16
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_____________
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15 (d) OF SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15 (d) OF SECURITIES EXCHANGE ACT OF 1943
For the transition period from _______ to _______
Commission file number 0-14897
Players International, Inc.
Nevada 95-4175832
(State or other jurisdiction (I.R.S. employer
of organization)incorporation identification no.)
1300 Atlantic Ave., Suite 800 Atlantic City, NJ 08401
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (609) 449-7777
Former name, former address and former fiscal year, if changed
since last report.
Indicate by check whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the registrant's
classes of common stock was 31,287,480 shares at February 14,
1997.
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Consolidated Balance Sheets at
December 31, 1996 and March 31, 1996 1
Condensed Consolidated Statements of
Operations for the Three and Nine
Months Ended December 31, 1996 and 1995 3
Condensed Consolidated Statements of
Cash Flows for the Nine Months
Ended December 31, 1996 and 1995 4
Notes to Condensed Consolidated
Financial Statements 5
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 4. Submission of Matters to a Vote
of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 15
Signature 16
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS
December 31, March 31,
1996 1996
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 16,006 $ 18,786
Marketable securities, net - 4,461
Accounts receivable, net of allowance
for doubtful accounts of $513 at
December 31, 1996 and $118 at March 4,286 4,541
31, 1996
Notes receivable 619 3,062
Inventories 3,152 2,719
Deferred income tax 2,969 2,970
Prepaid expenses and other current
assets 8,812 5,044
Total current assets 35,844 41,583
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and
amortization of $30,663 at December 290,198 279,916
31, 1996 and $23,078 at March 31, 1996
DEFERRED INCOME TAX - long-term 4,897 4,897
INTANGIBLES, net of accumulated
amortization of $2,349 at December 31,
1996 and $1,714 at March 31, 1996 36,415 37,126
INVESTMENT IN JOINT VENTURE 82,274 39,474
OTHER ASSETS 7,673 10,436
TOTAL ASSETS $ 457,301 $ 413,432
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except par value)
LIABILITIES AND STOCKHOLDERS' EQUITY
December March 31,
31, 1996 1996
(Unaudited)
CURRENT LIABILITIES:
Current portion of long -term debt $15,000 $-
Accounts payable 5,586 6,736
Accrued liabilities 22,265 32,432
Other liabilities 3,032 537
Total current liabilities 45,883 39,705
OTHER LONG-TERM LIABILITIES 29,424 27,100
LONG-TERM DEBT, net of current portion 185,000 153,000
STOCKHOLDERS' EQUITY:
Preferred stock, no par value,
Authorized--10,000,000 shares
Issued and outstanding--none - -
Common stock, $.005 par value,
Authorized--90,000,000 shares
Issued-31,959,580 at December 31, 160 149
1996 and 29,859,580 at March 31, 1996
Additional paid-in capital 129,260 123,719
Unrealized loss on marketable - (1)
securities, net of tax
Treasury stock, at cost; 672,100 shares (7,294) (7,294)
at December 31, 1996 and March 31, 1996
Retained earnings
74,868 77,054
Total Stockholders' Equity 196,994 193,627
TOTAL LIABILITIES AND STOCKHOLDERS' $ 457,301 $413,432
EQUITY
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(Unaudited)
For the Three Months For the Nine Months
Ended December 31, Ended December 31,
1996 1995 1996 1995
REVENUES:
Casino $58,105 $66,394 $197,617 $203,247
Food and beverage 3,195 3,246 10,604 8,416
Hotel 1,491 1,673 5,069 3,273
Other 2,057 1,413 5,576 3,698
64,848 72,726 218,866 218,634
COSTS AND EXPENSES:
Casino 28,270 27,937 89,951 82,178
Food and beverage 3,329 3,464 10,782 9,204
Hotel 690 940 2,320 1,858
Other operating expenses 8,834 10,305 27,955 25,666
Selling, general and 13,238 11,143 41,740 31,427
administrative
Corporate administrative 2,263 2,701 7,325 7,025
expenses
Pre-opening and gaming 1,660 3,179 4,954 11,174
development costs
Depreciation and 7,717 4,905 17,099 14,163
amortization
Restructuring charge - - 9,007 -
66,001 64,574 211,133 182,695
Income before other
income (expense) and
provision (benefit)
for income taxes (1,153) 8,152 7,733 35,939
OTHER INCOME (EXPENSE):
Interest income 27 1,187 194 5,370
Other income, net 11 315 76 692
Interest expense
(3,975) (4,224) (11,587) (11,576)
(3,937) (2,722) (11,317) (5,514)
Income (loss) before
provision (benefit) for
income taxes (5,090) 5,430 (3,584) 30,425
PROVISION (BENEFIT)
FOR INCOME TAXES (1,985) 2,118 (1,398) 11,866
NET INCOME (LOSS) $(3,105) $3,312 $(2,186) $18,559
EARNINGS (LOSS) PER
COMMON AND COMMON SHARE
EQUIVALENT
Primary $(0.10) $0.10 $(0.07) $0.57
Fully Diluted $(0.10) $0.10 $(0.07) $0.57
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES
Primary 30,562,870 31,743,708 30,751,992 32,282,100
Fully Diluted 30,362,391 31,743,708 30,380,799 32,283,354
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(Unaudited)
For the Nine Months
Ended December 31,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $(2,186) $18,559
Adjustments to reconcile net income/(loss)
to net cash provided by operating activities:
Depreciation and amortization 17,099 14,163
Amortization of bond premium/(discount) - (1,978)
Loss on disposition of property and 1,957 -
equipment
Other 618 205
Changes in assets and liabilities:
Accounts and notes receivable 2,140 (3,004)
Inventories, prepaid expenses and other (4,026) (4,995)
current assets
Other assets 1,096 (1,810)
Accounts payable and accrued liabilities (15,961) 556
9,500 (310)
Net cash provided by operating activities 10,237 21,386
CASH FLOWS FROM INVESTING ACTIVITIES:
Net purchases of property and equipment (33,626) (114,083)
Proceeds from disposal of property and 8,749 -
equipment
Purchase of marketable securities - (170,806)
Proceeds from sale of marketable securities 4,401 150,430
Investment in joint venture (42,800) (19,015)
Other (329) (350)
Net cash used in investing activities (63,605) (153,824)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 47,000 150,000
Payments of long-term debt - (9,132)
Debt issuance cost (1,963) (8,860)
Proceeds from exercise of stock options 5,599 1,260
Purchase of treasury stock - (5,834)
Other (48) (1)
Net cash provided by financing activities 50,588 127,433
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,780) (5,005)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 18,786 23,886
CASH AND CASH EQUIVALENTS AT END OF $16,006 $18,881
PERIOD
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $20,400 $9,209
Income taxes paid 4,127 12,805
Debt incurred to purchase land and - 667
equipment
Unrealized gain on marketable securities, - 342
net of tax
Accrued liabilities incurred to purchase - 31,743
property and equipment
Liabilities relating to costs in excess of - 494
fair value of tangible assets acquired
Land, property and equipment contributed to - 5,459
joint venture
PLAYERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to those rules and regulations. It is suggested that
these condensed consolidated financial statements be read in
conjunction with the financial statements and the notes thereto
included in the Company's Form 10-K for the year ended March 31,
1996. In the opinion of management, all adjustments (which
include normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows of
all periods presented have been made.
The results of operations for the nine month period ended
December 31, 1996, are not necessarily indicative of the
operating results for the full year.
Certain reclassifications have been made to the financial
statements as previously presented to conform to current
classifications.
Note 2 - Casino Revenues and Promotional Allowances
Casino revenues are the net of gaming wins less losses.
Revenues exclude the retail value of complimentary food and
beverage, hotel accommodations and other items furnished to
customers, which totaled approximately $6,634,000 and $5,718,000,
and $20,251,000 and $15,423,000 for the three and nine months
ended December 31, 1996 and 1995, respectively.
The estimated cost of providing such complimentary services
are included in casino costs and expenses through inter-
department allocations from the department granting the services
as follows (dollars in thousands):
For the Three Months For the Nine Months
Ended December 31, Ended December 31,
1996 1995 1996 1995
Food and beverage $4,854 $ 4,086 $15,922 $10,872
Hotel 371 - 897 -
Admissions and other 439 948 1,094 2,844
$5,664 $5,034 $17,913 $13,716
Note 3 - Pre-opening and Gaming Development Costs
All costs in connection with the identification and
development of new gaming jurisdictions and sites are expensed,
except for the cost of property and equipment which is
capitalized.
Note 4 - Primary and Fully Diluted Shares
Per share amounts have been computed based on the weighted
average number of outstanding shares and common stock
equivalents, if dilutive, during each period. A summary of the
number of shares used in computing primary earnings per share
follows:
For the Three Months For the Nine Months
Ended December 31, Ended December 31,
1996 1995 1996 1995
Weighted average 29,380,359 29,856,733 29,252,007 29,845,154
number of shares
outstanding
Dilutive effect of 1,182,511 1,886,975 1,499,985 2,436,946
options and warrants
Shares used in 30,562,870 31,743,708 30,751,992 32,282,100
computing primary
earnings per share
For the Three Months For the Nine Months
Ended December 31 Ended December 31,
1996 1995 1996 1995
Weighted average 29,380,359 29,856,733 29,252,007 29,845,154
number of shares
outstanding
Dilutive effect of 982,032 1,886,975 1,128,792 2,438,200
options and warrants
Shares used in 30,362,391 31,743,708 30,380,799 32,283,354
computing fully
diluted earnings
per share
Note 5 - Long-Term Debt
On August 25, 1995, the Company entered into a $120,000,000
revolving credit agreement (the "Credit Facility") with a
consortium of banks (the "Banks). In October 1996, the Company
informed the banks party to the Credit Facility that it had not
achieved the $65 million level of earnings before interest,
taxes, depreciation and amortization for the four consecutive
quarters ended September 30, 1996 as required by the covenants of
the Credit Facility, and thus was in default under the Credit
Facility. The Banks temporarily waived such default and in
December 1996, the Company and the Banks reached an agreement
that revised the terms of the Credit Facility (the "Amended and
Restated Credit Agreement"). The terms of the Amended and
Restated Credit Agreement provide for borrowings for construction
of the Company's joint venture casino hotel facility in Maryland
Heights, Missouri, of up to $60 million at prime plus 2.5% and
borrowings up to an additional $40 million at prime plus 5.5%.
As a result of these revisions, the Company expensed $2.7 million
of unamortized loan acquisition costs relating to the Credit
Facility. Costs associated with the Amended and Restated Credit
Agreement have been deferred and will be amortized over the
remaining life of the agreement.
Long-term debt at December 31, 1996 consisted of
$150,000,000 in 10-7/8% Senior Notes due 2005 and $50,000,000
(including current portion) outstanding under the Amended and
Restated Credit Agreement. Under the Amended and Restated Credit
Agreement financial covenant ratios, the Company has sufficient
borrowing capacity to complete its Maryland Heights project.
Note 6 - Subsequent Events
The Company entered into a letter of intent (the "Letter of
Intent") on January 28, 1997, concerning the potential sale of
the Company's Mesquite, Nevada casino resort (the "Mesquite
Property").
Although the Letter of Intent generally is not binding, the
following terms are binding upon the parties: the Company has
the right to invite, entertain, negotiate and/or accept offers
from other parties for the sale or other disposition of the
Mesquite Property until February 27, 1997 (the "30-Day Period");
the Company may terminate, prior to expiration of the 30-Day
Period, the Letter of Intent and any definitive agreement to be
negotiated and executed if the Company determines not to proceed
with the sale of the Mesquite Property, however, the Company may
be obligated to pay certain fees if the Company sells the
Mesquite Property to a third party under certain circumstances.
Definitive transaction terms have not been documented or
executed.
The transaction, if pursued, is subject to regulatory
approval, the receipt of all necessary third party consents,
including release of the property by the consortium of Banks
participating in the Amended and Restated Credit Agreement, and
the approval of the Company's Board of Directors. The carrying
value of the property was approximately $84.5 million at December
31, 1996. If the transaction contemplated by the Letter of
Intent is consummated, the Company expects to report a material
after-tax loss on the disposition of the Mesquite Property. In
addition, sale proceeds must be used in accordance with terms of
the Amended and Restated Credit Agreement.
Even if the transaction is not consummated, as a result of
these events and circumstances the Company has determined that
the property has been permanently impaired. Accordingly, the
Company is currently evaluating the amount of the permanent
impairment which is expected to be recorded in the fourth quarter
ended March 31, 1997, and could be in the range of $20 million to
$40 million on an after-tax basis. The recording of this
impairment will necessitate further amendments to the Amended and
Restated Credit Agreement in regards to certain financial
covenants.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Company operates gaming, resort and entertainment
facilities. These include a riverboat casino in Metropolis,
Illinois, two riverboat casinos in Lake Charles, Louisiana and a
land-based casino resort in Mesquite, Nevada. The Company also
owns and operates a thoroughbred racetrack in Paducah, Kentucky.
A joint venture riverboat casino entertainment complex in
Maryland Heights, Missouri, is presently under construction.
The Company's fiscal year ends on March 31. References to
the third quarter of 1997 or 1996, mean the three month periods
ended December 31, 1996 and December 31, 1995, respectively.
Comparison of Operating Results for the Three Month periods ended
December 31, 1996 and 1995
Results of Operations
Financial Highlights
% Increase
Three months ended December 31, 1996 1995 (Decrease)
31
(Dollars in thousands, except per share amounts)
Casino revenues
Metropolis $18,976 $21,079 (10.0)%
Lake Charles 33,341 39,946 (16.5)%
Mesquite 5,788 5,369 7.8%
$58,105 $66,394 (12.5)%
Total revenues
Metropolis $19,847 $22,010 (9.8)%
Lake Charles 35,023 41,213 (15.0)%
Mesquite 9,546 9,014 5.9%
Other 432 489 (11.7)%
$64,848 $72,726 (10.8)%
Operating income (loss)
Metropolis $5,803 $7,595 (23.6)%
Lake Charles 2,857 11,644 (75.5)%
Mesquite (2,323) (2,930) 20.7%
Corporate, development (7,490) (8,157) 8.2%
and pre-opening expenses
($1,153) $8,152 (114.1)%
Operating margin (operating
income/total revenues)
Metropolis 29.2% 34.5% (5.3) pts.
Lake Charles 8.2% 28.3% (20.1) pts.
Mesquite (24.3)% (32.5)% 8.2 pts.
Consolidated (1.8)% 11.2% (13.0) pts.
Depreciation and amortization $7,717 $4,905 57.3%
Interest expense, net $3,948 $3,037 30.0%
Net income (loss) ($3,105) $3,312 (193.7)%
Net income (loss) per share ($0.10) $0.10 (200.0)%
The approximate 13% decrease in casino revenues and 11%
decrease in total revenues during the 1997 third quarter versus
the prior year period, resulted from an increase in competing
riverboat casino capacity in both the Metropolis and Lake Charles
markets as well as competition from more distant casinos in
Tunica, Mississippi and St. Louis, Missouri. A competing
riverboat casino opened in Evansville, Indiana, in December 1995
and in Lake Charles a competitor opened its second riverboat in
July 1996.
Operating income for the three months ended December 31,
1996, decreased approximately 114% from the same period in 1995.
The 24% and 76% declines in Metropolis and Lake Charles,
respectively, resulted from a decline in casino revenues at both
properties coupled with increased expenditures for advertising,
marketing, promotions and entertainment incurred in response to
the additional competition. In Lake Charles, operating expenses
also increased as a result of the February 1996 opening of a
60,000 square foot floating entertainment "Island", which added
significant dining and entertainment capacity.
The 21% reduction in Mesquite's operating loss for the three
months ended December 31, 1996, was due to a modest increase in
revenue and increased operating efficiency, primarily the result
of lower food and beverage expenses.
The 57% increase in depreciation and amortization expense is
primarily the result of a $2.7 million write-off of the
unamortized loan acquisition costs relating to the Credit
Facility.
Other Factors Affecting Net Income
Net interest expense increased by 30%, to $3.9 million, for
the three months ended December 31, 1996, versus the same period
in 1995. Interest income decreased by approximately $1 million
as a result of the decrease in investable funds resulting from
the increased investments in the Maryland Heights project and the
Mesquite golf course development. Interest cost reflects the
$150 million, 10-7/8% Senior Notes issued in April 1995,
borrowings under a $120 million revolving bank credit agreement
(the "Credit Facility") entered into in August 1995, as amended
and restated in December 1996, (totaling $50 million as of
December 31, 1996) and imputed interest associated with the
August 1995 acquisition of the Downtowner Hotel in Lake Charles.
Capitalized interest increased by approximately $900,000 in the
third quarter of 1997, to $1.9 million, due to the ongoing
investment in the Maryland Heights project and the development of
the Mesquite golf course.
Comparison of Operating Results for the Nine Month periods ended
December 31, 1996 and 1995
Results of Operations
Financial Highlights
% Increase
Nine Months ended December 31, 1996 1995 (Decrease)
(Dollars in thousands, except per share amounts)
Casino revenues
Metropolis $58,513 $64,042 (8.6)%
Lake Charles 122,096 128,263 (4.8)%
Mesquite 17,008 10,942 55.4%
$197,617 $203,247 (2.8)%
Total revenues
Metropolis $61,033 $66,967 (8.9)%
Lake Charles 128,398 132,116 (2.8)%
Mesquite 28,356 18,346 54.6%
Other 1,079 1,205 (10.5)%
$218,866 $218,634 (.1)%
Operations income (loss)
Metropolis $17,652 $24,363 (27.5)%
Lake Charles 21,342 38,950 (45.2)%
Mesquite (5,423) (6,325) 14.3%
Corporate, development and
pre-opening expenses (16,831) (21,049) 20.0%
Restructuring charge (9,007) - -
$7,733 $35,939 (78.5)%
Operating Margin (operating
income/total revenues)
Metropolis 28.9% 36.4% (7.5) pts.
Lake Charles 16.6% 29.5% (12.9) pts.
Mesquite (19.1)% (34.5)% 15.4 pts.
Consolidated, excl.
restructuring charge 7.7% 16.4% (8.7) pts.
Consolidated 3.5% 16.4% (12.9) pts.
Depreciation and
amortization $17,099 $14,163 $20.7%
Interest expense, net $11,393 $6,206 83.6%
Net income, excl.
restructuring charge $3,308 $18,559 (82.2)%
Net income $(2,186) $18,559 (111.78)%
Net income per share, excl.
restructuring charge $0.11 $0.57 (80.1)%
Net income per share $(0.07) $0.57 (112.3)%
The 9% decrease in casino revenues and total revenues in
Metropolis during the nine months ended December 31, 1996, versus
the same period in 1995, resulted from the opening of a competing
riverboat casino in Evansville, Indiana. Casino and total
revenues in Mesquite increased 55% in the nine months ended
December 31, 1996. The Mesquite casino resort opened on June 29,
1995. As such, it had nine months of operations in the current
period compared to just over six months of operations in the
prior year period. The decrease in total revenues in Lake Charles
during the nine months ended December 31, 1996 versus the same
period in 1995, resulted from the opening of a competitor's
second riverboat in July 1996.
Operating income for the nine months ended December 31,
1996, excluding the restructuring charge, decreased approximately
53% from the same period in 1995. The 28% and 45% declines in
Metropolis and Lake Charles, respectively, resulted from declines
in casino revenues at both properties coupled with increased
expenditures for advertising, marketing, promotions and
entertainment incurred in response to additional competition. In
Lake Charles, operating expenses also increased as a result of
the February 1996 opening of the entertainment "Island."
Additionally, the per passenger tax paid to the local government
in Lake Charles was increased by $.50 in August 1995.
The approximately 14% reduction in Mesquite's operating loss
for the nine months ended December 31, 1996, versus the same
period in 1995, was due to increased operating efficiency,
primarily the result of lower food and beverage expenses. In
addition, Mesquite opened an 18-hole championship golf course in
October 1996.
Corporate, development and pre-opening expenses declined by
approximately 20% in the nine months ended December 31, 1996,
versus the same period in 1995, primarily due to the opening of
the Mesquite property in late June of 1995 with a subsequent
reduction in pre-opening expenses combined with the cessation of
new development activities.
The restructuring charge, which was incurred in the second
quarter, reflects the Company's decision to significantly reduce
its pursuit of development opportunities in new or emerging
jurisdictions and instead concentrate on improving its existing
operations. This resulted in the sale of the Players I riverboat
which was previously held for future deployment and a corporate
aircraft, the closure of two development offices and the
retirement or termination of 21 senior management and staff. The
affected employees included those specifically responsible for
the Company's developmental activities and others affected by the
Company's revised business plan. The one-time charge consists
principally of the net loss on the disposal of assets held for or
used in development activities and the cost of employee severance
arrangements.
The 21% increase in depreciation and amortization expense is
primarily the result of a $2.7 million write-off of the
unamortized loan acquisition costs relating to the Credit
Facility.
Other Factors Affecting Net Income
Net interest expense increased by approximately $5.2 million
for the nine months ended December 31, 1996, versus the same
period in 1995. Interest income declined by approximately $5.2
million, as a result of the decrease in investable funds
resulting from the increased investments in the Maryland Heights
project and the Mesquite golf course development. The increased
interest cost reflects the $150 million, 10-7/8% Senior Notes
issued in April 1995, increased borrowings under the credit
facility entered into in August 1995, as revised and amended in
December 1996, (totaling $50 million as of December 31, 1996) to
fund the Maryland Heights project and imputed interest associated
with the August 1995 acquisition of the Downtowner Hotel in Lake
Charles. Capitalized interest increased by approximately $3.4
million, to $4.7 million, due to the ongoing investment in
Maryland Heights and the development of the Mesquite golf course.
Forward Looking Information
Amendments to the Credit Facility in December 1996 will give
rise to increased borrowing costs going forward. Borrowing costs
under Tranche A of the Credit Facility will increase to prime
plus 2.5%, which will be applicable to a maximum of $60 million
in borrowings. Additional borrowings of up to $40 million will
carry interest and costs in excess of Tranche A levels. See
"Capital Resources, Capital Spending and Liquidity-Recent
Developments", which is incorporated by reference as though set
forth herein.
The Company is nearing completion of the Maryland Heights
project and, subject to receipt of final regulatory approvals,
such project is expected to open in March 1997.
Certain information included in this section and elsewhere
in this Quarterly Report on Form 10-Q contains, and other
materials filed or to be filed by the Company with the Securities
and Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by the
Company) contain or will contain or include, forward-looking
statements within the meaning of Section 21E of the Securities
and Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933, as amended. Such forward-looking
statements, address, among other things, the effects of
competition, the potential sale of the Mesquite property, future
borrowing costs and capital costs, plans for future expansion and
property enhancements, business development activities, capital
expenditure programs and requirements, financing sources and the
effects of regulation (including gaming licensure and regulation,
state and local regulation and tax regulation). Such forward-
looking information is based upon management's current plans or
expectations and is subject to a number of uncertainties and
risks that could significantly affect current plans, anticipated
actions and the Company's future financial condition, liquidity
and results. As a consequence, current plans, anticipated
actions and future financial condition, liquidity and results may
differ from those expressed in any forward-looking statements
made by or on behalf of the Company. These uncertainties and
risks include, but are not limited to, conducting operations in
an increasingly competitive environment, the availability and
cost of funds in an increasingly competitive industry, conducting
operations at a newly or recently developed site or in a
jurisdiction for which gaming has recently been permitted,
changes in gaming , state and local laws and regulations,
development and construction activities, leverage and debt
service requirements (including sensitivity to fluctuations in
interest rates), general economic conditions, changes in federal
or state tax laws, action taken under applications for licenses
(including renewals) and approvals under applicable laws and
regulations (including gaming laws and regulations) and the
legalization of gaming in certain jurisdictions.
Capital Resources, Capital Spending and Liquidity
During the nine months ended December 31, 1996, cash flow
from operations and $47 million in borrowings from the Credit
Facility were the sources of funds for capital expenditures, debt
service and other corporate requirements. During the comparable
period in 1995, the primary source of funds for such purposes was
the proceeds from the April 1995 issuance of $150 million of 10-
7/8% Senior Notes.
Operating activities provided $10.2 million in cash in the
current nine month period versus $21.4 million in the prior
period. The decrease is primarily attributable to the decline in
net income.
Capital expenditures during the nine months ended December
31, 1996, totaled $33.6 million, primarily for the development of
a golf course in Mesquite, which opened in October 1996, and
maintenance capital spending at the Company's three major
operating facilities. In addition, the Company invested $42.8
million in the unconsolidated Maryland Heights joint venture.
Capital expenditures during the comparable 1995 period totaled
$114.1 million, which consisted principally of the final
construction costs for Players Island Resort in Mesquite and the
addition of a second riverboat in Lake Charles.
Recent Developments
The Company and the banks (the "Banks") participating in the
Company's Credit Facility agreed on December 16, 1996 to amend
certain financial covenants and establish three separate
borrowing tranches with total credit availability of $120 million
(the "Amended Credit Agreement"). Tranche A has $60 million of
borrowing availability, of which $50 million was outstanding at
an interest rate of prime plus 2.5% as of December 31, 1996. No
amounts were drawn under Tranche B or C as of December 31, 1996.
$40 million is currently available under Tranche B at an interest
rate of prime plus 5.5% for construction of the Maryland Heights
project. No borrowing is currently available under Tranche C.
If any amounts are borrowed under Tranche B, the Company will
become obligated to pay a repayment incentive fee upon the
repayment of the entire amount outstanding under the Credit
Facility which increases from $1 million prior to March 31, 1997
up to $4 million prior to March 31, 1998. On April 1, 1998, if
the repayment incentive fee has not been previously paid in
connection with repayment of the entire Credit Facility amount,
the Company will be obligated to pay to the Banks an amount equal
to the increase in the Company's stock price (over a period
extending up to December 31, 2005) over the stock price at the
time of the first draw down under the B Tranche multiplied by six
percent of the common shares outstanding. The Company paid the
Banks a fee of $1.5 million in connection with entering into the
Amended Credit Agreement, will be obligated to pay a Tranche B
facility fee of $800,000 if any Tranche B borrowings are drawn
and is obligated to pay an unused commitment fee of .5% per annum
under the Amended Credit Agreement.
The Company has announced that it has signed a letter of
intent for the sale of its Mesquite Property. In connection with
such sale, the Company has commenced negotiations with the Banks
regarding the requisite release of such property as collateral
under the Amended Credit Agreement. It is anticipated that, in
the event such a sale is consummated, the borrowing availability
under Tranche B will be reduced by the amount of net proceeds of
such sale.
Although the Letter of Intent generally is not binding, the
following terms are binding upon the parties: the Company has
the right to invite, entertain, negotiate and/or accept offers
from other parties for the sale or other disposition of the
Mesquite Property until February 27, 1997 (the "30-Day Period");
the Company may terminate, prior to expiration of the 30-Day
Period, the Letter of Intent and any definitive agreement to be
negotiated and executed if the Company determines not to proceed
with the sale of the Mesquite Property, however, the Company may
be obligated to pay certain fees if the Company sells the
Mesquite Property to a third party under certain circumstances.
Definitive transaction terms have not been documented or
executed.
Even if the transaction is not consummated, as a result of
these events and circumstances the Company has determined that
the property has been permanently impaired. Accordingly, the
Company is currently evaluating the amount of the permanent
impairment which is expected to be recorded in the fourth quarter
ended March 31, 1997, and could be in the range of $20 million to
$40 million on an after-tax basis. The recording of this
impairment will necessitate further amendments to the Amended and
Restated Credit Agreement in regards to certain financial
covenants.
Also in connection with the foregoing, the Company has
commenced negotiations with the Banks and one or more third
parties regarding the provision of certain short term financing
of up to $10 million in lieu of drawings under Tranche B. Such
Interim Financing ("Interim Financing") would be used to fund
completion of the Maryland Heights Project. It is presently
anticipated that such Interim Financing would bear interest at
the same rate as Tranche B and would provide for an incentive fee
of up to 10% of the amount of the maximum amount of such Interim
Financing if no borrowings under Tranche B are made by the
Company. Any borrowings under such Interim Financing would be
repayable upon demand by the lender in certain circumstances and
in such event would be repaid by the Company by drawing upon
Tranche B.
The Company's portion of the Maryland Heights project is
expected to cost approximately $140 million, excluding
capitalized interest. As of December 31, 1996, the Company had
funded approximately $95 million of this amount. The Company
anticipates that borrowings under the Amended Credit Agreement
and cash flow from operations will be sufficient to fund the
completion and opening of the Maryland Heights project.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company has the following developments to report
concerning outstanding legal matters previously reported:
Poulos, Ahern and Schreier Litigation
The Company, certain suppliers and distributors of video
poker and electronic slot machines and over forty other casino
operators have been named as defendants in a class action suit
filed April 26, 1994 in the United States District Court, Middle
District of Florida, by William Ahern and William H. Poulos. The
plaintiffs allege common law fraud and deceit, mail fraud, wire
fraud and Racketeer Influenced and Corrupt Organizations Act
violations in the marketing and operation of video poker games
and electronic slot machines. The suit seeks unspecified damages
and recovery of attorney's fees and costs.
On or about October 27, 1995 the Company was served with a
purported class action in the United States District Court for
the District of Nevada by Larry Schreier which is essentially
identical to the Poulos and Ahearn litigation, except for certain
variations in the definition of the purported class. The Poulos
and Ahern litigation has been consolidated with the Schreier
litigation.
On December 9, 1994, an Order was entered by the District
Court in Florida transferring the consolidated action to the
United States District Court for the District of Nevada. Pretrial
discovery and motions are currently underway. The Company
believes that the claims are wholly without merit and does not
expect that the lawsuit will have a material adverse effect on
the Company's financial position or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
On November 14, 1996, the annual meeting of the Registrant's
Stockholders was held and current directors were re-elected. The
directors for fiscal year 1997 are Lawrence Cohen, Edward
Fishman, Thomas E. Gallagher, Marshall S. Geller, Howard A.
Goldberg, Jay M. Green, Charles M. Masson, Lee Seidler and Earl
E. Webb. On the record date fixed for the annual meeting,
stockholders holding 29,187,444 shares of the Registrant's Common
Stock were entitled to vote. Present at the meeting in person or
by proxy were stockholders holding 28,523,278 shares of Common
Stock.
Item 6. Exhibits and Reports on Form 8-K
Exhibits Filed with this Form 10-Q
Exhibit No. Exhibit Description
10.1 Amended and Restated Credit Agreement, dated as
of December 16, 1996, among the Company and the
Lenders party thereto, Wells Fargo Bank, N.A.,
Bankers Trust Company and BT Securities
Corporation.
27.0 Financial Data Schedule
Reports on Form 8-K Filed During Quarter
The Company's Current Report on Form 8-K filed with the
Securities and Exchange Commission on February 3, 1997 concerned
third quarter earnings, the Letter of Intent for the Mesquite
Property, and the Board of Directors' adoption of a Stockholders
Rights Plan, subject to regulatory approval.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
PLAYERS INTERNATIONAL, INC.
Date: February 18, 1997 By: /s/ Henry M. Applegate
Henry M. Applegate, Senior Vice
President, Chief Financial Officer
and Chief Accounting Officer
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123
EXHIBIT 10.1
This document was copied from LA1-660336.v26, the execution
version of the Credit Agreement. That version was then revised
to reflect the First Amendment to the Credit Agreement.
Subsequent versions have been revised for this deal.
PLAYERS INTERNATIONAL, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of December 16, 1996 and entered into by and among PLAYERS
INTERNATIONAL, INC., a Nevada corporation, as the borrower
("Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each individually referred to herein as a "Lender"
and collectively as "Lenders"), WELLS FARGO BANK, N.A. (successor
in interest by merger with First Interstate Bank of Nevada, N.A.)
("WFB," and, in its capacity as administrative agent for Lenders,
"Administrative Agent"), as a Lender, Administrative Agent, a
Managing Agent and a Co-Arranger, BANKERS TRUST COMPANY ("BTCo,"
in its capacity as managing agent for Lenders, a "Managing
Agent", and, collectively with WFB, the "Managing Agents"), as a
Lender and as a Managing Agent, and BT SECURITIES CORPORATION
("BT SECURITIES," in its capacity as Co-Arranger, a "Co-
Arranger," and, collectively with WFB, the "Co-Arrangers").
PRELIMINARY STATEMENTS
A. Company, Lenders, Administrative Agent, Managing
Agents and Co-Arrangers are parties to that certain Credit
Agreement dated as of August 25, 1995, as amended by that certain
First Amendment to Credit Agreement dated as of August 7, 1996
(as so amended, the "Existing Credit Agreement").
B. Company, Lenders, Administrative Agent, Managing
Agents and Co-Arrangers desire to amend and restate the Existing
Credit Agreement in its entirety in order to provide, among other
things, that (i) the Revolving Commitments under the Existing
Credit Agreement, in the aggregate amount of $120,000,000, shall
be converted into Tranche A Commitments in the aggregate amount
of $60,000,000, Tranche B Commitments in the aggregate amount of
$40,000,000, and Tranche C Commitments in the aggregate amount of
$20,000,000; (ii) on the Effective Date, all outstanding
Revolving Loans under the Existing Credit Agreement shall be
converted into Tranche A Loans hereunder; (iii) the interest
rates payable on the Loans and the unused Commitment fee shall be
revised as set forth herein; (iv) the scheduled reductions in
Commitments shall be revised as set forth herein; (v) the
financial covenants shall be revised as set forth herein; and
(vi) the terms and provisions of the Existing Credit Agreement
shall otherwise be modified as set forth herein.
C. Company agrees that its existing pledge and grant
of a security interest in substantially all of its present and
future real and personal property will continue as security for
the payment and performance of the Obligations of Company.
D. Company agrees that its existing pledge of all of
its capital stock in each of its Subsidiaries, whether now
existing or hereafter created or acquired, will continue as
security for the payment and performance of the Obligations of
Company.
E. Company agrees to cause Players Holding, Inc., to
guaranty the Obligations hereunder and to pledge all its capital
stock in each of its Subsidiaries, whether now existing or
hereafter created or acquired, as security for such guaranty.
F. Company agrees to cause each of its Subsidiaries
to confirm and agree that (i) its existing guaranty of the
obligations of Company under the Existing Credit Agreement will
continue as a guaranty of the Obligations hereunder and (ii) its
existing grant of a security interest in substantially all of its
assets to secure such guaranty will continue as security for the
payment and performance of such guaranty.
G. All modifications to the Existing Credit Agreement
and the other Loan Documents made hereby require the concurrence
of Requisite Lenders and the Loan Parties and such concurring
Requisite Lenders are identified as such on the signature pages
hereof (all non-concurring Lenders being identified on the
signature pages to indicate their names and addresses of record).
NOW, THEREFORE, in consideration of the premises and
the agreements, provisions and covenants herein contained,
Company, Lenders, Administrative Agent, Managing Agents and Co-
Arrangers agree that the Existing Credit Agreement shall be
amended and restated, without novation, as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have
the following meanings:
"Acknowledgement and Confirmation" means an
Acknowledgement and Confirmation Agreement dated as of the
Effective Date, substantially in the form of Exhibit X hereto,
pursuant to which each Guarantor shall acknowledge and confirm
that its obligations under the Guaranty and the Collateral
Documents to which it is a party shall continue to guaranty or
secure, as the case may be, the Obligations of Company hereunder,
as such Acknowledgement and Confirmation Agreement may hereafter
be amended, supplemented or otherwise modified from time to time.
"Acknowledgement and Estoppel Agreements" means those
certain Acknowledgement and Estoppel Agreements by various owners
of certain portions of the Premises, each as a landlord, and
certain of Company's Subsidiaries, each as a tenant, pursuant to
which each landlord thereto acknowledges the existence of
Administrative Agent as leasehold mortgagee and certifies the
validity of the leasehold interest held by the applicable
Subsidiary of Company.
"Administrative Agent" means WFB.
"Affiliate", as applied to any Person, means any other
Person directly or indirectly controlling, controlled by, or
under common control with, that Person. For the purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means (i) the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or
otherwise or (ii) the beneficial ownership of 10% or more of any
class of voting capital stock of a Person (on a fully diluted
basis) or of warrants or other rights to acquire such class of
capital stock (whether or not presently exercisable).
"Agreement" means this Amended and Restated Credit
Agreement dated as of December 16, 1996, as it may be amended,
supplemented or otherwise modified from time to time.
"Allocated Costs of Internal Counsel" means, as of any
date of determination, the internal costs imputed to in-house
counsel employed by Administrative Agent for the review,
negotiation, preparation, execution and administration of the
Loan Documents, as based on the time records submitted to Company
within 90 days of the services performed by such counsel at an
hourly rate not to exceed the then prevailing market rate in Los
Angeles, California for an attorney with a minimum of ten years
experience in financing transactions.
"Applicable Base Rate Margin" means, as of any date of
determination, (i) for Tranche A Loans, a percentage per annum
equal to 2.50%, (ii) for Tranche B Loans, a percentage per annum
equal to 5.50%, (iii) for Tranche C Loans, a percentage per annum
equal to 2.50% and (iv) for Swing Line Loans, a percentage per
annum equal to 2.00%.
"Assessment" means the obligation of any Person that
owns an equity interest in any legal entity to pay or contribute
additional capital to such entity, whether such obligation arises
on a scheduled basis or upon the occurrence of one or more
contingent events.
"Asset Sale" means the sale by Company or any of its
Subsidiaries to any Person other than Company or any of its
wholly-owned Subsidiaries of (i) any of the stock of any of
Company's Subsidiaries, (ii) 50% or more of the assets of Company
or any of its Subsidiaries, or (iii) any other assets used or
useful in the operations of Company or its Subsidiaries (whether
tangible or intangible) outside of the ordinary course of
business.
