telephone or telecopier (and if by telephone, promptly confirmed by
telecopier).
(c) Unless the Administrative Agent and the Requisite Banks
otherwise consent, no more than ten (10) Eurodollar Rate Loans shall be out
standing at any one time.
(d) No Eurodollar Rate Loan may be requested during the
continuation of a Default or Event of Default.
(e) Nothing contained herein shall require any Bank to fund any
Eurodollar Rate Advance in the Designated Eurodollar Market.
2.4 Letters of Credit.
-----------------
(a) Subject to the terms and conditions hereof, at any time
and from time to time from the Closing Date through the Maturity Date, the
Issuing Bank shall issue such Letters of Credit under the Commitment as
Borrower may request by a Request for Letter of Credit; provided that (i)
--------
giving effect to all such Letters of Credit, the sum of (A) the aggregate
---
principal amount outstanding under the Notes, plus (B) the Aggregate
----
Effective Amount of all outstanding Letters of Credit, plus (C) the
----
Aggregate Effective Amount of all outstanding Outside Letters of Credit,
plus (D) the Swing Line Outstandings do not exceed the then applicable
----
Commitment and (ii) the Aggregate Effective Amount under all outstanding
Letters of Credit shall not exceed $30,000,000. Each Letter of Credit
shall be in a form acceptable to the Issuing Bank. Unless all the Banks
otherwise consent in a writing delivered to the Administrative Agent, the
term of any Letter of Credit
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<PAGE>
shall not exceed one (1) year (except Letters of Credit (x) in support of
------
Borrower's workers compensation self-insurance program, which may have a
term of up to 395 days, and (y) with automatic renewal provisions, so long
as such provisions permit the Issuing Bank to decline to renew such Letter
of Credit in its discretion on each anniversary of the issuance thereof,
and are otherwise on terms acceptable to the Administrative Agent) or
extend beyond the Maturity Date.
(b) Each Request for Letter of Credit shall be submitted to the
Issuing Bank, with a copy to the Administrative Agent, at least five (5)
Banking Days prior to the date upon which the related Letter of Credit is
proposed to be issued. The Administrative Agent shall promptly notify the
Issuing Bank whether such Request for Letter of Credit, and the issuance of
a Letter of Credit pursuant thereto, conforms to the requirements of this
Agreement. Upon issuance of a Letter of Credit, the Issuing Bank shall
promptly notify the Administrative Agent, and the Administrative Agent
shall promptly notify the Banks, of the amount and terms thereof.
(c) Upon the issuance of a Letter of Credit, each Bank shall be
deemed to have purchased a pro rata participation in such Letter of Credit
from the Issuing Bank in an amount equal to that Bank's Pro Rata Share.
Without limiting the scope and nature of each Bank's participation in any
Letter of Credit, to the extent that the Issuing Bank has not been
reimbursed by Borrower for any payment required to be made by the Issuing
Bank under any Letter of Credit, each Bank shall, pro rata according to its
Pro Rata Share, reimburse the Issuing Bank through the Administrative Agent
promptly upon demand for the amount of such payment. The obligation of each
Bank to so reimburse the Issuing Bank shall be absolute and unconditional
and shall not be affected by the occurrence of an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of Borrower to reimburse the Issuing Bank
for the amount of any payment made by the Issuing Bank under any Letter of
Credit together with interest as hereinafter provided.
(d) Borrower agrees to pay to the Issuing Bank through the
Administrative Agent an amount equal to any payment made by the Issuing
Bank with respect to each Letter of Credit within one (1) Banking Day after
demand made by the Issuing Bank therefor, together with interest on such
amount from the date of any payment made by the Issuing Bank at the rate
applicable to Alternate Base Rate Loans for three Business Days and
thereafter at the Default Rate. The principal amount of any such payment
shall be used to reimburse the Issuing Bank for the payment made by it
under the Letter of Credit and, to the extent that the
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<PAGE>
Banks have not reimbursed the Issuing Bank pursuant to Section 2.4(c), the
-----
interest amount of any such payment shall be for the account of the Issuing
Bank. Each Bank that has reimbursed the Issuing Bank pursuant to Section
2.4(c) for its Pro Rata Share of any payment made by the Issuing Bank under
-----
a Letter of Credit shall thereupon acquire a pro rata participation, to the
extent of such reimburse ment, in the claim of the Issuing Bank against
Borrower for reimbursement of principal and interest under this Section
2.4(d) and shall share, in accordance with that pro rata participation, in
------
any principal payment made by Borrower with respect to such claim and in
any interest payment made by Borrower (but only with respect to periods
subsequent to the date such Bank reimbursed the Issuing Bank) with respect
to such claim.
(e) Borrower may, pursuant to a Request for Loan, request that
Advances be made pursuant to Section 2.1(a) to provide funds for the
---
payment required by Section 2.4(d) and, for this purpose, the conditions
------
precedent set forth in Article 8 shall not apply. The proceeds of such
---------
Advances shall be paid directly to the Issuing Bank to reimburse it for the
payment made by it under the Letter of Credit.
(f) If Borrower fails to make the payment required by Section
2.4(d) within the time period therein set forth, in lieu of the
------
reimbursement to the Issuing Bank under Section 2.4(c) the Issuing Bank may
------
(but is not required to), without notice to or the consent of Borrower,
instruct the Administrative Agent to cause Advances to be made by the Banks
under the Commitment in an aggregate amount equal to the amount paid by the
Issuing Bank with respect to that Letter of Credit and, for this purpose,
the conditions precedent set forth in Article 8 shall not apply. The
---------
proceeds of such Advances shall be paid directly to the Issuing Bank to
reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any supplement, modification, amendment,
renewal, or extension to or of any Letter of Credit shall be treated in all
respects the same as the issuance of a new Letter of Credit.
(h) The obligation of Borrower to pay to the Issuing Bank the
amount of any payment made by the Issuing Bank under any Letter of Credit
shall be absolute, unconditional, and irrevocable, subject only to
performance by the Issuing Bank of its obligations to Borrower under
Uniform Commercial Code Section 5108. Without limiting the foregoing,
Borrower's obligations shall not be affected by any of the following
circumstances:
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<PAGE>
(i) any lack of validity or enforceability of the Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) any amendment or waiver of or any consent to departure
from the Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto, with the consent of Borrower;
(iii) the existence of any claim, setoff, defense, or other
rights which Borrower may have at any time against the Issuing Bank,
the Administrative Agent or any Bank, any beneficiary of the Letter of
Credit (or any persons or entities for whom any such beneficiary may
be acting) or any other Person, whether in connection with the Letter
of Credit, this Agreement, or any other agreement or instrument
relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid,
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect whatsoever so long as any such document
appeared substantially to comply with the terms of the Letter of
Credit;
(v) payment by the Issuing Bank in good faith under the
Letter of Credit against presentation of a draft or any accompanying
document which does not strictly comply with the terms of the Letter
of Credit;
(vi) the existence, character, quality, quantity, condition,
packing, value or delivery of any Property purported to be represented
by documents presented in connection with any Letter of Credit or any
difference between any such Property and the character, quality,
quantity, condition, or value of such Property as described in such
documents;
(vii) the time, place, manner, order or contents of
shipments or deliveries of Property as described in documents
presented in connection with any Letter of Credit or the existence,
nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
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<PAGE>
(ix) any failure or delay in notice of shipments or arrival
of any Property;
(x) any error in the transmission of any message relating
to a Letter of Credit not caused by the Issuing Bank, or any delay or
interruption in any such message;
(xi) any error, neglect or default of any correspondent of
the Issuing Bank in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, war,
insurrection, civil unrest, disturbances, labor disputes, emergency
conditions or other causes beyond the control of the Issuing Bank;
(xiii) so long as the Issuing Bank in good faith determines
that the contract or document appears substantially to comply with the
terms of the Letter of Credit, the form, accuracy, genuineness or
legal effect of any contract or document referred to in any document
submitted to the Issuing Bank in connection with a Letter of Credit;
and
(xiv) where the Issuing Bank has acted in good faith and
observed general banking usage, any other circumstances whatsoever.
(i) The Issuing Bank shall be entitled to the protection accorded
to the Administrative Agent pursuant to Section 10.6, mutatis mutandis.
---- ------- --------
(j) The Uniform Customs and Practice for Documentary Credits, as
published in its most current version by the International Chamber of
Commerce at the date of issuance of a Letter of Credit, shall apply to that
Letter of Credit (unless expressly otherwise provided in that Letter of
Credit).
2.5 Voluntary Reduction of Commitment. Borrower shall have the
---------------------------------
right, at any time and from time to time, without penalty or charge, upon at
least three (3) Banking Days' prior written notice by a Responsible Official of
Borrower to the Administrative Agent, voluntarily to reduce, permanently and
irrevocably, in aggregate principal amounts in an integral multiple of
$1,000,000 but not less than $5,000,000, or to terminate, all or a portion of
the then undisbursed portion of the Commitment. The Administrative Agent shall
promptly notify the Banks of any reduction or termination of
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the Commitment under this Section. Any reduction of the Commitment under this
Section shall be applied to the Reduction Amounts on the nearest Reduction
Dates.
2.6 Scheduled Reduction of Commitment. The Commitment shall
---------------------------------
automatically reduce on each Reduction Date by the Reduction Amount.
2.7 Automatic Reduction of Commitment. The Commitment shall
---------------------------------
automatically be reduced on the date after Borrower receives Net Cash Proceeds
from the Disposition of any Excess Property, by an amount equal to the sum of
--- --
(i) 75% of the first $72,000,000 of Net Cash Proceeds from all Dispositions of
Excess Property subsequent to the Closing Date plus (ii) 25% of any such Net
----
Cash Proceeds in excess of $72,000,000. The amount of Net Cash Proceeds shall be
estimated by Borrower for this purpose as of the date of receipt subject to
adjustment at such time as the actual Net Cash Proceeds are determined. Any
reduction of the Commitment under this Section shall be applied to the Reduction
Amounts on the most remote Reduction Dates.
2.8 Optional Termination of Commitment. Following the occurrence
----------------------------------
of a Change in Control, the Requisite Banks may in their sole and absolute
discretion elect, during the thirty (30) day period immediately subsequent to
the later of (a) such occurrence or (b) the earlier of (i) receipt of Borrower's
-------- -------
written notice to the Administrative Agent of such occurrence or (ii) if no such
notice has been received by the Administrative Agent, the date upon which the
Administrative Agent has actual knowledge thereof, to terminate the Commitment,
in which case the Commitment shall be terminated effective on the date which is
thirty (30) days subsequent to written notice from the Administrative Agent to
Borrower thereof.
2.9 Administrative Agent's Right to Assume Funds Available for
----------------------------------------------------------
Advances. Unless the Administrative Agent shall have been notified by any Bank
- --------
no later than 10:00 a.m., California time, on the Banking Day of the proposed
funding by the Administrative Agent of any Loan that such Bank does not intend
to make available to the Administrative Agent such Bank's portion of the total
amount of such Loan, the Administrative Agent may assume that such Bank has made
such amount available to the Administrative Agent on the date of the Loan and
the Administrative Agent may, in reli ance upon such assumption, make available
to Borrower a corresponding amount. If the Administrative Agent has made funds
available to Borrower based on such assumption and such corresponding amount is
not in fact made available to the Administrative Agent by such Bank, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent promptly shall notify Borrower and Borrower shall pay such corresponding
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<PAGE>
amount to the Administrative Agent. The Administrative Agent also shall be
entitled to recover from such Bank interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to the daily
Federal Funds Rate. Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its share of the Commitment or to prejudice any rights
which the Administrative Agent or Borrower may have against any Bank as a result
of any default by such Bank hereunder.
2.10 Swing Line.
----------
(a) The Swing Line Bank shall from time to time from the Closing
Date through the day prior to the Maturity Date make Swing Line Loans to
Borrower in such amounts as Borrower may request, provided that (a) after
--------
giving effect to such Swing Line Loan, the Swing Line Outstandings do not
exceed $10,000,000, (b) without the consent of all of the Banks, no Swing
Line Loan may be made during the continuation of an Event of Default and
(c) the Swing Line Bank has not given at least twenty-four (24) hours prior
notice to Borrower that availability under the Swing Line is suspended or
terminated. Borrower may borrow, repay and reborrow under this Section.
Unless notified to the contrary by the Swing Line Bank, borrowings under
the Swing Line may be made in amounts which are integral multiples of
$100,000 upon telephonic request by a Responsible Official of Borrower made
to the Administrative Agent not later than 1:00 p.m., California time, on
the Banking Day of the requested borrowing (which telephonic request shall
be promptly confirmed in writing by telecopier). Promptly after receipt of
such a request for borrowing, the Administrative Agent shall provide
telephonic verification to the Swing Line Bank that, after giving effect to
such request, availability for Loans will exist under Section 2.1 (and such
---
verification shall be promptly confirmed in writing by telecopier). Unless
notified to the contrary by the Swing Line Bank, each repayment of a Swing
Line Loan shall be in an amount which is an integral multiple of $100,000.
If Borrower instructs the Swing Line Bank to debit its demand deposit
account at the Swing Line Bank in the amount of any payment with respect to
a Swing Line Loan, or the Swing Line Bank otherwise receives repayment,
after 3:00 p.m., California time, on a Banking Day, such payment shall be
deemed received on the next Banking Day. The Swing Line Bank shall
promptly notify the Administrative Agent of the Swing Loan Outstandings
each time there is a change therein.
(b) Swing Line Loans shall bear interest at a fluctuating rate
per annum equal to the Alternate Base Rate plus (if applicable) an interest
----
rate equal to
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<PAGE>
the excess of the Applicable Alternate Base Rate Margin over the Applicable
Commitment Fee Rate or minus (if applicable) an interest rate equal to the
-----
excess of the Applicable Commitment Fee Rate over the Applicable Alternate
Base Rate Margin. Interest shall be payable on such dates, not more
frequent than monthly, as may be specified by the Swing Line Bank and in
any event on the Maturity Date. The Swing Line Bank shall be responsible
for invoicing Borrower for such interest. The interest payable on Swing
Line Loans is solely for the account of the Swing Line Bank (subject to
clause (d) below).
(c) The Swing Line Loans shall be payable on demand made by the
Swing Line Bank and in any event on the Maturity Date.
(d) Upon the making of a Swing Line Loan, each Bank shall be
deemed to have purchased from the Swing Line Bank a participation therein
in an amount equal to that Bank's Pro Rata Share of the Commitment times
-----
the amount of the Swing Line Loan. Upon demand made by the Swing Line
Bank, each Bank shall, according to its Pro Rata Share of the Commitment,
promptly provide to the Swing Line Bank its purchase price therefor in an
amount equal to its participation therein. The obligation of each Bank to
so provide its purchase price to the Swing Line Bank shall be absolute and
unconditional (except only demand made by the Swing Line Bank) and shall
not be affected by the occurrence of a Default or Event of Default;
provided that no Bank shall be obligated to purchase its Pro Rata Share of
--------
(i) Swing Line Loans to the extent that Swing Line Outstandings are in
excess of $10,000,000 and (ii) any Swing Line Loan made (absent the consent
of all of the Banks) during the continuation of an Event of Default. Each
Bank that has provided to the Swing Line Bank the purchase price due for
its participation in Swing Line Loans shall thereupon acquire a pro rata
participation, to the extent of such payment, in the claim of the Swing
Line Bank against Borrower for principal and interest and shall share, in
accordance with that pro rata participation, in any principal payment made
by Borrower with respect to such claim and in any interest payment made by
Borrower (but only with respect to periods subsequent to the date such Bank
paid the Swing Line Bank its purchase price) with respect to such claim.
(e) In the event that the Swing Line Outstandings are in excess
of $5,000,000 on three (3) consecutive Banking Days, then on the next
Banking Day (unless Borrower has made other arrangements acceptable to the
Swing Line Bank to reduce the Swing Line Outstandings below $5,000,000),
Borrower shall request a Loan pursuant to Section 2.1 sufficient to reduce
---
the Swing Line Outstandings below $5,000,000. In addition, upon any demand
for payment of the Swing Line
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<PAGE>
Outstandings by the Swing Line Bank (unless Borrower has made other
arrange ments acceptable to the Swing Line Bank to reduce the Swing Line
Outstandings to $0), Borrower shall request a Loan pursuant to Section 2.1
---
sufficient to repay all Swing Line Outstandings (and, for this purpose,
Section 2.1(d) shall not apply). In each case, the Administrative Agent
------
shall automatically provide the responsive Advances made by each Bank to
the Swing Line Bank (which the Swing Line Bank shall then apply to the
Swing Line Outstandings). In the event that Borrower fails to request a
Loan within the time specified by Section 2.2 on any such date, the
---
Administrative Agent may, but is not required to, without notice to or the
consent of Borrower, cause Advances to be made by the Banks under the
Commitment in amounts which are sufficient to reduce the Swing Line
Outstandings as required above. The conditions precedent set forth in
Article 8 shall not apply to Advances to be made by the Banks pursuant to
---------
the three preceding sentences. The proceeds of such Advances shall be paid
directly to the Swing Line Bank for application to the Swing Line
Outstandings.
2.1 Facility Increase. Borrower may, at any time during the
-----------------
period commencing on the Closing Date and ending on October 15, 1999, request a
Facility Increase pursuant to this Section in a Facility Increase Amount not in
excess of $75,000,000; provided that Borrower or a Subsidiary of Borrower has
--------
theretofore been designated to be awarded all necessary permits and licenses
under applicable Gaming Laws to conduct gaming operations at the Indiana Project
(subject to completion of the Indiana Project in accordance with requirements of
the applicable Gaming Boards). The procedure for a Facility Increase shall be
as follows:
(a) Borrower shall notify the Administrative Agent in writing
of its request for a Facility Increase, which request shall (i) be
accompanied by documentation evidencing the designation of Borrower or its
Subsidiary by the relevant Gaming Boards to be awarded all necessary
permits and licenses for gaming operations at the Indiana Project, (ii)
specify the maximum amount of the Facility Increase requested and (iii)
describe the proposed uses of the proceeds of the Facility Increase Amount.
(b) The Administrative Agent shall promptly forward the request
for a Facility Increase and related materials to the Banks for their
consideration. Each Bank may determine, in its sole and absolute
discretion, whether or not to participate in the Facility Increase and, if
it does elect to participate, the maximum level of its participation;
provided that the approval of the Banks as a whole shall not be required
--------
for a Facility Increase in accordance with this Section.
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<PAGE>
(c) As soon as practicable, each Bank shall notify the
Administrative Agent in writing whether or not it wishes to participate in
the Facility Increase and, if so, the maximum level of such participation.
The Banks shall use their best efforts to respond promptly to such request,
but shall not be required to respond to such request sooner than 20 Banking
Days after receipt of the request for Facility Increase. The
Administrative Agent shall promptly forward such notifications to Borrower.
Any Bank that has not so notified the Administrative Agent within 20
Banking Days after receipt of the request for Facility Increase shall be
deemed to have declined to participate in the Facility Increase.
(d) If the aggregate amount of the maximum levels of
participation in the Facility Increase set forth in the Bank notifications
is equal to or less than the maximum amount of the Facility Increase
requested by Borrower, then the Facility Increase shall be implemented,
with each Bank's participation in the Facility Increase at the maximum
level indicated in their respective notifications. If the aggregate amount
of the maximum levels of participation set forth in the Bank notifications
is greater than the requested amount of the maximum Facility Increase, then
the Facility Increase shall be implemented by scaling back each Bank's
level of participation in the Facility Increase to a level that is mutually
acceptable to Borrower and the Administrative Agent.
(e) If the aggregate amount of the maximum levels of
participation in the Facility Increase set forth in the Bank notifications
is less than the maximum amount of the Facility Increase requested by
Borrower, Borrower may, at its election, solicit (through the
Administrative Agent) any other institutional lender that is an Eligible
Assignee and reasonably acceptable to the Administrative Agent to
participate in the balance of the requested maximum Facility Increase
amount.
(f) After completion of the foregoing, the Administrative Agent
shall give written notification to the Banks and any new lenders of the
Facility Increase Amount (which may not exceed $75,000,000) and the level
of participation of each Bank and such lender in the increased Commitment,
and thereupon the Facility Increase shall become effective. Concurrently
therewith, any new lender shall execute and deliver a joinder to this
Agreement in form and substance satisfactory to the Administrative Agent
and Borrower and shall become a Bank for all purposes hereunder. Borrower
shall execute and deliver such new Notes to the Banks as are necessary to
reflect the foregoing. The Administrative
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<PAGE>
Agent shall also prepare and circulate a revised Schedule 1.1 giving effect
------------
to the Facility Increase.
2.12 Collateral and Guaranty. The Obligations shall be secured by
-----------------------
the Collateral pursuant to the Collateral Documents and be guaranteed by the
Significant Subsidiaries pursuant to the Subsidiary Guaranty (General) and
Subsidiary Guaranty (Crystal Park), as applicable.
2.13 Release of Certain Collateral. Upon request by Borrower, the
-----------------------------
Administrative Agent shall execute such documents as are reasonably required to
release from the Lien of the respective Deed of Trust: (a) the Hollywood Park
Stadium Property, (b) the Hollywood Park Excess Property, (c) the Phoenix Eagle
Property and (d) the Phoenix Excess Property, provided that (i) such release
--------
must be in connection with a Disposition thereof, (ii) in each case, the
conditions precedent set forth below in this Section 2.13 shall be satisfied and
(iii) in the case of the Excess Property, (A) the Disposition must be in the
form of an outright sale thereof to a Person that is not an Affiliate of
Borrower (or such other form of Disposition as is reasonably acceptable to the
Requisite Banks), (B) the purchase price payable upon such Disposition must be
100% Cash (or such other form of consideration as is reasonably acceptable to
the Requisite Banks), (C) Borrower delivers to the Administrative Agent a
Certificate of a Senior Officer stating that the Disposition thereof will not
adversely affect existing or reasonably foreseeable business operations of
Borrower and (D) the Commitment is reduced pursuant to Section 2.7. The
-----------
execution and delivery by Administrative Agent of any release described in this
Section 2.13 shall also be subject to the prior satisfaction of the following
----
conditions precedent: (a) no Event of Default or Default exists under this
Agreement; (b) Borrower shall be responsible for and shall pay all escrow,
closing and recording costs, the costs of preparing and delivering such releases
and of the title insurance indorsements referred to below; (c) each property for
which a release is requested, and the portion of the related Collateral which
remains subject to the Lien of the applicable Deed of Trust following such
release, shall be lawfully created under all subdivision laws and ordinances,
and, if requested by Administrative Agent, Borrower shall have delivered to
Administrative Agent, at Borrower's sole cost, an indorsement to that effect to
the title policy held by Administrative Agent with respect to such Collateral;
(d) all portions of the applicable Collateral which remain subject to the Lien
of the applicable Deed of Trust following any release shall have actual access
to utilities and public streets reasonably satisfactory to Administrative Agent;
(e) if requested by Administrative Agent, Borrower shall have delivered to
Administrative Agent, at Borrower's sole cost, a CLTA Form 111 Indorsement
insuring the continued validity and priority of the applicable Deed of Trust
from any impairment resulting from the release.
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ARTICLE 3
PAYMENTS AND FEES
-----------------
3.1 Principal and Interest.
----------------------
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Advance from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth or
provided for herein before and after Default, before and after maturity,
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law, with interest on overdue interest
at the Default Rate to the fullest extent permitted by applicable Laws.
(b) Interest accrued on each Alternate Base Rate Loan on each
Quarterly Payment Date shall be due and payable on that day. Except as
------
otherwise provided in Section 3.9, the unpaid principal amount of any
---
Alternate Base Rate Loan shall bear interest at a fluctuating rate per
annum equal to the Alternate Base Rate plus the Applicable Alternate Base
----
Rate Margin. Each change in the interest rate under this Section 3.1(b)
---
due to a change in the Alternate Base Rate shall take effect simultaneously
with the corresponding change in the Alternate Base Rate.
(c) Interest accrued on each Eurodollar Rate Loan which is for a
term of three months or less shall be due and payable on the last day of
the related Eurodollar Period. Interest accrued on each other Eurodollar
Rate Loan shall be due and payable on the date which is three months after
the date such Eurodollar Rate Loan was made (and, in the event that all of
the Banks have approved a Eurodollar Period of longer than six months,
every three months thereafter through the last day of the Eurodollar
Period) and on the last day of the related Eurodollar Period. Except as
------
otherwise provided in Section 3.9, the unpaid principal amount of any
---
Eurodollar Rate Loan shall bear interest at a rate per annum equal to the
Eurodollar Rate for that Eurodollar Rate Loan plus the Applicable
----
Eurodollar Rate Margin.
(d) If not sooner paid, the principal Indebtedness evidenced by
the Notes shall be payable as follows:
(i) the principal amount of each Eurodollar Rate Loan shall
be payable on the last day of the Interest Period for such Loan, which
Loan
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<PAGE>
may be paid by the conversion thereof into an Alternate Base Rate
Loan pursuant to Section 2.1(g);
------
(ii) the amount, if any, by which the sum of (A) the
---
principal outstanding Indebtedness evidenced by the Notes, plus (B)
----
the Aggregate Effective Amount of all outstanding Letters of Credit,
plus (C) the Aggregate Effective Amount of all outstanding Outside
----
Letters of Credit, plus (D) the Swing Line Outstandings at any time
----
exceeds the then applicable Commitment, shall be payable immediately;
and
(iii) the principal Indebtedness evidenced by the Notes shall
in any event be payable on the Maturity Date.
(e) The Notes may, at any time and from time to time, voluntarily
be paid or prepaid in whole or in part without premium or penalty, except
------
that with respect to any voluntary prepayment under this Section (i) any
partial prepayment shall be not less than $5,000,000, (ii) the
Administrative Agent shall have received written notice of any prepayment
by 9:00 a.m. California time on the date of prepayment (which must be a
Banking Day) in the case of an Alternate Base Rate Loan, and, in the case
of a Eurodollar Rate Loan, three (3) Banking Days before the date of
prepayment, which notice shall identify the date and amount of the
prepayment and the Loan(s) being prepaid, (iii) each prepayment of
principal on any Eurodollar Rate Loan shall be accompanied by payment of
interest accrued to the date of payment on the amount of principal paid and
(iv) any payment or prepayment of all or any part of any Eurodollar Rate
Loan on a day other than the last day of the applicable Interest Period
shall be subject to Section 3.8(e).
------
3.2 Upfront Fees. On the Closing Date, Borrower shall pay to the
------------
Administrative Agent, for the respective accounts of the Banks (other than the
----- ----
Administrative Agent) pro rata according to their Pro Rata Share of the
Commitment, an upfront fee in an amount set forth in a letter from the Lead
Arranger to each Bank and acknowledged by that Bank and by Borrower as the
applicable upfront fee for such Bank. Such upfront fees are for the credit
facilities committed by each Bank under this Agreement and are fully earned when
paid. The upfront fees paid to each Bank are solely for its own account and are
nonrefundable.
3.3 Ticking Fee. On the Closing Date, Borrower shall pay to the
-----------
Administrative Agent, for the respective accounts of the Banks, a ticking fee
for each Bank equal to the product of 50% of the then Applicable Commitment Fee
Rate times the excess of that Bank's Pro Rata Share of the Commitment hereunder
-----
over its Pro Rata
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<PAGE>
Share of the Commitment (as such terms are defined in the Prior Loan Agreement)
under the Prior Loan Agreement for the period commencing on August 19, 1998 and
ending on the Closing Date. The ticking fee paid to each Bank is solely for its
own account and is nonrefundable.
3.4 Commitment Fees. From the Closing Date, Borrower shall pay
---------------
to the Administrative Agent, for the ratable accounts of the Banks pro rata
according to their Pro Rata Share of the Commitment, a commitment fee equal to
the Applicable Commitment Fee Rate per annum times the average daily amount by
-----
which the Commitment exceeds the sum of (a) the aggregate principal Indebtedness
------
evidenced by the Notes (but not the Swing Line Outstandings) plus (b) the
------- ----
Aggregate Effective Amount under all outstanding Standby Letters of Credit (but
---
not Commercial Letters of Credit). The commitment fee shall be payable
- ---
quarterly in arrears on each Quarterly Payment Date and on the Maturity Date.
3.5 Letter of Credit Fees. With respect to each Letter of
---------------------
Credit, Borrower shall pay the following fees:
(a) concurrently with the issuance of each Standby Letter of
Credit, a letter of credit issuance fee to the Issuing Bank for the sole
account of the Issuing Bank, in an amount set forth in a letter agreement
between Borrower and the Issuing Bank;
(b) concurrently with the issuance of each Standby Letter of
Credit, to the Administrative Agent for the ratable account of the Banks in
accordance with their Pro Rata Share of the Commitment, a standby letter of
credit fee in an amount equal to the Applicable Standby Letter of Credit
Fee as of the date of such issuance times the face amount of such Standby
-----
Letter of Credit through the termination or expiration of such Standby
Letter of Credit, which the Administrative Agent shall promptly pay to the
Banks; and
(c) concurrently with each issuance, negotiation, drawing or
amendment of each Commercial Letter of Credit, to the Issuing Bank for the
sole account of the Issuing Bank, issuance, negotiation, drawing and
amendment fees in the amounts set forth from time to time as the Issuing
Bank's published scheduled fees for such services.
Each of the fees payable with respect to Letters of Credit under this Section is
earned when due and is nonrefundable.
-60-
<PAGE>
3.6 Agency Fees. Borrower shall pay to the Administrative Agent
-----------
an agency fee in such amounts and at such times as heretofore agreed upon by
letter agreement between Borrower and the Administrative Agent. The agency fee
is for the services to be performed by the Administrative Agent in acting as
Administrative Agent and is fully earned on the date paid. The agency fee paid
to the Administrative Agent is solely for its own account and is nonrefundable.
3.7 Increased Commitment Costs. If any Bank shall determine in
--------------------------
good faith that the introduction after the Closing Date of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change therein
or any change in the interpretation or administration thereof by any central
bank or other Governmental Agency charged with the interpretation or
administration thereof, or compliance by such Bank (or its Eurodollar Lending
Office) or any corporation controlling the Bank, with any request, guideline or
directive regarding capital adequacy (whether or not having the force of Law) of
any such central bank or other authority, affects or would affect the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and such Bank's desired
return on capital) determines in good faith that the amount of such capital is
increased, or the rate of return on capital is reduced, as a consequence of its
obligations under this Agreement, then, within five (5) Banking Days after
demand of such Bank, Borrower shall pay to such Bank, from time to time as
specified in good faith by such Bank, additional amounts sufficient to
compensate such Bank in light of such circumstances, to the extent reasonably
allocable to such obligations under this Agreement, provided that Borrower shall
--------
not be obligated to pay any such amount which arose prior to the date which is
ninety (90) days preceding the date of such demand or is attributable to periods
prior to the date which is ninety (90) days preceding the date of such demand.
Each Bank's determination of such amounts shall be conclusive in the absence of
manifest error.
3.8 Eurodollar Costs and Related Matters.
------------------------------------
(a) In the event that any Governmental Agency imposes on any Bank
any reserve or comparable requirement (including any emergency,
---------
supplemental or other reserve) with respect to the Eurodollar Obligations
of that Bank, Borrower shall pay that Bank within five (5) Banking Days
after demand all amounts necessary to compensate such Bank (determined as
though such Bank's Eurodollar Lending Office had funded 100% of its
Eurodollar Rate Advance in the Designated Eurodollar Market) in respect of
the imposition of such reserve requirements. The Bank's determination of
such amount shall be conclusive in the absence of manifest error.
-61-
<PAGE>
(b) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance:
(i) shall subject any Bank or its Eurodollar Lending Office
to any tax, duty or other charge or cost with respect to any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate
Loans or its obligation to make Eurodollar Rate Advances, or shall
change the basis of taxation of payments to any Bank attributable to
the principal of or interest on any Eurodollar Rate Advance or any
other amounts due under this Agreement in respect of any Eurodollar
Rate Advance, any of its Notes evidencing Eurodollar Rate Loans or its
obligation to make Eurodollar Rate Advances, excluding (i) taxes
---------
imposed on or measured in whole or in part by its overall net income,
gross income or gross receipts and franchise taxes imposed on it, by
(A) any jurisdiction (or political subdivision thereof) in which it is
organized or maintains its principal office or Eurodollar Lending
Office or (B) any jurisdiction (or political subdivision thereof) in
which it is "doing business," (ii) any withholding taxes or other
taxes based on gross income imposed by the United States of America
(other than withholding taxes and taxes based on gross income
resulting from or attributable to any change in any law, rule or
regulation or any change in the interpretation or administration of
any law, rule or regulation by any Governmental Agency) and (iii) any
withholding taxes or other taxes based on gross income imposed by the
United States of America for any period with respect to which it has
failed to provide Borrower with the appropriate form or forms required
by Section 11.21, to the extent such forms are then required by
-----
applicable Laws;
(ii) shall impose, modify or deem applicable any reserve not
applicable or deemed applicable on the date hereof (including any
---------
reserve imposed by the Board of Governors of the Federal Reserve
System, special deposit, capital or similar requirements against
assets of, deposits with or for the account of, or credit extended by,
any Bank or its Eurodollar Lending Office); or
(iii) shall impose on any Bank or its Eurodollar Lending
Office or the Designated Eurodollar Market any other condition
affecting any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans, its obligation to make Eurodollar Rate Advances
or this Agreement, or shall otherwise affect any of the same;
-62-
<PAGE>
and the result of any of the foregoing, as determined in good faith by such
Bank, increases the cost to such Bank or its Eurodollar Lending Office of
making or maintaining any Eurodollar Rate Advance or in respect of any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate Loans
or its obligation to make Eurodollar Rate Advances or reduces the amount of
any sum received or receivable by such Bank or its Eurodollar Lending
Office with respect to any Eurodollar Rate Advance, any of its Notes
evidencing Eurodollar Rate Loans or its obligation to make Eurodollar Rate
Advances (assuming such Bank's Eurodollar Lending Office had funded 100% of
its Eurodollar Rate Advance in the Designated Eurodollar Market), then,
within five (5) Banking Days after demand by such Bank (with a copy to the
Administrative Agent), Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction (determined as though such Bank's Eurodollar Lending Office had
funded 100% of its Eurodollar Rate Advance in the Designated Eurodollar
Market). Each Bank's determination of such amounts shall be conclusive in
the absence of manifest error.
(c) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance shall, in the good faith opinion of any
Bank, make it unlawful or impossible for such Bank or its Eurodollar
Lending Office to make, maintain or fund its portion of any Eurodollar Rate
Loan, or materially restrict the authority of such Bank to purchase or
sell, or to take deposits of, Dollars in the Designated Eurodollar Market,
or to determine or charge interest rates based upon the Eurodollar Rate,
and such Bank shall so notify the Administrative Agent, then such Bank's
obligation to make Eurodollar Rate Advances shall be suspended for the
duration of such illegality or impossibility and the Administrative Agent
forthwith shall give notice thereof to the other Banks and Borrower. Upon
receipt of such notice, the outstanding principal amount of such Bank's
Eurodollar Rate Advances, together with accrued interest thereon,
automatically shall be converted to Alternate Base Rate Advances on either
(1) the last day of the Eurodollar Period(s) applicable to such Eurodollar
Rate Advances if such Bank may lawfully continue to maintain and fund such
Eurodollar Rate Advances to such day(s) or (2) immediately if such Bank may
not lawfully continue to fund and maintain such Eurodollar Rate Advances to
such day(s), provided that in such event the conversion shall not be
--------
subject to payment of a prepayment fee under Section 3.8(e). Each Bank
------
agrees to endeavor promptly to notify Borrower of any event of which it has
actual knowledge, occurring after the Closing Date, which will cause that
Bank to notify the Administrative Agent under this Section, and agrees to
designate a different Eurodollar Lending Office if such
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<PAGE>
designation will the need for such notice and will not, in the good faith
judgment of such Bank, otherwise be materially disadvantageous to such
Bank. In the event that any Bank is unable, for the reasons set forth
above, to make, maintain or fund its portion of any Eurodollar Rate Loan,
such Bank shall fund such amount as an Alternate Base Rate Advance for the
same period of time, and such amount shall be treated in all respects as an
Alternate Base Rate Advance. Any Bank whose obligation to make Eurodollar
Rate Advances has been suspended under this Section shall promptly notify
the Administrative Agent and Borrower of the cessation of the Special
Eurodollar Circumstance which gave rise to such suspension.
(d) If, with respect to any proposed Eurodollar Rate Loan:
(i) the Administrative Agent reasonably determines that, by
reason of circumstances affecting the Designated Eurodollar Market
generally that are beyond the reasonable control of the Banks,
deposits in Dollars (in the applicable amounts) are not being offered
to any Bank in the Designated Eurodollar Market for the applicable
Eurodollar Period; or
(ii) the Requisite Banks advise the Administrative Agent
that the Eurodollar Rate as determined by the Administrative Agent (i)
does not represent the effective pricing to such Banks for deposits in
Dollars in the Designated Eurodollar Market in the relevant amount for
the applicable Eurodollar Period, or (ii) will not adequately and
fairly reflect the cost to such Banks of making the applicable
Eurodollar Rate Advances;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Banks, whereupon until the Administrative Agent notifies
Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Banks to make any future Eurodollar Rate
Advances shall be suspended.
(e) Upon payment or prepayment of any Eurodollar Rate Advance
(other than a prepayment resulting from a conversion required under Section
----------
3.8(c)), on a day other than the last day in the applicable Eurodollar
------
Period (whether voluntarily, involuntarily, by reason of acceleration, or
otherwise), or upon the failure of Borrower (for a reason other than the
failure of a Bank to make an Advance) to borrow on the date or in the
amount specified for a Eurodollar Rate Loan in any Request for Loan,
Borrower shall pay to the appropriate Bank within five (5) Banking Days
after demand a prepayment fee or failure to borrow fee, as
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<PAGE>
the case may be (determined as though 100% of the Eurodollar Rate Advance
had been funded in the Designated Eurodollar Market) equal to the sum of:
---
(i) the principal amount of the Eurodollar Rate Advance
prepaid or not borrowed, as the case may be, times [the number of days
-----
from and including the date of prepayment or failure to borrow, as
applicable, to but excluding the last day in the applicable Eurodollar
Period], divided by 360, times the applicable Interest Differential
---------- -----
(provided that the product of the foregoing formula must be a positive
---------
number); plus
----
(ii all out-of-pocket expenses incurred by the Bank
reasonably attributable to such payment, prepayment or failure to
borrow.
Each Bank's determination of the amount of any prepayment fee payable under
this Section shall be conclusive in the absence of manifest error.
(f) Each Bank agrees to endeavor promptly to notify Borrower of
any event of which it has actual knowledge, occurring after the Closing
Date, which will entitle such Bank to compensation pursuant to clause (a)
or clause (b) of this Section, and agrees to designate a different
Eurodollar Lending Office if such designation will avoid the need for or
reduce the amount of such compensation and will not, in the good faith
judgment of such Bank, otherwise be materially disadvantageous to such
Bank. Any request for compensation by a Bank under this Section shall set
forth the basis upon which it has been determined that such an amount is
due from Borrower, a calculation of the amount due, and a certification
that the corresponding costs have been incurred by the Bank.
3.9 Late Payments. If any installment of principal or interest
-------------
or any fee or cost or other amount payable under any Loan Document to the
Administrative Agent or any Bank is not paid when due, commencing on the fourth
Banking Day after the date when due it shall bear interest at a fluctuating
interest rate per annum at all times equal to the sum of the Alternate Base Rate
------
plus the Applicable Alternate Base Rate Margin plus 2%, to the fullest extent
- ---- ----
permitted by applicable Laws. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be compounded monthly, on the
- ----------
last day of each calendar month, to the fullest extent permitted by applicable
Laws.
3.10 Computation of Interest and Fees. Computation of interest on
--------------------------------
Alternate Base Rate Loans shall be calculated on the basis of a year of 365 or
366 days, as the case may be, and the actual number of days elapsed; computation
of interest on Eurodollar Rate Loans and all fees under this Agreement shall be
calculated on the basis
-65-
<PAGE>
of a year of 360 days and the actual number of days elapsed. Borrower
acknowledges that such latter calculation method will result in a higher yield
to the Banks than a method based on a year of 365 or 366 days. Interest shall
accrue on each Loan for the day on which the Loan is made; interest shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid. Any Loan that is repaid on the same day on which it is made
shall bear interest for one day. Notwithstanding anything in this Agreement to
the contrary, interest in excess of the maximum amount permitted by applicable
Laws shall not accrue or be payable hereunder or under the Notes, and any amount
paid as interest hereunder or under the Notes which would otherwise be in excess
of such maximum permitted amount shall instead be treated as a payment of
principal.
3.11 Non-Banking Days. If any payment to be made by Borrower or
----------------
any other Party under any Loan Document shall come due on a day other than a
Banking Day, payment shall instead be considered due on the next succeeding
Banking Day and the extension of time shall be reflected in computing interest
and fees.
3.12 Manner and Treatment of Payments.
--------------------------------
(a) Each payment hereunder (except payments pursuant to Sections
------
2.9, 3.8, 11.3, 11.11 and 11.22) or on the Notes or under any other Loan
--- --- ---- ----- -----
Document shall be made to the Administrative Agent, at the Administrative
Agent's Office, for the account of each of the Banks or the Administrative
Agent, as the case may be, in immediately available funds not later than
11:00 a.m. (other than payments with respect to Swing Line Loans, which
-----
must be received by 3:00 p.m.), California time, on the day of payment
(which must be a Banking Day). All payments received after such time, on
any Banking Day, shall be deemed received on the next succeeding Banking
Day. The amount of all payments received by the Administrative Agent for
the account of each Bank shall be immediately paid by the Administrative
Agent to the applicable Bank in immediately available funds and, if such
payment was received by the Administrative Agent by 11:00 a.m., California
time, on a Banking Day and not so made available to the account of a Bank
on that Banking Day, the Administrative Agent shall reimburse that Bank for
the cost to such Bank of funding the amount of such payment at the Federal
Funds Rate. All payments shall be made in lawful money of the United
States of America without setoff, counterclaim, recoupment or deduction of
any kind.
(b) Each payment or prepayment on account of any Loan shall be
applied pro rata according to the outstanding Advances made by each Bank
comprising such Loan.
-66-
<PAGE>
(c) Each Bank shall use its best efforts to keep a record of
Advances made by it and payments received by it with respect to each of its
Notes and, subject to Section 10.6(g), such record shall, as against
-------
Borrower, be presumptive evidence of the amounts owing. Notwithstanding
the foregoing sentence, no Bank shall be liable to any Party for any
failure to keep such a record.
(d) Each payment of any amount payable by Borrower or any other
Party under this Agreement or any other Loan Document shall be made free
and clear of, and without reduction by reason of, any taxes, assessments or
other charges imposed by any Governmental Agency, central bank or
comparable authority, excluding (i) taxes imposed on or measured in whole
---------
or in part by its overall income or gross receipts and franchise taxes
imposed on it, by (A) any jurisdiction (or political subdivision thereof)
in which it is organized or maintains its principal office or Eurodollar
Lending Office or (B) any jurisdiction (or political subdivision thereof)
in which it is "doing business," (ii) any withholding taxes or other taxes
based on income imposed by the United States of America (other than
withholding taxes and taxes based on income resulting from or attributable
to any change in any law, rule or regulation or any change in the
interpretation or administration of any law, rule or regulation by any
Governmental Agency) and (iii) any withholding taxes or other taxes based
on income imposed by the United States of America for any period with
respect to which it has failed to provide Borrower with the appropriate
form or forms required by Section 11.21, to the extent such forms are then
-----
required by applicable Laws (all such non-excluded taxes, assessments or
other charges being hereinafter referred to as "Taxes"). To the extent
that Borrower is obligated by applicable Laws to make any deduction or
withholding on account of Taxes from any amount payable to any Bank under
this Agreement, Borrower shall (i) make such deduction or withholding and
pay the same to the relevant Governmental Agency and (ii) pay such
additional amount to that Bank as is necessary to result in that Bank's
receiving a net after-Tax amount equal to the amount to which that Bank
would have been entitled under this Agreement absent such deduction or
withholding. If and when receipt of such payment results in an excess
payment or credit to that Bank on account of such Taxes, that Bank shall
promptly refund such excess to Borrower.
3.13 Funding Sources. Nothing in this Agreement shall be deemed
---------------
to obligate any Bank to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Bank that it
has obtained or will obtain the funds for any Loan or Advance in any particular
place or manner.
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<PAGE>
3.14 Failure to Charge Not Subsequent Waiver. Any decision by the
---------------------------------------
Administrative Agent or any Bank not to require payment of any interest
(including interest arising under Section 3.9), fee, cost or other amount
---------- ---
payable under any Loan Document, or to calculate any amount payable by a
particular method, on any occasion shall in no way limit or be deemed a waiver
of the Administrative Agent's or such Bank's right to require full payment of
any interest (including interest arising under Section 3.9), fee, cost or other
--------- ---
amount payable under any Loan Document, or to calculate an amount payable by
another method that is not inconsistent with this Agreement, on any other or
subsequent occasion.
3.15 Administrative Agent's Right to Assume Payments Will be Made
------------------------------------------------------------
by Borrower. Unless the Administrative Agent shall have been notified by
- -----------
Borrower prior to the date on which any payment to be made by Borrower hereunder
is due that Borrower does not intend to remit such payment, the Administrative
Agent may, in its discretion, assume that Borrower has remitted such payment
when so due and the Administrative Agent may, in its discretion and in reliance
upon such assumption, make available to each Bank on such payment date an amount
equal to such Bank's share of such assumed payment. If Borrower has not in fact
remitted such payment to the Administrative Agent, each Bank shall forthwith on
demand repay to the Administrative Agent the amount of such assumed payment made
available to such Bank, together with interest thereon in respect of each day
from and including the date such amount was made available by the Administrative
Agent to such Bank to the date such amount is repaid to the Administrative Agent
at the Federal Funds Rate.
3.16 Fee Determination Detail. The Administrative Agent, and any
------------------------
Bank, shall provide reasonable detail to Borrower regarding the manner in which
the amount of any payment to the Administrative Agent and the Banks, or that
Bank, under Article 3 has been determined, concurrently with demand for such
---------
payment.
3.17 Survivability. All of Borrower's obligations under Sections
-------------
3.7 and 3.8 shall survive for ninety (90) days following the date on which the
- --- ---
Commitment is terminated, all Loans hereunder are fully paid and all Letters of
Credit have expired; provided, however, that following such date such
--------
obligations shall not be Obligations secured by the Collateral Documents.
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<PAGE>
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Banks that:
4.1 Existence and Qualification; Power; Compliance With Laws.
--------------------------------------------------------
Borrower is a corporation duly formed, validly existing and in good standing
under the Laws of Delaware. Borrower is duly qualified or registered to
transact business and is in good standing in California and each other
jurisdiction in which the conduct of its business or the ownership or leasing of
its Properties makes such qualification or registration necessary, except where
------
the failure so to qualify or register and to be in good standing would not
constitute a Material Adverse Effect. Borrower has all requisite corporate
power and authority to conduct its business, to own and lease its Properties and
to execute and deliver each Loan Document to which it is a Party and to perform
its Obligations. All outstanding shares of capital stock of Borrower are duly
authorized, validly issued, fully paid and non-assessable, and no holder thereof
has any enforceable right of rescission under any applicable state or federal
securities Laws. Borrower is in compliance with all Laws and other legal
requirements applicable to its business, has obtained all authorizations,
consents, approvals, orders, licenses and permits from, and has accomplished all
filings, registrations and qualifications with, or obtained exemptions from any
of the foregoing from, any Governmental Agency that are necessary for the
transaction of its business, except where the failure so to comply, file,
------
register, qualify or obtain exemptions does not constitute a Material Adverse
Effect.
