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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date earliest event reported) December 27, 1999
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MTR GAMING GROUP, INC.
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(exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-20508 84-1103135
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(Commission File Number) (IRS Employer Identification Number)
STATE ROUTE 2 SOUTH, CHESTER, WEST VIRGINIA
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(Address of principal executive offices)
26034
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(Zip Code)
Registrant's Telephone Number, Including Area Code: (304) 387-5712
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N/A
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS.
On December 27, 1999, MTR Gaming Group, Inc. and its wholly-owned
subsidiaries, Mountaineer Park, Inc., Speakeasy Gaming of Las Vegas, Inc., and
Speakeasy Gaming of Reno, Inc. (collectively, the "Company"), entered into a new
five-year senior secured reducing revolving credit facility in the principal
amount of $30 million (the "Wells Fargo Loan") with Wells Fargo Bank, National
Association ("Wells Fargo"). The Company has drawn the full $30 million
available under the Wells Fargo Loan and used the proceeds, combined with
approximately $5.3 million of the Company's cash, to (i) prepay in full all
loans previously made to the Company by Madeleine LLC under the Third Amended
and Restated Term Loan Agreement dated April 30, 1998 ("Madeleine Loan"); and
(ii) to pay the fees and costs of the transaction with Wells Fargo.
SUMMARY OF THE WELLS FARGO LOAN
Some of the more important terms of the Wells Fargo Loan are as
follows:
a. The loan is a five-year reducing revolving
commitment.
b. For the first six months, the loan will bear interest
at the rate of approximately 9.25%. This rate is tied
to the London Interbank Offered Rate, or LIBOR, plus
3%.
c. Thereafter, subject to certain limitations described
in the Credit Agreement, as LIBOR contracts expire,
the Company may elect from time to time either to
continue to borrow on a LIBOR basis (with 1,2,3 or 6
month contracts) or to convert to an interest rate
based upon the higher of the Prime Rate and Federal
Funds Rate ("Base Rate") plus the applicable margin.
LIBOR loans will have substantial prepayment
penalties; Base Rate loans will have no prepayment
penalty.
d. Beginning on the first day of the seventh month after
closing, the interest rate will be adjusted quarterly
depending upon the Company's Total Leverage Ratio (as
defined in the Credit Agreement) in accordance with
the following table:
<TABLE>
<CAPTION>
------------------------------------------- -------------- --------------
BASE RATE LIBO RATE
LEVERAGE RATIO MARGIN MARGIN
------------------------------------------- -------------- --------------
<S> <C> <C>
Greater than 2.50 to 1.00 1.50% 2.50%
------------------------------------------- -------------- --------------
Greater than 2.00 to 1.00 but less than 1.25% 2.25%
or equal to 2.50 to 1.00
------------------------------------------- -------------- --------------
Less than or equal to 2.00 to 1.00 1.00% 2.00%
------------------------------------------- -------------- --------------
</TABLE>
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e. Beginning ninety days after closing, the maximum
available credit line will be reduced by $1.5 million
per quarter, equating to a five-year amortization.
Amounts voluntarily prepaid over and above such
scheduled facility reductions may be re-borrowed,
subject to a commitment fee ranging from 37.5 to 50
basis points depending upon the Total Leverage Ratio
(as defined in the Credit Agreement).
f. The Credit Agreement evidencing the Wells Fargo Loan
contains a number of affirmative and negative
covenants which, among other things, require the
Company to maintain certain financial ratios and
refrain from certain actions without Wells Fargo's
concurrence. Customary events of default provisions
are also included.
g. The credit agreement likewise requires the Company to
maintain at least $8 million in key man life
insurance on Edson R. Arneault throughout the term of
the loan and to prepay $4 million of the outstanding
principal in the event of Mr. Arneault's death.
h. The Credit Agreement also requires the Company to
spend a minimum of 2% and a maximum of 6% of gross
revenues on maintenance of the Company's properties.
i. The credit agreement permits the Company to incur up
to $8 million of additional senior indebtedness for
the purchase or lease of gaming equipment as well as
up to $15,000,000 of subordinated debt for capital
improvements.
j. Substantially all of the Company's assets, including
all of the capital stock of Mountaineer Park, Inc.
and, subject to the approval of the Nevada Gaming
Control Board and Nevada Gaming Commission, the
capital stock of Speakeasy Gaming of Las Vegas, Inc.
and Speakeasy Gaming of Reno, Inc., are pledged as
security for repayment of the Wells Fargo Loan.
k. The financing also involved the payment of various
fees and charges, including an up front fee to Wells
Fargo of $600,000 or 2% of the total amount financed,
a financial advisory fee to Friedman, Billings Ramsey
& Co. of $450,000 or 1.5% of the total amount
financed, and other customary fees and charges.
The foregoing summary of the Wells Fargo Loan is qualified in its
entirety by the terms of the Credit Agreement, which is filed under Item 7
below.
PREPAYMENT AND TERMINATION OF THE MADELEINE LOAN
As part of the financing with Wells Fargo, the Company simultaneously
prepaid in full the $33,391,500 of principal outstanding under the Madeleine
Loan as well as $265,000 in accrued interest and a call premium of $429,530. The
Madeleine Loan bore interest at the rate of 13% per year, payable monthly, and
was scheduled to mature in July of 2001.
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The Company and Madeleine LLC entered a Termination and Release
Agreement by which Madeleine acknowledged the Company's satisfaction of all of
its obligations under the Madeleine Loan Agreement and the release of its
security interest in any of the Company's assets.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following are filed as exhibits to this report:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
10.1 Credit Agreement
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
MTR GAMING GROUP, INC.
By: /s/ Edson R. Arneault
----------------------------
Edson R. Arneault, President
Date: December 28, 1999
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Exhibit 10.1
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Credit Agreement") is made and entered
into as of the 20th day of December, 1999, by and among MTR GAMING GROUP, INC.,
a Delaware corporation ("MTRI"), MOUNTAINEER PARK, INC., a West Virginia
corporation ("MPI"), SPEAKEASY GAMING OF LAS VEGAS, INC., a Nevada corporation
("SGLVI") and SPEAKEASY GAMING OF RENO, INC., a Nevada corporation ("SGRI" and
together with MTRI, MPI and SGLVI, collectively referred to as the "Borrowers"),
each financial institution whose name is set forth on the signature pages of
this Credit Agreement and each lender which may hereafter become a party to this
Credit Agreement pursuant to Section 10.10(b) (each individually a "Lender" and
collectively the "Lenders"), and WELLS FARGO BANK, National Association, as
administrative and collateral agent for the Lender (herein, in such capacity,
called the "Agent Bank" and, together with the Lenders collectively referred to
as the "Banks").
R E C I T A L S:
WHEREAS:
A. In this Credit Agreement all capitalized words and
terms shall have the respective meanings and be construed herein as hereinafter
provided in Section 1.01 of this Credit Agreement and shall be deemed to
incorporate such words and terms as a part hereof in the same manner and with
the same effect as if the same were fully set forth.
B. MPI, SGLVI and SGRI are wholly owned subsidiaries of
MTRI. As of the date hereof, MTRI is indebted to the Existing Lender under the
terms of the Existing Secured Loan, Existing Note and Existing Loan Documents.
C. The Borrower Consolidation desires to refinance the
Existing Secured Loan by establishing a reducing revolving credit facility in
the amount of Thirty Million Dollars ($30,000,000.00), the proceeds of which,
together with additional Cash of the Borrower Consolidation,
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will be used to pay the Existing Secured Loan in full and for other general
corporate purposes.
D. Lenders are willing to establish the Credit Facility
in favor of the Borrower Consolidation in the initial principal amount of Thirty
Million Dollars ($30,000,000.00) at any time outstanding, subject to the
Scheduled Reductions as hereinafter provided, all on the terms and subject to
the conditions, covenants and understandings hereinafter set forth and contained
in each of the Loan Documents.
NOW, THEREFORE, in consideration of the foregoing, and other
valuable considerations as hereinafter described, the parties hereto do promise,
covenant and agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. DEFINITIONS. For the purposes of this Credit
Agreement, each of the following terms shall have the meaning specified with
respect thereto, unless a different meaning clearly appears from the context:
"Adjusted Fixed Charge Coverage Ratio" as of the end of any
Fiscal Quarter shall mean with reference to the Borrower Consolidation:
For the Fiscal Quarter under review, together with the most
recently ended three (3) preceding Fiscal Quarters, the sum
of: (i) EBITDA, less (ii) the aggregate amount of actually
paid federal and state taxes on or measured by income, less
(iii) the aggregate amount of Non-Financed Capital
Expenditures
Divided by ())
The sum of: (i) Interest Expense (expensed and capitalized),
plus (ii) the aggregate of Scheduled Reductions actually paid,
plus (iii) principal payments or reductions (without
duplication) required to be made on all other Indebtedness,
plus
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(iv) the current portion of Capitalized Lease Liabilities as
of the end of the Fiscal Quarter under review, in each case of
(i) through (iii) determined for the Fiscal Quarter under
review together with the most recently ended three (3)
preceding Fiscal Quarters.
"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 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.
"Agent Bank" shall mean WFB in its capacity as administrative
and collateral agent for Lenders.
"Aggregate Commitment" shall mean reference to the aggregate
amount committed by Lenders for advance to or on behalf of the Borrower
Consolidation during the Revolving Credit Period as Borrowings under the Credit
Facility up to the maximum amount of Thirty Million Dollars ($30,000,000.00) at
any time outstanding, subject to the limitations for advance as set forth in the
definition of Maximum Permitted Balance.
"Aggregate Commitment Reduction Schedule" shall mean the
Aggregate Commitment Reduction Schedule marked "Schedule 2.01(c)", affixed
hereto and by this reference incorporated herein and made a part hereof, setting
forth the Scheduled Reductions and Maximum Scheduled Balance as of each
Reduction Date under the Credit Facility.
"Applicable Margin" means for any Base Rate Loan or LIBOR Loan
the applicable per annum percentage amount to be added to the Base Rate or the
LIBO Rate, as the case may be, as follows: (i) commencing on the Closing Date
and continuing until the Rate Adjustment Date, three percent (3%) to be added to
the applicable LIBO Rate; (ii) commencing on the Rate
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Adjustment Date and continuing until the Maturity Date, the margin rates set
forth in the table below based on the Leverage Ratio of the Borrower
Consolidation as of each Fiscal Quarter end, commencing with the end of the
Fiscal Quarter ending March 31, 2000 (for the determination of the Applicable
Margin as of the Rate Adjustment Date), together with the immediately preceding
three (3) Fiscal Quarters on a four (4) Fiscal Quarter basis, any change in the
applicable percentage amount by reason thereof to be effective on the Rate
Adjustment Date and thereafter as of the 1st day of the third month immediately
following each such Fiscal Quarter end:
<TABLE>
<CAPTION>
- ------------------------------------- ----------------- --------------------
LIBO
LEVERAGE RATIO BASE RATE RATE
MARGIN MARGIN
- ------------------------------------- ----------------- --------------------
<S> <C> <C>
Greater than 2.50 to 1.00 1.50% 2.50%
- ------------------------------------- ----------------- --------------------
Greater than 2.00 to 1.00 but les 1.25% 2.25%
than or equal to 2.50 to 1.00
- ------------------------------------- ----------------- --------------------
Less than or equal to 2.00 to 1.00 1.00% 2.00%
- ------------------------------------- ----------------- --------------------
</TABLE>
"Arneault" shall mean Edson (Ted) Arneault, an individual,
President and Chief Executive Officer of MTRI as of the Closing Date.
"Assets" shall mean the total assets of the Borrower
Consolidation determined in accordance with GAAP.
"Assignment and Assumption Agreement" shall mean the document
evidencing an assignment of a Syndication Interest by any Lender to an Eligible
Assignee in the form of the Assignment, Assumption and Consent Agreement marked
"Exhibit H", affixed hereto and by this reference incorporated herein and made a
part hereof.
"Assignments" shall mean collective reference to the MPI
Assignment of Entitlements, Contracts, Rents and Revenues,
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SGLVI Assignment and SGRI Assignment of Entitlements, Contracts, Rents and
Revenues.
"Authorized Officer(s)" shall mean, relative to the Borrower
Consolidation, those of the respective officers whose signatures and incumbency
shall have been certified to Agent Bank and the Banks as required in Section
3.05(iv) of the Credit Agreement with the authority and responsibility to
deliver Notices of Borrowing, Continuation/Conversion Notices, Pricing
Certificates, Compliance Certificates and all other requests, notices, reports,
consents, certifications and authorizations on behalf of Borrowers and the
Borrower Consolidation.
"Available Borrowings" shall mean, at any time, and from time
to time, the aggregate amount available to Borrowers for a Borrowing not
exceeding the amount of the Maximum Availability, as of each date of
determination.