"Assumption Agreement" means that certain Assumption
Agreement between PLC and Administrative Agent dated as of the
date hereof, substantially in the form of Exhibit XIX, as such
agreement may be amended from time to time.
"Bankruptcy Code" means Title 11 of the United States
Code entitled "Bankruptcy", as now and hereafter in effect, or
any successor statute.
"Barges" means all barges located at or used in
connection with the Illinois Facilities or the Louisiana
Facilities, whether owned on the date hereof or subsequently
acquired, including, without limitation, all barges that are
documented, registered or certified pursuant to the laws of the
State of Illinois or the State of Louisiana.
"Base Rate" means, at any time, the higher of (x) the
Prime Rate or (y) the rate which is 1/2 of 1% in excess of the
Federal Funds Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in
subsection 2.2A.
"Best Knowledge" means, as applied to Company, (i)
actual knowledge by any Responsible Officer of any fact or (ii)
imputed knowledge of any fact which should, upon the reasonable
exercise of diligence (appropriate for the circumstance in
question) by any such Responsible Officer in his or her
employment position, have been known.
"BTCo" has the meaning assigned to that term in the
first paragraph of this Agreement.
"BT Securities" has the meaning assigned to that term
in the first paragraph of this Agreement.
"Business Day" means any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State
of California and New Jersey or is a day on which banking
institutions located in such state are authorized or required by
law or other governmental action to close.
"Capital Lease," as applied to any Person, means any
lease of any property (whether real, personal or mixed) by that
Person as lessee that, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of that Person.
"Cash" means money, currency or a credit balance in a
Deposit Account.
"Cash Equivalents" means, as at any date of
determination, (i) marketable securities (a) issued or directly
and unconditionally guaranteed as to interest and principal by
the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing
within one year after such date; (ii) marketable direct
obligations issued by any state of the United States of America
or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year
after such date and having, at the time of the acquisition
thereof, the highest rating obtainable from either Standard &
Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc.
("Moody's"); (iii) commercial paper maturing no more than one
year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at
least P-1 from Moody's; (iv) certificates of deposit or bankers'
acceptances maturing within one year after such date and issued
or accepted by any Lender or by any commercial bank organized
under the laws of the United States of America or any state
thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its
primary Federal banking regulator) and (b) has Tier 1 capital (as
defined in such regulations) of not less than $100,000,000; and
(v) shares of any money market mutual fund that (a) has at least
95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has
net assets of not less than $500,000,000, and (c) has the highest
rating obtainable from either S&P or Moody's.
"Cash Proceeds" means Cash payments (including any Cash
received by way of deferred payment pursuant to, or monetization
of, a note receivable or otherwise, but only as and when so
received) and Cash Equivalents received by Company or any of its
Subsidiaries from any Asset Sale or upon the occurrence of an
Event of Loss.
"Change of Control" means (i) any Person or "group"
(within the meaning of Section 13(d)(3) of the Exchange Act)
shall have acquired "beneficial ownership" (within the meaning of
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Company representing 20% or more of the combined
voting power of all securities of Company entitled to vote in the
election of directors; or (ii) during any period of up to 12
consecutive months, commencing before or after the date of this
Agreement, individuals who at the beginning of such 12-month
period were directors of Company shall cease for any reason to
constitute a majority of the Board of Directors of Company; or
(iii) any Person or "group" shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement
that upon consummation shall result in its or their acquisition
of or control over, securities of Company representing 20% or
more of the combined voting power of all securities of Company
entitled to vote in the election of directors; provided that a
Change of Control shall not be deemed to occur under clauses (i)
or (iii) above if the Person referred to in either such clause is
an Excluded Person, or the "group" referred to in either such
clause consists exclusively of two or more Excluded Persons,
unless (x) the transaction or series of transactions that creates
the Change of Control is subject to Rule 13e-3 under the Exchange
Act or any similar or successor rule and (y) immediately prior to
and during the 180-day period following either (1) such
transaction or series of transactions referred to in clause (x),
or (2) the time that any such Excluded Person or "group"
consisting exclusively of two or more Excluded Persons shall have
acquired "beneficial ownership", directly or indirectly, of 20%
or more of such total voting power, as referred to in clause
(iii), the Senior Notes are or become rated, in the case of
clause (1) or (2), "B+" or below by S&P and "B1" or below by
Moody's or, if either such rating agency or both such rating
agencies shall no longer make a rating of the Senior Notes
publicly available, the comparable ratings of another nationally
recognized securities rating agency or agencies, as the case may
be, selected by Company, which shall be substituted for S&P or
Moody's or both, as the case may be; provided further that the
180-day period referred to in clause (y) shall be extended for so
long as the rating of the Senior Notes is under publicly
announced consideration for possible downgrade by any such rating
agency.
"Co-Arranger" means either of WFB or BT Securities and
"Co-Arrangers" means WFB and BT Securities, collectively.
"Collateral" means all the real, personal and mixed
property made
subject to a Lien pursuant to the Collateral Documents.
"Collateral Account" has the meaning assigned to that
term in the Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral
Account Agreement dated as of August 25, 1995, executed and
delivered pursuant to the Existing Credit Agreement, pursuant to
which Company may pledge cash to Administrative Agent to secure
the obligations of Company to reimburse Administrative Agent for
payments made under one or more Letters of Credit as provided in
Section 8, as such Collateral Account Agreement has been amended
to the date hereof and as it may hereafter be amended,
supplemented or otherwise modified from time to time.
"Collateral Assignment Agreement" means that certain
Collateral Assignment Agreement between PMGC and Administrative
Agent dated as of August 25, 1995, executed and delivered
pursuant to the Existing Credit Agreement, as it has been amended
to the date hereof and as it may hereafter be amended,
supplemented or otherwise modified, from time to time.
"Collateral Documents" means the Mortgages, the Ship
Mortgages, the Guaranty, the PHI Guaranty, the Company Security
Agreement, the Subsidiary Security Agreements, the Company Pledge
Agreements, the LLC Membership Interest Security Agreements, the
Partnership Interest Security Agreements, the Resources Pledge
and Security Agreement, the Collateral Assignment Agreement,
documentation relating to the "Cash Concentration Account"
referred to in subsection 6.13 and all other instruments or
documents now or hereafter granting Liens on property of Company
or any of its Subsidiaries to Administrative Agent for benefit of
Lenders.
"Commitments" means the commitments of Lenders to make
Loans as set forth in subsection 2.1A, and the "Commitments" of
any Lender means the commitments of such Lender to make Loans as
set forth in subsection 2.1A.
"Commitment Termination Date" means June 30, 2000.
"Company" means Players International, Inc., a Nevada
corporation.
"Company Pledge Agreements" means those certain Pledge
Agreements between Company and Administrative Agent dated August
25, 1995 executed and delivered pursuant to the Existing Credit
Agreement, as each such agreement has been amended to the date
hereof and as each such agreement may hereafter be amended,
supplemented or otherwise modified, from time to time.
"Company Security Agreement" means that certain
Security Agreement between Company and Administrative Agent dated
August 25, 1995, executed and delivered pursuant to the Existing
Credit Agreement, as it has been amended to the date hereof and
as it may hereafter be amended, supplemented or otherwise
modified, from time to time.
"Completion of Construction Date" means, with respect
to the Maryland Heights Facility, the date on which the Company
delivers to Administrative Agent (A) certification acceptable to
Administrative Agent in its sole discretion that (i) construction
of the Maryland Heights Facility has been substantially completed
pursuant to the plans therefor, (ii) all governmental approvals
(including, without limitation, a certificate of occupancy and
all applicable gaming and liquor licenses including the issuance
of the applicable gaming license by the Missouri Gaming
Authorities) necessary for the opening to the public and
operations of the casinos have been obtained and copies delivered
to Administrative Agent, (iii) all casino and public space and a
hotel as set forth in the plans therefor are open to the public
and able to receive overnight guests in the ordinary course of
business, and (iv) all equitable liens, mechanics liens,
materialmen liens and any other liens against or directly related
to the Maryland Heights Facility have been paid, bonded or
provided for to the satisfaction of Administrative Agent;
provided that any such liens which have not been so paid, bonded
or provided for and which do not impair, or threaten to impair,
the conduct of business at the Maryland Heights Facility may be
consented to by Administrative Agent; (B) final "as-built" plans
and specifications of all improvements and construction related
to the Maryland Heights Facility; (C) an ALTA survey, at
Company's sole cost and expense, certified to Administrative
Agent and in form and substance satisfactory to Administrative
Agent, of the real property and improvements related to the
Maryland Heights Facility; and (D) a title insurance commitment,
at Company's sole cost and expense, covering the real property
related to the Maryland Heights Facility, which title insurance
commitment shall be in form and substance satisfactory to
Administrative Agent and which shall show, among other things, no
mechanics liens, materialmen liens or any other liens against or
affecting the Maryland Heights Facility.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit VIII annexed hereto
delivered to Administrative Agent and Lenders by Company pursuant
to subsection 6.1(iii).
"Consolidated Capital Expenditures" means, for any
period, the sum of the aggregate of all expenditures (whether
paid in cash or other consideration or accrued as a liability and
including that portion of Capital Leases that is capitalized on
the consolidated balance sheet of Company and its Subsidiaries)
by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "capital expenditures" or
comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries.
"Consolidated EBITDA" means, for any period
Consolidated Net Income for such period plus, to the extent such
items were subtracted in the determination of Consolidated Net
Income, the sum of the amounts for such period of
(i) Consolidated Interest Expense, (ii) provisions for taxes
based on income, (iii) total depreciation expense, (iv) total
amortization expense, and (v) other non-cash items reducing
Consolidated Net Income less other non-cash and/or extraordinary,
non-recurring items increasing Consolidated Net Income plus other
extraordinary and non-recurring items decreasing Consolidated Net
Income, all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP.
"Consolidated Fixed Charges" means, for any period, the
sum (without duplication) of the amounts for such period of
(i) Consolidated Interest Expense, (ii) scheduled payments of
principal on the long-term portion of Consolidated Total Debt,
(iii) the principal component of payments on Capital Leases and
(iv) all Assessments payable by Company or any of its
Subsidiaries during such period.
"Consolidated Interest Expense" means, for any period,
total interest expense (including that portion attributable to
Capital Leases in accordance with GAAP and capitalized interest)
of Company and its Subsidiaries on a consolidated basis with
respect to all outstanding Indebtedness of Company and its
Subsidiaries, including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under
Interest Rate Agreements, but excluding, however, any amounts
referred to in subsection 2.3 payable to Administrative Agent and
Lenders on or before the Effective Date.
"Consolidated Net Income" means, for any period, the
net income (or loss) of Company and its Subsidiaries on a
consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP; provided that there
shall be excluded (i) the income (or loss) of any Person (other
than a Subsidiary of Company) in which any other Person (other
than Company or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other
distributions actually paid to Company or any of its Subsidiaries
by such Person during such period, (ii) the income (or loss) of
any Person accrued prior to the date it becomes a Subsidiary of
Company or is merged into or consolidated with Company or any of
its Subsidiaries or that Person's assets are acquired by Company
or any of its Subsidiaries, (iii) the income of any Subsidiary of
Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that
income is not at the time permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
that Subsidiary, (iv) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan,
and (v) (to the extent not included in clauses (i) through (iv)
above) any net extraordinary gains or net non-cash extraordinary
losses.
"Consolidated Tangible Net Worth" means, as at any date
of determination, the sum of the par value of Company's capital
stock and additional paid-in capital plus retained earnings (or
minus accumulated deficits) less all intangible assets (including
goodwill and excess purchase price over historical basis entries)
of Company and its Subsidiaries on a consolidated basis
determined in conformity with GAAP.
"Consolidated Total Assets" means as at any date of
determination, the total assets of Company and its Subsidiaries
which would be shown as assets on a consolidated balance sheet of
Company and its Subsidiaries as of such date prepared in
accordance with GAAP, after eliminating all amounts properly
attributable to minority interests, if any, in the stock and
surplus of Subsidiaries.
"Consolidated Total Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness of Company and its Subsidiaries on a consolidated
basis in accordance with GAAP.
"Consolidating" means, as used to describe financial
statements referred to in subsections 5.3, 6.1(i), 6.1(ii) and
6.1(xiii), the separate financial statements reflecting the
accounts of Company and its Subsidiaries.
"Contingent Obligation", as applied to any Person,
means any direct or indirect liability, contingent or otherwise,
of that Person (i) with respect to any Indebtedness, lease,
dividend or other obligation of another if the primary purpose or
intent thereof by the Person incurring the Contingent Obligation
is to provide assurance to the obligee of such obligation of
another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof,
(ii) with respect to any letter of credit issued for the account
of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, (iii) under Interest Rate Agreements,
or (iv) to make an Investment in any other Person. Contingent
Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of
the obligation of another, (b) the obligation to make take-or-pay
or similar payments if required regardless of non-performance by
any other party or parties to an agreement, and (c) any liability
of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or
to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or
any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if
less, the amount to which such Contingent Obligation is
specifically limited.
"Contractual Obligation", as applied to any Person,
means any provision of any Security issued by that Person or of
any material indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Deposit Account" means a demand, time, savings,
passbook or like account with a bank, savings and loan
association, credit union or like organization, other than an
account evidenced by a negotiable certificate of deposit.
"Dollars" and the sign "$" mean the lawful money of the
United States of America.
"Effective Date" means the date on or before December
20, 1996, on which the conditions set forth in subsection 4.1 are
first satisfied or waived in writing by Administrative Agent and
Requisite Lenders.
"Eligible Assignee" means (A)(i) a commercial bank
organized under the laws of the United States or any state
thereof; (ii) a savings and loan association or savings bank
organized under the laws of the United States or any state
thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that
(x) such bank is acting through a branch or agency located in the
United States or (y) such bank is organized under the laws of a
country that is a member of the Organization for Economic
Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses
including, but not limited to, insurance companies, mutual funds
and lease financing companies, in each case (under clauses (i)
through (iv) above) that is reasonably acceptable to and
consented to by Managing Agents; and (B) any Lender and any
Affiliate of any Lender; provided that no Affiliate of Company
shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit
plan" as defined in Section 3(3) of ERISA which is, or was at any
time, maintained or contributed to by Company or any of its ERISA
Affiliates.
"Environmental Claim" means any accusation, allegation,
notice of violation, claim, demand, abatement order or other
order or direction (conditional or otherwise) by any governmental
authority or any Person for any damage, including, without
limitation, personal injury (including sickness, disease or
death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the
environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or
restrictions, in each case relating to, resulting from or in
connection with Hazardous Materials and relating to Company, any
of its Subsidiaries, any of their respective Affiliates or any
Facility.
"Environmental Indemnity" means the Environmental
Indemnity from Company in favor of Administrative Agent on behalf
of Lenders dated as of August 25, 1995, executed and delivered
pursuant to the Existing Credit Agreement, pursuant to which
Company indemnifies Administrative Agent on behalf of Lenders
against environmental risks, as it has been amended to the date
hereof and as it may hereafter be amended, supplemented or
otherwise modified from time to time.
"Environmental Laws" means all statutes, ordinances,
orders, rules, regulations, plans, policies or decrees and the
like relating to (i) environmental matters, including, without
limitation, those relating to fines, injunctions, penalties,
damages, contribution, cost recovery compensation, losses or
injuries resulting from the Release or threatened Release of
Hazardous Materials, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or
(iii) occupational safety and health, industrial hygiene, land
use or the protection of human, plant or animal health or
welfare, in any manner applicable to Company or any of its
Subsidiaries or any of their respective properties, including,
without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C.
5 6901 et seq.), the Federal Water Pollution Control Act ( 33
U.S.C. 1251 et seq.), the Clean Air Act (42 U.S.C. 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. 2601 et
seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C. 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. 651 et seq.) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. 11001 et seq.), each as amended or
supplemented, and any analogous future or present local, state
and federal statutes and regulations promulgated pursuant
thereto, each as in effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and any successor
statute.
"ERISA Affiliate", as applied to any Person, means
(i) any corporation which is, or was at any time, a member of a
controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person
is, or was at any time, a member; (ii) any trade or business
(whether or not incorporated) which is, or was at any time, a
member of a group of trades or businesses under common control
within the meaning of Section 414(c) of the Internal Revenue Code
of which that Person is, or was at any time, a member; and
(iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of
which that Person, any corporation described in clause (i) above
or any trade or business described in clause (ii) above is, or
was at any time, a member.
"ERISA Event" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued
thereunder with respect to any Pension Plan (excluding those for
which the provision for 30-day notice to the PBGC has been waived
by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect
to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to
make by its due date a required installment under Section 412(m)
of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer
Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described
in Section 4041(c) of ERISA; (iv) the withdrawal by Company or
any of its ERISA Affiliates from any Pension Plan with two or
more contributing sponsors or the termination of any such Pension
Plan resulting in liability pursuant to Sections 4063 or 4064 of
ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or
condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer,
any Pension Plan; (vi) the imposition of liability on Company or
any of its ERISA Affiliates pursuant to Section 4062(e) or 4069
of ERISA or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal by Company or any of its ERISA
Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor,
or the receipt by Company or any of its ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization
or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or
4042 of ERISA; (viii) the occurrence of an act or omission which
could give rise to the imposition on Company or any of its ERISA
Affiliates of any material fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue Code or under
Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against Company or any of its ERISA Affiliates in
connection with any such Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to
qualify under Section 401(a) of the Internal Revenue Code, or the
failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal
Revenue Code; or (xi) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"Event of Default" means each of the events set forth
in Section 8.
"Event of Loss" means, with respect to any property or
asset, (i) any loss, destruction or damage of such property or
asset or (ii) any condemnation, seizure or taking, by exercise of
the power of eminent domain or otherwise, of such property or
asset, or confiscation or requisition of the use of such property
or asset.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"Excluded Person" means (a) Company or any Guarantor
wholly-owned by Company, (b) any employee benefit plan of Company
or any Guarantor wholly-owned by Company or any trustee or
similar fiduciary holding capital stock of Company for or
pursuant to the terms of any such plan, (c) Merv Griffin, (d)
Edward Fishman, (e) David Fishman, (f) Howard Goldberg, (g)
Thomas E. Gallagher, (h) Marshall S. Geller, (i) Lee Seidler, (j)
Peter J. Aranow, (k) Jay Green, (l) Earl Webb, (m) Lawrence
Cohen, (n) Charles Masson, (o) Henry Applegate III, (p) John
Groom and (q) members of the immediate families and Affiliates of
any such Person (where the determination of whether a Person is
an Affiliate is made without reference to clause (ii) of the
definition of such term).
"Existing Credit Agreement" has the meaning specified
in Preliminary Statement A to this Agreement.
"Existing Letter of Credit" means each Letter of Credit
(as defined in the Existing Credit Agreement) outstanding on the
Effective Date that has not expired or been cancelled as of the
Effective Date.
"Existing Revolving Loan" has the meaning specified in
subsection 2.1F.
"Facilities" means, collectively, the Illinois
Facilities, the Louisiana Facilities, the Nevada Facilities and
the Maryland Heights Facility.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by
Agent from three Federal funds brokers of recognized standing
selected by Administrative Agent.
"FF&E" means any and all furniture, fixtures and
equipment which have been installed or are to be installed and
used in connection with the operation of the Improvements located
upon any of the Premises and those items of furniture, fixtures
and equipment which have been purchased or leased or are
hereafter purchased or leased in connection with any of the
Facilities.
"Fiscal Quarter" means the calendar quarters ending on
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the fiscal year period beginning
April 1 of each calendar year and ending on the following March
31.
"Fixed Charge Coverage Ratio" means, as of any date of
determination, the ratio of (y) Consolidated EBITDA for the
consecutive four full Fiscal Quarters most recently ended on or
before such date of determination to (z) Consolidated Fixed
Charges for such four Fiscal Quarter period.
"Flood Act" means the National Flood Insurance Act of
1968 as amended by the Flood Disaster Protection Act of 1973 (42
U.S.C. 4013 et. seq.).
"Former Lender" has the meaning assigned to that term
in subsection 10.1B(iii).
"Funding and Payment Office" means the office of
Administrative Agent located at the address set forth on the
signature pages hereof.
"Funding Date" means the date of the funding of a Loan
or the issuance of a Letter of Credit.
"GAAP" means, subject to the limitations on the
application thereof set forth in subsection 1.2, generally
accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by
a significant segment of the accounting profession, in each case
as the same are applicable to the circumstances as of the date of
determination.
"Gaming Authority" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any
nature whatsoever of the United States federal or foreign
government, any state, province or any city or other political
subdivision or otherwise and whether now or hereafter in
existence, or any officer or official thereof, including, without
limitation, the Illinois Gaming Authorities, the Missouri Gaming
Authorities, the Louisiana Gaming Authorities, the Kentucky
Gaming Authorities and the Nevada Gaming Authorities, with
authority to regulate any gaming operation (or proposed gaming
operation) owned, managed or operated by Company or any of its
Subsidiaries.
"Gaming Laws" means all statutes, rules, regulations,
ordinances, codes and administrative or judicial precedents
pursuant to which any Gaming Authority possesses regulatory,
licensing or permit authority over gambling, gaming or casino
activities conducted by Company and its Subsidiaries within its
jurisdiction, including the Illinois Riverboat Gambling Act, the
Kentucky Gaming Law, the Louisiana Riverboat Economic Development
and Gaming Control Act, the Missouri Gaming Act, and the Nevada
Gaming Control Act.
"Governmental Acts" has the meaning assigned to that
term in subsection 3.5A.
"Governmental Authority" means any of the United States
government, the government of any state thereof and any political
subdivision, agency, department, commission, court, board, bureau
or instrumentality of any of them, including any local
authorities and any Gaming Authority.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent, order or consent decree
of or from any Governmental Authority, including any Gaming
Authority.
"Guarantor" means any of PHI, PMHLP, PLC, SIRCC, PBD,
PNEV, PRM, PRI, PMGC, PRLLC, PML, PSI, PDI, PMH, PMHN, PLCR,
PRES, PEI, RR and SSP and "Guarantors" means all of them,
collectively; provided, however, that "Guarantors" shall also
mean any Person that becomes a Subsidiary of Company after the
Effective Date.
"Guaranty" means the Guaranty dated as of August 25,
1995, executed and delivered by each Guarantor in favor of
Administrative Agent, pursuant to the Existing Credit Agreement,
as it has been amended to the date hereof and as it may hereafter
be amended, supplemented or otherwise modified, from time to
time, including, without limitation, by the inclusion as
Guarantors of Persons becoming Subsidiaries of Company after the
Effective Date.
"Harrah's" means Harrah's Maryland Heights Corporation,
a Nevada corporation.
"Hazardous Materials" means (i) any chemical, material
or substance at any time defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous waste", "restricted hazardous
waste", "infectious waste", "toxic substances" or any other
formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar
import under any applicable Environmental Laws or publications
promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas
or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) asbestos in any
form; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per
million; (ix) pesticides; and (x) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated
by any governmental authority or which may or could pose a hazard
to the health and safety of the owners, occupants or any Persons
in the vicinity of the Facilities.
"Hostile Acquisition" means any acquisition of the
outstanding Securities or capital stock of any corporation,
partnership or other Person that is not an Affiliate of Company
other than (i) an acquisition which has been approved by
resolutions of the Board of Directors of the Person being
acquired or by similar action if the Person is not a corporation,
and as to which such approval has not been withdrawn, or (ii) any
acquisition of less than twenty percent (20%) of the outstanding
Securities of any class or type of any Person; provided that an
acquisition of Securities described in clause (ii) hereof as to
which Company or any of its Subsidiaries is required to file a
statement containing the information required by Schedule 13D
under the Exchange Act shall not be considered a Hostile
Acquisition only if the then currently effective Schedule 13D of
Company or such Subsidiary indicates that Company or such
Subsidiary views the Securities as an attractive Investment and
that Company or such Subsidiary has no plans or proposals which
relate to or which would result in any of the transactions
described in paragraphs (b) through (j) of Item 4 of Schedule
13D.
"Illinois Facilities" means the Illinois Premises and
the Improvements made thereon, along with all other related
personal and mixed property located thereon or related thereto,
including, without limitation, a four-deck paddle-wheeler
riverboat casino, a docking site (including all Barges), a new
office building, a cabaret style theater, all related restaurant,
bar, recreation and other facilities and all FF&E and other
personal property located therein, as more fully described in the
"Business" and "Properties" sections of the 10-K.
"Illinois Gaming Authorities" means, without
limitation, the Illinois Gaming Board and any other applicable
Governmental Authority involved in the regulation of gaming and
gaming activities conducted by Company or any of its Subsidiaries
in the State of Illinois.
"Illinois Mortgage" means that certain Mortgage,
Fixture Filing and Security Agreement with Assignment of Rents,
by and among SIRCC, as mortgagor and owner, in favor of
Administrative Agent, as mortgagee, dated August 25, 1995,
executed and delivered pursuant to the Existing Credit Agreement,
as it has been amended to the date hereof and as it may hereafter
be amended, supplemented or otherwise modified, from time to
time.
"Illinois Premises" means the real property owned in
fee or leased by Company or its respective Subsidiaries with
respect to the property commonly known as the Metropolis complex
in Metropolis, Illinois, as more fully described on Schedule A-1
hereto.
"Illinois Riverboat Gambling Act" means the Riverboat
Gambling Act of Illinois, as from time to time amended, or any
successor provision of law, and the regulations promulgated
thereunder.
"Illinois Ships" means each of the Players Riverboat II
and any other riverboat casino subsequently acquired by Company
or any of its Subsidiaries and operated out of the Illinois
Facilities, in each case, including the engines, boilers,
machinery, masts, derricks, drawworks, spars, boats, anchors,
cables, chains, tackle, fittings, pumping equipment and all other
components and appurtenances thereto, whether now owned or
hereafter acquired, whether on board or not, and whether
installed by Company, SIRCC or any other Person, and also any and
all changes, improvements, alterations, additions, renewals and
replacements at any time made in or to such units or any parts
thereof.
"Improvements" means all buildings, structures,
facilities and other improvements of every kind and description
now or hereafter located on any of the Premises, including all
parking areas, roads, driveways, walks, fences, walls, beams,
recreation facilities, drainage facilities, lighting facilities
and other site improvements, all water, sanitary and storm sewer,
drainage, electricity, steam, gas, telephone and other utility
equipment and facilities, all plumbing, lighting, heating,
ventilating, air-conditioning, refrigerating, incinerating,
compacting, fire protection and sprinkler, surveillance and
security, vacuum cleaning, public address and communications
equipment and systems, all screens, awnings, floor coverings,
partitions, elevators, escalators, motors, machinery, pipes,
fittings and other items of equipment and personal property of
every kind and description now or hereafter located on any of the
Premises or attached to the improvements that by the nature of
their location thereon or attachment thereto are real property
under applicable law; and including all materials intended for
the construction, reconstruction, repair, replacement,
alteration, addition or improvement of or to such buildings,
equipment, fixtures, structures and improvements.
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations
with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (iii) notes
payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is
(a) due more than six months from the date of incurrence of the
obligation in respect thereof or (b) evidenced by a note or
similar written instrument, and (v) all indebtedness secured by
any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is nonrecourse to the credit of
that Person. Any Contingent Obligation shall not constitute
Indebtedness until such time as, and only to the extent that, the
underlying obligation owed by the primary obligor to which such
Contingent Obligation relates has become due and payable and
remains unsatisfied after the due date thereof. Obligations
under Interest Rate Agreements constitute Contingent Obligations.
"Indemnitee" has the meaning assigned to that term in
subsection 10.3.
"Indenture" means that certain Indenture, dated as of
April 10, 1995, executed by Company, its Subsidiaries and First
Fidelity Bank, National Association, as trustee, in connection
with the issuance of and governing the terms of the Senior Notes,
as in effect on August 25, 1995, except to the extent amended in
accordance with subsection 7.13.
"Intellectual Property" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used
in or necessary for the conduct of the business of Company and
its Subsidiaries as currently conducted that are material to the
business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries, taken as
a whole.
"Interest Coverage Ratio" means, as of any date of
determination, the ratio of (x) Consolidated EBITDA for the
immediately preceding four Fiscal Quarters to (y) the
Consolidated Interest Expense for the immediately preceding four
Fiscal Quarters.
"Interest Payment Date" means the last day of each
calendar month.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to
protect Company or any of its Subsidiaries against fluctuations
in interest rates.
"Interest Rate Reduction Amount" means for each period
commencing on the first Business Day of the month following
receipt by Administrative Agent of a Pricing Determination
Certificate and ending on the first Business Day of the month
following the month in which the next successive Pricing
Determination Certificate is due, the following:
(x) if Consolidated EBITDA for the four consecutive
Fiscal Quarters most recently ended before the date of such
Pricing Determination Certificate is more than $85,000,000
but less than $95,000,000 and the Interest Coverage Ratio
for such period is not less than 2.00:1.00, then 1.00% per
annum;
(y) if Consolidated EBITDA for the four consecutive
Fiscal Quarters most recently ended before the date of such
Pricing Determination Certificate is more than $95,000,000,
the Interest Coverage Ratio for such period is not less than
2.00:1.00, and the Leverage Ratio on the last day of such
period is not greater than 2.25:1.00, then 2.00% per annum;
and
(z) in all other cases, 0.00%.
If Company fails to deliver a Pricing Determination Certificate
within the time required by subsection 6.1(xvi), the Interest
Rate Reduction Amount shall be 0.00% during the period commencing
on the first Business Day following the date on which delivery of
such Pricing Determination Certificate was due until the first
Business Day of the month following the date that such past due
certificate is actually received by Administrative Agent. During
the period commencing on the first Business Day of the month
following receipt of a past due certificate by Administrative
Agent, and ending on the First Business Day of the month
following the month in which the next successive Pricing
Determination Certificate is due, the Interest Rate Reduction
Amount shall be as set forth in the preceding clauses (x), (y),
or (z), as applicable.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended to the date hereof and from time to time
hereafter.
"Investment" means (i) any direct or indirect purchase
or other acquisition by Company or any of its Subsidiaries of, or
of a beneficial interest in, any Securities of any other Person
(other than a Person that is a wholly-owned Subsidiary of
Company), (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by any Subsidiary of
Company from any Person other than Company or any of its
Subsidiaries, of any equity Securities of such Subsidiary, or
(iii) any direct or indirect loan, advance (other than advances
to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course
of business) or capital contribution by Company or any of its
Subsidiaries to any other Person (other than a Person that is a
wholly-owned Subsidiary of Company), including all indebtedness
and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person
in the ordinary course of business. The amount of any Investment
shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"Joint Venture" means a joint venture, partnership or
other similar arrangement, whether in corporate, partnership or
other legal form; provided that in no event shall any corporate
Subsidiary of any Person be considered to be a Joint Venture to
which such Person is a party.
"Joint Venture Agreement" means the Partnership
Agreement, dated as of November 2, 1995, by and between PMHLP and
Harrah's.
"Joint Venture Interest Security Agreement" means that
certain Joint Venture Interest Security Agreement between PMHLP
and Administrative Agent, dated as of the Effective Date,
substantially in the form of Exhibit XVIII, as such agreement may
hereafter be amended, supplemented or otherwise modified, from
time to time.
"Kentucky Gaming Authority" means the Kentucky Racing
Commission.
"Kentucky Gaming Law" means Section 230.225 of the
Kentucky Revised Statutes and the rules and regulations
promulgated thereunder.
"Landlord Consents" means those certain Landlord's
Consents and Agreements executed by various owners of certain
portions of the Premises, as landlords, each in favor of
Administrative Agent, acknowledging and consenting to, among
other things, the granting by certain of Company's Subsidiaries,
as tenants, of Mortgages on the leasehold interests held by such
tenants.
"Lease Amendments" means those certain amendments to
lease agreements between various owners of certain portions of
the Premises, each as a landlord, and certain of Company's
Subsidiaries, each as a tenant, pursuant to which the parties
thereto have amended certain existing leases related to the
Premises for the benefit of Administrative Agent.
"Leasehold Documents" means, collectively, the
Mortgagee Attornment Agreements, the Landlord Consents, the Lease
Amendments and the Acknowledgement and Estoppel Agreements.
"Lender" and "Lenders" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to
subsection 10.1, and the term "Lenders" shall include Swing Line
Lender unless the context otherwise requires.
"Lender Assignment Agreement" has the meaning assigned
to that term in subsection 10.1A and a form of which is attached
as Exhibit III hereto, as noted in subsection 10.1B.
"Letter of Credit" or "Letters of Credit" means Standby
Letters of Credit issued or to be issued by Administrative Agent
for the account of Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which
is or at any time thereafter may become available for drawing
under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored
by Administrative Agent and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Loans
pursuant to subsection 3.3B).
"Leverage Ratio" means, as of any date of
determination, the ratio of (y) the sum (without duplication) of
the outstanding principal amount of Other Allowed Indebtedness
(Secured) as of such date plus the outstanding principal amount
of Other Allowed Indebtedness (Unsecured) as of such date plus
the average daily Total Utilization of Commitments for the Fiscal
Quarter most recently ended on or prior to such date plus
Contingent Obligations as of such date to (z) Consolidated EBITDA
for the consecutive four full Fiscal Quarters most recently ended
on or prior to such date.
"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 Authority
covering any casino, gambling or gaming facility owned or
operated by Company, any of its Subsidiaries.
"Lien" means any lien, mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including
any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any
security interest) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing.
"Linked Appreciation Rights Agreement" means that
certain Linked Appreciation Rights Agreement between Company and
each Lender dated as of the date the initial Tranche B Loan is
made, substantially in the form of Exhibit IX hereto, as such
agreement may hereafter be amended, supplemented or otherwise
modified, from time to time.
"LLC Membership Interest Security Agreements" means (i)
those certain Security Agreements between each of PRI and PRM,
and Administrative Agent, dated as of August 25, 1995, executed
and delivered pursuant to the Existing Credit Agreement, as each
such agreement has been amended to the date hereof and each such
agreement may hereafter be amended, supplemented or otherwise
modified, from time to time and (ii) those certain LLC Membership
Interest Security Agreements between certain Subsidiaries of
Company and Administrative Agent, dated as of the Effective Date,
substantially in the form of Exhibit XVI, as each such Agreement
may hereafter be amended, supplemented or otherwise modified from
time to time.
"Loan Documents" means this Agreement, any Notes, the
Letters of Credit (and any applications for, or reimbursement
agreements or other documents or certificates executed by Company
in favor of Administrative Agent relating to, the Letters of
Credit), the Collateral Account Agreement, the Collateral
Documents, the Linked Appreciation Rights Agreement, the Mortgage
Amendments, the Acknowledgment and Confirmation and all other
instruments or documents executed in connection therewith.
"Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the
Commitments, that Lender's Commitments and (ii) after the
termination of the Commitments, the sum of (a) the aggregate
outstanding principal amount of the Loans of that Lender plus
(b) in the event that Lender is Administrative Agent, the
aggregate Letter of Credit Usage in respect of all Letters of
Credit issued by that Lender (in each case net of any
participations purchased by other Lenders in such Letters of
Credit or any unreimbursed drawings thereunder) plus (c) the
aggregate amount of all participations purchased by that Lender
in any outstanding Letters of Credit or any unreimbursed drawings
under any Letters of Credit plus (d) in the case of Swing Line
Lender, the aggregate outstanding principal amount of all Swing
Line Loans (net of any participations therein purchased by other
Lenders) plus (e) the aggregate amount of all participations
purchased by that Lender in any outstanding Swing Line Loans.
"Loan Party" means any of Company and any Guarantor and
"Loan Parties" means Company and all Guarantors, collectively.
"Loans" means, collectively, all Revolving Loans made
pursuant to subsection 2.1A and all Swing Line Loans made
pursuant to subsection 2.1B.
"Louisiana Facilities" means the Louisiana Premises and
the Improvements made thereon, along with all other related
personal and mixed property located thereon or related thereto,
including, without limitation, two three-deck paddle-wheeler
riverboat casinos (individually known as the "Players III" and
the "Lake Charles Star Riverboat"), a docking site, floating
entertainment island and floating administrative center
(including all Barges), a hotel, all related restaurant, bar,
recreation and other facilities and all FF&E and other personal
property located therein, as more fully described in the
"Business" and "Properties" sections of the 10-K.
"Louisiana Gaming Authorities" means, without
limitation, the Louisiana Gaming Control Board, the Riverboat
Gaming Enforcement Division of the Louisiana State Police and any
other applicable Governmental Authority involved in the
regulation of gaming and gaming activities conducted by Company
or any of its Subsidiaries in the State of Louisiana.
"Louisiana Gaming Control Act" means the Louisiana
Riverboat Economic Development and Gaming Control Act, as from
time to time amended, or any successor provision of law, and the
regulations promulgated thereunder.
"Louisiana Mortgage" means that certain Acts of
Mortgage, Fixture Filing and Security Agreement with Pledge and
Assignment of Leases and Rents, among PLC, as mortgagor and
owner, in favor of Administrative Agent, as mortgagee, dated as
of August 25, 1995, executed and delivered pursuant to the
Existing Credit Agreement, as it has been amended to the date
hereof and as it may hereafter be amended, supplemented or
otherwise modified, from time to time.
"Louisiana Premises" means the real property owned in
fee or leased by Company or its respective Subsidiaries with
respect to the property commonly known as the Lake Charles
complex in Lake Charles, Louisiana, as more fully described on
Schedule A-2 hereto.
"Louisiana Ships" means each of the Lake Charles Star
Riverboat, the Players III and any other riverboat casino
subsequently acquired by Company or any of its Subsidiaries and
operated out of the Louisiana Facilities, in each case, including
the engines, boilers, machinery, masts, derricks, drawworks,
spars, boats, anchors, cables, chains, tackle, fittings, pumping
equipment and all other components and appurtenances thereto,
whether now owned or hereafter acquired, whether on board or not,
and whether installed by Company, PLC or any other Person, and
also any and all changes, improvements, alterations, additions,
renewals and replacements at any time made in or to such units or
any parts thereof.