4.2 Authority; Compliance With Other Agreements and Instruments
-----------------------------------------------------------
and Government Regulations. The execution, delivery and performance by Borrower
- --------------------------
and each Subsidiary Guarantor of the Loan Documents to which it is a Party have
been duly authorized by all necessary corporate (or partnership or other
organic) action, and do not and will not:
(a) Require any consent or approval not heretofore obtained of
any partner, director, stockholder or other equity holder, security holder
or creditor of such Party;
(b) Violate or conflict with any provision of such Party's
charter, articles of incorporation or bylaws, as applicable;
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<PAGE>
(c) Result in or require the creation or imposition of any Lien
or Right of Others upon or with respect to any Property now owned or leased
or hereafter acquired by such Party;
(d) Violate any Requirement of Law applicable to such Party,
subject to obtaining the authorizations from, or filings with, the
Governmental Agencies described in Schedule 4.3;
------------
(e) Result in a breach of or constitute a default under, or cause
or permit the acceleration of any obligation owed under, any indenture or
loan or credit agreement or any other Contractual Obligation to which such
Party is a party or by which such Party or any of its Property is bound or
affected;
and neither Borrower nor any Subsidiary Guarantor is in violation of, or default
under, any Requirement of Law or Contractual Obligation, or any indenture, loan
or credit agreement described in Section 4.2(e), in any respect that constitutes
------
a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as set forth in
---------------------------------- ------
Schedule 4.3 or previously obtained or made, no authorization, consent,
- ------------
approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Agency is or will be required to authorize
or permit under applicable Laws the execution, delivery and performance by
Borrower and the Subsidiary Guarantors of the Loan Documents to which it is a
Party. All authorizations from, or filings with, any Governmental Agency
described in Schedule 4.3 will be accomplished as of the Schedule Date stated in
------------
such Schedule, or such other date as may be specified in Schedule 4.3.
------------
4.4 Subsidiaries.
------------
(a) Schedule 4.4 hereto correctly sets forth the (i) names, (ii)
------------
form of legal entity, (iii) number of shares of capital stock (or other
units of equity interests) issued and outstanding, (iv) number of shares
(or units) owned by Borrower or a Subsidiary of Borrower (and specifying
such owner), (v) number of additional shares of such capital stock (or
units) which the holders of any Rights of Others are entitled to obtain
upon the exercise thereof, and (vi) jurisdictions of organization of all
Subsidiaries of Borrower. Schedule 4.4 hereto correctly specifies which of
------------
the Subsidiaries of the Borrower, as of the Schedule Date stated therein,
are Restricted Subsidiaries, Significant Subsidiaries and Unrestricted
Subsidiaries. Except as described in Schedule 4.4 or Schedule 6.17,
------------ -------------
Borrower
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<PAGE>
does not own any capital stock, equity interest or debt security which is
convertible, or exchangeable, for capital stock or equity interests in any
Person. Unless otherwise indicated in Schedule 4.4, all of the outstanding
------------
shares of capital stock (or units of equity interest) of each Restricted
Subsidiary are owned of record and beneficially by Borrower, there are no
outstanding options, warrants or other rights to purchase capital stock (or
such units) of any such Subsidiary, and all such shares (or such units) so
owned are duly authorized, validly issued, fully paid and non-assessable,
and were issued in compliance with all applicable state and federal
securities and other Laws, and are free and clear of all Liens and Rights
of Others, except for Permitted Encumbrances and Permitted
------
Rights of Others.
(b) Each Significant Subsidiary is duly formed, validly existing
and in good standing under the Laws of its jurisdiction of organization, in
the form of organization stated in Schedule 4.4 therefor, is duly qualified
------------
to do business as a foreign organization and is in good standing as such in
each jurisdiction in which the conduct of its business or the ownership or
leasing of its Properties makes such qualification necessary (except where
------
the failure to be so duly qualified and in good standing does not
constitute a Material Adverse Effect), and has all requisite power and
authority to conduct its business and to own and lease its Properties.
(c) Each Restricted Subsidiary is in compliance with all Laws and
other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from,
and each such Subsidiary has accomplished all filings, registrations, and
qualifications with, or obtained exemptions from any of the foregoing from,
any Governmental Agency that are necessary for the transaction of its
business, except where the failure to be in such compliance, obtain such
------
authorizations, consents, approvals, orders, licenses, and permits,
accomplish such filings, registrations, and qualifications, or obtain such
exemptions, does not constitute a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Banks
--------------------
(a) the audited consolidated financial statements of Borrower and its
Subsidiaries for the Fiscal Year ended December 30, 1997, (b) the audited
consolidated financial statements of CMC and its Subsidiaries for its fiscal
year ended December 31, 1997, (c) the unaudited consolidated financial
statements of Borrower and its Subsidiaries for the Fiscal Quarter ended June
30, 1998, (d) the unaudited consolidated financial statements of CMC and its
Subsidiaries for its fiscal quarter ended June 30, 1998 and (e) the unaudited
consolidated pro-forma balance sheet of Borrower and its Subsidiaries as of June
30, 1998, assuming that the Merger, the Redemption, this Agreement and the other
transactions contemplated hereby had been consummated as of that date. The
financial statements described in
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<PAGE>
clauses (a) and (c) fairly present in all material respects the financial
- -
condition, results of operations and changes in financial position of Borrower
and its Subsidiaries as of such dates and for such periods in conformity with
Generally Accepted Accounting Principles, consistently applied. The financial
statements described in clauses (b) and (d) fairly present in all material
- -
respects the financial condition, results of operations and changes in financial
position of CMC and its Subsidiaries as of such dates and for such periods in
conformity with Generally Accepted Accounting Principles, consistently applied.
The pro-forma balance sheet described in clause (e) fairly presents the pro-
-
forma financial condition of Borrower as of the date thereof, giving effect to
the Merger, the Redemption, this Agreement and the other transactions
contemplated hereby, subject to the assumptions described in the notes thereto.
4.6 No Other Liabilities; No Material Adverse Changes. As of the
-------------------------------------------------
Execution Date and as of the Closing Date: (a) Borrower and its Subsidiaries
do not have any material liability or material contingent liability required
under Generally Accepted Accounting Principles to be reflected or disclosed and
not reflected or disclosed in the pro forma balance sheet described in Section
4.5(e), other than liabilities and contingent liabilities arising in the
- ------ ----------
ordinary course of business since the date of such balance sheet; and (b) no
circumstance or event has occurred that constitutes a Material Adverse Effect
since June 30, 1998. As of any date subsequent to the Closing Date, no
circumstance or event has occurred that constitutes a Material Adverse Effect
since the Closing Date.
4.7 Title to Property. As of the Schedule Date for Schedule 4.7,
----------------- ------------
Borrower and the Restricted Subsidiaries have valid title to the Property (other
-----
than assets which are the subject of a Capital Lease Obligation) reflected in
- ----
the balance sheet described in Section 4.5(e) (other than items of Property or
------ ----------
exceptions to title which are in each case immaterial to Borrower and its
Subsidiaries, taken as a whole, and Property subsequently sold or disposed of in
the ordinary course of business), free and clear of all Liens and Rights of
Others other than Liens or Rights of Others described in Schedule 4.7 or
---------- ------------
permitted by Section 6.8.
---
4.8 Intangible Assets. Borrower and the Restricted Subsidiaries
-----------------
own, or possess the right to use to the extent necessary in their respective
businesses, all material trademarks, trade names, copyrights, patents, patent
rights, computer software, licenses and other Intangible Assets that are used in
the conduct of their businesses as now operated, and no such Intangible Asset,
to the best knowledge of Borrower, conflicts with the valid trademark, trade
name, copyright, patent, patent right or Intangible Asset of any other Person to
the extent that such conflict constitutes a Material Adverse Effect. Schedule
--------
4.8 sets forth all trademarks, trade names and trade styles used by Borrower or
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any of the Restricted Subsidiaries at any time within the five (5) year period
ending on the Schedule Date for such Schedule.
4.9 Public Utility Holding Company Act. Neither Borrower nor any
----------------------------------
of the Restricted Subsidiaries is a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully covered as to
---------- ------
subject matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against Borrower or any of the Restricted
Subsidiaries of less than $1,000,000, (c) matters of an administrative nature
not involving a claim or charge against Borrower or any of the Restricted
Subsidiaries and (d) matters set forth in Schedule 4.10, there are no actions,
-------------
suits, proceedings or investigations pending as to which Borrower or any of the
Restricted Subsidiaries have been served or have received notice or, to the best
knowledge of Borrower, threatened against or affecting Borrower or any of the
Restricted Subsidiaries or any Property of any of them before any Governmental
Agency.
4.11 Binding Obligations. Each of the Loan Documents to which
-------------------
Borrower or the Subsidiary Guarantors is a Party will, when executed and
delivered by such Party, constitute the legal, valid and binding obligation of
such Party, enforceable against such Party in accordance with its terms, except
------
as enforcement may be limited by Debtor Relief Laws, Gaming Laws or equitable
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion.
4.12 No Default. No event has occurred and is continuing that is
----------
a Default or Event of Default.
4.13 ERISA.
-----
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material respects
with ERISA and any other applicable Laws to the extent that non-
compliance could reasonably be expected to have a Material Adverse
Effect;
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(ii) such Pension Plan has not incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) that could
reasonably be expected to have a Material Adverse Effect;
(iii) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred that could reasonably be expected to have a
Material Adverse Effect; and
(iv) neither Borrower nor any of its ERISA Affiliates has
engaged in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code) that could reasonably be expected to have a
Material Adverse Effect.
(b) Neither Borrower nor any of its ERISA Affiliates has incurred
or expects to incur any withdrawal liability to any Multiemployer Plan that
could reasonably be expected to have a Material Adverse Effect.
4.14 Regulation U; Investment Company Act. No part of the
------------------------------------
proceeds of any Loan hereunder will be used to purchase or carry, or to extend
credit to others for the purpose of purchasing or carrying, any Margin Stock in
violation of Regulation U. Neither Borrower nor any of the Restricted
Subsidiaries is or is required to be registered as an "investment company" under
the Investment Company Act of 1940.
4.15 Disclosure. No written statement made by a Senior Officer to
----------
the Administrative Agent or any Bank in connection with this Agreement, or in
connection with any Loan, as of the date thereof contained any untrue statement
of a material fact or omitted a material fact necessary to make the statement
made not misleading in light of all the circumstances existing at the date the
statement was made.
4.16 Tax Liability. Borrower and the Restricted Subsidiaries have
-------------
filed all tax returns which are required to be filed, and have paid, or made
provision for the payment of, all taxes with respect to the periods, Property or
transactions covered by said returns, or pursuant to any assessment received by
Borrower or any of the Restricted Subsidiaries, except (a) such taxes, if any,
------
as are being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained and (b) immaterial taxes
so long as no material Property of Borrower or any of the Restricted
Subsidiaries is in jeopardy of being seized, levied upon or forfeited.
4.17 Projections. As of the Execution Date and as of the Closing
-----------
Date, to the best knowledge of Borrower, the assumptions set forth in the
Projections are
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reasonable and consistent with each other and with all facts known to Borrower,
and the Projections are reasonably based on such assumptions. Nothing in this
Section 4.17 shall be construed as a representation or covenant that the
----
Projections in fact will be achieved.
4.18 Hazardous Materials. Except as described in Schedule 4.18:
------------------- -------------
(a) neither Borrower nor any of the Restricted Subsidiaries at any time has
disposed of, discharged, released or threatened the release of any Hazardous
Materials on, from or under the Real Property in violation of any Hazardous
Materials Law that would individually or in the aggregate constitute a Material
Adverse Effect, (b) to the best knowledge of Borrower, no condition exists that
violates any Hazardous Material Law affecting any Real Property except for such
violations that would not individually or in the aggregate have a Material
Adverse Effect, (c) no Real Property or any portion thereof is or has been
utilized by Borrower or any of the Restricted Subsidiaries as a site for the
manufacture of any Hazardous Materials and (d) to the extent that any Hazardous
Materials are used, generated or stored by Borrower or any of the Restricted
Subsidiaries on any Real Property, or transported to or from such Real Property
by Borrower or any of the Restricted Subsidiaries, such use, generation, storage
and transportation are in compliance in all material respects with all Hazardous
Materials Laws.
4.19 Gaming Laws. Borrower and the Restricted Subsidiaries are in
-----------
compliance with all applicable Gaming Laws in all respects which are material to
the operations, businesses and prospects of Borrower and the Restricted
Subsidiaries, taken as a whole.
4.20 Security Interests.
------------------
(a) Upon the execution and delivery of the Omnibus Ancillary
Documents Amendment, the Security Agreement will continue a valid security
interest in the Collateral described therein securing the Obligations
(subject to such qualifications and exceptions as are contained in the
applicable Uniform Commercial Code with respect to the creation of security
interests in Property to which Article 9 of the applicable Uniform
Commercial Code does not apply), which security interest is of first
priority (subject only to Permitted Encumbrances, Permitted Rights of
Others, purchase money liens permitted under Section 6.8(f) and matters
------
disclosed in Schedule 4.7 and to such qualifications and exceptions as are
------------
contained in the applicable Uniform Commercial Code with respect to the
priority of security interests perfected by means other than the filing of
a financing statement), and all action necessary to perfect the security
interests so created, other than (i) filing of the UCC-1 financing
----------
statements delivered to the Administrative Agent pursuant to Section 8.1
---
with the appropriate Governmental
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<PAGE>
Agency and (ii) delivery of each of the instruments listed in Schedule I to
the Security Agreement to the parties indicated therein, have been taken
and completed.
(b) Upon the execution and delivery of the Omnibus Ancillary
Documents Amendment, the Trademark Collateral Assignment will continue a
valid first priority collateral assignment of the Collateral described
therein securing the Obligations and all action necessary to perfect the
collateral assignment so created, other than the filing of the Memorandum
----------
of Amendment (Trademark Collateral Assignment) with the United States
Patent and Trademark Office, will have been taken and completed.
(c) Upon the execution and delivery of Omnibus Ancillary
Documents Amendment, the Pledge Agreements (General) will continue a valid
first priority security interest in the Collateral described therein
(including the Pledged Collateral (General)) and upon delivery of the
----------
Pledged Collateral (General) to the Administrative Agent (or its designee)
all action necessary to perfect the security interest so created has been
taken and completed.
(d) Upon the execution and delivery of Omnibus Ancillary
Documents Amendment, the Pledge Agreements (Gaming Regulated) will continue
a valid first priority security interest in the Collateral described
therein (including the Pledged Collateral (Gaming Regulated)) and upon
---------
delivery of the Pledged Collateral (Gaming Regulated) to the Administrative
Agent (or its designee) in the jurisdiction(s) required under applicable
Gaming Laws all action necessary to perfect the security interest so
created has been taken and completed.
(e) Upon the execution and delivery of each of the Existing Deed
of Trust Amendments, each of the Existing Deeds of Trust will continue a
valid Lien in the Collateral described therein securing the Obligations,
other than those arising under Sections 4.18, 5.12 and 11.22 (subject only
---------- ---- ---- -----
to Permitted Encumbrances, Permitted Rights of Others and matters described
in Schedule 4.7), and all action necessary to perfect the Lien so created,
------------
other than recordation or filing thereof with the appropriate Governmental
----------
Agencies, will have been taken and completed.
(f) Upon the execution and delivery of the Biloxi CM Deed of
Trust and the Bay St. Louis Deed of Trust, such Deeds of Trust will create
a valid Lien in the Collateral described therein securing the Obligations,
other than those arising under Sections 4.18, 5.12, and 11.22 (subject only
---------- ---- ---- -----
to Permitted
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Encumbrances, Permitted Rights of Others and matters described
in Schedule 4.7), and all action necessary to perfect the Lien so created,
------------
other than recordation or filing thereof with the appropriate Governmental
----------
Agencies, will have been taken and completed.
(g) Upon the execution and delivery of the Omnibus Ancillary
Documents Amendment, each Preferred Ship's Mortgage will continue a valid
Lien in the Collateral described therein securing the Obligations (subject
only to Permitted Encumbrances, Permitted Rights of Others and matters
described in Schedule 4.7), and all action necessary to perfect the Lien so
------------
created, other than recordation or filing of the Memorandum of Amendment
----------
(Preferred Ship's Mortgage) with the appropriate Governmental Agencies,
will have been taken and completed.
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<PAGE>
ARTICLE 5
AFFIRMATIVE COVENANTS
---------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitment remains in force, Borrower shall, and
shall cause each of the Restricted Subsidiaries to, unless the Administrative
Agent (with the written approval of the Requisite Banks) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and
------------------------------------------
discharge promptly all taxes, assessments and governmental charges or levies
imposed upon any of them, upon their respective Property or any part thereof and
upon their respective income or profits or any part thereof, except that
------
Borrower and the Restricted Subsidiaries shall not be required to pay or cause
to be paid (a) any tax, assessment, charge or levy that is not yet past due, or
is being contested in good faith by appropriate proceedings so long as the
relevant entity has established and maintains adequate reserves for the payment
of the same or (b) any immaterial tax so long as no material Property of
Borrower or any of the Restricted Subsidiaries is in jeopardy of being seized,
levied upon or forfeited.
5.2 Preservation of Existence. Preserve and maintain their
-------------------------
respective existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business except (a) where the
------
failure to so preserve and maintain the existence of any Restricted Subsidiary
and such authorizations, rights, franchises, privileges, consents, approvals,
orders, licenses, permits, or registrations would not constitute a Material
Adverse Effect and (b) that a merger permitted by Section 6.3 shall not
---
constitute a violation of this covenant; and qualify and remain qualified to
transact business in each jurisdiction in which such qualification is necessary
in view of their respective business or the ownership or leasing of their
respective Properties except where the failure to so qualify or remain qualified
------
would not constitute a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and protect
-------------------------
all of their respective Properties in good order and condition, subject to wear
and tear in the ordinary course of business, and not permit any waste of their
respective Properties, except that the failure to maintain, preserve and protect
------
a particular item of Property that is not of significant value, either
intrinsically or to the operations of Borrower and the Restricted Subsidiaries,
taken as a whole, shall not constitute a violation of this covenant.
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5.4 Maintenance of Insurance. Maintain liability, casualty and
------------------------
other insurance (subject to customary deductibles and retentions) with
responsible insurance companies in such amounts and against such risks as is
carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and the Restricted
Subsidiaries operate and, in any event, (a) business interruption insurance so
--
long as such insurance is, in the reasonable judgment of the Requisite Banks,
- -------
generally commercially available at reasonable premiums and deductibles and (b)
such insurance as may be required under the Deeds of Trust.
5.5 Compliance With Laws. Comply with all Requirements of Law
--------------------
noncompliance with which constitutes a Material Adverse Effect, except that
------
Borrower and the Restricted Subsidiaries need not comply with a Requirement of
Law then being contested by any of them in good faith by appropriate
proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any time
-----------------
during regular business hours and as often as reasonably requested (but not so
as to materially interfere with the business of Borrower or any of its
Subsidiaries) permit the Administrative Agent or any Bank, or any authorized
employee, agent or representative thereof, to examine, audit and make copies and
abstracts from the records and books of account of, and to visit and inspect the
Properties of, Borrower and its Subsidiaries and to discuss the affairs,
finances and accounts of Borrower and its Subsidiaries with any of their
officers, key employees or accountants and, upon request, furnish promptly to
the Administrative Agent or any Bank true copies of all financial information
made available to the board of directors or audit committee of the board of
directors of Borrower.
5.7 Keeping of Records and Books of Account. Keep adequate
---------------------------------------
records and books of account reflecting all financial transactions in conformity
with Generally Accepted Accounting Principles, consistently applied, and in
material conformity with all applicable requirements of any Governmental Agency
having regulatory jurisdiction over Borrower or any of the Restricted
Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply with
--------------------------
all Contractual Obligations under all material agreements, indentures, leases
and/or instruments to which any one or more of them is a party, whether such
material agreements, indentures, leases or instruments are with a Bank or
another Person, except for any such Contractual Obligations (a) the performance
------
of which would cause a Default or (b) then being contested by any of them in
good faith by appropriate proceedings or if the failure to comply with such
agreements, indentures, leases or instruments does not constitute a Material
Adverse Effect.
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<PAGE>
5.9 Use of Proceeds. Use the proceeds of Loans for (a) payment
---------------
of the redemption price in respect of the Redemption, together with related
premiums, fees and transactional expenses, (b) payment of the Cash consideration
to the shareholders of CMC payable in respect of the Merger, (c) payment of
amounts payable to the holders of the Louisiana First Mortgage Notes pursuant to
their "change of control" rights with respect to the Merger, (d) Capital
Expenditures and Investments permitted hereunder and (e) working capital and
general corporate purposes of Borrower and the Restricted Subsidiaries.
5.10 Future Collateral. Upon the acquisition by Borrower or any
-----------------
Subsidiary Guarantor (other than a Subsidiary of Borrower described in Section
----- ---- -------
2.11) of (a) any capital stock (or other equity interest) of a new Subsidiary,
- -----
deliver the certificates evidencing such stock (or interest) in pledge to the
Administrative Agent (or its designee to the extent required by applicable
Gaming Laws) pursuant to the Pledge Agreement (General) or Pledge Agreement
(Gaming Regulated), as the case may be, (b) any Investment in certificated
securities or instruments, deliver all such securities and instruments in pledge
to the Administrative Agent pursuant to the Security Agreement, and (c) any fee
simple interest in real Property or any vessel or vehicle, any uncertificated
Investment or securities entitlement or any other interest in other Property
which is not subject to a perfected Lien under the Collateral Documents, execute
and deliver to the Administrative Agent such Collateral Documents as are
appropriate therefor, as requested by the Administrative Agent, to create a Lien
thereon securing the Obligations subject in priority only to Permitted
Encumbrances, purchase money liens (if any) permitted under Section 6.8(f) and
------
Liens existing thereon prior to such acquisition (and not done in contemplation
thereof). At such time as the Louisiana First Mortgage Notes are no longer
outstanding, deliver certificates evidencing the capital stock of Casino Magic
of Louisiana Corp. in pledge to the Administrative Agent pursuant to the Pledge
Agreement (Gaming Regulated), which pledge shall constitute a first priority
perfected security interest in such capital stock.
5.11 New Subsidiary Guarantors. Cause (a) each of its Restricted
-------------------------
Subsidiaries which hereafter becomes a Significant Subsidiary promptly upon so
becoming and (b) the CMC Louisiana Subsidiaries that are Significant
Subsidiaries promptly upon satisfaction or discharge of the Louisiana First
Mortgage Notes, in each case to execute and deliver to the Administrative Agent
an instrument of joinder of the Subsidiary Guaranty (General), Security
Agreement and the Trademark Collateral Assignment, and execute and deliver to
the Administrative Agent such deeds of trust in the form of the Model Deed of
Trust covering its Real Property as the Administrative Agent may request.
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<PAGE>
5.12 Hazardous Materials Laws. Keep and maintain all Real
------------------------
Property and each portion thereof in compliance in all material respects with
all applicable Hazardous Materials Laws and promptly notify the Administrative
Agent in writing (attaching a copy of any pertinent written material) of (a) any
and all material enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in writing by a
Governmental Agency pursuant to any applicable Hazardous Materials Laws, (b) any
and all material claims made or threatened in writing by any Person against
Borrower relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Materials and (c) discovery by any Senior
Officer of Borrower of any material occurrence or condition on any real Property
adjoining or in the vicinity of such Real Property that could reasonably be
expected to cause such Real Property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of such Real
Property under any applicable Hazardous Materials Laws.
5.13 Intercompany Notes. Execute a promissory note (in a form
------------------
reasonably acceptable to the Administrative Agent) evidencing any Indebtedness
of Borrower or a Restricted Subsidiary to any Restricted Subsidiary which is in
an amount of $5,000,000 or more, and cause each payee of such promissory note to
deliver the same to the Administrative Agent, with an endorsement in blank, as
Pledged Collateral (General).
5.14 Year 2000 Compliance. Take such steps as are reasonably
--------------------
necessary to assure that, prior to November 1, 1999, (a) Borrower and the
Restricted Subsidiaries are Year 2000 Compliant and (b) all customers and
vendors of Borrower and the Restricted Subsidiaries that are material to the
business of Borrower and whose ability to perform their business obligations to
Borrower may be materially affected by their not being Year 2000 Compliant are
Year 2000 Compliant. Such steps shall include the performance of a
comprehensive review and assessment of all data storage and operating systems
and the adoption of a detailed plan and budget for the remediation, monitoring
and testing of such systems. The term "Year 2000 Compliant" means, for purposes
-------------------
of the foregoing, that all hardware, software, firmware, equipment, goods and
systems used by a Person, or which are material to the business operations or
financial condition of a Person, will properly perform date-sensitive functions
on and after January 1, 2000.
5.15 Certain Notifications. Promptly following the Closing Date,
---------------------
(a) notify the Trustee under the indenture governing the Existing Subordinated
Notes that the Obligations are "Designated Senior Debt" thereunder and (b)
notify the Trustee under
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the indenture governing the Louisiana First Mortgage Notes of the "Change of
Control Offer" (as such term is defined in such indenture) required as a result
of the Merger.
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ARTICLE 6
NEGATIVE COVENANTS
------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitment remains in force, Borrower shall not,
and shall not permit any of the Restricted Subsidiaries to, unless the
Administrative Agent (with the written approval of the Requisite Banks or, if
required by Section 11.2, of all of the Banks) otherwise consents:
----
6.1 Payment of Subordinated Obligations. Pay any (a) principal
-----------------------------------
(including sinking fund payments) or any other amount (other than scheduled
- ---------- ----------
interest payments) with respect to any Subordinated Obligation, or purchase or
redeem (or offer to purchase or redeem) any Subordinated Obligation, or deposit
any monies, securities or other Property with any trustee or other Person to
provide assurance that the principal or any portion thereof of any Subordinated
Obligation will be paid when due or otherwise to provide for the defeasance of
any Subordinated Obligation or (b) scheduled interest on any Subordinated
Obligation unless the payment thereof is then permitted pursuant to the terms of
------
the Indenture governing such Subordinated Obligation;
provided, however, that this Section shall not apply to prohibit any payment
- -------- -------
consisting of the repurchase or redemption of Subordinated Obligations to the
extent necessary to prevent a License Revocation if (i) no Designated Default
then exists or would result therefrom and (ii) Borrower has notified the
Administrative Agent in writing of the necessity to invoke this proviso at least
ten (10) Banking Days (or such shorter period as may be necessary in order to
comply with a regulation or order of the relevant Gaming Board) in advance.
6.2 Disposition of Property. Make any Disposition of its
-----------------------
Property, whether now owned or hereafter acquired, except:
------
(a) a Disposition by Borrower to a Restricted Subsidiary, or by a
Restricted Subsidiary to Borrower or another Restricted Subsidiary;
(b) a Disposition of an Investment in an Unrestricted Subsidiary.
(c) Dispositions of the Hollywood Park Stadium Property and
Phoenix Eagle Property;
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(d) Dispositions of Excess Property in compliance with Section
2.13; and
----
(e) Disposition of the Property Held for Sale.
6.3 Mergers. Merge or consolidate with or into any Person,
-------
except:
- ------
(a) the Merger;
(b) mergers and consolidations of a Subsidiary of Borrower into
Borrower or a Restricted Subsidiary (with Borrower or the Restricted
Subsidiary as the surviving entity) or of Restricted Subsidiaries with each
other, provided that Borrower and each of such Subsidiaries have executed
--------
such amendments to the Loan Documents as the Administrative Agent may
reasonably determine are appropriate as a result of such merger; and
(c) a merger or consolidation of Borrower or any Restricted
Subsidiary with any other Person, provided that (i) either (A) Borrower or
--------
the Restricted Subsidiary is the surviving entity or (B) the surviving
entity is a corporation organized under the Laws of a State of the United
States of America or the District of Columbia and, as of the date of such
merger or consolidation, expressly assumes, by an appropriate instrument,
the Obligations of Borrower or the Restricted Subsidiary, as the case may
be, (ii) giving effect thereto on a pro-forma basis, no Default or Event of
Default exists or would result therefrom and (iii) as a result thereof, no
Change in Control has occurred.
6.4 Hostile Acquisitions. Directly or indirectly use the
--------------------
proceeds of any Loan in connection with the acquisition of part or all of a
voting interest of five percent (5%) or more in any corporation or other
business entity if such acquisition is opposed by the board of directors of such
corporation or business entity.
6.5 Distributions. Make any Distribution, whether from capital,
-------------
income or otherwise, and whether in Cash or other Property, except:
------
(a) Distributions by any Subsidiary of Borrower to Borrower or
any Restricted Subsidiary,
(b) Distributions by a Subsidiary of Borrower to other Persons
owning shares of capital stock of that Subsidiary that are in the same
proportion as
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a concurrent Distribution by that Subsidiary to Borrower or any Restricted
Subsidiary;
(c) dividends payable solely in Common Stock or rights to
purchase Common Stock;
(d) Distributions consisting of the repurchase of Common Stock
for an aggregate purchase price not in excess of $10,000,000, provided that
--------
no Default or Event of Default then exists or would result therefrom; and
(e) Distributions consisting of the purchase of (i) the limited
partnership interests in Mississippi-I Gaming, L.P. not owned by Borrower
or a Restricted Subsidiary or (ii) any equity interest in the Indiana
Project (or in any Restricted Subsidiary that directly owns the Indiana
Project) not owned by Borrower or a Restricted Subsidiary, provided that
--------
(i) the aggregate purchase prices therefor, when added to other Basket
Expenditures theretofore made, does not exceed $75,000,000 and (ii) no
Default or Event of Default then exists or would result therefrom;
provided, however, that this Section shall not apply to prohibit a Distribution
- --------
consisting of the repurchase or redemption of capital stock of Borrower to the
extent necessary to prevent a License Revocation if (i) no Designated Default
then exists or would result therefrom and (ii) Borrower has notified the
Administrative Agent in writing of the necessity to invoke this proviso at least
-------
ten (10) Banking Days (or such shorter period as may be necessary in order to
comply with a regulation or order of the relevant Gaming Board) in advance.
6.6 ERISA. At any time, permit any Pension Plan to: (i) engage
-----
in any non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code); (ii) fail to comply with ERISA or any other applicable Laws; (iii) incur
any material "accumulated funding deficiency" (as defined in Section 302 of
ERISA); or (iv) terminate in any manner, which, with respect to each event
listed above, could reasonably be expected to result in a Material Adverse
Effect or (b) withdraw, completely or partially, from any Multiemployer Plan if
to do so could reasonably be expected to result in a Material Adverse Effect.
6.7 Change in Nature of Business. Make any material change in
----------------------------
the nature of the business of Borrower and the Restricted Subsidiaries, taken as
a whole.
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6.8 Liens and Negative Pledges. Create, incur, assume or suffer
--------------------------
to exist any Lien or Negative Pledge of any nature upon or with respect to any
of their respective Properties, or engage in any sale and leaseback transaction
with respect to any of their respective Properties, whether now owned or
hereafter acquired, except:
------
(a) Permitted Encumbrances;
(b) Liens and Negative Pledges under the Loan Documents;
(c) Liens securing the Louisiana First Mortgage Notes;
(d) Liens (other than the Liens securing the Louisiana First
----------
Mortgage Notes) and Negative Pledges existing on the Closing Date and
disclosed in Schedule 4.7 and any renewals/extensions or amendments
------------
thereof, provided that the obligations secured or benefited thereby are not
--------
increased;
(e) any Lien or Negative Pledge on shares of any equity security
or any warrant or option to purchase an equity security or any security
which is convertible into an equity security issued by Borrower or any
Restricted Subsidiary that holds, directly or indirectly through a holding
company or otherwise, a registration, finding of suitability or license
under any Gaming Law of the State of Nevada; provided that this clause (e)
-------- -
shall apply only so long as the Gaming Laws of the State of Nevada provide
that the creation of any restriction on the disposition of any of such
securities shall not be effective without the prior approval of the
relevant Gaming Board and, if such Gaming Laws at any time cease to so
provide, then this clause (e) shall be of no further effect; and provided
- --------
further that if at any time Borrower creates or suffers to exist a Lien or
-------
Negative Pledge covering such securities in favor of the holder of any
other Indebtedness, it will (subject to any approval required under the
Gaming Laws of the State of Nevada) concurrently grant a pari-passu Lien or
---- -----
Negative Pledge likewise covering such securities in favor of the
Administrative Agent for the benefit of the Banks;
(f) Liens on Property acquired by Borrower or any of the
Restricted Subsidiaries that were in existence at the time of the
acquisition of such Property and were not created in contemplation of such
acquisition; and
(g) Liens securing Indebtedness permitted by Section 6.9(h) on
------
and limited to the capital assets acquired, constructed or financed with
the
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<PAGE>
proceeds of such Indebtedness or with the proceeds of any Indebtedness
directly or indirectly refinanced by such Indebtedness.
6.9 Indebtedness and Guaranty Obligations. Create, incur or
-------------------------------------
assume any Indebtedness or Guaranty Obligation except:
------
(a) Indebtedness (other than the Louisiana First Mortgage Notes)
----- ----
and Guaranty Obligations existing on the Closing Date and disclosed in
Schedule 6.9, and refinancings, renewals, extensions or amendments that do
------------
not increase the amount thereof;
(b) Indebtedness and Guaranty Obligations under the Loan
Documents;
(c) Indebtedness and Guaranty Obligations owed to Borrower or any
Restricted Subsidiary;
(d) the Louisiana First Mortgage Notes;
(e) New Subordinated Debt;
(f) Indebtedness consisting of Capital Lease Obligations, or
otherwise incurred to finance the purchase or construction of capital
assets (which shall be deemed to exist if the Indebtedness is incurred at
or within 90 days before or after the purchase or construction of the
capital asset), or to refinance any such Indebtedness, provided that the
--------
aggregate principal amount of such Indebtedness outstanding at any time
does not exceed $30,000,000;
(g) Indebtedness consisting of one or more Swap Agreements,
provided that the aggregate notional amount of Indebtedness covered by all
--------
Secured Swap Agreements shall not exceed $300,000,000;
(h) Guaranty Obligations in support of the obligations of a
Subsidiary Guarantor (provided that (i) such obligations are not prohibited
--------
by this Agreement and (ii) no Disposition has been made of any equity
interests of such Subsidiary in breach of Section 6.2);
-----------
(i) Guaranty Obligations in support of obligations of Persons
other than a Subsidiary Guarantor with an aggregate amount not in excess of
----------
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<PAGE>
$10,000,000 (provided that such supported obligations do not constitute
--------
Indebtedness);
(j) Outside Letters of Credit, provided that the sum of the
-------- ------
Aggregate Effective Amount thereof plus the Aggregate Effective Amount of
----
all outstanding Letters of Credit does not exceed $30,000,000; and
(k) Guaranty Obligations with respect to income tax obligations
of Borrower and its Subsidiaries by reason of the filing of a consolidated
income tax return by Borrower and its Subsidiaries.
6.10 Transactions with Affiliates. Enter into any transaction of
----------------------------
any kind with any Affiliate of Borrower other than (a) salary, bonus, employee
----------
stock option and other compensation arrangements with directors or officers in
the ordinary course of business, (b) transactions that are fully disclosed to
the board of directors (or executive committee thereof) of Borrower and
expressly authorized by a resolution of the board of directors (or executive
committee) of Borrower which is approved by a majority of the directors (or
executive committee) not having an interest in the transaction, (c) transactions
between or among Borrower and the Restricted Subsidiaries, (d) transactions
among CMC and its Subsidiaries in accordance with that certain Tax Allocation
Agreement dated October 14, 1993 among CMC and its Subsidiaries, and
transactions among Borrower and its Subsidiaries in accordance with a tax
allocation agreement substantially identical in all material respects to such
Tax Allocation Agreement and (e) transactions on overall terms at least as
favorable to Borrower or the Restricted Subsidiaries as would be the case in an
arm's-length transaction between unrelated parties of equal bargaining power.
6.11 Interest Coverage Ratio. Permit the Interest Coverage Ratio,
-----------------------
as of the last day of any Fiscal Quarter ending after the Closing Date, to be
less than the ratio set forth below opposite the period during which such Fiscal
Quarter ends:
-88-
<PAGE>
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Closing Date through
June 30, 1999 1.70 to 1.00
September 30, 1999 through
June 30, 2000 1.80 to 1.00
September 30, 2000 through
December 31, 2002 2.00 to 1.00
March 31, 2003
and thereafter 2.75 to 1.00
</TABLE>
6.12 Senior Funded Debt Ratio. Permit the Senior Funded Debt
------------------------
Ratio, as of the last day of any Fiscal Quarter ending after the Closing Date
to be greater than the ratio set forth below opposite the period during which
such Fiscal Quarter ends:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Closing Date through
December 31, 1998 3.50 to 1.00
March 31, 1999 through
December 31, 1999 3.00 to 1.00
March 31, 2000
and thereafter 2.50 to 1.00
</TABLE>
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<PAGE>
6.13 Funded Debt Ratio. Permit the Funded Debt Ratio, as of the
last day of any Fiscal Quarter ending after the Closing Date, to be greater than
the ratio set forth below opposite the period during which such Fiscal Quarter
ends:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Closing Date through
June 30, 1999 4.75 to 1.00
September 30, 1999 through
June 30, 2000 4.25 to 1.00
September 30, 2000
and thereafter 4.00 to 1.00
</TABLE>
6.14 Capital Expenditures. Make, or become legally obligated to
--------------------
make, any Capital Expenditure except:
------
(a) Maintenance Capital Expenditures not in excess of $40,000,000
in any Fiscal Year;
(b) Capital Expenditures to the extent financed by Indebtedness
permitted under Section 6.9(f);
------
(c) Capital Expenditures for the completion of the Reno Project
not in excess of $12,000,000;
(d) Capital Expenditures for the acquisition of land for and
construction of the Indiana Project not in excess of $150,000,000; provided
--------
that Borrower may not make any such Capital Expenditure which, when added
to all such Capital Expenditures previously made for the acquisition of
land for and construction of the Indiana Project, would exceed $25,000,000
unless at least 20 Banking Days prior thereto, (i) Borrower furnishes to
------
the Administrative Agent a detailed construction budget and timetable
therefor, together with projected financial statements by Fiscal Quarter of
Borrower and the Restricted Subsidiaries for the period extending one year
beyond the scheduled completion date, (ii) Borrower engages Bank of America
Construction Services Group (or a comparable firm reasonably acceptable to
the Administrative Agent), at the expense of Borrower, to monitor
construction of the Indiana Project and (iii) Borrower furnishes the
Administrative Agent with a letter from Bank of
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<PAGE>
America Construction Services Group (or such comparable firm) stating that
it believes the construction budget and construction timetable are
reasonable and feasible; and
(e) Capital Expenditures not otherwise permitted above which,
when added to all other Basket Expenditures theretofore made, do not exceed
$75,000,000.
6.15 Investments. Make or suffer to exist any Investment, except:
----------- ------
(a) Investments in existence on the Closing Date and disclosed on
Schedule 6.15;
-------------
(b) Investments consisting of Cash and Cash Equivalents;
(c) Investments in readily marketable securities not in excess of
$10,000,000;
(d) Investments consisting of advances to officers, directors and
employees of Borrower and the Restricted Subsidiaries for travel,
entertainment, relocation and analogous ordinary business purposes;
(e) Investments of Borrower in any Restricted Subsidiary and
Investments of any Restricted Subsidiary in another Restricted Subsidiary,
except in each case, Investments made after the Closing Date in the CMC
------
Louisiana Subsidiaries or any of the Foreign Subsidiaries;
(f) Investments in the CMC Louisiana Subsidiaries made after the
Closing Date in such amounts as are required to fund the amounts payable to
the holders of the Louisiana First Mortgage Notes pursuant to their "change
of control" rights with respect to the Merger;
(g) Investments in the CMC Louisiana Subsidiaries made after the
Closing Date if the Louisiana Mortgage Notes are not then outstanding;
(h) Investments in (i) the CMC Louisiana Subsidiaries made after
the Closing Date if the Louisiana First Mortgage Notes are then outstanding
and (ii) the Foreign Subsidiaries made after the Closing Date; provided
--------
that the aggregate Investments made after the Closing Date permitted by
this clause (h) do not exceed the sum of (A) $20,000,000 plus (B) the
- --- -- ----
aggregate amount of Cash
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<PAGE>
dividends received by Borrower after the Closing Date from the CMC
Louisiana Subsidiaries and the Foreign Subsidiaries;
(i) Investments consisting of the extension of credit to
customers or suppliers of Borrower and the Restricted Subsidiaries in the
ordinary course of business and any Investments received in satisfaction or
partial satisfaction thereof;
(j) Investments received in connection with the settlement of a
bona fide dispute with another Person;
(k) Investments representing all or a portion of the sales price
of Property sold or services provided to another Person;
(l) Investments consisting of Guaranty Obligations permitted by
Section 6.9;
---
(m) Investments consisting of 100 shares or less of publicly
traded equity securities of Persons engaged in any business in which
Borrower is engaged, which Investments do not exceed $100,000 in the
aggregate at any time; and
(n) Investments (other than Investments in the CMC Louisiana
----- ----
Subsidiary or any Foreign Subsidiary) not otherwise permitted above which,
when added to all other Basket Expenditures theretofore made, do not exceed
$75,000,000.
6.16 Subsidiary Indebtedness. Permit (whether or not otherwise
-----------------------
permitted under Section 6.9) any Restricted Subsidiary to create, incur, assume
---
or suffer to exist any Indebtedness or Guaranty Obligation, except (a)
------
Indebtedness and Guaranty Obligations in existence on the Closing Date, (b) the
Subsidiary Guaranty (General) and the Subsidiary Guaranty (Crystal Park), (c)
Indebtedness owed to Borrower or another Restricted Subsidiary, (d) Capital
Lease and purchase money obligations of a Restricted Subsidiary in respect of
Property used by that Subsidiary or another Restricted Subsidiary, (e) Guaranty
Obligations given by any CMC Louisiana Subsidiary with respect to the Louisiana
First Mortgage Notes, (f) Indebtedness incurred for working capital purposes by
Casino Magic Neuquen, S.A. or any of its Subsidiaries not in excess of
$5,000,000 and (g) other Indebtedness incurred in the ordinary course of
business not in excess, with respect to any Restricted Subsidiary, of $500,000.
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<PAGE>
6.17 Amendments to Subordinated Obligations. Amend or modify any
--------------------------------------
term or provision of any indenture, agreement or instrument evidencing or
governing any Subordinated Obligation in any respect that will or may adversely
affect the interests of the Banks.
6.18 Redemption or Repurchase of Louisiana First Mortgage Notes.
----------------------------------------------------------
Redeem or repurchase all or any portion of the Louisiana First Mortgage Notes,
except such amounts as are payable to the holders thereof pursuant to their
- ------
"change of control" rights with respect to the Merger.
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<PAGE>
ARTICLE 7
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
7.1 Financial and Business Information. So long as any Advance
----------------------------------
remains unpaid, or any other Obligation remains unpaid, or any portion of the
Commitment remains in force, Borrower shall, unless the Administrative Agent
(with the written approval of the Requisite Banks) otherwise consents, at
Borrower's sole expense, deliver to the Administrative Agent for distribution by
it to the Banks, a sufficient number of copies for all of the Banks of the
following:
(a) As soon as practicable, and in any event by the fifteenth
Banking Day in the next following month, an operating revenue report for
the preceding calendar month (other than a month that is the last month of
-----------
a Fiscal Quarter or Fiscal Year, in which case the operating revenue report
for such month shall be delivered as soon as practicable and in any event
within 60 days after the end of such calendar month) for each Gaming
Property, in a form reasonably acceptable to the Administrative Agent,
together with a written narrative statement discussing any significant
trends reflected therein signed by a Senior Officer of Borrower;
(b) As soon as practicable, and in any event within 60 days after
the end of each Fiscal Quarter (other than the fourth Fiscal Quarter in any
Fiscal Year), (i) the consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and the consolidated
statements of operations and cash flows for such Fiscal Quarter, and the
portion of the Fiscal Year ended with such Fiscal Quarter and (ii)
supporting consolidating financial information in the form approved by the
Administrative Agent prior to the Closing Date or such other form as may be
acceptable to the Administrative Agent. Such financial statements shall be
certified by a Senior Officer of Borrower as fairly presenting the
financial condition, results of operations and cash flows of Borrower and
its Subsidiaries in accordance with Generally Accepted Accounting
Principles (other than footnote disclosures), consistently applied, as at
such date and for such periods, subject only to normal year-end accruals
and audit adjustments;
(c) As soon as practicable, and in any event within 60 days after
the end of each Fiscal Quarter, a Pricing Certificate setting forth a
preliminary calculation of the Funded Debt Ratio as of the last day of such
Fiscal Quarter, and providing reasonable detail as to the calculation
thereof, which calculations shall be based on the preliminary unaudited
financial statements of Borrower and its
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<PAGE>
Subsidiaries for such Fiscal Quarter, and as soon as practicable
thereafter, in the event of any material variance in the actual calculation
of the Funded Debt Ratio from such preliminary calculation, a revised
Pricing Certificate setting forth the actual calculation thereof;
(d) As soon as practicable, and in any event within 105 days
after the end of each Fiscal Year, (i) the consolidated balance sheet of
Borrower and its Subsidiaries as at the end of such Fiscal Year and the
consolidated statements of operations, stockholders' equity and cash flows,
in each case of Borrower and its Subsidiaries, for such Fiscal Year and
(ii) supporting consolidating financial information in the form approved by
the Administrative Agent prior to the Closing Date or such other form as
may be acceptable to the Administrative Agent. Such financial statements
shall be prepared in accordance with Generally Accepted Accounting
Principles, consistently applied, and such consolidated balance sheet and
consolidated statements shall be accompanied by a report of independent
public accountants of recognized standing selected by Borrower and
reasonably satisfactory to the Requisite Banks, which report shall be
prepared in accordance with generally accepted auditing standards as at
such date, and shall not be subject to any qualifications or exceptions as
to the scope of the audit nor to any other qualification or exception
determined by the Requisite Banks in their good faith business judgment to
be adverse to the interests of the Banks. Such accountants' report shall
be accompanied by a certificate stating that, in making the examination
pursuant to generally accepted auditing standards necessary for the
certification of such financial statements and such report, such
accountants have obtained no knowledge of any Default or, if, in the
opinion of such accountants, any such Default shall exist, stating the
nature and status of such Default, and stating that such accountants have
reviewed Borrower's financial calculations as at the end of such Fiscal
Year (which shall accompany such certificate) under Sections 6.11 through
----
6.14, have read such Sections (including the definitions of all defined
---- ---------
terms used therein) and that nothing has come to the attention of such
accountants in the course of such examination that would cause them to
believe that the same were not calculated by Borrower in the manner
prescribed by this Agreement;
(e) As soon as practicable, and in any event within 45 days after
the commencement of each Fiscal Year, a budget and projection of Borrower's
statement of operations by Fiscal Quarter for that Fiscal Year and within
105 days after the commencement of each Fiscal Year, a budget and
projection of Borrower's balance sheet for that Fiscal Year and a budget
and projection of Borrower's statement of operations and balance sheet by
Fiscal Year for the next two succeeding Fiscal Years, all in reasonable
detail;
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<PAGE>
(f) Promptly after request by the Administrative Agent or any
Bank, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit
committee of the board of directors) of Borrower by independent accountants
in connection with the accounts or books of Borrower or any of its
Subsidiaries, or any audit of any of them;
(g) Promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent
to the stockholders of Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which Borrower may
file or be required to file with the Securities and Exchange Commission
under Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, and not otherwise required to be delivered to the Banks pursuant
to other provisions of this Section 7.1;
---
(h) Promptly after the same are available, copies of any written
communication to Borrower or any of the Restricted Subsidiaries from any
Gaming Board advising it of a violation of or non-compliance with any
Gaming Law by Borrower or any of the Restricted Subsidiaries;
(i) Promptly after request by the Administrative Agent or any
Bank, copies of any other report or other document that was filed by
Borrower or any of the Restricted Subsidiaries with any Governmental
Agency;
(j) Promptly upon a Senior Officer becoming aware, and in any
event within ten (10) Banking Days after becoming aware, of the occurrence
of any (i) "reportable event" (as such term is defined in Section 4043 of
ERISA) or (ii) "prohibited transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) in connection with any Pension
Plan or any trust created thereunder, telephonic notice specifying the
nature thereof, and, no more than five (5) Banking Days after such
telephonic notice, written notice again specifying the nature thereof and
specifying what action Borrower or any of the Restricted Subsidiaries is
taking or proposes to take with respect thereto, and, when known, any
action taken by the Internal Revenue Service with respect thereto;
(k) As soon as practicable, and in any event within two (2)
Banking Days after a Senior Officer becomes aware of the existence of any
condition or event which constitutes a Default or Event of Default,
telephonic notice specifying the nature and period of existence thereof,
and, no more than two (2) Banking Days after such telephonic notice,
written notice again specifying
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<PAGE>
the nature and period of existence thereof and specifying what action
Borrower or any of its Restricted Subsidiaries is taking or proposes to
take with respect thereto;
(l) Promptly upon a Senior Officer becoming aware that (i) any
Person has commenced a legal proceeding with respect to a claim against
Borrower or any of the Restricted Subsidiaries that is $5,000,000 or more
in excess of the amount thereof that is fully covered by insurance, (ii)
any creditor or lessor under a material credit agreement or material lease
has asserted a default thereunder on the part of Borrower or any of the
Restricted Subsidiaries which may reasonably be expected to result in a
Material Adverse Effect, (iii) any Person has commenced a legal proceeding
with respect to a claim against Borrower or any of the Restricted
Subsidiaries under a contract that is not a credit agreement or material
lease in excess of $5,000,000 or which otherwise may reasonably be expected
to result in a Material Adverse Effect, (iv) any labor union has notified
Borrower of its intent to strike Borrower or any of the Restricted
Subsidiaries on a date certain and such strike would involve more than 100
employees of Borrower and the Restricted Subsidiaries, or (v) any Gaming
Board has indicated its intent to consider or act upon a License Revocation
or a fine or penalty of $1,000,000 or more with respect to Borrower or any
of the Restricted Subsidiaries, a written notice describing the pertinent
facts relating thereto and what action Borrower or the Restricted
Subsidiaries is taking or proposes to take with respect thereto; and
(m) Such other data and information as from time to time may be
reasonably requested by the Administrative Agent, any Bank (through the
Administrative Agent) or the Requisite Banks.