"Banking Business Day" means (a) with respect to any
Borrowing, payment or rate determination of LIBOR Loans, a day, other than a
Saturday or Sunday, on which Agent Bank is open for business in San Francisco
and on which dealings in Dollars are carried on in the London interbank market,
and (b) for all other purposes any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of California and/or
Nevada, or is a day on which banking institutions located in California and/or
Nevada are required or authorized by law or other governmental action to close.
"Bankruptcy Code" shall mean the United States Bankruptcy
Code, as amended, 11 U.S.C. Section 101, ET SEQ.
"Banks" shall have the meaning set forth in the Preamble to
this Credit Agreement.
"Base Rate" shall mean, as of any date of determination, the
rate per annum equal to the higher of (a) the Prime Rate in effect on such date
and (b) the Federal Funds Rate in effect on such date plus one-half of one
percent (1/2 of 1%) (fifty basis points).
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"Base Rate Loan" shall mean reference to that portion of the
unpaid principal balance of the Credit Facility bearing interest with reference
to the Base Rate plus the Applicable Margin.
"Borrower Consolidation" shall mean collective reference to
Borrowers on a consolidated basis, without regard to any other Subsidiaries or
Affiliates.
"Borrowers" shall mean collective reference to MTRI, MPI,
SGLVI and SGRI.
"Borrowing(s)" shall mean collective reference to such amounts
as Borrowers may request from time to time to be advanced under the Credit
Facility by Notice of Borrowing in the manner provided in Section 2.03.
"Breakage Charges" shall have the meaning set forth in Section
2.07(c) of the Credit Agreement.
"Capital Expenditures" shall mean, for any period, without
duplication, the aggregate of all expenditures (whether paid in cash or accrued
as liabilities during that period and including Capitalized Lease Liabilities)
by a Borrower or the Borrower Consolidation, as the context may require, during
such period that, in conformity with GAAP, are required to be included in or
reflected by the property, plant or equipment or similar fixed or capital asset
accounts reflected in the balance sheet of a Borrower or the Borrower
Consolidation, as the context may require (including equipment which is
purchased simultaneously with the trade-in of existing equipment owned by
Borrower or the Borrower Consolidation, as the context may require, to the
extent of (a) the gross amount of such purchase price LESS (b) the cash proceeds
of trade-in credit of the equipment being traded in at such time), but excluding
capital expenditures made in connection with the replacement or restoration of
assets, to the extent reimbursed or refinanced from insurance proceeds paid on
account of the loss of or damage to the assets being replaced or restored, or
from awards of compensation arising from the taking by condemnation of or the
exercise of the power of eminent domain with respect to such assets being
replaced or restored.
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"Capital Proceeds" shall mean the proceeds received by the
Borrower Consolidation from (i) partial or total condemnation or destruction of
any part of the Collateral, (ii) insurance proceeds (other than rent insurance
and business interruption insurance) received in connection with damage to or
destruction of the Collateral, and (iii) the sale, transfer, conveyance or other
disposition of any portion of the Collateral in accordance with the provisions
of this Credit Agreement (not including, however, any proceeds received by
Borrowers, or any of them, from a sale, condemnation, damage or destruction of
FF&E or other personal property if such FF&E or other personal property is
replaced by items of equivalent value and utility, in each case such exclusion
to apply only during any period in which no Default or Event of Default has
occurred and is continuing).
"Capitalized Lease Liabilities" means all monetary obligations
of the Borrower Consolidation under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, and, for
purposes of this Credit Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Cash" shall mean, when used in connection with any Person,
all monetary and non-monetary items owned by that Person that are treated as
cash in accordance with GAAP.
"Cash Equivalents" shall mean, when used in connection with
any Person, that Person's Investments in:
(a) Government Securities due within one (1)
year after the date of the making of the Investment;
(b) readily marketable direct obligations of any
State of the United States of America given on the date of
such Investment a credit rating of at least Aa by Moody's
Investors Service, Inc. or AA by Standard & Poor's
Corporation, in each case due
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within one (1) year from the making of the Investment;
(c) certificates of deposit issued by, bank deposits
in, eurodollar deposits through, bankers' acceptance of, and
repurchase agreements covering Government Securities executed
by, United National Bank of West Virginia or any bank
incorporated under the laws of the United States of America or
any State thereof and having on the date of such Investment
combined capital, surplus and undivided profits of at least
Two Hundred Fifty Million Dollars ($250,000,000.00), or total
assets of at least Five Billion Dollars ($5,000,000,000.00),
in each case due within one (1) year after the date of the
making of the Investment;
(d) certificates of deposit issued by, bank deposits
in, eurodollar deposits through, bankers' acceptances of, and
repurchase agreements covering Government Securities executed
by, any branch or office located in the United States of
America of a bank incorporated under the laws of any
jurisdiction outside the United States of America having on
the date of such Investment combined capital, surplus and
undivided profits of at least Five Hundred Million Dollars
($500,000,000.00), or total assets of at least Fifteen Billion
Dollars ($15,000,000,000.00) in each case due within one year
after the date of the making of the Investment;
(e) repurchase agreements covering Government
Securities executed by a broker or dealer registered under
Section 15(b) of the Securities Exchange Act of 1934 having on
the date of the Investment capital of at least One Hundred
Million Dollars ($100,000,000.00), due within thirty (30) days
after the date of the making of the Investment; PROVIDED that
the maker of the Investment receives written confirmation of
the transfer to it of record ownership of the Government
Securities on the books of a "primary dealer" in such
Government Securities on the books of such registered broker
or dealer, as
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soon as practicable after the making of the Investment;
(f) readily marketable commercial paper of
corporations doing business in and incorporated under the laws
of the United States of America or any State thereof or of any
corporation that is the holding company for a bank described
in clauses (c) or (d) above given on the date of such
Investment a credit rating of at least P-1 by Moody's
Investors Service, Inc. or A-1 by Standard & Poor's
Corporation, in each case due within three hundred sixty-five
(365) days after the date of the making of the Investment;
(g) "money market preferred stock" issued by a
corporation incorporated under the laws of the United States
of America or any State thereof given on the date of such
Investment a credit rating of at least Aa by Moody's Investors
Service, Inc. or AA by Standard & Poor's Corporation, in each
case having an investment period not to exceed fifty (50)
days; PROVIDED that (i) the amount of all such Investments
issued by the same issuer does not exceed Five Million Dollars
($5,000,000.00) and (ii) the aggregate amount of all such
Investments does not exceed Fifteen Million Dollars
($15,000,000.00); and
(h) a readily redeemable "money market mutual fund"
sponsored by a bank described in clauses (c) or (d) hereof, or
a registered broker or dealer described in clause (e) hereof,
that has and maintains an investment policy limiting its
investments primarily to instruments of the types described in
clauses (a) through (g) hereof and having on the date of such
Investment total assets of at least One Billion Dollars
($1,000,000,000.00).
"Change in Control" shall mean the occurrence of any of the
following:
(a) Any "person" or "group" (as such terms are
defined in Sections 13(d) and 14(d) of the
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Securities Exchange Act of 1934, as amended) other than any
such "person" or "group" which is or which includes the
holders of the common stock (voting and non-voting) of MTRI as
of the Closing Date or their Affiliates, own or control, more
than forty percent (40%) of the common voting stock of MTRI;
or
(b) During any period of twenty-four (24) consecutive
months commencing after the Closing Date, individuals who at
the beginning of such period constituted MTRI's Board of
Directors (together with any new or replacement directors
whose election by MTRI's Board of Directors or whose
nomination for election by MTRI's shareholders, was approved
by a vote of at least a majority of the directors then still
in office who were either directors at the beginning of such
period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the directors then in office; or
(c) MTRI fails to own, directly or indirectly, one
hundred percent (100%) of the capital stock interests of MPI,
SGLVI and SGRI.
"Closing Disbursements" shall have the meaning set forth by
Section 2.02(a).
"Closing Instructions" shall mean a collective reference to
the Nevada Closing Instructions and the MPI Closing Instructions.
"Collateral" shall mean: (a) a collective reference to the MPI
Collateral, SGLVI Collateral and the SGRI Collateral; and (b) any and all other
property and/or intangible rights, interests or benefits inuring to or in favor
of Borrowers which are in any manner assigned, pledged, encumbered or otherwise
hypothecated in favor of Lenders or Agent Bank on behalf of the Lenders to
secure repayment of the Credit Facility.
"Collateral Properties" shall mean collective reference to the
real properties, improvements and associated
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FF&E which are pledged and encumbered as Collateral securing repayment of the
Credit Facility from time to time, which shall consist of the MPI Real Property,
SGLVI Real Property and SGRI Real Property, together with any other real
property or interests therein which may be held by Agent Bank from time to time
to secure repayment of the Credit Facility.
"Compliance Certificate" shall mean a compliance certificate
as described in Section 5.08(e) which is more particularly described on "Exhibit
D", affixed hereto and by this reference incorporated herein and made a part
hereof.
"Contingent Liability(ies)" shall mean, as to any Person any
obligation of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness, leases or dividends ("primary obligations") of
any other Person that is not a Borrower hereunder (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, (d) to make
payment in respect of any net liability arising in connection with any Interest
Rate Hedges, foreign currency exchange agreement, commodity hedging agreement or
any similar agreement or arrangement in any such case if the purpose or intent
of such agreement is to provide assurance that such primary obligation will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such primary obligation will be protected (in whole
or in part) against loss in respect thereof or (e) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Liability shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business, trade payables incurred in the ordinary course of
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business and less than ninety (90) days in arrears or any obligations under the
SABAL Loan. The amount of any Contingent Liability shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Liability is made or, if not stated or
determinable, the reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such Person in
good faith.
"Continuation/Conversion Notice" shall mean a notice of
continuation of or conversion to a LIBOR Loan and certificate duly executed by
an Authorized Officer, substantially in the form of that certain exhibit marked
"Exhibit C", affixed hereto and by this reference incorporated herein and made a
part hereof.
"Convert, Conversion and Converted" shall refer to a Borrowing
at or continuation of a particular interest rate basis or conversion of one
interest rate basis to another pursuant to Section 2.05(c).
"Credit Agreement" shall mean this Credit Agreement together
with all Schedules and Exhibits attached thereto, executed by and among
Borrowers and Banks setting forth the terms and conditions of the Credit
Facility, as may be amended, modified, extended, renewed or restated from time
to time.
"Credit Facility" shall mean the agreement of Lenders to fund
a reducing revolving line of credit during the Revolving Credit Period subject
to the terms and conditions set forth in this Credit Agreement and the Revolving
Credit Note, up to the Maximum Permitted Balance as reduced from time to time in
accordance with the terms of this Credit Agreement and the Revolving Credit
Note.
"Credit Facility Termination" shall mean indefeasible payment
in full of all sums owing under the Credit Facility and each of the Loan
Documents and the irrevocable termination of the obligation of Lenders to
advance Borrowings under the Credit Facility.
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"Deeds of Trust" shall mean collective reference to the MPI
Deed of Trust, SGLVI Deed of Trust and SGRI Deed of Trust.
"Default" shall mean the occurrence or non-occurrence, as the
case may be, of any event that with the giving of notice or passage of time, or
both, would become an Event of Default.
"Default Rate" shall have the meaning set forth in Section
2.09(b) with respect to defaults occurring under the Revolving Credit Note and
shall mean the Prime Rate plus the then Applicable Margin plus two percent (2%)
per annum for all other purposes.
"Defaulting Lender" means any Lender which fails or refuses to
perform its obligations under this Credit Agreement within the time period
specified for performance of such obligation or, if no time frame is specified,
if such failure or refusal continues for a period of five (5) Banking Business
Days after notice from Agent Bank.
"Designated Deposit Account" shall mean a deposit account to
be maintained by Borrowers with Agent Bank, as from time to time designated in
writing by an Authorized Officer.
"Dispute" shall have the meaning set forth in Section
10.14(a).
"Distributions" shall mean and collectively refer to any and
all cash dividends on stock, loans, management fees, payments, advances or other
distributions, fees or compensation of any kind or character whatsoever, other
than within the Borrower Consolidation, but shall not include consideration paid
for tangible and intangible assets in an arms length exchange for fair market
value, trade payments made and other payments for liabilities incurred in the
ordinary course of business or compensation to officers, directors and employees
of Borrowers in the ordinary course of business.
"Documents" shall have the meaning set forth in Section
10.14(a).
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"Dollars" and "$" means the lawful money of the United States
of America.