"Managing Agent" means either of WFB or BTCo and
"Managing Agents" means WFB and BTCo, collectively.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Marine Appraiser" means Larry Snyder.
"Maryland Heights Facility" means the riverboat casino
entertainment complex in Maryland Heights, Missouri being
developed to be operated by the Riverside Joint Venture as more
fully described in the "Business" and "Properties" sections of
the 10-K.
"Maryland Heights Subsidiaries" means PMH, PMHN and
PMHLP.
"Material Adverse Effect" means (i) a material adverse
effect upon the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Company and
its Subsidiaries, taken as a whole, or (ii) the impairment of the
ability of Company to perform, in any material respect, or of
Administrative Agent or Lenders to enforce, the Obligations.
"Missouri Gaming Act" means Sections 313.800 - 313.850
of the Revised Statutes of Missouri (Excursion Gambling Boats).
"Missouri Gaming Authority" means Missouri Gaming
Commission.
"Mortgage Amendments" has the meaning assigned thereto
in subsection 4.1G.
"Mortgagee Attornment Agreements" means those certain
Mortgagee Attornment Agreements between various owners of certain
portions of the Premises, each as a landlord, and certain of
Company's Subsidiaries, each as a tenant, for the benefit of
Administrative Agent, granting tenants the right to mortgage the
leasehold interests held by such tenants in certain portions of
the Premises.
"Mortgages" means, collectively, the Illinois Mortgage,
the Louisiana Mortgage and the Nevada Mortgages.
"Multiemployer Plan" means a "multiemployer plan", as
defined in Section 3(37) of ERISA, to which Company or any of its
ERISA Affiliates is contributing, or ever has contributed, or to
which Company or any of its ERISA Affiliates has, or ever has
had, an obligation to contribute.
"Net Cash Proceeds" means Cash Proceeds received from
any Asset Sale or upon the occurrence of an Event of Loss, in
each case, net of the sum of all bona fide direct fees,
commissions and other expenses incurred in connection therewith
less the amount of (estimated reasonably and in good faith by
Company) income, franchise, sales and other applicable taxes
required to be paid by Company or any of its Subsidiaries as a
result thereof within two years of the date of receipt of any
such Cash Proceeds.
"Nevada Facilities" means the Nevada Premises and the
Improvements made thereon, along with all other related resort-
facilities personal and mixed property located thereon,
including, without limitation, a golf course, a land-based casino
hotel, all related restaurant, bar, recreation and other
facilities and all FF&E and other personal property located
therein, as more fully described in the "Business" and
"Properties" sections of the 10-K.
"Nevada Gaming Authorities" means, without limitation,
the Nevada Gaming Commission, the Nevada State Gaming Control
Board and any other applicable Governmental Authority involved in
the regulation of gaming and gaming activities conducted by
Company or any of its Subsidiaries in the State of Nevada.
"Nevada Gaming Control Act" means the Nevada Gaming
Control Act, as from time to time amended, or any successor
provision of law, and the regulations promulgated thereunder.
"Nevada Mortgages" means those certain Deeds of Trust,
Fixture Filings and Security Agreements with Assignment of Rents,
among each of PNEV, PMGC and PML, as trustor and owner, in favor
of Chicago Title Insurance Company, as trustee, for the benefit
of Administrative Agent, as beneficiary, each dated as of August
25, 1995, executed and delivered pursuant to the Existing Credit
Agreement, as each such agreement has been amended to the date
hereof and as may hereafter be amended, supplemented or otherwise
modified, from time to time.
"Nevada Premises" means the real property owned in fee
or leased by Company or its respective Subsidiaries with respect
to the property in Mesquite, Nevada, as more fully described on
Schedule A-3 hereto.
"New Loan Documents" means this Agreement, the Notes
issued on the Effective Date, the Mortgage Amendments, the
Acknowledgement and Confirmation, the Joint Venture Interest
Security Agreement, the Linked Appreciation Rights Agreement, the
PHI Guaranty, the PHI Pledge, the Resources Pledge and Security
Agreement, and all other new agreements to be executed by the
Loan Parties on the Effective Date. The New Loan Documents to be
executed by each Loan Party are set forth on Schedule 1.1 hereto.
"Notes" means, collectively, the Revolving Notes and
the Swing Line Notes, and any Tranche A Notes, Tranche B Notes,
and Tranche C Notes, as they may be amended, supplemented, or
otherwise modified from time to time.
"Notice of Borrowing" means a notice substantially in
the form of Exhibit I annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.1C with respect to
a proposed borrowing.
"Notice of Issuance of Letter of Credit" means a notice
substantially in the form of Exhibit II annexed hereto delivered
by Company to Administrative Agent pursuant to subsection 3.1B(i)
with respect to the proposed issuance of a Letter of Credit.
"Notification Date" has the meaning assigned to that
term in subsection 3.1A(iii).
"Obligations" means all obligations of every nature of
any Loan Party, from time to time owed to Administrative Agent,
Managing Agents, Co-Arrangers, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses,
indemnification or otherwise.
"Officers' Certificate" means, as applied to any
corporation, a certificate executed on behalf of such corporation
by its chairman of the board (if an officer) or president, vice
presidents, chief financial officer or treasurer; provided that
every Officers' Certificate with respect to the compliance with a
condition precedent to the making of any Loans hereunder shall
include (i) a statement that the officer or officers making or
giving such Officers' Certificate have read such condition and
any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to
express an informed opinion as to whether or not such condition
has been complied with, and (iii) a statement as to whether, in
the opinion of the signers, such condition has been complied
with.
"Other Allowed Indebtedness (Secured)" means (a)
secured Interest Rate Agreements with Lenders having a maximum
notional amount of no more than $40,000,000, (b) Purchase Money
Debt and Capital Leases not to exceed $5,000,000 in aggregate
principal amount existing on the Effective Date and (c) after
such time that Consolidated EBITDA for the four Fiscal Quarter
period most recently ending exceeds $85,000,000, an additional
$10,000,000 of Indebtedness.
"Other Allowed Indebtedness (Unsecured)" means all
unsecured Indebtedness, whether existing on the Effective Date or
subsequently incurred, of Company or any of its Subsidiaries,
including, without limitation, the Senior Notes.
"Participant Subsidiary" has the meaning assigned to
that term in subsection 6.10B.
"Partnership Interest Security Agreements" means (i)
those certain Security Agreements between each of PRLLC and PRM,
and Administrative Agent, each dated as of August 25, 1995,
executed and delivered pursuant to the Existing Credit Agreement,
as each such agreement has been amended to the date hereof and as
each such agreement may hereafter be amended, supplemented or
otherwise modified, from time to time, and (ii) those certain
Partnership Interest Security Agreements between each of PMH,
PMHN and SIRCC and Administrative Agent, each dated as of the
Effective Date, substantially in the form of Exhibit XII, as each
such agreement may hereafter be amended, supplemented or
otherwise modified, from time to time.
"PBD" means Players Bluegrass Downs, Inc., a Kentucky
corporation.
"PBGC" means the Pension Benefit Guaranty Corporation
(or any successor thereto).
"PCI" means PCI, Inc., a Nevada corporation.
"PDI" means Players Development, Inc., a Nevada
corporation.
"PEI" means Players Entertainment, Inc., a Nevada
corporation.
"Pension Plan" means any Employee Benefit Plan, other
than a Multiemployer Plan, which is subject to Section 412 of the
Internal Revenue Code or Section 302 of ERISA.
"Permitted Encumbrances" means the following types of
Liens (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 6.3;
(ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics and materialmen and other
Liens imposed by law incurred in the ordinary course of
business for sums not yet delinquent or being contested in
good faith, if such reserve or other appropriate provision,
if any, as shall be required by GAAP shall have been made
therefor;
(iii) Liens incurred or deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed
money);
(iv) any attachment or judgment Lien not constituting
an Event of Default under subsection 8.8;
(v) leases or subleases granted to others (including,
without limitation, any Subsidiary of Company) not
interfering in any material respect with the ordinary
conduct of the business of Company or any of its
Subsidiaries; and
(vi) easements, rights-of-way, restrictions, minor
defects, encroachments or irregularities in title and other
similar immaterial charges or encumbrances that (a) arise
prior to the Effective Date and are accepted by Managing
Agents as exceptions to the Title Policies or (b) arise
after the Effective Date and would not, either individually
or in the aggregate, result in a Material Adverse Effect.
"Permitted Maryland Heights Indebtedness" means
Indebtedness in an aggregate amount not exceeding $40,000,000
incurred by Company or the Maryland Heights Subsidiaries for the
sole purpose of paying for the construction of, or to refinance
Loans the proceeds of which were used to pay for the construction
of, the Maryland Heights Facilities including, without
limitation, the purchase of any furniture, fixtures and equipment
in the Maryland Heights Facilities.
"Person" means and includes natural persons,
corporations, limited partnerships, general partnerships, joint
stock companies, Joint Ventures, associations, companies, trusts,
banks, trust companies, land trusts, business trusts, limited
liability companies or other organizations, whether or not legal
entities, and governments and agencies and political subdivisions
thereof.
"PHI" means Players Holding, Inc., a Nevada corporation
wholly owned by Company.
"PHI Guaranty" means the Guaranty dated as of the date
hereof, substantially in the form of Exhibit XIII, executed and
delivered by PHI in favor of Administrative Agent, as it may
hereafter be amended, supplemented or otherwise modified, from
time to time.
"PHI Pledge Agreement" means that certain Pledge
Agreement between PHI and Administrative Agent dated as of the
date hereof, substantially in the form of Exhibit XIV, pursuant
to which PHI continues the pledge of and security interest in the
capital stock in all of PHI's directly owned Subsidiaries,
previously created by the Company Pledge Agreement, as such
agreement may hereafter be amended, supplemented or otherwise
modified, from time to time.
"PLC" means Players Lake Charles LLC, a Louisiana
limited liability company.
"PLCR" means Players Lake Charles Riverboat, Inc., a
Louisiana corporation.
"PMGC" means Players Mesquite Golf Club, Inc., a Nevada
corporation.
"PMH" means Players Maryland Heights, Inc., a Missouri
corporation.
"PMHLP" means Players MH, L.P., a Missouri limited
partnership.
"PMHN" means Players Maryland Heights Nevada, Inc., a
Nevada corporation.
"PML" means Players Mesquite Land, Inc., a Nevada
corporation.
"PNEV" means Players Nevada, Inc., a Nevada
corporation.
"PRES" means Players Resources, Inc., a Nevada
corporation.
"PSI" means Players Services, Inc., a New Jersey
corporation.
"Policies of Insurance" means the insurance required to
be obtained and maintained by Company throughout the term of this
Agreement pursuant to subsection 6.4B hereof and Schedules 6.4(a)
and 6.4(b) annexed hereto.
"Potential Event of Default" means a condition or event
that, after notice or lapse of time or both, would constitute an
Event of Default.
"Premises" means, collectively, the Illinois Premises,
the Louisiana Premises and the Nevada Premises.
"PRI" means Players Riverboat, Inc., a Nevada
corporation.
"Pricing Determination Certificate" means an Officers'
Certificate of Company delivered on the Effective Date pursuant
to subsection 4.1R and thereafter pursuant to subsection
6.1(xvii) setting forth in reasonable detail (i) the Consolidated
EBITDA for the four consecutive Fiscal Quarter period ending on
the date of such Officers' Certificate, (ii) the Interest
Coverage ratio for such period and (iii) the Leverage Ratio as of
the last day of such period.
"Prime Rate" means the rate that WFB announces from
time to time as its prime lending rate, as in effect from time to
time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to
any customer. WFB or any other Lender may make commercial loans
or other loans at rates of interest at, above or below the Prime
Rate.
"PRLLC" means Players Riverboat, LLC, a Louisiana
limited liability company.
"PRM" means Players Riverboat Management, Inc., a
Nevada corporation.
"Pro Rata Share" means, with respect to each Lender,
the percentage obtained by dividing (x) the Commitments of that
Lender by (y) the aggregate Commitments of all Lenders, as such
percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The initial Pro Rata Share of each Lender is
set forth opposite the name of that Lender in Schedule 2.1
annexed hereto.
"Purchase Money Debt" means Indebtedness incurred to
finance the acquisition of assets pertaining to any business
reasonably related to any of Company's or its Subsidiaries'
gaming business and necessary for, in support or anticipation of
and ancillary to or in preparation for such gaming business
provided that the amount of such Indebtedness does not exceed
eighty percent (80%) of the purchase price of the asset acquired
and provided further that such Indebtedness is incurred at the
time of, or within 30 days following, such acquisition and
provided still further that any Lien securing such Indebtedness
shall attach only to the asset acquired and not to any other
asset of the obligor of such Indebtedness.
"Railroad" has the meaning assigned to that term in
subsection 6.10D.
"Refunded Swing Line Loans" has the meaning assigned to
that term in subsection 2.1B.
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time
to time.
"Reimbursement Date" has the meaning assigned to that
term in subsection 3.3B.
"Related Business" means the gaming business (including
parimutuel betting) conducted (or proposed to be conducted) by
Company and its Subsidiaries as of the Effective Date and any and
all reasonably related businesses necessary for, in support or
anticipation of and ancillary to or in preparation for, the
gaming business including, without limitation, the development,
expansion or operation of any casino, hotel, casino/hotel,
resort, casino/resort, riverboat casino, dock casino, any other
type of casino, golf course, retail facility, entertainment
center or similar facility.
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous
Materials into the indoor or outdoor environment (including,
without limitation, the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the
movement of any Hazardous Material through the air, soil, surface
water, groundwater or property.
"Requisite Lenders" means Lenders having or holding
sixty-six and two-thirds percent (66-2/3%) of the Loan Exposure,
or if no Loans or Letters of Credit are outstanding, having sixty-
six and two-thirds percent (66-2/3%) of the Commitments.
"Resources Pledge and Security Agreement" means that
certain Pledge and Security Agreement between PRES and
Administrative Agent dated as of the date hereof, substantially
in the form of Exhibit XVII, as such agreement may be amended
from time to time.
"Responsible Officer" means each of the following
officers of Company or any of its Subsidiaries, at the time that
any individual holds any such position: the chief executive
officer, the president, the chief financial officer, the
treasurer, any vice president, the general counsel and the
corporate secretary.
"Restricted Payment" means (i) any dividend or other
distribution of items of distribution, direct or indirect, on
account of any class of stock of Company in Company now or
hereafter outstanding, except a distribution payable solely in
interests of that class of stock to the holders of that class,
(ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of
any interests of any class of stock of Company now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights
to acquire any interests of any class of stock of Company now or
hereafter outstanding, (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in substance or legal
defeasance), sinking fund or similar payment with respect to, any
subordinated indebtedness, and (v) any payment or prepayment of
principal of, premium, if any, or redemption, purchase,
retirement or defeasance (including in substance or legal
defeasance) of the outstanding principal of any of the Senior
Notes other than as required under the Indenture (after giving
effect to any mandatory prepayment pursuant to subsection
2.4A(iii)) upon the occurrence of an Asset Sale or an Event of
Loss.
"Revolving Loans" means the Tranche A Loans, the
Tranche B Loans, and the Tranche C Loans, or any of them.
"Revolving Note" means any promissory note of Company
issued pursuant to subsection 2.1E of the Existing Credit
Agreement to evidence the Revolving Loans of a Lender, as it may
be amended, supplemented or otherwise modified from time to time.
"Riverside Joint Venture" means that certain Joint
Venture between PMHLP and Harrah's for the development and
operation of a riverboat casino entertainment complex in Maryland
Heights, Missouri, as more fully described in the "Business" and
"Properties" sections of the 10-K.
"RR" means Riverfront Realty Corporation, an Illinois
Corporation.
"Securities" means any stock, shares, partnership
interests, voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences
of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, and any successor statute.
"Senior Notes" means those certain 10-7/8% Senior Notes
Due 2005 of Company, in the original aggregate principal amount
of $150,000,000 issued pursuant to the Indenture, as amended from
time to time.
"Ship Mortgages" means (i) the First Preferred Ship
Mortgage by SSP in favor of the Trustee, for the benefit of
Administrative Agent on behalf of Lenders, dated as of August 25,
1995, executed and delivered pursuant to the Existing Credit
Agreement, as such mortgage has been amended to the date hereof
and as such mortgage may hereafter be amended, supplemented or
otherwise modified, from time to time and (ii) the First
Preferred Ship Mortgages by each of PLC and SIRCC in favor of the
Trustee, for the benefit of Administrative Agent on behalf of
Lenders, each dated as of the Effective Date and substantially in
the form of Exhibit XV, as such mortgages may hereafter be
amended, supplemented or otherwise modified, from time to time.
"Ships" means, collectively, the Illinois Ships and the
Louisiana Ships.
"SIRCC" means Southern Illinois Riverboat/Casino
Cruises, Inc., an Illinois corporation.
"SIRCC Pledge Agreement" means that certain Pledge
Agreement between SIRCC and Administrative Agent dated as of the
date hereof, substantially in the form of Exhibit XX, as such
agreement may be amended from time to time.
"Solvent" means, with respect to any Person, that as of
the date of determination both (A)(i) the then fair saleable
value of the property of such Person is (y) greater than the
total amount of liabilities (including contingent liabilities
with respect to Indebtedness) of such Person and (z) not less
than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person;
(ii) such Person's capital is not unreasonably small in relation
to its business or any contemplated or undertaken transaction;
and (iii) such Person does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts beyond
its ability to pay such debts as they become due; and (B) such
Person is "solvent" within the meaning given that term and
similar terms under applicable laws relating to fraudulent
transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured
liability.
"SSP" means Showboat Star Partnership, a Louisiana
general partnership.
"Standby Letter of Credit" means any standby letter of
credit or similar instrument issued for the purpose of supporting
(i) Indebtedness of Company or any of its Subsidiaries in respect
of industrial revenue or development bonds or financings,
(ii) workers' compensation liabilities of Company or any of its
Subsidiaries, (iii) the obligations of third party insurers of
Company or any of its Subsidiaries arising by virtue of the laws
of any jurisdiction requiring third party insurers,
(iv) obligations with respect to Capital Leases or Operating
Leases of Company or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of
Company or any of its Subsidiaries, in any case if required by
law or governmental rule or regulation or in accordance with
custom and practice in the industry; provided that Standby
Letters of Credit may not be issued for the purpose of supporting
(a) trade payables or (b) any Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association, joint venture or other
business entity of which more than 50% of the total voting power
of shares of stock or other ownership interests entitled (without
regard to the occurrence of any contingency) to vote in the
election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having
the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Subsidiary Security Agreements" means (i) those
certain Security Agreements between certain of Company's
Subsidiaries and Administrative Agent each dated as of August 25,
1995, executed and delivered pursuant to the Existing Credit
Agreement, as each such agreement has been amended to the date
hereof and as each such agreement may hereafter be amended,
supplemented or otherwise modified, from time to time, including,
without limitation, by the inclusion of Subsidiaries of Company
formed after the Effective Date and (ii) those certain Security
Agreements between certain of Company's Subsidiaries and
Administrative Agent each dated as of the date hereof, executed
and delivered pursuant to this Agreement, as such agreements may
be amended from time to time.
"Substitute Lender" has the meaning assigned to that
term in subsection 10.1B(iii).
"Swing Line Lender" means Administrative Agent, or any
Person serving as a successor Administrative Agent hereunder, in
its capacity as Swing Line Lender hereunder.
"Swing Line Loan Commitment" means the commitment of
Swing Line Lender to make Swing Line Loans to Company pursuant to
subsection 2.1B.
"Swing Line Loans" means the Loans made by Swing Line
Lender to Company pursuant to subsection 2.1B.
"Swing Line Note" means any promissory note of Company
issued pursuant to subsection 2.1E to evidence the Swing Line
Loans of Swing Line Lender, substantially in the form of Exhibit
V annexed hereto, as it may be amended, supplemented or otherwise
modified from time to time.
"Tax" or "Taxes" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature
and whatever called, by any Governmental Authority, on whomsoever
and wherever imposed, levied, collected, withheld or assessed;
provided that "Tax on the overall net income" of a Person shall
be construed as a reference to a tax imposed by any Governmental
Authority on all or part of the net income, profits or gains of
that Person (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise).
"10-K" means the annual report of the Company for the
Fiscal Year ended March 31, 1996, filed on Form 10-K with the
Securities and Exchange Commission.
"Title Company" means Chicago Title Insurance Company.
"Title Policies" means Policy Number LA-001-107-50497,
Policy Number 14 0142 107 00000001, Policy Number 29 0010 107
16901 and Policy Number 29 0010 107 16902, each issued by the
Title Company, insuring the Administrative Agent's interest as
mortgagee on certain real property described therein.
"Total Utilization of Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans (other than Revolving
Loans made for the purpose of repaying any Refunded Swing Line
Loans or reimbursing Administrative Agent for any amount drawn
under any Letter of Credit but not yet so applied) plus (ii) the
aggregate principal amount of all outstanding Swing Line Loans
plus (iii) the Letter of Credit Usage.
"Total Utilization of Tranche A Commitments" means, as
at any date of determination, the sum of (i) the aggregate
principal amount of all outstanding Tranche A Loans (other than
Tranche A Loans made for the purpose of repaying any Refunded
Swing Line Loans or reimbursing Administrative Agent for any
amount drawn under any Letter of Credit but not yet so applied)
plus (ii) the aggregate principal amount of all outstanding Swing
Line Loans plus (iii) the Letter of Credit Usage.
"Tranche A Loan Commitment" means the commitment of a
Lender to make Tranche A Loans to Company pursuant to subsection
2.1A(i), and "Tranche A Loan Commitments" means such commitments
of all Lenders in the aggregate.
"Tranche A Loans" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(i) and the Existing Revolving
Loans converted into Tranche A Loans pursuant to subsection 2.1F.
"Tranche A Notes" means the promissory notes of Company
issued pursuant to subsection 2.1E, if any, to evidence the
Tranche A Loans of any Lenders, substantially in the form of
Exhibit IV-A annexed hereto, as they may be amended, supplemented
or otherwise modified from time to time.
"Tranche B Loan Commitment" means the commitment of a
Lender to make Tranche B Loans to Company pursuant to subsection
2.1A(ii), and "Tranche B Loan Commitments" means such commitments
of all Lenders in the aggregate.
"Tranche B Loans" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(ii).
"Tranche B Notes" means the promissory notes of Company
issued pursuant to subsection 2.1E, if any, to evidence the
Tranche B Loans of any Lenders, substantially in the form of
Exhibit IV-B annexed hereto, as they may be amended, supplemented
or otherwise modified from time to time.
"Tranche C Loan Commitment" means the commitment of a
Lender to make Tranche C Loans to Company pursuant to subsection
2.1A(iii), and "Tranche C Loan Commitments" means such
commitments of all Lenders in the aggregate.
"Tranche C Loans" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(iii).
"Tranche C Notes" means the promissory notes of Company
issued pursuant to subsection 2.1E, if any, to evidence the
Tranche C Loans of any Lenders, substantially in the form of
Exhibit IV-C annexed hereto, as they may be amended, supplemented
or otherwise modified from time to time.
"Trust Agreement" means the Master Vessel and
Collateral Trust Agreement between the Trustee and Administrative
Agent on behalf of Lenders, dated as of August 25, 1995, executed
and delivered pursuant to the Existing Credit Agreement, as such
agreement has been amended to the date hereof and as such
agreement may hereafter be amended, supplemented or otherwise
modified from time to time.
"Trustee" means WFB, solely in its capacity as trustee
under the Trust Agreement and not in its individual capacity.
"WFB" has the meaning assigned to that term in the
first paragraph of this Agreement.
"Withdrawal Period" has the meaning assigned to that
term in subsection 10.1B(iii).
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.
Except as otherwise expressly provided in this
Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with GAAP.
Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii) and
(xiii) of subsection 6.1 shall be prepared in accordance with
GAAP as in effect at the time of such preparation (and delivered
together with the reconciliation statements provided for in
subsection 6.1(iv)). Calculations in connection with the
definitions, covenants and other provisions of this Agreement
shall utilize accounting principles and policies in conformity
with those used to prepare the financial statements referred to
in subsection 5.3.
1.3 Other Definitional Provisions.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless
otherwise specifically provided. Any of the terms defined in
subsection 1.1 may, unless the context otherwise requires, be
used in the singular or the plural, depending on the reference.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; Notes.
A. Revolving Loans.
(i) Tranche A Loans. Subject to the terms and
conditions of this Agreement and in reliance upon the
representations and warranties of the Loan Parties set forth
in the Loan Documents, each Lender hereby severally agrees,
subject to the limitations set forth below with respect to
the maximum amount of Loans permitted to be outstanding from
time to time, to lend to Company from time to time during
the period from the Effective Date to but excluding the
Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the
Tranche A Commitments to be used for the purposes identified
in subsection 2.5A(i). The original amount of each Lender's
Tranche A Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate original
amount of the Tranche A Commitments is $60,000,000; provided
that the Tranche A Commitments of Lenders shall be adjusted
to give effect to any assignments of the Tranche A
Commitments pursuant to subsection 10.1B; and provided
further that the amount of the Tranche A Commitments shall
be reduced from time to time by the amount of any reductions
thereto made pursuant to subsections 2.4A and 2.4B. Each
Lender's Tranche A Commitment shall expire on the Commitment
Termination Date and all Tranche A Revolving Loans and all
other amounts owed hereunder with respect to the Tranche A
Loans and the Tranche A Commitments shall be paid in full no
later than that date. Loans made by Lenders pursuant to
this subsection 2.1A(i) are described herein as "Tranche A
Loans". Amounts borrowed under this subsection 2.1A(i) may
be repaid and reborrowed (subject to compliance with Section
4) to but excluding the Commitment Termination Date.
(ii) Tranche B Loans. Subject to the terms and
conditions of this Agreement and in reliance upon the
representations and warranties of the Loan Parties set forth
in the Loan Documents, each Lender hereby severally agrees,
subject to the limitations set forth below with respect to
the maximum amount of Loans permitted to be outstanding from
time to time, to lend to Company from time to time during
the period from January 1, 1997, to but excluding June 1,
1997, an aggregate amount not exceeding its Pro Rata Share
of the aggregate amount of the Tranche B Commitments to be
used for the purposes identified in subsection 2.5A(ii).
The original amount of each Lender's Tranche B Commitment is
set forth opposite its name on Schedule 2.1 annexed hereto
and the aggregate original amount of the Tranche B
Commitments is $40,000,000; provided that the Tranche B
Commitments of Lenders shall be adjusted to give effect to
any assignments of the Tranche B Commitments pursuant to
subsection 10.1B; and provided further that the amount of
the Tranche B Commitments shall be reduced from time to time
by the amount of any reductions thereto made pursuant to
subsections 2.4A and 2.4B. The unused portion of each
Lender's Tranche B Commitment shall expire on June 1, 1997
and Tranche B Loans may not be made on or after that date.
Each Lender's Tranche B Commitment shall expire on the
Commitment Termination Date and all Tranche B Loans and all
other amounts owed hereunder with respect to the Tranche B
Loans and the Tranche B Commitments shall be paid in full no
later than that date. Loans made by Lenders pursuant to
this subsection 2.1A(ii) are described herein as "Tranche B
Loans." Amounts borrowed under this subsection 2.1A(ii) may
be repaid and reborrowed (subject to compliance with Section
4) to but excluding June 1, 1997.
Anything contained in this Agreement to the contrary
notwithstanding, the Tranche B Loans and Tranche B
Commitments shall be subject to the limitation that in no
event shall the sum of the principal amount of the
outstanding Tranche B Loans plus the principal amount of the
outstanding Permitted Maryland Heights Indebtedness exceed
the Tranche B Commitments then in effect.
(iii) Tranche C Loans. Subject to the terms and
conditions of this Agreement and in reliance upon the
representations and warranties of the Loan Parties set forth
in the Loan Documents, each Lender hereby severally agrees,
subject to the limitations set forth below with respect to
the maximum amount of Loans permitted to be outstanding from
time to time, to lend to Company from time to time during
the period from the Effective Date to but excluding the
Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the
Tranche C Commitments to be used for the purposes identified
in subsection 2.5A(iii). The original amount of each
Lender's Tranche C Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate original
amount of the Tranche C Commitments is $20,000,000; provided
that the Tranche C Commitments of Lenders shall be adjusted
to give effect to any assignments of the Tranche C
Commitments pursuant to subsection 10.1B; provided further
that the amount of the Tranche C Commitments shall be
adjusted from time to time by the amount of any adjustments
thereto made pursuant to subsections 2.4A and 2.4B. Each
Lender's Tranche C Commitment shall expire on the Commitment
Termination Date and all Tranche C Loans and all other
amounts owed hereunder with respect to the Tranche C Loans
and the Tranche C Commitments shall be paid in full no later
than that date. Loans made by Lenders pursuant to this
subsection 2.1A(iii) are described herein as "Tranche C
Loans." Amounts borrowed under this subsection 2.1A(iii)
may be repaid and reborrowed (subject to compliance with
Section 4) to but excluding the Commitment Termination Date.
B. Swing Line Loans. Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the
maximum amount of Swing Line Loans permitted to be outstanding
from time to time and subject to the other terms and conditions
hereof, to make a portion of the Tranche A Commitments available
to Company from time to time during the period from the Effective
Date to but excluding the Commitment Termination Date by making
Swing Line Loans to Company in an aggregate amount not exceeding
the amount of the Swing Line Loan Commitment to be used for the
purposes identified in subsection 2.5A(iv), notwithstanding the
fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Tranche A Loans and Swing Line Lender's Pro
Rata Share of the Letter of Credit Usage then in effect, may
exceed Swing Line Lender's Tranche A Commitment. The original
amount of the Swing Line Loan Commitment is $4,000,000; provided
that any reduction of the Commitments made pursuant to subsection
2.4A or 2.4B which reduces the aggregate Tranche A Commitments to
an amount less than the then current amount of the Swing Line
Loan Commitment shall result in an automatic corresponding
reduction of the Swing Line Loan Commitment to the amount of the
Tranche A Commitments, as so reduced, without any further action
on the part of Company or Swing Line Lender. The Swing Line Loan
Commitment shall expire on the fifth Business Day prior to the
Commitment Termination Date and all Swing Line Loans and all
other amounts owed hereunder with respect to the Swing Line Loans
shall be paid in full no later than that date. Amounts borrowed
under this subsection 2.1B may be repaid and reborrowed to but
excluding the fifth Business Day prior to the Commitment
Termination Date. Swing Line Lender shall not be obligated to
make any Swing Line Loans if it has elected not to do so after
the occurrence and during the continuation of a Potential Event
of Default of which it is aware or an Event of Default.
On Friday of each week, Swing Line Lender will notify
each Lender of the amount of Swing Line Loans then outstanding.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan
Commitment shall be subject to the limitation that in no event
shall the Total Utilization of Tranche A Commitments at any time
exceed the Tranche A Commitments then in effect.
With respect to any Swing Line Loans which have not
been voluntarily prepaid by Company pursuant to subsection
2.4B(i), Swing Line Lender may, at any time in its sole and
absolute discretion, deliver to Lenders (with a copy to Company),
no later than 8:30 A.M. (Pacific time) on the first Business Day
in advance of the proposed Funding Date, a notice (which shall be
deemed to be a Notice of Borrowing given by Company) requesting
Lenders to make Tranche A Loans that are Base Rate Loans on such
Funding Date in an amount equal to the amount of such Swing Line
Loans (the "Refunded Swing Line Loans") outstanding on the date
such notice is given which Swing Line Lender requests Lenders to
prepay. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of Tranche A Loans made by
Lenders other than Swing Line Lender shall be immediately
delivered to Swing Line Lender (and not to Company) and applied
to repay a corresponding portion of the Refunded Swing Line Loans
and (ii) on the day such Tranche A Loans are made, Swing Line
Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Tranche A Loan made by
Swing Line Lender, and such portion of the Swing Line Loans
deemed to be so paid shall no longer be outstanding as Swing Line
Loans and shall no longer be due under the Swing Line Note of
Swing Line Lender but shall instead constitute part of Swing Line
Lender's outstanding Tranche A Loans and shall be due under the
Tranche A Note of Swing Line Lender. Company hereby authorizes
Swing Line Lender to charge Company's account with Swing Line
Lender (up to the amount available in each such account) in order
to immediately pay Swing Line Lender the amount of the Refunded
Swing Line Loans to the extent the proceeds of such Tranche A
Loans made by Lenders, including the Tranche A Loan deemed to be
made by Swing Line Lender, are not sufficient to repay in full
the Refunded Swing Line Loans. If any portion of any such amount
paid (or deemed to be paid) to Swing Line Lender should be
recovered by or on behalf of Company from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably
shared among all Lenders in the manner contemplated by subsection
10.5.
If, as a result of any bankruptcy or similar proceeding
with respect to Company, Tranche A Loans are not made pursuant to
this subsection 2.1B in an amount sufficient to repay any amounts
owed to Swing Line Lender in respect of any outstanding Swing
Line Loans, each Lender shall be deemed to, and hereby agrees to,
have purchased a participation in such outstanding Swing Line
Loans in an amount equal to its Pro Rata Share (calculated
without giving effect to clauses (d) and (e) of the definition of
Loan Exposure) of the unpaid amount together with accrued
interest thereon. Upon one Business Day's notice from Swing Line
Lender, each Lender shall deliver to Swing Line Lender an amount
equal to its respective participation in same day funds at the
Funding and Payment Office. In order to evidence such
participation each Lender agrees to enter into a participation
agreement at the request of Swing Line Lender in form and
substance reasonably satisfactory to all parties. In the event
any Lender fails to make available to Swing Line Lender the
amount of such Lender's participation as provided in this
paragraph, Swing Line Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon
at the rate customarily used by Swing Line Lender for the
correction of errors among banks for three Business Days and
thereafter at the Base Rate. In the event Swing Line Lender
receives a payment of any amount in which other Lenders have
purchased participations as provided in this paragraph, Swing
Line Lender shall promptly distribute to each such other Lender
its Pro Rata Share of such payment.
Anything contained herein to the contrary
notwithstanding, each Lender's obligation to make Tranche A Loans
for the purpose of repaying any Refunded Swing Line Loan pursuant
to the second preceding paragraph and each Lender's obligation to
purchase a participation in any unpaid Swing Line Loan pursuant
to the immediately preceding paragraph shall be absolute and
unconditional and shall not be affected by any circumstance,
including without limitation (a) any set-off, counterclaim, re
coupment, defense or other right which such Lender may have
against Swing Line Lender, Company or any other Person for any
reason whatsoever; (b) the occurrence or continuation of an Event
of Default or a Potential Event of Default; (c) any adverse
change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its
Subsidiaries; (d) any breach of this Agreement or any other Loan
Document by any party thereto; or (e) any other circumstance,
happening or event whatsoever, whether or not similar to any of
the foregoing; provided if such unpaid Swing Line Loan increased
Total Utilization of Commitments (after giving effect to the
repayment of any Tranche A Loan with the proceeds of such Swing
Line Loan), such obligation of each Lender is subject to the
condition that one of the following must have occurred: (X) Swing
Line Lender did not have actual knowledge that any of the
conditions under Section 4 to the making of the applicable unpaid
Swing Line Loans were not satisfied at the time such unpaid Swing
Line Loans were made, (Y) such Lender had actual knowledge by
receipt of any notices required to be delivered to Lenders
pursuant to subsection 6.1(ix) or otherwise, that any such
condition had not been satisfied and such Lender failed to notify
Swing Line Lender in writing that it had no obligation to make
Tranche A Loans until such condition was satisfied (any such
notice to be effective as of the date of receipt thereof by Swing
Line Lender), or (Z) the satisfaction of any such condition not
satisfied had been waived in accordance with subsection 10.6
prior to or at the time such unpaid Swing Line Loans were made.
C. Borrowing Mechanics. Revolving Loans made on any
Funding Date (other than Tranche A Loans made pursuant to a
request by Swing Line Lender pursuant to subsection 2.1B for the
purpose of repaying any Refunded Swing Line Loans or Tranche A
Loans made pursuant to subsection 3.3B for the purpose of
reimbursing Administrative Agent for the amount of a drawing
under a Letter of Credit issued by it) shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000
in excess of that amount. Swing Line Loans made on any Funding
Date shall be in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount.
Whenever Company desires that Lenders make Revolving Loans it
shall deliver to Administrative Agent a Notice of Borrowing no
later than 8:30 A.M. (Pacific time) at least one Business Day in
advance of the proposed Funding Date. Whenever Company desires
that Swing Line Lender make a Swing Line Loan, it shall deliver
to Administrative Agent a Notice of Borrowing no later than 8:30
A.M. (Pacific time) on the proposed Funding Date. Each Notice of
Borrowing shall specify (i) the proposed Funding Date (which
shall be a Business Day) and (ii) the amount and type of Loans
requested. In lieu of delivering the above-described Notice of
Borrowing, Company may give Administrative Agent telephonic
notice by the required time of any proposed borrowing under this
subsection 2.1C; provided that such notice shall be promptly con
firmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur
any liability to Company in acting upon any telephonic notice
referred to above that Administrative Agent believes in good
faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Company or for otherwise
acting in good faith under this subsection 2.1C, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to
any such telephonic notice Company shall have effected Loans
hereunder.
Company shall notify Administrative Agent prior to the
funding of any Loans in the event that any of the matters to
which Company is required to certify in the applicable Notice of
Borrowing is no longer true and correct as of the applicable
Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of
the applicable Funding Date, as to the matters to which Company
is required to certify in the applicable Notice of Borrowing.