7.2 Compliance Certificates. So long as any Advance remains
-----------------------
unpaid, or any other Obligation remains unpaid or unperformed, or any portion of
the Commitment remains outstanding, Borrower shall, at Borrower's sole expense,
deliver to the Administrative Agent for distribution by it to the Banks
concurrently with the financial statements required pursuant to Sections 7.1(b)
---
and 7.1(d), Compliance Certificates signed by a Senior Officer of Borrower.
------
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<PAGE>
ARTICLE 8
CONDITIONS
----------
8.1 Initial Advances, Etc.. The obligation of each Bank to make
----------------------
the initial Advance under the Commitment to be made by it, or the obligation of
the Issuing Bank to issue the initial Letter of Credit (as applicable) under the
Commitment, is subject to the following conditions precedent, each of which
shall be satisfied prior to the making of such initial Advance or the issuance
of such initial Letter of Credit (unless all of the Banks, in their sole and
absolute discretion, shall agree otherwise):
(a) The Administrative Agent shall have received all of the fol
lowing, each of which shall be originals unless otherwise specified, each
properly executed by a Responsible Official of each party thereto, each
dated as of the Closing Date and each in form and substance satisfactory to
the Administrative Agent and its legal counsel (unless otherwise specified
or, in the case of the date of any of the following, unless the
Administrative Agent otherwise agrees or directs):
(i) the Global Assignment and Release, executed by the
Administrative Agent, the Prior Banks, the Banks and Borrower;
(ii at least one (1) executed counterpart of this
Agreement, together with arrangements satisfactory to the
Administrative Agent for additional executed counterparts, sufficient
in number for distribution to the Banks and Borrower;
(ii Notes executed by Borrower in favor of each Bank, each
in a principal amount equal to that Bank's Pro Rata Share of the
Commitment;
(iv) the Swing Line Documents;
(v) the Subsidiary Guaranty (General) executed by each of
the Joining Subsidiary Guarantors;
(vi) written confirmation of the Subsidiary Guaranty
executed by the Subsidiary Guarantors (other than the Joining
-----
Subsidiary Guarantors);
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<PAGE>
(vii) the Security Agreement executed by each of the
Joining Subsidiary Guarantors, together with each of the instruments
listed in Schedule I to the Security Agreement, executed by the
parties indicated therein;
(viii) such financing statements on Form UCC-1 executed by
Borrower and each Subsidiary Guarantor with respect to the Security
Agreement as the Administrative Agent may request;
(ix) the Trademark Collateral Assignment executed by each
of the Joining Subsidiary Guarantors;
(x) the Pledge Agreement (Gaming Regulated) executed by
CMC together with all certificates constituting the corresponding
Pledged Collateral (Gaming Regulated), accompanied by appropriate
stock powers endorsed in blank;
(xi) the Omnibus Ancillary Documents Amendment executed by
Borrower and the Subsidiary Guarantors;
(xii) the Memorandum of Amendment (Preferred Ship's
Mortgage) executed by the appropriate Subsidiary Guarantor;
(xiii) the Memorandum of Amendment (Trademark Collateral
Assignment) executed by Borrower and the Subsidiary Guarantors;
(xiv) the Biloxi CM Deeds of Trust executed by Biloxi
Casino Corp. and Casino One Corporation;
(xv) the Bay St. Louis Deeds of Trust executed by Mardi
Gras Casino Corp. and Bay St. Louis Casino Corp.;
(xvi) the Existing Deed of Trust Amendment executed by the
appropriate Subsidiary Guarantors;
(xvii) a Landlord Consent and Agreement substantially in the
form of the Model Landlord Consent and Agreement (with such revisions
thereto as may be acceptable to the Administrative Agent) executed by
each lessor of any portion of the Biloxi CM Property;
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<PAGE>
(xviii) written confirmations of the Landlord Consent and
Agreements previously furnished by the lessors of all other Real
Property Collateral, in form and substance acceptable to the
Administrative Agent;
(xix) written agreements executed by the holders of the
minority limited partnership interests or other equity interests, or
warrants or options to obtain the same, in Mississippi-I Gaming, L.P.,
to the effect that such holders consent to the transactions
contemplated by the Loan Documents, in form and substance satisfactory
to the Administrative Agent; provided that this condition shall be
--------
waived with respect to any such Subsidiary if an Opinion of Counsel
includes an opinion that such agreements are not legally required with
respect thereto and that the transactions contemplated by the Loan
Documents do not violate any obligation or duty owed by Borrower or
any of its Subsidiaries to such holders;
(xx) with respect to Borrower and each Subsidiary
Guarantor, such documentation as the Administrative Agent may require
to establish the due organization, valid existence and good standing
of Borrower and each such Subsidiary, its qualification to engage in
business in each material jurisdiction in which it is engaged in
business or required to be so qualified, its authority to execute,
deliver and perform any Loan Documents to which it is a Party, the
identity, authority and capacity of each Responsible Official thereof
authorized to act on its behalf, including certified copies of
---------
articles of incorporation and amendments thereto, bylaws and
amendments thereto, certificates of good standing and/or qualification
to engage in business, tax clearance certificates, certificates of
corporate resolutions, incumbency certificates, Certificates of
Responsible Officials, and the like;
(xxi) the Opinions of Counsel;
(xxii) written appraisals by a qualified independent
appraiser acceptable to the Administrative Agent and complying in all
respects with FIRREA of the Biloxi CM Property and the Bay St. Louis
Property that are in form and substance acceptable to the
Administrative Agent in its sole and absolute discretion;
(xxiii) a copy of a definitive written agreement between
Biloxi Casino Corp. and each of (A) G&W Enterprises, Inc. and (B) Gary
Gallot, Tommy Gallot and Tyrone Gallot delineating the boundaries of
the Real
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<PAGE>
Property covered by the respective leases between Biloxi Casino Corp.
and such Persons;
(xxiv) assurances from the Title Company that it is
prepared to issue appropriate amendments to its ALTA extended coverage
lenders policy insuring the Liens of the Deeds of Trust in an amount
not less than the aggregate fair market value of the Real Property
Collateral (provided, however, that the aggregate title insurance
amount shall not exceed the Commitment), subject to such exceptions
as are reasonably acceptable to the Administrative Agent, with such
title policy endorsements as the Administrative Agent may reasonably
require and with such assurances as the Administrative Agent may
reasonably require from title re-insurers acceptable to the
Administrative Agent;
(xxv) "Phase I" environmental reports with respect to the
Biloxi CM Property and the Bay St. Louis Property prepared by a
qualified independent environmental expert acceptable to the
Administrative Agent, together with a Certificate of a Senior Officer
of Borrower to the effect that, after appropriate inquiry of the
individuals responsible for monitoring such matters, he or she has no
knowledge of any event or circumstance that has occurred since the
dates thereof that would increase in any significant respect the
exposure under Hazardous Materials Laws with respect thereto;
(xxvi) a Certificate of a Senior Officer of Borrower to the
effect that, after appropriate inquiry of the individuals responsible
for monitoring such matters, he or she has no knowledge of any event
or circumstance that has occurred since the dates of the environmental
reports delivered under Section 8.1(a)(25) of the Prior Loan Agreement
----------
that would increase in any significant respect the exposure under
Hazardous Materials Laws with respect to the Collateral under the
Existing Deeds of Trust;
(xxvii) a certificate of insurance issued by Borrower's
insurance carrier or agent with respect to the insurance required to
be maintained pursuant to the Deeds of Trust, together with lenders'
loss payable endorsements thereof on Form 438BFU or other form
acceptable to the Administrative Agent;
(xxviii) such assurances as the Administrative Agent deems
appropriate that the relevant Gaming Boards have approved the
transactions
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<PAGE>
contemplated by the Loan Documents to the extent that such approval is
required by applicable Gaming Laws;
(xxix) a Certificate of a Responsible Official signed by a
Senior Officer of Borrower stating that, to the best of his knowledge
after due inquiry and consideration, the representation contained in
Section 4.17 is true and correct;
----
(xxx) a Certificate of a Responsible Official signed by a
Senior Officer of Borrower stating that the attached copy of the
Certificate of Merger (as defined in the Merger Agreement) as
transmitted for filing with the Delaware Secretary of State is a true
copy;
(xxxi) a Certificate of a Responsible Official signed by a
Senior Officer of Borrower certifying that the conditions specified in
Sections 8.1(k) and 8.1(l) have been satisfied; and
------ ------
(xxxii) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent reasonably may
require.
(b) The upfront fees payable pursuant to Section 3.2 shall have
---
been paid.
(c) The ticking fees payable pursuant to Section 3.3 shall have
---
been paid.
(d) Any agency fees payable on the Closing Date pursuant to
Section 3.6 shall have been paid.
---
(e) The Merger shall have been consummated (or shall concurrently
be consummated) in accordance with the Merger Agreement, and any waiver or
amendment of any provisions thereof shall have been approved by the Banks.
(f) Borrower shall have notified (or shall concurrently notify)
the trustee under the Mississippi First Mortgage Notes Indenture to effect
the Redemption.
(g) The Mississippi First Mortgage Notes Indenture shall have
been discharged (or shall concurrently be discharged) and the Liens created
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<PAGE>
thereby released, and the Administrative Agent shall have received written
confirmation from the Trustee thereunder to that effect.
(h) The Administrative Agent shall be satisfied that, upon filing
or recordation of the Collateral Documents with the appropriate
Governmental Agencies, the Lien of the Collateral Documents will be a first
priority perfected Lien on all of the assets of Borrower and the Subsidiary
Guarantors, subject only to such exceptions as are acceptable to the
Administrative Agent.
(i) There shall not be pending any material litigation or
proceeding before any Governmental Agency that, if resolved against
Borrower, CMC or any of their Subsidiaries, would materially affect the
Merger or the Redemption.
(j) The reasonable costs and expenses of the Administrative Agent
in connection with the preparation of the Loan Documents payable pursuant
to Section 11.3, and invoiced to Borrower prior to the Closing Date, shall
----
have been paid.
(k) The representations and warranties of Borrower contained in
Article 4 shall be true and correct.
---------
(l) Borrower and any other Parties shall be in compliance with
all the terms and provisions of the Loan Documents, and giving effect to
the initial Advance (or initial Letter of Credit, as applicable) no Default
or Event of Default shall have occurred and be continuing.
(m) All legal matters relating to the Loan Documents shall be
satisfactory to Sheppard, Mullin, Richter & Hampton LLP, special counsel to the
Administrative Agent.
(n) The Closing Date shall have occurred on or before October 31,
1998.
8.2 Acquisition of Future Collateral. The obligation of each Bank to
--------------------------------
make any Advance to be used to acquire any asset which is required pursuant to
Section 5.10 to be delivered as Collateral hereunder is subject to the
----
condition precedent that (unless the Requisite Banks, in their sole and absolute
discretion, shall agree otherwise) Borrower and the applicable Subsidiaries
concurrently execute and deliver such Collateral Documents as are required by
Section 5.10 with respect to such asset.
----
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<PAGE>
8.3 Any Advance, Etc. The obligation of each Bank to make any
-----------------
Advance and the obligation of the Issuing Bank to issue a Letter of Credit are
subject to the following conditions precedent (unless the Requisite Banks, in
their sole and absolute discretion, shall agree otherwise):
(a) except (i) for representations and warranties which expressly
------
speak as of a particular date or are no longer true and correct as a result
of a change which is permitted by this Agreement or (ii) as disclosed by
Borrower and approved in writing by the Requisite Banks, the
representations and warranties contained in Article 4 (other than Sections
--------- ----------
4.4(a), 4.6 (first sentence), 4.10, and 4.17) shall be true and correct on
------ --- ---- ----
and as of the date of the Advance as though made on that date;
(b) other than matters then described in Schedule 4.10 or not
-------------
required as of the Schedule Date thereof to be therein described, there
shall not be then pending or threatened any action, suit, proceeding or
investigation against or affecting Borrower or any of the Restricted
Subsidiaries or any Property of any of them before any Governmental Agency
that constitutes a Material Adverse Effect;
(c) the Administrative Agent shall have timely received a Request
for Loan in compliance with Article 2 (or telephonic or other request for
---------
Loan referred to in the second sentence of Section 2.1(b), if applicable)
------
or the Issuing Bank shall have received a Request for Letter of Credit, as
the case may be, in compliance with Article 2; and
---------
(d) the Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, such other assurances,
certificates, documents or consents related to the foregoing as the
Administrative Agent or Requisite Banks reasonably may require.
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<PAGE>
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
----------------------------------------------------
9.1 Events of Default. The existence or occurrence of any one or
-----------------
more of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal on any of the Notes, or
any portion thereof, on the date when due; or
(b) Borrower fails to pay any interest on any of the Notes, or
any fees under Sections 3.4, 3.5 or 3.6, or any portion thereof, within
--- --- ---
three (3) Banking Days after the date when due; or fail to pay any other
fee or amount payable to the Banks under any Loan Document, or any portion
thereof, within three (3) Banking Days after demand therefor; or
(c) Borrower fails to comply with any of the covenants contained
in Article 6; or
---------
(d) Borrower fails to comply with Section 7.1(l) in any respect
------
that is materially adverse to the interests of the Banks; or
(e) Borrower, any of the Subsidiary Guarantors or any other Party
fails to perform or observe any other covenant or agreement (not specified
in clause (a), (b), (c) or (d) above) contained in any Loan Document on its
- - - -
part to be performed or observed within fifteen (15) Banking Days after the
giving of notice by the Administrative Agent on behalf of the Requisite
Banks of such Default; or
(f) Any representation or warranty of Borrower or any of the
Subsidiary Guarantors made in any Loan Document, or in any certificate or
other writing delivered by Borrower or such Subsidiary Guarantor pursuant
to any Loan Document, proves to have been false or misleading when made or
reaffirmed in any respect that is materially adverse to the interests of
the Banks; or
(g) Borrower or any of the Restricted Subsidiaries (i) fails to
pay the principal, or any principal installment, of any present or future
indebtedness for borrowed money of $5,000,000 or more, or any guaranty of
present or future indebtedness for borrowed money of $5,000,000 or more, on
its part to be paid, when due (or within any stated grace period), whether
at the stated maturity, upon
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<PAGE>
acceleration, by reason of required prepayment or otherwise or (ii) fails
to perform or observe any other term, covenant or agreement on its part to
be performed or observed, or suffers any event of default to occur, in
connection with any present or future indebtedness for borrowed money of
$5,000,000 or more, or of any guaranty of present or future indebtedness
for borrowed money of $5,000,000 or more, if as a result of such failure or
sufferance any holder or holders thereof (or an agent or trustee on its or
their behalf) has the right to declare such indebtedness due before the
date on which it otherwise would become due or the right to require
Borrower or any Restricted Subsidiary to redeem or purchase, or offer to
redeem or purchase, all or any portion of such indebtedness; provided that
--------
this Section 9.1(g) shall not apply to the Louisiana First Mortgage Notes
------
or any Guaranty Obligation related thereto; or
(h) The occurrence of an "Event of Default" (as such term is
defined in the Louisiana First Mortgage Note Indenture) under the Louisiana
First Mortgage Note Indenture and the expiration of twenty (20) Banking
Days without the same being cured or waived; or
(i) Any event occurs which gives the holder or holders of any
Subordinated Obligation (or an agent or trustee on its or their behalf) the
right to declare such Subordinated Obligation due before the date on which
it otherwise would become due, or the right to require the issuer thereof
to redeem or purchase, or offer to redeem or purchase, all or any portion
of any Subordinated Obligation; or the trustee for, or any holder of, a
Subordinated Obligation breaches any subordination provision applicable to
such Subordinated Obligation; or
(j) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement or action (or omission
----- ----
to act) of the Administrative Agent or the Banks or satisfaction in full of
all the Obli gations ceases to be in full force and effect or is declared
by a court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect which, in any such event in the reasonable
opinion of the Requisite Banks, is materially adverse to the interests of
the Banks; or any Party thereto denies in writing that it has any or
further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind same; or
(k) A final judgment against any of Borrower or any of the
Restricted Subsidiaries is entered for the payment of money in excess of
$1,000,000 and, absent procurement of a stay of execution, such judgment
remains unsatisfied for thirty (30) calendar days after the date of entry
of judgment, or in
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<PAGE>
any event later than five (5) days prior to the date of any proposed sale
thereunder; or any writ or warrant of attachment or execution or similar
process is issued or levied against all or any material part of the
Property of any such Person and is not released, vacated or fully bonded
within thirty (30) calendar days after its issue or levy; or
(l) Borrower or any of the Significant Subsidiaries institutes or
consents to the institution of any proceeding under a Debtor Relief Law
relating to it or to all or any material part of its Property, or is unable
or admits in writing its inability to pay its debts as they mature, or
makes an assignment for the benefit of creditors; or applies for or
consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all
or any material part of its Property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed
without the application or consent of that Person and the appointment
continues undischarged or unstayed for sixty (60) calendar days; or any
proceeding under a Debtor Relief Law relating to any such Person or to all
or any part of its Property is instituted without the consent of that
Person and continues undismissed or unstayed for sixty (60) calendar days;
or
(m) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any
other Loan Document; or
(n) A final judgment is entered by a court of competent
jurisdiction that any Subordinated Obligation is not subordinated in
accordance with its terms to the Obligations; or
(o) Any Pension Plan maintained by Borrower or any of the
Restricted Subsidiaries is determined to have a material "accumulated
funding deficiency" as that term is defined in Section 302 of ERISA and the
result is a Material Adverse Effect; or
(p) The occurrence of a License Revocation that continues for
three (3) consecutive calendar days affecting gaming operations accounting
for five percent (5%) or more of the consolidated gross revenues of
Borrower and the Restricted Subsidiaries.
9.2 Remedies Upon Event of Default. Without limiting any other
------------------------------
rights or remedies of the Administrative Agent or the Banks provided for
elsewhere in
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<PAGE>
this Agreement, or the other Loan Documents, or by applicable Law or in equity,
or otherwise:
(a) Upon the occurrence, and during the continuance, of any Event
of Default other than an Event of Default described in Section 9.1(l):
----- ---- ------
(i) the Commitment to make Advances, the obligation of the
Issuing Bank to issue Letters of Credit and all other obligations of
the Administrative Agent or the Banks and all rights of Borrower and
any other Parties under the Loan Documents shall be suspended without
notice to or demand upon Borrower, which are expressly waived by
Borrower, except that all of the Banks or the Requisite Banks (as the
------
case may be, in accordance with Section 11.2) may waive an Event of
----
Default or, without waiving, determine, upon terms and conditions
satisfactory to the Banks or Requisite Banks, as the case may be, to
reinstate the Commitment and such other obligations and rights and
make further Advances, and cause the Issuing Bank to issue further
Letters of Credit which waiver or determi nation shall apply equally
to, and shall be binding upon, all the Banks;
(ii) the Issuing Bank may, with the approval of the
Administrative Agent on behalf of the Requisite Banks, demand
immediate payment by Borrower of an amount equal to the aggregate
amount of all outstanding Letters of Credit to be held by the Issuing
Bank in an interest-bearing cash collateral account as collateral
hereunder; and
(iii) the Requisite Banks may request the Administrative
Agent to, and the Administrative Agent thereupon shall, terminate the
Commitment and/or declare all or any part of the unpaid principal of
all Notes, all interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents to be forthwith due and
payable, whereupon the same shall become and be forthwith due and
payable, without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived by
Borrower.
(b) Upon the occurrence of any Event of Default described in
Section 9.1(l):
------
(i) the Commitment to make Advances, the obligation of the
Issuing Bank to issue Letters of Credit and all other obligations of
the Administrative Agent or the Banks and all rights of Borrower and
any other
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<PAGE>
Parties under the Loan Documents shall terminate without notice to or
demand upon Borrower, which are expressly waived by Borrower, except
------
that all of the Banks may waive the Event of Default or, without
waiving, determine, upon terms and conditions satisfactory to all the
Banks, to reinstate the Commitment and such other obligations and
rights and make further Advances and to cause the Issuing Bank to
issue further Letters of Credit, which determination shall apply
equally to, and shall be binding upon, all the Banks;
(ii) an amount equal to the aggregate amount of all
outstanding Letters of Credit shall be immediately due and payable to
the Issuing Bank without notice to or demand upon Borrower, which are
expressly waived by Borrower, to be held by the Issuing Bank in an
interest-bearing cash collateral account as collateral hereunder; and
(iii) the unpaid principal of all Notes, all interest
accrued and unpaid thereon and all other amounts payable under the
Loan Documents shall be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any kind,
all of which are expressly waived by Borrower.
(c) Upon the occurrence of any Event of Default, the Banks and
the Administrative Agent, or any of them, without notice to (except as
------
expressly provided for in any Loan Document) or demand upon Borrower, which
are expressly waived by Borrower (except as to notices expressly provided
------
for in any Loan Document), may proceed (but only with the consent of the
Requisite Banks) to protect, exercise and enforce their rights and remedies
under the Loan Documents against Borrower and any other Party and such
other rights and remedies as are provided by Law or equity.
(d) The order and manner in which the Banks' rights and remedies
are to be exercised shall be determined by the Requisite Banks in their
sole discretion, and all payments received by the Administrative Agent and
the Banks, or any of them, shall be applied first to the costs and expenses
(including reasonable attorneys' fees and disbursements and the reasonably
allocated costs of attorneys employed by the Administrative Agent or by any
Bank) of the Administrative Agent and of the Banks, and thereafter paid pro
rata to the Banks in the same proportions that the aggregate Obligations
owed to each Bank under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all the Banks, without
priority or preference among the Banks.
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<PAGE>
Regardless of how each Bank may treat payments for the purpose of its own
accounting, for the purpose of computing Borrower's Obligations hereunder
and under the Notes, payments shall be applied first, to the costs and
-----
expenses of the Administrative Agent and the Banks, as set forth above,
second, to the payment of accrued and unpaid interest due under any Loan
------
Documents to and including the date of such application (ratably, and
without duplication, according to the accrued and unpaid interest due under
each of the Loan Documents), and third, to the payment of all other amounts
-----
(including principal and fees) then owing to the Administrative Agent
or the Banks under the Loan Documents. Amounts due to a Bank under a
Secured Swap Agreement shall be considered a principal amount for purposes
of the preceding sentence. No application of payments will cure any Event
of Default, or prevent acceleration, or continued acceleration, of amounts
payable under the Loan Documents, or prevent the exercise, or continued
exercise, of rights or remedies of the Banks hereunder or thereunder or at
Law or in equity.
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<PAGE>
ARTICLE 10
THE ADMINISTRATIVE AGENT
------------------------
10.1 Appointment and Authorization. Subject to Section 10.8, each
----------------------------- ----
Bank hereby irrevocably appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Administrative Agent by the terms thereof or
are reasonably incidental, as determined by the Administrative Agent, thereto.
This appointment and authorization is intended solely for the purpose of
facilitating the servicing of the Loans and does not constitute appointment of
the Administrative Agent as trustee for any Bank or as representative of any
Bank for any other purpose and, except as specifically set forth in the Loan
------
Documents to the contrary, the Administrative Agent shall take such action and
exercise such powers only in an administrative and ministerial capacity.
102. Administrative Agent and Affiliates. Bank of America
-----------------------------------
National Trust and Savings Association (and each successor Administrative Agent)
has the same rights and powers under the Loan Documents as any other Bank and
may exercise the same as though it were not the Administrative Agent, and the
term "Bank" or "Banks" includes Bank of America National Trust and Savings
Association in its individual capacity. Bank of America National Trust and
Savings Association (and each successor Administrative Agent) and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
banking, trust or other business with Borrower, any Subsidiary thereof, or any
Affiliate of Borrower or any Subsidiary thereof, as if it were not the
Administrative Agent and without any duty to account therefor to the Banks. Bank
of America National Trust and Savings Association (and each successor
Administrative Agent) need not account to any other Bank for any monies received
by it for reimbursement of its costs and expenses as Administrative Agent
hereunder, or for any monies received by it in its capacity as a Bank hereunder.
The Administrative Agent shall not be deemed to hold a 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 Administrative Agent.
10.3 Proportionate Interest in any Collateral. The Administrative
----------------------------------------
Agent, on behalf of all the Banks, shall hold in accordance with the Loan
Documents all items of any collateral or interests therein received or held by
the Administrative Agent. Subject to the Administrative Agent's and the Banks'
rights to reimbursement for their costs and expenses hereunder (including
---------
reasonable attorneys' fees and disbursements and other professional services and
the reasonably allocated costs of attorneys employed by the Administrative Agent
or a Bank) and subject to the application of payments in accordance
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<PAGE>
with Section 9.2(d), each Bank shall have an interest in the Banks' interest in
------
the Collateral or interests therein in the same proportions that the aggregate
Obligations owed such Bank under the Loan Documents bear to the aggregate
Obligations owed under the Loan Documents to all the Banks, without priority or
preference among the Banks, except that Obligations owed to any Bank (or
------
Affiliate of a Bank) under a Secured Swap Agreement shall be secured on a pari
----
passu basis with all other Obligations up to an amount equal to the
- -----
Administrative Agent's then customary credit risk factor for Swap Agreements
times the notional amount of Indebtedness covered by such Secured Swap Agreement
and shall be secured on a subordinate basis as to amounts in excess of such
amount.
10.4 Banks' Credit Decisions. Each Bank agrees that it has,
-----------------------
independently and without reliance upon the Administrative Agent, any other Bank
or the directors, officers, agents, employees or attorneys of the Administrative
Agent or of any other Bank, and instead in reliance upon information supplied to
it by or on behalf of Borrower and upon such other information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each Bank also agrees that it shall, independently and without
reliance upon the Administrative Agent, any other Bank or the directors,
officers, agents, employees or attorneys of the Administrative Agent or of any
other Bank, continue to make its own independent credit analyses and decisions
in acting or not acting under the Loan Documents.
10.5 Action by Administrative Agent.
------------------------------
(a) Absent actual knowledge of the Administrative Agent of the
existence of a Default, the Administrative Agent may assume that no Default
has occurred and is continuing, unless the Administrative Agent (or the
Bank that is then the Administrative Agent) has received notice from
Borrower stating the nature of the Default or has received notice from a
Bank stating the nature of the Default and that such Bank considers the
Default to have occurred and to be continuing.
(b) The Administrative Agent has only those obligations under the
Loan Documents as are expressly set forth therein.
(c) Except for any obligation expressly set forth in the Loan
------
Documents and as long as the Administrative Agent may assume that no Event
of Default has occurred and is continuing, the Administrative Agent may,
but shall not be required to, exercise its discretion to act or not act,
except that the Administrative Agent shall be required to act or not act
------
upon the instructions of the
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<PAGE>
Requisite Banks (or of all the Banks, to the extent required by Section
11.2) and those instructions shall be binding upon the Administrative
-----
Agent and all the Banks, provided that the Administrative Agent shall not
--------
be required to act or not act if to do so would be contrary to any Loan
Document or to applicable Law or would result, in the reasonable judgment
of the Administrative Agent, in substantial risk of liability to the
Administrative Agent.
(d) If the Administrative Agent has received a notice specified
in clause (a), the Administrative Agent shall immediately give notice
-
thereof to the Banks and shall act or not act upon the instructions of the
Requisite Banks (or of all the Banks, to the extent required by Section
11.2), provided that the Administrative Agent shall not be required to act
---- --------
or not act if to do so would be contrary to any Loan Document or to
applicable Law or would result, in the reasonable judgment of the
Administrative Agent, in substantial risk of liability to the
Administrative Agent, and except that if the Requisite Banks (or all the
------
Banks, if required under Section 11.2) fail, for five (5) Banking Days
----
after the receipt of notice from the Administrative Agent, to instruct the
Administrative Agent, then the Administrative Agent, in its sole
discretion, may act or not act as it deems advisable for the protection of
the interests of the Banks.
(e) The Administrative Agent shall have no liability to any Bank
for acting, or not acting, as instructed by the Requisite Banks (or all the
Banks, if required under Section 11.2), notwithstanding any other provision
----
hereof.
10.6 Liability of Administrative Agent. Neither the
---------------------------------
Administrative Agent nor any of its directors, officers, agents, employees or
attorneys shall be liable for any action taken or not taken by them under or in
connection with the Loan Documents, except for their own gross negligence or
------
willful misconduct. Without limitation on the foregoing, the Administrative
Agent and its directors, officers, agents, employees and attorneys:
(a) May treat the payee of any Note as the holder thereof until
the Administrative Agent receives notice of the assignment or transfer
thereof, in form satisfactory to the Administrative Agent, signed by the
payee, and may treat each Bank as the owner of that Bank's interest in the
Obligations for all purposes of this Agreement until the Administrative
Agent receives notice of the assignment or transfer thereof, in form
satisfactory to the Administrative Agent, signed by that Bank.
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<PAGE>
(b) May consult with legal counsel (including in-house legal
---------
counsel), accountants (including in-house accountants) and other
---------
professionals or experts selected by it, or with legal counsel, accountants
or other professionals or experts for Borrower and/or its Subsidiaries or
the Banks, and shall not be liable for any action taken or not taken by it
in good faith in accordance with any advice of such legal counsel,
accountants or other professionals or experts.
(c) Shall not be responsible to any Bank for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report, request or other statement (written or oral)
given or made in connection with any of the Loan Documents.
(d) Except to the extent expressly set forth in the Loan
------
Documents, shall have no duty to ask or inquire as to the performance or
observance by Borrower or its Subsidiaries of any of the terms, conditions
or covenants of any of the Loan Documents or to inspect any Collateral or
the Property, books or records of Borrower or its Subsidiaries.
(e) Will not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, effectiveness, sufficiency
or value of any Loan Document, any other instrument or writing furnished
pursuant thereto or in connection therewith, or any Collateral.
(f) Will not incur any liability by acting or not acting in
reliance upon any Loan Document, notice, consent, certificate, statement,
request or other instrument or writing believed in good faith by it to be
genuine and signed or sent by the proper party or parties.
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by the Borrower or any Subsidiary or
Affiliate thereof or paid or payable to or received or receivable from any
Bank under any Loan Document, including principal, interest, commitment
---------
fees, Advances and other amounts; provided that, promptly upon discovery
--------
of such an error in computation, the Administrative Agent, the Banks and
(to the extent applicable) Borrower and/or its Subsidiaries or Affiliates
shall make such adjustments as are necessary to correct such error and to
restore the parties to the position that they would have occupied had the
error not occurred.
10.7 Indemnification. Each Bank shall, ratably in accordance with
---------------
its Pro Rata Share of the Commitment (if the Commitment is then in effect) or in
accordance
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<PAGE>
with its proportion of the aggregate Indebtedness then evidenced by the Notes
(if the Commitment has then been terminated), indemnify and hold the
Administrative Agent and its directors, officers, agents, employees and
attorneys harmless against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including attorneys' fees and disbursements
---------
and allocated costs of attorneys employed by the Administrative Agent) that may
be imposed on, incurred by or asserted against it or them in any way relating to
or arising out of the Loan Documents (other than losses incurred by reason of
the failure of Borrower to pay the Indebtedness represented by the Notes) or any
action taken or not taken by it as Administrative Agent thereunder, except such
------
as result from its own gross negligence or willful misconduct. Without
limitation on the foregoing, each Bank shall reimburse the Administrative Agent
upon demand for that Bank's Pro Rata Share of any out-of-pocket cost or expense
incurred by the Administrative Agent in connection with the negotiation,
preparation, execution, delivery, amendment, waiver, restructuring,
reorganization (including a bankruptcy reorganization), enforcement or attempted
---------
enforcement of the Loan Documents, to the extent that Borrower or any other
Party is required by Section 11.3 to pay that cost or expense but fails to do so
----
upon demand. Nothing in this Section 10.7 shall entitle the Administrative Agent
----
to recover any amount from the Banks if and to the extent that such amount has
theretofore been recovered from Borrower or any of their Subsidiaries. To the
extent that the Administrative Agent is later reimbursed such cost or expense by
Borrower or any of its Subsidiaries, it shall return the amounts paid to it by
the Banks in respect of such cost or expense.
10.8 Successor Administrative Agent. The Administrative Agent
------------------------------
may, and at the request of the Requisite Banks shall, resign as Administrative
Agent upon thirty (30) days' notice to the Banks and Borrower. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
the Requisite Banks shall appoint from among the Banks a successor
Administrative Agent for the Banks, which successor Administrative Agent shall
be approved by Borrower (and such approval shall not be unreasonably withheld or
delayed). If no successor Administrative Agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Banks and Borrower,
a successor Administrative Agent from among the Banks. Upon the acceptance of
its appointment as successor Administrative Agent hereunder, such successor
Administrative Agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "Administrative Agent" shall mean
such successor Administrative Agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 10, and Sections 11.3,
---------- ----
11.11 and 11.22, shall inure to its benefit as to any actions taken or omitted
- ----- -----
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<PAGE>
to be taken by it while it was Administrative Agent under this Agreement. If
(a) the Administrative Agent has not been paid its agency fees under Section 3.6
---
or has not been reimbursed for any expense reimbursable to it under Section
11.3, in either case for a period of at least one (1) year and (b) no successor
- ----
Administrative Agent has accepted appointment as Administrative Agent by the
date which is thirty (30) days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Requisite Banks appoint a successor Administrative Agent as provided for above.
10.9 Foreclosure on Collateral. In the event of foreclosure or
-------------------------
enforcement of the Lien created by any of the Collateral Documents, title to the
Collateral covered thereby shall be taken and held by the Administrative Agent
(or an Affiliate or designee thereof) pro rata for the benefit of the Banks in
accordance with the Obligations outstanding to each of them and shall be
administered in accordance with the standard form of collateral holding
participation agreement used by the Administrative Agent in comparable
syndicated credit facilities.
10.10 No Obligations of Borrower. Nothing contained in this
--------------------------
Article 10 shall be deemed to impose upon Borrower any obligation in respect of
the due and punctual performance by the Administrative Agent of its obligations
to the Banks under any provision of this Agreement, and Borrower shall have no
liability to the Administrative Agent or any of the Banks in respect of any
failure by the Administrative Agent or any Bank to perform any of its
obligations to the Administrative Agent or the Banks under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing under the Loan
Documents provides that such payments shall be made by Borrower to the
Administrative Agent for the account of the Banks, Borrower's obligations to the
Banks in respect of such payments shall be deemed to be satisfied upon the
making of such payments to the Administrative Agent in the manner provided by
this Agreement.
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<PAGE>
ARTICLE 11
MISCELLANEOUS
-------------
11.1 Cumulative Remedies; No Waiver. The rights, powers,
------------------------------
privileges and remedies of the Administrative Agent and the Banks provided
herein or in any Note or other Loan Document are cumulative and not exclusive of
any right, power, privilege or remedy provided by Law or equity. No failure or
delay on the part of the Administrative Agent or any Bank in exercising any
right, power, privilege or remedy may be, or may be deemed to be, a waiver
thereof; nor may any single or partial exercise of any right, power, privilege
or remedy preclude any other or further exercise of the same or any other right,
power, privilege or remedy. The terms and conditions of Article 8 hereof are
---------
inserted for the sole benefit of the Administrative Agent and the Banks; the
same may be waived in whole or in part, with or without terms or conditions, in
respect of any Loan or Letter of Credit without prejudicing the Administrative
Agent's or the Banks' rights to assert them in whole or in part in respect of
any other Loan or Letter of Credit.
11.2 Amendments; Consents. No amendment, modification,
--------------------
supplement, extension, termination or waiver of any provision of this Agreement
or any other Loan Document, no approval or consent thereunder, and no consent to
any departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the written
consent of Requisite Banks (and, in the case of any amendment, modification or
supplement of or to any Loan Document to which Borrower or any Subsidiary
Guarantor is a Party, signed by each such Party), and then only in the specific
instance and for the specific purpose given; and, without the written consent of
all the Banks, no amendment, modification, supplement, termination, waiver or
consent may be effective:
(a) To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on, any
Note, or the amount of the Commitment or the Pro Rata Share of any Bank or
the amount of any commitment fee payable to any Bank, or any other fee or
amount payable to any Bank under the Loan Documents or to waive an Event of
Default consisting of the failure of Borrower to pay when due principal,
interest or any commitment fee;
(b) To postpone any date fixed for any payment of principal of,
prepayment of principal of or any installment of interest on, any Note or
any installment of any commitment fee, or to extend the term of the
Commitment, or to release the Subsidiary Guaranty (General) or Subsidiary
Guaranty (Crystal Park);
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(c) to release any material portion of the Collateral except as
------
otherwise expressly provided for in any Loan Document;
(d) To amend the provisions of the definition of "Requisite
---------
Banks", Articles 8 or 9 or this Section 11.2 or to amend or waive Section
--------------- ----
6.4; or
---
(e) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Banks.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
----
Banks and the Administrative Agent.
11.3 Costs, Expenses and Taxes. Borrower shall pay within ten
-------------------------
(10) Banking Days after demand, accompanied by an invoice therefor, the
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the negotiation, preparation, syndication, execution and
delivery of the Loan Documents and, subject to any written agreement between
Borrower and the Administrative Agent at the time thereof, any amendment thereto
or waiver thereof. Borrower shall also pay on demand, accompanied by an invoice
therefor, the reasonable costs and expenses of the Administrative Agent and the
Banks in connection with the refinancing, restructuring (including a "work-
---------
out"), reorganization (including a bankruptcy reorganization) and enforcement or
---------
attempted enforcement of the Loan Documents, and any matter related thereto.
The foregoing costs and expenses shall include filing fees, recording fees,
title insurance fees, appraisal fees, search fees, and other out-of-pocket
expenses and the reasonable fees and out-of-pocket expenses of any legal counsel
(including reasonably allocated costs of legal counsel employed by the
---------
Administrative Agent or any Bank), independent public accountants and other
outside experts retained by the Administrative Agent or any Bank, whether or not
such costs and expenses are incurred or suffered by the Administrative Agent or
any Bank in connection with or during the course of any bankruptcy or insolvency
proceedings of Borrower or any Subsidiary thereof. Such costs and expenses
shall also include, in the case of any amendment or waiver of any Loan Document
requested by Borrower, the administrative costs of the Administrative Agent
reasonably attributable thereto. Borrower shall pay any and all documentary and
other taxes, excluding (i) taxes imposed on or measured in whole or in part by
---------
its overall income or gross receipts and franchise taxes imposed on it by (A)
any jurisdiction (or political subdivision thereof) in which it is organized or
maintains its principal office or Eurodollar Lending Office or (B) any
jurisdiction (or political subdivision thereof) in which it is "doing business",
(ii) any withholding taxes or other taxes based on income
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imposed by the United States of America (other than withholding taxes and taxes
based on income resulting from or attributable to any change in any law, rule or
regulation or any change in the interpretation or administration of any law,
rule or regulation by any Governmental Agency) or (iii) any withholding taxes or
other taxes based on income imposed by the United States of America for any
period with respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 11.21, to the extent such forms
-----
are then required by applicable Laws, and all costs, expenses, fees and charges
payable or determined to be payable in connection with the filing or recording
of this Agreement, any other Loan Document or any other instrument or writing to
be delivered hereunder or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify on
the terms set forth in 11.11 the Administrative Agent and the Banks from and
-----
against any and all loss, liability or legal or other expense with respect to
or resulting from any delay in paying or failure to pay any such tax, cost,
expense, fee or charge or that any of them may suffer or incur by reason of the
failure of any Party to perform any of its Obligations. Any amount payable to
the Administrative Agent or any Bank under this Section 11.3 shall bear interest
----
from the second Banking Day following the date of demand for payment at the
Default Rate.
11.4 Nature of Banks' Obligations. The obligations of the Banks
----------------------------
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the
Administrative Agent or the Banks or any of them pursuant hereto or thereto may,
or may be deemed to, make the Banks a partnership, an association, a joint
venture or other entity, either among themselves or with Borrower or any
Affiliate of Borrower. Each Bank's obligation to make any Advance pursuant
hereto is several and not joint or joint and several, and in the case of the
initial Advance only is conditioned upon the performance by all other Banks of
their obligations to make initial Advances. A default by any Bank will not
increase the Pro Rata Share of the Commitment attributable to any other Bank.
Any Bank not in default may, if it desires, assume in such proportion as the
nondefaulting Banks agree the obligations of any Bank in default, but is not
obligated to do so. The Administrative Agent agrees that it will use its best
efforts either to induce the other Banks to assume the obligations of a Bank in
default or to obtain another Bank, reasonably satisfactory to Borrower, to
replace such a Bank in default.
11.5 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making of the Loans
hereunder and the execution and delivery of the Notes, and have been or will be
relied upon by the Administrative Agent
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and each Bank, notwithstanding any investigation made by the Administrative
Agent or any Bank or on their behalf.
11.6 Notices. Except as otherwise expressly provided in the Loan
------- ------
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied, dispatched by commercial courier or
delivered to the appropriate party at the address set forth on the signature
pages of this Agreement or other applicable Loan Document or, as to any party to
any Loan Document, at any other address as may be designated by it in a written
notice sent to all other parties to such Loan Document in accordance with this
Section 11.6. Except as otherwise expressly provided in any Loan Document, if
----- ------
any notice, request, demand, direction or other communication required or
permitted by any Loan Document is given by mail it will be effective on the
earlier of receipt or the fourth Banking Day after deposit in the United States
mail with first class or airmail postage prepaid; if given by telegraph or
cable, when delivered to the telegraph company with charges prepaid; if given by
telecopier, when sent; if dispatched by commercial courier, on the scheduled
delivery date; or if given by personal delivery, when delivered.
11.7 Execution of Loan Documents. Unless the Administrative Agent
---------------------------
otherwise specifies with respect to any Loan Document, (a) this Agreement and
any other Loan Document may be executed in any number of counterparts and any
party hereto or thereto may execute any counterpart, each of which when executed
and delivered will be deemed to be an original and all of which counterparts of
this Agreement or any other Loan Document, as the case may be, when taken
together will be deemed to be but one and the same instrument and (b) execution
of any such counterpart may be evidenced by a telecopier transmission of the
signature of such party. The execution of this Agreement or any other Loan
Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.
11.8 Binding Effect; Assignment.
--------------------------
(a) This Agreement and the other Loan Documents to which
Borrower is a Party will be binding upon and inure to the benefit of
Borrower, the Administrative Agent, each of the Banks, and their respective
successors and assigns, except that, except as permitted in Section 6.3,
------ ---
Borrower may not assign its rights hereunder or thereunder or any interest
herein or therein without the prior written consent of all the Banks. Each
Bank represents that it is not acquiring its Note with a view to the
distribution thereof within the meaning of the Securities
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Act of 1933, as amended (subject to any requirement that disposition of
such Note must be within the control of such Bank). Any Bank may at any
time pledge its Note or any other instrument evidencing its rights as a
Bank under this Agreement to a Federal Reserve Bank, but no such pledge
shall release that Bank from its obligations hereunder or grant to such
Federal Reserve Bank the rights of a Bank hereunder absent foreclosure of
such pledge.
(b) From time to time following the Closing Date, each Bank may
assign to one or more Eligible Assignees all or any portion of its Pro Rata
Share of the Commitment; provided that (i) such Eligible Assignee, if not
--------
then a Bank or an Affiliate of the assigning Bank, shall be approved by
each of the Administrative Agent and Borrower (neither of which approvals
shall be unreasonably withheld or delayed), (ii) such assignment shall be
evidenced by a Commitment Assignment and Acceptance, a copy of which shall
be furnished to the Administrative Agent as hereinbelow provided, (iii)
except in the case of an assignment to an Affiliate of the assigning Bank,
------
to another Bank or of the entire remaining Commitment of the assigning
Bank, the assignment shall not assign a Pro Rata Share of the Commitment,
that is equivalent to less than $5,000,000 and (iv) the effective date of
any such assignment shall be as specified in the Commitment Assignment and
Acceptance, but not earlier than the date which is five (5) Banking Days
after the date the Administrative Agent has received the Commitment
Assignment and Acceptance. Upon the effective date of such Commitment
Assignment and Acceptance, the Eligible Assignee named therein shall be a
Bank for all purposes of this Agreement, with the Pro Rata Share of the
Commitment therein set forth and, to the extent of such Pro Rata Share, the
assigning Bank shall be released from its further obligations under this
Agreement. Borrower agree that it shall execute and deliver (against
delivery by the assigning Bank to Borrower of its Note) to such assignee
Bank, a Note evidencing that assignee Bank's Pro Rata Share of the
Commitment, and to the assigning Bank, a Note evidencing the remaining
balance Pro Rata Share retained by the assigning Bank.
(c) By executing and delivering a Commitment Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and agrees that:
(i) other than the representation and warranty that it is the legal and
beneficial owner of the Pro Rata Share of the Commitment being assigned
thereby free and clear of any adverse claim, the assigning Bank has made no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness or sufficiency of this Agreement or any other Loan Document;
(ii) the assigning Bank has made no representation or
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warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance by Borrower of the Obligations;
(iii) it has received a copy of this Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 7.1 and such
---
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Commitment Assignment
and Acceptance; (iv) it will, independently and without reliance upon the
Administrative Agent or any Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) it appoints and authorizes the Administrative Agent to take such action
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by this Agreement; and (vi) it will perform in
accordance with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Bank.
(d) The Administrative Agent shall maintain at the Administrative
Agent's Office a copy of each Commitment Assignment and Acceptance
delivered to it and a register (the "Register") of the names and address of
each of the Banks and the Pro Rata Share of the Commitment held by each
Bank, giving effect to each Commitment Assignment and Acceptance. The
Register shall be available during normal business hours for inspection by
Borrower or any Bank upon reasonable prior notice to the Administrative
Agent. After receipt of a completed Commitment Assignment and Acceptance
executed by any Bank and an Eligible Assignee, and receipt of an assignment
fee of $2,500 from such Eligible Assignee, the Administrative Agent shall,
promptly following the effective date thereof, provide to Borrower and the
Banks a revised Schedule 1.1 giving effect thereto. Borrower, the
------------
Administrative Agent and the Banks shall deem and treat the Persons listed
as Banks in the Register as the holders and owners of the Pro Rata Share of
the Commitment listed therein for all purposes hereof, and no assignment or
transfer of any such Pro Rata Share of the Commitment shall be effective,
in each case unless and until a Commitment Assignment and Acceptance
effecting the assignment or transfer thereof shall have been accepted by
the Administrative Agent and recorded in the Register as provided above.
Prior to such recordation, all amounts owed with respect to the applicable
Pro Rata Share of the Commitment shall be owed to the Bank listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Bank shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Pro Rata Share of the Commitment.