"EBITDA" shall mean with reference to any Person, for any
fiscal period under review, the sum of (i) Net Income for that period, less (ii)
any one-time non-Cash gain reflected in such Net Income, plus (iii) any losses
on sales of assets and other extraordinary losses and one-time non-Cash charges,
plus (iv) Interest Expense (expensed and capitalized) for that period, plus (v)
the aggregate amount of federal and state taxes on or measured by income for
that period (whether or not payable during that period), plus (vi) depreciation,
amortization and all other non-cash expenses for that period, plus (vii)
preopening expenses for that period, in each case determined in accordance with
GAAP and, in the case of items (iii), (iv), (v), (vi) and (vii), only to the
extent deducted in the determination of Net Income for that period.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Eligible Assignee" means (a) another Lender, (b) with respect
to any Lender, any Affiliate of that Lender and (c) any commercial bank having a
combined capital and surplus of Fifty Million Dollars ($50,000,000.00) or more
that is (i) organized under the Laws of the United States of America, any State
thereof or the District of Columbia or (ii) organized under the Laws of any
other country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of such a country, PROVIDED that (A)
such bank is acting through a branch or agency located in the United States of
America and (B) is otherwise exempt from withholding of tax on interest and
delivers Form 1001 or Form 4224 at the time of any assignment.
"Environmental Certificate" shall mean the Certificate and
Indemnification Regarding Hazardous Substances to be executed by Borrowers on or
before the Closing Date as a further inducement to the Banks to establish the
Credit Facility, as it may be amended, modified, extended, renewed or restated
from time to time.
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"Equipment Leases and Contracts" shall mean collective
reference to the MPI Equipment Leases and Contracts, SGLVI Equipment Leases and
Contracts and SGRI Equipment Leases and Contracts.
"Equity Offering" shall mean the issuance and sale of shares
of common voting stock by MTRI to the public after the Closing Date in exchange
for Cash or Cash Equivalents.
"Event of Default" shall mean any event of default as defined
in Section 7.01 hereof.
"Excess Capital Proceeds" shall have the meaning ascribed
to such term in Section 5.01 of this Credit Agreement.
"Existing Lender" shall mean Madeleine, L.L.C., a New York
limited liability company
"Existing Loan Documents" shall mean collective reference to
the Third Amended and Restated Term Loan Agreement dated as of July 2, 1996,
executed among Borrowers and Existing Lender, the Existing Note and all pledges,
security agreements, mortgages, deeds of trust, financing statements and other
documents and instruments securing repayment of the Existing Secured Loan,
including, without limitation, those documents and instruments set forth on the
Schedule of Existing Loan Documents marked "Schedule 3.11(a), affixed hereto and
by this reference incorporated herein and made a part hereof.
"Existing Note" shall mean collective reference to (i) the
Promissory Note dated as of April 30, 1998, in the original principal amount of
Twenty-Seven Million Eight Hundred Sixty-Five Thousand Dollars ($27,865,000.00),
executed by MPI, SGLVI and SGRI, payable to the order of Existing Lender, (ii)
the Promissory Note dated as of April 30, 1998, in the original principal amount
of Ten Million Three Hundred Seventy-Six Thousand Five Hundred Dollars
($10,376,500.00), executed by MPI, SGLVI and SGRI, payable to the order of
Existing Lender, and (iii) the Promissory Note dated as of April 30, 1998, in
the original principal amount of One Million Seven Hundred Thousand Dollars
($1,700,000.00),
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executed by MPI, SGLVI and SGRI, payable to the order of Existing Lender.
"Existing Secured Loan" shall mean the Indebtedness owing by
Borrowers to the Existing Lender evidenced by the Existing Note and secured by
the Existing Loan Documents.
"Expansion Capital Expenditures" shall mean collective
reference to Capital Expenditures made to or for the benefit of or for use in
connection with the Hotel/Casino Facilities which (i) are not for the purpose of
maintaining, repairing or replacing existing assets of the Borrower
Consolidation, (ii) consist of the acquisition, construction or creation of
additional assets and improvements owned by the Borrower Consolidation, and
(iii) are added as Collateral under the Credit Facility and are encumbered by
the Security Documentation, any amendments required by Agent Bank for such
purpose to be at the expense of the Borrower Consolidation.
"FF&E" shall mean reference to the MPI FF&E, SGLVI FF&E and
the SGRI FF&E and any other furniture, fixtures and equipment, including,
without limitation, all gaming devices and associated equipment, inventories and
supplies used in connection with the Hotel/Casino Facilities.
"FIRREA" shall mean the Financial Institutions Reform,
Recovery and Enforcement Act of 1989.
"Federal Funds Rate" means, as of any date of determination,
the rate set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such date opposite the caption "Federal Funds
(Effective)". If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any successor, the "Composite 3:30 p.m.
Quotation") for such date under the caption "Federal Funds Effective Rate". If
on any relevant date the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m.
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Quotations, the rate for such date will be the arithmetic mean of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that date by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent Bank. For purposes of the
Credit Agreement, any change in the Base Rate due to a change in the Federal
Funds Rate shall be effective as of the opening of business on the effective
date of such change.
"Fee Side Letter" shall mean the Side Letter of Understanding
Regarding Fees to be executed by and between Borrowers and Agent Bank on or
before the Closing Date concerning payment of the fees more particularly therein
described.
"Financial Covenants" shall mean collective reference to the
financial covenants set forth in Article VI of this Credit Agreement.
"Financing Statements" shall mean collective reference to the
MPI Financing Statements, SGLVI Financing Statements, SGRI Financing Statements
and MTRI Financing Statements.
"Fiscal Quarter" shall mean the consecutive three (3) month
periods during each Fiscal Year beginning on January 1, April 1, July 1 and
October 1 and ending on March 31, June 30, September 30 and December 31,
respectively.
"Fiscal Year" shall mean the fiscal year period beginning
January 1 of each calendar year and ending on the following December 31.
"Fiscal Year End" shall mean December 31 of each calendar
year.
"Funded Debt" shall mean with reference to the Borrower
Consolidation for any period the daily average of the Funded Outstandings for
such period, plus the total as of the last day of such period of both the
long-term and current portions (without duplication) of all other Indebtedness
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(including Contingent Liabilities) and Capitalized Lease Liabilities.
"Funded Outstandings" shall mean the unpaid principal amount
outstanding on the Credit Facility as of any given date of determination for
Borrowings made thereunder.
"Funding Date" shall mean each date upon which Lenders fund
Borrowings requested by Borrowers in accordance with the provisions of Section
2.03.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
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 in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination.
"Gaming Authority(ies)" shall mean 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, Nevada Gaming Authorities and West Virginia Gaming Authorities, with
authority to regulate any gaming operation owned, managed or operated by the
Borrower Consolidation.
"Gaming Devices" shall mean slot machines and other devices
which constitute gaming devices and related equipment.
"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 Borrowers within its
jurisdiction, including the Nevada Gaming Control Act and the West Virginia
Racing Act and Lottery Act.
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"Gaming Permits" shall mean collective reference to every
license, permit or other authorization required to own, operate and otherwise
conduct unrestricted gaming operations at the Hotel/Casino Facilities.
"Government Securities" means readily marketable (a) direct
full faith and credit obligations of the United States of America or obligations
guaranteed by the full faith and credit of the United States of America and (b)
obligations of an agency or instrumentality of, or corporation owned, controlled
or sponsored by, the United States of America that are generally considered in
the securities industry to be implicit obligations of the United States of
America.
"Governmental Authority" or "Governmental Authorities" shall
mean any federal, state, regional, county or municipal governmental agency,
board, commission, officer or official whose consent or approval is required or
whose regulations must be followed as a prerequisite to (i) the continued
operation and occupancy of the Collateral Properties and the Hotel/Casino
Facilities or (ii) the performance of any act or obligation or the observance of
any agreement, provision or condition of whatever nature herein contained.
"Hard Costs" shall mean those costs which are shown in the
Construction Budgets as a "construction cost" and any adjustments to such costs
pursuant to properly approved change orders.
"Hazardous Materials Laws" shall have the meaning set forth in
Section 5.20.
"Hotel/Casino Facility" shall mean individual reference and
"Hotel/Casino Facilities" shall mean collective reference to the MPI
Hotel/Casino Facilities, SGLVI Hotel/Casino Facility and the SGRI Hotel/Casino
Facility.
"Indebtedness" of any Person includes all obligations,
contingent or otherwise, which in accordance with GAAP should be classified upon
such Person's balance sheet as liabilities, but in any event including
liabilities for borrowed money or other liabilities secured by any lien existing
on property owned or acquired by such Person,
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Affiliate or a Subsidiary thereof (whether or not the liability secured thereby
shall have been assumed), obligations which have been or under GAAP should be
capitalized for financial reporting purposes, and all guaranties, endorsements,
and other contingent obligations with respect to Indebtedness of others,
including, but not limited to, any obligations to acquire any of such
Indebtedness, to purchase, sell, or furnish property or services primarily for
the purpose of enabling such other Person to make payment of any of such
Indebtedness, or otherwise to assure the owner of any of such Indebtedness
against loss with respect thereto.
"Insider Cash Loans" shall mean collective reference to all
loans advanced by any Borrower in Cash to any officer or director of any member
of the Borrower Consolidation, for the purpose of funding taxes payable by such
officers and directors from the purchase and sale of shares of MTRI acquired
through stock options or other employee incentive plans established by the
Borrower Consolidation.
"Insider Non-Cash Loans" shall mean collective reference to
loans made by book entry (and not evidenced by the advance of Cash) to any
officer or director of any member of the Borrower Consolidation for the purpose
of exercising stock options for the acquisition of shares of the stock of MTRI.
"Intangibles" shall mean the aggregate goodwill, trademarks,
patents, organizational expense and other similar intangible items of the
Borrower Consolidation determined on a consolidated basis in accordance with
GAAP.
"Interest Expense" shall mean with respect to any Person, as
of the last day of any fiscal period under review, the sum of (i) all interest,
fees, charges and related expenses paid or payable (without duplication but
including capitalized interest) for that fiscal period by such Person to a
lender in connection with borrowed money (including any obligations for fees,
charges and related expenses payable to the issuer of any letter of credit) or
the deferred purchase price of assets that are considered "interest expense"
under GAAP, plus (ii) the portion of the up front costs and expenses
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<PAGE>
for Interest Rate Hedges (to the extent not included in (i)) fairly allocated to
such interest rate hedges as expenses for such period, plus (iii) the portions
of Capital Lease Liabilities paid or payable with respect to such period that
should be treated as interest in accordance with GAAP.
"Interest Period(s)" shall have the meaning set forth in
Section 2.05(d) of the Credit Agreement.
"Interest Rate Hedges" shall mean, with respect to any Person,
all liabilities of such Person under interest rate swap agreements, interest
rate cap agreements, basis swap, forward rate agreement and interest collar or
floor agreements and all other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or currency exchange rates.
"Interest Rate Option" shall have the meaning ascribed to such
term in Section 2.05(b) of the Credit Agreement.
"Investment" shall mean, when used in connection with any
Person, any investment by or of that Person, whether by means of purchase or
other acquisition of stock or other securities of any other Person or by means
of a loan, advance creating a debt, capital contribution, guaranty or other debt
or equity participation or interest in any other Person, INCLUDING any
partnership and joint venture interests of such Person. The amount of any
Investment shall be the amount actually invested without adjustment for
subsequent increases or decreases in the value of such Investment.
"LIBO Rate" means, relative to any LIBOR Loan Interest
Period for any LIBOR Loan included in any Borrowing, the per annum rate
(reserve adjusted as hereinbelow provided) of interest quoted by Agent Bank,
rounded upwards, if necessary, to the nearest one-sixteenth of one percent
(0.0625%) at which Dollar deposits in immediately available funds are offered
by Agent Bank to leading banks in the London interbank market at
approximately 11:00 a.m. London, England time two (2) Banking Business Days
prior to the beginning of such Interest Period, for delivery on the first day
of such Interest Period for a period approximately equal to such
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Interest Period and in an amount equal or comparable to the LIBOR Loan to
which such Interest Period relates. The foregoing rate of interest shall be
reserve adjusted by dividing the applicable LIBO Rate by a one (1.00) minus
the LIBOR Reserve Percentage, with such quotient to be rounded upward to the
nearest whole multiple of one-hundredth of one percent (0.01%). All
references in this Credit Agreement or other Loan Documents to a LIBO Rate
include the aforesaid reserve adjustment.
"LIBOR Loan" shall mean each portion of the total unpaid
principal under the Credit Facility which bears interest at a rate determined by
reference to the LIBO Rate plus the Applicable Margin.
"LIBOR Reserve Percentage" means, relative to any Interest
Period for LIBOR Loans made by any Lender, the reserve percentage (expressed as
a decimal) equal to the actual aggregate reserve requirements (including all
basic, emergency, supplemental, marginal and other reserves and taking into
account any transactional adjustments or other scheduled changes in reserve
requirements) announced within Agent Bank as the reserve percentage applicable
to Agent Bank as specified under regulations issued from time to time by the
Federal Reserve Board. The LIBOR Reserve Percentage shall be based on Regulation
D of the Federal Reserve Board or other regulations from time to time in effect
concerning reserves for "Eurocurrency Liabilities" from related institutions as
though Agent Bank were in a net borrowing position.