D. Disbursement of Funds. All Revolving Loans under this
Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any default by
any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender be
increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested
hereunder. Promptly after receipt by Administrative Agent of a
Notice of Borrowing pursuant to subsection 2.1C (or telephonic
notice in lieu thereof), Administrative Agent shall notify each
Lender or Swing Line Lender, as the case may be, of the proposed
borrowing. Each Lender shall make the amount of its Loan
available to Administrative Agent not later than 1:00 P.M.
(Pacific time) on the applicable Funding Date, and Swing Line
Lender shall make the amount of its Swing Line Loan available to
Administrative Agent not later than 1:00 P.M. (Pacific time) on
the applicable Funding Date, in each case in same day funds in
Dollars, at the Funding and Payment Office. Except as provided
in subsection 2.1B or subsection 3.3B with respect to Tranche A
Loans used to repay Refunded Swing Line Loans or to reimburse
Administrative Agent for the amount of a drawing under a Letter
of Credit issued by it, upon satisfaction or waiver of the
conditions precedent specified in subsections 4.1 (in the case of
Loans made or converted on the Effective Date), 4.2 (in the case
of the initial Tranche B Loans), 4.3 (in the case of all Tranche
C Loans) and 4.4 (in the case of all Loans), Administrative Agent
shall make the proceeds of such Loans available to Company on the
applicable Funding Date by causing an amount of same day funds in
Dollars equal to the proceeds of all such Loans received by
Administrative Agent from Lenders or Swing Line Lender, as the
case may be, to be credited to the account of Company at the
Funding and Payment Office.
Unless Administrative Agent shall have been notified by
any Lender prior to the Funding Date for any Revolving Loans that
such Lender does not intend to make available to Administrative
Agent the amount of such Lender's Loan requested on such Funding
Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding
Date and Administrative Agent may, in its sole discretion, but
shall not be obligated to, make available to Company a correspond
ing amount on such Funding Date. If such corresponding amount is
not in fact made available to Administrative Agent by such
Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the
date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of
errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount
forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Company and Company
shall immediately pay such corresponding amount to Administrative
Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative
Agent, at the rate payable under this Agreement for Base Rate
Loans of the type then being repaid by Company. Nothing in this
subsection 2.1D shall be deemed to relieve any Lender from its
obligation to fulfill its Commitments hereunder or to prejudice
any rights that Company may have against any Lender as a result
of any default by such Lender hereunder.
E. Notes. The Revolving Loans made or converted hereunder
shall be evidenced by the Revolving Notes executed and delivered
by Company pursuant to subsection 2.1E of the Existing Credit
Agreement; provided, however, that upon request by any Lender,
Company shall execute and deliver to such Lender (or to
Administrative Agent for that Lender) a Tranche A Note to
evidence that Lender's Tranche A Loans, in the principal amount
of that Lender's Tranche A Commitment and with other appropriate
insertions, a Tranche B Note to evidence that Lender's Tranche B
Loans, in the principal amount of that Lender's Tranche B
Commitment and with other appropriate insertions, and a Tranche C
Note in the principal amount of that Lender's Tranche C
Commitment and with other appropriate insertions; and provided,
further, that upon request by Swing Line Lender, Company shall
execute and deliver to Swing Line Lender a Swing Line Note to
evidence Swing Line Lender's Swing Line Loans, in the principal
amount of the Swing Line Loan Commitment and with other
appropriate insertions. Upon the execution and delivery to any
Lender or Swing Line Lender of Notes pursuant to this subsection
2.1E, the Revolving Note or Swing Line Note, as the case may be,
that were executed and delivered to such Lender or Swing Line
Lender pursuant to the Existing Credit Agreement shall be null
and void, and such Lender or Swing Line Lender shall promptly
return such Revolving Note or Swing Line Note to Company for
cancellation.
Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and
until a Lender Assignment Agreement effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent
as provided in subsection 10.1B(ii). Any request, authority or
consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any
Note shall be conclusive and binding on any subsequent holder,
assignee or transferee of that Note or of any Note or Notes
issued in exchange therefor.
F. Conversion of Existing Revolving Loans into Tranche A
Loans. Upon satisfaction or written waiver by Requisite
Lenders of the conditions set forth in subsections 4.1 and 4.4,
as of the Effective Date all Revolving Loans (as defined in the
Existing Credit Agreement) outstanding under the Existing Credit
Agreement as of, and at the time of, the Effective Date
("Existing Revolving Loans") shall be converted into and deemed
to be Tranche A Loans for all purposes under this Agreement. Any
amounts of accrued interest or other amounts owed (whether or not
presently due and payable) by Company to the Lenders under or in
respect of the Existing Revolving Loans shall, as of the
Effective Date, continue to be due and payable to the Lenders
under the Revolving Notes issued to the Lenders under the
Existing Credit Agreement, which shall remain in full force and
effect, or, if any Lender shall request under subsection 2.1E
hereof the issuance of Tranche A Notes, Tranche B Notes and
Tranche C Notes in replacement of such Lender's Revolving Note,
such Tranche A Note. Notwithstanding anything to the contrary
contained in subsection 2.2D of the Existing Credit Agreement,
all such Existing Revolving Loans converted into Tranche A Loans
hereunder shall be converted into Base Rate Loans on the
Effective Date. The conversion of the Existing Revolving Loans
hereunder shall not be deemed to be repayment thereof, and
Company shall not be required to deliver any notice of prepayment
or notice of borrowing or to satisfy any other condition relating
to required amounts of prepayments or borrowings hereunder with
respect to such conversion of the Existing Revolving Loans.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of
subsections 2.2B, 2.2E, and 2.7, each Revolving Loan and each
Swing Line Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by
acceleration or otherwise) at the sum of the Base Rate plus the
Applicable Base Rate Margin minus the Interest Rate Reduction
Amount.
B. [Omitted].
C. Interest Payments. Subject to the provisions of
subsection 2.2E, interest on each Loan shall be payable in
arrears on and to each Interest Payment Date, upon any prepayment
of that Loan (to the extent accrued on the amount being prepaid)
and at maturity (including final maturity); provided that in the
event any Loans are prepaid pursuant to subsection 2.4A(iii) or
2.4B(i), interest accrued on such Loans through the date of such
prepayment shall be payable on the next succeeding Interest
Payment Date (or, if earlier, at final maturity).
D. [Omitted].
E. Post-Default Interest. Upon the occurrence and during
the continuation of any Event of Default, the outstanding
principal amount of all Loans and, to the extent permitted by
applicable law, the amount of any overdue interest payments on
the Loans or any overdue fees or other amounts owed hereunder
shall thereafter bear interest (including post-petition interest
in any proceeding under the Bankruptcy Code or other applicable
bankruptcy laws) payable on demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this
Agreement with respect to the applicable Loans (or, in the case
of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this
Agreement for Tranche A Loans). Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E
is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent
or any Lender.
F. Computation of Interest. Interest on the Loans shall
be computed on the basis of a 360-day year, in each case for the
actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the
making of such Loan shall be included, and the date of payment of
such Loan shall be excluded; provided that if a Loan is repaid on
the same day on which it is made, one day's interest shall be
paid on that Loan.
2.3 Fees.
A. Unused Commitment Fees. Company agrees to pay to
Administrative Agent, for distribution to each Lender in
proportion to that Lender's Pro Rata Share, commitment fees for
the period from and including the Effective Date to and excluding
the Commitment Termination Date equal to (i) the average of the
daily excess of the Commitments over the sum of the aggregate
principal amount of Revolving Loans outstanding plus the Letter
of Credit Usage multiplied by (ii) 0.50% per annum, such
commitment fees to be calculated on the basis of a 360-day year,
and the actual number of days elapsed and to be payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of
each year, commencing on the first such date to occur after the
Effective Date and on the Commitment Termination Date.
B. Additional Fees.
(i) Company agrees to pay to Administrative Agent on
the Effective Date, for distribution to each Lender in
accordance with such Lender's Pro Rata Share, a restructure
fee in the amount of $1,500,000.
(ii) On the day that the first Tranche B Loan is made,
Company agrees to pay to Administrative Agent, for
distribution to each Lender in accordance with such Lender's
Pro Rata Share, a Tranche B facility fee in the amount of
$800,000.
(iii) Company agrees to pay to Administrative Agent
on the Effective Date for distribution to each Lender in
accordance with such Lender's Pro Rata Share, all accrued
unpaid interest and fees owed under the Existing Credit
Agreement, whether or not then due and payable under the
Existing Credit Agreement.
2.4 Payments, Prepayments and Reductions in Commitments; General
Provisions Regarding Payments.
A. Scheduled and Mandatory Reductions of Commitments and
Mandatory Prepayments.
(i) Scheduled Reductions of Tranche A Commitments and
Tranche B Commitments. The Tranche A Commitments and
Tranche B Commitments shall be permanently reduced on the
dates, in the amounts and in the manner set forth below:
Scheduled Reduction of
Tranche A Commitments and
Date Tranche B Commitments
September 30, 1997 $ 7,500,000
December 31, 1997 7,500,000
March 31, 1998 7,500,000
June 30, 1998 7,500,000
September 30, 1998 7,500,000
December 31, 1998 7,500,000
March 31, 1999 8,000,000
June 30, 1999 8,000,000
September 30, 1999 8,000,000
December 31, 1999 10,000,000
March 31, 2000 10,000,000
June 30, 2000 11,000,000
Total Reductions $100,000,000
; provided that the scheduled reductions of the Tranche A
Commitments and Tranche B Commitments set forth above shall
be reduced in connection with any voluntary or mandatory
reductions of the Tranche A Commitments or the Tranche B
Commitments in accordance with subsections 2.4C(ii) and
2.4C(iv). The scheduled reductions of the Tranche A
Commitments and Tranche B Commitments set forth above shall
first be applied to reduce the Tranche B Commitments to the
extent thereof (as previously reduced from time to time) and
shall then be applied to reduce the Tranche A Commitments
(as previously reduced from time to time). The Tranche B
Commitments will be reduced on June 1, 1997, by an amount
equal to the excess of the Tranche B Commitments over the
amount of Tranche B Loans outstanding on that date.
(ii) Scheduled Reductions of Tranche C Commitments. The
Tranche C Commitments shall be permanently reduced on the
dates and in the amounts set forth below:
Scheduled Reduction of
Date Tranche C Commitments
September 30, 1999 $5,000,000
December 31, 1999 5,000,000
March 31, 2000 5,000,000
June 30, 2000 5,000,000
Total Reductions $20,000,000
; provided that the scheduled reductions of the Tranche C
Commitments set forth above shall be reduced in connection
with any voluntary or mandatory reductions of the Tranche C
Commitments in accordance with subsections 2.4C(ii) and
2.4C(iv); and provided further that the reductions set forth
above shall be increased (and, to the extent necessary,
additional reduction dates added) by amounts equal to the
additions to the Tranche C Commitment made pursuant to
subsection 2.4B(iii)(b)(2) and 2.4A(iii)(c) by increasing
the above scheduled amounts (and adding additional
reductions) to the extent of scheduled reductions of the
Tranche A Commitments and Tranche B Commitments set forth in
2.4B(i) in inverse order of maturity.
(iii) Mandatory Prepayments and Mandatory Reductions
of Commitments. The Loans shall be prepaid and the Commitments
shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and
reductions to be applied as set forth below or as more
specifically provided in subsection 2.4C:
(a) Prepayments and Reductions From Asset Sales.
(1) If Company or any of its Subsidiaries receives any
Net Cash Proceeds in an amount equal to or greater than
$2,500,000 from any Asset Sale, Company shall prepay the
Loans and the Commitments shall be permanently reduced in an
aggregate amount equal to the excess of such Net Cash
Proceeds of such Asset Sale over the amount of such Net Cash
Proceeds that the Company intends to invest in a Related
Business and are so invested within 270 days of receipt by
the Company or any of its Subsidiaries. Such prepayment
shall be due and such reduction in Commitments shall occur
on the earlier of (i) the second Business Day following a
determination by a Responsible Officer that such Net Cash
Proceeds will not be invested in assets or property of a
Related Business or (ii) 270 days after the receipt of such
Cash Proceeds, if they have not been so invested in a
Related Business;
(2) If Company or any of its Subsidiaries receives any
Net Cash Proceeds in an amount less than $2,500,000 from any
Asset Sale, Company shall prepay the Loans and the
Commitments shall be permanently reduced in an aggregate
amount equal to the excess of such Net Cash Proceeds of such
Asset Sale over such Net Cash Proceeds that Company intends
to invest in a Related Business and are so invested within
270 days of receipt by Company or any of its Subsidiaries.
Such prepayment shall be due and such reduction in
Commitments shall occur on the second Business Day following
receipt by Company or any of its Subsidiaries of Net Cash
Proceeds in an amount that, together with all Net Cash
Proceeds received by Company from Asset Sales since the
later of the Effective Date or the date of the most recent
payment made pursuant to this subsection 2.4A(iii)(a),
exceeds $6,000,000.
(3) Concurrently with any prepayment of the Loans and
reduction of the Commitments pursuant to this subsection
2.4A(iii)(a), Company shall deliver to Agent an Officers'
Certificate demonstrating the derivation of the Net Cash
Proceeds from the correlative Asset Sale from the gross
sales price thereof. In the event that Company shall, at
any time after receipt of Cash Proceeds from any Asset Sale
requiring a prepayment or a reduction of the Commitments
pursuant to this subsection 2.4A(iii)(a), determine that the
prepayments and/or reductions of the Commitments previously
made in respect of such Asset Sale were in an aggregate
amount less than that required by the terms of this
subsection 2.4A(iii)(a), Company shall promptly make an
additional prepayment of the Swing Line Loans, or Revolving
Loans, as the case may be (and the Commitments shall be
permanently reduced), in the manner described above in an
amount equal to the amount of any such deficit, and Company
shall concurrently therewith deliver to Agent an Officers'
Certificate demonstrating the derivation of the additional
Net Cash Proceeds resulting in such deficit.
(b) Prepayments and Reductions Due to the Occurrence of
an Event of Loss.
(1) If Company or any of its Subsidiaries receives any
Net Cash Proceeds in an amount equal to or greater than
$2,500,000 from any Event of Loss, Company shall prepay the
Loans and the Commitments shall be permanently reduced in an
aggregate amount equal to the excess of such Net Cash
Proceeds of from such Event of Loss over the amount of such
Net Cash Proceeds that the Company intends to invest in a
Related Business and are so invested within 270 days of
receipt by the Company or any of its Subsidiaries. Such
prepayment shall be due and such reduction in Commitments
shall occur on the earlier of (i) the second Business Day
following a determination by a Responsible Officer that such
Net Cash Proceeds will not be invested in assets or property
of a Related Business or (ii) 270 days after the receipt of
such Net Cash Proceeds, if they have not been so invested in
a Related Business;
(2) If Company or any of its Subsidiaries receives any
Net Cash Proceeds in an amount less than $2,500,000 from any
Event of Loss, Company shall prepay the Loans and (i) the
Tranche B Commitments shall be permanently reduced in an
aggregate amount equal to the excess of such Net Cash
Proceeds of such Asset Sale over such Net Cash Proceeds that
Company intends to invest in a Related Business and are so
invested within 270 days of receipt by Company or any of its
Subsidiaries and (ii) the Tranche C Commitment shall be
adjusted by adding to such commitment an amount equivalent
to such reduction. Such prepayment shall be due and such
reduction in Commitments shall occur on the second Business
Day following receipt by Company or any of its Subsidiaries
of Net Cash Proceeds in an amount that, together with all
Net Cash Proceeds received by Company from Events of Loss
since the later of the Effective Date or the date of the
most recent payment made pursuant to this subsection
2.4A(iii)(b), exceeds $6,000,000.
(3) Concurrently with any prepayment of the Loans and
reduction of the Commitments pursuant to this subsection
2.4A(iii)(b), Company shall deliver to Agent an Officers'
Certificate demonstrating the derivation of the Net Cash
Proceeds from the correlative Event of Loss. In the event
that Company shall, at any time after receipt of Cash
Proceeds from any Event of Loss requiring a prepayment or a
reduction of the Commitments pursuant to this subsection
2.4A(iii)(b), determine that the prepayments and/or
reductions of the Commitments previously made in respect of
such Event of Loss were in an aggregate amount less than
that required by the terms of this subsection 2.4A(iii)(b),
Company shall promptly make an additional prepayment of the
Swing Line Loans or Revolving Loans, as the case may be (and
the Commitments shall be permanently reduced), in the manner
described above in an amount equal to the amount of any such
deficit, and Company shall concurrently therewith deliver to
Agent an Officers' Certificate demonstrating the derivation
of the additional Net Cash Proceeds resulting in such
deficit.
(c) Prepayments and Reductions Due to Incurrence of
Indebtedness. If Company or any of its Subsidiaries incurs,
guaranties or becomes liable with respect to any
Indebtedness in an aggregate amount in excess of
$10,000,000, other than the Loans, the Senior Notes,
Permitted Maryland Heights Indebtedness and intercompany
Indebtedness of Company or any wholly-owned Subsidiary of
Company, Company shall, not more than one Business Day after
the incurrence or guaranty of such Indebtedness prepay the
Tranche B Loans and Swing Line Loans and (i) Tranche B
Commitments shall be permanently reduced by the amount such
Indebtedness exceeds $10,000,000 and the Tranche C
Commitment shall be adjusted by adding to such commitment an
amount equivalent to such reduction.
(d) Prepayments of Tranche C Loans due to Consolidated
EBITDA or Interest Coverage Ratio. If any Compliance
Certificate delivered pursuant to subsection 6.1(iv)
demonstrates either that Consolidated EBITDA for the four
Fiscal Quarter period most recently ended before the date of
such Compliance Certificate is equal to or less than
$85,000,000 or that the Interest Coverage Ratio on the last
day of the Fiscal Quarter most recently ended before such
date is equal to or greater than 2.0 to 1.0, Company shall
prepay the Tranche C Loans on the date such Compliance
Certificate is delivered; provided that if Consolidated
EBITDA for such period is equal to or in excess of
$85,000,000 such prepayment may be limited to an amount to
cause such Interest Coverage Ratio to equal 2.0 to 1.0 on a
proforma basis giving effect to such prepayment of Tranche C
Loans. If Company fails to deliver any Compliance
Certificate within the time specified by subsection
6.1(iii), Company shall prepay the Tranche C Loans on the
date such Compliance Certificate was required to have been
delivered.
(e) Prepayments Due to Reductions of Tranche A
Commitments, Tranche B Commitments, and Tranche C
Commitments. On each date on which the Commitments are
scheduled to be reduced pursuant to subsection 2.4A(i) or
2.4A(ii), (i) Company shall pay the Tranche A Loans to the
extent necessary so that aggregate outstanding Tranche A
Loans, Swing Line Loans and Letters of Credit do not exceed
the amount of the Tranche A Commitments after giving effect
to the reduction made on such date, (ii) Company shall pay
the Tranche B Loans to the extent necessary so that
aggregate outstanding Tranche B Loans plus the aggregate
amount of outstanding Permitted Maryland Heights
Indebtedness, do not exceed the amount of the Tranche B
Commitments after giving effect to the reduction made on
such date, and (iii) Company shall pay the Tranche C Loans
to the extent necessary so that the aggregate outstanding
Tranche C Loans do not exceed the amount of the Tranche C
Commitments after giving effect to the reduction made on
such date.
B. Voluntary Prepayments, Voluntary Reductions in
Commitments, and Mandatory Prepayments.
(i) Voluntary Prepayments. Company may, upon written
or telephonic notice to Administrative Agent on or prior to
10:00 A.M. (Pacific time) on the date of prepayment, which
notice, if telephonic, shall be promptly confirmed in
writing, at any time and from time to time prepay any Swing
Line Loan on any Business Day in whole or in part in an
aggregate minimum amount of $500,000 and integral multiples
of $100,000 in excess of that amount. Company may, upon not
less than one Business Day's prior written or telephonic
notice given to Administrative Agent by 10:00 A.M. (Pacific
time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent
will promptly transmit by telefacsimile or telephone to each
Lender), at any time and from time to time prepay any
Revolving Loans on any Business Day in whole or in part in
an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount. Any
voluntary prepayments made pursuant to this subsection
2.4B(i) shall be applied to the type of Loan directed by
Company in the applicable notice of prepayment provided that
in the event Company fails to specify the Loans to which any
such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Swing Line Loans to the
full extent thereof and second to repay outstanding Tranche
A Loans to the full extent thereof, and third to repay
outstanding Tranche B Loans to the full extent thereof, and
fourth to repay outstanding Tranche C Loans to the full
extent thereof.
(ii) Mandatory Prepayments. Company will make the
prepayments on the Loans required by subsection 2.4A.
(iii) Voluntary Reductions of Commitments. Company
may, upon not less than three Business Days' prior written
or telephonic notice confirmed in writing to Administrative
Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile
or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part,
without premium or penalty, the Commitments in an amount up
to the amount by which the Commitments exceed the Total
Utilization of Commitments at the time of such proposed
termination or reduction; provided that any such partial
reduction of the Commitments shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of
$100,000 in excess of that amount. Company's notice to
Administrative Agent shall designate the date (which shall
be a Business Day) of such termination or reduction and the
amount of any partial reduction, and such termination or
reduction of the Commitments shall be effective on the date
specified in Company's notice and shall reduce the
Commitment of each Lender proportionately to its Pro Rata
Share.
C. Application of Prepayments and Commitment Reductions.
(i) Application of Mandatory Prepayments by Type of
Loans. Any amount (the ``Prepayment Amount'') required to
be applied as a mandatory prepayment of the Loans pursuant
to subsections 2.4A(iii)(a)-(b) shall be applied first to
prepay the Tranche B Loans to the full extent thereof,
second, to the extent of any remaining portion of the
Prepayment Amount, to prepay the Swing Line Loans to the
full extent thereof, third, to the extent of any remaining
portion of the Prepayment Amount, to prepay the Tranche A
Loans to the full extent thereof, and fourth to the extent
of any remaining portion of the Prepayment Amount, to prepay
the Tranche C Loans to the full extent thereof.
(ii) Application of Mandatory Commitment Reductions by
Type of Loans. Any amount (the ``Commitment Reduction
Amount'') required to be applied as a reduction of the
Commitments pursuant to subsections 2.4A(iii)(a)-(b) shall
be applied first to permanently reduce the Tranche B
Commitments by the Commitment Reduction Amount, second, to
the extent of any remaining portion of the Commitment
Reduction Amount, to permanently reduce the Tranche A
Commitments by the amount of such remaining portion, and
third, to the extent of any remaining portion of the
Commitment Reduction Amount, to permanently reduce the
Tranche C Commitments by the amount of such remaining
portion.
(iii) [Omitted].
(iv) Application of Unscheduled Reductions of
Commitments. Any voluntary or mandatory reduction of the
Tranche A Commitments, the Tranche B Commitments or the
Tranche C Commitments pursuant to subsection 2.4A(iii) or
2.4B shall be applied to reduce the scheduled reductions of
the Tranche A Commitments and Tranche B Commitments (set
forth in subsection 2.4A(ii) or the scheduled reductions of
the Tranche C Commitments set forth in subsection 2.4A(ii),
as the case may be, in reverse chronological order.
D. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by
Company of principal, interest, fees and other Obligations
hereunder and under the Notes, if any, shall be made in
Dollars in same day funds, without defense, setoff or
counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 10:00 A.M.
(Pacific time) on the date due at the Funding and Payment
Office for the account of Lenders; funds received by
Administrative Agent after that time on such due date shall
be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes
Administrative Agent to charge its accounts with
Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest,
fees, expenses and other amounts due hereunder (subject to
sufficient funds being available in its accounts for that
purpose).
(ii) Application of Payments to Principal and Interest.
Except as set forth in subsection 2.2C, all payments in
respect of the principal amount of any Loan shall include
payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments shall be applied to
the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate
principal and interest payments (other than payments in
respect of Swing Line Loans, which shall be made to the
Swing Line Lender) shall be apportioned among all
outstanding Tranche A Loans, Tranche B Loans and Tranche C
Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each
Lender, at its primary address set forth below its name on
the appropriate signature page hereof or at such other
address as such Lender may request, its Pro Rata Share of
all such payments received by Administrative Agent and the
commitment fees of such Lender when received by
Administrative Agent pursuant to subsection 2.3A.
Notwithstanding the foregoing provisions of this subsection
2.4D(iii), if Company prepays all amounts owed to a Former
Lender after the expiration of the applicable Withdrawal
Period pursuant to subsection 10.1B(iii), then
Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to
be made hereunder shall be stated to be due on a day that is
not a Business Day, such payment shall be made on the next
succeeding Business Day except as set forth in subsection
2.2B(iii), and such extension of time shall be included in
the computation of the payment of interest hereunder or of
the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that
before disposing of any Note held by it, or any part thereof
(other than by granting participations therein), that Lender
will make a notation thereon of all Tranche A Loans, Tranche
B Loans and Tranche C Loans evidenced by that Note and all
principal payments previously made thereon and of the date
to which interest thereon has been paid; provided that the
failure to make (or any error in the making of) a notation
of any Tranche A Loans, Tranche B Loans or Tranche C Loans
made under such Note shall not limit or otherwise affect the
obligations of Company hereunder to the extent of Company's
actual indebtedness or under such Note with respect to any
Tranche A Loans, Tranche B Loans and Tranche C Loans or any
payments of principal or interest on such Note.
2.5 Use of Proceeds.
A. Use of Proceeds.
(i) Tranche A Loans. Prior to the Completion of
Construction Date for the Maryland Heights Facility, the
proceeds of Tranche A Loans shall be applied by Company
solely for purposes of paying for the construction of the
Maryland Heights Facility and to pay interest on the Loans
and fees owed under subsection 2.3. After the Completion of
Construction Date for the Maryland Heights Facility, the
proceeds of Tranche A Loans shall be applied by Company for
general corporate purposes; provided, however, Company may
not apply all or any portion of the proceeds of the Tranche
A Loans to fund, directly and indirectly, a Hostile
Acquisition.
(ii) Tranche B Loans. The proceeds of Tranche B Loans
shall be applied by Company solely for the purpose of paying
for the construction of the Maryland Heights Facility and to
pay interest on the Loans and fees owed under subsection
2.3.
(iii) Tranche C Loans. The proceeds of Tranche C
Loans shall be applied by Company for general corporate
purposes; provided, however, Company may not apply all or
any portion of the proceeds of the Tranche C Loans to fund,
directly and indirectly, a Hostile Acquisition.
(iv) Swing Line Loans. The proceeds of the Swing Line
Loans shall be applied by Company for general corporate
purposes; provided, however, that Company may not apply all
or any portion of the proceeds of Swing Line Loans to fund,
directly or indirectly, a Hostile Acquisition.
B. Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of
its Subsidiaries in any manner that might cause the borrowing or
the application of such proceeds to violate Regulation G,
Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation
of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of
proceeds.
2.6 [Omitted.]
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to
the provisions of subsection 2.7B, in the event that any Lender
shall reasonably determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule,
regulation or order adopted after the date hereof, or any change
therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes
effective after the date hereof, or compliance by such Lender
with any guideline, request or directive issued or made after the
date hereof by any central bank or other governmental or quasi-
governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this
Agreement or any of its obligations hereunder or any
payments to such Lender (or its applicable lending office)
of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency,
supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement
against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by,
any office of such Lender; or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Lender (or its
applicable lending office) or its obligations hereunder;
and the result of any of the foregoing is to increase the cost to
such Lender of agreeing to make, making or maintaining Loans
hereunder or to reduce any amount received or receivable by such
Lender (or its applicable lending office) with respect thereto;
then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next
sentence, such additional amount or amounts (in the form of an
increased rate of, or a different method of calculating, interest
or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any
such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Company (with
a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by
Company under this Agreement and the other Loan Documents
shall be paid free and clear of and (except to the extent
required by law) without any deduction or withholding on
account of any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied, collected, withheld
or assessed by or within the United States of America or any
political subdivision in or of the United States of America
or any other jurisdiction from or to which a payment is made
by or on behalf of Company or by any federation or
organization of which the United States of America or any
such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or
withholding on account of any such Tax from any sum paid or
payable by Company to Administrative Agent or any Lender
under any of the Loan Documents:
(a) Company shall notify Administrative Agent
of any such requirement or any change in any such
requirement as soon as Company becomes aware of it;
(b) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to
be made (if the liability to pay is imposed on Company)
for its own account or (if that liability is imposed on
Administrative Agent or such Lender, as the case may
be) on behalf of and in the name of Administrative
Agent or such Lender;
(c) the sum payable by Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to
ensure that, after the making of that deduction,
withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a
net sum equal to what it would have received had no
such deduction, withholding or payment been required or
made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of
payment of any Tax which it is required by clause (b)
above to pay, Company shall deliver to Administrative
Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or
other authority.
(iii) Evidence of Exemption from U.S. Withholding
Tax.
(a) Each Lender that is organized under the
laws of any jurisdiction other than the United States
or any state or other political subdivision thereof
(for purposes of this subsection 2.7B(iii), a "Non-US
Lender") shall deliver to Administrative Agent for
transmission to Company, on or prior to the Effective
Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Lender
Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such
other times as may be necessary in the determination of
Company or Administrative Agent (each in the reasonable
exercise of its discretion), (1) two original copies of
Internal Revenue Service Form 1001 or 4224 (or any
successor forms), properly completed and duly executed
by such Lender, together with any other certificate or
statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction
or withholding of United States federal income tax with
respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of
the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3)
of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to
clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue
Service Form W-8 (or any successor form), properly
completed and duly executed by such Lender, together
with any other certificate or statement of exemption
required under the Internal Revenue Code or the
regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of
United States federal income tax with respect to any
payments to such Lender of interest payable under any
of the Loan Documents.
(b) Each Lender required to deliver any
forms, certificates or other evidence with respect to
United States federal income tax withholding matters
pursuant to subsection 2.7B(iii)(a) hereby agrees, from
time to time after the initial delivery by such Lender
of such forms, certificates or other evidence, whenever
a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or
inaccurate in any material respect, such Lender shall
(1) deliver to Administrative Agent for transmission to
Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank
Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly
completed and duly executed by such Lender, together
with any other certificate or statement of exemption
required in order to confirm or establish that such
Lender is not subject to deduction or withholding of
United States federal income tax with respect to
payments to such Lender under the Loan Documents or
(2) immediately notify Administrative Agent and Company
of its inability to deliver any such forms,
certificates or other evidence; provided that Company
may continue to rely on any form, certificate or other
evidence delivered to it pursuant to subsection
2.7B(iii)(a) until such time as it has received
information pursuant to this subsection 2.7B(iii)(b)
that is intended to replace or supplant the information
provided on any such previously delivered form or
certificate.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c)
of subsection 2.7B(ii) if such Lender shall have failed
to satisfy the requirements of subsection 2.7B(iii)(a);
provided that if such Lender shall have satisfied such
requirements on the Effective Date (in the case of each
Lender listed on the signature pages hereof) or on the
date of the Lender Assignment Agreement pursuant to
which it became a Lender (in the case of each other
Lender), nothing in this subsection 2.7B(iii)(c) shall
relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii)
in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation
or order, or any change in the interpretation,
administration or application thereof, such Lender is
no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject
to withholding as described in subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall
reasonably have determined that the adoption, effectiveness,
phase-in or applicability after the date hereof of any law, rule
or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or Letters of Credit or
participations therein or other obligations hereunder with
respect to the Loans or Letters of Credit to a level below that
which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration
the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five
Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to
such Lender such additional amount or amounts as will compensate
such Lender or such controlling corporation on an after-tax basis
for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) a written statement, setting forth
in reasonable detail the basis of the calculation of such
additional amounts, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
2.8 Obligation of Lenders and Administrative Agent to Mitigate.
Each Lender and Administrative Agent agree that, as
promptly as practicable after the officer of such Lender or
Administrative Agent responsible for administering the Loans or
Letters of Credit of such Lender or Administrative Agent becomes
aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender to receive payments
under subsection 2.7 or subsection 3.6, it will, to the extent
not inconsistent with the internal policies of such Lender or
Administrative Agent and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitment of such Lender or Administrative Agent or
the affected Loans of such Lender or Administrative Agent through
another lending or letter of credit office of such Lender or
Administrative Agent, or (ii) take such other measures as such
Lender or Administrative Agent may deem reasonable, if as a
result thereof the circumstances which would cause such Lender or
Administrative Agent to be an Affected Lender would cease to
exist or the additional amounts which would otherwise be required
to be paid to such Lender or Administrative Agent pursuant to
subsection 2.7 or subsection 3.6 would be materially reduced and
if, as determined by such Lender or Administrative Agent in its
sole discretion, the making, issuing, funding or maintaining of
such Commitment or Loans or Letters of Credit through such other
lending or letter of credit office or in accordance with such
other measures, as the case may be, would not otherwise
materially adversely affect such Commitment or Loans or Letters
of Credit or the interests of such Lender or Administrative
Agent; provided that such Lender or Administrative Agent will not
be obligated to utilize such other lending or letter of credit
office pursuant to this subsection 2.8 unless Company agrees to
pay all reasonable incremental expenses incurred by such Lender
or Administrative Agent as a result of utilizing such other
lending or letter of credit office as described in clause (i)
above. A certificate as to the amount of any such expenses
payable by Company pursuant to this subsection 2.8 (setting forth
in reasonable detail the basis for requesting such amount)
submitted by such Lender or Administrative Agent to Company (with
a copy to Administrative Agent) shall be conclusive absent
manifest error.
2.9 Replacement of Lenders.
In the event Company is required under the provisions of
subsection 2.7 or subsection 3.6 to make payments to any Lender,
Company may, within 120 days after the date any notice or demand
requiring such payment under subsection 2.7 or subsection 3.6 is
given and so long as no Event of Default shall have occurred and
be continuing, elect to terminate such Lender as a party to this
Agreement; provided that, concurrently with such termination,
(i) Company shall pay that Lender, without duplication, all
principal, interest and fees and other amounts owed to such
Lender through such date of termination, (ii) another Lender or
Eligible Assignee shall agree, as of such date, to become a
Lender for all purposes under this Agreement (whether by
assignment or amendment, if necessary) and to assume all
obligations under this Agreement of the Lender to be terminated
as of such date and (iii) all documents and supporting materials
necessary, in the judgment of Administrative Agent to evidence
the substitution of such Lender shall have been received and
approved by Administrative Agent as of such date.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein.
A. Letters of Credit. In addition to Company requesting
that Lenders make Tranche A Loans pursuant to subsection 2.1A and
that Swing Line Lender make Swing Line Loans pursuant to
subsection 2.1B, Company may request, in accordance with the
provisions of this subsection 3.1, from time to time during the
period from the Effective Date to but excluding the tenth
Business Day prior to the Commitment Termination Date, that
Administrative Agent issue Letters of Credit for the account of
Company for the purposes specified in the definition of Standby
Letters of Credit. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties
of Company herein set forth, Administrative Agent shall issue
such Letters of Credit in accordance with the provisions of this
subsection 3.1; provided that Company shall not request that
Administrative Agent issue (and Administrative Agent shall not
issue):
(i) any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of Tranche A
Commitments would exceed the Tranche A Commitments then in
effect;
(ii) any Letter of Credit if, after giving effect to
such issuance, the Letter of Credit Usage would exceed
$1,000,000;
(iii) any Letter of Credit having an expiration date
later than the earlier of (a) the fifth Business Day prior
to the Commitment Termination Date and (b) the date which is
one year from the date of issuance of such Letter of Credit;
provided that the immediately preceding clause (b) shall not
prevent Administrative Agent from agreeing that a Letter of
Credit will automatically be extended for one or more
successive periods not to exceed one year each unless
Administrative Agent elects not to extend for any such
additional period; or
(iv) any Letter of Credit denominated in a currency
other than Dollars.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires
the issuance of a Letter of Credit, it shall deliver to
Administrative Agent a Notice of Issuance of Letter of
Credit substantially in the form of Exhibit II annexed
hereto no later than 10:00 A.M. (Pacific time) at least
5 Business Days, or in each case such shorter period as
may be agreed to by Administrative Agent in any
particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit
shall specify (a) the proposed date of issuance (which
shall be a Business Day), (b) the face amount of the
Letter of Credit, (c) the expiration date of the
Letter of Credit, (d) the name and address of the
beneficiary, and (e) the verbatim text of the proposed
Letter of Credit or the proposed terms and conditions
thereof, including a precise description of any
documents and the verbatim text of any certificates to
be presented by the beneficiary which, if presented by
the beneficiary prior to the expiration date of the
Letter of Credit, would require Administrative Agent to
make payment under the Letter of Credit; provided that
Administrative Agent, in its reasonable discretion, may
require changes in the text of the proposed Letter of
Credit or any such documents or certificates; and
provided, further that no Letter of Credit shall
require payment against a conforming draft to be made
thereunder on the same business day (under the laws of
the jurisdiction in which the office of Administrative
Agent to which such draft is required to be presented
is located) that such draft is presented if such
presentation is made after 10:00 A.M. (in the time zone
of such office of Administrative Agent) on such
business day.
Company shall notify Administrative Agent prior to
the issuance of any Letter of Credit in the event that any
of the matters to which Company is required to certify in
the applicable Notice of Issuance of Letter of Credit is no
longer true and correct as of the proposed date of issuance
of such Letter of Credit, and upon the issuance of any
Letter of Credit Company shall be deemed to have re-
certified, as of the date of such issuance, as to the
matters to which Company is required to certify in the
applicable Notice of Issuance of Letter of Credit.
(ii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the
conditions set forth in subsection 4.4, Administrative Agent
shall issue the requested Letter of Credit in accordance
with Administrative Agent's standard operating procedures.
(iii) Notification to Lenders. Upon the issuance of
any Letter of Credit Administrative Agent shall notify each
other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly
after receipt of such notice, Administrative Agent shall
notify each Lender of the amount of such Lender's respective
participation in such Letter of Credit, determined in
accordance with subsection 3.1C.