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<PAGE>
(e) Each Bank may from time to time grant participations to one
or more banks or other financial institutions (including another Bank) in a
---------
portion of its Pro Rata Share of the Commitment; provided, however, that
-------- -------
(i) such Bank's obligations under this Agreement shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participating banks or
other financial institutions shall not be a Bank hereunder for any purpose
except, if the participation agreement so provides, for the purposes of
------
Sections 3.8, 3.9, 11.11 and 11.22 but only to the extent that the cost of
--- --- ----- -----
such benefits to Borrower does not exceed the cost which Borrower would
have incurred in respect of such Bank absent the participation, (iv)
Borrower, the Administrative Agent and the other Banks shall continue to
deal solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement, (v) the participation interest
shall be expressed as a percentage of the granting Bank's Pro Rata Share of
the Commitment as it then exists and shall not restrict an increase in the
Commitment, or in the granting Bank's Pro Rata Share of the Commitment, so
long as the amount of the participation interest is not affected thereby
and (vi) the consent of the holder of such participation interest shall not
be required for amendments or waivers of provisions of the Loan Documents
other than those which (A) extend the Initial Reduction Date, the Maturity
----------
Date or any other date upon which any payment of money is due to the Banks,
(B) reduce the rate of interest on the Notes, any fee or any other monetary
amount payable to the Banks, (C) reduce the amount of any installment of
principal due under the Notes, or (D) release any material portion of the
Collateral (except as otherwise expressly provided for in any Loan
Document).
(f) Notwithstanding anything in this Section 11.8 to the
----
contrary, the rights of the Banks to make assignments of, and grant
participations in, their Pro Rata Shares of the Commitment shall be subject
to the approval of any Gaming Board, to the extent required by applicable
Gaming Laws, and to compliance with applicable securities laws.
11.9 Right of Setoff. If an Event of Default has occurred and is
---------------
continuing, the Administrative Agent or any Bank (but in each case only with the
consent of the Requisite Banks) may exercise its rights under Article 9 of the
Uniform Commercial Code and other applicable Laws and, to the extent permitted
by applicable Laws, apply any funds in any deposit account maintained with it by
Borrower and/or any Property of Borrower in its possession against the
Obligations.
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11.10 Sharing of Setoffs. Each Bank severally agrees that if it,
------------------
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Bank, through any means, receives in payment
of the Obligations held by that Bank, then, subject to applicable Laws: (a) the
Bank exercising the right of setoff, banker's lien or counterclaim or otherwise
receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from the other Bank a participation in the Obligations
held by the other Bank and shall pay to the other Bank a purchase price in an
amount so that the share of the Obligations held by each Bank after the exercise
of the right of setoff, banker's lien or counterclaim or receipt of payment
shall be in the same proportion that existed prior to the exercise of the right
of setoff, banker's lien or counterclaim or receipt of payment; and (b) such
other adjustments and purchases of participations shall be made from time to
time as shall be equitable to ensure that all of the Banks share any payment
obtained in respect of the Obligations ratably in accordance with each Bank's
share of the Obligations immediately prior to, and without taking into account,
the payment; provided that, if all or any portion of a disproportionate payment
--------
obtained as a result of the exercise of the right of setoff, banker's lien,
counterclaim or otherwise is thereafter recovered from the purchasing Bank by
Borrower or any Person claiming through or succeeding to the rights of Borrower,
the purchase of a participation shall be rescinded and the purchase price
thereof shall be restored to the extent of the recovery, but without interest.
Each Bank that purchases a participation in the Obligations pursuant to this
Section 11.10 shall from and after the purchase have the right to give all
-----
notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Bank were the original owner of the
Obligations purchased. Borrower expressly consents to the foregoing
arrangements and agrees that any Bank holding a participation in an Obligation
so purchased may exercise any and all rights of setoff, banker's lien or
counterclaim with respect to the participation as fully as if the Bank were the
original owner of the Obligation purchased.
11.11 Indemnity by Borrower. Borrower agrees to indemnify, save
---------------------
and hold harmless the Administrative Agent and each Bank and their directors,
officers, agents, attorneys and employees (collectively the "Indemnitees") from
-----------
and against: (a) any and all claims, demands, actions or causes of action if the
claim, demand, action or cause of action arises out of or relates to any act or
omission (or alleged act or omission) of Borrower, its Affiliates or any of its
officers, directors or stockholders relating to the Commitment, the use or
contemplated use of proceeds of any Loan, or the relationship of Borrower and
the Banks under this Agreement; (b) any administrative or investigative
proceeding by any Governmental Agency arising out of or related to a claim,
demand, action or cause of action described in clause (a) above; and (c) any and
all
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liabilities, losses, costs or expenses (including reasonable attorneys' fees
---------
and the reasonably allocated costs of attorneys employed by any Indemnitee and
disbursements of such attorneys and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; provided that no Indemnitee shall be
--------
entitled to indemnification for any loss caused by its own gross negligence or
willful misconduct or for any loss asserted against it by another Indemnitee.
If any claim, demand, action or cause of action is asserted against any
Indemnitee, such Indemnitee shall promptly notify Borrower, but the failure to
so promptly notify Borrower shall not affect Borrower's obligations under this
Section unless such failure materially prejudices Borrower's right to
participate in the contest of such claim, demand, action or cause of action, as
hereinafter provided. Such Indemnitee may (and shall, if requested by Borrower
in writing) contest the validity, applicability and amount of such claim,
demand, action or cause of action and shall permit Borrower to participate in
such contest. Any Indemnitee that proposes to settle or compromise any claim or
proceeding for which Borrower may be liable for payment of indemnity hereunder
shall give Borrower written notice of the terms of such proposed settlement or
compromise reasonably in advance of settling or compromising such claim or
proceeding and shall obtain Borrower's prior consent (which shall not be
unreasonably withheld or delayed). In connection with any claim, demand, action
or cause of action covered by this Section 11.11 against more than one
-----
Indemnitee, all such Indemnitees shall be represented by the same legal counsel
(which may be a law firm engaged by the Indemnitees or attorneys employed by an
Indemnitee or a combination of the foregoing) selected by the Indemnitees and
reasonably acceptable to Borrower; provided, that if such legal counsel
--------
determines in good faith that representing all such Indemnitees would or could
result in a conflict of interest under Laws or ethical principles applicable to
such legal counsel or that a defense or counterclaim is available to an
Indemnitee that is not available to all such Indemnitees, then to the extent
reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each Indemnitee shall
be entitled to separate representation by legal counsel selected by that
Indemnitee and reasonably acceptable to Borrower, with all such legal counsel
using reasonable efforts to avoid unnecessary duplication of effort by counsel
for all Indemnitees; and further provided that the Administrative Agent (as an
------- --------
Indemnitee) shall at all times be entitled to representation by separate legal
counsel (which may be a law firm or attorneys employed by the Administrative
Agent or a combination of the foregoing). Any obligation or liability of
Borrower to any Indemnitee under this Section 11.11 shall survive the expiration
-----
or termination of this Agreement and the repayment of all Loans and the payment
and performance of all other Obligations owed to the Banks.
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11.12 Nonliability of the Banks. Borrower acknowledges and agrees
-------------------------
that:
(a) Any inspections of any Property of Borrower made by or
through the Administrative Agent or the Banks are for purposes of
administration of the Loan only and Borrower is not entitled to rely upon
the same (whether or not such inspections are at the expense of Borrower);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Administrative Agent or the Banks
pursuant to the Loan Documents, neither the Administrative Agent nor the
Banks shall be deemed to have warranted or represented the sufficiency,
legality, effectiveness or legal effect of the same, or of any term,
provision or condition thereof, and such acceptance or approval thereof
shall not constitute a warranty or representation to anyone with respect
thereto by the Administrative Agent or the Banks;
(c) The relationship between Borrower and the Administrative
Agent and the Banks is, and shall at all times remain, solely that of
borrower and lenders; neither the Administrative Agent nor the Banks shall
under any circumstance be construed to be partners or joint venturers of
Borrower or its Affiliates; neither the Administrative Agent nor the Banks
shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with Borrower or its
Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
neither the Administrative Agent nor the Banks undertake or assume any
responsibility or duty to Borrower or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Borrower or its Affiliates
of any matter in connection with its Property or the operations of Borrower
or its Affiliates; Borrower and its Affiliates shall rely entirely upon
their own judgment with respect to such matters; and any review,
inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by the Administrative Agent or the Banks in
connection with such matters is solely for the protection of the
Administrative Agent and the Banks and neither Borrower nor any other
Person is entitled to rely thereon; and
(d) The Administrative Agent and the Banks shall not be
responsible or liable to any Person for any loss, damage, liability or
claim of any kind relating to injury or death to Persons or damage to
Property caused by the actions, inaction or negligence of Borrower and/or
its Affiliates and Borrower hereby indemnifies and holds the Administrative
Agent and the Banks harmless on the terms set forth in Section 11.11 from
-----
any such loss, damage, liability or claim.
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11.13 No Third Parties Benefited. This Agreement is made for the
--------------------------
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Administrative Agent and the Banks in connection with the Loans
and Letters of Credit, and is made for the sole benefit of Borrower, the
Administrative Agent and the Banks, and the Administrative Agent's and the
Banks' successors and assigns. Except as provided in Sections 11.8 and 11.11,
------ ---- -----
no other Person shall have any rights of any nature hereunder or by reason
hereof.
11.14 Confidentiality. Each Bank agrees to hold any confidential
---------------
information that it may receive from Borrower pursuant to this Agreement in
confidence, except for disclosure: (a) to other Banks; (b) to legal counsel and
------
accountants for Borrower or any Bank or any affiliate of any Bank; (c) to other
professional advisors to Borrower or any Bank, provided that the recipient has
accepted such information subject to a confidentiality agreement substantially
similar to this Section 11.14; (d) to regulatory officials having jurisdiction
-----
over that Bank; (e) to any Gaming Board having regulatory jurisdiction over
Borrower or its Subsidiaries, provided that each Bank agrees to use its best
efforts to notify Borrower of any such disclosure unless prohibited by
applicable Laws; (f) as required by Law or legal process or in connection with
any legal proceeding to which that Bank and Borrower are adverse parties; and
(g) to another financial institution in connection with a disposition or
proposed disposition to that financial institution of all or part of that Bank's
interests hereunder or a participation interest in its Note, provided that the
recipient has accepted such information subject to a confidentiality agreement
substantially similar to this Section 11.14. For purposes of the foregoing,
-----
"confidential information" shall mean any information respecting Borrower or its
Subsidiaries reasonably considered by Borrower to be confidential, other than
----------
(i) information previously filed with any Governmental Agency and available to
the public, (ii) information previously published in any public medium from a
source other than, directly or indirectly, that Bank, and (iii) information
previously disclosed by Borrower to any Person not associated with Borrower
without a confidentiality agreement or obligation substantially similar to this
Section 11.14. Nothing in this Section shall be construed to create or give
-----
rise to any fiduciary duty on the part of the Administrative Agent or the Banks
to Borrower.
11.15 Further Assurances. Borrower and the Significant
------------------
Subsidiaries shall, at their expense and without expense to the Banks or the
Administrative Agent, do, execute and deliver such further acts and documents as
the Requisite Banks or the Administrative Agent from time to time reasonably
require for the assuring and confirming unto the Banks or the Administrative
Agent of the rights hereby created or intended now or hereafter so to be, or for
carrying out the intention or facilitating the performance of the terms of any
Loan Document.
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11.16 Integration. This Agreement, together with the other Loan
-----------
Documents and the letter agreements referred to in Sections 3.2, 3.3 and 3.6,
--- --- ---
comprises the complete and integrated agreement of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
--------
rights or remedies in favor of the Administrative Agent or the Banks in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.
11.17 Governing Law. Except to the extent otherwise provided
------------- ------
therein, each Loan Document shall be governed by, and construed and enforced in
accordance with, the local Laws of California.
11.18 Severability of Provisions. Any provision in any Loan
--------------------------
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions
or the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
11.19 Headings. Article and Section headings in this Agreement and
--------
the other Loan Documents are included for convenience of reference only and are
not part of this Agreement or the other Loan Documents for any other purpose.
11.20 Time of the Essence. Time is of the essence of the Loan
-------------------
Documents.
11.21 Foreign Banks and Participants. Each Bank that is
------------------------------
incorporated or otherwise organized under the Laws of a jurisdiction other than
the United States of America or any State thereof or the District of Columbia
shall deliver to Borrower (with a copy to the Administrative Agent), within
twenty (20) days after the Closing Date (or after accepting an assignment or
receiving a participation interest herein pursuant to Section 11.8, if
----
applicable) two duly completed copies, signed by a Responsible Official, of
either Form 1001 (relating to such Bank and entitling it to a complete exemption
from withholding on all payments to be made to such Bank by Borrower pursuant to
this Agreement) or Form 4224 (relating to all payments to be made to such Bank
by the
-128-
<PAGE>
Borrower pursuant to this Agreement) of the United States Internal Revenue
Service or such other evidence (including, if reasonably necessary, Form
---------
W-9) satisfactory to Borrower and the Administrative Agent that no withholding
under the federal income tax laws is required with respect to such Bank.
Thereafter and from time to time, each such Bank shall (a) promptly submit to
Borrower (with a copy to the Administrative Agent), such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to Borrower and the
Administrative Agent of any available exemption from, United States withholding
taxes in respect of all payments to be made to such Bank by Borrower pursuant to
this Agreement and (b) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Bank, and as may be
reasonably necessary (including the re-designation of its Eurodollar Lending
Office, if any) to avoid any requirement of applicable Laws that Borrower make
any deduction or withholding for taxes from amounts payable to such Bank. In
the event that Borrower or the Administrative Agent become aware that a
participation has been granted pursuant to Section 11.8(e) to a financial
-------
institution that is incorporated or otherwise organized under the Laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia, then, upon request made by Borrower or the Administrative
Agent to the Bank which granted such participation, such Bank shall cause such
participant financial institution to deliver the same documents and information
to Borrower and the Administrative Agent as would be required under this Section
if such financial institution were a Bank.
11.22 Hazardous Material Indemnity. Borrower hereby agrees to
----------------------------
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) the Administrative Agent and each of the Banks and their
respective directors, officers, employees, agents, successors and assigns from
and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders, judgments, remedial
action requirements, enforcement actions of any kind, and all costs and expenses
incurred in connection therewith (including but not limited to reasonable
attorneys' fees and the reasonably allocated costs of attorneys employed by the
Administrative Agent or any Bank, and expenses to the extent that the defense of
any such action has not been assumed by Borrower), arising directly or
indirectly out of (i) the presence on, in, under or about any Real Property of
any Hazardous Materials, or any releases or discharges of any Hazardous
Materials on, under or from any Real Property and (ii) any activity carried on
or undertaken on or off any Real Property by Borrower or any of its predecessors
in title, whether prior to or during the term of this Agreement, and whether by
Borrower or any predecessor in title or any employees, agents, contractors or
subcontractors of Borrower or any
-129-
<PAGE>
predecessor in title, or any third persons at any time occupying or present on
any Real Property, in connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous Materials at
any time located or present on, in, under or about any Real Property. The
foregoing indemnity shall further apply to any residual contamination on, in,
under or about any Real Property, or affecting any natural resources, and to any
contamination of any Property or natural resources arising in connection with
the generation, use, handling, storage, transport or disposal of any such
Hazardous Materials, and irrespective of whether any of such activities were or
will be undertaken in accordance with applicable Laws, but the foregoing
indemnity shall not apply to Hazardous Materials on any Real Property, the
presence of which is caused by the Administrative Agent or the Banks. Borrower
hereby acknowledges and agrees that, notwithstanding any other provision of this
Agreement or any of the other Loan Documents to the contrary, the obligations of
Borrower under this Section (and under Sections 4.18 and 5.14) shall be
---- ----
unlimited corporate obligations of Borrower and shall not be secured by any Lien
---
on any Real Property. Any obligation or liability of Borrower to any Indemnitee
under this Section 11.22 shall survive the expiration or termination of this
-----
Agreement and the repayment of all Loans and the payment and performance of all
other Obligations owed to the Banks.
11.23 Gaming Boards. The Administrative Agent and each of the
-------------
Banks agree to cooperate with all Gaming Boards in connection with the
administration of their regulatory jurisdiction over Borrower and its
Subsidiaries, including the provision of such documents or other information as
---------
may be requested by any such Gaming Board relating to Borrower or any of its
Subsidiaries or to the Loan Documents.
11.24 Waiver of Right to Trial by Jury. EACH PARTY TO THIS
--------------------------------
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT
-130-
<PAGE>
OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.25 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES
-------------------------
THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR
MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT IT
----
WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR
WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY BANK
THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT,
----
MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
HOLLYWOOD PARK, INC.
By: /s/ G. Michael Finnegan
-----------------------------------------------
Name: Michael Finnegan
Title: Executive Vice President.
Treasurer and Chief Financial Officer
Address:
Hollywood Park, Inc.
1050 South Prairie Avenue
Inglewood, California 90301
Attn: G. Michael Finnigan
Executive Vice President and
Chief Financial Officer
Telecopier: (310) 673-2582
Telephone: (310) 419-1539
-131-
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent
By: /s/ Janice Hammond
----------------------------
Janice Hammond
Vice President
Address:
Bank of America National Trust and Savings
Association
USCG, Agency Management
Los Angeles 20529
555 South Flower Street, 11th Floor
Los Angeles, California 90071
Attn: Janice Hammond
Vice President
Telecopier: (213) 228-2299
Telephone: (213) 228-9861
-132-
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By: /s/ Jon Varnell
----------------------
Jon Varnell
Managing Director
Address:
Bank of America National Trust and Savings
Association
555 South Flower Street, #3283
Los Angeles, California 90071
Attn: Jon Varnell
Managing Director
Telecopier: (213) 228-2641
Telephone: (213) 228-6181
With a copy to:
Bank of America National Trust and
Savings Association
555 South Flower Street (LA-5777)
Los Angeles, California 90071
Attn: William Newby
Managing Director
Telecopier: (213) 228-3145
Telephone: (213) 228-2438
-133-
<PAGE>
SOCIETE GENERALE, as a Managing Agent and a
Bank
By /s/ Alex Kim
-----------------------------
Alex Kim
Vice President
Address:
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, California 90067
Attn: Alex Kim
Vice President
Telecopier: (310) 551-1537
Telephone: (310) 788-7108
BANK OF SCOTLAND, as a Managing Agent and
a Bank
By /s/ Joseph Fratus
-----------------------------
Joseph Fratus
Assistant Vice President
Address:
Bank of Scotland
565 Fifth Avenue
New York, New York 10017
Attn: Annie Chin Tat
Senior Vice President
Telecopier: (212) 557-9460
Telephone: (212) 450-0871
-134-
<PAGE>
FIRST NATIONAL BANK OF COMMERCE, as
Co-Agent and a Bank
By /s/ Louis Ballero
----------------------------
Louis Ballero
Senior Vice President
Address:
First National Bank of Commerce
201 St. Charles Avenue, 28th Floor
New Orleans, Louisiana 70170
Attn: Dianne Randazzo
Telecopier: (504) 623-1316
Telephone: (504) 623-1634
IMPERIAL BANK, as a Bank
By /s/ Steven Johnson
----------------------------
Steven Johnson
Sr. Vice President
Address:
Imperial Bank
9920 South La Cienega Boulevard, 14th Floor
Inglewood, California 90301
Attn: Steven Johnson
Telecopier: (310) 417-5997
Telephone: (310) 417-5657
-135-
<PAGE>
EXHIBIT A
---------
COMMITMENT ASSIGNMENT AND ACCEPTANCE
------------------------------------
This COMMITMENT ASSIGNMENT AND ACCEPTANCE ("Assignment") dated as of
----------
____________, _____ is made with reference to that certain Amended and Restated
Reducing Revolving Loan Agreement dated as of October 14, 1998 (as amended,
extended, renewed, supplemented or otherwise modified from time to time, the
"Loan Agreement") by and among Hollywood Park, Inc., a Delaware corporation, the
- ---------------
Banks which are party thereto, Societe Generale and Bank of Scotland, as
Managing Agents, and First National Bank of Commerce, as Co-Agent, and Bank of
America National Trust and Savings Association, as Administrative Agent.
This Assignment is entered into between __________________, the
"Assignor" in its capacity as a Bank under the Loan Agreement and
- ---------
_________________, the "Assignee." The Assignor and Assignee hereby represent,
--------
warrant and agree as follows:
1. Definitions. Capitalized terms used but otherwise not defined
-----------
herein shall have the respective meanings assigned to them in the Loan
Agreement. In addition, as used in this Assignment, the following capitalized
terms shall have the meanings set forth below:
"Assigned Pro Rata Share" means that interest in and to all the
-----------------------
Assignor's rights and obligations under the Loan Agreement as of the date hereof
which represents the percentage interest specified in Item 2 of Schedule A to
this Assignment.
"Loan Documents" means the "Loan Documents" as such term is defined in
--------------
the Loan Agreement.
"Note" means a Note issued by Borrower pursuant to the Loan Agreement.
----
"Effective Date" means the effective date of this Assignment as
--------------
determined in accordance with Section 10 of this Assignment.
----------
"Loan Agreement" has the meaning set forth in the preamble hereto.
--------------
-1-
<PAGE>
2. Representations and Warranties of the Assignor. The Assignor
----------------------------------------------
represents and warrants as follows:
(a) The Assignor is the legal and beneficial owner of the
Assigned Pro Rata Share. The Assigned Pro Rata Share is free and clear of
any adverse claim.
(b) The Assignor has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and any and all
other documents required to be executed by it in connection with this
Assignment and to fulfill its obligations under, and to consummate the
transactions contemplated by this Assignment, and no governmental
authorizations or other authorizations are required in connection herewith.
(c) The Assignor makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower
or its Subsidiaries, the performance by Borrower and its Subsidiaries, and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Agreement or the
execution, legality, validity, enforceability, genuineness, or sufficiency
of the Loan Agreement or any loan document other than as expressly set
forth above.
(d) This Assignment constitutes the legal, valid and binding
obligation of the Assignor.
3. Representations and Warranties of the Assignee.
----------------------------------------------
The Assignee represents and warrants as follows:
(a) The Assignee has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and any and all
other documents required to be executed by it in connection with this
Assignment and to fulfill its obligations under, and to consummate the
transactions contemplated by this Assignment, and no governmental
authorizations or other authorizations are required in connection herewith.
(b) The Assignee has independently and without reliance upon the
Administrative Agent or the Assignor and based on such documents and
information as the Assignee has deemed appropriate, made its own credit
analysis and decision to enter into this Assignment. The Assignee will,
independently and without reliance upon the Administrative Agent or any
Bank,
-2-
<PAGE>
and based upon such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not
taking action under the Loan Agreement.
(c) The Assignee has received copies of the Loan Agreement
together with copies of the financial statements referred to therein and
such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment.
(d) The Assignee is an Eligible Assignee.
(e) The Assignee will perform in accordance with their respective
terms all of the obligations which, by the terms of the Loan Agreement, are
required to be performed by it as a Bank.
(f) This Assignment constitutes the legal, valid and binding
obligation of the Assignor.
4. Assignment. On the terms set forth herein, the Assignor, as of
----------
the Effective Date, hereby irrevocably sells, and assigns and transfers to the
Assignee all of the rights and obligations of the Assignor under the Loan
Agreement, the other Loan Documents and Assignor's Note to the extent of the
Assigned Pro Rata Share, and the Assignee irrevocably accepts such assignment of
the rights and assumes such obligations from the Assignor on such terms as of
the Effective Date. As of the Effective Date, the Assignee shall have the
rights and obligations of a "Bank" under the Loan Documents, and the Assignor
shall to the extent provided in this Assignment relinquish such rights and
interest and be released from such liabilities, duties and obligations under the
Loan Documents. The Assignee hereby appoints and authorizes the Administrative
Agent, the Issuing Bank, and Swing Line Bank, as the case may be, to take such
action and to exercise such powers as delegated to the Administrative Agent, the
Issuing Bank, and Swing Line Bank, as applicable, as are delegated by the Loan
Agreement.
5. Payments.
--------
(a) As of the Effective Date, the Assignee shall pay to the
Assignor, in immediately available funds, an amount equal to the outstanding
indebtedness owed to it by the Borrower under the Loan Agreement with respect to
the Assigned Pro Rata Share.
-3-
<PAGE>
SCHEDULE A
TO COMMITMENT ASSIGNMENT AND ACCEPTANCE
1. Name and Date of Loan Agreement: Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998, as further defined in this
Assignment.
2. Assigned Portion:
(a) Aggregate Commitments/Loans of All Banks $___________
(b) Assigned Pro Rata Share ___________%
(c) Amount of Assigned Pro Rata Share $___________
3. Settlement Date: _______________, _____.
4. Payment Instructions:
ASSIGNOR: ASSIGNEE:
______________________ __________________________
______________________ __________________________
______________________ __________________________
Attn: _________________ Attn: ____________________
Ref: __________________ Ref: _____________________
5. Notice Address:
ASSIGNOR: ASSIGNEE:
______________________ __________________________
______________________ __________________________
______________________ __________________________
Attn: _________________ Attn: ____________________
Fax: __________________ Fax: _____________________
Voice: ________________ Voice: ___________________
-6-
<PAGE>
Assignee to the Administrative Agent of such forms, certificates or other
evidence with respect to United States federal income tax withholding matters as
the Assignee may be required to deliver to Administrative Agent pursuant to
Section 11.21 of the Loan Agreement, and (vi) the receipt by the Administrative
- -------------
Agent of originals or telecopies of the counterparts described above and
authorization of delivery thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed and delivered by their respective officials, officers or agents
thereunto duly authorized, such execution being made as of the Effective Date in
the applicable spaces provided on Schedule A.
-5-
<PAGE>
SCHEDULE A
TO COMMITMENT ASSIGNMENT AND ACCEPTANCE
1. Name and Date of Loan Agreement: Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998, as further defined in this
Assignment.
2. Assigned Portion:
(a) Aggregate Commitments/Loans of All Banks $___________
(b) Assigned Pro Rata Share ___________%
(c) Amount of Assigned Pro Rata Share $___________
3. Settlement Date: _______________, _____.
4. Payment Instructions:
ASSIGNOR: ASSIGNEE:
______________________ __________________________
______________________ __________________________
______________________ __________________________
Attn: ________________ Attn: ____________________
Ref: _________________ Ref: _____________________
5. Notice Address:
ASSIGNOR: ASSIGNEE:
______________________ __________________________
______________________ __________________________
______________________ __________________________
Attn: ________________ Attn: ____________________
Fax: _________________ Fax: _____________________
Voice: _______________ Voice: ___________________
-6-
<PAGE>
6. SIGNATURES:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
as ASSIGNOR as ASSIGNEE
By: ______________________ By: _______________________
______________________ _______________________
Printed Name & Title Printed Name & Title
Consented to in accordance with the Loan Agreement:
HOLLYWOOD PARK, INC.,
a Delaware corporation
By: _____________________
_____________________
Printed Name & Title
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By: _____________________
_____________________
Printed Name & Title
-7-
<PAGE>
EXHIBIT B
---------
COMPLIANCE CERTIFICATE
----------------------
To: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, AS ADMINISTRATIVE
AGENT
This Compliance Certificate is delivered with reference to that
certain Amended and Restated Reducing Revolving Loan Agreement dated as of
October ___, 1998, among Hollywood Park, Inc., a Delaware corporation
("Borrower"), the Banks which are parties thereto, Societe Generale and Bank of
--------
Scotland as Managing Agents, First National Bank of Commerce as Co-Agent, and
Bank of America National Trust and Savings Association, as Administrative Agent
(as amended, extended, renewed, supplemented or otherwise modified from time to
time, the "Loan Agreement"). Terms defined in the Loan Agreement and not
--------------
otherwise defined in this Compliance Certificate ("Certificate") shall have the
-----------
meanings defined for them in the Loan Agreement. Section references herein
relate to the Loan Agreement unless stated otherwise.
This Certificate is delivered in accordance with Section 7.2 of the
-----------
Loan Agreement by a Senior Officer of Borrower. This Certificate is delivered
with respect to the Fiscal Quarter ended _________________, [19]___ (the "Test
----
Fiscal Quarter"). Computations indicating compliance with respect to the
- --------------
covenants contained in Sections 6.5, 6.9, 6.11, 6.12, 6.13, 6.14, 6.15 and 6.16
--- --- ---- ---- ---- ---- ---- ----
of the Loan Agreement are set forth below:
I. SECTION 6.5 - DISTRIBUTIONS. As of the last day of the Test Fiscal Quarter
---------------------------
(the "Determination Date"):
------------------
A. Aggregate Distributions for the repurchase of Common Stock were
$______________.
Maximum Permitted: $10,000,000
-----------------
B. Aggregate Distributions permitted by Section 6.5(e) of the Loan
------
Agreement were $______________.
Maximum Permitted: $75,000,000
-----------------
-1-
<PAGE>
II. SECTION 6.9 - INDEBTEDNESS AND GUARANTY OBLIGATIONS. As of the
---------------------------------------------------
Determination Date:
A. Aggregate Indebtedness consisting of Capital Lease Obligations, or
otherwise incurred to finance the purchase or construction of capital assets
(which shall be deemed to exist if the Indebtedness is incurred at or within 90
days before or after the purchase or construction of the capital asset), or to
refinance such Indebtedness was $_________________.
Maximum Permitted: $30,000,000
-----------------
B. Aggregate notional amount of Indebtedness covered by one or more
Secured Swap Agreements was $________________.
Maximum Permitted: $300,000,000
-----------------
C. Aggregate of principal amount of Guaranty Obligations in support of
the obligations of Persons other than a Subsidiary Guarantor was
$_______________.
Maximum Permitted: $10,000,000
-----------------
D. Aggregate Effective Amount of Outside Letters of Credit plus the
----
Aggregate Effective Amount of all outstanding Letters of Credit was
$_______________.
Maximum Permitted: $30,000,000
-----------------
III. SECTION 6.11 - INTEREST COVERAGE RATIO. As of the Determination Date,
--------------------------------------
Interest Coverage Ratio was ____:1:00.
Minimum Requirement: ____:1.00/1//
------------------- -
Interest Coverage Ratio is computed as follows:
(a) the sum of (i) Adjusted EBITDA (as calculated in
--- --
Appendix I) for the fiscal period consisting of the Test
Fiscal Quarter plus the three immediately preceding Fiscal
Quarters (the "Test Period") $______
- --------------------
/1// Insert minimum required ratio applicable to the Determination Date as
- set forth in Section 6.11 of the Loan Agreement.
----
-2-
<PAGE>
<TABLE>
<S> <C>
minus (ii) the aggregate Maintenance Capital Expenditures
-----
made in that Test Period ($______)
minus (iii) Cash Income Taxes for the Test Period ($______)
-----
minus (iv) Distributions consisting of dividends on
-----
capital stock of Borrower made in Cash during that
Test Period ($______)
(a) equals [(i) - (ii) - (iii) - (iv)] $______
------
divided by (b) the Interest Charges for the Test Period
----------
(which is the sum of (x) and (y) set forth below):
--- --
(x) Interest Expense for the Test Period (as
calculated in Appendix I) that is paid or payable in
Cash $______
plus (y) all interest currently payable in Cash
----
(other than the arrangement fee and upfront fees
----- ----
payable pursuant to Sections 3.2 and 3.3 of the Loan
Agreement) incurred during the Test Period which
is capitalized under Generally Accepted Accounting
Principles, but excluding (i) so long as the Louisiana
First Mortgage Notes are outstanding, Interest
Charges attributable to the CMC Louisiana
Subsidiaries and (ii) Interest Charges attributable to
any Foreign Subsidiary except to the extent that
EBITDA (as calculated in Appendix I) attributable
to that Foreign Subsidiary is included within
Adjusted EBITDA (as calculated in Appendix I) $______
(b) equals [(x) + (y)] $______
------
Interest Coverage Ratio equals [(a) / (b)] ____:1.00
------
</TABLE>
-3-
<PAGE>
IV. SECTION 6.12 - SENIOR FUNDED DEBT RATIO. As of the Determination Date, the
---------------------------------------
Senior Funded Debt Ratio was ___:1:00.
Maximum Permitted: ____:1:00/2//
-----------------
<TABLE>
<S> <C>
Senior Funded Debt Ratio is computed as follows:
(a) Average Quarterly Senior Funded Debt for the Test
Period (as calculated in Appendix I) $______
divided by (b) Adjusted EBITDA for the Test Period
----------
(as calculated in Appendix I) $______
equals Senior Funded Debt Ratio [(a)/(b)] $______
------
</TABLE>
V. SECTION 6.13 - FUNDED DEBT RATIO. As of the Determination Date, the Funded
--------------------------------
Debt Ratio was ____:1.00.
Maximum Permitted: _____:1.00/3//
-----------------
Funded Debt Ratio is computed as follows:
<TABLE>
<S> <C>
(a) Average Quarterly Funded Debt for the Test Period (as
calculated in Appendix I) $______
divided by (b) Adjusted EBITDA for the Test Period (as
----------
calculated in Appendix I) $______
equals Funded Debt Ratio [(a)/(b)] ____:1.00
------
</TABLE>
VI. SECTION 6.14 - CAPITAL EXPENDITURES.
-----------------------------------
A. Maintenance Capital Expenditures for the Fiscal Year (or portion
thereof) ending on the Determination Date were $_______________.
Maximum Permitted: $40,000,000
-----------------
- ----------------------
/2// Insert maximum permitted ratio as set forth in Section 6.12 of the Loan
- --- ----
Agreement.
/3// Insert maximum permitted ratio as set forth in Section 6.13 of the Loan
- --- ----
Agreement.
-4-
<PAGE>
B. As of the Determination Date, aggregate Capital Expenditures for the
completion of the Reno Project were $______________.
Maximum Permitted: $12,000,000
-----------------
C. As of the Determination Date, aggregate Capital Expenditures for the
acquisition of land for and construction of the Indiana Project were
$____________, (and when in excess of $25,000,000, were in compliance with the
additional requirements of Section 6.14(d)).
Maximum Permitted: $150,000,000
-----------------
D. As of the Determination Date, aggregate Capital Expenditures not
otherwise permitted in Sections 6.14(a) to (d) of the Loan Agreement which, when
--------------
added to all other Basket Expenditures theretofore made, were $_______________.
Maximum Permitted: $75,000,000
-----------------
VII. SECTION 6.15 - INVESTMENTS.
--------------------------
A. As of the Determination Date the aggregate value of Investments
permitted by Section 6.15(h) of the Loan Agreement was $____________.
-------
Maximum Permitted: $____________/4//
-----------------
B. As of the Determination Date the aggregate value of Investments
permitted by Section 6.15(m) of the Loan Agreement was $____________.
-------
Maximum Permitted: $100,000
-----------------
C. As of the Determination Date, Investments (other than Investments in
the CMC Louisiana Subsidiaries or any Foreign Subsidiary) not otherwise
permitted by Sections 6.15(a) to (m) of the Loan Agreement which, when added to
------- ---
all other Basket Expenditures theretofore made, were $______________.
Maximum Permitted: $75,000,000
-----------------
- ----------------------
/4// Insert the sum of (a) $20,000,000 plus (b) the aggregate amount of Cash
-
dividends received by Borrower after the Closing Date from the CMC Louisiana
Subsidiaries and the Foreign Subsidiaries.
-5-
<PAGE>
VIII. SECTION 6.16 - SUBSIDIARY INDEBTEDNESS.
--------------------------------------
A. As of the Determination Date, aggregate Indebtedness incurred for
working capital purposes by Casino Magic Neuquen, S.A. or any of its
Subsidiaries was $______________.
Maximum Permitted: $5,000,000
-----------------
B. As of the Determination Date and with respect to each of the following
Restricted Subsidiaries, if any, the aggregate amount of Indebtedness and
Guaranty Obligations incurred in the ordinary course of such Significant
Subsidiary's business and not otherwise permitted by Sections 6.16(a) through
---------------
(f) ("Non-Excluded Subsidiary Debt"), was that amount set forth opposite such
- --- ----------------------------
Restricted Subsidiary:
<TABLE>
<CAPTION>
Amount of
Non-Excluded
Restricted Subsidiary Subsidiary Debt
--------------------- ---------------
<S> <C>
____________________________ $______________
____________________________ $______________
____________________________ $______________
____________________________ $______________
</TABLE>
Maximum Permitted: $500,000 per Restricted
----------------- Subsidiary
IX. A review of the activities of Borrower and its Subsidiaries during the
fiscal period covered by this Certificate has been made under the supervision of
the undersigned with a view to determining whether during such fiscal period
Borrower and its Restricted Subsidiaries performed and observed all of their
respective Obligations. To the best knowledge of the undersigned, during the
fiscal period covered by this Certificate, all covenants and conditions have
been so performed and observed and no Default or Event of Default has occurred
and is continuing, with the exceptions set forth below in response to which
Borrower and the Restricted Subsidiaries have taken or propose to take the
following actions (if none, so state).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
-6-
<PAGE>
X. The undersigned Senior Officer of Borrower certifies that the calculations
made and the information contained herein are derived from the books and records
of Borrower and its Subsidiaries, as applicable, and that each and every matter
contained herein correctly reflects those books and records.
XI. To the best knowledge of the undersigned no event or circumstance has
occurred that constitutes a Material Adverse Effect since the date the most
recent Compliance Certificate was executed and delivered, with the exceptions
set forth below (if none, so state).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated: _______________, [19]___
________________________________
________________________________
Printed Name and Title of Senior
Officer of Hollywood Park, Inc.
-7-
<PAGE>
Appendix I
----------
to
--
Compliance Certificate
----------------------
ADJUSTED EBITDA - COMPONENT CALCULATIONS
- ----------------------------------------
Adjusted EBITDA for the Test Period is calculated as follows, in each case as
- ---------------
determined in accordance with Generally Accepted Accounting Principles, and in
the case of items (d), (e) and (f) only to the extent reflected in the
determination of item (a) for such Test Period:
<TABLE>
<S> <C>
EBITDA equals the sum of (a) consolidated net income of Borrower and
------ ------
the Restricted Subsidiaries ("Net Income") for the Test Period $______
plus (b) any extraordinary loss reflected in Net Income for the Test
----
Period $______
minus (c) any extraordinary gain reflected in Net Income for the Test
-----
Period ($______)
plus (d) Interest Expense for the Test Period ( as defined below) $______
----
plus (e) the aggregate amount of federal and state taxes on or
----
measured by income for the Test Period (whether or not payable during
the Test Period) $______
plus (f) depreciation, amortization and all other non-cash expenses
----
for the Test Period $______
equals EBITDA [(a)+(b)-(c)+(d)+(e)+(f)] $______
-------------
Adjusted EBITDA equals EBITDA $______
---------------
plus (g) any pre-opening and related promotional expenses recorded
----
during that fiscal period for a new Gaming Property $______
</TABLE>
-8-
<PAGE>
<TABLE>
<S> <C>
plus (h) any transactional expenses incurred in connection with the
----
acquisition of a new Gaming Property $______
plus (i) the amount by which EBITDA for the Test Period would have
----
been increased if the Merger had occurred on the first day of the Test
Period, but excluding (i) so long as the Louisiana First Mortgage
---------
Notes are outstanding, EBITDA attributable to the CMC Louisiana
Subsidiaries and (ii) EBITDA attributable to any Foreign Subsidiary
except to the extent actually received in Dollars in the United States
------
of America by Borrower, net of all taxes thereon imposed by the Laws
of a jurisdiction other than the United States of America or a State
----------
thereof. EBITDA of a Foreign Subsidiary shall be deemed "received"
(y) to the extent a dividend is paid to Borrower by the Foreign
Subsidiary, when such dividend is received in Dollars in the United
States of America and (z) to the extent that amounts are advanced as a
loan to Borrower by the Foreign Subsidiary, when such advance is
received in Dollars in the United States of America provided that (A)
--------
the aggregate outstanding amount of such advances shall at no time
exceed the aggregate EBITDA of the Foreign Subsidiary attributable to
Borrower's proportionate ownership of such Foreign Subsidiary which
has not previously been dividend to Borrower and (B) the Indebtedness
of Borrower to the Foreign Subsidiary arising from such advances is
cancelled and offset by a dividend (which dividend shall not be deemed
"received" for purposes of clause (y) above) paid by the Foreign
Subsidiary to Borrower with respect to each Fiscal Year within three
months following the end of that Fiscal Year. If at any date the
Louisiana First Mortgage Notes are not outstanding, EBITDA of the CMC
Louisiana Subsidiaries shall be included in Adjusted EBITDA for the
Test Period $______
equals Adjusted EBITDA [EBITDA+(g)+(h)+(i)] $______
----------------------
</TABLE>
AVERAGE QUARTERLY FUNDED DEBT - COMPONENT CALCULATIONS
- ------------------------------------------------------
Average Quarterly Funded Debt is calculated as follows:
-9-
<PAGE>
<TABLE>
<S> <C>
the average of the sum of (a) the amount of all principal Indebtedness
------
of Borrowers and the Restricted Subsidiaries for borrowed money
(including debt securities issued by Borrowers and the Restricted
----------
Subsidiaries) (but excluding (i) so long as the Louisiana First
Mortgage Notes are outstanding, any Funded Debt of the CMC Louisiana
Subsidiaries and (ii) any Funded Debt of Foreign Subsidiaries)
outstanding on the last day of each of the three fiscal months
comprising the Test Fiscal Quarter $______
plus (b) the aggregate amount of the principal portion of all Capital
----
Lease Obligations of Borrower and the Restricted Subsidiaries
outstanding on the last day of each of the three fiscal months
comprising the Test Fiscal Quarter $______
equals Average Quarterly Funded Debt [(a)+(b)] $______
------
AVERAGE QUARTERLY SENIOR FUNDED DEBT - COMPONENT CALCULATIONS
- -------------------------------------------------------------
Average Quarterly Senior Funded Debt is calculated as follows:
the average of the sum of (a) the amount of all principal Indebtedness
------
of Borrowers and the Restricted Subsidiaries for borrowed money
(including debt securities issued by Borrowers and the Restricted
----------
Subsidiaries) (but excluding (i) so long as the Louisiana First
Mortgage Notes are outstanding, any Funded Debt of the CMC Louisiana
Subsidiaries and (ii) any Funded Debt of Foreign Subsidiaries) that
are not Subordinated Obligations outstanding on the last day of each
of the three fiscal months comprising the Test Fiscal Quarter $______
plus (b) the aggregate amount of the principal portion of all Capital
----
Lease Obligations of Borrower and the Restricted Subsidiaries that are
not Subordinated Obligations outstanding on the last day of each of
the three fiscal months comprising the Test Fiscal Quarter $______
equals Average Quarterly Senior Funded Debt [(a)+(b)] $______
------
</TABLE>
-10-
<PAGE>
INTEREST EXPENSE - COMPONENT CALCULATIONS
- -----------------------------------------
<TABLE>
<S> <C>
Interest Expense is calculated as follows:
The sum of (a) all interest, fees and finance charges paid or payable
------
(without duplication, on a consolidated basis) for the Test Period by
Borrower and the Restricted Subsidiaries to a lender for money
borrowed (including any obligations for fees and finance charges
---------
payable to the issuer of any letter of credit) or the deferred
purchase price of assets that are considered "interest expense" under
Generally Accepted Accounting Principles $______
plus (b) the portion of rent paid or payable (without duplication, on
----
a consolidated basis) for the Test Period by Borrower and the
Restricted Subsidiaries under Capital Lease Obligations that should be
treated as interest in accordance with Financial Accounting Standards
Board Statement No. 13 $______
equals Interest Expense [(a) + (b)] $______
-----------------------
</TABLE>
-11-
<PAGE>
EXHIBIT C
---------
GLOBAL ASSIGNMENT AND RELEASE AGREEMENT
THIS GLOBAL ASSIGNMENT AND RELEASE AGREEMENT ("Agreement") dated as of
---------
October 14, 1998 is entered into by the Assignors and Assignees described on the
signature pages hereto with reference to the Reducing Revolving Loan Agreement
dated as of March 27, 1997 (as amended or otherwise supplemented or modified,
the "Existing Loan Agreement") among Hollywood Park, Inc. ("HP"), the Banks
----------------------- --
therein named, Bank of Scotland, Bankers Trust Company and Societe Generale, as
Co-Agents, and Bank of America National Trust and Savings Association, as
Managing Agent. The parties hereto agree with reference to the following facts:
A. Each of the Assignors is party to the Existing Loan Agreement with the
percentage interests in the credit facilities provided to HP thereunder set
forth in Column I of Schedule A hereto.
----------
B. As of the date hereof, the principal amount of the Obligations under
the Existing Loan Agreement is as set forth on Schedule B hereto.
----------
C. Immediately following the effectiveness of this Agreement, the Existing
Loan Agreement shall be amended and restated pursuant to an Amended and
Restated Reducing Revolving Loan Agreement (the "Amended Loan Agreement")
----------------------
of even date herewith.
D. In anticipation of the execution of the Amended Loan Agreement, the
parties desire to make the assignments contemplated herein, so as to adjust
their respective percentage interests under the Amended Loan Agreement.
E. Bankers Trust Company, who will hereby assign its entire interest in
the Existing Loan Agreement as set forth on the signature page hereof (the
"Exiting Bank") shall hereby terminate its status as a Bank under the
------------
Existing Loan Agreement and shall not participate in the Amended Loan
Agreement.
The parties hereto hereby severally represent, warrant, assign, accept and agree
as follows:
1. Definitions. Capitalized terms used but not defined herein are
-----------
used with the meanings set forth for such terms in the Existing Loan Agreement.
As
-1-
<PAGE>
used in this Agreement, the following capitalized terms shall have the meanings
set forth below:
"Assignee" means those of the Banks having a positive amount set forth
--------
opposite the name of that Bank in Column II of Schedule A hereto.
----------
"Assigned Pro Rata Share" means, as to each Bank and the Amended Loan
-----------------------
Agreement, the amount and percentage interest assigned or accepted by that
Bank under the Amended Loan Agreement, as detailed on Schedule A.
----------
"Assignor" means those of the Banks having a positive amount set forth
--------
opposite the name of that Bank in Column I of Schedule A hereto.
----------
"Effective Date" means the date upon which the Amended Loan Agreement
--------------
becomes effective and the payments described in Section 6 hereof have been
---------
made.
"Exiting Bank" means Bankers Trust Company.
------------
"Loan Documents" means the Loan Documents described in the Existing
--------------
Loan Agreement.
"Managing Agent" means Bank of America National Trust and Savings
--------------
Association, in its capacity as Managing Agent for each of the Banks under
the Existing Loan Agreement.
"Obligations" means, collectively, the obligations and indebtedness of
-----------
HP under the Existing Loan Agreement.
"Pro Rata Shares" means, as the context requires, the percentage
---------------
interest of the relevant Bank of the commitments under the Existing Loan
Agreement.
2. Representations and Warranties of the Assignors. Each Assignor
-----------------------------------------------
severally represents and warrants, each for itself and not for any other
Assignor, to the Assignees as follows:
(a) As of the date hereof, the Pro Rata Share of such Assignor under
the Existing Loan Agreement is as set forth in Column I of Schedule A, in
----------
each case without giving effect to assignments thereof which have not yet
become effective;
-2-
<PAGE>
(b) Such Assignor is the legal and beneficial owner of such Assignor's
Assigned Pro Rata Share and such Assignor's Assigned Pro Rata Share is free
and clear of any adverse claim. Schedule B accurately reflects the
----------
aggregate outstandings under the Existing Loan Agreement;
(c) Such Assignor has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement and any and all
other documents required or permitted to be executed or delivered by it in
connection with this Agreement and to fulfill its obligations under, and to
consummate the transactions contemplated by, this Agreement, and no
governmental authorizations or other authorizations are required in
connection therewith;
(d) This Agreement constitutes the legal, valid and binding obligation
of such Assignor.
The Assignors make no representation or warranty and assume no responsibility
with respect to the financial condition of HP or the performance by HP of the
Obligations, and assume no responsibility with respect to any statements,
warranties or representations made in or in connection with the Existing Loan
Agreement or the execution, legality, validity, enforceability, genuineness, or
sufficiency of the Existing Loan Agreement or any Loan Document other than as
expressly set forth above.