"Laws" means, collectively, all international, foreign,
federal, state and local statutes, maritime laws, treaties, rules, regulations,
ordinances, codes and administrative or judicial precedents.
"Lender Reply Period" shall have the meaning set forth in
Section 9.10(d).
"Lenders" shall have the meaning set forth in the Preamble to
this Credit Agreement. At all times that there are no Lenders other than WFB,
the terms "Lender" and "Lenders" means WFB in its individual capacity. With
respect to matters requiring the consent to or approval of all Lenders
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<PAGE>
at any given time, all then existing Defaulting Lenders will be disregarded and
excluded, and, for voting purposes only, "all Lenders" shall be deemed to mean
"all Lenders other than Defaulting Lenders".
"Leverage Ratio" as of the end of any Fiscal Quarter shall
mean the ratio resulting by dividing (a) Funded Debt for the Fiscal Quarter
under review by (b) the sum of EBITDA for the Fiscal Quarter under review plus
EBITDA for each of the most recently ended three (3) preceding Fiscal Quarters.
"Liabilities" shall mean the total liabilities of the Borrower
Consolidation in accordance with GAAP.
"Liabilities and Costs" means all claims, judgments,
liabilities, obligations, responsibilities, losses, damages (including lost
profits), punitive or treble damages, costs, disbursements and expenses
(including, without limitation, reasonable attorneys', experts' and consulting
fees and costs of investigation and feasibility studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan Documents" shall mean collective reference to the Credit
Agreement, the Revolving Credit Note, the Security Documentation, the
Environmental Certificate and all other documents and instruments which may
hereafter be executed and delivered by or on behalf of Borrowers or any other
Person in connection with the Credit facility for the benefit of Banks or Agent
Bank on behalf of the Lenders, as the same may be amended, modified,
supplemented, replaced, renewed or restated from time to time.
"Logan Filly Parcel" shall mean the real property subject to
the Logan Filly Purchase Agreement which is
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particularly described on that certain exhibit marked "Exhibit O" affixed hereto
and by this reference incorporated herein and made a part hereof.
"Logan Filly Parcel Closing" shall mean closing of the sale
transaction for MPI's acquisition of the Logan Filly Parcel.
"Logan Filly Parcel Permitted Exceptions" shall mean a
collective reference to Exceptions numbered 1 through 7, 9, 11 through 14, 18
and 20 through 24 which are set forth by that certain Title Insurance Commitment
which has been issued by Chicago Title Insurance Company, with respect to the
Logan Filly Parcel, under Commitment No. A-4893 and dated as of April 13, 1999.
"Logan Filly Purchase Agreement" shall mean that certain
Purchase Agreement Filly Parcel, under date of June 22, 1999, by and between
MPI, as purchaser, and the Logan Group, as seller, pursuant to which, among
other things, the Logan Group agreed to sell the Logan Filly Parcel to MPI in
accordance with the terms and conditions set forth therein.
"Logan Group" shall mean a collective reference to Robert
Logan, an individual, and Realm, Inc., a West Virginia corporation.
"Logan Loan Documents" shall mean a collective reference to:
(i) the promissory note which is to be executed by MPI and payable to the order
of the Logan Group, in a principal amount of Three Hundred Eighty-three Thousand
Dollars ($383,000.00), and in the form which is attached to the Logan Primary
Purchase Agreement as "Exhibit E", as part of the purchase price for the Logan
Primary Parcel; and (ii) a Deed of Trust (Commercial Loan), securing performance
under such promissory note, in the form which has been delivered to Agent Bank
under cover of a letter from Robert Gach, Esq. dated December 14, 1999 and
addressed to Henderson & Morgan, LLC; all of which are to be executed and
delivered as of the Logan Primary Parcel Closing in accordance with the terms
and conditions of the Logan Primary Purchase Agreement.
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"Logan Primary Parcel" shall mean the real property subject to
the Logan Primary Purchase Agreement which is particularly described on that
certain exhibit marked "Exhibit N" affixed hereto and by this reference
incorporated herein and made a part hereof.
"Logan Primary Parcel Closing" shall mean closing of the sale
transaction for MPI's acquisition of the Logan Primary Parcel from the Logan
Group.
"Logan Primary Parcel Permitted Exceptions" shall mean a
collective reference to: (i) the Logan Loan Documents; and (ii) exceptions 2, 5
through 9, 12, 13, 15 through 24, 26 through 29 and 31, all as set forth on that
certain Title Insurance Commitment which has been issued by Chicago Title
Insurance Company, with respect to the Logan Primary Parcel, under Commitment
No. A-4700 and dated as of September 15, 1998.
"Logan Primary Purchase Agreement" shall mean that certain
Purchase Agreement, under date of June 22, 1999, by and between MPI, as
purchaser, and the Logan Group, as seller, pursuant to which, among other
things, the Logan Group agreed to sell the Logan Primary Parcel to MPI in
accordance with the terms and conditions set forth therein.
"Logan Purchase Agreements" shall mean a collective
reference to the Logan Filly Purchase Agreement and the Logan Primary Purchase
Agreement.
"MPI" shall have the meaning ascribed to such term in the
Preamble of this Credit Agreement.
"MPI Assignment of Entitlements, Contracts, Rents and
Revenues" shall mean the assignment to be executed by MPI on or before the
Closing Date, whereby MPI presently assigns to Agent Bank on behalf of Lenders,
in consideration of the Credit Facility (reserving a revocable license to retain
and use during any period in which an Event of Default has not occurred and
remains continuing): (a) all of its right, title and interest under all MPI
Spaceleases and MPI Equipment Leases and Contracts relating to the MPI
Hotel/Casino Facilities, (b) all of its right, title and interest in and to all
permits, licenses and contracts relating to the MPI Hotel/Casino
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Facilities, except Gaming Permits and those permits, licenses and contracts
which are unassignable, and (c) all rents, issues, profits, revenues and income
from the MPI Real Property and the operation of the MPI Hotel/Casino Facilities
and any other business activity conducted on the MPI Real Property, together
with any and all future expansions thereof, related thereto or used in
connection therewith, as such assignment may be amended, modified, extended,
renewed or restated from time to time.
"MPI Closing Instructions" shall mean the Closing Instructions
to be given by Agent Bank to the MPI Title Insurance Company on or before the
Closing Date setting forth the requirements of Lenders for the issuance of the
MPI Title Insurance Policy and other conditions for the funding of the Closing
Disbursements to the reasonable satisfaction of Agent Bank, Lenders and the
Borrowers.
"MPI Collateral" shall mean collective reference to: (i) all
of the MPI Real Property, MPI FF&E and the contract rights, leases, intangibles
and other interests of MPI which are subject to the liens and security interests
of the MPI Security Documents; (ii) all rights of MPI presently assigned
pursuant to the terms of the MPI Security Documents; and (iii) any and all other
property and/or intangible rights, interest or benefits inuring to or in favor
of Borrowers, which are in any manner assigned, pledged, encumbered or otherwise
hypothecated in favor of Agent Bank on behalf of Lenders to secure payment of
the Credit Facility.
"MPI Deed of Trust" shall mean the Deed of Trust, Fixture
Filing and Security Agreement with Assignment of Rents to be executed by MPI on
or before the Closing Date in favor of Agent Bank, on behalf of Lenders, for the
purpose of securing the Credit Facility and Borrowers' payment and performance
under each of the Loan Documents (other than the Environmental Certificate) as
such deed of trust may be amended, modified, extended, renewed or restated from
time to time.
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<PAGE>
"MPI Equipment Leases and Contracts" shall mean the executed
leases and purchase contracts pertaining to the MPI FF&E wherein MPI is the
lessee or vendee, as the case may be, as set forth on that certain schedule
marked "Schedule 4.16(A)", affixed hereto and by this reference incorporated
herein and made a part hereof.
"MPI FF&E" shall mean the furniture, fixtures and equipment
and all gaming equipment and devices which have been installed or are to be
installed and used, owned or leased by MPI in connection with the operation of
the MPI Hotel/Casino Facilities.
"MPI Financing Statements" shall mean the Uniform Commercial
Code financing statements to be filed in the Office of the Secretary of State of
the State of West Virginia and in the Office of the County Recorder of Hancock
County, West Virginia, in order to perfect the security interest granted to
Agent Bank on behalf of Lenders under the MPI Deed of Trust and other MPI
Security Documents in accordance with requirements of the West Virginia Uniform
Commercial Code, as such financing statements may be amended, modified,
extended, renewed or restated from time to time.
"MPI Hotel/Casino Facilities" shall mean the racetrack, hotel
and casino business and related activities conducted on the MPI Real Property
under the common law trade names of the "Mountaineer Racetrack & Gaming Resort",
"Mountaineer Lodge" and "Woodview Golf Course".
"MPI Permitted Encumbrances" shall mean, at any particular
time, (i) liens for taxes, assessments or governmental charges not then due and
payable or not then delinquent, (ii) statutory liens for labor and/or materials
and liens for taxes, assessments or governmental charges the validity of which,
in either instance, are being contested in good faith by Borrowers by
appropriate proceedings, and as provided in Sections 5.03 and 5.10 hereof,
respectively, provided that, Borrowers shall have maintained adequate reserves
in accordance with GAAP for payment of same, (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
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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) leases or subleases granted to others
(including, without limitation, any Subsidiary) not interfering in any material
respect with the ordinary conduct of the business of the MPI Hotel/Casino
Facilities, including, without limitation, the MPI Trailer Park Leases, (v)
liens created or contemplated by the MPI Security Documents, (vi) the liens,
encumbrances and restrictions on the MPI Real Property, MPI FF&E and existing
improvements which are shown as exceptions on Schedule B of the MPI Title
Insurance Policy to be issued by MPI Title Insurance Company as of the Closing
Date, including, without limitation, the Woodview Loan Documents, (vii) liens
consented to in writing by Agent Bank upon the approval of Requisite Lenders,
(viii) liens of legally valid capital leases and purchase money security
interests for MPI FF&E to the extent permitted by Section 6.09(c), (ix) each and
every easement, restriction, license or right-of-way that (A) is hereafter
granted to any Governmental Authority or public utility providing services to
the MPI Real Property or (B) does not interfere in any material respect with the
MPI Hotel/Casino facilities; (x) judgment liens, writs, warrants, levies,
distraints, attachments and other similar process which do not constitute an
Event of Default; (xi) subsequent to the Logan Primary Parcel Closing, the Logan
Primary Parcel Permitted Exceptions; and (xii) subsequent to the Logan Filly
Parcel Closing, the Logan Filly Parcel Permitted Exceptions.
"MPI Real Property" shall mean: (i) the real property owned by
MPI which is more particularly described on that certain exhibit marked "Exhibit
K", affixed hereto and by this reference incorporated herein and made a part
hereof; (ii) subsequent to occurrence of the Logan Primary Parcel Closing, the
Logan Primary Parcel; and (iii) subsequent to occurrence of the Logan Filly
Parcel Closing, the Logan Filly Parcel.
"MPI Security Documents" shall mean collective reference to
the MPI Deed of Trust, MPI Assignment of Entitlements, Contracts, Rents and
Revenues, the MPI Financing
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Statements and all other documents, instruments or agreements which are executed
or delivered by or on behalf of MPI and accepted by Agent Bank, on behalf of
Lenders, as security for payment of the Credit Facility.
"MPI Spaceleases" shall mean the executed leases and
concession agreements pertaining to the MPI Hotel/Casino Facilities, or any
portion thereof, wherein MPI is the lessor, as set forth on that certain
schedule marked "Schedule 4.15(A)", affixed hereto and by this reference
incorporated herein and made a part hereof.
"MPI Title Insurance Company" shall mean Frankovitch,
Anetakis, Colontonio & Simon, attorneys at law, with offices located at 337
Penco Road, in Weirton, West Virginia, as the issuing agent for Commonwealth
Land Title Insurance Company, together with such reinsurers with direct access
as are requested by Agent Bank or other title insurance company or companies as
may be reasonably acceptable to Agent Bank.
"MPI Title Insurance Policy" shall mean the ALTA Extended
Coverage Lenders Policy of Title Insurance, and the endorsements thereto, which
are to be issued by the MPI Title Insurance Company, as of the Closing Date, in
the amount of Eighteen Million Dollars ($18,000,000.00), in favor of Agent Bank,
insuring the MPI Deed of Trust as a first priority mortgage lien encumbering the
MPI Real Property therein described, subject only to the exceptions shown
therein in Schedule B, Part One, together with such endorsements thereto as are
required by Agent Bank (including, without limitation, a Tie-In endorsement with
regard to the SGLVI Title Insurance Policy and the SGRI Title Insurance Policy);
all in accordance with the MPI Closing Instructions.