(iv) Reports to Lenders. Within 15 days after the end
of each calendar quarter of Company ending after the
Effective Date, so long as any Letter of Credit shall have
been outstanding during such calendar quarter,
Administrative Agent shall deliver to each Lender a report
setting forth the average for such calendar quarter of the
daily maximum amount available to be drawn under the Letters
of Credit issued by Administrative Agent that were
outstanding during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of
Credit. Immediately upon the issuance of each Letter of Credit,
each Lender shall be deemed to, and hereby agrees to, have
irrevocably purchased from Administrative Agent a participation
in such Letter of Credit and drawings thereunder in an amount
equal to such Lender's Pro Rata Share of the maximum amount which
is or at any time may become available to be drawn thereunder.
D. Existing Letters of Credit. Each Existing Letter of
Credit outstanding on the Effective Date shall be deemed to be a
Letter of Credit hereunder.
3.2 Letter of Credit Fees.
Company agrees to pay the following amounts to
Administrative Agent with respect to Letters of Credit issued by
it:
(i) on the date of issuance and of each extension
thereof of each Letter of Credit, (a) a non-refundable
letter of credit fee equal to either 3.00% per annum if the
Leverage Ratio reflected on the most recently delivered
Pricing Determination Certificate is less than or equal to
3.25 to 1.00 or 3.25% per annum if the Leverage Ratio
reflected on such Pricing Determination Certificate is
greater than 3.25 to 1.00 multiplied by the maximum amount
available to be drawn under such Letter of Credit and (b) a
non-refundable fronting letter of credit fee equal to 0.25%
per annum of the maximum amount available to be drawn under
such Letter of Credit, in each case computed on the basis of
a 360-day year for the actual number of days in the term of
such Letter of Credit, including any extension thereof;
(ii) with respect to the amendment or transfer of each
Letter of Credit and each drawing made thereunder (without
duplication of the fees payable under clause (i) above),
documentary and processing charges in accordance with
Administrative Agent's standard schedule for such charges in
effect at the time of such issuance, amendment, transfer or
drawing, as the case may be and, to the extent such
amendment increases the maximum amount available to be drawn
under any such Letter of Credit, increased fees in
accordance with the formula set forth in subsection
3.2(i)(a) above.
Promptly upon receipt by Administrative Agent of any amount
described in clause (i)(a) of this subsection 3.2, Administrative
Agent shall distribute to each other Lender its Pro Rata Share of
such amount.
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of
Credit.
A. Responsibility of Administrative Agent With Respect to
Drawings. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, Administrative Agent
shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit
have been delivered and that they comply on their face with the
requirements of such Letter of Credit.
B. Reimbursement by Company of Amounts Drawn Under Letters
of Credit. In the event Administrative Agent has determined to
honor a drawing under a Letter of Credit issued by it,
Administrative Agent shall immediately notify Company, and
Company shall reimburse Administrative Agent on or before the
Business Day immediately following the date on which such drawing
is honored (the "Reimbursement Date") in an amount in Dollars and
in same day funds equal to the amount of such drawing; provided
that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless Company shall have notified
Administrative Agent prior to 8:30 A.M. (Pacific time) on the
date of such drawing that Company intends to reimburse
Administrative Agent for the amount of such drawing with funds
other than the proceeds of Tranche A Loans, Company shall be
deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Tranche A Loans
on the Reimbursement Date in an amount in Dollars equal to the
amount of such drawing and (ii) subject to satisfaction or waiver
of the conditions specified in subsection 4.4B, Lenders shall, on
the Reimbursement Date, make Tranche A Loans in the amount of
such drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse Administrative Agent for the
amount of such drawing; and provided, further that if for any
reason proceeds of Tranche A Loans are not received by
Administrative Agent on the Reimbursement Date in an amount equal
to the amount of such drawing, Company shall reimburse
Administrative Agent, on demand, in an amount in same day funds
equal to the excess of the amount of such drawing over the
aggregate amount of such Tranche A Loans, if any, which are so
received. Nothing in this subsection 3.3B shall be deemed to
relieve any Lender from its obligation to make Tranche A Loans on
the terms and conditions set forth in this Agreement, and Company
shall retain any and all rights it may have against any Lender
resulting from the failure of such Lender to make such Tranche A
Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Drawings Under
Letters of Credit.
(i) Payment by Lenders. In the event that Company
shall fail for any reason to reimburse Administrative Agent
as provided in subsection 3.3B in an amount equal to the
amount of any drawing honored by Administrative Agent under
a Letter of Credit issued by it, Administrative Agent shall
promptly notify each other Lender of the unreimbursed amount
of such drawing and of such other Lender's respective
participation therein based on such Lender's Pro Rata Share.
Each Lender shall make available to Administrative Agent an
amount equal to its respective participation, in Dollars and
in same day funds, at the office of Administrative Agent
specified in such notice, not later than 1:30 P.M. (Pacific
time) on the first business day (under the laws of the
jurisdiction in which such office of Administrative Agent is
located) after the date notified by Administrative Agent.
In the event that any Lender fails to make available to
Administrative Agent on such business day the amount of such
Lender's participation in such Letter of Credit as provided
in this subsection 3.3C, Administrative Agent shall be
entitled to recover such amount on demand from such Lender
together with interest thereon at the rate customarily used
by Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at the Base
Rate. Nothing in this subsection 3.3C shall be deemed to
prejudice the right of any Lender to recover from
Administrative Agent any amounts made available by such
Lender to Administrative Agent pursuant to this subsection
3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the
payment with respect to a Letter of Credit by Administrative
Agent in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the
part of Administrative Agent.
(ii) Distribution to Lenders of Reimbursements Received
From Company. In the event Administrative Agent shall have
been reimbursed by other Lenders pursuant to subsection
3.3C(i) for all or any portion of any drawing honored by
Administrative Agent under a Letter of Credit issued by it,
Administrative Agent shall distribute to each other Lender
which has paid all amounts payable by it under subsection
3.3C(i) with respect to such drawing such other Lender's Pro
Rata Share of all payments subsequently received by
Administrative Agent from Company in reimbursement of such
drawing when such payments are received. Any such distri
bution shall be made to a Lender at its primary address set
forth below its name on the appropriate signature page
hereof or at such other address as such Lender may request.
D. Interest on Amounts Drawn Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to
pay to Administrative Agent, with respect to drawings made
under any Letters of Credit issued by it, interest on the
amount paid by Administrative Agent in respect of each such
drawing from the date of such drawing to but excluding the
date such amount is reimbursed by Company (including any
such reimbursement out of the proceeds of Tranche A Loans
pursuant to subsection 3.3B) at a rate equal to (a) for the
period from the date of such drawing to but excluding the
Reimbursement Date, the rate then in effect under this
Agreement with respect to Tranche A Loans and (b)
thereafter, a rate which is 2% per annum in excess of the
rate of interest otherwise payable under this Agreement with
respect to Tranche A Loans that. Interest payable pursuant
to this subsection 3.3D(i) shall be computed on the basis of
a 360-day year for the actual number of days elapsed in the
period during which it accrues and shall be payable on
demand or, if no demand is made, on the date on which the
related drawing under a Letter of Credit is reimbursed in
full.
(ii) Distribution of Interest Payments by Administrative
Agent. Promptly upon receipt by Administrative Agent of any
payment of interest pursuant to subsection 3.3D(i) with
respect to a drawing under a Letter of Credit issued by it,
(a) Administrative Agent shall distribute to each other
Lender, out of the interest received by Administrative Agent
in respect of the period from the date of such drawing to
but excluding the date on which Administrative Agent is
reimbursed for the amount of such drawing (including any
such reimbursement out of the proceeds of Tranche A Loans
pursuant to subsection 3.3B), the amount that such other
Lender would have been entitled to receive in respect of the
letter of credit fee that would have been payable in respect
of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been made under such Letter
of Credit, and (b) in the event Administrative Agent shall
have been reimbursed by other Lenders pursuant to subsection
3.3C(i) for all or any portion of such drawing,
Administrative Agent shall distribute to each other Lender
which has paid all amounts payable by it under subsection
3.3C(i) with respect to such drawing such other Lender's Pro
Rata Share of any interest received by Administrative Agent
in respect of that portion of such drawing so reimbursed by
other Lenders for the period from the date on which such
Administrative Agent was so reimbursed by other Lenders to
and including the date on which such portion of such drawing
is reimbursed by Company. Any such distribution shall be
made to a Lender at its primary address set forth below its
name on the appropriate signature page hereof or at such
other address as such Lender may request.
3.4 Obligations Absolute.
The obligation of Company to reimburse Administrative
Agent for drawings made under the Letters of Credit issued by it
and to repay any Revolving Loans made by Lenders pursuant to
subsection 3.3B and the obligations of Lenders under subsection
3.3C(i) shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off, defense or
other right which Company or any Lender may have at any time
against a beneficiary or any transferee of any Letter of
Credit (or any Persons for whom any such transferee may be
acting), Administrative Agent or other Lender or any other
Person or, in the case of a Lender, against Company, whether
in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including
any underlying transaction between Company or one of its
Subsidiaries and the beneficiary for which any Letter of
Credit was procured);
(iii) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by Administrative Agent under any Letter of
Credit against presentation of a demand, draft or
certificate or other document which does not comply with the
terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing;
or
(viii) the fact that an Event of Default or a
Potential Event of Default shall have occurred and be
continuing;
provided, in each case, that payment by Administrative Agent
under the applicable Letter of Credit shall not have constituted
gross negligence or willful misconduct of Administrative Agent
under the circumstances in question (as determined by a final
judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Administrative Agent's Duties.
A. Indemnification. In addition to amounts payable as
provided in subsection 3.6, Company hereby agrees to protect,
indemnify, pay and save harmless Administrative Agent from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel and Allocated Costs of
Internal Counsel) which Administrative Agent may incur or be
subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit by Administrative Agent, other
than as a result of (a) the gross negligence or willful
misconduct of Administrative Agent as determined by a final
judgment of a court of competent jurisdiction or (b) subject to
the following clause (ii), the wrongful dishonor by
Administrative Agent of a proper demand for payment made under
any Letter of Credit issued by it or (ii) the failure of
Administrative Agent to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government
or governmental authority (all such acts or omissions herein
called "Governmental Acts").
B. Nature of Administrative Agent's Duties. As between
Company and Administrative Agent, Company assumes all risks of
the acts and omissions of, or misuse of the Letters of Credit
issued by Administrative Agent by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation
of the foregoing, Administrative Agent shall not be responsible
for: (i) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in
connection with the application for and issuance of any such
Letter of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or
forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the
beneficiary of any such Letter of Credit to comply fully with any
conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to
make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter
of Credit; or (viii) any consequences arising from causes beyond
the control of Administrative Agent, including without limitation
any Governmental Acts, and none of the above shall affect or
impair, or prevent the vesting of, any of Administrative Agent's
rights or powers hereunder.
In furtherance and extension and not in limitation of
the specific provisions set forth in the first paragraph of this
subsection 3.5B, any action taken or omitted by Administrative
Agent under or in connection with the Letters of Credit issued by
it or any documents and certificates delivered thereunder, if
taken or omitted in good faith, shall not put Administrative
Agent under any resulting liability to Company.
Notwithstanding anything to the contrary contained in
this subsection 3.5, Company shall retain any and all rights it
may have against Administrative Agent for any liability arising
solely out of the gross negligence or willful misconduct of such
Administrative Agent, as determined by a final judgment of a
court of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
In the event that Administrative Agent or any Lender
shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or governmental rule, regulation or
order, or any change therein or in the interpretation,
administration or application thereof (including the introduction
of any new law, treaty or governmental rule, regulation or
order), or any determination of a court or governmental
authority, in each case that becomes effective after the date
hereof, or compliance by Administrative Agent or Lenders with any
guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-
governmental authority (whether or not having the force of law):
(i) subjects Administrative Agent or such Lender (or
its applicable lending or letter of credit office) to any
additional Tax (other than any Tax on the overall net income
of Administrative Agent or such Lender) with respect to the
issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or
any other obligations under this Section 3, whether directly
or by such being imposed on or suffered by Administrative
Agent;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency,
supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement in
respect of any Letters of Credit issued by Administrative
Agent or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting Administrative
Agent or such Lender (or its applicable lending or letter of
credit office) regarding this Section 3 or any Letter of
Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to
Administrative Agent or such Lender of agreeing to issue, issuing
or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce
any amount received or receivable by Administrative Agent or such
Lender (or its applicable lending or letter of credit office)
with respect thereto; then, in any case, Company shall promptly
pay to Administrative Agent or such Lender, upon receipt of the
statement referred to in the next sentence, such additional
amount or amounts as may be necessary to compensate
Administrative Agent or such Lender for any such increased cost
or reduction in amounts received or receivable hereunder.
Administrative Agent or such Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis
for calculating the additional amounts owed to Administrative
Agent or such Lender under this subsection 3.6, which statement
shall be conclusive and binding upon all parties hereto absent
manifest error.
SECTION 4.
CONDITIONS TO EFFECTIVENESS;
CONDITIONS TO LOANS AND LETTERS OF CREDIT
4.1 Conditions to Effectiveness.
This Agreement shall become effective only upon the
satisfaction or written waiver by Requisite Lenders of the
following conditions precedent:
A. Company Documents. On or before the Effective Date,
Company shall deliver or cause to be delivered to Lenders (or to
Administrative Agent for Lenders with sufficient originally
executed copies, where appropriate, for each Lender and its
counsel) the following, each, unless otherwise noted, dated the
Effective Date:
(i) Certified copies of its charter documents, together
with a good standing certificate from the Secretary of State
of the State of Nevada and each state in which it is
qualified as a foreign corporation to do business and, to
the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing
authority of each of such states, each dated a recent date
prior to the Effective Date;
(ii) Copies of its Bylaws, certified as of the Effective
Date by its secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors
approving and authorizing the execution, delivery and
performance of this Agreement and the other New Loan
Documents to which it is a party, certified as of the
Effective Date by its secretary or an assistant secretary as
being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of its
officers executing this Agreement and the other New Loan
Documents to which it is a party;
(v) Executed originals of this Agreement, any Notes
drawn to the order of each Lender and Swing Line Lender if
requested by such Lender or Swing Line Lender and with
appropriate insertions, the Acknowledgement and Confirmation
and the other New Loan Documents to which it is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
B. Loan Party Documents. On or before the Effective Date,
each Loan Party shall deliver or cause to be delivered to Lenders
(or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender
and its counsel) the following, each, unless otherwise noted,
dated the Effective Date:
(i) Certified copies of its Certificate or Articles of
Incorporation or other charter documents, together with a
good standing certificate from the Secretary of State of the
state of its incorporation and each other state in which it
is qualified as a foreign corporation to do business and, to
the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing
authority of each of such states, each dated a recent date
prior to the Effective Date;
(ii) Copies of its Bylaws, if any, certified as of the
Effective Date by its corporate secretary or an assistant
secretary;
(iii) Resolutions of its Board of Directors
approving and authorizing the execution, delivery and
performance of the New Loan Documents to which it is a
party, certified as of the Effective Date by its corporate
secretary or an assistant secretary as being in full force
and effect without modification or amendment;
(iv) Signature and incumbency certificates of its
officers executing the New Loan Documents to which it is a
party;
(v) Executed originals of the New Loan Documents to
which it is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
C. Corporate and Capital Structure. The corporate
organizational structure of Company and its Subsidiaries shall be
as set forth on Schedule 4.1(c) annexed hereto.
D. Opinions of Company's Counsel. Lenders and their
respective counsel shall have received (i) originally executed
copies of the favorable written opinion of Morgan, Lewis &
Bockius LLP, counsel for Company, in form and substance
reasonably satisfactory to Administrative Agent and its counsel,
dated as of the Effective Date and setting forth substantially
the matters in the opinions designated in Exhibit VI-A annexed
hereto and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request and (ii)
opinions from special counsel to Company (including admiralty
counsel) with respect to such matters governed by the laws of the
states of Nevada, Illinois, Louisiana, Missouri, Kentucky and New
Jersey and by maritime law as Administrative Agent acting on
behalf of Lenders may reasonably request.
E. Opinions of Administrative Agent's Counsel. Lenders
shall have received originally executed copies of one or more
favorable written opinions of O'Melveny & Myers LLP, counsel to
Administrative Agent, dated as of the Effective Date,
substantially in the form of Exhibit VII annexed hereto and as to
such other matters as Administrative Agent acting on behalf of
Lenders may reasonably request.
F. Flood Insurance. Administrative Agent shall have been
provided with satisfactory evidence, which may be in the form of
a letter from an insurance broker, municipal engineer, or other
knowledgeable source unaffiliated with Company, as to whether
(a) any of the Premises are located in an area designated by the
Department of Housing and Urban Development as having special
flood or mudslide hazards, and (b) any of the communities in
which any of the Facilities are located is participating in the
National Flood Insurance Program. If both of the aforesaid
conditions exist, Administrative Agent shall receive satisfactory
policies of flood insurance covering the applicable Improvements
as required by the Flood Act.
G. Perfection of Security Interests. Loan Parties shall
have taken or caused to be taken such actions in such a manner so
that Administrative Agent, on behalf of Lenders, or the Trustee,
solely for the benefit of the Administrative Agent, on behalf of
Lenders, as the case may be, each has a valid and perfected first
priority security interest (subject only to Liens permitted under
subsection 7.2) in all Collateral in which a Lien is purported to
be granted by the Collateral Documents. Such actions shall
include, without limitation, the following:
(i) the receipt by the Administrative Agent of evidence
satisfactory to it that amendments ("Mortgage Amendments")
to each Mortgage heretofore executed and delivered pursuant
to subsection 4.1F of the Existing Credit Agreement (such
Mortgages being the "Existing Mortgages") have been executed
and acknowledged and will be recorded in all jurisdictions
as may be necessary or, in the opinion of Administrative
Agent, desirable to effectively create or maintain in effect
valid and perfected Liens (subject only to Liens permitted
under subsection 7.2) created by the Existing Mortgages
securing the Obligations, as such Obligations have been
amended or modified by this Agreement; and
(ii) the receipt by the Administrative Agent of evidence
satisfactory to it that all other filings, recordings and
other actions Administrative Agent deems necessary or
advisable to establish, preserve and perfect the first
priority Liens (subject only to Liens permitted under
subsection 7.2) granted to Administrative Agent in the
Collateral (including, without limitation, Collateral
subject to the Lien of any Collateral Document executed and
delivered pursuant to the Existing Credit Agreement) shall
have been made.
H. Amendments to Title Policies. Lenders shall have
received confirmation from the Title Company that the Title
Company will issue endorsements to, or rewrites of, the Title
Policies over all Liens other than Liens previously identified in
and excluded from the coverage of the Title Policies, and
otherwise providing the Lenders with the same types and levels of
insurance provided in the Title Policies.
I. UCC and Judgment Searches. Administrative Agent shall
have received current searches of the UCC filing offices and
judgment searches with the Offices of the Secretary of States of
Illinois, Louisiana and Nevada, the local recorders office in
each county or parish in which any of the Premises are located
and elsewhere showing no security interests or judgments
affecting the Facilities or any Collateral except to the extent
permitted pursuant to subsection 7.2.
J. Necessary Consents. On or before the Effective Date,
each Loan Party shall have obtained all consents that are
required for the operation of the Facilities, in each case, and
the transactions contemplated under this Agreement and the other
Loan Documents of (i) Illinois Gaming Authorities, Louisiana
Gaming Authorities, Nevada Gaming Authorities, Missouri Gaming
Authorities and other Governmental Authorities and (ii) any
Person required under any Contractual Obligation of any Loan
Party, all of the foregoing in form and substance satisfactory to
Administrative Agent.
K. Fees. Company shall have paid to Administrative Agent,
for distribution (as appropriate) to Administrative Agent and
Lenders, (i) the $1,500,000 restructure fee payable on the
Effective Date referred to in subsection 2.3B(i) and (ii) all
accrued and unpaid interest and fees under the Existing Credit
Agreement payable on the Effective Date as provided in subsection
2.3B(iii).
L. Conversion of Existing Revolving Loans. Notwithstanding
anything to the contrary contained in the Existing Credit
Agreement, Company shall have converted all Existing Revolving
Loans that are Eurodollar Loans into Base Rate Loans and, in
connection therewith, shall have paid to the Lenders under the
Existing Credit Agreement such amounts as would have been payable
under subsection 2.6D of the Existing Credit Agreement if such
Eurodollar Loans had been prepaid on the Effective Date.
M. Payment of Amounts owed under Existing Credit Agreement.
Company shall have paid to Administrative Agent for distribution
to the Lenders under the Existing Credit Agreement (i) all
interest and commitment fees that have accrued through the
Effective Date, (ii) all accrued and unpaid fees and commissions
with respect to all Existing Letters of Credit that have accrued
through the Effective Date and (iii) all other fees and amounts
owed under the Existing Credit Agreement (other than the
principal amount of the Loans that shall continue to be owed
hereunder and under the Notes).
N. Administrative Agent's Counsel Fees. Company shall have
paid the reasonable fees and disbursements of counsel to
Administrative Agent.
O. No Material Adverse Effect. Since September 30, 1996,
no Material Adverse Effect (in the sole opinion of each Lender)
shall have occurred.
P. Representations and Warranties; Performance of
Agreements. Company shall have delivered to Administrative Agent
an Officers' Certificate, in form and substance satisfactory to
Administrative Agent, to the effect that the representations and
warranties in Section 5 hereof are true, correct and complete on
and as of the Effective Date to the same extent as though made on
and as of that date and that Company shall have performed all
agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before the
Effective Date except as otherwise disclosed to and agreed to in
writing by Administrative Agent and each Lender.
Q. Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental
thereto not previously found acceptable by Administrative Agent,
acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and
such counsel, and Administrative Agent and such counsel shall
have received all such counterpart originals or certified copies
of such documents as Administrative Agent may reasonably request.
R. Delivery of Pricing Determination Certificate.
Administrative Agent shall have received a Pricing Determination
Certificate calculated utilizing the most recent financial
statements delivered to Administrative Agent under the Existing
Credit Agreement.
S. Budget for Maryland Heights Facility Company shall have
delivered to Administrative Agent, for delivery to Lenders, a
budget for the completion of construction and opening of the
Maryland Heights Facility together with an Officer's Certificate
from Company's chief financial officer stating that such budget
is based on facts that Company believes to be correct and
assumptions that Company believes to be reasonable. Such budget
shall be satisfactory in form and substance to Administrative
Agent and Lenders and shall demonstrate that (i) Company's share
of the total costs of the Maryland Heights Facility will not
exceed $144,000,000, (ii) the Maryland Heights Facility will be
completed and the casino open and operating not later than May 1,
1997, (iii) Company will be able to make the payments specified
in subsection 6.11 from sources other than the proceeds of Loans
hereunder, other borrowings, Permitted Maryland Heights
Indebtedness and the proceeds from the sale of the M/V Players
Riverboat I, to be applied to the construction of the Maryland
Heights Facility, and (iv) such payments, together with the
Tranche A Loans and Tranche B Loans, constitute adequate
financing to complete and open the Maryland Heights Facility by
May 1, 1997.
T. Ship Inspection. Administrative Agent shall have
received copies of current certificates of inspection issued by
the United States Coast Guard for the Players III.
U. Title to the Players III. Administrative Agent shall
have received evidence satisfactory in form and substance to
Administrative Agent that:
(i) PLC has good and valid title to the Players III,
free and clear of all liens, charges, encumbrances and
security interests other than Permitted Encumbrances;
(ii) the Players III is subject to a valid certificate
of documentation identifying PLC as the registered owner
thereof under the laws and regulations of the United States;
and
(iii) PLC has all necessary authority required to
own and operate the Players III for such Ship's intended
purposes.
V. Leases. Administrative Agent shall have received
complete copies of all leases for any of the properties and
facilities comprising all or any portion of the Facilities that
are leased by Company or any of its Subsidiaries, and a "landlord
estoppel certificate" for such leases, certifying that no
defaults by the lessee currently exist under any such lease and
confirming, among other things, the annual rental amount paid by
Company or its Subsidiaries to lessor thereunder.
W. Governmental Authorizations. Administrative Agent shall
have received satisfactory evidence that Company and its
Subsidiaries have obtained all Governmental Authorizations
(including, without limitation, Governmental Authorizations from
Gaming Authorities and all zoning approvals, special or
conditional use permits, variances, permits, licenses, liquor
licenses, certificates of occupancy and franchises) necessary to
permit the use, occupancy and operation of each of the Facilities
presently in operation or necessary for Company to amend and
restate the Existing Credit Agreement pursuant to this Agreement
and for Loan Parties to perform the transactions contemplated
hereby.
X. Effective Date. The Effective Date is on or before
December 20, 1996.
4.2 Conditions to Initial Tranche B Loans.
The obligations of Lenders to make Tranche B Loans is
subject to the previous satisfaction or waiver by Requisite
Lenders of each of the conditions set forth in subsection 4.1 and
the satisfaction or waiver by Requisite Lenders of the additional
conditions precedent set forth in this subsection 4.2:
A. Initial Tranche B Loans. The initial Tranche B Loan
shall be made not later than April 1, 1997.
B. Consolidated EBITDA. Company shall have provided to
Administrative Agent an Officers' Certificate demonstrating that
Consolidated EBITDA for the four Fiscal Quarter period most
recently ended before the initial Tranche B Loan exceeds
$35,000,000.
C. Lack of Other Credit Facilities. Company shall deliver
to Administrative Agent an Officers' Certificate stating that
Company has no other credit facilities (other than pursuant to
this Agreement) available for the construction of the Maryland
Heights Facility and has incurred no other Indebtedness (other
than Permitted Maryland Heights Indebtedness) for construction of
the Maryland Heights Facility.
D. Payment of Fees. Company shall have paid to
Administrative Agent the $800,000 facility fee set forth in
subsection 2.3B(ii).
E. Delivery of Linked Appreciation Rights Agreement.
Company shall have executed and delivered to each Lender a Linked
Appreciation Rights Agreement substantially in the form of
Exhibit IX annexed hereto, with appropriate insertions.
F. Opinions of Company's Counsel. Lenders and their
respective counsel shall have received originally executed copies
of the favorable written opinions of Morgan, Lewis & Bockius LLP,
counsel for Company, and local counsel of Company in the States
of Nevada, New Jersey, Illinois, Kentucky, Missouri and
Louisiana, or, in each case, other counsel reasonably acceptable
to Administrative Agent, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of
the Effective Date and setting forth substantially the matters in
the opinions designated in Exhibit VI-B annexed hereto and as to
such other matters as Administrative Agent acting on behalf of
Lenders may reasonably request.
4.3 Conditions to All Tranche C Loans.
The obligations of Lenders to make each Tranche C Loan
is subject to the previous satisfaction or waiver by Requisite
Lenders of each of the conditions set forth in subsection 4.1 and
the satisfaction or waiver by Requisite Lenders of the additional
conditions precedent set forth in this subsection 4.3:
A. Consolidated EBITDA and Leverage Ratio. Company
shall have provided to Administrative Agent an Officers'
Certificate demonstrating that Consolidated EBITDA for the four
Fiscal Quarter period most recently ended before the date the
Tranche C Loans are requested exceeds $85,000,000 and that the
Interest Coverage Ratio on the last day of the Fiscal Quarter
most recently ended before such date is not less than 2.0 to 1.0.
4.4 Conditions to All Loans.
The obligations of Lenders to make Revolving Loans and
of Swing Line Lender to make Swing Line Loans on each Funding
Date are subject to the following further conditions precedent:
A. Administrative Agent shall have received before
that Funding Date, in accordance with the provisions of
subsection 2.1C, an originally executed Notice of Borrowing, in
each case signed by the chief executive officer, the chief
financial officer or the treasurer of Company or by any executive
officer of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to
Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and
complete in all material respects on and as of that Funding
Date to the same extent as though made on and as of that
date, except to the extent such representations and
warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been
true, correct and complete in all material respects on and
as of such earlier date;
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing
contemplated by such Notice of Borrowing that would
constitute an Event of Default or, to Company's Best
Knowledge, a Potential Event of Default;
(iii) Company shall have performed in all material
respects all agreements and satisfied all conditions which
this Agreement provides shall be performed or satisfied by
it on or before that Funding Date;
(iv) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin
or restrain any Lender from making the Loans to be made by
it on that Funding Date; provided that any such order,
judgment or decree shall only relieve that Lender on whom
such order, judgment or decree is binding from its
obligation to make Loans to Company.
(v) The making of the Loans requested on such Funding
Date shall not violate any law including, without
limitation, Regulation G, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal
Reserve System;
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property
of Company or any of its Subsidiaries that has not been
disclosed by Company in writing pursuant to subsection 5.6
or 6.1(x) prior to the making of the last preceding Loans
(or, in the case of the initial Loans, prior to the
execution of this Agreement), and there shall have occurred
no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so
disclosed, that, in either event, in the opinion of
Administrative Agent or of Requisite Lenders, would be
expected to have a Material Adverse Effect; and no
injunction or other restraining order shall have been issued
and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of Loans
hereunder;
(vii) Since September 30, 1996, no Material Adverse
Effect (in the sole opinion of each Lender) shall have
occurred; provided that such opinion by any Lender as to the
occurrence of a Material Adverse Effect shall only relieve
that Lender holding such opinion from its obligation to make
Loans to Company;
(viii) Company shall deliver to Administrative Agent
an Officers' Certificate and other evidence satisfactory to
Administrative Agent demonstrating that Company's share of
projected unpaid costs to complete the Maryland Heights
Facility does not, at the time the Loans are requested to be
made or Letters of Credit are requested to be issued, exceed
the sum of (a) the Tranche A Commitments plus (b) the
Tranche B Commitments plus (c) $11,000,000 minus (d) the sum
of (v) the outstanding Tranche A Loans, plus (w) the sum of
the outstanding Tranche B Loans and the outstanding
principal amount of Permitted Maryland Heights Indebtedness
plus (x) the outstanding Swing Line Loans plus (y) the
outstanding Letters of Credit plus (z) the amount of costs
to complete the Maryland Heights Facility paid by Company
during the period from October 1, 1996, to the date of such
request from cash proceeds of sources other than the
proceeds of Loans hereunder, other borrowings, Permitted
Maryland Heights Indebtedness and the proceeds from the sale
of the M/V Players Riverboat I, in each case measured at the
time such Loans or Letters of Credit are requested.
C. Neither Administrative Agent nor any Lender has
given each other Lender written notice that it has actual
knowledge of the occurrence of any event that, on such Funding
Date, causes any of the representations and warranties to be made
by Company on such date to be untrue in any material respect as
of such date.
4.5 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter
of Credit pursuant to this Agreement, the conditions set forth in
subsection 4.1 shall have been satisfied or waived in writing by
Requisite Lenders.
B. On or before the date of issuance of such Letter of
Credit, Administrative Agent shall have received, in accordance
with the provisions of subsection 3.1B(i), an originally executed
Notice of Issuance of Letter of Credit, signed by the chief
executive officer, the chief financial officer or the treasurer
of Company or by any executive officer of Company designated by
any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all
other information specified in subsection 3.1B(i) and such other
documents or information as Administrative Agent may reasonably
require in connection with the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.4B shall be
satisfied to the same extent as if the issuance of such Letter of
Credit were the making of a Loan and the date of issuance of such
Letter of Credit were a Funding Date.
SECTION 5.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement
and to make the Loans, to induce Administrative Agent to issue
Letters of Credit and to induce other Lenders to purchase
participations therein, Company represents and warrants to each
Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business
and Subsidiaries.
A. Organization and Powers. Company is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Nevada. Company has all requisite corporate
power and authority to own and operate its properties, to carry
on its business as now conducted and as proposed to be conducted,
to enter into the Loan Documents and to carry out the
transactions contemplated thereby.
B. Qualification and Good Standing. Company is qualified
to do business and in good standing in every jurisdiction where
its assets are located and wherever necessary to carry out its
business and operations, except in jurisdictions where the
failure to be so qualified or in good standing has not had and,
to Company's Best Knowledge, will not have a Material Adverse
Effect.
C. Conduct of Business. Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in
pursuant to subsection 7.10.
D. Subsidiaries. Except for Subsidiaries identified on
Schedule 5.1 with no substantial assets that are to be dissolved,
all of the Subsidiaries of Company are identified in Schedule 5.1
annexed hereto, as said Schedule 5.1 may be supplemented from
time to time pursuant to the provisions of subsection 6.1(xvii).
The capital stock of each of the Subsidiaries of Company
identified in Schedule 5.1 annexed hereto (as so supplemented) is
duly authorized, validly issued, fully paid and nonassessable and
none of such capital stock constitutes Margin Stock. Except in
the case of Players Bluegrass Downs, Inc., each of the Sub
sidiaries of Company identified in Schedule 5.1 annexed hereto
(as so supplemented) is a corporation duly organized, validly
existing and in good standing under the laws of its respective
jurisdiction of incorporation set forth therein, has all
requisite corporate power and authority to own and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in
good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations,
in each case except where failure to be so qualified or in good
standing or a lack of such corporate power and authority has not
had and, to Company's Best Knowledge, will not have a Material
Adverse Effect except for Subsidiaries identified on Schedule 5.1
with no substantial assets that are to be dissolved.
Schedule 5.1 annexed hereto (as so supplemented) correctly sets
forth the ownership interest of Company and each of its Subsidi
aries in each of the Subsidiaries of Company identified therein.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents have been duly authorized by
all necessary corporate action on the part of Company.
B. No Conflict. The execution, delivery and performance by
each Loan Party of the Loan Documents and the consummation of the
transactions contemplated by the Loan Documents do not and, to
Company's Best Knowledge, will not (i) violate (X) any provision
of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries the violation of which could
have a Material Adverse Effect, (Y) the Certificate or Articles
of Incorporation or Bylaws of Company or any of its Subsidiaries
or (Z) any order, judgment or decree of any court or other agency
of government binding on Company or any of its Subsidiaries the
violation of which could have a Material Adverse Effect,
(ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual
Obligation of Company or any of its Subsidiaries, if the
execution of any of the Loan Documents would afford any party
(other than Company) the right (after the giving of notice or
lapse of time or both) to terminate such Contractual Obligation
or seek judicial relief against Company as a result thereof,
(iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Company or any of its
Subsidiaries (other than any Liens created under any of the Loan
Documents in favor of Administrative Agent on behalf of Lenders),
or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company
or any of its Subsidiaries, except for such approvals or consents
which will be obtained on or before the Effective Date and
disclosed in writing to Lenders.
C. Governmental Consents. The execution, delivery and
performance by the Loan Parties of the Loan Documents and the
consummation of the transactions contemplated by the Loan
Documents do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or
by, any federal, state or other governmental authority or
regulatory body except (i) those that have been obtained and
copies of which have been delivered to Administrative Agent
pursuant to subsection 4.1J or the absence of which
Administrative Agent has deemed satisfactory pursuant to
subsection 4.1J, (ii) those notices or informational filings or
both that will be required to be given to the Securities and
Exchange Commission or any Gaming Board but that are not yet due,
(iii) any right of any Gaming Board to object to any Lender or
participant in the Loans at any future date, and (iv) any
regulatory approvals in Louisiana that are granted after the
fact.
D. Binding Obligation. Each of the Loan Documents has been
duly executed and delivered by the Loan Parties signatory thereto
and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
5.3 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information:
(i) the audited consolidated balance sheet of Company and its
Subsidiaries as at March 31, 1996 and the related consolidated
statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for the Fiscal Year then ended and
(ii) the unaudited consolidated and Consolidating balance sheets
of Company and its Subsidiaries as at September 30, 1996 and the
related unaudited consolidated and Consolidating statements of
income, stockholders' equity and cash flows of Company and its
Subsidiaries for the six months then ended. All such statements
were prepared in conformity with GAAP and fairly present the
financial position (on a consolidated and, where applicable,
Consolidating basis) of the entities described in such financial
statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated and, where
applicable, Consolidating basis) of the entities described
therein for each of the periods then ended, subject, in the case
of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments, including the
information presented in the footnotes to Company's audited
financial statements. Company does not (and will not following
the funding of the initial Loans) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in
the foregoing financial statements or the notes thereto or,
following the funding of initial Loans, in the financial
statements required to be delivered pursuant to subsection 6.1
and which in any such case is material in relation to the
business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries, taken as
a whole.
5.4 No Material Adverse Change; No Restricted Payments.
Since September 30, 1996, no event or change has
occurred that has caused or evidences, either in any case or in
the aggregate, a Material Adverse Effect. Neither Company nor
any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any
Restricted Payment or agreed to do so except as permitted by
subsection 7.5.
5.5 Title to Properties; Liens.
A. Company and its Subsidiaries have (i) good, sufficient
and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good
title to (in the case of all other personal property), all of
their respective properties and assets reflected in the financial
statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in
each case except for assets disposed of since the date of such
financial statements in the ordinary course of business or as
otherwise permitted under subsection 7.7 and except for an
encroachment relating to the relocation of a portion of the golf
course at Mesquite, Nevada. Except as permitted by this
Agreement, all such properties and assets are free and clear of
Liens.
B. (i) All of the assets, of whatever kind and nature,
whether real, personal or mixed property, used in connection
with the Illinois Facilities or placed or located in or on
the Illinois Premises are owned or leased directly by SIRCC
or RR and not by Company or any of Company's other
Subsidiaries.
(ii) All of the assets, of whatever kind and nature,
whether real, personal or mixed property, used in connection
with the Louisiana Facilities or placed or located in or on
the Louisiana Premises are owned or leased directly by PLC,
SSP or PRLLC and not by Company or any of Company's other
Subsidiaries.
(iii) All of the assets, of whatever kind and
nature, whether real, personal or mixed property, used in
connection with the Nevada Facilities or placed or located
in or on the Nevada Premises are owned or leased directly by
PNEV, PMGC or PML and not by Company or any of Company's
other Subsidiaries.