3. Representations and Warranties of the Assignees. Each Assignee
-----------------------------------------------
hereby represents and warrants, for itself and not for any other Assignee, to
each Assignor as follows:
(a) Such Assignee has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement, and any and all
other documents required or permitted to be executed or delivered by it in
connection with this Agreement and to fulfill its obligations under, and to
consummate the transactions contemplated by, this Agreement, and no
governmental authorizations or other authorizations are required in
connection therewith;
(b) This Agreement constitutes the legal, valid and binding
obligation of such Assignee;
(c) Such Assignee has independently and without reliance upon the
Managing Agent or any Assignor and based on such documents and information
as such Assignee has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Such Assignee will, independently
and without reliance upon the Managing Agent or any Bank, and
-3-
<PAGE>
based upon such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Amended Loan Agreement;
(d) Such Assignee has received copies of such of the Existing
Loan Agreement and the Amended Loan Agreement, related loan documents and
financial statements of HP and its Affiliates as it has requested;
(e) Such Assignee will perform in accordance with their
respective terms all of the obligations which by the terms of the Amended
Loan Agreement are required to be performed by it as a Bank; and
(f) Such Assignee is an Eligible Assignee.
4. Assignment and Acceptance; Release of Exiting Bank.
--------------------------------------------------
(a) On the Effective Date and on the terms set forth herein, each
Bank under the Existing Loan Agreement hereby irrevocably sells, assigns and
transfers, as an Assignor, its Assigned Pro Rata Share under the Existing Loan
Agreement (detailed as to percentage and amount in Column I of Schedule A
----------
hereto) to each Bank which is an Assignee under the Amended Loan Agreement, its
Assigned Pro Rata Share under the Amended Loan Agreement (detailed as to
percentage and amount in Column II of Schedule A hereto). Each Bank which is an
----------
Assignee under the Amended Loan Agreement hereby irrevocably accepts, from each
such Assignor, an Assigned Pro Rata Share in the amount and percentage interest
detailed in Column II of Schedule A hereto.
----------
(b) On the Effective Date, the Exiting Bank hereby accepts
termination of its status as a Bank under the Existing Loan Agreement, and all
of the other parties thereto hereby release such Exiting Bank from its lending
commitments and any other obligation under the Existing Loan Agreement.
(c) As of the Effective Date, each Assignee shall have the rights
and obligations of a "Bank" under the Loan Documents. Each Assignee hereby
appoints and authorizes the Managing Agent to take such action and to exercise
such powers under the Existing Loan Agreement as are delegated to the Managing
Agent by the Existing Loan Agreement.
5. Payment. On the Effective Date, and as a condition precedent to
-------
the assignments contemplated hereby, (i) HP shall pay to each Bank through the
Managing Agent all interest, fees, and other amounts which have accrued and
remain unpaid under the Existing Loan Agreement as of the date hereof and (ii)
the Assignees
-4-
<PAGE>
shall pay to the Assignors through the Managing Agent such principal amounts
outstanding under the Existing Loan Agreement as are necessary to result in each
Bank holding the percentage interest in the Amended Loan Agreement as set forth
in Column II of Schedule A hereto (with any excess amount advanced to HP as
----------
additional principal outstanding under the Amended Loan Agreement, as the case
may be). The Managing Agent shall advise each Bank of the amounts to be so paid
and (in the absence of written objection from any Bank) the advice of the
Managing Agent shall be conclusively presumed to be correct. The Managing Agent
may require that each payment made by or to a Bank be net of any amounts to be
paid to or by that Bank. The Assignors and the Assignees hereby agree that if
any of them receives any payment of interest, principal, fees or any other
amount under the Existing Loan Agreement, their respective Notes or any other
Loan Documents which is for the account of one of the other parties hereto, it
shall hold the same in trust for such party to the extent of such party's
interest therein and shall promptly pay the same to such party.
6. Notes. Concurrently herewith each Bank is redelivering its
-----
promissory note under the Existing Loan Agreement to counsel for the Managing
Agent for cancellation in consideration of the issuance of the new promissory
notes to be issued in connection with the Amended Loan Agreement.
7. Further Assurances. The Assignors and the Assignees further
------------------
agree to execute and deliver such other instruments, and take such other action,
as any party hereto may reasonably request in connection with the transactions
contemplated by this Agreement.
8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
-------------
CONTRACTUAL OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LOCAL LAWS OF THE STATE OF CALIFORNIA. FOR
ANY DISPUTE ARISING IN CONNECTION WITH THIS AGREEMENT, EACH ASSIGNEE HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
CALIFORNIA.
9. Notices. All communications among the parties or notices in
-------
connection herewith shall be in writing, and shall be delivered in the manner
set forth in the Existing Loan Agreement.
10. Binding Effect. This Agreement shall be binding upon and inure
--------------
to the benefit of the parties and their respective successors and assigns;
provided, however, that no Assignee shall assign its rights or obligations under
this Agreement
-5-
<PAGE>
without the prior written consent of each Assignor and any purported assignment,
absent such consent, shall be void. Nothing contained in this Section shall
restrict the assignment by any Assignee of its rights under the Loan Documents
following the Effective Date.
11. Consent of Managing Agent and HP. By executing this Agreement in
--------------------------------
the space provided below, Bank of America National Trust and Savings Association
consents (in its capacity as Managing Agent under the Existing Loan Agreement)
to each of the assignments described herein, and waives the recordation fees
payable to it as Managing Agent pursuant to the Existing Loan Agreement in
connection with such assignments. HP (while not a party to this Agreement) has
signed this Agreement below to evidence its consent to such assignments.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officials, officers or agents
thereunto duly authorized as of the date first above written.
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION (as Managing
Agent under the Existing Loan
Agreement)
By: _____________________________
Title: __________________________
-6-
<PAGE>
"Assignors"
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: __________________________________
Jon Varnell
Managing Director
Address:
Bank of America National Trust and
Savings Association
555 South Flower Street, #3283
Los Angeles, California 90071
Attn: Jon Varnell
Managing Director
Telecopier: (213) 228-2641
Telephone: (213) 228-6181
With a copy to:
Bank of America National Trust and
Savings Association
555 South Flower Street (LA-5777)
Los Angeles, California 90071
Attn: William Newby
Managing Director
Telecopier: (213) 228-3145
Telephone: (213) 228-2438
-7-
<PAGE>
SOCIETE GENERALE
By:_________________________________
Alex Kim
Vice President
Address:
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, California 90067
Attn: Alex Kim
Vice President
Telecopier: (310) 551-1537
Telephone: (310) 788-7108
BANK OF SCOTLAND
By:_________________________________
Annie Chin Tat
Senior Vice President
Address:
Bank of Scotland
565 Fifth Avenue
New York, New York 10017
Attn: Annie Chin Tat
Senior Vice President
Telecopier: (212) 557-9460
Telephone: (212) 450-0871
-8-
<PAGE>
FIRST NATIONAL BANK OF COMMERCE
By:_________________________________
Louis Ballero
Senior Vice President
Address:
First National Bank of Commerce
201 St. Charles Avenue, 28th Floor
New Orleans, Louisiana 70170
Attn: Dianne Randazzo
Telecopier: (504) 623-1316
Telephone: (504) 623-1634
BANKERS TRUST COMPANY, as an Assignor
and the Exiting Bank
By:_________________________________
Timothy Morris
Vice President
Address:
Bankers Trust Company
1 Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attn: Jennifer Quinn
Assistant Vice President
Telecopier: (212) 250-7351
Telephone: (212) 250-4169
-9-
<PAGE>
with a copy to:
Bankers Trust Company
300 South Grand Avenue, 41st Floor
Los Angeles, California 90071
Attn: Robert I. Bernstein
Vice President
Telecopier: (213) 620- 8484
Telephone: (213) 620-8173
"Assignees"
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: __________________________________
Jon Varnell
Managing Director
Address:
Bank of America National Trust and
Savings Association
555 South Flower Street, #3283
Los Angeles, California 90071
Attn: Jon Varnell
Managing Director
Telecopier: (213) 228-2641
Telephone: (213) 228-6181
-10-
<PAGE>
With a copy to:
Bank of America National Trust and
Savings Association
555 South Flower Street (LA-5777)
Los Angeles, California 90071
Attn: William Newby
Managing Director
Telecopier: (213) 228-3145
Telephone: (213) 228-2438
SOCIETE GENERALE
By:_________________________________
Alex Kim
Vice President
Address:
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, California 90067
Attn: Alex Kim
Vice President
Telecopier: (310) 551-1537
Telephone: (310) 788-7108
-11-
<PAGE>
BANK OF SCOTLAND
By:_________________________________
Annie Chin Tat
Senior Vice President
Address:
Bank of Scotland
565 Fifth Avenue
New York, New York 10017
Attn: Annie Chin Tat
Senior Vice President
Telecopier: (212) 557-9460
Telephone: (212) 450-0871
FIRST NATIONAL BANK OF COMMERCE
By:_________________________________
Louis Ballero
Senior Vice President
Address:
First National Bank of Commerce
201 St. Charles Avenue, 28th Floor
New Orleans, Louisiana 70170
Attn: Dianne Randazzo
Telecopier: (504) 623-1316
Telephone: (504) 623-1634
-12-
<PAGE>
IMPERIAL BANK
By:_____________________________
Steven Johnson
Vice President
Address:
Imperial Bank
9920 South La Cienega Boulevard,
14th Floor
Inglewood, California 90301
Attn: Steven Johnson
Telecopier: (310) 417-5997
Telephone: (310) 417-5657
<PAGE>
The undersigned hereby consents to the assignments described above and to the
release of the Exiting Bank from its lending commitments under the Existing Loan
Agreement:
HOLLYWOOD PARK, INC.
By: _______________________
Name: ____________________
Title: _____________________
-13-
<PAGE>
SCHEDULE A
----------
TO GLOBAL ASSIGNMENT AND RELEASE AGREEMENT
------------------------------------------
<TABLE>
<CAPTION>
Column I Column II
---------------- ----------------
<S> <C> <C>
Assignor Assignee
Pro Rata Share Pro Rata Share
- ---------------------------------- ---------------
Bank of America NT & SA 33.33333334% 50.00000000%
$ 33,333,333.34 $150,000,000.00
Societe Generale 22.22222222% 21.66666667%
$ 22,222,222.22 $ 65,000,000.00
Bank of Scotland 22.22222222% 16.66666667%
$ 22,222,222.22 $ 50,000,000.00
First National Bank of Commerce 15.00000000% 8.33333333%
$ 15,000,000.00 $ 25,000,000.00
Bankers Trust Company 7.22222222% 0.00%
$ 7,222,222.22 $ 0.00
Imperial Bank 0.00% 3.33333333%
$ 0.00 $ 10,000,000.00
All Lenders 100.00% 100.00%
$100,000,000.00 $300,000,000.00
</TABLE>
-1-
<PAGE>
SCHEDULE B
----------
TO GLOBAL ASSIGNMENT AND RELEASE AGREEMENT
------------------------------------------
Principal amount of Obligations under the Reducing Revolving Loan Agreement
dated as of March 27, 1997 with Hollywood Park, Inc. as Borrower:
$40,000,000.00.
-1-
<PAGE>
EXHIBIT D
---------
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Sheppard, Mullin, Richter & Hampton, LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Attention: Charles E. McCormick, Esquire
================================================================================
THIS SPACE ABOVE FOR RECORDER'S USE
MEMORANDUM OF AMENDMENT TO PREFERRED SHIP MORTGAGE
--------------------------------------------------
This MEMORANDUM OF AMENDMENT TO PREFERRED SHIP MORTGAGE (this
"Memorandum"), dated as of October ___, 1998, is entered into by and between
----------
_____________________ ("Owner") and Bank of America National Trust and Savings
-----
Association as Administrative Agent for the ratable benefit of the Banks (as
defined below).
1. Owner has entered into that certain Preferred Ship Mortgage dated
__________________ on the vessel ________________, No. ___________, made by
Owner in favor of _______________________, which was recorded on _____________
with the National Vessel Documentation Center (the "Preferred Ship Mortgage").
-----------------------
2. Hollywood Park, Inc., a Delaware corporation ("Borrower"),
--------
Societe Generale and Bank of Scotland, as Managing Agents, First National Bank
of Commerce, as Co-Agent, the Banks party thereto (the "Banks"), and Bank of
-----
America National Trust and Savings Association as Administrative Agent, have
entered into that certain Amended and Restated Reducing Revolving Loan Agreement
dated as of October 14, 1998 (the "Loan Agreement").
--------------
-1-
<PAGE>
3. This Memorandum memorializes the following amendments to the
Preferred Ship Mortgage which were effected pursuant to the terms of that
certain Omnibus Ancillary Documents Amendment (the "Omnibus Ancillary Documents
---------------------------
Amendment") dated as of October 14, 1998 by and among Borrower, Hollywood Park
- ---------
Operating Company, a Delaware corporation, Hollywood Park Food Services, Inc., a
California corporation, Hollywood Park Fall Operating Co., a Delaware
corporation, HP/Compton, Inc., a California corporation, HP Yakama, Inc., a
Delaware corporation, Turf Paradise, Inc., an Arizona corporation, Louisiana-I
Gaming, a Louisiana Partnership in Commendam, Louisiana Gaming Enterprises,
Inc., a Louisiana corporation, Boomtown, Inc., a Delaware corporation, Boomtown
Hotel & Casino, Inc., a Nevada corporation, Mississippi-I Gaming, L.P., a
Mississippi limited partnership, Bayview Yacht Club, Inc., a Mississippi
corporation, Crystal Park Hotel and Casino Development Company, LLC, a
California limited liability company, and Bank of America National Trust and
Savings Association, as Administrative Agent for the Banks:
[insert applicable amendments]
4. Except as expressly amended and supplemented by the Omnibus
Ancillary Documents Amendment as described herein, the terms and conditions of
the Preferred Ship Mortgage shall remain unaltered, are hereby reaffirmed, and
shall continue in full force and effect.
-2-
<PAGE>
IN WITNESS WHEREOF, Owner has executed this Memorandum by its duly
authorized officer as of the date first above written.
"Owner"
______________________________
By _________________________________
Title _______________________________
ACCEPTED AND AGREED
AS OF THE DATE FIRST
ABOVE WRITTEN:
"Administrative Agent"
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent for the Banks
By
--------------------------------
Title
------------------------------
-3-
<PAGE>
State of -------- )
)
County of ________ )
On ______________ before me, ______________________________, Notary Public,
personally appeared ____________________________________________________,
[ ] personally known to me or [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
State of _____________ )
)
County of ____________ )
On ______________ before me, _____________________________, Notary Public,
personally appeared ___________________________________________________,
[ ] personally known to me or [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________
-4-
<PAGE>
EXHIBIT E
---------
MEMORANDUM OF AMENDMENT TO TRADEMARK
SECURITY INTEREST ASSIGNMENT
----------------------------
THIS MEMORANDUM OF AMENDMENT TO TRADEMARK SECURITY INTEREST ASSIGNMENT
(this "Memorandum"), dated as of October ___, 1998, is entered into by and among
----------
Hollywood Park, Inc., a Delaware corporation ("Borrower"), Hollywood Park
--------
Operating Company, a Delaware corporation ("HPOC"), Hollywood Park Fall
----
Operating Co., a California corporation ("HPFC"), HP/Compton, Inc., a California
----
corporation ("HPCI"), HP Yakama, Inc., a Delaware corporation ("HPYI"), Crystal
---- ----
Park Hotel and Casino Development Company, LLC, a California limited liability
company ("Crystal Park"), Turf Paradise, Inc., an Arizona corporation ("TPI"),
------------ ---
Louisiana-I Gaming, a Louisiana Partnership in Commendam ("LIG"), Louisiana
---
Gaming Enterprises, Inc., a Louisiana corporation ("LGEI"), Boomtown, Inc., a
----
Delaware corporation ("Boomtown"), Boomtown Hotel & Casino, Inc., a Nevada
--------
corporation ("BHCI"), Mississippi-I Gaming, L.P., a Mississippi limited
----
partnership ("MIGP"), Bayview Yacht Club, Inc., a Mississippi corporation
----
("BYCI", and together with Borrower, HPOC, HPFC, HPCI, HPYI, Crystal Park, TPI,
----
LIG, LGEI, Boomtown, BHCI and MIGP, "Grantors"), and Bank of America National
--------
Trust and Savings Association ("BofA"), as Administrative Agent ("Administrative
---- --------------
Agent") for the Amended Loan Agreement Banks (as defined below).
- -----
1. Certain of the Grantors entered into that certain Trademark
Security Interest Assignment (the "Original Trademark Agreement") dated as of
----------------------------
June 30, 1997 in favor of BofA as the Managing Agent under the Loan Agreement
referred to therein for the ratable benefit of each of the Banks named in such
Loan Agreement, and the Original Trademark Agreement was recorded on August 13,
1997 in Reel 1628, Frame 0061 of the records of the United States Patent and
Trademark Office.
2. Borrower has entered into that certain Amended and Restated
Reducing Revolving Loan Agreement dated as of October 14, 1998 (the "Amended
-------
Loan Agreement") with Societe Generale and Bank of Scotland, as Managing Agents,
- --------------
First National Bank of Commerce, as Co-Agent, BofA as Administrative Agent, and
the Banks party thereto (the "Amended Loan Agreement Banks").
----------------------------
3. This Memorandum memorializes the following amendments to the
Original Trademark Agreement which were effected pursuant to the terms of that
certain Omnibus Ancillary Documents Amendment (the "Omnibus Ancillary
-----------------
-1-
<PAGE>
Documents Amendment") dated as of October 14, 1998 by and among Borrower, HPOC,
- -------------------
Hollywood Park Food Services, Inc., a California corporation, HPFC, HPCI, HPYI,
TPI, LIG, LGEI, Boomtown, BHCI, MIGP, BYCI, Crystal Park, and Administrative
Agent:
[insert applicable amendments]
4. Except as expressly amended and supplemented by the Omnibus
Ancillary Documents Amendment as described herein, the terms and conditions of
the Original Trademark Agreement shall remain unaltered, are hereby reaffirmed,
and shall continue in full force and effect.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Memorandum by their
respective duly authorized officers as of the date first above written.
"Grantors"
HOLLYWOOD PARK, INC.,
a Delaware corporation
By: _________________________________
Name:
Title:
HOLLYWOOD PARK OPERATING COMPANY,
a Delaware corporation
By: _________________________________
Name:
Title:
HOLLYWOOD PARK FALL OPERATING CO.,
a Delaware corporation
By: _________________________________
Name:
Title:
HP/COMPTON, INC.,
a California corporation
By: _________________________________
Name:
Title:
-3-
<PAGE>
HP YAKAMA, INC.,
a Delaware corporation
By: _________________________________
Name:
Title:
TURF PARADISE, INC.,
an Arizona corporation
By: _________________________________
Name:
Title:
LOUISIANA-I GAMING,
a Louisiana Partnership in Commendam
By: Louisiana Gaming Enterprises, Inc.,
a Louisiana corporation,
its general partner
By: _______________________________
Name:
Title:
LOUISIANA GAMING ENTERPRISES, INC.,
a Louisiana corporation
By: _________________________________
Name:
Title:
-4-
<PAGE>
BOOMTOWN, INC.,
a Delaware corporation
By: _________________________________
Name:
Title:
BOOMTOWN HOTEL & CASINO, INC.,
a Nevada corporation
By: _________________________________
Name:
Title:
MISSISSIPPI-I GAMING, L.P.,
a Mississippi limited partnership
By: BAYVIEW YACHT CLUB, INC.,
a Mississippi corporation, its general partner
By: __________________________
Name:
Title:
BAYVIEW YACHT CLUB, INC.,
a Mississippi corporation
By: _________________________________
Name:
Title:
-5-
<PAGE>
CRYSTAL PARK HOTEL AND CASINO
DEVELOPMENT COMPANY, LLC,
a California limited liability company
By: HP/COMPTON, INC.,
a California corporation,
its managing member
By: _______________________________
Name:
Title:
"Secured Party"
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent for the Amended Loan Agreement Banks
By: _________________________________
Name:
Title:
-6-
<PAGE>
EXHIBIT F
---------
RECORDING REQUESTED BY AND )
WHEN RECORDED MAIL TO: )
Sheppard, Mullin, Richter & Hampton )
333 South Hope Street, 48th Floor )
Los Angeles, California 90071 )
)
Attn.: )
Loan No.: )
)
)
- --------------------------------------------------------------------------------
Space Above for Recorder's Use
FIRST MODIFICATION TO DEED OF TRUST,
WITH ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING
(Short Form)
This Modification Agreement ("Agreement") is made as of October __,
1998, by Hollywood Park, Inc. a Delaware corporation ("Trustor"), and Bank of
America National Trust and Savings Association, a national banking association
("Bank of America"), as "Administrative Agent" for the "Banks", the "Swing Line
Bank" and the "Issuing Bank" (as each of those terms is defined in the Loan
Agreement defined below).
Factual Background
------------------
A. Hollywood Park, Inc. a Delaware corporation ("Borrower") has
heretofore entered into that certain Reducing Revolving Loan Agreement dated as
of March 27, 1997 (as amended, the "Original Loan Agreement") with Bank of
America, as "Managing Agent" and Bank of America and certain other financial
institutions (collectively, the "Original Banks"), as "Banks". The obligations
of Borrower to Managing Agent and the Original Banks under the Original Loan
Agreement and the other "Loan Documents" described in the Original Loan
Agreement are secured by, among other things, that certain deed of trust ("Deed
of Trust") dated as of ____________, 1997, made by Trustor, as trustor, for the
benefit of Bank of America, as "Managing Agent" for the Original Banks, as
beneficiary, and recorded on ____________, 1997 as Instrument No. _____________
in the Official Records of _____________ County, State of ____________.
-1-
<PAGE>
B. Borrower has requested that the Original Loan Agreement be amended to
increase the "Commitment", extend the "Maturity Date" and make certain other
revisions, all as set forth in that certain Amended and Restated Reducing
Revolving Loan Agreement (the "Loan Agreement") dated as of even date herewith,
executed by and among Borrower, Bank of America, as the Administrative Agent,
and Bank of America and the other financial institutions (collectively, the
"Banks") party thereto. Certain of the Original Banks will not be a party to
the Loan Agreement, certain Banks were not a party to the Original Loan
Agreement and, with respect to certain of those Banks who are also Original
Banks, the "Pro Rata Share" of such Banks is different under the Loan Agreement
from that under the Original Loan Agreement. Capitalized terms used herein
without definition have the meanings ascribed to them in the Loan Agreement.
C. As used here, the term "Loan Documents" means this Agreement, the Loan
Agreement, the "Notes" (as defined in the Loan Agreement), the Deed of Trust, as
amended by this Agreement and any other documents executed in connection with
the Loan Agreement, including those which evidence, guaranty, secure or modify
the Commitment, as any or all of them may have been amended to date.
Agreement
---------
Therefore, Borrower and Bank of America agree as follows:
1. Amendments.
----------
(a) Section 1.2.1 (a) of the Deed of Trust is hereby amended and
restated in its entirety to read as follows:
"(a) Except as specified in Section 1.2.2 below, the payment and
-----
performance of all Obligations of Borrower, including, without limitation, (i)
payment of all amounts owing by Borrower under the Notes, including, without
limitation, principal in the aggregate amount of up to the Commitment (which is
initially $300,000,000.00, but which is subject to increase to $375,000,000 in
accordance with Section 2.11 of the Loan Agreement) and interest thereon; (ii)
payment of all amounts owing by Borrower under Section 2.4(d) of the Loan
------
Agreement for reimbursement of draws, and all amounts owing by Borrower under
Section 9.2(a)(ii) of the Loan Agreement for payment of cash collateral for the
----------
undrawn amounts, under the Letters of Credit in the aggregate face amount of up
to $30,000,000, and interest thereon; (iii) payment of all amounts owing by
Borrower under the Swing Line Documents, including, without limitation,
principal in an amount of up to $10,000,000 and interest thereon; (iv) payment
of all amounts owing by Borrower under any and all Secured Swap Agreements; and
(v) payment of all fees, charges, costs and other amounts owing by Borrower
under the Loan Documents,
-2-
<PAGE>
including, without limitation, the agency fees described in Section 3.6 of the
---
Loan Agreement; "
(b) Section 1.2.4. The date referred to in Section 1.2.4 of the Deed
-------------
of Trust as "June 30, 2002" is amended to read "December 31, 2003".
(c) All references in the Deed of Trust to the "Managing Agent" shall
mean and refer to the Administrative Agent. All references in the Deed of Trust
to the "Loan Agreement" shall mean and refer to the Loan Agreement, as amended
and restated. All references in the Deed of Trust to the "Notes" shall mean and
refer to the Notes, as defined in the Loan Agreement. All references to the
Deed of Trust in the Deed of Trust shall mean and refer to the Deed of Trust as
amended hereby. Except as otherwise provided above, each capitalized term used
in the Deed of Trust but not defined in the Deed of Trust shall have the meaning
given that term in the Loan Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
"Trustor"
Hollywood Park, Inc.
a Delaware corporation
By:_____________________________
G. Michael Finnigan
Executive President and
Chief Financial Officer
"Bank of America"
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national
banking association
By:_____________________________
Janice Hammond
Vice President
-3-
<PAGE>
ACKNOWLEDGMENT
--------------
STATE OF CALIFORNIA )
) ss.
COUNTY OF _______________)
On ________________ before me, ______________________________
________________________________, a Notary Public in and for the State of
California, personally appeared
___________________________________________________ [and
____________________________], personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person[s] whose name[s] [is/are]
subscribed to the within instrument and acknowledged to me that [he/she/they]
executed the same in [his/her/their] authorized [capacity/capacities], and that
by [his/her/their] signature[s] on the instrument the person[s], or the entity
upon behalf of which the person[s] acted, executed the instrument.
WITNESS my hand and official seal.
- ---------------------------------- (Space above for official notarial
(Signature) seal)
-4-
<PAGE>
ACKNOWLEDGMENT
--------------
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On ________________ before me, _________________________________
________________________________, a Notary Public in and for the State of
California, personally appeared
___________________________________________________ [and
____________________________], personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person[s] whose name[s] [is/are]
subscribed to the within instrument and acknowledged to me that [he/she/they]
executed the same in [his/her/their] authorized [capacity/capacities], and that
by [his/her/their] signature[s] on the instrument the person[s], or the entity
upon behalf of which the person[s] acted, executed the instrument.
WITNESS my hand and official seal.
- ------------------------------------ (Space above for official notarial
(Signature) seal)
-5-
<PAGE>
EXHIBIT G
---------
PROMISSORY NOTE
---------------
$_________________ ____________, ____
Los Angeles, California
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
_________________________________ (the "Bank"), the principal amount of
----
____________________________________________ DOLLARS ($_____________) or such
lesser aggregate amount of Advances as may be made by the Bank with respect to
the Commitment under the Loan Agreement referred to below, together with
interest on the principal amount of each Advance made hereunder and remaining
unpaid from time to time from the date of each such Advance until the date of
payment in full, payable as hereinafter set forth.
Reference is made to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998, by and among the undersigned, as
Borrower, the Banks which are parties thereto, Societe Generale and Bank of
Scotland, as Managing Agents, First National Bank of Commerce, as Co-Agent, and
Bank of America National Trust and Savings Association, as Administrative Agent
(the "Loan Agreement"). Terms defined in the Loan Agreement and not otherwise
--------------
defined herein are used herein with the meanings given those terms in the Loan
Agreement. This is one of the Notes referred to in the Loan Agreement, and any
holder hereof is entitled to all of the rights, remedies, benefits and
privileges provided for in the Loan Agreement as originally executed or as it
may from time to time be supplemented, modified or amended. The Loan Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events upon the terms and conditions
therein specified.
The principal indebtedness evidenced by this Note shall be payable as
provided in the Loan Agreement and in any event on the Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal
amount of Advances from the date of each such Advance until payment in full and
shall accrue and be payable at the rates and on the dates set forth in the Loan
-1-
<PAGE>
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue principal and interest to bear interest at
the rate set forth in Section 3.9 of the Loan Agreement, to the fullest extent
-----------
permitted by applicable Law.
Each payment hereunder shall be made to the Administrative Agent at
the Administrative Agent's Office for the account of the Bank in immediately
available funds not later than 11:00 a.m. (California time) on the day of
payment (which must be a Banking Day). All payments received after 11:00 a.m.
(California time) on any particular Banking Day shall be deemed received on the
next succeeding Banking Day. All payments shall be made in lawful money of the
United States of America.
The Bank shall use its best efforts to keep a record of Advances made
by it and payments received by it with respect to this Note, and such record
shall be presumptive evidence of the amounts owing under this Note.
The undersigned hereby promises to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigned's obligations
hereunder or in enforcing or attempting to enforce any of such holder's rights
hereunder, including reasonable attorneys' fees and disbursements, whether or
not an action is filed in connection therewith.
The undersigned hereby waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
This Note shall be delivered to and accepted by the Bank, or by the
Administrative Agent on its behalf, in the State of California, and shall be
governed by, and construed and enforced in accordance with, the local Laws
thereof.
HOLLYWOOD PARK, INC.,
a Delaware corporation
By: ______________________________
G. Michael Finnigan
Executive Vice President and
Chief Financial Officer
-2-
<PAGE>
EXHIBIT H
---------
OMNIBUS ANCILLARY DOCUMENTS AMENDMENT
-------------------------------------
THIS OMNIBUS ANCILLARY DOCUMENTS AMENDMENT (this "Amendment"), dated
---------
as of October 14, 1998, is entered into by and among Hollywood Park, Inc., a
Delaware corporation ("Borrower"), Hollywood Park Operating Company, a Delaware
--------
corporation, Hollywood Park Food Services, Inc., a California corporation,
Hollywood Park Fall Operating Co., a Delaware corporation, HP/Compton, Inc., a
California corporation, HP Yakama, Inc., a Delaware corporation, Turf Paradise,
Inc., an Arizona corporation ("TPI"), Louisiana-I Gaming, a Louisiana
---
Partnership in Commendam, Louisiana Gaming Enterprises, Inc., a Louisiana
corporation ("LGEI"), Boomtown, Inc., a Delaware corporation ("Boomtown"),
---- --------
Boomtown Hotel & Casino, Inc., a Nevada corporation ("BHCI"), Mississippi-I
----
Gaming, L.P., a Mississippi limited partnership, Bayview Yacht Club, Inc., a
Mississippi corporation ("BYCI"), Crystal Park Hotel and Casino Development
----
Company, LLC, a California limited liability company ("Crystal Park"), and Bank
------------
of America National Trust and Savings Association, as Administrative Agent for
the Amended Loan Agreement Banks (as defined below), with reference to the
following facts:
RECITALS
--------
A. Borrower has previously entered into that certain Reducing
Revolving Loan Agreement, dated as of March 27, 1997 (as amended, the "Prior
-----
Loan Agreement"), with the Banks party thereto (the "Prior Banks"), Bank of
- -------------- -----------
Scotland, Bankers Trust Company, and Societe Generale, as Co-Agents, and Bank of
America National Trust and Savings Association, as Managing Agent, pursuant to
which the Prior Banks provided Borrower with certain secured reducing revolving
loan and letter of credit facilities.
B. The obligations of Borrower to the Prior Banks under the Prior
Loan Agreement are guaranteed by certain other Subsidiaries of Borrower pursuant
to a certain Subsidiary Guaranty (General) and a certain Subsidiary Guaranty
(Crystal Park)(as such terms are defined in the Prior Loan Agreement) and
secured by the Collateral provided under the Collateral Documents (as such terms
are defined in the Prior Loan Agreement).
C. At Borrower's request, the credit facilities created under the
Prior Loan Agreement will be amended and restated pursuant to that certain
Amended and Restated Reducing Revolving Loan Agreement of even date herewith
(the "Amended Loan Agreement"), by and among Borrower, Societe Generale and Bank
----------------------
of Scotland, as Managing Agents, First National Bank of Commerce, as Co-Agent,
Bank of America National Trust and Savings Association, as Administrative Agent,
and the Banks party
-1-
<PAGE>
thereto (the "Amended Loan Agreement Banks"), with a new lender joining the
----------------------------
credit facility and with differing participation levels for the continuing
lenders in the reducing revolving credit facility.
D. The parties agree that the Collateral (as defined in the Prior
Loan Agreement) will continue to secure the Obligations (as defined in the
Amended Loan Agreement) under the Amended Loan Agreement, along with any
additional Collateral (as defined in the Amended Loan Agreement) provided by
Borrower and Subsidiary Guarantors pursuant to the Amended Loan Agreement and
the Loan Documents (as defined in the Amended Loan Agreement). The parties to
this Amendment wish to amend certain of the Collateral Documents, the Subsidiary
Guaranty (General), and the Subsidiary Guaranty (Crystal Park) as set forth
below to give effect to the foregoing intentions of the parties.
NOW, THEREFORE, in consideration of the above premises, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Defined Terms. Any and all initially capitalized terms used in this
-------------
Amendment (including, without limitation, in the Recitals hereto) without
definition shall have the respective meanings assigned thereto in the Amended
Loan Agreement.
2. Excluded Assets. Notwithstanding anything to the contrary in any of
---------------
the Collateral Documents, the security interests and Liens created thereby shall
not attach to, and the Collateral thereunder shall not include (i) the Property
Held for Sale, or (ii) any Foreign Assets.
3. Amendments to Collateral Documents, Subsidiary Guaranty (General) and
---------------------------------------------------------------------
Subsidiary Guaranty (Crystal Park).
- ----------------------------------
A. Amendments to Security Agreement. The Security Agreement is
--------------------------------
hereby amended as follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This SECURITY AGREEMENT ("Agreement") dated as of June 30, 1997, is
---------
made by Hollywood Park, Inc., a Delaware corporation ("Borrower") and
--------
those Subsidiaries of Borrower that are parties hereto, as indicated
on the signature pages hereof, and/or that become parties hereto in
the manner provided in Section 16 hereof, and each of them, jointly
----------
and severally, as Grantors (each a "Grantor" and collectively
-------
"Grantors") in
--------
-2-
<PAGE>
favor of Bank of America National Trust and Savings Association, as
the Administrative Agent under the Loan Agreement referred to below
for the ratable benefit of each of the Banks which are parties to the
Loan Agreement from time to time, as Secured Party, with reference to
the following facts:"
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 by and among Borrower, the
Banks which are parties thereto, Societe Generale and Bank of
Scotland, as Managing Agents, First National Bank of Commerce, as Co-
Agent, and Bank of America National Trust and Savings Association, as
Administrative Agent (as such agreement may from time to time be
amended, extended, renewed, supplemented or otherwise modified, the
"Loan Agreement"), the Banks have agreed to extend certain credit
--------------
facilities to Borrower. The Loan Agreement amends and restates in its
entirety the Reducing Revolving Loan Agreement dated as of March 27,
1997 among Borrower, Bank of Scotland, Bankers Trust Company and
Societe Generale, as Co-Agents, the Banks therein named, and Bank of
America National Trust and Savings Association, as Managing Agent (the
"Prior Loan Agreement"), and the Collateral (as defined in the Prior
--------------------
Loan Agreement) shall continue to secure the Obligations (as defined
in the Loan Agreement)."
(3) Amendment to Definition of "Secured Obligations". The definition
------------------------------------------------
of "Secured Obligations" is hereby amended by replacing the term "Managing
Agent" in the sixth line thereof with the term "Administrative Agent".
(4) Amendment to Definition of "Secured Party". The definition of
------------------------------------------
"Secured Party" is hereby amended by replacing the term "Managing Agent" in the
first and fifth lines thereof with the term "Administrative Agent".
(5) Amendment to Section 4. Section 4 of the Security Agreement is
---------------------- ---------
hereby amended as follows: (i) the word "and" is inserted immediately before
subsection (g), (ii) a period is added after "Banking Days" at the end of
-
subsection (g), (iii) the words "; and" immediately prior to subsection (h) are
- -
deleted in their entirety, and (iv) subsection (h) is deleted in its entirety.
-
-3-
<PAGE>
(6) Amendment to Section 15. Section 15 of the Security Agreement is
----------------------- ----------
hereby amended by replacing the term "Managing Agent" in the ninth line thereof
with the term "Administrative Agent".
(7) Amendment to Section 18. Section 18 of the Security Agreement is
----------------------- ----------
hereby amended by replacing the term "Managing Agent" in the second line thereof
with the term "Administrative Agent".
(8) Amendment to Exhibit A. Exhibit A to the Security Agreement (the
---------------------- ---------
Instrument of Joinder) is hereby amended to read in full as set forth in
Attachment "A" to this Amendment.
(9) Amendment to Schedule I. Schedule I to the Security
----------------------- ----------
Agreement is hereby deleted in its entirety.
B. Amendments to Trademark Collateral Assignment. The Trademark
---------------------------------------------
Collateral Assignment is hereby amended as follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This TRADEMARK SECURITY INTEREST ASSIGNMENT (this "Assignment") is
----------
made and entered into as of June 30, 1997 by Hollywood Park, Inc., a
Delaware corporation ("Borrower") and those Subsidiaries of Borrower
--------
that are parties hereto, as indicated on the signature pages hereof,
and/or that become parties hereto in the manner provided in Section 10
----------
hereof, and each of them, jointly and severally, as Grantors (each a
"Grantor", and collectively "Grantors"), in favor of Bank of America
------- --------
National Trust and Savings Association, as the Administrative Agent
under the Loan Agreement referred to below for the ratable benefit of
each of the Banks which are parties to the Loan Agreement from time to
time, as Secured Party ("Secured Party"), with reference to the
-------------
following facts:"
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 by and among Borrower, the
Banks which are parties thereto, Societe Generale and Bank of
Scotland, as Managing Agents, First National Bank of Commerce, as Co-
Agent, and Bank of America National Trust and Savings Association, as
-4-
<PAGE>
Administrative Agent (as such agreement may from time to time be
amended, extended, renewed, supplemented or otherwise modified, the
"Loan Agreement"), the Banks have agreed to extend certain credit
--------------
facilities to Borrower. The Loan Agreement amends and restates in its
entirety the Reducing Revolving Loan Agreement dated as of March 27,
1997 among Borrower, Bank of Scotland, Bankers Trust Company and
Societe Generale, as Co-Agents, the Banks therein named, and Bank of
America National Trust and Savings Association, as Managing Agent (the
"Prior Loan Agreement"), and the Collateral (as defined in the Prior
--------------------
Loan Agreement) shall continue to secure the Obligations (as defined
in the Loan Agreement)."
(3) Amendments to Section 1.
-----------------------
(a) The first sentence of Section 1 is hereby amended by
---------
replacing the term "Trademark Security Interest Assignment" therein with
the term "Trademark Collateral Assignment".
(b) The definition of "Secured Obligations" is hereby
amended to read in full as follows:
"'Secured Obligations' means any and all Obligations of any type
-------------------
or nature of any one or more of Grantors or any Party to the
Administrative Agent, the Banks, and any one or more of them,
arising under or relating to one or more of the Loan Documents,
whether due or to become due, matured or unmatured, liquidated or
unliquidated, or contingent or noncontingent, including
obligations of performance as well as obligations of payment, and
including interest that accrues after the commencement of any
bankruptcy or insolvency proceeding by or against any Grantor or
any other Person."
(c) The definition of "Secured Party" is hereby amended to
read in full as follows:
"'Secured Party' means the Administrative Agent who shall receive
-------------
and hold the assignments made hereunder for the ratable benefit
of each of the Banks which are parties to the Loan Agreement from
time to time. Subject to the terms and conditions of the Loan
Agreement, any right, remedy, privilege, or power of Secured
Party shall be exercised by the Administrative Agent."
-5-
<PAGE>
(4) Amendment to Section 4(g). Section 4(g) is amended by
------------------------- ------------
replacing the term "Managing Agent" in the third line thereof with the term
"Administrative Agent".
(5) Amendment to Section 9. Section 9 is amended by replacing
---------------------- ---------
the term "Managing Agent" in the ninth line thereof with the term
"Administrative Agent".
(6) Amendment to Section 12. Section 12 is amended as follows:
----------------------- ----------
(a) by replacing the term "Managing Agent" in the second line thereof with the
term "Administrative Agent", and (b) by replacing the term "Loan Assignment" in
the second line thereof with the term "Loan Agreement".
(7) Amendment to Schedule 1. Schedule 1 to the Trademark
----------------------- ----------
Collateral Assignment is hereby amended to read in full as set forth on
Attachment "B" to this Amendment.
(8) Amendment to Exhibit A. Exhibit A to the Trademark
----------------------
Collateral Assignment (the Instrument of Joinder) is hereby amended to read in
full as set forth on Attachment "C" to this Amendment.
C. Amendment to Pledge Agreement (General). The Pledge Agreement
---------------------------------------
(General) is hereby amended as follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This PLEDGE AGREEMENT (GENERAL) ("Agreement") dated as of June 30,
---------
1997, is made by Hollywood Park, Inc., a Delaware corporation
("Borrower"), and those Significant Subsidiaries of Borrower (as
----------
defined below) that are parties hereto, as indicated on the signature
pages hereof, and/or that become parties hereto in the manner provided
in Section 14 hereof, and each of them, and severally, as Grantors
----------
(each a "Grantor"), in favor of and for the benefit of Bank of America
-------
National Trust and Savings Association, as the Administrative Agent
under the Loan Agreement referred to below for the ratable benefit of
each of the Banks which are parties to the Loan Agreement from time to
time, as Secured Party ("Secured Party"), with reference to the
-------------
following facts:"
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
-6-
<PAGE>
"A. Pursuant to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 by and among Borrower, the
Banks which are parties thereto, Societe Generale and Bank of
Scotland, as Managing Agents, First National Bank of Commerce, as Co-
Agent, and Bank of America National Trust and Savings Association, as
Administrative Agent (as such agreement may from time to time be
extended, modified, renewed, restated, supplemented or amended, the
"Loan Agreement"), the Banks have agreed to extend certain credit
--------------
facilities to Borrower. The Loan Agreement amends and restates in its
entirety the Reducing Revolving Loan Agreement dated as of March 27,
1997 among Borrower, Bank of Scotland, Bankers Trust Company and
Societe Generale, as Co-Agents, the Banks therein named, and Bank of
America National Trust and Savings Association, as Managing Agent (the
"Prior Loan Agreement"), and the Collateral (as defined in the Prior
--------------------
Loan Agreement) shall continue to secure the Obligations (as defined
in the Loan Agreement)."
(3) Amendment to Definition of "Pledged Securities". The
-----------------------------------------------
definition of "Pledged Securities" is hereby amended to read in full as follows:
"'Pledged Securities' means (a) any and all shares of capital stock of
------------------
all existing Subsidiaries and other affiliates of Borrower other than
Casino Magic of Louisiana Corp. (each an "Issuer") , which existing
------
Issuers are listed on Schedule 1 hereto, now or hereafter owned by
----------
Grantors, (b) any and all securities now or hereafter issued in
substitution, exchange or replacement therefor, or with respect
thereto, (c) any and all warrants, options or other rights to
subscribe to or acquire any additional capital stock of the existing
Issuers listed on Schedule 1 hereto, and (d) any and all securities
----------
entitlements, and other equity interests and the Certificates or other
written evidences representing such equity interests and any interest
of any Grantor in the entries on the books of any Securities
Intermediary or other financial intermediary pertaining thereto now or
hereafter acquired by any Grantor in any existing or future Subsidiary
of any Grantor (other than a Gaming Subsidiary subject to Gaming
Laws)."
(4) Amendment to Definition of "Secured Party". The definition
------------------------------------------
of "Secured Party" is hereby amended to read in full as follows:
"'Secured Party' means the Administrative Agent who shall hold the
-------------
pledges and security interest granted hereunder for the ratable
benefit of each of the Banks which are parties to the Loan Agreement
from time to time. Subject
-7-
<PAGE>
to the terms and conditions hereof and of the Loan Agreement, any
right, remedy, privilege or power of Secured Party shall be exercised
by the Administrative Agent."
(5) Amendment to Section 3.1. The last sentence of Section 3.1
------------------------ -----------
is hereby amended to read in full as follows:
"The security interest and pledge created by this Section 3.1 shall
-----------
continue in effect so long as any Obligation is owed or any commitment
to extend credit to Borrower remains outstanding from Banks."
(6) Amendment to Section 7.3. The last sentence of Section 7.3
------------------------ -----------
is amended by replacing the term "Secured Party" therein with the term "Banks".
(7) Amendment to Section 18. Section 18 is hereby amended by
----------------------- ----------
replacing the term "Managing Agent" in the second line thereof with the term
"Administrative Agent".
(8) Amendment to Exhibit A. Exhibit A to the Pledge Agreement
----------------------
(General)(the Instrument of Joinder) is hereby amended to read in full as set
forth on Attachment "D" to this Amendment.
(9) Amendment to Schedule 1. Schedule 1 to the Pledge Agreement
-----------------------
(General) is hereby amended to read in full as set forth on Attachment "E" to
this Amendment.
(10) Amendment to Schedule 2. Schedule 2 to the Pledge Agreement
-----------------------
(General) is hereby amended to read in full as set forth on Attachment "F" to
this Amendment.
D. Amendments to Pledge Agreement (Gaming Regulated - Borrower). The
------------------------------------------------------------
Pledge Agreement (Gaming Regulated - Borrower) dated as of June 30, 1997 by
Borrower concerning the shares of capital stock of Boomtown is hereby amended as
follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This PLEDGE AGREEMENT ("Agreement"), dated as of June 30, 1997, is
---------
made by Hollywood Park, Inc., a Delaware corporation, as Grantor
("Grantor"), in favor of and for the benefit of BANK OF AMERICA
---------
-8-
<PAGE>
NATIONAL TRUST AND SAVINGS ASSOCIATION, as the Administrative Agent
under the Loan Agreement hereafter referred to for the ratable benefit
of each of the Banks which are parties to the Loan Agreement from time
to time, as Secured Party ("Secured Party"), with reference to the
-------------
following facts:"
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 by and among Grantor, the
lenders from time to time party thereto (collectively, the "Banks" and
-----
individually, a "Bank"), Societe Generale and Bank of Scotland, as
----
Managing Agents, First National Bank of Commerce, as Co-Agent, and
Bank of America National Trust and Savings Association, as
Administrative Agent (as such agreement may from time to time be
extended, modified, renewed, restated, supplemented or amended, the
"Loan Agreement"), the Banks have agreed to extend certain credit
--------------
facilities to Grantor."
(3) Amendment to definition of "Secured Party". The definition of
------------------------------------------
"Secured Party" is hereby amended to read in full as follows:
"'Secured Party' means the Administrative Agent, who shall hold the
-------------
pledges and security interests granted hereunder for the ratable
benefit of each of the Banks which are parties to the Loan Agreement
from time to time. Subject to the terms hereof and of the Loan
Agreement, any right, remedy, privilege or power of Secured Party
shall be exercised by the Administrative Agent acting with the consent
of the Requisite Banks."
(4) Amendment to Section 3.1. The last sentence of Section 3.1
------------------------ -----------
is hereby amended to read in full as follows:
"The security interest and pledge created by this Section 3.1 shall
-----------
continue in effect so long as any Obligation is owed or any commitment
to extend credit to the Grantor remains outstanding from Banks."
(5) Amendment to Section 7.3. The last sentence of Section 7.3
------------------------ -----------
is amended by replacing the term "Secured Party" therein with the term "Banks".
(6) Amendment to Section 18. The first sentence of Section 18 is
----------------------- ----------
hereby amended by replacing the term "Managing Agent" therein with the term
"Administrative Agent".
-9-
<PAGE>
E. Amendments to Pledge Agreement (Gaming Regulated - Arizona). The
-----------------------------------------------------------
Pledge Agreement (Gaming Regulated - Arizona) dated as of June 30, 1997 by
Borrower concerning the shares of capital stock of TPI is hereby amended as
follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This PLEDGE AGREEMENT ("Agreement"), dated as of June 30, 1997, is
---------
made by Hollywood Park, Inc., a Delaware corporation, as Grantor
("Grantor"), in favor of and for the benefit of BANK OF AMERICA
-------
NATIONAL TRUST AND SAVINGS ASSOCIATION, as the Administrative Agent
under the Loan Agreement hereafter referred to for the ratable benefit
of each of the Banks which are parties to the Loan Agreement from time
to time, as Secured Party ("Secured Party"), with reference to the
-------------
following facts:"
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 by and among Grantor, the
lenders from time to time party thereto (collectively, the "Banks" and
-----
individually, a "Bank"), Societe Generale and Bank of Scotland, as
----
Managing Agents, First National Bank of Commerce, as Co-Agent, and
Bank of America National Trust and Savings Association, as
Administrative Agent (as such agreement may from time to time be
extended, modified, renewed, restated, supplemented or amended, the
"Loan Agreement"), the Banks have agreed to extend certain credit
--------------
facilities to Grantor."