"MPI Trailer Park Leases" shall mean collective reference to
the leases of trailer spaces at Mountaineer Mobile City which are more
particularly described on Schedule 4.15(A).
"MTRI" shall have the meaning ascribed to such term in the
Preamble of this Credit Agreement.
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"MTRI Financing Statements" shall mean the Uniform Commercial
Code financing statements to be filed in the Office of the Secretary of State of
the State of West Virginia and in the Office of the Secretary of State of the
State of Delaware, in order to perfect the security interest granted to Agent
Bank on behalf of Lenders under the MTRI Security Agreement in accordance with
requirements of the West Virginia Uniform Commercial Code, and the Delaware
Uniform Commercial Code, as such financing statements may be amended, modified,
extended, renewed or restated from time to time.
"MTRI Permitted Encumbrances" shall mean, at any particular
time, (i) liens for taxes, assessments or governmental charges not then due and
payable or not then delinquent, (ii) statutory liens for labor and/or materials
and liens for taxes, assessments or governmental charges the validity of which,
in either instance, are being contested in good faith by Borrowers by
appropriate proceedings, and as provided in Sections 5.03 and 5.10 hereof,
respectively, provided that, Borrowers shall have maintained adequate reserves
in accordance with GAAP for payment of same, (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) liens created or contemplated by the
MTRI Security Agreement and MTRI Financing Statements; (v) liens consented to in
writing by Agent Bank upon the approval of Requisite Lenders, (vi) liens of
legally valid capital leases and purchase money security interests for SGRI FF&E
to the extent permitted by Section 6.09(c); and (vii) judgment liens, writs,
warrants, levies, distraints, attachments and other similar process which do not
constitute an Event of Default.
"MTRI Security Agreement" shall mean the Security Agreement to
be executed by MTRI, as debtor and Agent Bank, as secured party, on or before
the Closing Date in favor of Agent Bank, on behalf of Lenders, as secured party,
encumbering the Collateral therein described for the purpose of providing
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security for the Credit Facility as such Security Agreement may be amended,
modified, extended, renewed or restated from time to time.
"Margin Stock" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System.
"Material Adverse Change" shall mean: (i) any set of
circumstances of events which, other than with respect to the Representations
and Warranties set forth in Article IV of the Credit Agreement which shall be
construed to be applicable to circumstances and events existing both as of the
Closing Date (or such earlier date as may be referenced in each particular
provision) and subsequent to the Closing Date, are not in existence as of the
Closing Date, which are material and adverse to (a) the Collateral or (b) the
condition (financial or otherwise) or business operations of the Borrower
Consolidation taken as a whole, or (c) the ability of any of the Lenders to
enforce any of their material rights or remedies under any of the Loan
Documents, or (ii) any events or changes, which, other than with respect to the
Representations and Warranties set forth in Article IV of the Credit Agreement
which shall be construed to be applicable to events and changes existing both as
of the Closing Date (or such earlier date as may be referenced in each
particular provision) and subsequent to the Closing Date, are not in existence
as of the Closing Date and which have or result in a material adverse effect
upon (a) the value of the Hotel/Casino Facilities taken as a whole or the
priority of the security interests granted to Agent Bank, (b) the validity of
any of the Loan Documents, or (c) the use, occupancy or operation of the
Hotel/Casino Facilities taken as a whole.
"Maturity Date" shall mean December 23, 2004.
"Maximum Availability" shall mean the Maximum Permitted
Balance less the Funded Outstandings.
"Maximum Cap Ex Limit" shall have the meaning ascribed to such
term in Section 6.06 of the Credit Agreement.
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"Maximum Permitted Balance" shall mean the maximum amount of
Funded Outstandings which may be outstanding on the Credit Facility from time to
time which shall be the lesser of: (a) the Maximum Scheduled Balance, or (b) the
amount to which the Maximum Scheduled Balance is voluntarily reduced by
Borrowers pursuant to Section 2.01(c) or is otherwise reduced or limited
pursuant to Sections 5.01, 5.12, 5.23 or 8.02 or by Scheduled Reductions.
"Maximum Scheduled Balance" shall mean the maximum amount of
scheduled principal which may be outstanding on the Credit Facility from time to
time as set forth on the Aggregate Commitment Reduction Schedule.
"Minimum Cap Ex Requirement" shall have the meaning ascribed
to such term in Section 6.06 of the Credit Agreement.
"Net Income" shall mean with respect to any Person for any
fiscal period, the net income of such Person (determined without regard to any
Insider Non-Cash Loans) during such fiscal period determined in accordance with
GAAP.
"Net Proceeds" shall mean the aggregate cash proceeds received
by the Borrower Consolidation in respect of (a) Capital Proceeds net of the
direct costs relating to such sale, transfer, conveyance or disposition of FF&E,
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such sale, transfer,
conveyance or disposition of FF&E and all Indebtedness assumed by the purchaser
in connection with such sale, transfer, conveyance or disposition of FF&E and
all taxes paid or payable as a result of such sale, transfer, conveyance or
disposition, and (b) Subordinated Debt issued by any member of the Borrower
Consolidation or Equity Offering issued by MTRI, in each case less all costs,
fees and expenses (including without limitation underwriting, placement,
financial advisory and similar fees and expenses) incurred in connection with
the placement or incurrence of such Subordinated Debt or the issuance of such
Equity Offering, but shall not include the proceeds of Insider Cash Loan and
Insider Non-Cash Loans.
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"Nevada Closing Instructions" shall mean the Closing
Instructions to be given by Agent Bank to the Nevada Title Insurance Company on
or before the Closing Date setting forth the requirements of Lenders for the
issuance of the SGLVI Title Insurance Policy and the SGRI Title Insurance Policy
and other conditions for the funding of the Closing Disbursements, to the
reasonable satisfaction of Agent Bank, Lenders and the Borrowers.
"Nevada Gaming Authorities" shall mean, without limitation,
the Nevada Gaming Commission and the State Gaming Control Board and any other
applicable governmental or administrative state or local agency involved in the
regulation of gaming and gaming activities conducted by the Borrower
Consolidation in the State of Nevada.
"Nevada Title Insurance Company" shall mean Nevada Title
Company, with offices located at 3800 Howard Hughes Parkway, Suite 920, Las
Vegas, Nevada, as the issuing agent for Commonwealth Land Title Insurance
Company, together with such reinsurers with direct access as are requested by
Agent Bank or other title insurance company or companies as may be reasonably
acceptable to Agent Bank.
"Non-Financed Capital Expenditures" shall mean Capital
Expenditures which are paid by Borrowers from assets of the Borrower
Consolidation and not from the Credit Facility or through any other loan, credit
agreement, lease or financing from any source.
"Non Pro Rata Borrowing" means a Borrowing with respect to
which fewer than all Lenders have funded their respective Pro Rata Shares of
such Borrowing and the failure of the non-funding Lender or Lenders to fund its
or their respective Pro Rata Shares of such Borrowing constitutes a breach of
this Credit Agreement.
"Nonusage Fee" shall have the meaning ascribed to such term in
Section 2.08(b) of this Credit Agreement.
"Notice of Borrowing" shall have the meaning set forth in
Section 2.03.
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"Obligations" means, from time to time, all Indebtedness of
Borrowers owing to Agent Bank, any Lender or any Person entitled to
indemnification pursuant to Section 5.14, or any of their respective successors,
transferees or assigns, of every type and description, whether or not evidenced
by any note, guaranty or other instrument, arising under or in connection with
this Credit Agreement or any other Loan Document, whether or not for the payment
of money, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired. The term includes, without limitation, all interest,
charges, expenses, fees, reasonable attorneys' fees and disbursements,
reasonable fees and disbursements of expert witnesses and other consultants, and
any other sum now or hereinafter chargeable to Borrowers under or in connection
with Credit Agreement or any other Loan Document. Notwithstanding the foregoing
definition of "Obligations", Borrowers' obligations under any environmental
indemnity agreement constituting a Loan Document, or any environmental
representation, warranty, covenant, indemnity or similar provision in this
Credit Agreement or any other Loan Document, shall be secured by the Collateral
only to the extent, if any, specifically provided in the Security Documentation.
"Pension Plan" means any "employee pension benefit plan"
(other than a "multi-employer plan" as defined in Title IV of ERISA which is
maintained by any Person which is not a member of the Borrower Consolidation)
that is subject to Title IV of ERISA and which is maintained for employees of
Borrowers or any of its ERISA Affiliates.
"Permitted Encumbrances" shall mean collective reference to
the MPI Permitted Encumbrances, SGLVI Permitted Encumbrances, the SGRI Permitted
Encumbrances and the MTRI Permitted Encumbrances.
"Person" means an individual, firm, corporation, limited
liability company, trust, association, partnership, joint venture, tribunal or
other entity.
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"Policies of Insurance" shall mean the insurance to be
obtained and maintained by Borrowers throughout the term of this Credit
Agreement as provided by Section 5.09 herein.
"Post Foreclosure Plan" shall have the meaning set forth in
Section 9.11(e).
"Pricing Certificate" shall have the meaning set forth in
Section 5.08(b).
"Prime Rate" means at any time, and from time to time, the
rate of interest most recently announced within WFB at its principal office in
San Francisco, California, as its "Prime Rate", with the understanding that
WFB's "Prime Rate" is one of its base rates and serves as the basis upon which
effective rates of interest are calculated for those loans and extensions of
credit making reference thereto, and is evidenced by the recording thereof after
its announcement in such internal publication or publications as WFB may
designate. Each change in the Prime Rate shall be effective on the day the
change is announced within WFB.
"Principal Prepayments" shall have the meaning set forth in
Section 2.07(a) of this Credit Agreement.
"Pro Rata Share" shall mean, with respect to any Lender, a
percentage equal to such Lender's Syndication Interest in the Credit Facility as
set forth on the Schedule of Lenders' Proportions in Credit Facility.
"Protective Advance" means all sums expended as determined by
Agent Bank to be necessary to: (a) protect the priority, validity and
enforceability of the Security Documentation on, and security interests in, any
Collateral and the instruments evidencing or securing the Obligations, or (b)
prevent the value of any Collateral from being materially diminished (assuming
the lack of such a payment within the necessary time frame could potentially
cause such Collateral to lose value), or (c) protect any of the Collateral from
being materially damaged, impaired, mismanaged or taken, including, without
limitation, any amounts expended in accordance with Section 10.20 or
post-foreclosure ownership, maintenance, operation or marketing of any
Collateral.
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"Qualified Appraisal" shall mean reference to an appraisal or
appraisals of the Hotel/Casino Facilities and Collateral, or any portion
thereof, acceptable to Agent Bank, prepared at Borrowers' expense in compliance
with FIRREA by an appraiser acceptable to Agent Bank, with sufficient copies
delivered to Agent Bank for distribution to each of the Lenders.
"Rate Adjustment Date" shall mean June 1, 2000.
"Reduction Date(s)" shall mean reference to each date or the
dates, as the context may require upon which the Maximum Scheduled Balance is
reduced by a Scheduled Reduction as set forth on the Aggregate Commitment
Reduction Schedule.
"Related Entities" shall mean collective reference to all
stockholders, employees, Affiliates and Subsidiaries of the Borrowers, or any of
them, other than another Borrower.
"Replacement Note(s)" shall have the meaning set forth in
Section 2.06(i) of the Credit Agreement.
"Reportable Event" shall mean any of the events described in
Section 4043(b) of ERISA, other than an event for which the thirty (30) day
notice requirement is waived by regulations.
"Requisite Lenders" means, as of any date of determination
prior to the occurrence of an Event of Default, Lenders holding Syndication
Interests equal to or in excess of sixty-six and two-thirds percent (66-2/3%) of
the Credit Facility; and at all times during which an Event of Default has
occurred and remains continuing, Lenders holding a percentage equal to or in
excess of sixty-six and two-thirds percent (66-2/3%) of the Funded Outstandings;
PROVIDED THAT, (i) in determining such percentage at any given time, all then
existing Defaulting Lenders will be disregarded and excluded and the Pro Rata
Shares of Lenders shall be redetermined, for voting purposes only, to exclude
the Pro Rata Shares of such Defaulting Lenders, and (ii) notwithstanding the
foregoing, at all times when two or more Lenders are party to this Credit
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Agreement, the term Requisite Lenders shall in no event mean less than two (2)
Lenders.
"Revolving Credit Note" shall mean the Revolving Credit
Promissory Note, a copy of which is marked "Exhibit A", affixed hereto and by
this reference incorporated herein and made a part hereof, to be executed by
Borrowers on the Closing Date, payable to the order of Agent Bank on behalf of
the Lenders, evidencing the Credit Facility.
"Revolving Credit Period" shall mean the period commencing on
the Closing Date and terminating on the Maturity Date.