(iv) All of the assets, of whatever kind and nature,
whether real, personal or mixed property, used in connection
with the Maryland Heights Facility or placed or located in
or on the Maryland Heights Facility are owned or leased
directly by the Maryland Heights Subsidiaries (or Harrah's)
and not by Company or any of Company's other Subsidiaries.
C. (i) SIRCC, PLC, SSP, and PRLLC each have good and valid
title to the Ship or Ships and the Barge or Barges owned by
it, free and clear of all liens, charges, encumbrances and
security interests other than those in favor of
Administrative Agent pursuant to the Existing Credit
Agreement or those permitted under subsection 7.2;
(ii) each Ship listed on Schedule 5.5, as said Schedule
5.5 may be supplemented from time to time pursuant to the
provisions of subsection 6.1(xx), is subject to a valid
certificate of documentation identifying SIRCC, PLC, SSP or
PRLLC, as the case may be, as the registered owner thereof
under the laws and regulations of the United States; and
(iii) SIRCC, PLC, SSP, and PRLLC each have all
necessary authority required to own and operate the Ship or
Ships and the Barge or Barges owned by it for such Ships' or
Barges' intended purposes.
D. On the Effective Date, the only water craft of any
nature whatsoever (whether constituting a vessel, Barge, floating
structure or otherwise) owned by Company or any of its
Subsidiaries that is subject to a valid certificate of
documentation pursuant to the laws of the United States of
America are the Lake Charles Star Riverboat, the Players
Riverboat II, the Players III and the Barges described on
Schedule 5.5.
5.6 Litigation; Adverse Facts.
Except as set forth in Schedule 5.6 annexed hereto,
there are no actions, suits, proceedings, arbitrations or, to
Company's Best Knowledge, governmental investigations (whether or
not purportedly on behalf of Company or any of its Subsidiaries)
at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, pending or, to
the knowledge of Company, threatened against or affecting Company
or any of its Subsidiaries or any property of Company or any of
its Subsidiaries that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
Neither Company nor any of its Subsidiaries is (i) in violation
of any applicable laws that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse
Effect or (ii) subject to or in default with respect to any final
judgments, writs, injunctions, decrees, rules or regulations of
any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse
Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all
tax returns and reports of Company and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes,
assessments, fees and other governmental charges upon Company and
its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have
been paid when due and payable. Company knows of no proposed tax
assessment against Company or any of its Subsidiaries which has
not been provided for or which is not being actively contested by
Company or such Subsidiary in good faith and by appropriate
proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements.
A. Neither Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any of its
Contractual Obligations, and no condition exists that, with the
giving of notice or the lapse of time or both, would constitute
such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a
Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party
to or is otherwise subject to any agreements or instruments or
any charter or other internal restrictions which, individually or
in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
5.9 Governmental Regulation.
Neither Company nor any of its Subsidiaries is subject
to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or under any other federal or
state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of
the Obligations unenforceable.
5.10 Securities Activities.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Company only
or of Company and its Subsidiaries on a consolidated basis)
subject to the provisions of subsection 7.2 or 7.7 or subject to
any restriction contained in any agreement or instrument, between
Company and any Lender or any Affiliate of any Lender, relating
to Indebtedness and within the scope of subsection 8.2, will be
Margin Stock.
5.11 Employee Benefit Plans.
A. Company and each of its ERISA Affiliates are in
compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have
performed all their obligations under each Employee Benefit Plan.
B. No ERISA Event has occurred or is reasonably expected to
occur with respect to Company or any of its ERISA Affiliates.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code or except as set forth in Schedule 5.11
annexed hereto, no Employee Benefit Plan provides health or
welfare benefits (through the purchase of insurance or otherwise)
for any retired or former employees of Company or any of its
ERISA Affiliates.
D. As of the most recent valuation date for any Pension
Plan, the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate
for all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit
liabilities), does not exceed $5,000,000.
5.12 Certain Fees.
No broker's or finder's fee or commission will be
payable with respect to this Agreement or any of the transactions
contemplated hereby, and Company hereby indemnifies
Administrative Agent, Managing Agents and Co-Arrangers against,
and agrees that it will hold Administrative Agent, Managing
Agents and Co-Arrangers harmless from, any claim, demand or
liability for any such broker's or finder's fees alleged to have
been incurred by Administrative Agent, Managing Agents or Co-
Arrangers as the result of any action or inaction by Company in
connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising
in connection with any such claim, demand or liability.
5.13 Environmental Protection.
Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of Company and each of its
Subsidiaries (including, without limitation, all operations
and conditions at or in the Facilities) comply in all
material respects with all Environmental Laws;
(ii) Company and each of its Subsidiaries have obtained
all Governmental Authorizations under Environmental Laws
necessary to their respective operations, and all such
Governmental Authorizations are in good standing, and
Company and each of its Subsidiaries are in compliance with
all material terms and conditions of such Governmental
Authorizations;
(iii) neither Company nor any of its Subsidiaries
has received (a) any notice or claim to the effect that it
is or may be liable to any Person as a result of or in
connection with any Hazardous Materials or (b) any letter or
request for information under Section 104 of the Comprehen
sive Environmental Response, Compensation, and Liability Act
(42 U.S.C. 9604) or comparable state laws, and, to the
best of Company's knowledge, none of the operations of
Company or any of its Subsidiaries is the subject of any
federal or state investigation relating to or in connection
with any Hazardous Materials at any Facility or at any other
location;
(iv) none of the operations of Company or any of its
Subsidiaries is subject to any judicial or administrative
proceeding alleging the violation of or liability under any
Environmental Laws which if adversely determined could
reasonably be expected to have a Material Adverse Effect;
(v) neither Company nor any of its Subsidiaries nor any
of their respective Facilities or operations are subject to
any outstanding written order or agreement with any
governmental authority or private party relating to (a) any
Environmental Laws or (b) any Environmental Claims;
(vi) neither Company nor any of its Subsidiaries has any
contingent liability in connection with any Release of any
Hazardous Materials by Company or any of its Subsidiaries;
(vii) neither Company nor any of its Subsidiaries
nor, to Company's Best Knowledge, any predecessor of Company
or any of its Subsidiaries has filed any notice under any
Environmental Law indicating past or present treatment or
Release of Hazardous Materials at any Facility, and none of
Company's or any of its Subsidiaries' operations involves
the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent;
(viii) no Hazardous Materials exist on, under or
about any Facility in a manner that has a reasonably
possibility of giving rise to an Environmental Claim having
a Material Adverse Effect, and neither Company nor any of
its Subsidiaries has filed any notice or report of a Release
of any Hazardous Materials that has a reasonable possibility
of giving rise to an Environmental Claim having a Material
Adverse Effect;
(ix) neither Company nor any of its Subsidiaries nor, to
Company's Best Knowledge, any of their respective predeces
sors has disposed of any Hazardous Materials in a manner
that has a reasonable possibility of giving rise to an
Environmental Claim having a Material Adverse Effect;
(x) no surface impoundments are on or at any Facility
or, to Company's Best Knowledge, no underground storage
tanks are on or at any Facility; and
(xi) no Lien in favor of any Person relating to or in
connection with any Environmental Claim has been filed or
has been attached to any Facility.
5.14 Employee Matters.
There is no strike or work stoppage in existence or
threatened involving Company or any of its Subsidiaries that
could reasonably be expected to have a Material Adverse Effect.
5.15 Solvency.
Company and each of its Subsidiaries (including PHI) is
and, upon the incurrence of any Obligations by Company on any
date on which this representation is made, will be, Solvent.
5.16 Disclosure.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document or in any other
document, certificate or written statement furnished to Lenders
by or on behalf of Company or any of its Subsidiaries for use in
connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to
state a material fact (known to Company, in the case of any
document not furnished by it) necessary in order to make the
statements contained herein or therein not misleading in light of
the circumstances in which the same were made. Any projections
and pro forma financial information contained in such materials
are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the
projected results. To Company's Best Knowledge, no facts exist
(other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect and that have not been
disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the
transactions contemplated hereby.
5.17Compliance With Laws.
Company and its Subsidiaries are in compliance with the
requirements of all applicable laws, rules, regulations,
ordinances and orders (including, without limitation, Gaming
Laws) if noncompliance would affect the ability of any such party
to operate any of the Facilities or the ability of any of Company
or any of its Subsidiaries to perform their obligations under the
Loan Documents to which it is a party, except where the failure
to so comply or perform would not have a Material Adverse Effect.
The use of each of the Facilities complies with applicable zoning
ordinances, regulations, restrictive covenants and requirements
of Governmental Authorizations affecting the respective
Facilities as well as all environmental, ecological, landmark,
and other applicable laws and regulations (including, without
limitation, Gaming Laws); and all requirements for such use have
been satisfied, except where the failure to so comply would not
have a Material Adverse Effect.
5.18Representations Relating to Operation of Facilities.
A. The Nevada Facilities are open to the public and all
authorizations, licenses and permits required by any Governmental
Authority for the use, occupancy and operation of the Nevada
Premises for the purposes contemplated herein have been obtained
and all requirements for such use have been satisfied.
B. All utility services required to operate each of the
Facilities are available and in adequate supply.
5.19Intangible Property.
Company and its Subsidiaries are the sole and exclusive
owner or licensee of all trade names, unregistered trademarks and
service marks, brand names, patents, registered and unregistered
copyrights, registered trademarks and service marks, and all
applications for any of the foregoing, and all permits, grants
and licenses or other rights with respect thereto, except where
the absence of such sole ownership would not have a Material
Adverse Effect. Schedule 5.19 annexed hereto sets forth a true
and complete list of all service marks and registered trademarks
(or trademarks for which registration is pending) of Company and
its Subsidiaries. None of Company and its Subsidiaries has been
charged with any material infringement of any intangible property
of the character described above or been notified or advised of
any material claim of any other Person relating to any of the
intangible property.
5.20Rights to Agreements, Permits and Licenses.
From and after the Effective Date, Company (or its
Subsidiaries) will be the true owner of all rights in and to all
existing agreements, permits and licenses relating to all of its
facilities (now or hereafter acquired) and each of the respective
Premises (other than rights of third parties under leases and
agreements permitted hereunder), and will be the true owner of
all rights in and to all future agreements, permits and licenses
relating to all of its facilities (now or hereafter acquired),
other than rights of third parties under leases and agreements
permitted hereunder, except where the absence of such true
ownership would not have a Material Adverse Effect. Company's
interest in all such agreements, permits, and licenses is not
and, to Company's Best Knowledge, will not be subject to any
present claim (other than under the Loan Documents), set-off or
deduction other than in the ordinary course of business.
5.21 Classification of Ships.
From and after the Effective Date, the American Bureau
of Shipping classification of each Ship shall remain the highest
applicable classification and rating to which a ship of the same
age and type as such Ship can qualify under the rules and
standards of the American Bureau of Shipping.
5.22 Recordation of Ship Mortgages.
Each Ship Mortgage is in due form for filing, and has
been duly filed in the appropriate office of the United States
Coast Guard. Upon such filing, each Ship Mortgage will
constitute a legal, valid and binding first preferred ship
mortgage under the Ship Mortgage Act of 1920, as amended and
codified in Chapter 313 of Title 46 of the United States Code, on
the applicable Ship or US Documented Barge in favor of the
Trustee as mortgagee under such Ship Mortgage for the benefit of
Administrative Agent on behalf of Lenders. No other filings or
recordings or refilings or re-recordings of any other instruments
are necessary to cause the lien of any of the Ship Mortgages to
be legal, valid and binding on the parties thereto, and to create
in favor of the Trustee, as secured party, for the benefit of the
Administrative Agent on behalf of Lenders, the preferred mortgage
which the Ship Mortgages purport to create.
5.23 Policies of Insurance.
Each of the copies of the declaration pages, original
binders and certificates of insurance evidencing the Policies of
Insurance delivered to Administrative Agent pursuant to
subsection 4.1P of the Existing Credit Agreement is a true,
correct and complete copy of the respective original thereof as
in effect on the date hereof, and no amendments or modifications
of said documents or instruments not included in such copies have
been made. Furthermore, none of such documents or instruments
has been terminated and each is in full force and effect.
Neither the Company nor any of its Subsidiaries are in default in
the observance or performance of their respective obligations
under said documents and instruments and Company and its
Subsidiaries have taken all actions required to be performed
under all Policies of Insurance to keep unimpaired their rights
thereunder.
5.24 Survival of Rights Created under Existing Credit
Agreement.
Notwithstanding the modification or deletion of certain
representations and warranties of Company contained in the
Existing Credit Agreement (including, without limitation, the
deletion of representations and warranties as to the future
consequences of certain events which occurred prior to the date
of this Agreement), Company acknowledges and agrees that any
choses in action or other rights created in
favor of any Lender and their respective successors and assigns
arising out of the representations and warranties of Company
contained in or delivered (including representations and
warranties delivered in connection with the making of loans
thereunder) in connection with the Existing Credit Agreement,
shall survive the execution and delivery of this Agreement.
Company and Lenders acknowledge that certain representations and
warranties made by Company under the Existing Credit Agreement
(including representations and warranties as to the future
consequences of certain events which occurred prior to the date
of this Agreement) were made subject to changes in the facts and
conditions on which such representations and warranties were
based, which such changes were permitted or required under the
Existing Credit Agreement or this Agreement and any such
representations and warranties incorporated
herein are so incorporated subject to such changes permitted or
required under the Existing Credit Agreement or this Agreement.
SECTION 6.
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as the
Commitments hereunder shall remain in effect and until payment in
full of all of the Loans and other Obligations and the
cancellation or expiration of all Letters of Credit, unless each
Lender shall otherwise give prior written consent, Company shall
perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its
Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to
permit preparation of financial statements in conformity with
GAAP. Company will deliver to Administrative Agent and Lenders:
(i) Monthly Financials: until such time as Consolidated
EBITDA for the immediately preceding four Fiscal Quarters is
greater than or equal to $85,000,000, as soon as available
and in any event within 30 days after the end of each month
(and concurrently with the delivery of financial statements
pursuant to subdivisions (ii) and (iii) below): (a) the
consolidated and consolidating balance sheet of Company and
its Subsidiaries as at the end of such month and the related
consolidated and consolidating statements of profit and
loss, stockholders' equity and cash flows of Company and its
Subsidiaries for such month, setting forth in each case in
comparable form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the
corresponding figures from the consolidated plan and
financial forecast for the current Fiscal Year delivered
pursuant to subsection 6.1(xiv), all in reasonable detail
and certified by the Chief Financial Officer of the Company
that they fairly present the financial condition of Company
and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit
and normal year-end adjustments, (b) an analysis of
Company's operations during such month which analysis shall
explain the effect of the Company's operations during such
month or Company's ability to perform its obligations under
the Agreement and the other Loan Documents and (c) the
balance sheet of each Facility as at the end of such month
and the related statements of profit and loss, stockholder's
equity and cash flows of such Facility for such month,
setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the
previous Fiscal Year all in reasonable detail and certified
by the Chief Financial Officer of Company that they fairly
present the financial condition of such Facility as at the
dates indicated and the results of such Facility's
operations and cash flows for the period indicated, subject
to changes resulting from audit and normal year-end
adjustments.
(ii) Quarterly Financials: as soon as available and in
any event within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year and, with respect
to the fourth Fiscal Quarter of each Fiscal Year,
concurrently with the delivery of financial statements
pursuant to subdivision (iii) below, (a) (1) the
consolidated and Consolidating balance sheets of Company and
its Subsidiaries as at the end of such Fiscal Quarter and
the related consolidated and Consolidating statements of
income, stockholders' equity and cash flows of Company and
its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the
end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the
corresponding figures from the consolidated plan and
financial forecast for the current Fiscal Year delivered
pursuant to subsection 6.1(xiv), all in reasonable detail
and certified by the chief financial officer of Company that
they fairly present the financial condition of Company and
its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and
normal year-end adjustments and (2) copies of Company's
relevant 10-Q filed with the Securities and Exchange
Commission within 15 days of such filing;
(iii) Year-End Financials: as soon as available and
in any event within 90 days after the end of each Fiscal
Year, (a) (1) the consolidated and Consolidating balance
sheets of Company and its Subsidiaries as at the end of such
Fiscal Year and the related consolidated and Consolidating
statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and, when available,
the corresponding figures from the consolidated plan and
financial forecast delivered pursuant to subsection
6.1(xiii) for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present
the financial condition of Company and its Subsidiaries as
at the dates indicated and the results of their operations
and their cash flows for the periods indicated, and (2)
copies of Company's relevant 10-K filed with the Securities
and Exchange Commission within 15 days of such filing, and
(b) in the case of such consolidated financial statements, a
report thereon of Ernst & Young, LLP or other independent
certified public accountants of recognized national standing
selected by Company and satisfactory to Managing Agents,
which report shall be unqualified, shall not express any
doubts about the ability of Company and its Subsidiaries to
continue as a going concern, and shall state that such
consolidated financial statements fairly present the
consolidated financial position of Company and its
Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods
indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed
in such financial statements) and that the examination by
such accountants in connection with such consolidated
financial statements has been made in accordance with
generally accepted auditing standards;
(iv) Officers' and Compliance Certificates:
(a) together with each delivery of financial statements of
Company and its Subsidiaries pursuant to subdivisions (i),
(ii) and (iii) above, an Officers' Certificate of Company
stating that the signers have reviewed the terms of this
Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the
transactions and condition of Company and its Subsidiaries
during the accounting period covered by such financial
statements and that such review has not disclosed the
existence during or at the end of such accounting period,
and that the signers do not have actual knowledge of the
existence as at the date of such Officers' Certificate, of
any condition or event that constitutes an Event of Default
or Potential Event of Default, or, if any such condition or
event existed or exists, specifying the nature and period of
existence thereof and what action Company has taken, is
taking and proposes to take with respect thereto; and
(b) together with each delivery of financial statements of
Company and its Subsidiaries pursuant to subdivision (i)
above, a Compliance Certificate demonstrating in reasonable
detail compliance (X) during and at the end of the
applicable accounting periods with the restrictions
contained in subsections 7.1, 7.3, 7.4 and 7.5 and (Y) at
the end of the applicable accounting periods with the
restrictions contained in subsection 7.6, and setting forth
in reasonable detail the calculation of Consolidated EBITDA
for the four Fiscal Quarter period ending on the date of the
end of such accounting period and the Interest Coverage
Ratio as of such date;
(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used
in the preparation of the audited financial statements
referred to in subsection 5.3, the consolidated financial
statements of Company and its Subsidiaries delivered
pursuant to subdivisions (ii) and (iii) of this subsection
6.1 will differ in any material respect from the
consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change
in accounting principles and policies been made, then
(a) together with the first delivery of financial statements
pursuant to subdivision (ii) and (iii) of this subsection
6.1 following such change, consolidated financial statements
of Company and its Subsidiaries for (y) the current Fiscal
Year to the effective date of such change and (z) the two
full Fiscal Years immediately preceding the Fiscal Year in
which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial
statements pursuant to subdivision (ii) and (iii) of this
subsection 6.1 following such change, a written statement of
the chief accounting officer or chief financial officer of
Company setting forth the differences which would have
resulted if such financial statements had been prepared
without giving effect to such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and
its Subsidiaries pursuant to subdivision (iii) above, a
written statement by the independent certified public
accountants giving the report thereon (a) stating that their
audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that
constitutes an Event of Default or Potential Event of
Default has come to their attention and, if such a condition
or event has come to their attention, specifying the nature
and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to
obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course
of their audit examination, and (c) stating that based on
their audit examination nothing has come to their attention
that causes them to believe either or both that the
information contained in the certificates delivered
therewith pursuant to subdivision (iv) above is not correct
or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of subdivision
(iv) above for the applicable Fiscal Year are not stated in
accordance with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon, but in
no case later than 15 calendar days after, receipt thereof
(unless restricted by applicable professional standards),
copies of all reports submitted to Company by independent
certified public accountants in connection with each annual,
interim or special audit of the financial statements of
Company and its Subsidiaries made by such accountants,
including, without limitation, any comment letter submitted
by such accountants to management in connection with their
annual audit;
(viii) Insurance: as soon as practicable and in any
event by the last day of each Fiscal Year, a report in form
and substance satisfactory to Administrative Agent outlining
all material insurance coverage maintained as of the date of
such report by Company and its Subsidiaries (including all
coverages referred to in subsection 6.4B hereof and
Schedules 6.4(a) and 6.4(b) annexed hereto, section 6 of
each of the Mortgages and within each of the Ship Mortgages
under the heading "Vessel Insurance Requirements and
Provisions") and all material insurance coverage then
planned to be maintained by Company and its Subsidiaries in
the immediately succeeding Fiscal Year, if in each case
there shall be any material changes in such insurance
coverage from the insurance coverage in existence on the
date hereof;
(ix) SEC Filings and Press Releases: promptly upon
their becoming available but in any event within 15 days
after filing with the Securities and Exchange Commission,
copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company
to its security holders or by any Subsidiary of Company to
its security holders other than Company or another
Subsidiary of Company, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a
similar form) and prospectuses, if any, filed by any of
Company's Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental
or private regulatory authority, and (c) all press releases
and other statements made available generally by Company or
any of Company's Subsidiaries to the public concerning
material developments in the business of Company or any of
Company's Subsidiaries;
(x) Events of Default, etc.: promptly, but in any
event within 5 calendar days, upon Company's Best Knowledge
(a) of any condition or event that constitutes an Event of
Default or Potential Event of Default, or that any Lender
has given any notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of
Default or Potential Event of Default, (b) that any Person
has given any notice to Company or any of its Subsidiaries
or taken any other action with respect to a claimed default
or event or condition of the type referred to in subsection
8.2, (c) of any condition or event that would be required to
be disclosed in a current report filed by Company with the
Securities and Exchange Commission on Form 8-K (Items 1, 2,
4, 5 and 6 of such Form as in effect on the date hereof) if
Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or
change that has caused or evidences, either in any case or
in the aggregate, a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice
given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has
taken, is taking and proposes to take with respect thereto;
(xi) Litigation or Other Proceedings: (a) promptly upon
any Responsible Officer obtaining knowledge of (X) the
institution of, or non-frivolous threat of, any action,
suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration
against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries
(collectively, "Proceedings") not previously disclosed in
writing by Company to Lenders or (Y) any material
development in any Proceeding that, in any case of (X) or of
(Y):
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse
Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated
hereby;
written notice thereof together with such other information
as may be reasonably available to Company to enable Lenders
and their counsel to evaluate such matters; and (b) within
twenty days after the end of each Fiscal Quarter of Company,
a schedule of all Proceedings involving an alleged liability
of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $10,000,000 in the
aggregate, and promptly after request by Administrative
Agent such other information as may be reasonably requested
by Administrative Agent to enable Administrative Agent and
its counsel to evaluate any of such Proceedings;
(xii) ERISA Events: promptly upon becoming aware
of, but in no case later than 15 calendar days after, the
occurrence of or forthcoming occurrence of any ERISA Event,
a written notice specifying the nature thereof, what action
Company or any of its ERISA Affiliates has taken, is taking
or proposes to take with respect thereto and, when known,
any action taken or threatened by the Internal Revenue
Service, the Department of Labor or the PBGC with respect
thereto;
(xiii) ERISA Notices: with reasonable promptness,
copies of (a) each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) as required to be filed by
Company or any of its ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (b) all
notices received by Company or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event;
and (c) such other documents or governmental reports or
filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(xiv) Financial Plans: as soon as practicable and
in any event no later than 30 days after the beginning of
each Fiscal Year, a consolidated and Consolidating plan and
financial forecast for such Fiscal Year, including without
limitation (a) forecasted consolidated and Consolidating
balance sheet and forecasted consolidated statements of
income and cash flows of Company and its Subsidiaries for
such Fiscal Year, together with a pro forma Compliance
Certificate for such Fiscal Year and an explanation of the
assumptions on which such forecasts are based,
(b) forecasted consolidated and Consolidating statements of
income and cash flows of Company and its Subsidiaries for
each Fiscal Quarter of each such Fiscal Year, together with
an explanation of the assumptions on which such forecasts
are based, (c) the amount of forecasted unallocated overhead
for each such Fiscal Year, and (d) such other information
and projections as any Lender may reasonably request;
(xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, but in no case later
than 15 calendar days after, copies of all environmental
audits and reports, whether prepared by personnel of Company
or any of its Subsidiaries or by independent consultants,
with respect to significant environmental matters at any
Facility or which relate to an Environmental Claim which
could result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable
promptness, written notice of any change in the Board of
Directors of Company;
(xvii) Pricing Determination Certificate: at the
time of any request for an interest rate reduction pursuant
to subsection 2.2A and thereafter concurrently with the
delivery of the financial statements for each month required
under subsection 6.1(i), Company shall deliver a Pricing
Determination Certificate;
(xviii) New Subsidiaries: promptly upon any Person
becoming a Subsidiary of Company, a written notice setting
forth with respect to such Person (a) the date on which such
Person became a Subsidiary of Company and (b) all of the
data required to be set forth in Schedule 5.1 annexed hereto
with respect to all Subsidiaries of Company (it being
understood that such written notice shall be automatically
deemed to supplement Schedule 5.1 to this Agreement for all
purposes, including the Guaranty);
(xix) Maryland Heights Facility Matters: together
with each Notice of Borrowing requesting a Tranche A Loan or
Tranche B Loan prior to the Completion of Construction Date
of the Maryland Heights Facility (a) an Officer's
Certificate stating that (i) the proceeds of such borrowing
will be used exclusively to fund construction at the
Maryland Heights Facility and to pay fees and interest
hereunder, (ii) the Maryland Heights Facility is free of
liens (other than Permitted Encumbrances), and (iii) no
event of default exists under the Joint Venture Agreement,
(b) a statement reconciling the approved budget with the
costs of completion, which statement shall indicate for each
line item any variations from the approved budget amount,
(c) a calculation of the total contribution made by Company
to the Joint Venture from October 1, 1996 to the date of
such request from sources other than the proceeds of Loans
hereunder, other borrowings, Permitted Maryland Heights
Indebtedness and the proceeds from the sale of the M/V
Players Riverboat I, and (d) a schedule detailing (i) the
critical path items remaining in the construction of the
Maryland Heights Facility, (ii) the expected date of
completion of each item listed therein and (iii)
demonstrating the ability of the Joint Venture to open for
business on or before May 1, 1997.
(xx) Regulation 6.090 Reports: promptly, but in no case
later than 15 calendar days, after the same are available,
copies of the Nevada "Regulation 6.090 Report" and "6-A
Report" and copies of any written communication to Company
or any of its Subsidiaries from any Gaming Board advising it
of a violation of or non-compliance with, any Gaming Law by
Company or any of its Subsidiaries;
(xxi) US Documented Barges: promptly upon the
acquisition or documentation by Company or any of its
Subsidiaries of any additional US documented Barge, a
written notice setting forth with respect to such Person
(a) the date on which such barge became a US documented
Barge and (b) all of the data required to be set forth in
Schedule 5.5 annexed hereto with respect to all US
documented Barges (it being understood that such written
notice shall be automatically deemed to supplement Schedule
5.5 to this Agreement for all purposes); and
(xxii) Other Information: with reasonable
promptness, such other information and data with respect to
Company or any of its Subsidiaries as from time to time may
be reasonably requested by any Lender.
6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Company will,
and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect its corporate or other legal
existence, as applicable, and all rights and franchises material
to its business.
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries
to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect
of any of its income, businesses or franchises before any penalty
accrues thereon, and all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums that
have become due and payable and that by law have or may become a
Lien upon any of its properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto;
provided that no such tax, charge or claim need be paid if being
contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity
with GAAP shall have been made therefor.
B. Company will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other than
Company or any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance.
A. Company will, and will cause each of its Subsidiaries
to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of Company and
its Subsidiaries (including, without limitation, maintenance of
Intellectual Property) and from time to time will make or cause
to be made all appropriate repairs, renewals and replacements
thereof.
B. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, throughout the term of
this Agreement, all Policies of Insurance required pursuant to
Schedules 6.4(a) and 6.4(b) annexed hereto and will otherwise
comply fully with the terms and conditions provided in
subsection 6 of each of the Mortgages and within each of the Ship
Mortgages under the heading "Vessel Insurance Requirements and
Provisions". Each such policy of insurance shall name
Administrative Agent for the benefit of Lenders as the loss payee
thereunder for amounts in excess of $2,500,000 and shall provide
for at least 30 days prior written notice to Administrative Agent
of any modification or cancellation of such policy.
6.5 Inspection; Lender Meeting.
Company shall, and shall cause each of its Subsidiaries
to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Company or
any of its Subsidiaries, including its and their financial and
accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public
accountants (provided that Company may, if it so chooses, be
present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal
business hours and as often as may be reasonably requested.
Without in any way limiting the foregoing, Company will, upon the
request of Managing Agents or Requisite Lenders, participate in a
meeting of Managing Agents and Lenders once during each Fiscal
Year to be held at Company's corporate offices (or such other
location as may be agreed to by Company and Managing Agents) at
such time as may be agreed to by Company and Managing Agents.
6.6 Compliance with Laws, etc.
Company shall, and shall cause each of its Subsidiaries
to, comply with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority, including
all Gaming Laws, and to obtain and keep in full force and effect
any permit, license, consent, or approval required under this
Agreement if such noncompliance or failure to obtain and keep in
full force and effect could reasonably be expected to cause a
Material Adverse Effect. Company shall and shall cause each of
its Subsidiaries to comply with the requirements of all Gaming
Laws applicable to such Person.
6.7 Environmental Disclosure and Inspection.
A. Company shall, and shall cause each of its Subsidiaries
to, exercise all due diligence in order to comply and use its
best efforts to cause (i) all tenants under any leases or
occupancy agreements affecting any portion of the Facilities and
(ii) all other Persons on or occupying such property, to comply
with all Environmental Laws.
B. Company agrees that Administrative Agent may, once
during each Fiscal Year until the Commitment Termination Date or
at any time upon the occurrence of an Event of Default, retain,
at Company's expense, an independent professional consultant to
review any report relating to Hazardous Materials prepared by or
for Company and to conduct its own investigation of any Facility
currently owned, leased, operated or used by Company or any of
its Subsidiaries, and Company agrees to use its best efforts to
obtain permission for Administrative Agent's professional
consultant to conduct its own investigation of any Facility
previously owned, leased, operated or used by Company or any of
its Subsidiaries. Company hereby grants to Administrative Agent
and its agents, employees, consultants and contractors the right
to enter into or on to the Facilities currently owned, leased,
operated or used by Company or any of its Subsidiaries to perform
such tests on such property as are reasonably necessary to
conduct such a review and/or investigation. Any such
investigation of any Facility shall be conducted, unless
otherwise agreed to by Company and Administrative Agent, during
normal business hours and, to the extent reasonably practicable,
shall be conducted so as not to interfere with the ongoing
operations at any such Facility or to cause any damage or loss to
any property at such Facility. Company and Administrative Agent
hereby acknowledge and agree that any report of any investigation
conducted at the request of Administrative Agent pursuant to this
subsection 6.7B will be obtained and shall be used by
Administrative Agent and Lenders solely for the purposes of
Lenders' internal credit decisions, to monitor and police the
Loans and to protect Lenders' security interests, if any, created
by the Loan Documents. Administrative Agent agrees to deliver a
copy of any such report to Company with the understanding that
Company acknowledges and agrees that (i) it will hold harmless
Administrative Agent and each Lender from any costs, losses or
liabilities relating to Company's use of or reliance on such
report, (ii) neither Administrative Agent nor any Lender makes
any representation or warranty with respect to such report, and
(iii) by delivering such report to Company, neither
Administrative Agent nor any Lender is requiring or recommending
the implementation of any suggestions or recommendations
contained in such report.
C. Company shall promptly advise Lenders in writing and in
reasonable detail of (i) any Release of any Hazardous Materials
required to be reported to any federal, state or local
governmental or regulatory agency under any applicable
Environmental Laws, (ii) any and all written communications with
respect to any Environmental Claims that have a reasonable
possibility of giving rise to a Material Adverse Effect or with
respect to any Release of Hazardous Materials required to be
reported to any federal, state or local governmental or
regulatory agency, (iii) any remedial action taken by Company or
any other Person in response to (x) any Hazardous Materials on,
under or about any Facility, the existence of which has a
reasonable possibility of resulting in an Environmental Claim
having a Material Adverse Effect, or (y) any Environmental Claim
that could have a Material Adverse Effect, (iv) discovery by any
Responsible Officer of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could
cause such Facility or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws, and (v) any request for
information from any governmental agency that suggests such
agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for a Release of
Hazardous Materials.
D. Company shall promptly notify Lenders of (i) any
proposed acquisition of stock, assets, or property by Company or
any of its Subsidiaries that could reasonably be expected to
expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that could have a Material Adverse Effect or
that could reasonably be expected to have a material adverse
effect on any Governmental Authorization then held by Company or
any of its Subsidiaries and (ii) any proposed action to be taken
by Company or any of its Subsidiaries to commence manufacturing,
industrial or other operations that could reasonably be expected
to subject Company or any of its Subsidiaries to additional laws,
rules or regulations, including, without limitation, laws, rules
and regulations requiring additional environmental permits or
licenses.
E. Company shall, at its own expense, provide copies of
such documents or information as Administrative Agent may
reasonably request in relation to any matters disclosed pursuant
to this subsection 6.7.
6.8 Company's Remedial Action Regarding Hazardous Materials.
Company shall promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all necessary remedial
action in connection with the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials on, under or
about any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations. In the event
Company or any of its Subsidiaries undertakes any remedial action
with respect to any Hazardous Materials on, under or about any
Facility, Company or such Subsidiary shall conduct and complete
such remedial action in compliance with all applicable
Environmental Laws, and in accordance with the policies, orders
and directives of all federal, state and local governmental
authorities except when, and only to the extent that, Company's
or such Subsidiary's liability for such presence, storage, use,
disposal, transportation or discharge of any Hazardous Materials
is being contested in good faith by Company or such Subsidiary.
6.9 Post-Closing Matters.
A. Not later than the 30th day after the Effective
Date, Company shall cause PMGC to execute an amendment to the
lease covering the golf course, such that, after the execution of
such amendment, PMGC will have a valid leasehold interest in all
of the land comprising the golf course.
B. Immediately upon the approval of the Nevada Gaming
Authorities, Company shall convey the stock of PNEV to PHI
pursuant to an instrument of transfer which shall not become
effective until such time as Company shall have delivered
certificates, indorsed in blank, representing all of the issued
and outstanding stock of PNEV to Administrative Agent.
6.10New Subsidiaries; New Joint Ventures; Further Assurances.
A. In the event a Person becomes a Subsidiary of Company
after the Effective Date, Company, upon the request of
Administrative Agent, shall and shall cause such Subsidiary to
execute and deliver such guaranties, collateral documents and
such other agreements, pledges, assignments, documents and
certificates (including, without limitation, any amendments to
the Loan Documents) as may be necessary or desirable or as
Administrative Agent may request and do such other acts and
things as Administrative Agent reasonably may request in order to
have a lien on the stock of such Subsidiary and to have such
Subsidiary guaranty and/or secure the Obligations and effect
fully the purposes of this Agreement and the other Loan Documents
and to provide for payment of the Obligations in accordance with
the terms of this Agreement and the other Loan Documents.
B. In the event Company or any of its Subsidiaries enters
into any Joint Venture by means of the ownership of any
Subsidiary (a "Participant Subsidiary") that, directly or
indirectly, holds stock in a Joint Venture in corporate form or
acts as a partner in a Joint Venture in partnership form, (i)
Company shall, and shall cause each of its Subsidiaries to,
pledge its interests in such Participant Subsidiary that enters
into such Joint Venture as Collateral, (ii) neither Company nor
any of its Subsidiaries shall enter into any other agreement that
creates any Lien on the interests that Company or any such
Subsidiary owns in such Participant Subsidiary or Joint Venture
and (iii) neither Company nor any of its Subsidiaries will enter
into any agreement that prohibits, restricts or conditions
Lenders' rights to encumber the stock or ownership interests in
such Participant Subsidiary or Joint Venture.
C. Additionally, Company shall, and shall cause each of its
Subsidiaries to, execute such documents as Administrative Agent
reasonably may request to perfect Administrative Agent's Lien on
real or personal property located at any of the Facilities
acquired after the Effective Date.
D. Without limiting the generality of subsection 6.10C, if,
and at such time as, SIRCC or any Affiliate of Company purchases
any of the parking lots used in connection with the Illinois
Facilities from Burlington Northern Railroad Company (the
"Railroad"), which parking lots SIRCC currently leases from the
Railroad, unless Administrative Agent otherwise agrees, Company
shall cause SIRCC or such Affiliate purchasing such parking lot
(i) to grant to Administrative Agent a deed of trust or mortgage,
in form and substance acceptable to Administrative Agent, on such
parking lot(s), (ii) to pay or cause to be paid any monetary
Liens then encumbering such parking lot(s), (iii) to provide
Administrative Agent with a lender's policy of title insurance
and any endorsements thereto, in form and substance acceptable to
Administrative Agent (but, subject to such non-monetary Liens as
do not materially affect the use and operation of such parking
lot), insuring such deed of trust or mortgage as a first priority
Lien on such parking lot in favor of Administrative Agent, and
(iv) to execute and deliver such other instruments and agreements
and undertake such other acts as Administrative Agent may request
in connection therewith (including, without limitation, executing
security agreements, fixture filings, and financing statements
with respect to such parking lots).