(3) Amendment to definition of "Secured Party". The definition
------------------------------------------
of "Secured Party" is hereby amended to read in full as follows:
"'Secured Party' means the Administrative Agent, who shall hold the
-------------
pledges and security interests granted hereunder for the ratable
benefit of each of the Banks which are parties to the Loan Agreement
from time to time. Subject to the terms hereof and of the Loan
Agreement, any right, remedy, privilege or power of Secured Party
shall be exercised by the Administrative Agent acting with the consent
of the Requisite Banks."
-10-
<PAGE>
(4) Amendment to Section 3.1. The last sentence of Section 3.1
------------------------ -----------
is hereby amended to read in full as follows:
"The security interest and pledge created by this Section 3.1 shall
-----------
continue in effect so long as any Obligation is owed or any commitment
to extend credit to the Grantor remains outstanding from Banks."
(5) Amendment to Section 7.3. The last sentence of Section 7.3
------------------------ -----------
is amended by replacing the term "Secured Party" therein with the term "Banks".
(6) Amendment to Section 18. The first sentence of Section 18 is
----------------------- ----------
hereby amended by replacing the term "Managing Agent" therein with the term
"Administrative Agent".
F. Amendments to Pledge Agreement (Gaming Regulated - Boomtown -
-------------------------------------------------------------
Nevada). The Pledge Agreement (Gaming Regulated - Boomtown - Nevada) dated as
- -------
of June 30, 1997 by Boomtown concerning the shares of capital stock of BHCI is
hereby amended as follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This PLEDGE AGREEMENT ("Agreement"), dated as of June 30, 1997, is
---------
made by Boomtown, Inc., a Delaware corporation, as Grantor
("Grantor"), in favor of and for the benefit of BANK OF AMERICA
-------
NATIONAL TRUST AND SAVINGS ASSOCIATION, as the Administrative Agent
under the Loan Agreement hereafter referred to for the ratable benefit
of each of the Banks which are parties to the Loan Agreement from time
to time, as Secured Party ("Secured Party"), with reference to the
-------------
following facts:"
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 by and among Hollywood Park,
Inc., a Delaware corporation ("Borrower"), the lenders from time to
--------
time party thereto (collectively, the "Banks" and individually, a
-----
"Bank"), Societe Generale and Bank of Scotland, as Managing Agents,
-----
First National Bank of Commerce, as Co-Agent, and Bank of America
National Trust and Savings Association, as Administrative Agent (as
such agreement may from
-11-
<PAGE>
time to time be extended, modified, renewed, restated, supplemented or
amended, the "Loan Agreement"), the Banks have agreed to extend
--------------
certain credit facilities to Borrower."
(3) Amendment to definition of "Gaming Laws". The definition of
----------------------------------------
"Gaming Laws" is hereby amended by replacing the term "Borrower" therein with
the term "Grantor".
(4) Amendment to definition of "Secured Party". The definition
------------------------------------------
of "Secured Party" is hereby amended to read in full as follows:
"'Secured Party' means the Administrative Agent, who shall hold the
-------------
pledges and security interests granted hereunder for the ratable
benefit of each of the Banks which are parties to the Loan Agreement
from time to time. Subject to the terms hereof and of the Loan
Agreement, any right, remedy, privilege or power of Secured Party
shall be exercised by the Administrative Agent acting with the consent
of the Requisite Banks."
(5) Amendment to Section 3.1. The last sentence of Section 3.1
------------------------ -----------
is hereby amended to read in full as follows:
"The security interest and pledge created by this Section 3.1 shall
-----------
continue in effect so long as any Obligation is owed or any commitment
to extend credit to the Borrower remains outstanding from Banks."
(6) Amendment to Section 7.3. The last sentence of Section 7.3
------------------------ -----------
is amended by replacing the term "Secured Party" therein with the term "Banks".
(7) Amendment to Section 18. The first sentence of Section 18 is
----------------------- ----------
hereby amended by replacing the term "Managing Agent" therein with the term
"Administrative Agent".
G. Amendments to Pledge Agreement (Gaming Regulated - Bayview). The
-----------------------------------------------------------
Pledge Agreement (Gaming Regulated - Bayview) dated as of June 30, 1997 by
Boomtown concerning the shares of capital stock of BYCI is hereby amended as
follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This PLEDGE AGREEMENT ("Agreement"), dated as of June 30, 1997, is
---------
made by Boomtown, Inc., a Delaware corporation ("Grantor"), in favor
-------
of
-12-
<PAGE>
and for the benefit of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as the Administrative Agent under the Loan Agreement
referred to below for the ratable benefit of each of the Banks which
are parties to the Loan Agreement from time to time, as Secured Party
("Secured Party"), with reference to the following facts:"
-------------
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 by and among Hollywood Park,
Inc., a Delaware corporation ("Borrower"), the lenders from time to
--------
time party thereto (collectively, the "Banks" and individually, a
-----
"Bank"), Societe Generale and Bank of Scotland, as Managing Agents,
-----
First National Bank of Commerce, as Co-Agent, and Bank of America
National Trust and Savings Association, as Administrative Agent (as
such agreement may from time to time be extended, modified, renewed,
restated, supplemented or amended, the "Loan Agreement"), the Banks
--------------
have agreed to extend certain credit facilities to Borrower."
(3) Amendment to definition of "Secured Party". The definition
------------------------------------------
of "Secured Party" is hereby amended to read in full as follows:
"'Secured Party' means the Administrative Agent, who shall hold the
-------------
pledges and security interests granted hereunder for the ratable
benefit of each of the Banks which are parties to the Loan Agreement
from time to time. Subject to the terms hereof and of the Loan
Agreement, any right, remedy, privilege or power of Secured Party
shall be exercised by the Administrative Agent acting with the consent
of the Requisite Banks."
(4) Amendment to definition of "Pledged Securities". The
-----------------------------------------------
definition of "Pledged Securities" is hereby amended to read in full as follows:
"'Pledged Securities' means (i) 100% of the shares of capital stock of
------------------
Bayview Yacht Club, Inc., a Mississippi corporation ('BYCI') and 100%
----
of the partnership interests owned by Grantor in Mississippi-I Gaming,
L.P., a Mississippi limited partnership ('MIGLP', and together with
-----
BYCI, the 'Initial Gaming Subsidiaries'), as more particularly
---------------------------
described on Schedule 1 hereto, (ii) any and all securities or
----------
partnership interests now or hereafter issued in substitution,
exchange or replacement therefor, or with respect thereto, (iii) any
and all warrants, options or other rights to subscribe to or acquire
any additional capital stock or partnership interests of the Initial
-13-
<PAGE>
Gaming Subsidiaries, (iv) any and all additional capital stock or
partnership interests of the Initial Gaming Subsidiaries, and (v) any
and all securities entitlements and other equity interests and the
Certificates or other written evidences representing all such equity
interests (and any interest of Grantor in the entries on the books of
any securities intermediary or other financial intermediary pertaining
thereto) hereafter acquired by any Grantor in any future Gaming
Subsidiary."
(5) Amendment to Section 3.1. The last sentence of Section 3.1
------------------------ -----------
is hereby amended to read in full as follows:
"The security interest and pledge created by this Section 3.1 shall
-----------
continue in effect so long as any Obligation is owed or any commitment
to extend credit to Borrower remains outstanding from Banks."
(6) Amendment to Section 3.2. The first sentence of Section 3.2
------------------------ -----------
is hereby amended to read in full as follows:
"On or before the Closing Date (but in any event subject to compliance
with applicable Gaming Laws), Grantor shall cause to be pledged and
delivered to Secured Party the Certificates evidencing the capital
stock of BYCI."
(7) Amendment to Section 4. Section 4 is hereby amended to read
---------------------- ---------
in full as follows:
"4. Security for Obligations. This Agreement and the pledge and
------------------------
security interests granted herein secure the prompt payment, in full
in cash, and full performance of, all Obligations, whether for
principal, interest, fees, expenses or otherwise, including, without
limitation, all Obligations of Borrower now or hereafter existing
under the Loan Documents, all Obligations of Grantor now or hereafter
existing under this Agreement, and all interest that accrues on all or
any part of any of the Obligations of Borrower and/or Grantor after
the filing of any petition or pleading against Borrower, Grantor or
any other Person for a proceeding under any Debtor Relief Law."
(8) Amendment to Section 7.3. Section 7.3 is hereby amended to
------------------------ -----------
read in full as follows:
"7.3 Irrevocable Proxy. Grantor hereby revokes all previous proxies
-----------------
with regard to the Pledged Securities and, to the extent allowable
under applicable Law (including, without limitation, applicable Gaming
Laws),
-14-
<PAGE>
appoints Secured Party as its proxyholder to attend and vote at any
and all meetings of the shareholders (or members, partners or other
equity owners as applicable) of each Gaming Subsidiary, and any
adjournments thereof, held on or after the date of the giving of this
proxy and prior to the termination of this proxy and to execute any
and all written consents of shareholders (or members, partners or
other equity owners as applicable) of such Gaming Subsidiaries
executed on or after the date of the giving of this proxy and prior to
the termination of this proxy, with the same effect as if Grantor had
personally attended the meetings or had personally voted its shares
(or other equity interest) or had personally signed the written
consents; provided, however, that the proxyholder shall have rights
hereunder only upon the occurrence and during the continuance of an
Event of Default under the Loan Agreement. Grantor hereby authorizes
Secured Party to substitute another Person as the proxyholder and,
upon the occurrence or during the continuance of any Event of Default,
hereby authorizes and directs the proxyholder to file this proxy and
the substitution instrument with the secretary or other appropriate
office of the appropriate Gaming Subsidiary. This proxy is coupled
with an interest and is irrevocable until such time as no commitment
to extend credit to Borrower remains outstanding from Banks and until
such time as all Obligations have been paid and performed in full."
(9) Amendment to Section 15. Section 15 is hereby amended by
----------------------- ----------
inserting "which is a corporation" immediately following the term "Gaming
Subsidiaries" and immediately following the term "Gaming Subsidiary" where such
terms appear in Section 15.
----------
(10) Amendment to Section 16. Section 16 is hereby amended by
-----------------------
inserting "or partnership interests" immediately following the term "capital
stock" where such term appears in Section 16.
----------
(11) Amendment to Section 18. The first sentence of Section 18
----------------------- ----------
is hereby amended by replacing the term "Managing Agent" therein with the term
"Administrative Agent".
(12) Amendment to Schedule 1. Schedule 1 to the Pledge Agreement
-----------------------
(Gaming Regulated - Bayview) is hereby amended to read in full as set forth on
Attachment "G" to this Amendment.
(13) BYCI. BYCI is deleted as a party to the Pledge Agreement
----
(Gaming Regulated - Bayview).
-15-
<PAGE>
H. Amendments to Pledge Agreement (Gaming Regulated - Louisiana).
-------------------------------------------------------------
The Pledge Agreement (Gaming Regulated - Louisiana) dated as of August 1, 1997
by Boomtown concerning the shares of capital stock of LGEI is hereby amended as
follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This PLEDGE AGREEMENT ("Agreement"), dated as of August 1, 1997, is
---------
made by Boomtown, Inc., a Delaware corporation ("Grantor"), in favor
-------
of and for the benefit of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as the Administrative Agent under the Loan Agreement
referred to below for the ratable benefit of each of the Banks which
are parties to the Loan Agreement from time to time, as Secured Party
("Secured Party"), with reference to the following facts:"
-------------
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to the Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 by and among Hollywood Park,
Inc., a Delaware corporation (the "Borrower"), the lenders from time
--------
to time party thereto (collectively, the "Banks" and individually, a
-----
"Bank"), Societe Generale and Bank of Scotland, as Managing Agents,
-----
First National Bank of Commerce, as Co-Agent, and Bank of America
National Trust and Savings Association, as Administrative Agent (as
such agreement may from time to time be extended, modified, renewed,
restated, supplemented or amended, the "Loan Agreement"), the Banks
--------------
have agreed to extend certain credit facilities to Borrower."
(3) Amendment to definition of "Gaming Subsidiary". The
----------------------------------------------
definition of "Gaming Subsidiary" is hereby amended to read in full as follows:
"'Gaming Subsidiary' means any Restricted Subsidiary of Grantor with
-----------------
respect to which the inclusion of Grantor's equity interest in such
Subsidiary in the applicable Pledged Collateral would require
compliance with one or more Gaming Laws of the State of Louisiana in
connection with the execution, delivery or performance of this
Agreement."
(4) Amendment to definition of "Pledged Securities". The
-----------------------------------------------
definition of "Pledged Securities" is hereby amended to read in full as follows:
-16-
<PAGE>
"'Pledged Securities' means (i) 100% of the shares of capital stock of
------------------
Louisiana Gaming Enterprises, Inc., a Louisiana corporation ('LGEI')
----
and 100% of the partnership interests owned by Grantor in Louisiana-I
Gaming, a Louisiana Partnership in Commendam ('LIG', and together with
---
LGEI, the 'Initial Gaming Subsidiaries'), as more particularly
---------------------------
described on Schedule 1 hereto, (ii) any and all securities or
----------
partnership interests now or hereafter issued in substitution,
exchange or replacement therefor, or with respect thereto, (iii) any
and all warrants, options or other rights to subscribe to or acquire
any additional capital stock or partnership interests of the Initial
Gaming Subsidiaries, (iv) any and all additional capital stock or
partnership interests of the Initial Gaming Subsidiaries, and (v) any
and all securities entitlements and other equity interests and the
Certificates or other written evidences representing all such equity
interests (and any interest of Grantor in the entries on the books of
any securities intermediary or other financial intermediary pertaining
thereto) hereafter acquired by any Grantor in any future Gaming
Subsidiary."
(5) Amendment to definition of "Secured Party". The definition
------------------------------------------
of "Secured Party" is hereby amended to read in full as follows:
"'Secured Party' means the Administrative Agent, who shall hold the
-------------
pledges and security interests granted hereunder for the ratable
benefit of each of the Banks which are parties to the Loan Agreement
from time to time. Subject to the terms hereof and of the Loan
Agreement, any right, remedy, privilege or power of Secured Party
shall be exercised by the Administrative Agent acting with the consent
of the Requisite Banks."
(6) Amendment to Section 3.1. The last sentence of Section 3.1
------------------------ -----------
is hereby amended to read in full as follows:
"The security interest and pledge created by this Section 3.1 shall
-----------
continue in effect so long as any Obligation is owed or any commitment
to extend credit to Borrower remains outstanding from Banks."
(7) Amendment to Section 3.2. The first sentence of Section 3.2
------------------------ -----------
is hereby amended to read in full as follows:
"On or before the Closing Date (but in any event subject to compliance
with applicable Gaming Laws), Grantor shall cause to be pledged and
delivered to Secured Party the Certificates evidencing the capital
stock of LGEI."
-17-
<PAGE>
(8) Amendment to Section 4. Section 4 is hereby amended to read
---------------------- ---------
in full as follows:
"4. Security for Obligations. This Agreement and the pledge and
------------------------
security interests granted herein secure the prompt payment, in full
in cash, and full performance of, all Obligations, whether for
principal, interest, fees, expenses or otherwise, including, without
limitation, all Obligations of Borrower now or hereafter existing
under the Loan Documents, all Obligations of Grantor now or hereafter
existing under this Agreement, and all interest that accrues on all or
any part of any of the Obligations of Borrower and/or Grantor after
the filing of any petition or pleading against Borrower, Grantor or
any other Person for a proceeding under any Debtor Relief Law."
(9) Amendment to Section 7.3. Section 7.3 is hereby amended to
------------------------ -----------
read in full as follows:
"7.3 Irrevocable Proxy. Grantor hereby revokes all previous proxies
-----------------
with regard to the Pledged Securities and, to the extent allowable
under applicable Law (including, without limitation, applicable Gaming
Laws), appoints Secured Party as its proxyholder to attend and vote at
any and all meetings of the shareholders (or members, partners or
other equity owners as applicable) of each Gaming Subsidiary, and any
adjournments thereof, held on or after the date of the giving of this
proxy and prior to the termination of this proxy and to execute any
and all written consents of shareholders (or members, partners or
other equity owners as applicable) of such Gaming Subsidiaries
executed on or after the date of the giving of this proxy and prior to
the termination of this proxy, with the same effect as if Grantor had
personally attended the meetings or had personally voted its shares
(or other equity interest) or had personally signed the written
consents; provided, however, that the proxyholder shall have rights
hereunder only upon the occurrence and during the continuance of an
Event of Default under the Loan Agreement. Grantor hereby authorizes
Secured Party to substitute another Person as the proxyholder and,
upon the occurrence or during the continuance of any Event of
Default, hereby authorizes and directs the proxyholder to file this
proxy and the substitution instrument with the secretary or other
appropriate office of the appropriate Gaming Subsidiary. This proxy
is coupled with an interest and is irrevocable until such time as no
commitment to extend credit to Borrower remains outstanding from Banks
and until such time as all Obligations have been paid and performed in
full."
-18-
<PAGE>
(10) Amendment to Section 15. Section 15 is hereby amended by
----------------------- ----------
inserting "which is a corporation" immediately following the term "Gaming
Subsidiaries" and immediately following the term "Gaming Subsidiary" where such
terms appear in Section 15.
----------
(11) Amendment to Section 16. Section 16 is hereby amended by
-----------------------
inserting "or partnership interests" immediately following the term "capital
stock" where such term appears in Section 16.
----------
(12) Amendment to Section 18. The first sentence of Section 18
----------------------- ----------
is hereby amended by replacing the term "Managing Agent" therein with the term
"Administrative Agent".
(13) Amendment to Schedule 1. Schedule 1 to the Pledge Agreement
-----------------------
(Gaming Regulated - Louisiana) is hereby amended to read in full as set forth on
Attachment "H" to this Amendment.
I. Amendments to Subsidiary Guaranty (General). The Subsidiary
-------------------------------------------
Guaranty (General) is hereby amended as follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This SUBSIDIARY GUARANTY (GENERAL) ("Guaranty") dated as of June 30,
--------
1997, is made by each of the corporations and partnerships listed on
the signature pages hereto, together with each other Person who may
become a party hereto pursuant to Section 18 of this Guaranty (each a
----------
"Guarantor" and collectively "Guarantors"), jointly and severally in
--------- ----------
favor of Bank of America National Trust and Savings Association, as
Administrative Agent, and the Banks that are party to the Loan
Agreement referred to below (referred to herein collectively and
individually as "Lender"), with reference to the following facts:"
------
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to that certain Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998, by and among Hollywood
Park, Inc., a Delaware corporation ("Borrower"), the Banks which are
--------
parties thereto, Societe Generale and Bank of Scotland, as Managing
Agents, First National Bank of Commerce, as Co-Agent, and Bank of
-19-
<PAGE>
America National Trust and Savings Association, as Administrative
Agent (as such agreement may from time to time be extended, modified,
renewed, restated, supplemented or amended, the "Loan Agreement"), the
--------------
Banks are making certain credit facilities available to Borrower."
(3) Amendment to Definition of "Lender". The definition of
-----------------------------------
"Lender" is hereby amended to read in full as follows:
"'Lender' means the Administrative Agent (acting as the Administrative
------
Agent and/or on behalf of the Banks), and the Banks, and each of them,
and any one or more of them. Subject to the terms hereof and of the
Loan Agreement, any right, remedy, privilege or power of Lender may be
exercised by the Administrative Agent, or by the Requisite Banks, or
by any Bank acting with the consent of the Requisite Banks."
(4) Amendment to Section 19. The second sentence of Section 19
----------------------- ----------
is hereby amended to read in full as follows:
"Upon such release of any or all such Guarantors' Obligations
hereunder, Administrative Agent shall endorse, execute, deliver,
record and file all instruments and documents, and do all other acts
and things, reasonably required to evidence or document the release of
Lender's rights arising under this Guaranty, all as reasonably
requested by, and at the sole expense of, Guarantors."
(5) Amendment to Exhibit A. Exhibit A to the Subsidiary Guaranty
----------------------
(General) (the Instrument of Joinder) is hereby amended to read in full as set
forth on Attachment "I" to this Amendment.
J. Amendments to Subsidiary Guaranty (Crystal Park). The Subsidiary
------------------------------------------------
Guaranty (Crystal Park) is hereby amended as follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"This SUBSIDIARY GUARANTY (CRYSTAL PARK) ("Guaranty") dated as of
--------
June 30, 1997, is made by Crystal Park Hotel and Casino Development
Company, LLC, a California limited liability company ("Guarantor"), in
---------
favor of Bank of America National Trust and Savings Association, as
Administrative Agent, and the Banks that are party to the
-20-
<PAGE>
Loan Agreement referred to below (referred to herein collectively and
individually as "Lender"), with reference to the following facts:"
------
(2) Amendment to Recital A. Recital A is hereby amended to read
----------------------
in full as follows:
"A. Pursuant to that certain Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998, by and among Hollywood
Park, Inc., a Delaware corporation ("Borrower"), the Banks which are
--------
parties thereto, Societe Generale and Bank of Scotland, as Managing
Agents, First National Bank of Commerce, as Co-Agent, and Bank of
America National Trust and Savings Association, as Administrative
Agent (as such agreement may from time to time be extended, modified,
renewed, restated, supplemented or amended, the "Loan Agreement"), the
--------------
Banks are making certain credit facilities available to Borrower."
(3) Amendment to Definition of "Lender". The definition of
-----------------------------------
"Lender" is hereby amended to read in full as follows:
"'Lender' means the Administrative Agent (acting as the Administrative
------
Agent and/or on behalf of the Banks), and the Banks, and each of them,
and any one or more of them. Subject to the terms hereof and of the
Loan Agreement, any right, remedy, privilege or power of Lender may be
exercised by the Administrative Agent, or by the Requisite Banks, or
by any Bank acting with the consent of the Requisite Banks."
(4) Amendment to Section 16. The second sentence of Section 16
----------------------- ----------
is hereby amended to read in full as follows:
"Upon such release of Guarantor's obligations hereunder,
Administrative Agent shall endorse, execute, deliver, record and file
all instruments and documents, and do all other acts and things,
reasonably required to evidence or document the release of Lender's
rights arising under this Guaranty, all as reasonably requested by,
and at the sole expense of, Guarantor."
K. Amendments to New Orleans Preferred Ship's Mortgage Re: "Boomtown
-----------------------------------------------------------------
Belle" . The New Orleans Preferred Ship's Mortgage concerning "Boomtown Belle"
- -------
is hereby amended as follows:
-21-
<PAGE>
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"THIS PREFERRED SHIP MORTGAGE ("Mortgage") on the vessel "Boomtown
--------
Belle", No. 1024005, dated as of August 1, 1997, is made by Louisiana-
I Gaming, a Louisiana Partnership in Commendam ("Owner") with an
-----
office at 1050 South Prairie Avenue, Inglewood, California 90301, in
favor of Bank of America National Trust and Savings Association, with
an office at 555 South Flower Street, #3283, Los Angeles, California
90071, in its capacity as Administrative Agent (herein, "Mortgagee")
---------
for the benefit of itself, Societe Generale and Bank of Scotland, as
Managing Agents, First National Bank of Commerce, as Co-Agent, and the
"Banks" party to the Loan Agreement referred to below (such parties
being referred to herein collectively and individually as "Lenders")."
-------
(2) Amendment to Recital B. Recital B is hereby amended to read
----------------------
in full as follows:
"B. The total amount of this Mortgage is $300,000,000 (which amount
is subject to increase to $375,000,000 in accordance with the
provisions of Section 2.11 of the Loan Agreement referred to below)
------------
plus interest and performance of mortgage covenants and the discharge
amount is the same as the total amount."
(3) Amendment to Recital C. Recital C is hereby amended to read
----------------------
in full as follows:
"C. Pursuant to that certain Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998 entered into among
Hollywood Park, Inc., a Delaware corporation ("Borrower"), the
--------
Mortgagee as Administrative Agent and the other Lenders (as amended,
extended, renewed, supplemented or otherwise modified from time to
time, the "Loan Agreement"), the Lenders have made certain credit
--------------
facilities available to Borrower which consist of, among other things,
loans in the amount of $300,000,000 (which amount is subject to
increase to $375,000,000 in accordance with the provisions of Section
-------
2.11 of the Loan Agreement)."
----
(4) Additional Amendments to Amount of Secured Obligations. The
------------------------------------------------------
last paragraph on page 2 is hereby amended to read in full as follows:
"TO HAVE AND TO HOLD all and singular the Vessel unto Mortgagee, its
successors and assigns, forever, upon the terms herein set forth for
the
-22-
<PAGE>
enforcement of the Secured Obligations, including, without limitation,
the payment of $300,000,000 (which amount is subject to increase to
$375,000,000 in accordance with the provisions of Section 2.11 of the
------------
Loan Agreement) and interest and to secure performance of, and
compliance with all agreements, covenants, terms and conditions in,
this Mortgage and the Loan Documents;"
(5) Amendment to Section 1.7. The contents of the form of
------------------------
notice set forth in Section 1.7 are hereby amended to read in full as follows:
-----------
"NOTICE OF PREFERRED SHIP MORTGAGE
This vessel is owned by Louisiana-I Gaming, a Louisiana Partnership in
Commendam, and is subject to a Preferred Ship Mortgage in favor of
Bank of America National Trust and Savings Association, as Mortgagee
in its capacity as Administrative Agent for itself and certain
Managing Agents and a certain Co-Agent and Banks party to a certain
credit facility. Under the terms of the Preferred Ship Mortgage,
neither the owner, any charterer, the master, nor any other person has
the right, power or authority to create, incur or permit to be placed
or imposed upon this vessel, its freight, profits or hire, any lien
whatsoever, other than the liens explicitly permitted by the terms of
the Preferred Ship Mortgage."
(6) Amendment to Article 4. The second full paragraph of Article
----------------------
4 is hereby amended by replacing the amount "$225,000,000" in the third line
thereof with the following: "$300,000,000 (which amount is subject to increase
to $375,000,000 in accordance with the provisions of Section 2.11 of the Loan
------------
Agreement)".
L. Amendments to Biloxi BT Preferred Ship's Mortgage . The Biloxi
--------------------------------------------------
BT Preferred Ship's Mortgage is hereby amended as follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"THIS PREFERRED SHIP MORTGAGE ("Mortgage") on the vessel Boomtown, No.
--------
1023175, dated December 30, 1997, is made by Mississippi-I Gaming,
L.P., a Mississippi limited partnership ("Owner") with an office at I-
-----
80 West and Boomtown Garson Road, Verdi, Nevada 89439, in favor of
Bank of America National Trust and Savings Association, with an office
at 555 South Flower Street, #3283, Los Angeles, California 90071, in
its capacity as Administrative Agent (herein,
-23-
<PAGE>
"Mortgagee") for the benefit of itself, Societe Generale and Bank of
---------
Scotland, as Managing Agents, First National Bank of Commerce, as Co-
Agent, and the "Banks" party to the Loan Agreement referred to below
(such parties being referred to herein collectively and individually
as "Lenders")."
-------
(2) Amendment to Recital B. Recital B is hereby amended to read
----------------------
in full as follows:
"B. The total amount of this Mortgage is $300,000,000 (which amount
is subject to increase to $375,000,000 in accordance with the
provisions of Section 2.11 of the Loan Agreement referred to below)
------------
plus interest and performance of mortgage covenants and the discharge
amount is the same as the total amount."
(3) Amendment to Recital C. Recital C is hereby amended to read
----------------------
in full as follows:
"C. Pursuant to that certain Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998 entered into among
Hollywood Park, Inc., a Delaware corporation ("Borrower"), the
Mortgagee as Administrative Agent and the other Lenders (as amended,
extended, renewed, supplemented or otherwise modified from time to
time, the "Loan Agreement"), the Lenders have agreed to make certain
--------------
credit facilities available to Borrower which consist of, among other
things, loans of up to $300,000,000 in principal amount (which amount
is subject to increase to $375,000,000 in accordance with the
provisions of Section 2.11 of the Loan Agreement)."
------------
(4) Additional Amendments to Amount of Secured Obligations. The
------------------------------------------------------
second full paragraph on page 2 is hereby amended to read in full as follows:
"TO HAVE AND TO HOLD all and singular the Vessel unto Mortgagee, its
successors and assigns, forever, upon the terms herein set forth for
the enforcement of the Secured Obligations, including, without
limitation, the payment of $300,000,000 (which amount is subject to
increase to $375,000,000 in accordance with the provisions of Section
-------
2.11 of the Loan Agreement) and interest and to secure performance of,
----
and compliance with all agreements, covenants, terms and conditions
in, this Mortgage and the Loan Documents;".
-24-
<PAGE>
(5) Amendment to Section 1.7. The contents of the form of notice
------------------------
set forth in Section 1.7 are hereby amended to read in full as follows:
-----------
"NOTICE OF PREFERRED SHIP MORTGAGE
This vessel is owned by Mississippi-I Gaming, L.P., and is subject to
a Preferred Ship Mortgage in favor of Bank of America National Trust
and Savings Association, as Mortgagee in its capacity as
Administrative Agent for itself and certain Managing Agents and a
certain Co-Agent and Banks party to a certain credit facility. Under
the terms of the Preferred Ship Mortgage, neither the owner, any
charterer, the master, nor any other person has the right, power or
authority to create, incur or permit to be placed or imposed upon this
vessel, its freight, profits or hire, any lien whatsoever, other than
the liens explicitly permitted by the terms of the Preferred Ship
Mortgage."
(6) Amendment to Article IV. The second full paragraph of
-----------------------
Article IV is hereby amended by replacing the amount "$225,000,000" in the third
line thereof with the following: "$300,000,000 (which amount is subject to
increase to $375,000,000 in accordance with the provisions of Section 2.11 of
------------
the Loan Agreement)".
M. Amendments to New Orleans Preferred Ship's Mortgage Re: "Boomtown
-----------------------------------------------------------------
Belle II" . The New Orleans Preferred Ship's Mortgage concerning "Boomtown
- ----------
Belle II" is hereby amended as follows:
(1) Amendment to Preamble. The Preamble is hereby amended to
---------------------
read in full as follows:
"THIS PREFERRED SHIP MORTGAGE ("Mortgage") on the vessel Boomtown
--------
Belle II, No. 1028319, dated February 2, 1998, is made by Louisiana-I
Gaming, a Louisiana Partnership in Commendam ("Owner") with an office
-----
at 4132 Peters Road, P.O. Box 1385, Harvey, LA 70059, in favor of Bank
of America National Trust and Savings Association, with an office at
555 South Flower Street, #3283, Los Angeles, California 90071, in its
capacity as Administrative Agent (herein, "Mortgagee") for the benefit
---------
of itself, Societe Generale and Bank of Scotland, as Managing Agents,
First National Bank of Commerce, as Co-Agent, and the "Banks" party to
the Loan Agreement referred to below (such parties being referred to
herein collectively and individually as "Lenders")."
-------
-25-
<PAGE>
(2) Amendment to Recital B. Recital B is hereby amended to read
----------------------
in full as follows:
"B. The total amount of this Mortgage is $300,000,000 (which amount
is subject to increase to $375,000,000 in accordance with the
provisions of Section 2.11 of the Loan Agreement referred to below)
------------
plus interest and performance of mortgage covenants and the discharge
amount is the same as the total amount."
(3) Amendment to Recital C. Recital C is hereby amended to read
----------------------
in full as follows:
"C. Pursuant to that certain Amended and Restated Reducing Revolving
Loan Agreement dated as of October 14, 1998 entered into among
Hollywood Park, Inc., a Delaware corporation ("Borrower"), the
--------
Mortgagee as Administrative Agent and the other Lenders (as amended,
extended, renewed, supplemented or otherwise modified from time to
time, the "Loan Agreement"), the Lenders have agreed to make certain
--------------
credit facilities available to Borrower which consist of, among other
things, loans of up to $300,000,000 in principal amount (which amount
is subject to increase to $375,000,000 in accordance with the
provisions of Section 2.11 of the Loan Agreement)."
------------
(4) Additional Amendments to Amount of Secured Obligations. The
------------------------------------------------------
last paragraph on page 2 is hereby amended to read in full as follows:
"TO HAVE AND TO HOLD all and singular the Vessel unto Mortgagee, its
successors and assigns, forever, upon the terms herein set forth for
the enforcement of the Secured Obligations, including, without
limitation, the payment of $300,000,000 (which amount is subject to
increase to $375,000,000 in accordance with the provisions of Section
-------
2.11 of the Loan Agreement) and interest and to secure performance of,
----
and compliance with all agreements, covenants, terms and conditions
in, this Mortgage and the Loan Documents;"
(5) Amendment to Section 1.7. The contents of the form of
------------------------
notice set forth in Section 1.7 are hereby amended to read in full as follows:
-----------
"NOTICE OF PREFERRED SHIP MORTGAGE
This vessel is owned by Louisiana-I Gaming, a Louisiana Partnership in
Commendam, and is subject to a Preferred Ship Mortgage in favor of
Bank
-26-
<PAGE>
of America National Trust and Savings Association, as Mortgagee in its
capacity as Administrative Agent for itself and certain Managing
Agents and a certain Co-Agent and Banks party to a certain credit
facility. Under the terms of the Preferred Ship Mortgage, neither the
owner, any charterer, the master, nor any other person has the right,
power or authority to create, incur or permit to be placed or imposed
upon this vessel, its freight, profits or hire, any lien whatsoever,
other than the liens explicitly permitted by the terms of the
Preferred Ship Mortgage."
(6) Amendment to Article IV. The second full paragraph of
-----------------------
Article IV is hereby amended by replacing the amount "$225,000,000" in the third
line thereof with the following: "$300,000,000 (which amount is subject to
increase to $375,000,000 in accordance with the provisions of Section 2.11 of
------------
the Loan Agreement)"
4. Otherwise Not Affected. Except as expressly amended and supplemented
----------------------
by this Amendment, the terms and conditions of the Collateral Documents, the
Subsidiary Guaranty (General), and the Subsidiary Guaranty (Crystal Park) shall
remain unaltered, are hereby reaffirmed, and shall continue in full force and
effect.
-27-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment by their
respective duly authorized officers as of the date first above written.
HOLLYWOOD PARK, INC.,
a Delaware corporation
By: _________________________________
Name:
Title:
HOLLYWOOD PARK OPERATING COMPANY,
a Delaware corporation
By: _________________________________
Name:
Title:
HOLLYWOOD PARK FOOD SERVICES, INC.,
a California corporation
By: _________________________________
Name:
Title:
HOLLYWOOD PARK FALL OPERATING CO.,
a Delaware corporation
By: _________________________________
Name:
Title:
-28-
<PAGE>
HP/COMPTON, INC.,
a California corporation
By: _________________________________
Name:
Title:
HP YAKAMA, INC.,
a Delaware corporation
By: _________________________________
Name:
Title:
TURF PARADISE, INC.,
an Arizona corporation
By: _________________________________
Name:
Title:
LOUISIANA-I GAMING,
a Louisiana Partnership in Commendam
By: LOUISIANA GAMING ENTERPRISES,
INC., a Louisiana corporation,
its general partner
By: _______________________________
Name:
Title:
-29-
<PAGE>
LOUISIANA GAMING ENTERPRISES, INC.,
a Louisiana corporation
By: _________________________________
Name:
Title:
BOOMTOWN, INC.,
a Delaware corporation
By: _________________________________
Name:
Title:
BOOMTOWN HOTEL & CASINO, INC.,
a Nevada corporation
By: _________________________________
Name:
Title:
MISSISSIPPI-I GAMING, L.P.,
a Mississippi limited partnership
By: BAYVIEW YACHT CLUB, INC.,
a Mississippi corporation, its general partner
By: __________________________
Name:
Title:
-30-
<PAGE>
BAYVIEW YACHT CLUB, INC.,
a Mississippi corporation
By: _________________________________
Name:
Title:
CRYSTAL PARK HOTEL AND CASINO
DEVELOPMENT COMPANY, LLC,
a California limited liability company
By: HP/COMPTON, INC.,
a California corporation,
its managing member
By: _______________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative
Agent for the Amended Loan Agreement Banks
By: _________________________________
Name:
Title:
-31-
<PAGE>
ATTACHMENT "A"
--------------
TO
--
OMNIBUS ANCILLARY DOCUMENTS AMENDMENT
-------------------------------------
EXHIBIT A
TO
SECURITY AGREEMENT
INSTRUMENT OF JOINDER
---------------------
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as of
-------
_________________, _____, by ______________________________, a
___________________________ ("Joining Party"), and delivered to Bank of America
-------------
National Trust and Savings Association, as Administrative Agent, pursuant to the
Security Agreement dated as of June 30, 1997 made by Hollywood Park, Inc., a
California corporation (the "Borrower"), and each of the other Grantors party
--------
thereto (each a "Grantor" and collectively the "Grantors") in favor of the
------- --------
Managing Agent and the Banks described therein, as amended by that certain
Omnibus Ancillary Documents Amendment dated as of October 14, 1998
(collectively, and as it may be amended from time to time, the "Security
--------
Agreement"). Terms used but not defined in this Joinder shall have the meanings
- ---------
defined for those terms in the Security Agreement.
RECITALS
--------
(a) The Security Agreement was made by the Grantors in favor of
the Administrative Agent for the ratable benefit of the Banks that are
parties to that certain Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998, by and among the Borrower, the
Banks which are parties thereto (the "Amended Loan Agreement Banks"),
----------------------------
Societe Generale and Bank of Scotland as Managing Agents, First National
Bank of Commerce as Co-Agent, and Bank of America National Trust and
Savings Association, as the Administrative Agent (the "Loan Agreement").
--------------
(b) Joining Party has become a Significant Subsidiary of
Borrower, and as such is required pursuant to Section 5.11 of the Loan
------------
Agreement to become a Grantor.
(c) Joining Party expects to realize direct and indirect benefits
as a result of the availability to Borrower of the credit facilities under
the Loan Agreement.
-32-
<PAGE>
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
---------
(1) By this Joinder, Joining Party becomes a "Grantor" under and
pursuant to Section 16 of the Security Agreement. Joining Party agrees that,
----------
upon its execution hereof, it will become a Grantor under the Security Agreement
with respect to all Obligations of Borrower heretofore or hereafter incurred
under the Loan Documents, and will be bound by all terms, conditions, and duties
applicable to a Grantor under the Security Agreement.
(2) The effective date of this Joinder is _________, _____.
"Joining Party"
_________________________________
a _________________________
By:______________________________
Title:___________________________
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By:__________________________
Title:_______________________
-33-
<PAGE>
ATTACHMENT "C"
--------------
TO
--
OMNIBUS ANCILLARY DOCUMENTS AMENDMENT
-------------------------------------
EXHIBIT A
TO
TRADEMARK SECURITY INTEREST ASSIGNMENT
INSTRUMENT OF JOINDER
---------------------
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as of
-------
_________________, _____, by ______________________________, a
___________________________ ("Joining Party"), and delivered to Bank of America
-------------
National Trust and Savings Association, as Administrative Agent, pursuant to the
Trademark Security Interest Assignment dated as of June 30, 1997 made by
Hollywood Park, Inc., a California corporation (the "Borrower"), and each of the
--------
other Grantors party thereto (each a "Grantor" and collectively the "Grantors")
------- --------
in favor of the Managing Agent and the Banks described therein, as amended by
that certain Omnibus Ancillary Documents Amendment dated as of October 14, 1998
(collectively, and as it may be amended from time to time, the "Trademark
---------
Assignment"). Terms used but not defined in this Joinder shall have the
- ----------
meanings defined for those terms in the Trademark Assignment.
RECITALS
--------
(a) The Trademark Assignment was made by the Grantors in favor
of the Administrative Agent for the ratable benefit of the Banks that are
parties to that certain Amended and Restated Reducing Revolving Loan
Agreement dated as of October 14, 1998 (the "Amended Loan Agreement"), by
----------------------
and among Borrower, Societe Generale and Bank of Scotland as Managing
Agents, First National Bank of Commerce as Co-Agent, Bank of America
National Trust and Savings Association, as Administrative Agent, and the
Banks which are parties thereto (the "Amended Loan Agreement Banks").
----------------------------
(b) Joining Party has become a Significant Subsidiary of
Borrower, and as such is required pursuant to Section 5.11 of the Amended
------------
Loan Agreement to become a Grantor.
(c) Joining Party expects to realize direct and indirect benefits
as a result of the availability to Borrower of the credit facilities under the
Amended Loan Agreement.
-34-
<PAGE>
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
---------
(1) By this Joinder, Joining Party becomes a "Grantor" under and
pursuant to Section 10 of the Trademark Assignment. Joining Party agrees that,
----------
upon its execution hereof, it will become a Grantor under the Trademark
Assignment with respect to all Obligations of Borrower heretofore or hereafter
incurred under the Loan Documents, and will be bound by all terms, conditions,
and duties applicable to a Grantor under the Trademark Assignment.
(2) Attached hereto as Schedule 1 is a complete list of all of Joining
Party's trademarks, trade names, trade styles, and service marks which shall
also constitute "Collateral" as defined in the Trademark Assignment.
(3) The effective date of this Joinder is _________, _____.
"Joining Party"
_________________________________
a _________________________
By:______________________________
Title:___________________________
-35-
<PAGE>
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By:__________________________
Title:_______________________
[attach notarial acknowledgments]
-36-
<PAGE>
SCHEDULE 1
----------
to Instrument of Joinder
------------------------
Existing and Pending Trademarks
-------------------------------
Name of Joining Party: _____________________________
Registration Registration
Mark Class Number Date
- ---- ----- ------------ ------------
-37-
<PAGE>
ATTACHMENT "D"
--------------
TO
--
OMNIBUS ANCILLARY DOCUMENTS AMENDMENT
-------------------------------------
EXHIBIT A
TO
PLEDGE AGREEMENT (GENERAL)
INSTRUMENT OF JOINDER
---------------------
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as of ____________,
-------
_____, by ________________________, a ___________________ ("Joining Party"), and
-------------
delivered to Bank of America National Trust and Savings Association, as
Administrative Agent, pursuant to the Pledge Agreement (General) dated as of
June 30, 1997, as made by Hollywood Park, Inc., a Delaware corporation, and each
of the other Grantors party thereto (each a "Grantor", and collectively, the
-------
"Grantors") in favor of the Managing Agent and the Banks described therein, as
--------
amended by that certain Omnibus Ancillary Documents Amendment dated as of
October 14, 1998 (collectively, and as it may be amended from time to time, the
"Agreement"). Terms used but not defined in this Joinder shall have the
---------
meanings defined for those terms in the Agreement.
RECITALS
--------
(a) The Agreement was made by the Grantors in favor of the
Administrative Agent for the ratable benefit of the Banks that are parties
to that certain Amended and Restated Reducing Revolving Loan Agreement
dated as of October 14, 1998 (the "Loan Agreement") by and among Hollywood
--------------
Park, Inc., a Delaware corporation, the Banks which are parties thereto
(the "Amended Loan Agreement Banks"), Societe Generale and Bank of Scotland
----------------------------
as Managing Agents, First National Bank of Commerce as Co-Agent, and Bank
of America National Trust and Savings Association, as Administrative Agent.
(b) Joining Party is a Subsidiary Guarantor of Borrower, and is
required pursuant to Section 5.10 of the Loan Agreement and the Agreement
------------
to become a Grantor.
(c) Joining Party expects to realize direct and indirect benefits
as a result of the availability to Borrower of the credit facilities under
the Loan Agreement.
-38-
<PAGE>
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
---------
(1) By this Joinder, Joining Party becomes a "Grantor" under and
pursuant to Section 14 of the Agreement. Joining Party agrees that, upon its
----------
execution hereof, it will become a Grantor under the Agreement with respect to
all Obligations of Borrower heretofore or hereafter incurred under the Loan
Documents, and will be bound by all terms, conditions, and duties applicable to
a Grantor under the Agreement;
(2) Concurrently with the execution hereof, Joining Party shall cause
to be pledged and delivered to Secured Party the Certificates evidencing the
capital stock of the Subsidiaries listed on Schedule 1 hereto and the
----------
Intercompany Notes listed on Schedule 2 hereto. All Certificates and
----------
Intercompany Notes delivered to Secured Party shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Secured Party. All Certificates and Intercompany Notes delivered pursuant to
this Joinder shall also be considered "Certificates" and "Intercompany Notes"
and shall constitute additional "Pledged Collateral" as defined in the
Agreement; and
(3) The effective date of this Joinder is _________, ______.
"Joining Party"
___________________________,
a _________________________
By:_____________________________
Title:__________________________
-39-
<PAGE>
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By:__________________________
Title:_______________________
-40-
<PAGE>
SCHEDULE 1
----------
to Instrument of Joinder
------------------------
PLEDGED SECURITIES
------------------
Joining Party:______________________
<TABLE>
<CAPTION>
Class Stock Number Percentage
Stock of Certificate of of
Issuer Stock No(s). Shares Ownership
- ------ ----- ----------- ------ ----------
<S> <C> <C> <C> <C>
</TABLE>
-41-
<PAGE>
SCHEDULE 2
----------
to Instrument of Joinder
------------------------
INTERCOMPANY NOTES
------------------
-42-
<PAGE>
ATTACHMENT "I"
--------------
TO
--
OMNIBUS ANCILLARY DOCUMENTS AMENDMENT
-------------------------------------
EXHIBIT A
TO
SUBSIDIARY GUARANTY (GENERAL)
INSTRUMENT OF JOINDER
---------------------
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as of
-------
_________________, _____, by ______________________________, a
___________________________ ("Joining Party"), and delivered to Bank of America
-------------
National Trust and Savings Association, as Administrative Agent, pursuant to the
Subsidiary Guaranty (General) dated as of June 30, 1997 made by Hollywood Park
Operating Company, a California corporation, and each of the other Guarantors
party thereto (each a "Guarantor", and collectively, the "Guarantors") in favor
--------- ----------
of the Managing Agent and the Banks described therein, as amended by that
certain Omnibus Ancillary Documents Amendment dated as of October 14, 1998
(collectively, and as it may be amended from time to time, the "Guaranty").
--------
Terms used but not defined in this Joinder shall have the meanings defined for
those terms in the Guaranty.
RECITALS
--------
(a) The Guaranty was made by the Guarantors in favor of the
Administrative Agent for the benefit of the Banks that are parties to
that certain Amended and Restated Reducing Revolving Loan Agreement
dated as of October 14, 1998, by and among Hollywood Park, Inc., a
Delaware corporation ("Borrower"), the Banks which are parties thereto
--------
(the "Amended Loan Agreement Banks"), Societe Generale and Bank of
----------------------------
Scotland as Managing Agents, First National Bank of Commerce as Co-
Agent, and Bank of America National Trust and Savings Association, as
Administrative Agent (the "Loan Agreement").
---------------
(b) Joining Party has become a Subsidiary Guarantor of
Borrower, and as such is required pursuant to Section 5.11 of the Loan
------------
Agreement to become an additional Guarantor.
-43-
<PAGE>
(c) Joining Party expects to realize direct and indirect
benefits as a result of the availability to Borrower of the credit
facilities under the Loan Agreement.
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
---------
(1) By this Joinder, Joining Party becomes a "Guarantor" under and
pursuant to Section 18 of the Guaranty. Joining Party agrees that, upon its
----------
execution hereof, it will become a Guarantor under the Guaranty with respect to
all Obligations of Borrower heretofore or hereafter incurred under the Loan
Documents, and will be bound by all terms, conditions, and duties applicable to
a Guarantor under the Guaranty.
(2) The effective date of this Joinder is _________, ______.
"Joining Party"
_________________________________
a _________________________
By: __________________________
Title: ___________________________
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By: _______________________
Title: _______________________
-44-
<PAGE>
EXHIBIT J
---------
PRICING CERTIFICATE
-------------------
TO: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, AS ADMINISTRATIVE
AGENT
This Pricing Certificate is delivered with reference to that certain
Amended and Restated Reducing Revolving Loan Agreement (the "Loan Agreement")
--------------
dated as of October ___, 1998, among Hollywood Park, Inc., a Delaware
corporation ("Borrower"), the Banks which are parties thereto, Societe Generale
--------
and Bank of Scotland as Managing Agents, First National Bank of Commerce as Co-
Agent, and Bank of America National Trust and Savings Association, as
Administrative Agent (as amended, extended, renewed, supplemented or otherwise
modified from time to time, the "Loan Agreement"). Terms defined in the Loan
--------------
Agreement and not otherwise defined in this Pricing Certificate ("Certificate")
-----------
shall have the meanings defined for them in the Loan Agreement.