"SABAL Loan" shall mean the obligation of MTRI to lend to
SABAL Corp. up to Five Hundred Thousand Dollars ($500,000.00) (of which Three
Hundred Eighty-Three Thousand Three Hundred Twenty-Six Dollars and Fourteen
Cents ($383,326.14) had been lent as of November 30, 1999) pursuant to a
December 30, 1998 non-revolving Term Loan Agreement entered by SABAL Corp. and
ExCal Energy Corporation, a wholly owned subsidiary of MTRI, in connection with
MTRI's divestiture of its oil and gas assets.
"SGLVI" shall have the meaning ascribed to such term in the
Preamble of this Credit Agreement.
"SGLVI Assignment of Entitlements, Contracts, Rents and
Revenues" shall mean the assignment to be executed by SGLVI on or before the
Closing Date, whereby SGLVI presently assigns to Agent Bank on behalf of
Lenders, in consideration of Credit Facility (reserving a revocable license to
retain and use during any period in which an Event of Default has not occurred
and remains continuing): (a) all of its right, title and interest under all
SGLVI Spaceleases and SGLVI Equipment Leases and Contracts relating to the SGLVI
Hotel/Casino Facility, (b) all of its right, title and interest in and to all
permits, licenses and contracts relating to the SGLVI Hotel/Casino Facilities,
except Gaming Permits and those permits, licenses and contracts which are
unassignable, and (c) all rents, issues, profits, revenues and income from the
SGLVI Real Property and the SGLVI Hotel/Casino Facility and any other business
activity conducted on the SGLVI Real
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Property, together with any and all future expansions thereof, related thereto
or used in connection therewith, as such assignment may be amended, modified,
extended, renewed or restated from time to time.
"SGLVI Collateral" shall mean collective reference to: (i) all
of the SGLVI Real Property, SGLVI FF&E, and the contract rights, leases,
intangibles and other interests of SGLVI, which are subject to the liens and
security interests of the SGLVI Security Documents; (ii) all rights of SGLVI
presently assigned pursuant to the terms of the SGLVI Security Documents; and
(iii) any and all other property and/or intangible rights, interest or benefits
inuring to or in favor of SGLVI, which are in any manner assigned, pledged,
encumbered or otherwise hypothecated in favor of Agent Bank on behalf of Lenders
to secure payment of the Credit Facility.
"SGLVI Deed of Trust" shall mean the Deed of Trust, Fixture
Filing and Security Agreement with Assignment of Rents to be executed by SGLVI
on or before the Closing Date in favor of Agent Bank on behalf of the Lenders,
encumbering the SGLVI Real Property, SGLVI FF&E and other SGLVI Collateral
therein described, for the purpose of securing the Credit Facility and
Borrowers' payment and performance under each of the Loan Documents (other than
the Environmental Certificate), as such deed of trust may be amended, modified,
extended, renewed or restated from time to time.
"SGLVI Equipment Leases and Contracts" shall mean the executed
leases and purchase contracts pertaining to the SGLVI FF&E wherein SGLVI is the
lessee or vendee, as the case may be, as set forth on that certain schedule
marked "Schedule 4.16(B)", affixed hereto and by this reference incorporated
herein and made a part hereof.
"SGLVI FF&E" shall mean the furniture, fixtures and equipment
and all gaming equipment and devices which have been installed or are to be
installed and used, owned or leased by SGLVI in connection with the operation of
the SGLVI Hotel/Casino Facility.
"SGLVI Financing Statements" shall mean the Uniform Commercial
Code financing statements to be filed in the Office of the Secretary of State of
the State of Nevada, in the Office
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of the Secretary of State of West Virginia and in the Office of the County
Recorder of Clark County, Nevada, in order to perfect the security interest
granted to Agent Bank on behalf of Lenders under the SGLVI Deed of Trust and
other SGLVI Security Documents in accordance with requirements of the Nevada
Uniform Commercial Code, as such financing statements may be amended, modified,
extended, renewed or restated from time to time.
"SGLVI Hotel/Casino Facility" shall mean the improvements and
the hotel and casino business and related activities conducted on the SGLVI Real
Property under the trade name of Ramada Inn and Speedway Casino.
"SGLVI Permitted Encumbrances" shall mean, at any particular
time, (i) liens for taxes, assessments or governmental charges not then due and
payable or not then delinquent, (ii) statutory liens for labor and/or materials
and liens for taxes, assessments or governmental charges the validity of which,
in either instance, are being contested in good faith by Borrowers by
appropriate proceedings, and as provided in Sections 5.03 and 5.10 hereof,
respectively, provided that, Borrowers shall have maintained adequate reserves
in accordance with GAAP for payment of same, (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) leases or subleases granted to others
(including, without limitation, any Subsidiary) not interfering in any material
respect with the ordinary conduct of the business of the SGLVI Hotel/Casino
Facility; (v) liens created or contemplated by the SGLVI Security Documents,
(vi) the liens, encumbrances and restrictions on the SGLVI Real Property, SGLVI
FF&E and existing improvements which are shown as exceptions on Schedule B of
the SGLVI Title Insurance Policy to be issued by Nevada Title Insurance Company
as of the Closing Date, (vii) liens consented to in writing by Agent Bank upon
the approval of Requisite Lenders, (viii) liens of
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legally valid capital leases and purchase money security interests for SGLVI
FF&E to the extent permitted by Section 6.09(c), and (ix) each and every
easement, license, restriction or right-of-way that (A) is hereafter granted to
any Governmental Authority or public utility providing services to the SGLVI
Real Property or (B) does not interfere in any material respect with the SGLVI
Hotel/Casino Facility; and (x) judgment liens, writs, warrants, levies,
distraints, attachments and other similar process which do not constitute an
Event of Default.
"SGLVI Real Property" shall mean the real property owned by
SGLVI which is more particularly described on that certain exhibit marked
"Exhibit L", affixed hereto and by this reference incorporated herein and made a
part hereof.
"SGLVI Security Documents" shall mean collective reference to
the SGLVI Deed of Trust, SGLVI Assignment of Entitlements, Contracts, Rents and
Revenues, the SGLVI Financing Statements and all other documents, instruments or
agreements which are executed or delivered by or on behalf of SGLVI, and
accepted by Agent Bank, on behalf of the Lenders, as security for payment of the
Credit Facility.
"SGLVI Spaceleases" shall mean the executed leases and
concession agreements pertaining to the SGLVI Hotel/Casino Facility, or any
portion thereof, wherein SGLVI is the lessor, as set forth on that certain
schedule marked "Schedule 4.15(B)", affixed hereto and by this reference
incorporated herein and made a part hereof.
"SGLVI Title Insurance Policy" shall mean the ALTA Extended
Coverage Lenders Policy of Title Insurance, and the endorsements thereto, which
are to be issued by the Nevada Title Insurance Company, as of the Closing Date,
in the amount of Seven Million Five Hundred Thousand Dollars ($7,500,000.00), in
favor of Agent Bank, insuring the SGLVI Deed of Trust and SGRI Deed of Trust as
a first priority mortgage lien encumbering the SGLVI Real Property therein
described subject only to the exceptions shown therein in Schedule B, Part One,
together with all such coverage allocations and endorsements thereto as are
required by Agent Bank (including, without limitation, a Tie-In endorsement with
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regard to the MPI Title Insurance Policy and the SGRI Title Insurance Policy);
all in accordance with the Nevada Closing Instructions.
"SGRI" shall have the meaning ascribed to such term in the
Preamble of this Credit Agreement.
"SGRI Assignment of Entitlements, Contracts, Rents and
Revenues" shall mean the assignment to be executed by SGRI on or before the
Closing Date, whereby SGRI presently assigns to Agent Bank on behalf of Lenders,
in consideration of the Credit Facility (reserving a revocable license to retain
and use during any period in which an Event of Default has not occurred and
remains continuing): (a) all of its right, title and interest under all SGRI
Spaceleases and SGRI Equipment Leases and Contracts relating to the SGRI
Hotel/Casino Facilities, (b) all of its right, title and interest in and to all
permits, licenses and contracts relating to the SGRI Hotel/Casino Facilities,
except Gaming Permits and those permits, licenses and contracts which are
unassignable, and (c) all rents, issues, profits, revenues and income from the
SGRI Real Property and the operation of the SGRI Hotel/Casino Facilities and any
other business activity conducted on the SGRI Real Property, together with any
and all future expansions thereof, related thereto or used in connection
therewith, as such assignment may be amended, modified, extended, renewed or
restated from time to time.
"SGRI Collateral" shall mean collective reference to: (i) all
of the SGRI Real Property, SGRI FF&E and the contract rights, leases,
intangibles and other interests of SGRI which are subject to the liens and
security interests of the SGRI Security Documents; (ii) all rights of SGRI
presently assigned pursuant to the terms of the SGRI Security Documents; and
(iii) any and all other property and/or intangible rights, interest or benefits
inuring to or in favor of Borrowers, which are in any manner assigned, pledged,
encumbered or otherwise hypothecated in favor of Agent Bank on behalf of Lenders
to secure payment of the Credit Facility.
"SGRI Deed of Trust" shall mean the Deed of Trust, Fixture
Filing and Security Agreement with Assignment of Rents to be executed by SGRI on
or before the Closing Date in favor
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of Agent Bank, on behalf of Lenders, for the purpose of securing the Credit
Facility and Borrowers' payment and performance under each of the Loan Documents
(other than the Environmental Certificate) as such deed of trust may be amended,
modified, extended, renewed or restated from time to time.
"SGRI Equipment Leases and Contracts" shall mean the executed
leases and purchase contracts pertaining to the SGRI FF&E wherein SGRI is the
lessee or vendee, as the case may be, as set forth on that certain schedule
marked "Schedule 4.16(C)", affixed hereto and by this reference incorporated
herein and made a part hereof.
"SGRI FF&E" shall mean the furniture, fixtures and equipment
and all gaming equipment and devices which have been installed or are to be
installed and used, owned or leased by SGRI in connection with the operation of
the SGRI Hotel/Casino Facilities.
"SGRI Financing Statements" shall mean the Uniform Commercial
Code financing statements to be filed in the Office of the Secretary of State of
the State of Nevada, in the Office of the West Virginia Secretary of State and
in the Office of the County Recorder of Washoe County, Nevada, in order to
perfect the security interest granted to Agent Bank on behalf of Lenders under
the SGRI Deed of Trust and other SGRI Security Documents in accordance with
requirements of the Nevada Uniform Commercial Code, as such financing statements
may be amended, modified, extended, renewed or restated from time to time.
"SGRI Hotel/Casino Facilities" shall mean the hotel and casino
business and related activities conducted on the SGRI Real Property under the
trade names of the Ramada Inn and Speakeasy Casino.
"SGRI Permitted Encumbrances" shall mean, at any particular
time, (i) liens for taxes, assessments or governmental charges not then due and
payable or not then delinquent, (ii) statutory liens for labor and/or materials
and liens for taxes, assessments or governmental charges the validity of which,
in either instance, are being contested in
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good faith by Borrowers by appropriate proceedings, and as provided in Sections
5.03 and 5.10 hereof, respectively, provided that, Borrowers shall have
maintained adequate reserves in accordance with GAAP for payment of same, (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) leases or subleases
granted to others (including, without limitation, any Subsidiary) not
interfering in any material respect with the ordinary conduct of the business of
the SGRI Hotel/Casino Facility, (v) liens created or contemplated by the SGRI
Security Documents, (vi) the liens, encumbrances and restrictions on the SGRI
Real Property, SGRI FF&E and existing improvements which are shown as exceptions
on Schedule B of the Nevada Title Insurance Policy to be issued by Nevada Title
Insurance Company as of the Closing Date, (vii) liens consented to in writing by
Agent Bank upon the approval of Requisite Lenders, (viii) liens of legally valid
capital leases and purchase money security interests for SGRI FF&E to the extent
permitted by Section 6.09(c), (ix) each and every easement, restriction, license
or right-of-way that (A) is hereafter granted to any Governmental Authority or
public utility providing services to the SGRI Real Property or (B) does not
interfere in any material respect with the SGRI Hotel/Casino facilities; and (x)
judgment liens, writs, warrants, levies, distraints, attachments and other
similar process which do not constitute an Event of Default.
"SGRI Real Property" shall mean the real property owned by
SGRI which is more particularly described on that certain exhibit marked
"Exhibit P", affixed hereto and by this reference incorporated herein and made a
part hereof.
"SGRI Security Documents" shall mean collective reference to
the SGRI Deed of Trust, SGRI Assignment of Entitlements, Contracts, Rents and
Revenues, the SGRI Financing Statements and all other documents, instruments or
agreements which are executed or delivered by or on behalf of
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SGRI and accepted by Agent Bank, on behalf of Lenders, as security for payment
of the Credit Facility.
"SGRI Spaceleases" shall mean the executed leases and
concession agreements pertaining to the SGRI Hotel/Casino Facility, or any
portion thereof, wherein SGRI is the lessor, as set forth on that certain
schedule marked "Schedule 4.15(C)", affixed hereto and by this reference
incorporated herein and made a part hereof.