E. Company, Administrative Agent and each of the Lenders
will, at the expense of Company, do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and
delivered, such amendments or supplements hereto or to any of the
Loan Documents and such further documents, instruments and
transfers as any such party may reasonably require for the curing
of any defect in the execution or acknowledgment hereof or in any
of the Loan Documents, or in the description of the real property
or other Collateral or for the proper evidencing of giving notice
of each Lien or security interest securing repayment of the
Obligations. Further, upon the execution and delivery of the
Mortgages, the Ship Mortgages and each of the Loan Documents and
thereafter, from time to time, Company shall cause the Mortgages,
the Ship Mortgages and each of the Loan Documents and each
amendment and supplement thereto to be filed, registered and
recorded and to be refiled, re-registered and re-recorded in such
manner and in such places as may be reasonably required by
Requisite Lenders or Administrative Agent, in order to publish
notice of and fully protect the Liens of the Mortgages, the Ship
Mortgages and each of the Loan Documents in the Collateral and to
perform or cause to be performed from time to time any other
actions required by law and execute or cause to be executed any
and all instruments of further assurance that may be necessary
for such publication, perfection, continuation and protection.
F. Company shall give Administrative Agent written notice
(the "Initial Notice") promptly upon entering into contracts
after the Effective Date other than the Excluded Contracts (as
defined below) which individually or in the aggregate could give
rise to mechanic's liens in excess of $1,000,000 with respect to
the construction or renovation of Improvements or any other
contracts aggregating more than $1,000,000 that might give rise
to mechanics or other statutory Liens at any one of the following
locations (a) the Illinois Premises, (b) the Louisiana Premises,
(c) the portion of the Nevada Premises insured by Title Policy
#29 0010 107 16901 issued by Chicago Title Insurance Company or
(d) the portion of the Nevada Premises insured by Title Policy
#29 0010 107 16902 issued by Chicago Title Insurance Company,
which notice shall include the location at which such
construction or renovation is taking place and a brief
description of the nature of the construction or renovation.
From and after the date of the Initial Notice, Company shall give
Administrative Agent written notice ("Subsequent Notice")
promptly upon entering into contracts which individually or in
the aggregate increase Company's exposure to mechanics or other
statutory Liens by any amount in excess of $100,000 from the
amount of mechanics or other statutory Liens for which Company
was potentially liable on the day Company gave the Initial
Notice, or, thereafter, the day Company gave the most recent
prior Subsequent Notice. Administrative Agent shall promptly
transmit all such notices required under this clause to Lenders
and, upon receipt of written requests therefor from Requisite
Lenders, shall request Title Company to issue at Company's
expense a California Land Title Association Form 122 (or
comparable) endorsement to the Title Policy issued at the closing
of this Agreement with respect to the location at which such
construction or renovation is being conducted, which endorsement
shall provide insurance against any mechanics or other statutory
liens arising from such construction or renovation; provided that
Requisite Lenders may request such an endorsement be issued no
more often than quarterly during the period from the date of
receipt of any such notice from Company until such date as all of
the following have occurred (x) a certificate of use or occupancy
(or comparable certificate in the applicable jurisdiction) has
been issued with respect to such construction or renovation, (y)
any statutory period within which a mechanics Lien could be
asserted has expired and (z) all contractors with respect to such
construction or renovation have been paid in full. Company
agrees to cooperate with the Title Company to cause such
endorsements to be issued. For purposes of this Section 6.10C
Excluded Contracts shall mean contracts with respect to which the
Title Policies delivered on the Effective Date provided
endorsements as to the absence of mechanics or other statutory
Liens arising in connection with the performance thereof.
G. Upon each exercise of the option in the Waterbottom
Lease (as defined in the Louisiana Mortgage) that permits PLC to
lease additional waterbottom lands from the State of Louisiana,
Players shall record, or shall cause PLC to record, in the land
records of Calcasieu Parish, Louisiana, a memorandum of exercise
of option for purposes of putting of record PLC's rights in such
additional lands. Concurrently therewith, Players shall notify
the Administrative Agent in writing and shall execute, deliver,
and record any instruments and agreements and do such other acts
as the Administrative Agent may deem necessary or appropriate to
insure the senior priority of the lien of the Louisiana Mortgage
over such additional lands (including, without limitation,
causing the Title Company to issue, at Company's sole cost and
expense, an endorsement to the applicable Title Policy ensuring
the senior priority of the lien of the Louisiana Mortgage on
PLC's rights in such additional lands).
H. At such time as the lessor under the golf course
lease that consists of a portion of the Nevada Facilities
acquires title to that certain real property designated as
"Government Lot 2" under Section 31 of such lease, Players shall
notify, or shall cause PMGC, to notify the Administrative Agent,
and Players and PMGC shall execute, deliver, and record any
instruments and agreements and do such other acts as the
Administrative Agent may deem necessary or appropriate to insure
the senior priority of the lien of the applicable Nevada Mortgage
over such additional real property (including, without
limitation, causing the Title Company to issue, at Company's sole
cost and expense, an endorsement to the applicable Title Policy
ensuring the senior priority of the lien of the Nevada Mortgage
on PMGC's rights in such additional real property).
6.11 Maryland Heights Facility Matters.
A. Maryland Heights Facility Budget. Not more than 15
days after the last day of each calendar month set forth below,
Company shall provide evidence satisfactory to Administrative
Agent that costs in an amount not less than the amount set forth
opposite such month of constructing the Maryland Heights Facility
incurred during the period from October 1, 1996, to the last day
of such month were paid with cash generated from sources other
than the proceeds of Loans hereunder, other borrowings, Permitted
Maryland Heights Indebtedness and the sale of the M/V Players
Riverboat I:
Period Amount
November 1996 $4,000,000
December 1996 $6,000,000
January 1997 $8,000,000
February 1997 $10,000,000
March 1997 $11,000,000
B. Maryland Heights Facility Construction Monitor.
Lenders shall be entitled to hire, at the expense of Company, a
consulting engineer to monitor the construction of the Maryland
Heights Project and to make reports on the progress to Completion
of Construction to Lenders.
C. Release of Liens Relating to Maryland Heights
Project. In the event Company incurs Permitted Maryland Heights
Indebtedness secured by Liens permitted by subsections 7.2(vi) or
7.2(vii), Lenders agree that the Liens created pursuant to the
Partnership Interest Security Agreement to be executed by PMHLP
and the Subsidiary Security Agreement (Missouri), the Liens on
the capital stock of PMHN and PMH created pursuant to the
Holdings Pledge Agreement and any other Liens in favor of the
Lenders in any of the assets of PMHN, PMH and PMHLP shall be
terminated and the Liens created thereby released, the guaranties
made by PMHLP, PMHN and PMH pursuant to the Guaranty shall be
made subordinated in right of payment to the Permitted Maryland
Heights Indebtedness on terms satisfactory to Administrative
Agent and direct Administrative Agent to execute all documents
necessary to give effect to such termination, release and
subordination.
6.12 Appraisals.
On or before June 30, 1997, Company shall, and shall
cause each of its Subsidiaries to, permit one or more independent
appraisers selected by and satisfactory to Administrative Agent,
upon reasonable notice, to visit and inspect any real or personal
property of Company and its Subsidiaries for the purpose of
preparing one or more appraisals of such real and personal
property satisfying the criteria established by any applicable
laws and regulations (in each case to the extent required under
such laws and regulations as determined by Administrative Agent
in its discretion). All fees and expenses incurred in connection
with the preparation and review of such appraisals shall be for
the account of Company, and Company shall pay such amounts upon
demand by Administrative Agent.
6.13 Cash Concentration Account.
Commencing on the Completion of Construction Date, and
at all times thereafter, Company shall cause each banking
institution with which Company or any of its Subsidiaries
maintains an account to deposit in a collateral account (the
"Cash Concentration Account") established with the Administrative
Agent in San Francisco, California all collections on the
accounts of, and other funds and other payments received by,
Company or any of its Subsidiaries in excess of the amount which
in accordance with past practices of the Company and its
Subsidiaries is reasonably necessary for use in the daily
operation of its casino business. Company has, prior to the date
hereof, given Administrative Agent and Lenders written notice
specifying the name and location of each banking institution at
which Company or any of its Subsidiaries maintains an account and
Company shall, upon the establishment of any new account, give
Administrative Agent prior written notification thereof. Company
shall give each such banking institution irrevocable written
instructions, in form and substance satisfactory to
Administrative Agent in its sole discretion, to transmit, on the
day of receipt, all monies and all amounts required to be placed
in the Cash Concentration Account pursuant to this Section 6.13.
At the end of each Business Day, funds in the Cash Concentration
Account shall be applied first to the Swing Line Loan and, to the
extent funds are available, then to the Revolving Loans. Company
may subsequently reborrow Revolving Loans in accordance with the
provisions of Section 4.
SECTION 7.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as the
Commitments hereunder shall remain in effect and until payment in
full of all of the Loans and other Obligations and the
cancellation or expiration of all Letters of Credit, unless
Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 7.
7.1 Indebtedness.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except (i) the Loans,
(ii) the Senior Notes, (iii) Permitted Maryland Heights
Indebtedness, (iv) intercompany Indebtedness of Company owed to
any wholly-owned Subsidiary or any intercompany Indebtedness owed
by any wholly-owned Subsidiary of Company to Company or any other
wholly-owned Subsidiary of Company; provided that any payment
under the Guaranty or the PHI Guaranty shall result in a pro
tanto reduction of the amount of such intercompany Indebtedness
owed by a Guarantor or PHI, as the case may be, to Company, and
(v) so long as no Event of Default or, to Company's Best
Knowledge, Potential Event of Default shall have occurred and be
continuing, or shall be caused thereby, (A) Other Allowed
Indebtedness (Secured) and (B) Company and its Subsidiaries may
create, incur, assume or guaranty or otherwise become or remain
liable directly or indirectly liable with respect to Other
Allowed Indebtedness (Unsecured) if, after giving effect thereto,
Company shall be in compliance on a pro forma basis with the
Leverage Ratio then applicable pursuant to subsection 7.6C;
provided that the aggregate Indebtedness of Company and its
Subsidiaries outstanding at any time under clauses (i), (ii),
(iii), (iv) and (v) above shall not exceed $280,000,000.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with
respect to any of their respective assets, whether now owned or
hereafter acquired, or any income or profits therefrom, or file
or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with
respect to any of the Collateral under the Uniform Commercial
Code of any State or under any similar recording or notice
statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted or permitted pursuant to the
Collateral Documents;
(iii) Liens to secure Other Allowed Indebtedness
(Secured) to the extent permitted pursuant to the
definitions of "Other Allowed Indebtedness (Secured)" and
"Purchase Money Debt";
(iv) Liens existing on the Effective Date and described
on Schedule 7.2 annexed hereto;
(v) a Lien to be granted by PMH and/or PMHLP, as
lessee, on certain of its gaming equipment and gaming
receivables, in favor of the Riverside Joint Venture, as
landlord, to secure the payment by PMH of certain lease
obligations owed to the Riverside Joint Venture in
connection with the operation of the Maryland Heights
Facility;
(vi) a Lien on PMHLP's partnership interest in the
Riverside Joint Venture and on the capital stock of PMHN and
PMH, to secure Permitted Maryland Heights Indebtedness if
both of the following conditions are satisfied: (x) the
Permitted Maryland Heights Indebtedness is in the principal
amount of $40,000,000 and (y) no Tranche B Loans are
outstanding and the Tranche B Commitments have been
terminated; and
(vii) a Lien on PMHLP's interest in the FF&E located
at the Maryland Heights Facility to secure Permitted
Maryland Heights Indebtedness if both of the following
conditions are satisfied: (x) the Permitted Maryland Heights
Indebtedness is in the principal amount of $40,000,000 and
(y) no Tranche B Loans are outstanding and the Tranche B
Commitments have been terminated.
B. No Further Negative Pledges. Except with respect to
specific property encumbered pursuant to subsection 7.2A or to be
sold pursuant to an executed agreement with respect to an Asset
Sale, neither Company nor any of its Subsidiaries shall enter
into any agreement prohibiting the creation or assumption of any
Lien upon any of its properties or assets, whether now owned or
hereafter acquired.
C. No Restrictions on Subsidiary Distributions to Company
or Other Subsidiaries. Except as provided herein, Company will
not, and will not permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by
Company or any other Subsidiary of Company, (ii) repay or prepay
any Indebtedness owed by such Subsidiary to Company or any other
Subsidiary of Company, (iii) make loans or advances to Company or
any other Subsidiary of Company, or (iv) transfer any of its
property or assets to Company or any other Subsidiary of Company.
7.3 Investments, Loans and Advances; Capital Expenditures.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any
Investment or make any capital expenditure in any Person,
including any Joint Venture or to make Consolidated Capital
Expenditures, except:
(i) Investments permitted under subsection 2.4A(iii);
(ii) Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1; provided that
the obligations under any such loans are subordinated to the
Obligations of Company or any such Subsidiary under the Loans or
the Guaranty, as the case may be;
(iii) Company and its Subsidiaries may continue to
own the Investments owned by them and described in Schedule 7.3
annexed hereto; and
(iv) Company and its Subsidiaries may make Consolidated
Capital Expenditures relating to the Maryland Heights Facility
not exceeding $144,000,000 in the aggregate, (b) Consolidated
Capital Expenditures (other than those related to the Maryland
Heights Facility) during the period from October 1, 1996 to and
including March 31, 1997 not exceeding $5,000,000 in the
aggregate, (c) Consolidated Capital Expenditures (other than
those related to the Maryland Heights Facility) in the Fiscal
Year ending March 31, 1998 not exceeding $16,000,000 in the
aggregate and (d) Consolidated Capital Expenditures (other than
those related to the Maryland Heights Facility) in each Fiscal
Year (commencing with the Fiscal Year ending March 31, 1999) not
exceeding $8,000,000 in the aggregate during each such year.
7.4 Contingent Obligations.
Company shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of
Administrative Agent and Requisite Lenders, directly or
indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Company and such Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of
any Indebtedness of Company or any of its Subsidiaries
permitted by subsection 7.1;
(ii) Company and such Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of
Letters of Credit; and
(iii) Company and such Subsidiaries may become and
remain liable for Contingent Obligations to make Investments
permitted by subsection 7.3.
7.5 Restricted Payments.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Payment; provided
that nothing contained in this restriction shall limit Company's
ability to repurchase Senior Notes pursuant to a Regulatory
Redemption (as defined in the Indenture).
7.6 Financial Covenants.
A. Minimum Fixed Charge Coverage Ratio. Company shall not
permit the Fixed Charge Coverage Ratio on the each date set forth
below to be less than the amount set forth opposite such date:
Date Amount
December 31, 1996 2.7:1.00
March 31, 1997 2.5:1.00
June 30, 30, 1997 1.9:1.00
September 30, 1997 1.3:1.00
December 31, 1997 1.2:1.00
March 31, 1998 1.1:1.00
June 30, 1998 1.0:1.00
September 30, 1998 1.0:1.00
December 31, 1998 1.0:1.00
March 31, 1999 1.0:1.00
June 30, 1999 1.0:1.00
September 30, 1999 1.0:1.00
December 31, 1999 1.0:1.00
March 31, 2000 1.0:1.00
B. Minimum Consolidated EBITDA (Quarterly).
Company shall not permit Consolidated EBITDA for the
Fiscal Quarter ended on each date set forth below to be less than
the amount set forth opposite such date:
Date Amount
December 31, 1996 $ 6,000,000
March 31, 1997 6,500,000
June 30, 1997 11,000,000
September 30, 1997 15,000,000
December 31, 1997 14,000,000
March 31, 1998 14,700,000
June 30, 1998 15,400,000
September 30, 1998 20,500,000
December 31, 1998 15,000,000
March 31, 1999 15,400,000
June 30, 1999 15,400,000
September 30, 1999 20,500,000
December 31, 1999 15,000,000
March 31, 2000 15,400,000
C. Minimum Consolidated EBITDA (Rolling four Quarters).
Company shall not permit Consolidated EBITDA for the
four consecutive Fiscal Quarter period ended on each date set
forth below to be less than the amount set forth opposite such
date:
Date Amount
December 31, 1996 $44,000,000
March 31, 1997 40,000,000
June 30, 1997 35,000,000
September 30, 1997 37,000,000
December 31, 1997 46,000,000
March 31, 1998 54,000,000
June 30, 1998 59,000,000
September 30, 1998 65,000,000
December 31, 1998 65,000,000
March 31, 1999 70,000,000
June 30, 1999 60,000,000
September 30, 1999 65,000,000
December 31, 1999 65,000,000
March 31, 2000 70,000,000
D. Maximum Leverage Ratio. Company shall not permit the
ratio of (x) Consolidated Total Assets divided by (y)
Consolidated Net Worth on each date set forth below to be more
than the amount set forth opposite such date:
Date Amount
December 31, 1996 2.7:1.00
March 31, 1997 2.7:1.00
June 30, 30, 1997 2.8:1.00
September 30, 1997 2.7:1.00
December 31, 1997 2.6:1.00
March 31, 1998 2.6:1.00
June 30, 1998 2.5:1.00
September 30, 1998 2.4:1.00
December 31, 1998 2.3:1.00
March 31, 1999 2.3:1.00
June 30, 1999 2.3:1.00
September 30, 1999 2.3:1.00
December 31, 1999 2.3:1.00
March 31, 2000 2.3:1.00
E. Minimum Consolidated Tangible Net Worth. Company shall
not permit Consolidated Tangible Net Worth on each date set forth
below to be less than the amount set forth opposite such date:
Date Amount
December 31, 1996 $150,000,000
March 31, 1997 152,000,000
June 30, 1997 154,000,000
September 30, 1997 158,000,000
December 31, 1997 160,000,000
March 31, 1998 164,000,000
June 30, 1998 170,000,000
September 30 1998 176,000,000
December 31, 1998 180,000,000
March 31, 1999 186,000,000
June 30, 1999 188,000,000
September 30 1999 190,000,000
December 31, 1999 192,000,000
March 31, 2000 194,000,000
F. Maximum Total Debt Ratio. Company shall not permit the
ratio of (x) Consolidated Total Debt divided by (y) Consolidated
EBITDA for the four consecutive Fiscal Quarter period ended on
each date set forth below to be less than the amount set forth
opposite such date:
Date Amount
December 31, 1996 4.8:1.00
March 31, 1997 6.0:1.00
June 30, 30, 1997 6.0:1.00
September 30, 1997 6.0:1.00
December 31, 1997 4.5:1.00
March 31, 1998 4.0:1.00
June 30, 1998 4.0:1.00
September 30, 1998 3.5:1.00
December 31, 1998 3.5:1.00
March 31, 1999 3.0:1.00
June 30, 1999 3.0:1.00
September 30, 1999 3.0:1.00
December 31, 1999 3.0:1.00
March 31, 2000 3.0:1.00
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions.
Company shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure
of Company or any of its Subsidiaries, or enter into any
transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, sub-lease, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any
substantial part of its business, property or fixed assets,
whether now owned or hereafter acquired, or acquire by purchase
or otherwise 50% or more of the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of,
any Person or any division or line of business of any Person,
except:
(i) any Subsidiary of Company (other than a Guarantor)
may be merged with or into Company or any wholly-owned
Subsidiary of Company, or be liquidated, wound up or
dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of
transactions, to Company or any wholly-owned Subsidiary of
Company; provided that, in the case of such a merger,
Company or such wholly-owned Subsidiary shall be the
continuing or surviving corporation; provided further if any
Guarantor or grantor under a Collateral Document is the
disappearing entity in a merger with a wholly-owned
Subsidiary that is not a Guarantor or grantor, the surviving
corporation shall execute a Guaranty and/or a Subsidiary
Security Agreement, as the case may be;
(ii) any Subsidiary of Company may change its legal
structure so long as (X) any such modification does not in
any manner impair any Lender's ability to realize the
Collateral owned by such Subsidiary upon an Event of Default
and (Y) if such Subsidiary is the disappearing entity in a
merger devised to effect such a structural change, the
surviving entity shall execute a Guaranty and/or a
Subsidiary Security Agreement, as the case may be;
(iii) subject to subsections 7.11 and 2.4A(iii),
Company and its Subsidiaries may make Asset Sales of assets
having a fair market value not in excess of $5,000,000 on an
individual basis; provided that, with respect to the sale of
any asset having a fair market value equal to or exceeding
$2,500,000, (x) the consideration received for such assets
shall be in an amount at least equal to the fair market
value thereof and (y) at least eighty percent (80%) of the
consideration received shall be Cash;
(iv) Company and its Subsidiaries may make acquisitions
of Securities issued by Company consistent with subsection
7.5; and
7.8 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the
rendering of any service) the subject matter of which involves an
amount in excess of $1,000,000 with any holder of 5% or more of
any class of equity Securities of Company or with any Affiliate
of Company or of any such holder, on terms that are less
favorable to Company or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not
such a holder or Affiliate; provided that nothing contained in
the foregoing restriction shall apply to (i) any transaction
between Company and any of its wholly-owned Subsidiaries or
between any of its wholly-owned Subsidiaries or (ii) reasonable
and customary fees paid to members of the Boards of Directors of
Company and its Subsidiaries.
7.9 Disposal of Subsidiary Stock.
Company shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock
or other equity Securities of any of its Subsidiaries,
except to qualify directors if required by applicable law;
or
(ii) permit any of its Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise encumber or
dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries (including such
Subsidiary), except to Company, another Subsidiary of
Company, or to qualify directors if required by applicable
law.
7.10Conduct of Business.
From and after the Effective Date, Company shall not,
and shall not permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in by Company and
its Subsidiaries on the Effective Date as described in the
"Business" and "Properties" section of the 10-K and any Related
Business and (ii) such other lines of business as may be
consented to by Requisite Lenders.
7.11 Tradenames, Trademarks and Servicemarks.
Company and its Subsidiaries shall not assign or in any
other manner alienate its interest in any tradenames, trademarks
or servicemarks relating or pertaining to any of the Facilities
other than (i) as provided on Schedule 7.11, (ii) assignments in
the ordinary course of Company's business and similar in nature
to the types of assignments undertaken by comparable gaming
entities or (iii) assignments to Company or any wholly-owned
Subsidiary of Company, if such assignment does not affect the
validity and enforceability of such tradenames, trademarks or
servicemarks and, prior to any such assignment, the assignee has
granted Administrative Agent a legally valid and enforceable
security interest in any such tradenames, trademarks or
servicemarks.
7.12Change of Control Offer.
Company shall not commence a Change of Control Offer (as
defined in the Indenture) without the consent of Requisite
Lenders.
7.13 No Amendment of Indenture.
Company shall not amend the Indenture in any manner
without the prior written consent of Requisite Lenders, which
consent shall not be unreasonably withheld; provided that nothing
contained in this restriction shall apply to any amendment to the
Indenture that either (i) does not require the consent of any
holder of Senior Notes or (ii) is required by a final order or
decree of a court of competent jurisdiction.
7.14 No Movement of Other Barges.
Company and its Subsidiaries shall not permit any Barge
to be moved from permanent moorage at the Louisiana Premises or
the Illinois Premises, as applicable, unless and until (i) such
Barge is registered with the United States Coast Guard and (ii) a
first priority Lien has been created for the benefit of the
Lenders pursuant to a duly authorized, executed and delivered
Ship Mortgage.
SECTION 8.
EVENTS OF DEFAULT
IF any of the following conditions or events ("Events of
Default") shall occur:
8.1 Failure to Make Payments When Due.
Failure by Company to pay (i) any installment of
principal of or interest on any Loan when due, whether at stated
maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment or otherwise; (ii) when due any amount
payable to Administrative Agent in reimbursement of any drawing
under a Letter of Credit; or (iii) any interest on any Loan or
any fee or any other amount due under this Agreement within five
days after the date due; or
8.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to
pay when due (a) any principal of or interest on any Indebtedness
(other than Indebtedness referred to in subsection 8.1) in an
individual principal amount of $2,500,000 or more or any items of
Indebtedness with an aggregate principal amount of $5,000,000 or
more or (b) any Contingent Obligation in an individual principal
amount of $2,500,000 or more or any Contingent Obligations with
an aggregate principal amount of $5,000,000 or more, in each case
beyond the end of any grace period provided therefor; or
(ii) breach or default by Company or any of its Subsidiaries with
respect to any other material term of (a) any evidence of any
Indebtedness in an individual principal amount of $2,500,000 or
more or any items of Indebtedness with an aggregate principal
amount of $5,000,000 or more or any Contingent Obligation in an
individual principal amount of $2,500,000 or more or any Contin
gent Obligations with an aggregate principal amount of $5,000,000
or more or (b) any loan agreement, mortgage, indenture or other
agreement relating to such Indebtedness or Contingent
Obligation(s), if the effect of such breach or default is to
cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obliga
tion(s) to become or be declared due and payable prior to its
stated maturity or the stated maturity of any underlying obliga
tion, as the case may be (upon the giving or receiving of notice,
lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of Company to perform or comply with any term or
condition contained in subsection 2.4A(iii), 2.4B(ii),
6.1(ix)(a), 6.2, 6.4B or Section 7 of this Agreement; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other
statement made or deemed made by Company or any of its
Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material
respect on the date as of which made; or
8.5 Other Defaults Under Loan Documents.
Company or any of its Subsidiaries shall default in the
performance of or compliance with any term contained in this
Agreement or any of the other Loan Documents, other than any such
term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 15
days after the earlier of (i) a Responsible Officer becoming
aware of such default or (ii) receipt by Company of notice from
Administrative Agent or any Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of Company or any
of its Subsidiaries in an involuntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, which decree or order is
not stayed; or any other similar relief shall be granted under
any applicable federal or state law; or (ii) an involuntary case
shall be commenced against Company or any of its Subsidiaries
under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect;
or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar
powers over Company or any of its Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of Company or any of
its Subsidiaries for all or a substantial part of its property;
or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of
Company or any of its Subsidiaries, and any such event described
in this clause (ii) shall continue for 45 days unless dismissed,
bonded, discharged or stayed; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Company or any of its Subsidiaries shall have an
order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter
in effect, or shall consent to the entry of an order for relief
in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to
the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or
Company or any of its Subsidiaries shall make any assignment for
the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall
admit in writing its inability, to pay its debts as such debts
become due; or the Board of Directors of Company or any of its
Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of
the actions
referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or
similar process involving (i) in any individual case an amount in
excess of $2,500,000 or (ii) in the aggregate at any time an
amount in excess of $5,000,000 (in either case not adequately
covered by insurance as to which an unaffiliated insurance
company has acknowledged coverage) shall be entered or filed
against Company or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 45 days (or in any event
later than five days prior to the date of any proposed sale
thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against
Company or any of its Subsidiaries decreeing the dissolution or
split up of Company or that Subsidiary and such order shall
remain undischarged or unstayed for a period in excess of 30
days; or
8.10Employee Benefit Plans.
A. There shall occur one or more ERISA Events which
individually or in the aggregate results in or might reasonably
be expected to result in liability of Company or any of its
Subsidiaries or any of their respective ERISA Affiliates in
excess of $5,000,000 during the term of this Agreement.
B. There shall exist an amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding
for purposes of such computation any Pension Plans with respect
to which assets exceed benefit liabilities), which exceeds
$5,000,000, and such default shall not have been remedied or
waived within 10 days after the earlier of (i) the date that, to
Company's Best Knowledge, such condition exists or (ii) receipt
by Company of notice from Administrative Agent or any Lender of
such default; or
8.11Change in Control.
A Change of Control shall have occurred; or
8.12Impairment of Collateral.
(A) A judgment creditor of Company or any of its
Subsidiaries shall obtain possession of any material portion of
the Collateral under the Collateral Documents by any means,
including, without limitation, levy, distraint, replevin or self-
help, (B) any substantial portion of the Collateral shall be
taken by eminent domain or condemnation, (C) any of the
Collateral Documents shall cease for any reason (other than an
act by Administrative Agent or any Lender) to be in full force
and effect, or any party thereto shall purport to disavow its
obligations thereunder or shall declare that it does not have any
further obligations thereunder or shall contest the validity or
enforceability thereof or Lenders shall cease to have a valid and
perfected first priority security interest in any material
Collateral therein, or (D) Lenders' security interests or liens
on any material portion of the Collateral under the Collateral
Documents shall become otherwise impaired or unenforceable; or
8.13Loss of Gaming License.
The occurrence of a License Revocation by any Gaming
Authority in a jurisdiction in which Company or any of its
Subsidiaries owns or operates a casino, hotel, casino/hotel,
resort, casino/resort, riverboat casino, dock casino, any other
type of casino, golf course, entertainment center or similar
facility; provided that such License Revocation continues for at
least five (5) calendar days; or
8.14 Failure to Open Maryland Heights or to Obtain Gaming
License.
Failure of Company to open and commence operation of
Company's casino located at the Maryland Heights Facility on or
before May 1, 1997; or failure of Company to obtain all gaming
licenses from any Gaming Authority needed to open and operate
such casino on or before May 1, 1997;
8.15 Invalidity of Guaranties.
Either the Guaranty or the PHI Guaranty, for any reason,
other than the satisfaction in full of all Obligations, the
termination of this Agreement or the termination of the Guaranty
or the PHI Guaranty (or any Guarantor's obligations thereunder)
in accordance with its terms, ceases to be in full force and
effect or is declared to be null and void by final order of a
court of competent jurisdiction, or any Guarantor denies that it
has any further liability under the Guaranty or the PHI Guaranty
or claims that the Guaranty or the PHI Guaranty is void or has no
force or effect in whole or in part or gives notice to such
effect; or
8.16 Material Adverse Change.
The occurrence of an event or change that causes or
evidences, either in any case or in the aggregate, a Material
Adverse Effect.
THEN
8.17 Remedies.
At any time, (i) upon the occurrence of any Event of
Default described in subsection 8.6 or 8.7, each of (a) the
unpaid principal amount of and accrued interest on the Loans, (b)
an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or
not any beneficiary under any such Letter of Credit shall have
presented, or shall be entitled at such time to present, the
drafts or other documents or certificates required to draw under
such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind,
all of which are hereby expressly waived by Company, and the
obligation of each Lender to make any Loan and the obligation of
Administrative Agent to issue any Letter of Credit shall
thereupon terminate, and (ii) upon the occurrence and during the
continuation of any other Event of Default, Administrative Agent
shall, upon the written request or with the written consent of
Requisite Lenders, by written notice to Company, declare all or
any portion of the amounts described in clauses (a) through (c)
above to be, and the same shall forthwith become, immediately due
and payable, and the obligation of each Lender to make any Loan
shall thereupon terminate and the obligation of Administrative
Agent to issue any Letter of Credit hereunder shall thereupon
terminate; provided, however, that the foregoing shall not affect
in any way the obligations of Lenders under subsection 3.3C(i) or
the obligations of Lenders to purchase participations in any
unpaid Swing Line Loans as provided in subsection 2.1B.
Any amounts described in clause (b) above, when received
by Administrative Agent, shall be held by Administrative Agent
pursuant to the terms of the Collateral Account Agreement and
shall be applied as therein provided.
Notwithstanding anything contained in the second
preceding paragraph, if at any time within 60 days after an
acceleration of the Loans pursuant to such paragraph Company
shall pay all arrears of interest and all payments on account of
principal which shall have become due otherwise than as a result
of such acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates
specified in this Agreement) and all Events of Default and
Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall
be remedied or waived pursuant to subsection 10.6, then Requisite
Lenders, by written notice to Company, may at their option
rescind and annul such acceleration and its consequences; but
such action shall not affect any subsequent Event of Default or
Potential Event of Default or impair any right consequent
thereon. The provisions of this paragraph are intended merely to
bind Lenders to a decision that may be made at the election of
Requisite Lenders and are not intended to benefit Company and do
not grant Company the right to require Lenders to rescind or
annul any acceleration hereunder, even if the conditions set
forth herein are met.
SECTION 9.
ADMINISTRATIVE AGENT
9.1 Appointment.
WFB is hereby appointed Administrative Agent hereunder
and under the other Loan Documents and each Lender hereby
authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents.
Administrative Agent agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the
benefit of Administrative Agent, Managing Agents, Co-Arrangers
and Lenders and Company shall have no rights as a third party
beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, Administrative Agent
shall act solely as an agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its
Subsidiaries.
9.2 Powers; General Immunity.
A. Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf
and to exercise such powers hereunder and under the other Loan
Documents as are specifically delegated to Administrative Agent
by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Administrative Agent shall have
only those duties and responsibilities that are expressly
specified in this Agreement and the other Loan Documents and it
may perform such duties by or through its agents or employees.
No Managing Agent or Co-Arranger shall have any duty or
responsibility under this Agreement or any Loan Document in its
capacity therein. No Managing Agent, Co-Arranger or
Administrative Agent shall have, by reason of this Agreement or
any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of
the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon Administrative Agent any
obligations in respect of this Agreement or any of the other Loan
Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. Administrative
Agent shall not be responsible to any Lender for the execution,
effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any other Loan
Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral
statements or in any financial or other statements, instruments,
reports or certificates or any other documents furnished or made
by Administrative Agent to Lenders or by or on behalf of Company
to Administrative Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other
Person liable for the payment of any Obligations, nor shall
Administrative Agent be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the
use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any
liability arising from confirmations of the amount of outstanding
Loans or the Letter of Credit Usage or the component amounts
thereof.
C. Exculpatory Provisions. Neither Administrative Agent
nor any of its officers, directors, employees or agents shall be
liable to Lenders for any action taken or omitted by
Administrative Agent under or in connection with any of the Loan
Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. If Administrative Agent
shall request instructions from Lenders with respect to any act
or action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents,
Administrative Agent shall be entitled to refrain from such act
or taking such action unless and until Administrative Agent shall
have received instructions from Requisite Lenders. Without
prejudice to the generality of the foregoing, (i) Administrative
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed
by it to be genuine and correct and to have been signed or sent
by the proper person or persons, and shall be entitled to rely
and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its
Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right
of action whatsoever against Administrative Agent as a result of
Administrative Agent acting or (where so instructed) refraining
from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite
Lenders. Administrative Agent shall be entitled to refrain from
exercising any power, discretion or authority vested in it under
this Agreement or any of the other Loan Documents unless and
until it has obtained the instructions of Requisite Lenders or
all Lenders as required or permitted by this Agreement. Each
Lender agrees that it shall not exercise any right of set-off
described in subsection 10.4 without the concurrence of
Administrative Agent.
D. Administrative Agent Entitled to Act as Lender. The
agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon,
Administrative Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and
the Letters of Credit, Administrative Agent shall have the same
rights and powers hereunder as any other Lender and may exercise
the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or
"Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its
individual capacity. Administrative Agent and its Affiliates may
accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with
Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other
consideration from Company for services in connection with this
Agreement and otherwise without having to account for the same to
Lenders.
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness.
Each Lender represents and warrants that it has made its
own independent investigation of the financial condition and
affairs of Company and its Subsidiaries in connection with the
making of the Loans and the issuance of the Letters of Credit
hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of Company and its
Subsidiaries. Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to
make any such investigation or any such appraisal on behalf of
Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times
thereafter, and Administrative Agent shall not have any
responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify Administrative Agent, to the extent
that Administrative Agent shall not have been reimbursed by
Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and
disbursements) or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against
Administrative Agent in performing its duties hereunder or under
the other Loan Documents or otherwise in its capacity as
Administrative Agent in any way relating to or arising out of
this Agreement or the other Loan Documents; provided that no
Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from
Administrative Agent's gross negligence or willful misconduct.
If any indemnity furnished to Administrative Agent for any
purpose shall, in the opinion of Administrative Agent, be
insufficient or become impaired, Administrative Agent may call
for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is
furnished.
9.5 Successor Administrative Agent and Swing Line Lender.
A. Administrative Agent may resign at any time by giving 30
days' prior written notice thereof to Lenders and Company,
provided that on or before the effective date of any such
resignation, a successor Administrative Agent shall have been
appointed pursuant to this subsection 9.5A. Administrative Agent
may be removed at any time with cause by an instrument or
concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any
such notice of resignation or any such removal, Requisite Lenders
shall have the right, upon five Business Days' notice to Company,
to appoint a successor Administrative Agent. Upon the acceptance
of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed
Administrative Agent and the retiring or removed Administrative
Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
B. Any resignation or removal of Administrative Agent
pursuant to subsection 9.5A shall also constitute the resignation
or removal of WFB or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection
9.5A shall, upon its acceptance of such appointment, become the
successor Swing Line Lender for all purposes hereunder. In such
event (i) Company shall prepay any outstanding Swing Line Loans
made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the
retiring or removed Administrative Agent and Swing Line Lender
shall surrender any Swing Line Note held by it to Company for
cancellation, and (iii) if so requested by the successor
Administrative Agent and Swing Line Lender in accordance with
subsection 2.1E, Company shall issue a new Swing Line Note to the
successor Administrative Agent and Swing Line Lender
substantially in the form of Exhibit V annexed hereto, in the
principal amount of the Swing Line Loan Commitment then in effect
and with other appropriate insertions.
9.6 Collateral Documents.
Each Lender hereby further authorizes Administrative
Agent to enter into the Collateral Documents as secured party on
behalf of and for the benefit of each Lender and agrees to be
bound by the terms of the Collateral Documents; provided that
Administrative Agent shall not enter into or consent to any
amendment, modification, termination or waiver of any provision
contained in the Collateral Documents except as set forth in
subsection 10.6. Anything contained in any of the Loan Documents
to the contrary notwithstanding, each Lender agrees that no
Lender shall have any right individually to realize upon any of
the collateral under the Collateral Documents, it being
understood and agreed that all rights and remedies under the
Collateral Documents may be exercised solely by Administrative
Agent for the benefit of Lenders in accordance with the terms
thereof.