This Certificate is delivered in accordance with Section 7.1(c) of the
--------------
Loan Agreement by a Senior Officer of Borrower. This Certificate is delivered
with respect to the Pricing Period commencing ___________, [19]___, and ending
on ___________, [19]___ (the "Subject Pricing Period"). Computations used to
----------------------
determine the Applicable Pricing Level for the Subject Pricing Period are set
forth below:
I. Calculations.
------------
A. APPLICABLE PRICING LEVEL. Subject to later adjustment as provided in
------------------------
the Loan Agreement, the Applicable Pricing Level for the Subject Pricing Period
shall be Level ______/1//. The Applicable Pricing Level was determined based
on the Funded Debt Ratio computed as of the last day of the Fiscal Quarter ended
_______________, [19]___ (the "Determination Date") .
------------------
B. FUNDED DEBT RATIO. As of the Determination Date, the Funded Debt
----------------- -----------
Ratio was____:1.00.
- -----
- --------------
/1// Insert Level I, II, III, IV, V or VI in accordance with the terms of the
Loan Agreement based upon the determination of Funded Debt Ratio.
-1-
<PAGE>
<TABLE>
<S> <C>
Funded Debt Ratio is computed as follows:
(a) Average Quarterly Funded Debt as of the Determination Date (as
calculated below) $______
divided by (b) Adjusted EBITDA for the Fiscal Quarter ending on the
----------
Determination Date and the three (3) immediately preceding Fiscal
Quarters (the "Test Period") (as calculated below) $______
equals Funded Debt Ratio [(a)/(b)] _____:1.00
------
C. AVERAGE QUARTERLY FUNDED DEBT -- COMPONENT CALCULATIONS. In the above
-------------------------------------------------------
computation, Average Quarterly Funded Debt as of the Determination Date is
calculated as follows:
the average of the sum of (a) the amount of all principal Indebtedness
---
of Borrower and the Restricted Subsidiaries for borrowed money
(including debt securities issued by Borrower and the Restricted
----------
Subsidiaries, but excluding (i) so long as the Louisiana First
---------
Mortgage Notes are outstanding, any Funded Debt of the CMC Louisiana
Subsidiaries and (ii) any Funded Debt of Foreign Subsidiaries) on the
last day of each of the three fiscal months comprising the Fiscal
Quarter ending on the Determination Date (the "Test Fiscal Quarter") $______
plus (b) the aggregate amount of the principal portion of all Capital
----
Lease Obligations of Borrower and the Restricted Subsidiaries on the
last day of each of the three fiscal months comprising the Test Fiscal
Quarter $______
equals Average Quarterly Funded Debt [(a)+(b)] $______
------
</TABLE>
D. ADJUSTED EBITDA - COMPONENT CALCULATIONS. In the above calculation,
----------------------------------------
Adjusted EBITDA for the Test Period is calculated as follows, in each case as
determined in accordance with Generally Accepted Accounting Principles, and in
the case of items (d), (e) and (f) only to the extent reflected in the
determination of item (a) for such Test Period:
-2-
<PAGE>
<TABLE>
<S> <C>
(a) consolidated net income of Borrower and the Restricted
Subsidiaries ("Net Income") for the Test Period $______
plus (b) any extraordinary loss reflected in Net Income for the Test
----
Period $______
minus (c) any extraordinary gain reflected in Net Income for the Test
-----
Period ($______)
plus (d) Interest Expense for the Test Period (which is the sum of (x)
----
and (y) set forth below) $______
(x) all interest, fees and finance charges paid or payable
(without duplication, on a consolidated basis) for the Test
Period by Borrower and the Restricted Subsidiaries to a lender
for money borrowed (including any obligations for fees and
finance charges payable to the issuer of any letter of credit) or
the deferred purchase price of assets that are considered
"interest expense" under Generally Accepted Accounting Principles
$__________
plus (y) the portion of rent paid or payable (without
----
duplication, on a consolidated basis) for the Test Period by
Borrower and the Restricted Subsidiaries under Capital Lease
Obligations that should be treated as interest in accordance with
Financial Accounting Standards Board Statement No. 13
$___________
Interest Expense [(x)+(y)] equals $______
------
plus (e) the aggregate amount of federal and state taxes on or
----
measured by income for the Test Period (whether or not payable during
the Test Period) $______
plus (f) depreciation, amortization and all other non-cash expenses
----
for the Test Period $______
equals EBITDA [(a)+(b)-(c)+(d)+(e)+(f)] $______
------
</TABLE>
-3-
<PAGE>
<TABLE>
<S> <C>
plus (g) any pre-opening and related promotional expenses recorded
----
during that fiscal period for a new Gaming Property $______
plus (h) any transactional expenses incurred in connection with the
----
acquisition of a new Gaming Property $______
plus (i) the amount by which EBITDA for the Test Period would have
----
been increased if the Merger had occurred on the first day of the Test
Period, but excluding (i) so long as the Louisiana First Mortgage
Notes are outstanding, EBITDA attributable to the CMC Louisiana
Subsidiaries and (ii) EBITDA attributable to any Foreign Subsidiary
except to the extent actually received in Dollars in the United States
------
of America by Borrower, net of all taxes thereon imposed by the Laws
of a jurisdiction other than the United States of America or a State
----------
thereof. EBITDA of a Foreign Subsidiary shall be deemed "received"
(y) to the extent a dividend is paid to Borrower by the Foreign
Subsidiary, when such dividend is received in Dollars in the United
States of America and (z) to the extent that amounts are advanced as a
loan to Borrower by the Foreign Subsidiary, when such advance is
received in Dollars in the United States of America provided that (A)
--------
the aggregate outstanding amount of such advances shall at no time
exceed the aggregate EBITDA of the Foreign Subsidiary attributable to
Borrower's proportionate ownership of such Foreign Subsidiary which
has not previously been dividend to Borrower and (B) the Indebtedness
of Borrower to the Foreign Subsidiary arising from such advances is
cancelled and offset by a dividend (which dividend shall not be deemed
"received" for purposes of clause (y) above) paid by the Foreign
Subsidiary to Borrower with respect to each Fiscal Year within three
months following the end of that Fiscal Year. If at any date the
Louisiana First Mortgage Notes are not outstanding, EBITDA of the CMC
Louisiana Subsidiaries shall be included in Adjusted EBITDA for the
Test Period $______
equals Adjusted EBITDA [EBITDA+(g)+(h)+(i)] $______
----------------------
</TABLE>
-4-
<PAGE>
II. I further certify that the calculations made and the information contained
herein are derived from the books and records of Borrower and its Restricted
Subsidiaries, as applicable, and that each and every matter correctly reflects
those books and records.
IN WITNESS WHEREOF, I have signed this Certificate on this _______ day
of __________, [19]___.
____________________________________
____________________________________
Printed Name and Title of Senior
Officer of Hollywood Park, Inc.
-5-
<PAGE>
EXHIBIT K
---------
REQUEST FOR LETTER OF CREDIT
----------------------------
1. This REQUEST FOR LETTER OF CREDIT is executed and delivered by
Hollywood Park, Inc., a Delaware corporation ("Borrower") to Bank of America
--------
National Trust and Savings Association, as the Issuing Bank, pursuant to
Sections 2.4 and 8.3 of that certain Amended and Restated Reducing Revolving
- ------------ ----
Loan Agreement (as amended, modified or extended, the "Agreement") dated as of
---------
October 14, 1998, among Borrower, the Banks which are parties thereto, Societe
Generale and Bank of Scotland, as Managing Agents, First National Bank of
Commerce, as Co-Agent, and Bank of America National Trust and Savings
Association, as Administrative Agent. Any terms used herein and not defined
herein shall have the meanings set forth for such terms in the Agreement.
2. Borrower hereby requests that the Issuing Bank issue a Letter of
Credit as follows:
(a) Amount of Letter of Credit: $_______________.
(b) Date of Issuance: ________________, ____.
(c) Beneficiary under Letter of Credit:
Name: _______________________________
Address: ____________________________
____________________________
____________________________
(d) Expiry Date: __________________, ____.
(e) Purpose of Letter of Credit: _____________________
____________________________________________.
-1-
<PAGE>
(f) Additional Information/Terms: __________________
____________________________________________.
3. The requested Letter of Credit is (check one box only):
[_] a new Letter of Credit in addition to Letters of Credit already
outstanding.
[_] a supplement, modification, amendment, renewal, or extension to
or of the following outstanding Letter(s) of Credit: [identify]
--------
4. In connection with the issuance of the Letter of Credit requested
herein, Borrower represents, warrants and certifies to the Banks that:
(a) Now and as of the date of the issuance of the requested Letter of
Credit, except (i) for representations and warranties which expressly speak
------
as of a particular date or which are no longer true and correct as a result
of a change permitted by the Agreement or (ii) as disclosed by Borrower and
approved in writing by the Requisite Banks, each representation and
warranty made by Borrower in Article 4 of the Agreement (other than
--------- ----------
Sections 4.4(a), 4.6 (first sentence), 4.10 and 4.17) will be true and
------ --- ---- ----
correct, both immediately before such Letter of Credit is issued and after
giving effect to such Letter of Credit, as though such representations and
warranties were made on and as of the date of such Letter of Credit;
(b) Other than matters described in Schedule 4.10 to the Agreement or
---------- -------------
not required as of the Closing Date to be described therein, there is not
any action, suit, proceeding or investigation pending or threatened against
or affecting Borrower or any of the Restricted Subsidiaries or any Property
of any of them before any Governmental Agency that constitutes a Material
Adverse Effect;
(c) Now and as of the date of the requested Letter of Credit, no
Default or Event of Default presently exists or will have occurred and be
continuing as a result of the issuance of the Letter of Credit; and
(d) Following the issuance of the Letter of Credit requested herein,
(i) the Aggregate Effective Amount under all outstanding Letters of Credit
will not exceed $30,000,000, and (ii) the sum of (A) the aggregate
---
principal amount
-2-
<PAGE>
outstanding under the Notes, plus (B) the Aggregate Effective Amount of
----
all outstanding Letters of Credit, plus (C) the Aggregate Effective
----
Amount of all outstanding Outside Letters of Credit, plus (D) the Swing
----
Line Outstandings will not exceed the applicable Commitment.
5. Attached hereto is an Application for Letter of Credit on the form
provided to Borrower by the Issuing Bank.
6. This Request for Letter of Credit is executed on _____________, _____.
The undersigned hereby certifies each and every matter contained herein to be
true and correct.
HOLLYWOOD PARK, INC.,
a Delaware corporation
By:___________________________
Title:________________________
-3-
<PAGE>
EXHIBIT L
---------
REQUEST FOR LOAN
----------------
1. This REQUEST FOR LOAN is executed and delivered by Hollywood
Park, Inc., a Delaware corporation ("Borrower"), to Bank of America National
--------
Trust and Savings Association, as Administrative Agent, pursuant to Sections 2.1
------------
and 8.3 of that certain Amended and Restated Reducing Revolving Loan Agreement
---
(as amended, modified or extended, the "Agreement") dated as of October 14,
---------
1998, among Borrower, the Banks which are parties thereto, Societe Generale and
Bank of Scotland, as Managing Agents, First National Bank of Commerce, as Co-
Agent, and Bank of America National Trust and Savings Association, as
Administrative Agent. Any terms used herein and not defined herein shall have
the meanings set forth for such terms in the Agreement.
2. Borrower hereby requests that the Banks make a Loan pursuant to
the Agreement as follows:
(a) Amount of Requested Loan: $______________
(b) Date of Requested Loan: _________________
(c) Type of Requested Loan (Check one box only):
[_] Alternate Base Rate
[_] Eurodollar Rate for a Eurodollar Period of ________ Months/1//
3. In connection with the request, Borrower certifies that:
(a) Now and as of the date of the requested Loan, except (i) for
------
representations and warranties which expressly speak as of a particular
date or which are no longer true and correct as a result of a change
permitted by the Agreement or (ii) as disclosed by Borrower and approved in
writing by the Requisite Banks, each representation and warranty made by
Borrower in
- -----------------
/1// Specify whether 1, 2, 3 or 6-month Eurodollar Period (or with the
written consent of all of the Banks, any other period).
-1-
<PAGE>
Article 4 of the Agreement (other than Sections 4.4(a), 4.6
--------- ---------- ------ ---
(first sentence), 4.10 and 4.17) will be true and correct, both
---- ----
immediately before and after giving effect to such Loan, as though such
representations and warranties were made on and as of that date;
(b) Other than matters described in Schedule 4.10 to the
---------- -------------
Agreement or not required as of the Closing Date to be described therein,
there is not any action, suit, proceeding or investigation pending or
threatened against or affecting Borrower or any of the Restricted
Subsidiaries or any Property of any of them before any Governmental Agency
that constitutes a Material Adverse Effect; and
(c) Now and as of the date of the requested Loan, no Default or
Event of Default presently exists or will have occurred and be continuing
as a result of the Loan.
4. This Request for Loan is executed on __________, _____. The
undersigned hereby certifies each and every matter contained herein to be true
and correct.
HOLLYWOOD PARK, INC.,
a Delaware corporation
By:___________________________
Title:________________________
-2-
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report dated February 27, 1998 included in this Form 8-k, which was previously
included in Casino Magic Corp.'s Form 10-K for the year ended December 31, 1997.
It should be noted that we have not audited any financial statements of the
company subsequent to December 31, 1997 or performed any audit procedures
subsequent to the date of our report.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
New Orleans, Louisiana
October 30, 1998
<PAGE>
EXHIBIT 99.1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Casino Magic Corp.:
We have audited the accompanying consolidated balance sheets of Casino Magic
Corp. (a Minnesota corporation) and subsidiaries (the Company) as of December
31, 1997 and 1996, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements 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 financial statements referred to above present fairly, in
all material respects, the financial position of Casino Magic Corp. and
subsidiaries as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
February 27, 1998
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Revenues:
Casino $ 246,320,048 $ 167,153,012 $ 165,997,836
Food, beverage and rooms 10,784,762 8,080,067 8,392,529
Royalty and management fees -- 3,099,407 2,224,351
Other Operating revenues 4,369,206 1,945,357 1,108,049
------------- ------------- -------------
261,474,016 180,277,843 177,722,765
------------- ------------- -------------
Costs and expenses:
Casino 118,467,492 74,943,304 69,654,888
Food and beverage 10,756,505 7,351,838 6,795,164
Rooms 639,778 1,039,081 1,224,685
Other operating costs and expenses 4,292,276 2,807,038 1,333,183
Advertising and marketing 36,427,434 20,901,821 25,873,832
General and administrative 26,425,200 24,216,613 28,501,308
Property operation, maintenance and
energy cost 11,210,297 7,433,262 4,057,144
Rents, property taxes and insurance 7,891,199 5,991,261 4,314,355
Depreciation and amortization 20,246,663 18,346,202 15,768,546
Preopening expenses -- 6,554,535 1,818,715
Development expenses 562,419 1,849,583 2,228,549
Write-off capitalized costs relating to
inactive developments -- -- 11,381,945
------------- ------------- -------------
236,919,263 171,434,538 172,952,314
------------- ------------- -------------
Income from operations 24,554,753 8,843,305 4,770,451
Other (income) expense:
Interest expense 34,723,613 25,071,767 17,436,904
Interest capitalized (1,963,955) (5,717,494) (867,236)
Interest income (1,375,100) (1,436,468) (803,624)
Loss from unconsolidated subsidiaries 505,424 26,501,808 112,250
Write-off of capitalized costs primarily
relating to joint ventures -- -- 2,210,219
Other (1,555,201) 689,221 204,981
------------- ------------- -------------
30,334,781 45,108,834 18,293,494
------------- ------------- -------------
Income (loss) before income taxes and
Minority interest in income of subsidiary (5,780,028) (36,265,529) (13,523,043)
Income tax benefit (1,935,000) (4,676,182) (3,230,864)
Minority Interest 1,404,180 -- --
------------- ------------- -------------
Net loss $ (5,249,208) $ (31,589,347) $ (10,292,179)
============= ============= =============
Net loss per common share:
Basic $ (0.15) $ (0.89) $ (0.31)
============= ============= =============
Diluted $ (0.15) $ (0.89) $ (0.31)
============= ============= =============
Average shares and equivalents outstanding:
Basic 35,662,616 35,448,068 33,260,904
============= ============= =============
Diluted 35,662,616 35,448,068 33,260,904
============= ============= =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
December 31,
1997 1996
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 20,901,510 $ 17,561,512
Restricted Cash 85,000 16,984,654
Restricted Marketable Securities 10,629,405 --
Prepaid expenses 3,330,041 2,844,995
Notes and accounts receivable, net 3,781,945 2,889,486
Other current assets 1,012,886 873,676
------------ ------------
Total current assets 39,740,787 41,154,323
------------ ------------
Property and equipment, net 263,993,452 243,692,571
------------ ------------
Other long-term assets:
Notes receivable 3,385,198 4,119,700
Investments in unconsolidated subsidiaries 713,035 957,831
Options and land deposits -- 2,282,244
Foreign casino concession agreement, net of
accumulated amortization of $2,846,685 in
1997 and $1,897,790 in 1996 8,540,055 9,488,950
Deferred gaming license cost, net of
accumulated amortization of $2,013,838 in 1997
and $395,489 in 1996 38,048,426 38,337,333
Property held for development 525,000 3,040,357
Property held for sale 5,606,265 15,108,541
Debt issuance costs, net of accumulated
amortization of $4,289,382 in 1997 and
$2,506,133 in 1996 8,957,645 10,195,688
Deposits and other 3,194,954 1,421,979
------------ -----------
Total other long-term assets 68,970,578 84,952,623
------------ ------------
$372,704,817 $369,799,517
============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
December 31,
1997 1996
---- ----
<S> <C> <C>
Current liabilities:
Notes and contracts payable $ 305,925 $ 4,708,603
Current maturities of long-term debt 8,590,945 4,648,638
Accounts Payable 9,323,949 7,945,068
Accrued Expenses 11,522,887 11,320,101
Accrued Interest 9,783,784 8,830,040
Accrued payroll and related benefits 7,719,441 8,341,720
Accrued progressive gaming liabilities 1,445,257 1,121,623
Other current liabilities 2,338,909 731,018
------------- -------------
Total current liabilities 51,031,097 47,646,811
------------- -------------
Deferred income taxes -- 266,761
------------- -------------
Other long-term liabilities and minority interest 8,748,212 --
------------- -------------
Long-term debt, net of current maturities 253,471,219 258,261,231
------------- -------------
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par, 50,000,000 shares,
authorized 35,722,124 issued and outstanding
in 1997 and 35,637,083 in 1996 issued and
outstanding 357,221 356,371
Undesignated stock, 2,500,000 shares
authorized, None issued -- --
Additional paid-in capital 67,122,852 67,123,702
Retained earnings (deficit) (7,762,270) (2,513,062)
Unrealized holding loss on securities -- (850,156)
Less unearned compensation (263,514) (492,141)
------------ -------------
Total shareholders' equity 59,454,289 63,624,714
------------- -------------
$ 372,704,817 $ 369,799,517
============= =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Foreign
Common Stock Additonal currency
Shares Amount paid-in capital adjustment
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 29,961,750 $ 299,618 $ 41,127,168 --
Amortization of unearned compensation -- -- -- --
Write-off of unearned compensation -- -- (1,642,886) --
Stock options granted to executive officers -- -- 101,563 --
Vested stock grants to executive officers 16,250 162 (162) --
Net proceeds from exercise of employee
stock options 308,564 3,086 376,726 --
Net proceeds from common stock issued
pursuant to Reg. S 1,771,000 17,710 8,303,095 --
Stock issued for consultants' compensation 12,000 120 63,632 --
Stock issued for land 3,210,000 32,100 17,758,277 --
Foreign currency translation -- -- -- (224,195)
Net loss -- -- -- --
-----------------------------------------------------------------
Balance at December 31, 1995 35,279,564 $ 352,796 $ 66,087,413 (224,195)
Amortization of unearned compensation -- -- -- --
Stock options granted to executive officers -- -- 567,188 --
Net proceeds from exercise of warrants -- -- 500 --
Net proceeds from exercise of employee
and non-employee director stock options 357,519 3,575 453,654 --
Casino One Corp. acquisition -- -- 14,947 --
Unrealized Holding Loss on Securities
Available for Sale -- -- -- --
Foreign currency translation adjustment -- -- -- 224,195
Net loss -- -- -- --
-----------------------------------------------------------------
Balance at December 31, 1996 35,637,083 $ 356,371 $ 67,123,702 --
Amortization of unearned compensation
Vested stock grants to executive officers 85,041 850 (850)
Available for Sale
Loss on Securities
Net loss
-----------------------------------------------------------------
Balance at December 31, 1997 35,722,124 $ 357,221 $ 67,122,852 --
=================================================================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (CONTINUED)
<TABLE>
<CAPTION>
Unrealized holding Retained Less
loss on securities (deficit) Unearned
available for sale earnings compensation Total
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 -- $ 39,368,464 $ (1,218,751) $ 79,576,499
Amortization of unearned compensation -- -- 470,962 470,962
Write-off of unearned compensation -- -- 735,819 (907,067)
Stock options granted to executive officers -- -- (101,563) --
Vested stock grants to executive officers -- -- -- --
Net proceeds from exercise of employee
stock options -- -- -- 379,812
Net proceeds from common stock issued
pursuant to Reg. S -- -- -- 8,320,805
Stock issued for consultants' compensation -- -- -- 63,752
Stock issued for land -- -- -- 17,790,377
Foreign currency translation -- -- -- (224,195)
Net loss -- (10,292,179) -- (10,292,179)
-----------------------------------------------------------------------
Balance at December 31, 1995 -- $ 29,076,285 $ (113,533) $ 95,178,766
Amortization of unearned compensation -- -- 188,580 188,580
Stock options granted to executive officers -- -- (567,188) --
Net proceeds from exercise of warrants -- -- -- 500
Net proceeds from exercise of employee
and non-employee director stock options -- -- -- 457,229
Casino One Corp. acquisition -- -- -- 14,947
Unrealized Holding Loss on Securities
Available for Sale (850,156) -- -- (850,156)
Foreign currency translation adjustment -- -- -- 224,195
Net loss (31,589,347) (31,589,347)
------------------------------------------------------------------------
Balance at December 31, 1996 (850,156) $ (2,513,062) $ (492,141) $ 63,624,714
Amortization of unearned compensation 228,627 228,627
Vested stock grants to executive officers -
Loss on Securities -
Available for Sale 850,156 850,156
Net loss (5,249,208) (5,249,208)
------------------------------------------------------------------------
Balance at December 31, 1997 -- $ (7,762,270) $ (263,514) $ 59,454,289
========================================================================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss (5,249,208) (31,589,347) (10,292,179)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 17,655,235 16,263,270 13,387,345
Amortization 2,591,428 2,082,932 2,381,201
Loss (gain) on disposal of property and equipment (2,632,633) 339,056 466,712
Amortization of original issue discount and deferred debt issuance costs 1,966,074 1,496,259 954,351
Amortization of unearned stock compensation, net of recoveries 228,627 188,580 (436,105)
Consultants' compensation recognized on issuance of stock -- -- 63,752
Gain on contract settlement -- -- (855,000)
Write-off of preopening costs, development project costs, land options and
deposits & property held for development -- 7,054,532 12,104,212
Net loss on investment in unconsolidated subsidiaries 505,424 22,436,241 112,250
Minority interest 1,404,180 -- --
Decrease in income tax receivable -- 4,225,047 1,899,459
(Increase) decrease in prepaid expenses (507,361) 88,861 1,634,019
Decrease in notes and accounts receivable, net 2,327,826 (147,705) (4,753,232)
Decrease in deferred income taxes - current 3,157,856 2,923,171 (720,628)
Increase in other current assets (139,210) (277,793) (129,225)
Decrease in net deferred income tax liability - non current (266,759) (4,173,197) (1,063,610)
Increase (decrease) in accounts payable (2,251,299) 2,924,820 (389,241)
Increase (decrease) in accrued expenses 3,595,066 (4,278,518) (2,026,436)
Increase in accrued interest 888,886 3,487,883 208,449
Increase (decrease) in accrued payroll and related benefits (622,279) 1,255,364 2,236,447
Increase (decrease) in accrued progressive gaming liabilities 323,634 55,376 (393,866)
Decrease in income taxes payable 805,716 (228,591) 959,609
----------- ----------- -----------
Net cash provided by operating activities 23,781,203 24,126,241 15,348,284
----------- ----------- -----------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
Years ended December 31,
------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash flows from investing activities:
Proceeds from sale of property and equipment 19,895,616 1,436,821 173,389
Acquisitions of property and equipment (37,176,995) (67,850,010) (11,396,332)
Acquisitions of gaming license -- (15,250,000) --
Acquisitions of property held for sale (126,400) 40,437 --
Investments in unconsolidated subsidiaries (260,628) (651,206) (6,117,636)
Expenditures for organizational and acquisition cost -- (359) (80,788)
Expenditures for land options and deposits -- (480,000) (1,326,130)
Expenditures for development and preopening costs -- (6,554,535) (130,794)
(Increase) decrease in deposits and other long-term assets (2,920,936) 2,530,873 (1,898,786)
(Increase) decrease in marketable securities (10,629,405) -- 10,244,233
------------ ------------ ------------
Net cash provided by (used in) investing activities (31,218,748) (86,777,979) (10,532,844)
------------ ------------ ------------
Cash flows from financing activities:
Proceeds from issuance of debt or notes payable 6,350,000 121,043,749 202,011
Payments of debt issuance costs (349,955) (5,419,575) (2,000)
Principal payments on notes payable (4,606,480) (1,010,180) (1,185,342)
Principal payments on long-term debt (7,515,676) (48,644,469) (2,261,096)
Net proceeds from sale of common stock -- 14,947 8,320,805
Net proceeds from exercise of employee stock options -- 457,734 379,812
------------ ------------ ------------
Net cash provided by (used in) financing activities (6,122,111) 66,442,206 5,454,190
------------ ------------ ------------
Net increase (decrease) in cash and cash equivalents (13,559,656) 3,790,468 10,269,630
Cash and cash equivalents, beginning of period 34,546,166 30,755,698 20,486,068
------------ ------------ ------------
Cash and cash equivalents, including restricted cash, end of period 20,986,510 34,546,166 30,755,698
============ ============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
Years ended December 31,
------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Interest paid, net of amount capitalized 29,551,551 12,379,128 15,406,868
Income taxes paid, net of refunds (6,382,324) (7,604,043) (4,236,206)
Supplemental schedule of non-cash operating, investing, and financing
activities:
Other current assets 22,315 -- --
Other current liabilities 302,758 -- --
Property and equipment and other asset acquisitions financed
with short-term notes payable -- -- 850,208
Property and equipment and other asset acquisitions included in
accounts and construction payable and accrued expenses 1,805,945 5,455,469 177,091
Gaming license acquisition financed with long-term debt -- 21,617,612 --
Land acquired through the issuance of common stock -- -- 22,140,969
Property and equipment under capital leases 375,891 81,114 63,632
Property and equipment and property held for sale financed
with long-term debt -- 30,728,879 --
Consulting services performed for common stock -- -- 63,752
Common stock granted to officers -- 567,188 101,563
Commitment for land options -- -- (156,725)
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of significant accounting policies:
Organization and basis of presentation:
Casino Magic Corp. and Subsidiaries is an international gaming company with
operations in Bay Saint Louis, Mississippi ("Casino Magic-BSL"), Biloxi,
Mississippi ("Casino Magic-Biloxi"), Bossier City, Louisiana ("Casino
Magic-Bossier City"), and the Argentina Province of Neuquen in the cities of
Neuquen City and San Martin de los Andes ("Casino Magic-Neuquen").
Unless the context requires otherwise, reference in this Annual Report to the
"Company" means Casino Magic Corp. and its relevant subsidiaries, and reference
to "Casino Magic" means Casino Magic Corp.
The consolidated financial statements include the accounts of Casino Magic Corp.
and its wholly-owned and majority-owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated.
Casino revenues and complimentaries:
In accordance with common industry practice, casino revenues are the net of
gaming wins less losses. Revenues exclude the retail value of complimentary
rooms, food and beverage furnished gratuitously to customers. The estimated
departmental costs of providing rooms is not significant, and the estimated
departmental costs of providing food and beverage services are included in
casino expense as follows:
Years Ended December 31,
------------------------
1997 1996 1995
---- ---- ----
$21,846,000 $13,838,000 $12,072,000
=========== =========== ===========
Cash and cash equivalents:
For purposes of the consolidated balance sheets and statements of cash flows,
the Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
Marketable Securities:
The Company holds U.S. agency securities as held to maturity and as such, the
investments are recorded at amortized costs, which, based on the short term
nature of the investments approximates fair value.
Restricted Funds:
The Louisiana First Mortgage Notes (See Note 8), restrict the use of certain
cash amounts. At December 31, 1997, funds relating to the net proceeds from the
sale of the Crescent City Queen Riverboat ($11.7 million) are restricted to be
used for capital improvements at Casino Magic-Bossier City. The balances that
remain in these restricted accounts at December 31, 1997 are shown as restricted
marketable securities. At December 31, 1996, funds shown as restricted cash
relate to proceeds from the issuance of the Louisiana First Mortgage Notes and
were restricted for use in the original construction of the land based pavilion
and facilities at Casino Magic-Bossier City.
Property and equipment:
Property and equipment are stated at cost. Depreciation, including amortization
of capital leases and leasehold improvements, is computed using the
straight-line method. Estimated useful lives for property and equipment are 15 -
31 years for barges and buildings, life of the lease for leasehold improvements
and 5-7 years for furniture and equipment.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of significant accounting policies (continued):
Property and Equipment (continued):
Normal repairs and maintenance are charged to expense when incurred.
Expenditures which materially extend the useful life of capital assets are
capitalized.
In June 1997, the Company changed the depreciable lives on the asset categories,
land improvements, buildings and improvements, and barges and improvements from
originally estimated useful lives of 10 or 15 years to 31 years. The useful
lives for these assets originally reflected their tax lives and have been
changed to anticipated useful lives. These changes reduced the December 31,
1997, net loss by $859,796 and the loss share by $0.02. Excluding the change in
depreciable lives net loss and earnings per share would have been $(6,109,004)
and $(0.17), respectively.
Investments in unconsolidated subsidiaries:
Investments in unconsolidated subsidiaries where the Company exercises
significant influence are accounted for under the equity method.
Options and land deposits:
The costs of land options are amortized over the life of the option until such
time as the option is exercised or considered impaired by Management. As of
December 31, 1997, all land options were fully reserved.
Amortization of intangibles:
Deferred charges relating to debt issuance costs and original issue discounts on
long-term debt instruments are amortized over the life of the related debt using
the effective interest rate method to provide a constant yield.
Included under other long term assets is "Deferred gaming license cost."
Deferred gaming license cost represents the estimated fair value of the
Louisiana gaming license, an asset acquired in conjunction with the purchase of
Crescent City Development Corporation ("Crescent City" see Note 5). This cost is
being amortized on a straight-line basis over twenty-five years, the estimated
period to be benefited by the license which commenced at the time gaming
operations began in Bossier City.
The costs capitalized to acquire the foreign casino concession agreement are
being amortized on a straight-line basis over the twelve-year life of the
agreement.
Development and preopening costs:
All internal salary and related costs of the Company's development activities
are expensed as incurred. Amounts paid for outside consultants and professional
fees are expensed until gaming has been legalized in the jurisdiction, the
Company has an approved site and there is a reasonable likelihood that the
Company will be granted a gaming license. Preopening costs are capitalized then
expensed when the related business commences operations.
Income taxes:
Deferred tax assets and liabilities are recognized for future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of significant accounting policies (continued):
Earnings per share:
In February 1997, the Financial Accounting Standards Board issued Statement No.
128 ("FAS 128"), "Earnings Per Share", which simplifies the computation of
earnings per share ("EPS"). FAS 128 is effective for financial statements issued
for periods ending after December 15, 1997, and requires restatement for all
prior period earnings per share data presented. Under FAS 128, the Company
computes two earnings per share amounts - basic EPS and EPS assuming dilution.
Basic Weighted average number of shares of common stock outstanding for the
1997, 1996 and 1995 periods were 35,662,616, 35,448,068 and 33,260,904
respectively. EPS assuming dilution is based on the weighted average number of
shares of common stock outstanding for the periods, including common equivalent
shares which reflect the dilutive effect of stock options granted to certain
employees and outside directors on various dates through December 31, 1997.
Dilutive options that are issued during a period or that expire or are cancelled
during a period are reflected in EPS assuming dilution computations for the time
they were outstanding during the periods being reported. There were no common
equivalent shares for 1997, 1996 and 1995. For the years ended December 31,
1997, 1996 and 1995, the Company had 2,943,535, 2,320,292, and 2,2107,642
options which were considered antidilutive as a result of the exercise price of
the options exceeding the average price for the period, or that the Company had
a net loss for the period and therefore are not included in the calculation of
common
Certain significant risks and uncertainties:
Gaming regulation licensing. The Company has gaming operations in the United
States and abroad that depend on the continued licensability or qualification of
the Company and subsidiaries that hold gaming licenses in various jurisdictions.
Such licensing and qualifications are reviewed periodically by the gaming
authorities in those jurisdictions.
Competition. The gaming industry is extremely competitive and the Company faces
competition from new developments in both the United States, specifically on the
Mississippi Gulf Coast and in Louisiana, and abroad.
Foreign operations. The Company has investments and net assets of approximately
$9 million in gaming operations outside of the United States which are subject
to risks associated with the distance of these casino facilities from the
Company's executive offices, the stability of the relevant government,
regulations imposed by foreign governments, the continued ability to repatriate
cash, and currency exchange issues.
Severe weather. The Mississippi Gulf Coast is subject to severe weather,
including hurricanes. Severe weather could cause damage to one or both of the
Company's Mississippi casino facilities. The Company maintains insurance against
casualty losses resulting from severe weather and against business interruption.
Such insurance may not adequately compensate the Company for loss of profits
resulting from severe weather.
Construction. Risk include cost overruns, delay in receipt of governmental
approvals, shortages in materials or skilled labor, labor disputes, unforeseen
environmental or engineering problems, work stoppage, fire and other natural
disasters, construction scheduling problems and weather interferences, any of
which, if it occurred, could delay construction or result in a substantial
increase in costs to the Company.
Pervasiveness of estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Reclassifications:
Certain reclassifications have been made to the 1996 and 1995 amounts to conform
with the December 31, 1997 presentation.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Proposed Merger :
On February 19, 1998, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with Hollywood Park, Inc. ("Hollywood"), and
Acquisition II, Inc. ("HP") a wholly-owned subsidiary of Hollywood. Under the
Merger Agreement, the Company has agreed to merge (the "Merger") with HP. Upon
such Merger, the Company shall be the surviving entity and will become a
wholly-owned subsidiary of Hollywood. Upon the Merger, the shareholders of the
Company will be entitled to receive $2.27 for each share of the Company's stock
held.
The Merger is subject to the approval of the Company's shareholders prior to
October 31, 1998, and to the approval of the Mississippi Gaming Commission, the
Nevada Gaming Commission, and the Louisiana Gaming Control Board. If the Merger
Agreement is terminated for certain reasons, the Company will be required to pay
Hollywood $3,500,000.
The Merger Agreement restricts the ability of the Company to engage in certain
transactions prior to the time of the Merger, except those which are in the
ordinary course of business consistent with past practice, unless the Company
obtains the consent of Hollywood, which consent may not be unreasonably
withheld. The Merger Agreement also imposes limits on the capital expenditures
and borrowing which the Company may effect, which are not inconsistent with the
Company's current plans.
3. Notes and Accounts Receivable:
Notes and accounts receivable consist of the following:
December 31,
------------
1997 1996
---- ----
Current:
--------
Notes receivable $ 885,995 $ 790,228
Accounts receivable - air charter 156,818 548,239
Accounts receivable - trade 3,601,778 2,505,463
Other 581,376 606,631
----------- -----------
5,225,967 4,450,561
Less allowance for doubtful accounts 1,444,022 1,561,075
----------- -----------
Total Notes and Accounts Receivable (current) 3,781,945 2,889,486
Noncurrent:
-----------
Notes receivable 3,385,198 4,119,700
----------- -----------
Total Notes and Accounts Receivable $ 7,167,143 $ 7,009,186
=========== ===========
Included in notes receivable is a commercial loan in which the Company, through
a wholly-owned subsidiary, participated in the initial amount of $5 million. The
entire loan amount is $17,500,000. A consortium of lenders made the loan to the
Sisseton-Wahpeton Dakota Nation, a Native American Tribe, for the construction
of a casino facility on Tribal land. The term loan is repayable over a
sixty-month period beginning February 1997, in monthly installments of $105,230
including principal and interest at a fixed rate of 10% through February 2002.
4. Property and Equipment:
Property and equipment consists of the following:
December 31,
------------
1997 1996
---- ----
Land and improvements $ 85,020,923 $ 67,658,624
Buildings and improvements 69,193,225 44,554,665
Barges and improvements 57,568,009 55,203,063
Leasehold improvements 300,801 382,907
Furniture and equipment 75,876,943 69,663,192
Construction in progress 33,843,154 48,549,525
------------- --------------
321,803,055 286,011,976
Less accumulated depreciation
and amortization (57,809,603) (42,319,405)
--------------- --------------
$ 263,993,452 $ 243,692,571
============== ==============
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Stock Acquisitions:
In May 1996, Casino Magic, through its wholly-owned subsidiary, Jefferson Casino
Corporation ("Jefferson Corp") acquired Crescent City Capital Development
Corp.("Crescent City") for $50 million plus the assumption of $5.7 million in
equipment liabilities. Jefferson Corp paid $15 million in cash at closing and
caused Crescent City to issue $35 million of 11.5% secured, three year notes.
Crescent City, which was the subject of a plan of reorganization under Chapter
11 of the U.S. Bankruptcy Code, owned the Crescent City Queen riverboat
("Crescent City Riverboat"), gaming and related equipment and surveillance
equipment and a license to conduct riverboat gaming operations in Louisiana.
Crescent City emerged from the Bankruptcy proceedings as Casino Magic of
Louisiana Corp. ("Casino Magic-Bossier City"). The Company is using Casino
Magic-Bossier City's gaming license in Bossier City, Louisiana, where it
currently owns 23 acres of land. Although Jefferson Corp. was required to
purchase the Crescent City Riverboat to obtain the Louisiana gaming license, the
Crescent City Riverboat could not be used at Casino Magic-Bossier City because
of its width. Therefore, the Company purchased a casino riverboat (the "Bossier
Riverboat") for use at Casino Magic-Bossier City for $20 million. The Crescent
City Riverboat, was sold and the proceeds will be used to assist in the funding
of the pavilion expansion and construction of a hotel at Casino Magic-Bossier
City.
No assurances can be given that the proceeds from the sale of the Crescent City
Riverboat and the cash flow from the operations of Casino Magic-Bossier City
will be sufficient to complete such hotel and related facilities.
6. Dispositions:
In September 1997, the Company sold the Crescent City Riverboat for $11.7
million. Other income for the period ended December 31, 1997, includes the gain
on the sale of $1.4 million. The proceeds from the sale are restricted by the
Indenture governing the $115 First Mortgage Notes issued by Casino Magic-Bossier
City. The Indenture restriction requires the proceeds from the sale of the
Crescent City Riverboat to be used for capital improvements at the Casino
Magic-Bossier City facility or returned to the Indenture trustee.
On June 1, 1997, the Company sold a 49% interest in its wholly-owned subsidiary,
Casino Magic Neuquen S.A., for $7.0 million. The Company retained a controlling
interest in Casino Magic-Neuquen and manages its two facilities located in
Neuquen City and San Martin de Los Andes, Argentina for a fee equal to two
percent of Casino Magic-Neuquen's gross monthly revenues. The gain of $1.3
million is recorded in other income.
At September 30, 1996, management determined that its 49% equity investment in
Porto Carras Casino S.A., and notes and accounts receivable relating to unpaid
management fees and royalties were impaired. Because of this impairment,
management wrote off its investment in such gaming facilities in Porto Carras,
Greece, ("Porto Carras") and all unpaid notes and receivables related thereto.
The total charge recorded relating to the write off of Porto Carras was $26.1
million. Management's decision was based, primarily, on the results from Porto
Carras after the opening of a competing casino. Although the Company anticipated
some revenue loss as a result of this increased competition, the actual effects
were much greater than anticipated and resulted in a $2.0 million loss from
operations at Porto Carras for the month of September 1996. Despite new
marketing and cost containment efforts, these losses continued; furthermore, the
majority owner in Porto Carras venture was unwilling or unable to advance any
funds to the operation. Additionally, the majority owner informed the Company
that it did not intend to operate a substantial portion of the Porto Carras
resort area, consisting of two hotels and amenities, during the 1997 season.
These factors, among others, led to the Company's decision to write off its
investment in Porto Carras and led to the sale of Porto Carras, for a nominal
amount in December 1996.
7. Notes and Contracts Payable:
Short-term notes and contracts payable consist of the following:
December 31,
------------
1997 1996
---- ----
Construction contracts (a) $ 382 $ 4,540,434
Other (b) 305,543 168,169
---------- -----------
$ 305,925 $ 4,708,603
========== ===========
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Notes and Contracts Payable (continued):
(a) Consists of various payables relating to both fixed and cost plus contracts.
(b) In 1997, the balance consisted of five notes payable. The detail of these
notes is as follows: (i) $199,763 equipment, payable in monthly installments
of $15,814. (ii) $164,989 note collateralized by equipment, payable in
monthly installments of $14,892. (iii) three notes totaling $12,000
collateralized by equipment, payable in total monthly installments of $500.
8. Long -Term Debt:
Long-term debt, including capital lease obligations, consists of the following:
December 31,
------------
1997 1996
---- ----
Notes payable, bank (a) $ 8,170,063 $ 9,585,130
Equipment contracts (b) 2,099,465 622,274
Notes payable, land (c) 2,052,569 3,470,415
Other (d) 920,422 308,514
Capital lease obligations (Note 9) 726,018 1,207,986
Louisiana First Mortgage Notes (e) 115,000,000 115,000,000
First Mortgage Notes (f) 135,000,000 135,000,000
Unamortized original
issue discount (1,906,373) (2,284,450)
---------------- ----------------
262,062,164 262,909,869
Less current maturities (8,590,945) (4,648,638)
---------------- ----------------
$ 253,471,219 $ 258,261,231
=============== ===============
(a) Consists of four notes payable to banks. The detail of these notes is as
follows: (i) Original balance of $3,000,000 uncollateralized promissory
note, payable in monthly installments of interest only through July 1996;
thereafter, principal and interest based on a 60 month amortization through
February 2000. The promissory note bears interest at prime plus 1% (9.5% at
December 31, 1997) throughout the life of the note with a final balloon
payment of $305,243 due in February 2000. (ii) Original balance of
$1,700,000 note collateralized by gaming equipment. Payments of principal
and interest based on a 36 month amortization through May 1998. The note
bears interest at prime plus .25%. (8.75% at December 31, 1997) with a
final balloon payment of $1,065,807 due in May 1998. (iii) Original balance
of $3,850,000 note collateralized by the equipment. The note is payable in
10 quarterly payments of $385,000, including interest at 8.25%. (iv)
Original balance of $2,500,000 uncollateralized line of credit due in March
1998 bearing interest at prime plus 1/4% (8.75% at December 31, 1997). In
March 1998 this note was refinanced to a term loan payable in eighteen
monthly installments of $142,760 bearing interest at 8.75%.
During 1997 the Company was not in compliance with certain debt covenants
relating to notes (iii) and (iv). The Company has received a waiver of the
covenants at December 31, 1997, and has restructured these covenants to
allow the Company to maintain compliance.
(b) Consists of two notes payable collateralized by equipment. The detail of
these notes is as follows: (i) Original balance of $946,005 note payable in
eleven monthly payments of $78,833, including interest at prime plus
3%.(11.5% at December 31, 1997) with final balloon payment due at term of
note. (ii) Original balance of $1,075,740 note collateralized by equipment,
payable in twenty-three monthly payments of $44,823, including interest at
prime plus 1%.(9.50% at December 31, 1997) with final balloon payment due
at term of note. In March 1998 these notes were refinanced to a term loan
payable in twenty-three monthly installments of $93,465 bearing interest at
10.5% with a final balloon payment of $101,319 due in March 2000.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Long-Term Debt (continued):
(c) Consists of three notes payable for land acquisitions. The detail of the
three notes is as follows: (i) Original balance of $700,000 note payable in
monthly installments of $14,959 including interest at prime plus 2% (10.50%
at December 31, 1997), through April 1999. (ii) Original balance of
$870,942 note payable in monthly installments of $12,134 including interest
at 8% through July 2003. (iii) Original balance of $3,000,000 note payable
in monthly installments of $111,699 including interest at 8.75% through
November 1998.
(d) Consists of various collateralized notes payable through the year 2004. The
interest rates on these notes vary from 9.5% to 13.25% at fixed rates.
(e) On August 22, 1996, a wholly owned subsidiary of the Company, Casino
Magic-Bossier City, sold $115,000,000 aggregate principal amount of 13%,
First Mortgage Notes securities due in 2003 ("Louisiana First Mortgage
Notes"). Contingent Interest is payable on the Louisiana First Mortgage
Notes, on each interest payment date, in an aggregate amount equal to 5% of
Casino Magic-Bossier City's Adjusted Consolidated Cash Flow (as defined in
the Louisiana First Mortgage Notes Indenture ("Louisiana Indenture") for
the Accrual Period (as defined in the Louisiana Indenture, but generally a
six month period) last completed prior to such interest payment date;
provided that no Contingent Interest is payable with respect to any period
prior to the Commencement Date (as defined in the Louisiana Indenture).
Payment of all or a portion of any installment of Contingent Interest may
be deferred, at the option of Casino Magic-Bossier City, if, and only to
the extent that, (i) the payment of such portion of Contingent Interest
will cause Casino Magic-Bossier City's Adjusted Fixed Charge Coverage Ratio
(as defined in the Louisiana Indenture) for Casino Magic-Bossier City's
most recently completed Reference Period prior to such interest payment
date to be less than 1.5 to 1.0 on a pro forma basis after giving effect to
the assumed payment of such Contingent Interest and (ii) the principal
amount of the Louisiana First Mortgage Notes corresponding to such
Contingent Interest has not then matured and become due and payable (at
stated maturity, upon acceleration, upon redemption, upon maturity of a
repurchase obligation or otherwise). The aggregate amount of Contingent
Interest payable in any Semiannual Period will be reduced pro rata for
reductions in the outstanding principal amount of notes prior to the close
of business on the record date immediately preceding such payment of
Contingent Interest. During 1997, the Company accrued $677,251 of
contingent interest, none of which was paid.
The Louisiana First Mortgage Notes are secured by a first priority security
interest, subject to permitted liens, in substantially all of the existing
and future assets of Bossier City, including the Bossier Riverboat and
substantially all of the other assets that comprise Casino Magic-Bossier
City.. The Jefferson Guarantee will be secured by a pledge of all of the
capital stock of Jefferson Casino Corp., a wholly owned subsidiary of the
Company.
Casino Magic-Bossier City has contractually committed to apply net proceeds
from the asset sale of the Crescent City Riverboat to the construction of
an entertainment facility or hotel.
The Louisiana First Mortgage Notes are governed by the Louisiana Indenture.
The Louisiana Indenture pursuant to which the Louisiana First Mortgage
Notes have been issued contains certain covenants that will limit the
ability of Casino Magic-Bossier City and its subsidiaries to, among other
things, incur additional indebtedness and issue preferred stock, pay
dividends, make investments or make other restricted payments, incur liens,
enter into mergers or consolidations, enter into transactions with
affiliates or sell assets.
The proposed Merger (See Note 2), if effected, is a Change of Control as
defined in the Louisiana Indenture. Upon a Change of Control, each holder
of Louisiana First Mortgage Notes will have the right to require Casino
Magic-Bossier City to repurchase all or any part of the Louisiana First
Mortgage Notes at a price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest, if any, thereon to the
date of repurchase. Within 30 days following any Change of Control, the
Company will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to
repurchase the Louisiana First Mortgage Notes pursuant to the procedures
required by the Louisiana Indenture and described in such notice.