"SGRI Title Insurance Policy" shall mean the ALTA Extended
Coverage Lenders Policy of Title Insurance, and the endorsements thereto, which
are to be issued by the Nevada Title Insurance Company, as of the Closing Date,
in the amount of Four Million Five Hundred Thousand Dollars ($4,500,000.00), in
favor of Agent Bank, insuring the SGRI Deed of Trust as a first priority
mortgage lien encumbering the SGRI Real Property therein described, subject only
to the exceptions shown therein in Schedule B, Part One, together with such
endorsements thereto as are required by Agent Bank (including, without
limitation, a Tie-In endorsement with regard to the MPI Title Policy and the
SGLVI Title Insurance Policy); all in accordance with the Nevada Closing
Instructions.
"Schedule of Existing Subsidiaries" shall mean the Schedule of
Existing Subsidiaries, a copy of which is set forth as Schedule 4.24, affixed
hereto and by this reference incorporated herein and made a part hereof, setting
forth the information described in Section 4.24 with respect to each Subsidiary
which exists as of the Closing Date.
"Schedule of Lenders' Proportions in Credit Facility" shall
mean the Schedule of Lenders' Proportions in Credit Facility, a copy of which is
marked "Schedule 2.01(a)", affixed hereto and by this reference incorporated
herein and made a part hereof, setting forth the respective Syndication Interest
and maximum amount to be funded under the Credit Facility by each Lender, as the
same may be amended, modified or restated from time to time in connection with
an Assignment and Assumption Agreement.
"Schedule of Significant Litigation" shall mean the Schedule
of Significant Litigation, a copy of which is set
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forth as Schedule 3.18, affixed hereto and by this reference incorporated herein
and made a part hereof, setting forth the information described in Section 3.18
with respect to each Significant Litigation.
"Scheduled Reductions" shall mean the amount by which the
Aggregate Commitment is reduced on each Reduction Date as set forth on the
Aggregate Commitment Reduction Schedule.
"Secured Interest Rate Hedge(s)" shall mean any Interest Rate
Hedge entered into between any Borrower and any Lender, or Affiliate of any
Lender, which is secured by the Security Documentation.
"Security Documentation" shall mean a collective reference to
the MPI Security Documents, SGLVI Security Documents, SGRI Security Documents,
the Stock Pledges, the Trademark Security Agreement and all other instruments
and agreements to be executed by or on behalf of Borrowers or other applicable
Persons, in favor of Agent Bank on behalf of the Lenders securing repayment of
the Credit Facility.
"Share Repurchases" shall mean the purchase of shares of any
class of stock, option, right or other equity interest, whether voting or
non-voting of MTRI by any member of the Borrower Consolidation, or any of them.
"Significant Litigation" shall mean each action, suit,
proceeding, litigation and controversy involving Borrowers, or any of them,
involving claims in excess of One Million Dollars ($1,000,000.00) or which if
determined adverse to the interests of Borrowers, or any of them, could result
in a Material Adverse Change.
"Spaceleases" shall mean collective reference to the MPI
Spaceleases, SGLVI Spaceleases and SGRI Spaceleases.
"Stock Pledges" shall mean collective reference to: (i) the
Security Agreements and Stock Pledges, and (ii) the Irrevocable Stock Powers, in
each case to be executed and delivered into escrow on behalf of the Banks as of
the Closing Date, pursuant to which, subject to the prior approval of all
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necessary Gaming Authorities, the stock of MPI, SGLVI and SGRI is pledged by
MTRI to Agent Bank on behalf of Lenders as security for the Credit Facility and
all other sums which may be owing by Borrowers to the Banks from time to time
under the terms of the Credit Agreement.
"Subordinated Debt" shall mean unsecured Indebtedness of the
Borrower Consolidation which is contractually subordinated to the Credit
Facility and the Obligations and for which (a) there is no principal or sinking
fund payment requirement maturing or otherwise coming due prior to four (4)
years after the Closing Date; (b) the maturity date of the Subordinated Debt
shall not be earlier than four (4) years subsequent to the Closing Date; (c) all
material covenants, terms and conditions of the Subordinated Debt shall be no
more restrictive on MTRI and the Borrower Consolidation than those applicable
under this Credit Agreement; and (d) the subordination and blockage provisions
and events of default of the Subordinated Debt are acceptable to the Requisite
Lenders in their reasonable credit judgment.
"Subsidiary" shall mean, on the date in question, any Person
of which an aggregate of 50% or more of the stock of any class or classes (or
equivalent interests) is owned of record or beneficially, directly or
indirectly, by another Person and/or any of its Subsidiaries, if the holders of
the stock of such class or classes (or equivalent interests) (a) are ordinarily,
in the absence of contingencies, entitled to vote for the election of a majority
of the directors (or individuals performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are entitled, as such holders, to vote for the election of a
majority of the directors (or individuals performing similar functions) of such
Person, whether or not the right so to vote exists by reason of the happening of
a contingency.
"Subsidiary Guaranty" shall mean the General Continuing
Subsidiary Guaranty to be executed by each Subsidiary in favor of the Agent Bank
on behalf of Banks in the form of the General Continuing Subsidiary Guaranty
marked "Exhibit J", affixed hereto and by this reference incorporated herein and
made a part hereof, under the terms of which each
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Subsidiary irrevocably and unconditionally guaranties to Agent Bank on behalf of
the Banks the full and prompt payment and performance of all Obligations.
"Syndication Costs" shall mean collective reference to all
costs and expenses incurred by Agent Bank in connection with the sale, transfer
and/or assignment of a Syndication Interest to any other Lender.
"Syndication Interest" shall mean the proportionate interest
of each Lender in the Credit Facility as set forth on the Schedule of Lenders'
Proportions in Credit Facility, as the same may be amended or restated from time
to time.
"Tangible Net Worth" shall mean Assets, excluding Intangibles,
less Liabilities, in each instance calculated without regard to Insider Non-Cash
Loans and Insider Cash Loans.
"Title Insurance Companies" shall mean collective reference to
the MPI Title Insurance Company and the Nevada Title Insurance Company.
"Title Insurance Policies" shall mean collective reference to
the MPI Title Insurance Policy, SGLVI Title Insurance and SGRI Title Insurance
Policy.
"Trademark Security Agreement" shall mean the security
agreement to be executed by Borrowers as of the Closing Date for the purpose of
granting a security interest in favor of Agent Bank on behalf of Lenders in all
trademarks, tradenames, copyrights and servicemarks used in connection with the
Hotel/Casino Facilities, including, without limitation each registration and
application set forth on Schedule 4.27 or otherwise described on Schedule A to
the Trademark Security Agreement.
"Unsuitable Lender" shall have the meaning set forth in
Section 10.10(d).
"Voluntary Permanent Reduction" shall have the meaning set
forth in Section 2.01(c).
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"WFB" shall mean Wells Fargo Bank, National Association.
"West Virginia Gaming Authorities" shall mean the West
Virginia State Racing Commission and West Virginia State Lottery Commission and
any other applicable governmental or administrative state or local agency
involved in the regulation of gaming and gaming activities conducted by the
Borrower Consolidation in the State of West Virginia.
"Woodview Citizens Bank Documents" shall mean a collective
reference to: (i) that certain Deed of Trust encumbering the Woodview Real
Property which is executed by Robert H. Hillis, as borrower, for the benefit of
The Citizens Banking Company, as lender, and which is recorded in the Official
Records of Hancock County, West Virginia on February 4, 1994 in Book 313 at Page
609 as Document No. 007556; (ii) the promissory note secured by said Deed of
Trust which is executed by the Woodview Partnership under date of January 31,
1994 and is payable to the order of The Citizens Banking Company in the original
principal amount of Two Hundred Six Thousand Dollars ($206,000.00); and (iii)
that certain Commercial Loan Modification Agreement which is executed under date
of January 21, 1999 by the Woodview Partnership, MPI, Robert B. Hillis, Randall
J. Hillis and The Citizens Banking Company.
"Woodview Citizens Bank Estoppel" shall mean an Estoppel
Certificate duly executed by The Citizens Banking Company, wherein it certifies
and represents to Agent Bank on behalf of the Lenders that: (a) the Woodview
Citizens Bank Documents represent the entire agreement between The Citizens
Banking Company and the borrowers under the Woodview Citizens Bank Documents,
(b) the Woodview Citizens Bank Documents have not been modified, supplemented or
amended except as described therein, (c) to the best knowledge of The Citizens
Banking Company, there are no defaults presently existing or continuing under
the Woodview Citizens Bank Documents, and (d) other provisions are set forth
regarding notice to Agent Bank on behalf of Lenders in the event of default
under the Woodview Citizens Bank Documents and the rights of Banks to cure any
such default.
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"Woodview Estoppel Certificates" shall mean a collective
reference to the Woodview Citizens Bank Estoppel and the Woodview Hillis
Estoppel.
"Woodview Hillis Documents" shall mean a collective reference
to: (i) that certain Deed of Trust encumbering the Woodview Real Property which
is executed by MPI, as grantor, for the benefit of Robert B. Hillis and Randall
J. Hillis, as lenders, and which is recorded in the Official Records of Hancock
County, West Virginia on January 22, 1999 in Book 379 at Page 239 as Document
No. 012844; and (ii) the promissory note secured by said Deed of Trust which is
executed by MPI under date of January 21, 1999 and is payable to the order of
Robert B. Hillis and Randall J. Hillis in the original principal amount of Six
Hundred Three Thousand Four Hundred Seventy-nine Dollars and Nine Cents
($603,479.09).
"Woodview Hillis Estoppel" shall mean an Estoppel Certificate
duly executed by Robert B. Hillis and Randall J. Hillis wherein they certify and
represent to Agent Bank on behalf of the Lenders that: (a) the Woodview Hillis
Documents represent the entire agreement between them and MPI, (b) the Woodview
Hillis Documents have not been modified, supplemented or amended except as
described therein, (c) to their best knowledge, there are no defaults presently
existing or continuing under the Woodview Hillis Documents, and (d) other
provisions are set forth regarding notice to Agent Bank on behalf of Lenders in
the event of default under the Woodview Hillis Documents and the rights of Banks
to cure any such default.
"Woodview Loan Documents" shall mean a collective reference to
the Woodview Citizens Bank Documents and the Woodview Hillis Documents.
"Woodview Partnership" shall mean Woodview Golf Course, a West
Virginia general partnership.
Section 1.02. INTERPRETATION AND CONSTRUCTION. In this Credit
Agreement, unless the context otherwise requires:
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(a) Articles and Sections mentioned by number only
are the respective Articles and Sections of this Credit Agreement as so
numbered;
(b) Words importing a particular gender mean and
include every other gender, and words importing the singular number mean and
include the plural number and VICE VERSA;
(c) All times specified herein, unless otherwise
specifically referred, shall be the time in San Francisco, California;
(d) Any headings preceding the texts of the several
Articles and Sections of this Credit Agreement, and any table of contents or
marginal notes appended to copies hereof, shall be solely for convenience of
reference and shall not constitute a part of this Credit Agreement, nor shall
they affect its meaning, construction or effect;
(e) If any clause, definition, provision or Section
of this Credit Agreement shall be determined to be apparently contrary to or
conflicting with any other clause, definition, provision or Section of this
Credit Agreement then the clause, definition, provision or Section containing
the more specific provisions shall control and govern with respect to such
apparent conflict. The parties hereto do agree that each has contributed to the
drafting of this Credit Agreement and all Loan Documents and that the provisions
herein contained shall not be construed against either Borrowers or Lenders as
having been the person or persons responsible for the preparation thereof;
(f) The terms "herein", "hereunder", "hereby",
"hereto", "hereof" and any similar terms as used in the Credit Agreement refer
to this Credit Agreement; the term "heretofore" means before the date of
execution of this Credit Agreement; and the term "hereafter" means after the
date of the execution of this Credit Agreement;
(g) All accounting terms used herein which are not
otherwise specifically defined shall be used in accordance with GAAP;
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(h) If any clause, provision or Section of this
Credit Agreement shall be ruled invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any of the remaining provisions hereof;
(i) Each reference to this Credit Agreement or any
other Loan Document or any of them, as used in this Credit Agreement or in any
other Loan Document, shall be deemed a reference to this Credit Agreement or
such Loan Document, as applicable, as the same may be amended, modified,
supplemented, replaced, renewed or restated from time to time; and
(j) Every affirmative duty, covenant and obligation
of Borrowers hereunder shall be equally applicable to each of the Borrowers
individually and where the context would result in the best interests or rights
of Banks shall be construed to mean "Borrowers or any of them" or "Borrowers and
each of them", as applicable.