9.7 Release of Collateral.
Administrative Agent may release personal property
Collateral without the consent of any Lender to the extent sold
or disposed of by Company or any of its Subsidiaries in a
transaction or series of transactions that constitute a permitted
Asset Sale pursuant to subsection 7.7(ii) and that meets all of
the requirements contained therein. Administrative Agent may
also, upon Borrower's request, take such actions as are necessary
to terminate any Ship Mortgage relating to a Barge on file with
the United States Coast Guard if, and only if, (i) such Barge has
ceased, or will concurrently with such termination cease, to be a
US Documented Barge and (ii) Administrative Agent shall have
received assurances, reasonably satisfactory to Administrative
Agent, that upon giving effect to such termination, such Barge
will be subject to a perfected first priority Lien in favor of
Administrative Agent for the benefit of Lenders.
SECTION 10.
MISCELLANEOUS
10.1Assignments and Participations in Loans and Letters of
Credit
A. General. Each Lender shall have the right at any time
to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part
(subject to certain limitations set forth in subsection 10.1B
below) of its Commitments or any Loan or Loans made by it or its
Letters of Credit or participations therein or any other interest
herein or in any other Obligations owed to it, subject to the
following restrictions:
(v) no such sale, assignment, transfer or participation
shall, without the consent of Company, require Company to
file a registration statement with the Securities and
Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities
laws of any state;
(w) no such sale, assignment or transfer described in
clause (i) above shall be effective unless and until a
Lender Assignment Agreement (a "Lender Assignment
Agreement") effecting such sale, assignment or transfer
shall have been accepted by Administrative Agent as provided
in subsection 10.1B(ii);
(x) no such sale, assignment, transfer or participation
of any Letter of Credit or any participation therein may be
made separately from a sale, assignment, transfer or
participation of a corresponding interest in the Commitments
and the Loans of the Lender effecting such sale, assignment,
transfer or participation;
(y) anything contained herein to the contrary
notwithstanding, the Swing Line Loan Commitment may not be
sold, assigned or transferred as described in clause (i)
above to any Person other than a successor Administrative
Agent and Swing Line Lender to the extent contemplated by
subsection 9.5; and
(z) no Lender may sell, assign or transfer its Tranche A
Commitment, Tranche B Commitment or its Tranche C Commitment
as described in clause (i) except together with a
proportionate share of all such Commitments held by such
Lender.
Except as otherwise provided in this subsection 10.1, no Lender
shall, as between Company and such Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment or
transfer of, or any granting of participations in, all or any
part of its Commitment or the Loans or the other Obligations owed
to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Letter of Credit or participation therein, or other
Obligation may (a) be assigned in any amount to another
Lender or to an Affiliate of the assigning Lender or another
Lender, with the giving of notice to Company and
Administrative Agent or (b) be assigned in an aggregate
amount of not less than $5,000,000 (or such lesser amount as
shall constitute the aggregate amount of the Commitments,
Loans, Letters of Credit and participations therein, and
other Obligations of the assigning Lender) to any other
Eligible Assignee with the giving of notice to Company and
with the consent of Managing Agents (which consent shall not
be unreasonably withheld). To the extent of any such
assignment in accordance with either clause (a) or (b)
above, the assigning Lender shall be relieved of its
obligations with respect to its Commitments, Loans, Letters
of Credit or participations therein, or other Obligations or
the portion thereof so assigned. The parties to each such
assignment shall execute and deliver to Administrative
Agent, for its acceptance, a Lender Assignment Agreement,
together with a processing fee of $2,500 and such forms,
certificates or other evidence, if any, with respect to
United States federal income tax withholding matters as the
assignee under such Lender Assignment Agreement may be
required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii)(a). Upon such execution, delivery,
acceptance and recordation from and after the effective date
specified in such Lender Assignment Agreement, (y) the
assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been
assigned to it pursuant to such Lender Assignment Agreement,
shall have the rights and obligations of a Lender hereunder
and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by
it pursuant to such Lender Assignment Agreement, relinquish
its rights and be released from its obligations under this
Agreement (and, in the case of a Lender Assignment Agreement
covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). The Commitments
hereunder shall be modified to reflect the Commitments of
such assignee and any remaining Commitments of such
assigning Lender and the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter
as practicable, surrender its Note to Administrative Agent
for cancellation, and thereupon new Notes shall, if so
requested by the assignee and/or the assigning Lender in
accordance with subsection 2.1E, be issued to the assignee
and/or to the assigning Lender, substantially in the form of
Exhibits IV-A, IV-B, IV-C or Exhibit V, respectively,
annexed hereto with appropriate insertions, to reflect the
new Commitments of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent. Upon its
receipt of a Lender Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an
Eligible Assignee, together with the processing fee and any
forms, certificates or other evidence with respect to United
States federal income tax withholding matters that such
assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent
shall, if such Lender Assignment Agreement has been
completed and is in substantially the form of Exhibit III
hereto and if Managing Agents have consented to the
assignment evidenced thereby (to the extent such consent is
required pursuant to subsection 10.1B(i)), (a) accept such
Lender Assignment Agreement by executing a counterpart
thereof as provided therein (which acceptance shall evidence
any required consent of Administrative Agent to such
assignment) and (b) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Lender
Assignment Agreement delivered to and accepted by it as
provided in this subsection 10.1B(ii).
(iii) Mandatory Assignment by Non-Suitable Lender.
If any Lender is required to qualify or be found suitable by
the regulations of any Gaming Authority and does not so
qualify or otherwise not meet the suitability standards
pursuant to such regulations (in such case, a "Former
Lender"), such Former Lender shall and hereby agrees to sell
its rights and obligations under this Agreement to Eligible
Assignee (the "Substitute Lender"). The Substitute Lender
shall assume the rights and obligations of the Former Lender
under this Agreement pursuant to a Lender Assignment
Agreement, which assumption shall be required to comply
with, and shall become effective in accordance with, the
provisions of subsection 10.1B; provided that the purchase
price to be paid by the Substitute Lender to Administrative
Agent for the account of the Former Lender for such
assumption shall equal the sum of (i) the unpaid principal
amount of any Loans held by the Former Lender plus accrued
interest thereon plus (ii) the Former Lender's Pro Rata
Share (through the required purchase of participations
pursuant to subsection 3.1C) of the aggregate amount of
drawings under all Letters of Credit that have not been
reimbursed by Company, plus accrued interest thereon, plus
(iii) such Former Lender's pro rata share of accrued fees to
the date of the assumption; provided further that, upon
receipt by the Former Lender of all such amounts,
Administrative Agent shall thereafter pay all obligations
owing to the Former Lender under the Loan Documents to the
Substitute Lender. Each Lender agrees that if it becomes a
Former Lender, upon payment to it by Administrative Agent
(upon Administrative Agent's receipt thereof from the
Substitute Lender) of all such amounts, if any, owing to it
under the Loan Documents, it will execute and deliver a
Lender Assignment Agreement.
Notwithstanding the foregoing, if any Lender becomes a
Former Lender and fails to find a Substitute Lender within
10 days of being determined unsuitable or unqualified, or
such lesser period of time as specified by any such Gaming
Authority for the withdrawal of a Former Lender (the
"Withdrawal Period"), Company shall have an additional 90
day period, or such lesser period of time as specified by
such Gaming Authority, to find a Substitute Lender, which
Substitute Lender shall assume the rights and obligations of
the Former Lender as provided in the preceding paragraph.
In the event that Company shall not have found a Substitute
Lender within such period of time, Company shall immediately
(i) prepay in full the outstanding principal amount of Loans
held by such Former Lender, together with accrued interest
thereon to the earlier of (X) the date of payment or (Y) the
last day of any Withdrawal Period, and (ii) at the option of
Company either (A) place an amount equal to such Former
Lender's Pro Rata Share in each Letter of Credit issued by
Administrative Agent, in a separate cash collateral account
with Administrative Agent for each outstanding Letter of
Credit, which amount will be applied by Administrative Agent
to satisfy Company's reimbursement obligations to
Administrative Agent in respect of unreimbursed drawings
under the applicable Letter of Credit or (B) if no Event of
Default then exists, terminate the Commitments of such
Former Lender, at which time the other Lenders' Pro Rata
Shares will be automatically adjusted as a result thereof;
provided that the option specified in this clause (B) may
only be exercised if, immediately after giving effect
thereto, no Lender's outstanding Revolving Loans, when added
to the product of (a) such Lender's Pro Rata Share and (b)
the sum of (I) the aggregate amount of all outstanding
Letters of Credit at such time and (II) the aggregate amount
of all Swing Line Loans then outstanding, would exceed such
Lender's Commitments at such time. Each Lender agrees that,
to the extent and for so long as required by any applicable
Gaming Authority, such Lender's rights and obligations under
this Agreement are subject to the provisions of this
subsection 10.1B(iii) and all restrictions of any applicable
Gaming Authority.
C. Participations. The holder of any participation, other
than an Affiliate of the Lender granting such participation,
shall not be entitled to require such Lender to take or omit to
take any action hereunder except action directly affecting
(i) the extension of the final maturity of any portion of the
principal amount of or interest on any Loan allocated to such
participation or (ii) a reduction of the principal amount of or
the rate of interest payable on any Loan allocated to such
participation, and all amounts payable by Company hereunder
(including without limitation amounts payable to such Lender
pursuant to subsection 2.7) shall be determined as if such Lender
had not sold such participation. Company and each Lender hereby
acknowledge and agree that, solely for purposes of subsections
10.4 and 10.5, (a) any participation will give rise to a direct
obligation of Company to the participant and (b) the participant
shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to
the assignments and participations permitted under the foregoing
provisions of this subsection 10.1, any Lender may assign and
pledge all or any portion of its Loans, the other Obligations
owed to such Lender, and its Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve Bank; provided that
(i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any
such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be
entitled to require the assigning Lender to take or omit to take
any action hereunder.
E. Assignments and Participations Subject to Gaming Laws.
Subject to the last sentence of this subsection 10.1E, each
Lender agrees that all assignments and participations made
hereunder shall be subject to, and made in compliance with, all
Gaming Laws applicable to Lenders. Company hereby acknowledges
that unless Company has provided Lenders with a written opinion
of counsel as to the suitability standards applicable to Lenders
of any relevant Gaming Authority with jurisdiction over the
business of Company and its Subsidiaries, no Lender shall have
the responsibility of determining whether or not a potential
assignee or participant of such Lender would qualify as a
suitable Lender under the Gaming Laws of any such jurisdiction.
F. Information. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that
Lender from time to time to assignees and participants (including
prospective assignees and participants), subject to subsection
10.19.
10.2Expenses.
Whether or not the transactions contemplated hereby
shall be consummated, Company agrees to pay promptly (i) all the
actual and reasonable costs and expenses of preparation of the
Loan Documents; (ii) all the costs of furnishing all opinions by
counsel for Company (including without limitation any opinions
requested by Lenders as to any legal matters arising hereunder)
and of each Loan Party's performance of and compliance with all
agreements and conditions on its part to be performed or complied
with under this Agreement and the other Loan Documents including,
without limitation, with respect to confirming compliance with
environmental and insurance requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Administrative
Agent (including Allocated Costs of Internal Counsel) in
connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loans and any
consents, amendments, waivers or other modifications hereto or
thereto and any other documents or matters requested by Company
or any other Loan Party; (iv) all other actual and reasonable
costs and expenses incurred by Administrative Agent, Managing
Agents and Co-Arrangers in connection with the syndication of the
Commitments and the negotiation, preparation and execution of the
Loan Documents and the transactions contemplated hereby and
thereby; and (v) after the occurrence of an Event of Default, all
costs and expenses, including reasonable attorneys' fees
(including Allocated Costs of Internal Counsel) and costs of
settlement, incurred by Administrative Agent and Lenders in
enforcing any Obligations of or in collecting any payments due
from Company or any other Loan Party hereunder or under the other
Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy
proceedings.
10.3Indemnity.
In addition to the payment of expenses pursuant to
subsection 10.2, whether or not the transactions contemplated
hereby shall be consummated, Company agrees to defend, indemnify,
pay and hold harmless Administrative Agent, Managing Agents and
Co-Arrangers and Lenders, and the officers, directors, employees,
agents and affiliates of Administrative Agent and Lenders
(collectively called the "Indemnitees") from and against any and
all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including without
limitation the reasonable fees and disbursements of counsel for
such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be
designated as a party or a potential party thereto), whether
direct, indirect or consequential and whether based on any
federal, state or foreign laws, statutes, rules or regulations
(including without limitation securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common
law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee,
in any manner relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or
thereby (including without limitation Lenders' agreement to make
the Loans hereunder or the use or intended use of the proceeds of
any of the Loans or the issuance of the Letters of Credit
hereunder or the use or intended use of any of the Letters of
Credit) or the statements contained in the commitment letter
delivered by any Lender to Company with respect thereto
(collectively called the "Indemnified Liabilities"); provided
that Company shall not have any obligation to any Indemnitee
hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross
negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction. To the
extent that the undertaking to defend, indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, Company
shall contribute the maximum portion that it is permitted to pay
and satisfy under applicable law to the payment and satisfaction
of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
10.4Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuation of any Event of
Default each Lender (with the consent of Administrative Agent) is
hereby authorized by Company at any time or from time to time,
without notice to Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and
to apply any and all deposits (general or special, including, but
not limited to, Indebtedness evidenced by certificates of
deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by
that Lender to or for the credit or the account of Company
against and on account of the obligations and liabilities of
Company to that Lender under this Agreement, the Letters of
Credit and participations therein and the other Loan Documents,
including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement, the
Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not (i) that Lender shall
have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due
and payable pursuant to Section 8 and although said obligations
and liabilities, or any of them, may be contingent or unmatured.
Company hereby further grants to Administrative Agent and each
Lender a security interest in all deposits and accounts
maintained with Administrative Agent or such Lender as security
for the Obligations.
10.5Ratable Sharing.
Lenders hereby agree among themselves that if any of
them shall, whether by voluntary payment, by realization upon
security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the
enforcement of any right under the Loan Documents or otherwise,
or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other
amounts then due and owing to that Lender hereunder or under the
other Loan Documents (collectively, the "Aggregate Amounts Due"
to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately
greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase participations (which it
shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of
its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts
Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may
exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Company
to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
10.6Amendments and Waivers.
No amendment, modification, termination or waiver of any
provision of this Agreement, the Notes or any other Loan
Document, or consent to any departure by Company therefrom, shall
in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: increases the
amount of any of the Commitments; changes any Lender's Pro Rata
Share; changes in any manner the definition of "Requisite
Lenders"; changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or
concurrence of all Lenders; postpones the Commitment Termination
Date; postpones the date on which any interest or any fees are
payable; decreases the interest rate borne by any of the Loans
(other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2E) or
the amount of any fees payable hereunder; increases the maximum
duration of Interest Periods permitted hereunder; reduces the
amount or postpones the due date of any amount payable in respect
of, or extends the required expiration date of, any Letter of
Credit; changes in any manner the obligations of Lenders relating
to the purchase of participations in Letters of Credit; or
changes in any manner the provisions contained in subsection 8.1
or this subsection 10.6 shall be effective only if evidenced by a
writing signed by or on behalf of all Lenders. In addition,
(i) any amendment, modification, termination or waiver of any of
the provisions contained in Section 4 shall be effective only if
evidenced by a writing signed by or on behalf of Administrative
Agent and Requisite Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is
the holder of that Note, (iii) no amendment, modification,
termination or waiver of any provision of subsection 2.1B or any
other provision of this Agreement relating to the Swing Line Loan
Commitment or the Swing Line Loans shall be effective without the
written concurrence of Swing Line Lender, (iv) no amendment,
modification, termination or waiver of any provision of Section 3
or of any Letter of Credit shall be effective without the written
concurrence of Administrative Agent, and (v) no amendment, modifi
cation, termination or waiver of any provision of Section 9 or of
any other provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of Administrative
Agent shall be effective without the written concurrence of
Administrative Agent. Administrative Agent may, but shall have
no obligation to, with the written concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it
was given. No notice to or demand on Company in any case shall
entitle Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on
Company.
10.7Independence of Covenants.
All covenants hereunder shall be given independent
effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence
of an Event of Default or Potential Event of Default if such
action is taken or condition exists.
10.8Notices.
Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed
or sent by telefacsimile or United States mail or courier service
and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex, or
five Business Days after depositing it in the United States mail
with postage prepaid and properly addressed. For the purposes
hereof, the address of each party hereto shall be as set forth
under such party's name on the signature pages hereof or such
other address as shall be designated by such party in a written
notice delivered to the other parties hereto.
10.9Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement
and the making of the Loans and the issuance of the Letters of
Credit hereunder.
B. Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of Company set
forth in subsections 2.7, 10.2, 10.3 and 10.4 and the agreements
of Lenders set forth in subsections 9.2C, 9.4 and 10.5 shall
survive the payment of the Loans, the cancellation or termination
of the Letters of Credit and the reimbursement of any amounts
drawn thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent
or any Lender in the exercise of any power, right or privilege
hereunder or under any other Loan Document shall impair such
power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement
and the other Loan Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be
under any obligation to marshal any assets in favor of Company or
any other party or against or in payment of any or all of the
Obligations. To the extent that Company makes a payment or
payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights
of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, any other state or federal law,
common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or
related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 General Release.
m. Except with respect to the matters, rights and
obligations specified in subsection 10.12B hereof, Company, for
itself and on behalf of its parent, subsidiary and affiliate
corporations, past or present, and each of them, as well as each
of their respective directors, officers, agents, servants,
shareholders, representatives, attorneys, administrators,
executors, heirs, assigns, predecessors and successors in
interest, and each of them (collectively, the "Releasors") hereby
release and forever discharge Lenders and each of their
respective parents, subsidiaries and affiliates, past or present,
and each of them, as well as each of their directors, officers,
agents, servants, employees, representatives, shareholders,
attorneys, administrators, executors, predecessors and successors
in interest, heirs and assigns, and all other persons, firms or
corporations with whom any of the former have been, are now, or
may hereafter be affiliated, and each of them (collectively, the
"Releasees"), from and against any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes
of action in law or equity, obligations, controversies, debts,
costs, expenses, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether
known or unknown, fixed or contingent, suspected or unsuspected
by the Releasors, and whether concealed or hidden, which
Releasors now own or hold or have at any time heretofore owned or
held, which are based upon or arise out of or in connection with
any matter, cause or thing existing at any time prior to the date
hereof or anything done, omitted or suffered to be done or
omitted at any time prior to the date hereof, which relate in any
way to (i) the Existing Credit Agreement and the other Loan
Documents (as defined in the Existing Credit Agreement), (ii)
this Agreement and the other Loan Documents, and (iii) the
transactions occurring in connection with either of the foregoing
and the lending relationship established thereby, irrespective of
whether any such matter, cause or thing, or action done, omitted
or suffered to be done was authorized, permitted or prohibited by
the documents and agreements described in the preceding clauses
(i) and (ii) (collectively the "Released Matters").
A. Notwithstanding anything hereunder to the contrary, this
Release shall not release or alter any obligation arising on or
subsequent to the Effective Date to comply with the terms and
conditions of this Agreement and the other Loan Documents. It is
expressly understood and agreed that it is the intent of Company
to forever release certain claims against the Lenders, including,
but not limited to, any claims related to the actions and
omissions of Releasees prior to the date hereof, but that nothing
herein shall affect the obligations of the Releasees subsequent
to the date hereof, including, but not by way of limitation,
compliance subsequent to the date hereof with all terms and
conditions of this Agreement and the other Loan Documents.
B. Without limiting the generality of the foregoing,
Company for itself and on behalf of the other Releasors expressly
releases any and all past, present and future claims in
connection with the Released Matters, about which the Releasors
do not know of or suspect to exist in their favor, whether
through ignorance, oversight, error, negligence or otherwise, and
which, if known, would materially affect Company's decision to
give the release set forth in this subsection 10.12, and to this
end Company for itself and on behalf of each of the other
Releasors waives all rights under Section 1542 of the Civil Code
of California, which states in full as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by
him must have materially affected his settlement with
the debtor."
Company knowingly and willingly waives the provisions of Section
1542 and acknowledges and agrees that this waiver is an essential
and material term of this Agreement. Company has reviewed this
Agreement and the release contained in this subsection 10.12 with
Company's legal counsel, and Company understands and acknowledges
the significance and consequence of this Agreement and of the
specific waiver of Section 1542 of the Civil Code of California.
C. Company represents, warrants and agrees that in
executing and entering into this Agreement, Company is not
relying and has not relied upon any representation, promise or
statement made by anyone which is not recited, contained or
embodied in this Agreement or the other Loan Documents. Company
understands and expressly assumes the risk that any fact not
recited, contained or embodied therein may turn out hereafter to
be other than, different from, or contrary to the facts now known
to Company or believed by Company to be true. Nevertheless,
Company intends by this Agreement to release fully, finally and
forever all Released Matters and agrees that this Agreement shall
be effective in all respects notwithstanding any such difference
in facts, and shall not be subject to termination, modification
or rescission by reason of any such difference in facts.
D. Company hereby represents and warrants that it has not
heretofore assigned or transferred or purported to assign or
transfer to any person or entity all or any part of or any
interest in any Released Matter. Company agrees to indemnify and
hold harmless the Releasees against any claim, contention,
demand, cause of action, obligation and liability of any nature,
character or description whatsoever, including the payment of
attorney's fees and costs actually incurred, whether or not
litigation is commenced, which may be based upon or which may
arise out of or in connection with any such assignment or
transfer or purported assignment or transfer of any Released
Matter against any Releasee.
E. Company shall, from time to time, promptly execute and
deliver to the Lenders such further instruments, documents and
papers and perform such further acts as may be necessary or, in
Lenders' reasonable judgment, useful to carry out and effect the
terms of this subsection 10.12.
F. This subsection 10.12 is not to be construed and does
not constitute an admission of any liability by any person or
entity for any purpose.
G. Company represents, warrants and agrees that in
executing and entering into this Agreement, Company is not
relying upon, nor is Company acting in consideration of, any
other person or entity executing a similar release. This
Agreement shall be binding, valid and enforceable against Company
and the other Releasors irrespective of whether any other person
or entity executes any other release.
10.13 Severability.
In case any provision in or obligation under this
Agreement or the Notes shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.14 Obligations Several; Independent Nature of Lenders'
Rights.
The obligations of Lenders hereunder are several and no
Lender shall be responsible for the obligations or Commitment of
any other Lender hereunder. Nothing contained herein or in any
other Loan Document, and no action taken by Lenders pursuant
hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a Joint Venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall
be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such
purpose.
10.15 Headings.
Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be
given any substantive effect.
10.16 Applicable Law.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES; PROVIDED THAT THE
EXERCISE OF CERTAIN RIGHTS HEREUNDER OR UNDER THE LOAN DOCUMENTS
MAY BE SUBJECT TO AND/OR REQUIRE COMPLIANCE WITH THE GAMING LAWS.
10.17 Successors and Assigns.
This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns
of Lenders (it being understood that Lenders' rights of
assignment are subject to subsection 10.1). Neither Company's
rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written
consent of all Lenders.
10.18 Consent to Jurisdiction and Service of Process; Choice
of Forum.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT COMPANY ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH
THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION.
Company hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or
certified mail, return receipt requested, to Company at its
address provided in subsection 10.8, such service upon receipt by
Company being hereby acknowledged by Company to be sufficient for
personal jurisdiction in any action against Company in any such
court upon such receipt and to be otherwise effective and binding
service in every respect. Nothing herein shall affect the right
to serve process in any other manner permitted by law or shall
limit the right of any Lender to bring proceedings against
Company in the courts of any other jurisdiction.
10.19 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The
scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate
to the subject matter of this transaction, including without
limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter
into a business relationship, that each has already relied on
this waiver in entering into this Agreement, and that each will
continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of
litigation, this Agreement may be filed as a written consent to a
trial by the court.
10.20 Confidentiality.
Each Lender shall hold all non-public information
obtained pursuant to the requirements of this Agreement which has
been identified as confidential by Company in accordance with
such Lender's customary procedures for handling confidential
information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that
in any event a Lender may make disclosures reasonably required by
any bona fide assignee, transferee or participant in connection
with the contemplated assignment or transfer by such Lender of
any Loans or any participation therein or as required or
requested by any governmental agency or representative thereof or
pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Lender shall
notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection
with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and
provided, further that in no event shall any Lender be obligated
or required to return any materials furnished by Company or any
of its Subsidiaries.
10.21 Licensing of Administrative Agent and Lenders.
If an Event of Default shall have occurred hereunder or
under any of the Loan Documents and it shall become necessary, or
in the opinion of Administrative Agent advisable, for an agent,
receiver or other representative of Administrative Agent to
become licensed under the provisions of the laws of the State of
Illinois, Louisiana, Kentucky, Missouri or Nevada, or rules and
regulations adopted pursuant thereto, as a condition to receiving
the benefit of any Collateral encumbered by the Collateral
Documents for the benefit of Administrative Agent on behalf of
Lenders or otherwise to enforce their rights hereunder, Company
does hereby give its consent, and agrees to cause its
Subsidiaries to give their consents, to the granting of such
license or licenses and agrees to execute such further documents
as may be required in connection with the evidencing of such
consent.
10.22 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in
any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
This Agreement shall become effective upon (i) the execution of a
counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery
thereof and (ii) the satisfaction or waiver by Requisite Lenders
of the conditions set forth in subsection 4.1. At the time of
the effectiveness of this Agreement, this Agreement shall amend
and restate the Existing Credit Agreement, all obligations of
Company under the Existing Credit Agreement that have not been
paid as of the Effective Date shall become Obligations of Company
hereunder, and the commitments under the Existing Credit
Agreement shall terminate.
10.23 Cooperation With Gaming Authorities.
Administrative Agent and each Lender agree to cooperate
with all Gaming Boards in connection with the administration of
their regulatory jurisdiction over any Loan Party, including the
provision of such documents or other information as may be
requested by any such Gaming Authority relating to any Loan Party
or to the Loan Documents.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written
above.
PLAYERS INTERNATIONAL,INC.,
as Borrower
By:
Title:
Notice Address:
Citicenter Building, Suite 800
1300 Atlantic Avenue
Atlantic City, New Jersey 08401
Attention: President
With copies to:
Players International, Inc.
Citicenter Building, Suite 800
1300 Atlantic Avenue
Atlantic City, New Jersey 08401
Attention: Chief Financial Officer
- and -
Players International, Inc.
Citicenter Building, Suite 800
1300 Atlantic Avenue
Atlantic City, New Jersey 08401
Attention: Vice President,Compliance and
Legal Affairs
*WELLS FARGO BANK, N.A.,
individually, as Administrative Agent,
a Managing Agent and a Co-Arranger
By:
Title:
Notice Address:
111 Sutter Street, 17th Floor
San Francisco, California 94104
Attention: P. Steven Dobel MAC #0188-176
*BANKERS TRUST COMPANY,
individually and as a Managing Agent
By:
Title:
Notice Address:
130 Liberty Street, 14th Floor
New York, New York 10006
Attention: Carmen Melendez
With a copy to:
300 South Grand Avenue, 41st Floor
Los Angeles, California 90071
Attention: Victoria Floyd
______________
* Indicates Lenders executing and delivering the Amended and
Restated Credit Agreement.
*FIRST NATIONAL BANK OF COMMERCE,
as a Lender
By:
Title:
Notice Address:
210 Baronne Street
New Orleans, Louisiana 70160
Attention: Louis Ballero
*COMMUNITY NATIONAL BANK OF METROPOLIS,
as a Lender
By:
Title:
Notice Address:
522 Market Street
Metropolis, Illinois 62960
Attention: David York
MERCANTILE BANK OF ST. LOUIS, N.A.,
as a Lender
By:
Title:
Notice Address:
7th & Washington
St. Louis, Missouri 63101
Attention: Louis Hermann
*NBD BANK,
as a Lender
By:
Title:
Notice Address:
One First National Plaza
Mail Suite 0286
Chicago, Illinois 60670
Attention: Joseph G. Gavin
With a copy to:
One First National Plaza
Mail Suite 0631
Chicago, Illinois 60670
Attention: Thomas Bower
NORWEST BANK NEVADA, FSB,
as a Lender
By:
Title:
Notice Address:
3300 West Sahara, #951
Las Vegas, Nevada 89102
Attention: Mal Ercanbrack
*WHITNEY NATIONAL BANK
as a Lender
By:____________________
Title:_________________
Notice Address:
228 St. Charles Avenue
P.O. Box 61260
New Orleans, Louisiana 70130
Attention: John Zollinger
EXECUTION
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 16, 1996
AMONG
PLAYERS INTERNATIONAL, INC.,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
WELLS FARGO BANK, N.A.,
Individually and as Administrative Agent, a Managing Agent and a
Co-Arranger,
BANKERS TRUST COMPANY,
Individually and as a Managing Agent,
and
BT SECURITIES CORPORATION,
as a Co-Arranger
PLAYERS INTERNATIONAL, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS 2
1.1 Certain Defined Terms 2
1.2 Accounting Terms; Utilization of GAAP for
Purposes of Calculations Under Agreement 35
1.3 Other Definitional Provisions 35
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS 36
2.1 Commitments; Making of Loans; Notes 36
2.2 Interest on the Loans 43
2.3 Fees 44
2.4 Payments, Prepayments and Reductions in Commitments;
General Provisions Regarding Payments 45
2.5 Use of Proceeds 52
2.6 [Omitted.] 53
2.7 Increased Costs; Taxes; Capital Adequacy 53
2.8 Obligation of Lenders and Administrative
Agent to Mitigate 57
2.9 Replacement of Lenders 58
SECTION 3.
LETTERS OF CREDIT 58
3.1 Issuance of Letters of Credit and Lenders'
Purchase of Participations Therein 58
3.2 Letter of Credit Fees 60
3.3 Drawings and Reimbursement of Amounts Drawn Under
Letters of Credit. 61
3.4 Obligations Absolute 64
3.5 Indemnification; Nature of Administrative Agent's
Duties 65
3.6 Increased Costs and Taxes Relating to Letters
of Credit 66
SECTION 4.
CONDITIONS TO EFFECTIVENESS;
CONDITIONS TO LOANS AND LETTERS OF CREDIT 67
4.1 Conditions to Effectiveness 67
4.2 Conditions to Initial Tranche B Loans. 73
4.3 Conditions to All Tranche C Loans 73
4.4 Conditions to All Loans 74
4.5 Conditions to Letters of Credit 76
SECTION 5.
COMPANY'S REPRESENTATIONS AND WARRANTIES 76
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries 76
5.2 Authorization of Borrowing, etc. 77
5.3 Financial Condition 78
5.4 No Material Adverse Change;
No Restricted Payments 79
5.5 Title to Properties; Liens 79
5.6 Litigation; Adverse Facts 80
5.7 Payment of Taxes 81
5.8 Performance of Agreements;
Materially Adverse Agreements 81
5.9 Governmental Regulation 81
5.10 Securities Activities 82
5.11 Employee Benefit Plans 82
5.12 Certain Fees 82
5.13 Environmental Protection 83
5.14 Employee Matters 84
5.15 Solvency 84
5.16 Disclosure 84
5.17 Compliance With Laws 85
5.18 Representations Relating to Operation
of Facilities 85
5.19 Intangible Property 85
5.20 Rights to Agreements, Permits and Licenses 85
5.21 Classification of Ships 86
5.22 Recordation of Ship Mortgages 86
5.23 Policies of Insurance 86
5.24 Survival of Rights Created under Existing
Credit Agreement 87
SECTION 6.
COMPANY'S AFFIRMATIVE COVENANTS 87
6.1 Financial Statements and Other Reports 87
6.2 Corporate Existence, etc. 94
6.3 Payment of Taxes and Claims; Tax Consolidation 94
6.4 Maintenance of Properties; Insurance 95
6.5 Inspection; Lender Meeting 95
6.6 Compliance with Laws, etc. 96
6.7 Environmental Disclosure and Inspection 96
6.8 Company's Remedial Action Regarding Hazardous
Materials 97
6.9 Post-Closing Matters 98
6.10 New Subsidiaries; New Joint Ventures;
Further Assurances 98
6.11 Maryland Heights Facility Matters 101
6.12 Appraisals 102
6.13 Cash Concentration Account 102
SECTION 7.
COMPANY'S NEGATIVE COVENANTS 103
7.1 Indebtedness 103
7.2 Liens and Related Matters 103
7.3 Investments, Loans and Advances; Capital
Expenditures 104
7.4 Contingent Obligations 105
7.5 Restricted Payments 106
7.6 Financial Covenants 106
7.7 Restriction on Fundamental Changes;
Asset Sales and Acquisitions 109
7.8 Transactions with Shareholders and Affiliates 110
7.9 Disposal of Subsidiary Stock 110
7.10 Conduct of Business 111
7.11 Tradenames, Trademarks and Servicemarks 111
7.12 Change of Control Offer 111
7.13 No Amendment of Indenture 111
7.14 No Movement of Other Barges 111
SECTION 8.
EVENTS OF DEFAULT 112
8.1 Failure to Make Payments When Due 112
8.2 Default in Other Agreements 112
8.3 Breach of Certain Covenants 112
8.4 Breach of Warranty 113
8.5 Other Defaults Under Loan Documents 113
8.6 Involuntary Bankruptcy; Appointment
of Receiver, etc. 113
8.7 Voluntary Bankruptcy; Appointment of
Receiver, etc. 114
8.8 Judgments and Attachments 114
8.9 Dissolution 114
8.10 Employee Benefit Plans 114
8.11 Change in Control 115
8.12 Impairment of Collateral 115
8.13 Loss of Gaming License 115
8.14 Failure to Open Maryland Heights or to
Obtain Gaming License 115
8.15 Invalidity of Guaranties 115
8.16 Material Adverse Change 116
8.17 Remedies 116
SECTION 9.
ADMINISTRATIVE AGENT 117
9.1 Appointment 117
9.2 Powers; General Immunity 117
9.3 Representations and Warranties;
No Responsibility For Appraisal
of Creditworthiness 119
9.4 Right to Indemnity 119
9.5 Successor Administrative Agent
and Swing Line Lender. 120
9.6 Collateral Documents 120
9.7 Release of Collateral 121
SECTION 10.
MISCELLANEOUS 121
10.1 Assignments and Participations in Loans
and Letters of Credit 121
10.2 Expenses 125
10.3 Indemnity 126
10.4 Set-Off; Security Interest in Deposit Accounts 127
10.5 Ratable Sharing 127
10.6 Amendments and Waivers 128
10.7 Independence of Covenants 129
10.8 Notices 129
10.9 Survival of Representations,
Warranties and Agreements 129
10.10 Failure or Indulgence Not Waiver;
Remedies Cumulative 130
10.11 Marshalling; Payments Set Aside 130
10.12 General Release 130
10.13 Severability 132
10.14 Obligations Several; Independent Nature of
Lenders' Rights 133
10.15 Headings 133
10.16 Applicable Law 133
10.17 Successors and Assigns 133
10.18 Consent to Jurisdiction and Service of Process;
Choice of Forum 133
10.19 Waiver of Jury Trial 134
10.20 Confidentiality 134
10.21 Licensing of Administrative Agent and Lenders 135
10.22 Counterparts; Effectiveness. 135
10.23 Cooperation With Gaming Authorities 136
Signature pages S-1
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
III FORM OF LENDER ASSIGNMENT AGREEMENT
IV-A FORM OF TRANCHE A NOTE
IV-B FORM OF TRANCHE B NOTE
IV-C FORM OF TRANCHE C NOTE
V FORM OF SWING LINE NOTE
VI-A FORM OF OPINION OF COMPANY COUNSEL [EFFECTIVE DATE]
VI-B FORM OF OPINION OF COMPANY COUNSEL [TRANCHE B
EFFECTIVE DATE]
VII FORM OF OPINION OF O'MELVENY & MYERS LLP
VIII FORM OF COMPLIANCE CERTIFICATE
IX FORM OF LINKED APPRECIATION RIGHTS AGREEMENT
X FORM OF ACKNOWLEDGEMENT AND CONFIRMATION
[XI-A FORM OF SUBSIDIARY SECURITY AGREEMENT (LOUISIANA)]
XI-B FORM OF SUBSIDIARY SECURITY AGREEMENT (MISSOURI)
XI-C FORM OF SUBSIDIARY SECURITY AGREEMENT (ILLINOIS)
XI-D FORM OF SUBSIDIARY SECURITY AGREEMENT (NEW JERSEY)
XI-E FORM OF SUBSIDIARY SECURITY AGREEMENT (KENTUCKY)
XII FORM OF PARTNERSHIP INTEREST SECURITY AGREEMENT
XIII FORM OF PHI GUARANTY
XIV FORM OF PHI PLEDGE AGREEMENT
XV FORM OF SHIP MORTGAGE
XVI FORM OF LLC MEMBERSHIP INTEREST SECURITY AGREEMENT
XVII FORM OF RESOURCES PLEDGE AND SECURITY AGREEMENT
XVIII FORM OF JOINT VENTURE INTEREST SECURITY AGREEMENT
XIX FORM OF ASSUMPTION AGREEMENT
XX FORM OF SIRCC PLEDGE AGREEMENT
SCHEDULES
1.1 NEW LOAN DOCUMENTS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1(c) CORPORATE STRUCTURE OF COMPANY AND ITS SUBSIDIARIES
5.1 SUBSIDIARIES OF COMPANY
5.5 US DOCUMENTED BARGES
5.6 LITIGATION MATTERS
5.11 ERISA MATTERS
5.13 ENVIRONMENTAL MATTERS
5.19 TRADEMARK MATTERS
6.4(a) MINIMUM INSURANCE REQUIREMENTS
6.4(b) MINIMUM INSURANCE REQUIREMENTS - CONSTRUCTION
6.9 POST-CLOSING CONDITIONS
7.2 LIENS
7.3 INVESTMENTS
7.11 INTELLECTUAL PROPERTY ASSIGNMENTS
A-1 DESCRIPTION OF ILLINOIS PREMISES
A-2 DESCRIPTION OF LOUISIANA PREMISES
A-3 DESCRIPTION OF NEVADA PREMISES