The Louisiana First Mortgage Notes are redeemable at the option of the
Company. The redemption amounts are as follows:
August 15,
2000 106.500%
2001 104.332%
2002 102.166%
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Long-Term Debt (continued):
(f) On October 14, 1993, a wholly owned indirect subsidiary of the Company,
Casino Magic Finance Corp. ("Finance Corp."), sold $135,000,000 in
aggregate principal amount of 11 1/2% First Mortgage Notes due in 2001 (the
" Finance Notes") and warrants to purchase 810,000 shares of Casino Magic
Corp. common stock. Proceeds from the Notes were allocated by the
underwriter between the Finance Corp. and the Company based on the
estimated fair market value at the time of issuance of the Finance Notes
and the warrants in the amounts of $131,760,000 and $3,240,000 ($4 per
warrant), respectively. The value of the warrants is treated as original
issue discount for financial statement purposes, and is reflected in the
balance sheet net of amortization as an adjustment to the carrying value of
long-term debt. The Finance Notes are governed by an Indenture (the
"Indenture") entered into on the same date between Finance Corp., the
Company and IBJ Schroder Bank & Trust Company as the Trustee. Under Section
4.10 of the Indenture, the Company's ability to pay dividends on its common
stock is restricted to an amount which is determined under a formula based
primarily on the Company's future income, and is precluded upon the
occurrence of an "Event of Default" as defined under the Indenture. Events
of Default include, among other things, the failure to pay the interest or
principal due on the Finance Notes, the entry of a judgment in excess of
$10,000,000 against the Company or Casino Magic-BSL, Casino Magic- Biloxi
and Finance Corp., which is not discharged within 60 days after entry, and
the default by the Casino Magic or Casino Magic-BSL, Casino Magic-Biloxi
and Finance Corp. under indebtedness due to third parties. The Indenture
also contains certain covenants that restrict, among other things, the
making of certain investments, payments of dividends and other
distributions, the incurrence of additional indebtedness and future
guarantees of indebtedness, certain transactions with shareholders and
affiliates, certain mergers and consolidations, certain asset sales and the
creation of certain liens. The Finance Notes are secured by a pledge of the
stock of Finance Corp., Bay Saint Louis and Biloxi along with the accounts
receivable, inventories, property and equipment, property held for
development and deposits of Casino Magic-BSL and Casino Magic-Biloxi.
The Finance Notes are redeemable at the option of the Company. The
redemption amounts are as follows:
October 15,
1997 105.750%
1998 103.833%
1999 101.917%
2000 and thereafter 100.000%
Maturities of the Company's long-term debt, including capital lease obligations,
as of December 31, 1997, are as follows:
Year ending December 31,
------------------------
1998 $ 8,590,945
1999 3,503,955
2000 1,017,061
2001 250,963
2002 135,273,782
Thereafter 115,331,829
--------------
263,968,535
Unamortized Original Issue Discount (1,906,371)
--------------
$ 262,062,164
==============
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. Lease commitments:
The Company has long-term lease agreements for land for the site of Casino
Magic-Biloxi and additional land at Casino Magic-BSL. The Casino Magic-Biloxi
land is classified as an operating lease. The annual rental payments for the
initial five-year term of the Casino Magic-Biloxi land lease began June 5, 1993,
and are $550,000, $250,000, $450,000, $450,000 and $200,000 for the first
through fifth year. The land lease contains seventeen, five-year renewal options
at contractually higher rentals, plus inflation adjustments not to exceed 4.5%
per year.
On June 4, 1993, the Company entered into a long-term agreement with the State
of Mississippi to lease 283,217 square foot of submerged lands or tidelands for
Casino Magic-Biloxi. The initial lease term expires May 31, 2003, with one five
year extension. Annual rental payments are due in advance on the first of June
in the amount of $595,000, plus an annual increase of $45,000 for the first five
years. In May 1998 the lease amount will be determined under Mississippi law
regarding the leasing of public trust tidelands.
The following is a schedule of future minimum lease payments for capital and
operating leases (with initial or remaining terms in excess of one year) as of
December 31, 1997:
Year ending December 31,
------------------------
Capital Operating
Leases Leases
------ ------
1998 $ 192,065 $ 1,479,257
1999 207,325 1,164,357
2000 153,856 1,026,287
2001 20,348 782,454
2002 22,007 775,000
Thereafter 130,417 4,650,000
---------- -----------
Total minimum lease payments 726,018 $ 9,877,355
Less amount representing interest (9% to 13%) 145,059 ===========
----------
Present value of net minimum capital lease payments $ 580,959
==========
Rent expense for all non-cancelable operating leases were $3,644,000 $1,800,000,
and $3,048,000 for the years ended December 31, 1997, 1996 and 1995,
respectively.
10. Other Commitments and Contingencies:
Ongoing legal proceedings:
A class action lawsuit was filed on April 26, 1994, in the United States
District Court, Middle District of Florida (the "Poulos Lawsuit"), naming as
defendants 41 manufacturers, distributors and casino operators of video poker
and electronic slot machines, including the Company. The lawsuit alleges that
such defendants have engaged in a course of fraudulent and misleading conduct
intended to induce people to play such games based on a false belief concerning
the operation of the gaming machines, as well as the extent to which there is an
opportunity to win. The suit alleges violations of the Racketeer Influenced and
Corrupt Organization Act, as well as claims of common law fraud, unjust
enrichment and negligent misrepresentation, and seeks damages in excess of $6
billion. On May 10, 1994, a second class action lawsuit was filed in the United
States District Court, Middle District of Florida (the "Ahern Lawsuit"), naming
as defendants the same defendants who were named in the Poulos Lawsuit and
adding as defendants the owners of certain casino operations in Puerto Rico and
the Bahamas, who were not named as defendants in the Poulos Lawsuit. The claims
in the Ahern Lawsuit are identical to the claims in the Poulos Lawsuit. Because
of the similarity of parties and claims, the Poulos Lawsuit and Ahern Lawsuit
were consolidated into one case file in the United States District Court, Middle
District of Florida. On December 9, 1994 a motion by the defendants for change
of venue was granted, transferring the case to the United States District Court
for the District of Nevada, in Las Vegas. In response to a motion to dismiss the
Complaint brought by the Company and other defendants, the United States
District Court for the District of Nevada entered an order dated April 17, 1996,
granting the motions and dismissing the complaint without prejudice.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Other Commitments and Contingencies (continued):
Ongoing legal proceedings (continued):
The plaintiffs then filed an amended Complaint on May 31, 1996, in which the
plaintiffs sought damages against the Company and other defendants in excess of
$1 billion and punitive damages for violations of the Racketeer Influenced and
Corrupt Organizations Act and for state common law claims for fraud, unjust
enrichment and negligent misrepresentation. The Company and other defendants
have moved to dismiss the amended Complaint. The Company believes that the
claims are without merit and does not expect that the lawsuit will have a
material adverse effect on the financial condition or results of operations of
the Company.
On or about September 6, 1996, Casino America, Inc. commenced litigation in the
Chancery Court of Harrison County, Mississippi, Second Judicial District,
against the Company, and James Edward Ernst, its Chief Executive Officer
(collectively "Defendants"), seeking injunctive relief and unspecified
compensatory damages in an amount to be proven at trial as well as punitive
damages. Plaintiff claims, among other things, that Defendants (i) breached the
terms of an agreement they had with Plaintiff, (ii) tortiously interfered with
certain business relations of plaintiff; and (iii) breached covenants of good
faith and fair dealing they allegedly owed to plaintiff. On or about October 8,
1996, Defendants interposed an answer to plaintiff's complaint denying the
allegations contained in the complaint. The discovery phase of this litigation
is continuing and a trial date has been set for August 1998. While the Company's
management cannot predict the outcome of this action, management believes
plaintiff's claims are without merit and the Company intends to vigorously
defend this action.
In addition, the Company is a litigant in legal matters arising in the normal
course of business. In the opinion of management, all such pending legal matters
are either adequately covered by insurance, or if not insured, will not have a
material adverse effect on the financial position or results of operations of
the Company.
Contractual agreements:
Argentina. In December 1994, the Company, through its wholly-owned subsidiary,
Casino Magic-Neuquen, entered into a 12-year concession agreement with the
Province of Neuquen, Argentina. Casino Magic-Neuquen which began operations in
January 1995 operates two casinos in the Province of Neuquen in the cities of
Neuquen City and San Martin de los Andes. The Company has unrestricted rights to
increase the number of gaming positions at both locations.
Camptown Greyhound Racing, Inc. On July 7, 1994, the Company and Alliance Gaming
Corp. (formerly United Gaming) formed two joint ventures ("KGP" and "KFP") to
lend Camptown Greyhound Racing, Inc. ("Camptown') approximately $3.2 million. On
October 28, 1994, KFP executed a loan agreement with Boatmen's Bank of Kansas
City ("Boatmen's") whereby Boatmen's lent $3.2 million to Camptown. KFP had
collateralized the loan with a $3.1 million certificate of deposit (one-half
funded by each party to the joint venture) and, in addition, guaranteed the
repayment of the loan. In January 1996, Camptown filed for protection under
Chapter 11 of U.S. Bankruptcy Code. KFP has satisfied its obligation under the
guarantee, and now owns a second mortgage on Camptown's facility in Frontense,
Kansas in the amount of $3,205,000, plus accrued interest. The Company has taken
steps to protect its investment and rights to operate gaming devices at the
Camptown facility, if and when such operation is legalized. The Company's
$1,580,000 share of the amount lent by KFP to Camptown was expensed in 1995.
In January 1997, the Company transferred all of its interest in KGP and KFP to
Alliance Gaming Corp., an unrelated third party, except for a deminimus
interest. The consideration for the transfer was Alliance Gaming Corp.'s
agreement to assume certain current financial obligations and to repay the
Company all of its cost in the project if they are successful in commencing
gaming operations at Camptown.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Other Commitments and Contingencies Contractual agreements:
Contractual agreements (continued):
Lakes Regional Greyhound Park. In May 1995, the Company entered into an
agreement with Lakes Regional Greyhound Park ("LRGP"). Under the terms of the
Agreement, the parties intend to form an entity to pursue a gaming development
at LRGP's pari-mutuel track in Belmont, New Hampshire. The entity will be
equally owned by the Company and LRGP and the Company will manage gaming
operations. Under the agreement, the Company is obligated to provide up to $4
million in funding to the entity of which the payment of $3 million is subject
to certain contingencies including the passage of legislation permitting gaming
at racetracks in New Hampshire. There is no assurance that the Company will have
the funds to pursue such gaming opportunity if required.
Indiana. The Company, through its wholly owned subsidiary, Crawford County
Casino, Corp. ("Indiana Corp.") is one of two applicants for the tenth gaming
license expected to be issued in the State of Indiana. If successful in
obtaining this gaming license, the Company has entered into an option agreement
to sell to Harrah's Operating Company the common stock of Indiana Corp. for
approximately $5.0 million. The option expires on January 2001. The Company can
give no assurances that a gaming license will be obtained in Indiana. All land
options held by Indiana Corp. associated with a possible gaming site are fully
reserved at December 31, 1997.
Land Acquisitions.
In 1993, the Company exercised its option to purchase of approximately 3.5 acres
of unimproved land in downtown St. Louis, Missouri at a cost of approximately
$4,000,000. At December 31, 1997, approximately $4,000,000 is included in
property held for sale related to this transaction.
In 1994, the Company exercised an option and to purchase additional real estate
located in Downtown St. Louis, Missouri at a cost of approximately $800,000. At
December 31, 1997, approximately $800,000 is included in property held for sale
related to this transaction.
In 1992, the Company purchased real estate located in downtown Bay Saint Louis,
Mississippi at a cost of approximately $1,200,000. At December 31, 1997, the
Company had written down the value of the property to $800,000 and this value is
included in property held for sale.
The Company had acquired land and options to purchase land in order to enhance
the Company's developmental and licensing procurement potential in various
States. Management has significantly reduced its development of new gaming
venues and because of this all land options are reserved for on the Company's
financial statements at December 31, 1997.
11. Stock and employee benefit plans:
Incentive stock option plan:
In 1992, the Company adopted an incentive stock option plan (the "Plan") in
which directors, officers, and key employees of the Company participate. The
Company has registered 3,700,000 shares of the Company's common stock currently
authorized for issuance under the Plan pursuant to stock options.
In October 1995, the FASB issued Statement of Financial Accounting Standards No.
123 ("SFAS 123"), "Accounting for Stock-Based Compensation," effective in 1996.
Under SFAS 123, companies can either record expense based on the fair value of
stock based compensation upon issuance or elect to remain under the current "APB
Opinion No. 25" method whereby no compensation cost is recognized upon grant if
certain requirements are met. The Company is continuing to account for its
stock-based compensation plans under APB Opinion No. 25. However, pro forma
disclosures as if the Company adopted the cost recognition requirements under
SFAS 123 are presented below.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. Stock and employee benefit plan (continued):
Incentive stock option plan (continued):
A summary of the status of the Company's stock options, non-qualified options,
and warrants as of December 31, 1997, 1996 and 1995 and changes during the years
ended on those dates is presented below (shares in thousands):
<TABLE>
<CAPTION>
December 31,
------------
1997 1996 1995
---- ---- ----
Weighted Average Weighted Average Weighted Average
Shares Exercise Price Shares Exercise Price Shares Exercise Price
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 4,200 $ .67 5,108 $ 7.60 4,943 $ 7.42
Granted 400 $ 1.69 1,998 $ 3.56 950 $ 5.06
Exercised (239) $ 1.59 (424) $ 1.72 (344) $ 1.43
Canceled (915) $ 2.23 (2,482) $ 12.00 (441) $ 4.61
Outstanding at end of year 3,446 $ 3.96 4,200 $ 3.67 5,108 $ 7.60
Options exercisable at end of year 1,985 $ 3.96 2,655 $ 3.11 3,072 $ 9.12
Options available for future grants 2,582 2,068 1,583
Weighted average fair value of options
granted during the year $ 1.69 $ 1.11 $ 1.28
</TABLE>
The following table summarizes information about stock options and warrants
outstanding at December 31, 1997:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
Number Wgtd. Avg. Wgtd. Avg. Number Wgtd. Avg.
Exercise Outstanding Remaining Exercise Exercisable Exercise
Price at 12/31/97 Contr. Life Price at 12/31/97 Price
----- ----------- ----------- ----- ----------- -----
<S> <C> <C> <C> <C> <C>
$ 1.69 399,500 4.77 1.69 15,000 1.69
2.75 980,000 0.81 2.75 980,000 2.75
3.50 150,000 4.56 3.50 30,000 3.50
3.63 1,288,200 3.70 3.63 575,375 3.63
3.75 3,000 4.66 3.75 600 3.75
5.81 200,000 4.48 5.81 200,000 5.81
7.20 69,100 1.30 7.20 69,100 7.20
7.35 50,000 1.88 7.35 50,000 7.35
15.30 200,000 6.30 15.30 60,000 15.30
---------- ---- ------ ---------- ------
Totals 3,339,800 3.15 $ 3.96 1,980,075 $ 3.96
========== ==== ====== ========== ======
</TABLE>
Had compensation cost for the Company's 1997, 1996 and 1995 grants for
stock-based compensation plans been determined consistent with SFAS 123, the
Company's net income and net earnings (loss) per common share for the years
ended December 31, 1997, 1996 and 1995 would approximate the pro forma amounts
below (in thousands, except per share data):
The fair value of each option granted during the periods presented is estimated
on the date of grant using the Black-Scholes option-pricing model with the
following assumptions: (1) dividend yield of 0%, (2) expected volatility of 20%,
(3) risk-free interest rates of 5.2%, 5.26%, 5.47% and 5.5%, and (4) expected
life of 2.25, 4.5, 6.75, and 9 years.
<TABLE>
<CAPTION>
December 31,
------------
1997 1996 1995
---- ---- ----
As Reported Pro Forma As Reported Pro Forma As Reported Pro Forma
---------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net Income (Loss) $(5,249) $(5,958) $(31,589) $(32,563) $(10,292) $(10,660)
Earnings per common share
Basic $ (0.15) $ (0.17) $ (0.89) $ (0.92) $ (0.31) $ (0.32)
Diluted $ (0.15) $ (0.17) $ (0.89) $ (0.92) $ (0.31) $ (0.32)
</TABLE>
The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of future amounts. SFAS 123 does not apply to awards prior to 1995, and
additional awards in future years are anticipated.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. Stock and employee benefit plan (continued):
Pensions and other benefits:
In July 1993, the Company adopted The Casino Magic Corp. 401(k) Plan (the
"401(k) Plan"), a defined contribution plan covering all eligible employees of
the Company who have one year of service and are age twenty-one or older. The
401(k) Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). Each year, participants may contribute up to 15%
of pretax annual compensation, as defined in the 401(k) Plan. The Company's
matching and/or additional contributions may be contributed at the discretion of
the Company's Board of Directors. The Company's contributions to the 401(k) Plan
are allocated to employed participants' accounts as of the last day of the plan
year. Total employer contributions to the 401(k) Plan at December 31, 1997, 1996
and 1995 were approximately $201,000, $176,000, and $177,000, respectively.
12. Write-off of capitalized costs relating to inactive developments:
In 1995, the Company decided to terminate development efforts with respect to
specific properties and jurisdictions. Because of this determination,
significant capitalized amounts relating to land, land options, joint ventures
and construction projects were written-off or revalued. In addition, certain
consulting agreements that were entered into to pursue gaming opportunities in
new jurisdictions were terminated. The amount expensed in the fourth quarter of
1995 was $14,542,164.
13. Advertising:
The company expenses all production and communication costs of advertising as
incurred. Advertising expense was approximately $7,815,000, $5,470,000, and
$4,472,000 for years ended December 31, 1997, 1996, and 1995, respectively.
14. Related Party Transactions:
During the years ended December 31, 1997, 1996, and 1995, the Company incurred
$7,247, $1,346,861 and $353,888, respectively, for architectural and design
services provided by an architectural firm that is wholly-owned by an outside
director and shareholder of the Company. The director resigned in October 1996.
During the years ended December 31, 1997, 1996, and 1995, the Company incurred
$145,744, $154,028 and $388,944, respectively, for legal services provided by a
law firm in which an outside director of the Company is a shareholder.
During the year ended December 31, 1996 and 1995, the Company incurred $219,800,
and $387,422, respectively, for charter plane rentals provided by a company that
is wholly owned by the Company's Chairman.
The Company purchased a jet airplane in February 1996 from the Company's
Chairman. The Company paid $1.7 million for the airplane which approximated fair
value at the date of purchase. The plane was sold in February 1997 to an
unrelated third party for $1.4 million, which approximated fair value.
15. Income taxes:
Pretax financial income (loss) generated from domestic and foreign sources was
as follows:
December 31,
------------
1997 1996 1995
---- ---- ----
Domestic $ (12,132,945) $ (15,322,992) $ (15,336,975)
Foreign 4,948,737 (20,942,537) 1,813,932
------------- ------------- -------------
Total pretax loss $ (7,184,208) $ (36,265,529) $ (13,523,043)
============== ============= ==============
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. Income taxes (continued):
Provision (benefit) for income taxes for the years ended December 31 are as
follows:
December 31,
------------
1997 1996 1995
---- ---- ----
Federal and state current $ (2,733,203) $ (4,253,704) $ (2,546,443)
Foreign current 1,064,963 827,548 1,099,816
Federal deferred (266,760) (1,250,026) (1,221,514)
Foreign deferred -- -- (562,723)
------------- -------------- ------------
Total $ (1,935,000) $ (4,676,182) $ (3,230,864)
============= ============== ============
Components of deferred tax liabilities (assets) are as follows:
<TABLE>
<CAPTION>
December 31,
------------
1997 1996
---- ----
<S> <C> <C>
Depreciation and amortization $ 12,154,826 $ 9,535,121
Foreign source income 257,949 257,949
------------ ------------
Gross deferred tax liabilities 12,412,775 9,793,070
------------ ------------
Write-off of preopening costs (1,781,870) (2,493,074)
Tax benefits related to non-statutory stock Options (504,000) (504,000)
Accrued employee benefits and liabilities (1,428,370) (1,433,067)
Abandoned development projects (1,515,657) (10,229,821)
Net operating loss carry-forward (21,299,675) (2,269,344)
Other (902,737) (798,293)
------------ ------------
Gross deferred tax assets (27,432,309) (17,727,599)
------------ ------------
Less valuation allowance 15,019,534 8,201,290
============ ============
Net deferred tax liabilities $ -- $ 266,761
============ ============
</TABLE>
The provision for income taxes differs from the amount of income tax determined
by applying the applicable U.S. statutory federal income tax rate to pre-tax
income from continuing operations as a result of the following differences:
<TABLE>
<CAPTION>
December 31,
------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Statutory U.S. tax rate (35%) $ (2,023,010) $(12,692,935) $ (4,733,065)
Increase (decrease) in rates resulting from:
Expenses which were non-deductible
for tax purposes 1,299,010 357,805 733,876
Expenses which were deductible
for tax purposes and not book (6,988,244) -- --
Foreign taxes 1,064,963 827,548 1,099,816
Valuation allowance 6,818,244 8,201,290 --
State tax benefit -- (802,174) --
Other (2,105,996) (567,716) (331,491)
------------ ------------ ------------
Effective tax rate (33%), (13%)
and (24%), respectively $ (1,935,000) $ (4,676,182) $ (3,230,864)
============ ============ ============
</TABLE>
The valuation allowance against net deferred tax assets was recorded in
recognition of the significant operating losses incurred by the Company for the
last three years.
Mississippi State taxes were offset by a tax credit for state gaming taxes based
on gross revenues realized by Casino Magic-BSL and Casino Magic-Biloxi. The
credit is the lesser of the annual total gaming taxes paid or the state income
tax. Credit carry-forwards are not permitted.
Louisiana State taxes do not allow for an offset of state gaming taxes based on
gross revenues realized by Louisiana.
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. Fair value of financial instruments:
The carrying amounts and fair values of the Company's financial instruments at
December 31, 1997 are as follows:
Carrying Fair
(In thousands) Amount Value
- -------------- ------ -----
Cash and cash equivalents 20,902 20,902
Marketable securities 10,629 10,629
Notes receivable 3,385 3,385
Notes payable and current maturities of long-term debt
and long-term debt 262,368 247,568
The following methods and assumptions were used by the Company in estimating its
fair value disclosure:
Cash and cash equivalents, and marketable securities, . The carrying amount
reported on the consolidated balance sheet approximates its fair value because
of the short term nature of these instruments.
Notes receivable. This is a long-term note receivable from an Indian Tribe. The
fair value of the note approximates market value based on the interest rate of
the note and the collateral securing the note.
Notes payable and current maturities of long-term debt and long-term debt. The
fair value of the Company's debt either approximates its carrying value or is
based upon the market price of the debt instruments.
Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.
17. Selected quarterly financial information (Unaudited):
<TABLE>
<CAPTION>
Year ended December 31, 1997
(in thousands, except
per share amounts) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Totals
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue $ 65,781 $ 65,958 $ 66,495 $ 63,240 $ 261,474
Income from operations 1,997 5,927 10,125 6,506 24,555
Income (loss) before tax and
minority interest (5,607) (1,020) 3,390 (2,543) (5,780)
Net income (loss) (3,672) (1,222) 2,675 (3,030) (5,249)
Earnings (loss) per share:
Basic (0.10) (0.03) 0.08 (.08) (0.15)
Diluted (0.10) (0.03) 0.08 (.08) (0.15)
<CAPTION>
Year ended December 31, 1996
(in thousands, except
per share amounts) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Totals
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue $ 43,125 42,368 $ 43,271 $ 51,514 $ 180,278
Income from operations 5,565 6,473 5,355 (8,550) 8,843
Income (loss) before tax 2,352 2,456 (26,024) (15,050) (36,266)
Net income (loss) 1,644 1,660 (20,683) (14,210) (31,589)
Earnings (loss) per share:
Basic 0.05 0.05 (0.57) (0.40) (0.89)
Diluted 0.05 0.05 (0.57) (0.40) (0.89)
</TABLE>
NOTE: Earnings (loss) per share totals will not necessarily agree to the sum of
the quarterly information
<PAGE>
PART I - FINANCIAL INFORMATION
CASINO MAGIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
1998 1997
---- ----
<S> <C> <C>
Revenues:
Casino $ 138,208,950 $ 123,731,151
Food and beverage 5,103,982 4,986,717
Rooms 1,561,087 775,014
Other operating income 2,623,837 2,245,541
------------- -------------
Total revenues 147,497,856 131,738,423
------------- -------------
Costs and expenses:
Casino 63,865,168 58,241,241
Food and beverage 5,733,569 6,597,024
Rooms 680,290 368,665
Other operating costs and expenses 2,186,555 2,308,621
Advertising and marketing 17,965,920 21,405,322
General and administrative 13,118,131 14,080,585
Property operation, maintenance and energy cost 5,480,911 6,044,447
Rents, property taxes and insurance 4,450,647 3,959,568
Development expenses 219,848 455,132
Preopening expenses 681,754 --
Depreciation and amortization 10,347,608 10,353,382
------------- -------------
Total costs and expenses 124,730,401 123,813,987
------------- -------------
Income from operations 22,767,455 7,924,436
------------- -------------
Other (Income) Expenses:
Equity loss from unconsolidated subsidiary 244,307 229,061
Interest expense, net 14,980,269 15,749,566
Other 1,111,410 (1,427,177)
------------- -------------
Total other expense 16,335,986 14,551,450
------------- -------------
Income (loss) before income taxes and
minority interest of subsidiary: 6,431,469 (6,627,014)
Income taxes expense (benefit) 1,112,173 (1,935,000)
Minority interest 851,773 201,512
------------- -------------
Net income (loss) $ 4,467,523 $ (4,893,526)
============= =============
Net income (loss) per common share:
Basic $ 0.13 $ (0.14)
============= =============
Diluted $ 0.12 $ (0.14)
============= =============
Average shares and equivalents outstanding:
Basic 35,722,124 35,637,083
============= =============
Diluted 35,857,716 35,637,083
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
June 30,
1998 1997
---- ----
<S> <C> <C>
Revenues:
Casino $ 70,036,910 $ 62,057,468
Food and beverage 2,691,139 2,479,674
Rooms 1,192,048 227,583
Other operating income 1,391,858 1,192,820
------------ ------------
Total revenues 75,311,955 65,957,545
------------ ------------
Costs and expenses:
Casino 31,711,328 31,705,786
Food and beverage 3,090,421 1,707,142
Rooms 528,746 (57,582)
Other operating costs and expenses 1,177,877 1,153,665
Advertising and marketing 9,214,590 8,250,625
General and administrative 6,460,676 6,763,040
Property operation, maintenance and energy cost 2,778,102 3,034,439
Rents, property taxes and insurance 2,361,293 1,986,566
Development expenses 141,607 172,843
Preopening expenses 681,754 --
Depreciation and amortization 5,352,618 5,313,728
------------ ------------
Total costs and expenses 63,499,012 60,030,252
------------ ------------
Income from operations 11,812,943 5,927,293
------------ ------------
Other (Income) Expenses:
Equity loss from unconsolidated subsidiary 128,658 113,937
Interest expense, net 7,485,062 8,069,102
Other 665,002 (1,235,441)
------------ ------------
Total other expense 8,278,722 6,947,598
------------ ------------
Income (loss) before income taxes and
minority interest of subsidiary: 3,534,221 (1,020,305)
Income taxes expense 1,112,173 --
Minority interest 432,953 201,512
------------ ------------
Net income (loss) $ 1,989,095 $ (1,221,817)
============ ============
Net income (loss) per common share:
Basic $ .06 $ (0.03)
============ ============
Diluted $ .06 $ (0.03)
============ ============
Average shares and equivalents outstanding:
Basic 35,722,124 35,637,083
============ ============
Diluted 35,892,435 35,637,083
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1998 1997(*)
---- -------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 17,470,386 $ 20,986,510
Restricted marketable securities 11,699,487 10,629,405
Other current assets 8,927,714 8,124,872
------------- -------------
Total current assets 38,097,587 39,740,787
Property and equipment, net 279,831,475 263,993,452
Other long-term assets 64,818,117 68,970,578
------------- -------------
$ 382,747,179 $ 372,704,817
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 50,806,822 $ 51,031,097
Other long-term liabilities and minority interest 8,358,639 8,748,212
Long-term debt, net of current maturities 259,545,594 253,471,219
Shareholders' Equity
Common stock, $0.01 par, 50,000,000 shares authorized,
35,722,124 issued and outstanding at June 30, 1998
and December 31, 1997 357,221 357,221
Undesignated stock, 2,500,000 shares authorized, none issued -- --
Additional paid-in capital 67,122,856 67,122,852
Retained deficit (3,294,753) (7,762,270)
Less unearned compensation (149,200) (263,514)
------------- -------------
Total shareholders' equity 64,036,124 59,454,289
------------- -------------
$ 382,747,179 $ 372,704,817
============= =============
</TABLE>
* Derived from audited financial statements
See notes to condensed consolidated financial statements.
3
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 4,467,523 $ (4,893,526)
Adjustments for non-cash charges 11,788,196 9,505,514
Changes in assets and liabilities (2,739,797) 6,624,971
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 13,515,922 11,236,959
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment (16,234,648) (20,409,274)
Proceeds from sale of subsidiary and property and equipment -- 8,174,586
Other, net 588,359 290,874
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (15,646,289) (11,943,814)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable and long-term debt (4,216,867) (10,842,560)
Net proceeds from issuance of long-term debt 2,977,445 6,350,000
Other, net (146,335) --
------------ ------------
NET CASH USED IN BY FINANCING ACTIVITIES (1,385,757) (4,492,560)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,516,124) (5,199,415)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 20,986,510 34,546,164
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 17,470,386 $ 29,346,749
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID DURING THE PERIOD FOR:
Interest (net of amount capitalized) $ 13,961,006 $ 16,708,321
Income taxes (net of refunds) -- (6,382,324)
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Property and equipment and other asset acquisitions included
in accounts and construction payable and accrued expenses 2,524,626 1,931,566
Property and equipment financed with long-term debt 6,142,215 18,079
Reclassification of long-term liabilities to accrued expenses -- 170,029
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information with respect to the Three and Six Months Ended June 30,
1998 and 1997 is Unaudited)
1. Summary of significant accounting policies:
Organization and basis of presentation:
Casino Magic Corp. and Subsidiaries is an international gaming company with
operations in Bay Saint Louis, Mississippi ("Casino Magic-BSL"), Biloxi,
Mississippi ("Casino Magic-Biloxi"), Bossier City, Louisiana ("Casino
Magic-Bossier City"), and the Argentina Province of Neuquen in the cities of
Neuquen City and San Martin de los Andes ("Casino Magic-Neuquen").
Unless the context requires otherwise, reference in this report to the "Company"
means Casino Magic Corp. and its relevant subsidiaries, and reference to "Casino
Magic" means Casino Magic Corp.
The consolidated financial statements include the accounts of Casino Magic Corp.
and its wholly-owned and majority-owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated.
The accompanying unaudited consolidated financial statements contain all
adjustments which are, in the opinion of management, necessary for a fair
statement of the results of the interim periods. The results of operations for
the interim periods are not necessarily indicative of results of operations for
an entire year. It is suggested that these consolidated financial statements be
read in conjunction with the consolidated financial statements and the notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, and Form 10-Q for March 31, 1998.
Certain reclassifications have been made to 1997 amounts to conform with the
June 30, 1998 presentation.
2. New Accounting Pronouncements
(a) Accounting for Start-Up Costs:
During April 1998, the Accounting Standards Executive Committee of the AICPA
issued Statement of Position 98-5 ("SOP"), "Reporting on the Costs of Start-Up
Activities." The SOP requires costs of start-up activities and organization
costs to be expensed as incurred. The SOP is effective for financial statements
for fiscal years beginning after December 15, 1998. The company has not adopted
the SOP. However, due to the opening of the hotel at Casino Magic - Biloxi in
May 1998, all start-up costs associated with the hotel have been expensed in the
quarter ended June 30, 1998, in accordance with company policy.
(b) Accounting for Derivative Instruments and Hedging Activities:
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No, 133, Accounting for Derivative Instruments
and Hedging Activities. The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special accounting
for qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate, and assess the effectiveness of transactions
that receive hedge accounting.
Statement 133 is effective for fiscal years beginning after June 15, 1999. A
company may also implement the Statement as of the beginning of any fiscal
quarter after issuance (that is, fiscal quarters beginning June 16, 1998 and
thereafter). Statement 133 cannot be applied retroactively. Statement 133 must
be applied to (a) derivative instruments and (b) certain derivative instruments
embedded in hybrid contracts that were issued, acquired, or substantively
modified after December 31, 1997 (and, at the company's election, before January
1, 1998).
We believe the impact of adopting Statement 133 on the financial statements is
expected to be immaterial.
5
<PAGE>
CASINO MAGIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information with respect to the Three and Six Months Ended June 30,
1998 and 1997 is Unaudited)
3. Long Term Debt:
Additions to long-term debt during the first six months of 1998 consist of the
following:
Ending Balances at June 30, 1998
Notes payable, bank (a) $2,850,108
Notes payable, other (b) $6,068,357
(a) Consists of one note payable to The Peoples Bank, collateralized by certain
parcels of land, payable in fifty-nine monthly payments of $61,100 including
interest at 8.5% through February 2002 with a final balloon payment of $60,120
in March 2002.
(b) Consists of five notes payable to Boeing Capital Corp. All notes
collateralized by furniture and equipment used at the 378 room hotel at
Casino Magic-Biloxi. 1) original balance of $4,347,833, payable in
forty-seven monthly installments of $110,523.04 including interest of
10.12% through April 2002 with a final balloon payment of $112,400 in May
2002. 2) original balance of $733,516.63, payable in one installment of
$21,616.66 on July 1, 1998, and forty-seven monthly installments of
$18,714.77 including interest at 10.314% through April 2002. 3) original
balance of $391,024.97, payable in one installment of $2,885.61 on August
1, 1998, and forty-eight installments of $9,958.37 through including
interest at 10.2179% August 2002. 4) original balance of $328,148.41,
payable in one installment of $1,769.63 on July 1, 1998, and forty-eight
monthly installments of $8,357.07 including interest at 10.2179% through
August 2001. 5) original balance of $341,692.16, payable in forty-eight
monthly installments beginning July 1, 1998, of $8,674.42 including
interest at 10.2179% through June 2001.
6
<PAGE>
EXHIBIT 99.2
Unaudited Pro Forma Combined Consolidated
Financial Statements
The following unaudited pro forma combined consolidated balance sheet has been
prepared by combining the unaudited balance sheet of Hollywood Park, Inc.
("Hollywood Park") and Casino Magic Corp. ("Casino Magic") as of June 30, 1998.
The following unaudited pro forma combined consolidated statements of operations
were prepared by combining the consolidated statements of operations of
Hollywood Park and Casino Magic for the year ended December 31, 1997, and for
the six months ended June 30, 1998. It was assumed that the acquisition and
valuation of Casino Magic's assets and liabilities occurred at January 1, 1997.
The acquisition of Casino Magic will be accounted for using the purchase method
of accounting for a business combination. The following unaudited pro forma
combined consolidated financial statements should be read in conjunction with
the accompanying notes.
The pro forma financial information is presented for illustrative purposes only
and is not necessarily indicative of the operating results or financial position
that would have occurred if the Casino Magic acquisition had been completed in
an earlier period, nor is it necessarily indicative of future operating results
or financial position.
These pro forma financial statements are based on, and should be read in
conjunction with, the historical consolidated financial statements and the
related notes thereto of Hollywood Park (see Hollywood Park's Annual Report on
Form 10-K for 1997, and Quarterly Report on Form 10-Q, for June 30, 1998) and
Casino Magic (included elsewhere herein).
<PAGE>
Hollywood Park, Inc.
Notes to Unaudited Pro Forma Combined Consolidated
Balance Sheet
Assumptions The acquisition will be accounted for under the purchase method of
accounting for a business combination. The unaudited combined consolidated
balance sheet is presented as if the Casino Magic acquisition had taken place as
of June 30, 1998.
Pro Forma Adjustments The following adjustments have been made to the unaudited
pro forma combined consolidated balance sheet:
(a) To record the estimate 40% deferred tax benefit associated with purchase
related adjustments to Casino Magic's statement of operations.
(b) To eliminate Casino Magic's net prepaid debt issuance costs associated with
the $135,000,000 Casino Magic First Mortgage Notes (the "Casino Magic
Notes"), which as of October 15, 1997, (the earliest date at which the
Casino Magic Notes would have been repaid) were assumed to have been
replaced with bank debt.
(c) To record the bank debt fees associated with amending Hollywood Park's bank
credit facility to cover funds needed to acquire Casino Magic's common
stock and to redeem the Casino Magic Notes.
(d) To record the approximately $62,146,000 of purchase price paid in excess of
Casino Magic's net assets acquired.
(e) To eliminate interest accrued on the Casino Magic Notes. (f) To eliminate
the principal balance of the Casino Magic Notes. (g) To eliminate to net
discount associated with the Casino Magic Notes.
(h) To record bank debt assumed by Hollywood Park to purchase Casino Magic's
common stock at $2.27 per share, and to redeem the Casino Magic Notes
including the 5.75% redemption premium.
(i) To record the premium associated with the Casino Magic Louisiana Notes,
based on the trading price of these Notes as of October 15, 1998.
(j) To eliminate Casino Magic's equity accounts.
Estimated Purchase Price The following is the calculation of the pro forma
purchase price and pro forma preliminary purchase price allocation:
Pro forma purchase price:
Estimated cost to purchase Casino Magic common
stock at $2.27 per share $80,896,000
Estimated transaction expenses 2,560,000
Assumption of Casino Magic debt 259,546,000
----------------
Pro forma purchase price $343,002,000
================
Pro forma preliminary purchase price allocation:
Property, plant and equipment $279,831,000
Other, net 1,025,000
Goodwill 62,146,000
----------------
$343,002,000
================
<PAGE>
Reclassifications Certain reclassifications have been made to the Hollywood Park
and Casino Magic historical consolidated balance sheets to conform to the pro
forma combined consolidated balance sheet presentation.
<PAGE>
Hollywood Park, Inc.
Unaudited Pro Forma Combined Consolidated Balance Sheet
As of June 30, 1998
<TABLE>
<CAPTION>
Pro Forma
Hollywood Casino Pro Forma Combined
Park, Inc. Magic Corp. Adjustments Consolidated
--------- --------- --------- ---------
(in thousands)
Assets
<S> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 40,079 $ 17,385 $ 0 $ 57,464
Restricted Cash 6,178 11,784 0 17,962
Short term investments 3,514 0 0 3,514
Other receivables, net 11,621 0 0 11,621
Prepaid expenses and other assets 13,161 5,280 0 18,441
Deferred tax assets 12,202 0 1,588 (a) 13,790
Current portion of notes receivable 2,386 3,648 0 6,034
--------- --------- --------- ---------
Total current assets 89,141 38,097 1,588 128,826
Notes receivable 15,640 0 0 15,640
Property, plant and equipment, net 299,452 279,831 0 579,283
Land held for sale or development 0 6,146 0 6,146
Foreign casino concession agreement, net 0 8,066 0 8,066
Debt related costs, net 6,984 8,241 (3,779)(b) 13,946
-- -- 2,500 (c) --
Gaming license costs, net 0 37,247 0 37,247
Goodwill, net 50,777 57 62,146 (d) 112,980
Other assets 15,193 5,062 0 20,255
--------- --------- --------- ---------
$ 477,187 $ 382,747 $ 62,455 $ 922,389
========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Liabilities and Stockholders' Equity
<S> <C> <C> <C> <C>
Current Liabilities:
Accounts payable $ 12,013 $ 9,992 $ 0 $ 22,005
Accrued compensation 8,930 7,872 0 16,802
Accrued liabilities 31,660 12,492 24,737 (d) 68,889
Accrued interest 5,396 10,332 (3,234)(e) 12,494
Gaming liabilities 3,497 1,395 0 4,892
Racing liabilities 15,640 0 0 15,640
Current portion of notes payable 2,085 8,724 0 10,809
--------- --------- --------- ---------
Total current liabilities 79,221 50,807 21,503 151,531
Notes payable 159,819 259,546 (135,000)(f) 528,132
-- -- (1,700)(g) --
-- -- 236,267 (h) --
9,200 (i)
Deferred tax liabilities 8,769 60 0 8,829
Other liabilities 0 3,649 0 3,649
--------- --------- --------- ---------
Total liabilities 247,809 314,062 130,270 692,141
Minority interests 0 4,649 0 4,649
Stockholders' Equity:
Capital stock -
Preferred 0 0 0 0
Common 2,629 357 (357)(j) 2,629
Capital in excess of par value 223,389 67,123 (67,123)(j) 223,389
Retained earnings (accumulated deficit) 3,358 (3,295) 3,295 (j) (421)
-- -- (3,779)(b) --
Accumulated other comprehensive income (loss) 2 (149) 149 (j) 2
--------- --------- --------- ---------
Total stockholders' equity 229,378 64,036 (67,815) 225,599
--------- --------- --------- ---------
$ 477,187 $ 382,747 $ 62,455 $ 922,389
========= ========= ========= =========
</TABLE>
<PAGE>
Hollywood Park, Inc.
Notes to Unaudited Pro Forma Combined Consolidated
Statements of Operations
Assumptions The acquisition will be accounted for under the purchase method of
accounting for a business combination. The unaudited pro forma combined
consolidated statements of operations for the year ended December 31, 1998, and
the six months ended June 30, 1998, are presented as if the Casino Magic
acquisition had taken place on January 1, 1997.
Pro Forma Adjustments The following adjustments have been made to the unaudited
pro forma combined consolidated statements of operations:
(a) To eliminate compensation expense associated with Casino Magic's President
and Chief Executive Office, who will resign as of the close of the
acquisition and will not be replaced.
(b) To eliminate Casino Magic director fees and expenses. Casino Magic's board
will be dissolved upon the close of the acquisition.
(c) To record the amortization of the approximately $62,146,000 of excess
purchase price over net assets acquired. To be amortized over 40 years.
(d) To eliminate the gain associated with the sale of a Casino Magic riverboat
to Hollywood Park.
(e) To eliminate the interest expense associated with Casino Magic's Notes,
which were assumed to have been replaced with bank debt as of October 15,
1997.
(f) To record interest expense at 8.0% on the approximately $80,896,000 of bank
debt assumed to purchase Casino Magic common stock at $2.27 per share.
(g) To record the amortization of the premium associated with the Casino Magic
Louisiana Notes.
(h) To record interest expense at 8.0% associated with the approximately
$142,763,000 of bank debt assumed to redeem the Casino Magic Notes.
(i) To record the amortization of the approximately $2,500,000 of bank debt
fees associated with the bank debt assumed to replace the Casino Magic
Notes, and to purchase the Casino Magic common shares. To be amortized over
5 years.
(j) To record the estimated 40% tax benefit associated with the net pro forma
adjustments.
Reclassifications Certain reclassifications have been made to the Casino Magic
historical consolidated statements of operations to conform to the pro forma
combined consolidated statements of operations.
Pro Forma Per Share Data The pro forma earnings per share amounts are based on
the weighted average number of shares of Hollywood Park common stock outstanding
during the period presented, inclusive of the effect, when dilutive, of the
exercise of stock options.
Combination Costs It is expected that Hollywood Park will incur costs of
approximately $2,200,000 related to the acquisition. These costs will be
incorporated into the price of the acquisition under the purchase method of
accounting for a business combination. Cost incurred by Casino Magic are
expensed as incurred.
<PAGE>
Hollywood Park, Inc.
Unaudited Pro Forma Combined Consolidated Statements of Operations
For the year ended December 31, 1997
<TABLE>
<CAPTION>
Pro Forma
Hollywood Casino Pro Forma Combined
Park, Inc. Magic Corp. Adjustments Consolidated
--------- --------- --------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues:
Gaming $ 137,659 $ 246,320 $ 0 $ 383,979
Racing 68,844 0 0 68,844
Food and beverage 19,894 9,414 0 29,308
Hotel and recreational vehicle park 937 1,724 0 2,661
Truck stop and service station 8,633 0 0 8,633
Other income 12,161 4,289 0 16,450
--------- --------- --------- ---------
248,128 261,747 0 509,875
--------- --------- --------- ---------
Expenses:
Gaming 74,733 155,885 0 230,618
Racing 30,304 0 0 30,304
Food and beverage 25,745 10,757 0 36,502
Hotel and recreational vehicle park 356 834 0 1,190
Truck stop and service station 7,969 0 0 7,969
Administration 61,514 45,099 (656)(a) 105,828
-- -- (129)(b) --
Other 5,048 4,098 0 9,146
REIT restructuring 2,483 0 0 2,483
Depreciation and amortization 18,157 20,246 1,554 (c) 39,957
--------- --------- --------- ---------
226,309 236,919 769 463,997
--------- --------- --------- ---------
Operating income 21,819 24,828 (769) 45,878
Equity loss from unconsolidated subsidiary 0 505 0 505
Gain on sale of assets 0 (2,632) 1,440 (d) (1,192)
Write off of available for sale securities 0 1,350 0 1,350
Interest expense 7,302 31,385 (3,492)(e) 42,705
-- -- 2,379 (f) --
-- -- (1,840)(g) --
-- -- 6,471 (h) --
-- -- 500 (i) --
--------- --------- --------- ---------
Income (loss) before minority interests and taxes 14,517 (5,780) (6,227) 2,510
Minority interests (3) 1,404 0 1,401
Income tax expense (benefit) 5,850 (1,935) (2,491)(j) 1,424
--------- --------- --------- ---------
Net income (loss) $ 8,670 ($ 5,249) ($ 3,736) ($ 315)
========= ========= ========= =========
====================================================================================================================================
Dividend requirements on convertible preferred stock $ 1,520
Net loss allocated to common shareholders ($ 1,835)
Per common share:
Net loss - basic ($ 0.08)
Net loss - diluted ($ 0.08)
Number of shares - basic 22,010
Number of shares - diluted 22,340
</TABLE>
<PAGE>
Hollywood Park, Inc.
Unaudited Pro Forma Combined Consolidated Statements of Operations
For the six months ended June 30, 1998
<TABLE>
<CAPTION>
Pro Forma
Hollywood Casino Pro Forma Combined
Park, Inc. Magic Corp. Adjustments Consolidated
--------- --------- --------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues:
Gaming $ 114,706 $ 138,209 $ 0 $ 252,915
Racing 36,714 0 0 36,714
Food and beverage 13,862 5,104 0 18,966
Hotel and recreational vehicle park 725 1,753 0 2,478
Truck stop and service station 6,546 0 0 6,546
Other income 8,729 2,460 0 11,189
--------- --------- --------- ---------
181,282 147,526 0 328,808
--------- --------- --------- ---------
Expenses:
Gaming 63,316 82,333 0 145,649
Racing 15,682 0 0 15,682
Food and beverage 17,536 5,735 0 23,271
Hotel and recreational vehicle park 287 773 0 1,060
Truck stop and service station 5,987 0 0 5,987
Administration 42,121 22,986 (350)(a) 64,620
-- -- (137)(b) --
Other 3,575 2,775 0 6,350
Hollywood Park/Casino Magic merger costs 0 912 0 912
REIT restructuring 469 0 0 469
Depreciation and amortization 13,049 10,347 777 (c) 24,173
--------- --------- --------- ---------
162,022 125,861 290 288,173
--------- --------- --------- ---------
Operating income 19,260 21,665 (290) 40,635
Equity loss from unconsolidated subsidiaries 0 244 0 244
Interest expense 7,715 14,990 (8,428)(e) 22,867
-- -- 5,711 (f) --
-- -- (607)(g) --
-- -- 3,236 (h) --
-- -- 250 (i) --
--------- --------- --------- ---------
Income (loss) before minority interests and taxes 11,545 6,431 (452) 17,524
Minority interests 0 852 0 852
Income tax expense (benefit) 4,650 1,112 (181)(j) 5,581
--------- --------- --------- ---------
Net income (loss) $ 6,895 $ 4,467 ($ 271) $ 11,091
========= ========= ========= =========
Per common share:
Net income - basic $ 0.42
Net income - diluted $ 0.42
Number of shares - basic 26,285
Number of shares - diluted 26,428
</TABLE>