Section 1.03. USE OF DEFINED TERMS. Unless otherwise defined
or the context otherwise requires, terms for which meanings are provided in this
Credit Agreement shall have such meanings when used in the Revolving Credit Note
and in each Loan Document and other communication delivered from time to time in
connection with this Credit Agreement or any other Loan Document.
Section 1.04. CROSS-REFERENCES. Unless otherwise specified,
references in this Credit Agreement and in each other Loan Document to any
Article or Section are references to such Article or Section of this Credit
Agreement or such other Loan Document, as the case may be, and, unless otherwise
specified, references in any Article, Section or definition to any clause are
references to such clause of such Article, Section or definition.
Section 1.05. EXHIBITS AND SCHEDULES. All Exhibits and
Schedules to this Credit Agreement, either as
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originally existing or as the same may from time to time be supplemented,
modified or amended, are incorporated herein by this reference.
ARTICLE II.
AMOUNT, TERMS AND SECURITY OF THE CREDIT FACILITY
Section 2.01. THE CREDIT FACILITY.
a. Subject to the conditions and upon the terms
hereinafter set forth and in accordance with the terms and provisions of the
Revolving Credit Note, on and after the Closing Date Lenders severally agree in
the proportions set forth on the Schedule of Lenders' Proportions in Credit
Facility to lend and advance Borrowings to Borrowers, up to the Maximum
Permitted Balance, consisting of the Closing Disbursements on the Closing Date
and such amounts as Borrowers may request during the Revolving Credit Period by
Notice of Borrowing duly executed by an Authorized Officer and delivered to
Agent Bank from time to time for Borrowings under the Credit Facility as
provided in Section 2.03, subject to the uses and purposes set forth in Section
2.02.
b. Subject to the uses and purposes set forth in
Section 2.02, on and after the Closing Date Borrowers may borrow, repay and
reborrow the Available Borrowings up to the Maximum Permitted Balance from time
to time. Provided, however, amounts of Funded Outstandings bearing interest with
reference to a LIBO Rate shall be subject to Breakage Charges incident to
prepayment. The Credit Facility shall be for a term commencing on the Closing
Date and terminating on the Maturity Date, on which date the entire outstanding
balance of the Credit Facility shall be fully paid and Credit Facility
Termination shall occur. In no event shall any Lender be liable to fund any
amounts under the Credit Facility in excess of its respective Syndication
Interest in any Borrowing.
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c. Notwithstanding the Scheduled Reductions to the
Maximum Permitted Balance as set forth on the Aggregate Commitment Reduction
Schedule, Borrowers may voluntarily further permanently reduce the Maximum
Permitted Balance from time to time (a "Voluntary Permanent Reduction") on the
following conditions:
(i) that each such Voluntary Permanent
Reduction be in the minimum amount of One Million Dollars
($1,000,000.00) and made in writing by an Authorized Officer,
effective on the fifth (5th) Banking Business Day following
receipt by Agent Bank;
(ii) that each such Voluntary Permanent
Reduction shall be irrevocable and a permanent reduction to
the Maximum Permitted Balance; and
(iii) in the event any Voluntary Permanent
Reduction reduces the Maximum Permitted Balance to less than
the sum of the Funded Outstandings, the Borrowers shall
immediately cause the Funded Outstandings to be reduced by
such amount as may be necessary to cause the Funded
Outstandings to be equal to or less than the Maximum Permitted
Balance.
d. In the event any Scheduled Reduction or Voluntary
Permanent Reduction reduces the Maximum Permitted Balance to less than the sum
of the Funded Outstandings, the Borrowers shall on or before the next ensuing
Banking Business Day cause the Funded Outstandings to be reduced by such amount
as may be necessary to cause the Funded Outstandings to be equal to or less than
the Maximum Permitted Balance.
Section 2.02. USE OF PROCEEDS OF THE CREDIT FACILITY.
Available Borrowings shall be used for the purposes of:
a. On the Closing Date (collectively the "Closing
Disbursements"):
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(i) paying in full all loans and advances
outstanding under the Existing Secured Loan as of the Closing
Date; and
(ii) paying in full the Upfront Fee, the
costs, fees and expenses of Title Insurance Companies incurred
in connection with the issuance of the Title Insurance
Policies, the costs, fees and expenses of the attorneys for
Borrowers and the costs, fees and expenses of Henderson &
Morgan, LLC, attorneys for Agent Bank, and associate counsel
and insurance consultants retained by them incurred to the
Closing Date.
b. During the Revolving Credit Period:
(i) funding working capital needs of the
Borrower Consolidation relating to the Hotel/Casino
Facilities; and
(ii) funding ongoing Capital Expenditure
requirements of the Borrower Consolidation relating to the
Hotel/Casino Facilities.
Section 2.03. NOTICE OF BORROWINGS AND EXERCISE OF INTEREST
RATE OPTIONS.
a. An Authorized Officer may give Agent Bank, no
later than 9:00 a.m. on any Banking Business Day at Agent Bank's office
specified in Section 2.07, three (3) full Banking Business Days prior written
notice in the form of the Notice of Borrowing ("Notice of Borrowing"), a copy of
which is marked "Exhibit C", affixed hereto and by this reference incorporated
herein and made a part hereof, for each proposed Borrowing to be made with
reference to a LIBO Rate and at least two (2) full Banking Business Days prior
notice for all other Borrowings, specifying the date and amount of each proposed
Borrowing. Agent Bank shall give prompt notice of each Notice of Borrowing to
Lenders of the amount to be funded and specifying the Funding Date. Not later
than 11:00 a.m. on the Funding Date specified, each Lender shall disburse to
Agent Bank its Pro Rata Share of the amount to be advanced by each such Lender
in lawful money of the United States of
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America and in immediately available funds. Agent Bank shall make the proceeds
of such fundings received by it on or before 11:00 a.m. from the Lenders
available to Borrowers by depositing, prior to 1:00 p.m. on the day so received
(but not prior to the Funding Date) in the Designated Deposit Account maintained
with Agent Bank, the amounts received from the Lenders. No Borrowing may exceed
the Available Borrowings. Each Borrowing to be made with reference to the Base
Rate shall be in a minimum amount of Five Hundred Thousand Dollars ($500,000.00)
and in increments of One Hundred Thousand Dollars ($100,000.00). Borrowers shall
be entitled to no more than three (3) Borrowings during each calendar month.
b. The failure of any Lender to fund its Pro Rata
Share of any Borrowing on any Funding Date shall neither relieve any other
Lender of any obligation hereunder to fund its Pro Rata Share of such Borrowing
on such Funding Date nor relieve such Lender which has failed to fund its Pro
Rata Share of its obligations to Borrowers hereunder. No Lender shall be
responsible for the failure of any other Lender to fund its Pro Rata Share of
such Borrowing on any Funding Date nor shall any Lender be responsible for the
failure of any other Lender to perform its respective obligations hereunder. The
provisions set forth in Section 10.10(d) shall be applicable to a Defaulting
Lender to the same extent as if such Defaulting Lender was found to be an
Unsuitable Lender.
Section 2.04. CONDITIONS OF BORROWINGS. Borrowings will only
be made so long as Borrowers are in full compliance with each of the
requirements and conditions precedent set forth in Article III B of this Credit
Agreement; provided, however, upon the consent of Requisite Lenders, Lenders
shall advance Borrowings notwithstanding the existence of less than full
compliance with the requirements of Article III B and Borrowings so made shall
be deemed to have been made pursuant to this Credit Agreement.
Section 2.05. THE REVOLVING CREDIT NOTE AND INTEREST RATE
OPTIONS.
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a. The Credit Facility shall be further evidenced by
the Revolving Credit Note payable to the order of Agent Bank on behalf of the
Lenders. Agent Bank shall record manually or electronically the date and amount
of each Borrowing advanced by the Lenders together with the applicable Interest
Period in the case of portions of the unpaid principal under the Credit Facility
bearing interest with reference to a LIBO Rate, and the amount of each repayment
of principal made thereunder by Borrowers and the entry of such records shall be
conclusive absent manifest or demonstrable error; provided, however, the failure
to make such a record or notation with respect to any Borrowing or repayment
thereof, or an error in making such a record or notation, shall not limit or
otherwise affect the obligations of Borrowers hereunder or under the Revolving
Credit Note.
b. Commencing on the Closing Date and continuing
until the Rate Adjustment Date, interest shall accrue at the LIBO Rate quoted by
Agent Bank for the amount of the Closing Disbursement for an Interest Period
commencing on the Closing Date and ending on the Rate Adjustment Date, to which
LIBO Rate shall be added to the Applicable Margin. On and after the Rate
Adjustment Date, interest shall accrue on the entire outstanding principal
balance of the Credit Facility at a rate per annum equal to the Base Rate plus
the Applicable Margin, unless Borrowers request a LIBOR Loan pursuant to Section
2.03 or elect pursuant to Section 2.05(c) hereinbelow to have interest accrue on
a portion or portions of the outstanding principal balance of the Credit
Facility at a LIBO Rate ("Interest Rate Option"), in which case interest on such
portion or portions shall accrue at a rate per annum equal to such LIBO Rate
plus the Applicable Margin in effect as of the second Banking Business Day prior
to the first day of the applicable Interest Period, as long as: (i) each such
LIBOR Loan is in a minimum amount of Five Million Dollars ($5,000,000.00) plus
minimum increments of One Million Dollars ($1,000,000.00), or such lesser amount
as equals the Maximum Permitted Balance, and (ii) no more than five (5) LIBOR
Loans may be outstanding at any one time. Interest accrued on each Base Rate
Loan shall be due and payable on
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the first day of the month following the Closing Date, on the first day of each
successive month thereafter, and on the Maturity Date. For each LIBOR Loan,
accrued interest shall be due and payable at the end of each Interest Period
applicable thereto, but in any event no less frequently than at the end of each
three (3) month period during the term of such LIBOR Loan. Except as qualified
above, the outstanding principal balance hereunder may be a Base Rate Loan or
one or more LIBOR Loans, or any combination thereof, as Borrowers shall specify.
c. So long as no Default or Event of Default shall
have occurred and remains continuing, Borrowers may Convert from one Interest
Rate Option to another Interest Rate Option or continue an Interest Rate Option
for another Interest Period by giving irrevocable notice to Agent Bank of such
Conversion by 9:00 a.m., on a day which is at least three (3) Banking Business
Days prior to the proposed date of such Conversion to or Continuation of each
LIBOR Loan or one (1) Banking Business Day prior to the proposed date of such
Conversion to each Base Rate Loan. Each such notice shall be made by an
Authorized Officer by telephone and thereafter immediately confirmed in writing
by delivery to Agent Bank of a Continuation/Conversion Notice specifying the
date of such Conversion or Continuation, the amounts to be so Converted or
Continued and the Interest Period if the Conversion or Continuation is being
made with reference to a LIBOR Loan. Upon receipt of such
Continuation/Conversion Notice, Agent Bank shall promptly set the applicable
interest rate (which in the case of a LIBOR Loan shall be the LIBO Rate plus the
Applicable Margin as of the second Banking Business Day prior to the first day
of the applicable Interest Period) and the applicable Interest Period if the
Conversion or Continuation is being made with reference to a LIBOR Loan and
shall confirm the same in writing to Borrowers and Lenders. Each Conversion
shall be on a Banking Business Day. No LIBOR Loan shall be converted to a Base
Rate Loan or renewed on any day other than the last day of the current Interest
Period relating to such amounts outstanding unless Borrowers pay any applicable
Breakage Charges. If Borrowers fail to give a Continuation/Conversion Notice for
the continuation of a
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LIBOR Loan as a LIBOR Loan for a new Interest Period in accordance with this
Section 2.05(c), such LIBOR Loan shall automatically become a Base Rate Loan at
the end of its then current Interest Period.
d. Each interest period (each individually an
"Interest Period" and collectively the "Interest Periods") for a LIBOR Loan
shall commence on the date such LIBOR Loan is made or the date of Conversion or
Continuation of any amount or amounts of the outstanding Borrowings hereunder to
a LIBOR Loan, as the case may be, and shall end on the date which is one (1),
two (2), three (3) or six (6) months thereafter, as elected by Borrowers.
However, no Interest Period may extend beyond the Maturity Date and no Interest
Period may extend beyond any Reduction Date unless the sum of the aggregate
amount of LIBOR Loans having an Interest Period ending after such Reduction Date
does not exceed the Maximum Permitted Balance after giving effect to the
Scheduled Reduction on such Reduction Date. Each Interest Period for a LIBOR
Loan shall commence and end on a Banking Business Day. If any Interest Period
commences on a date for which there is no corresponding date in the month in
which it is scheduled to end, such Interest Period shall end on the last Banking
Business Day of such month. If any Interest Period would otherwise expire on a
day which is not a Banking Business Day, the Interest Period shall be extended
to expire on the next succeeding Banking Business Day, unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Banking
Business Day.
e. The applicable LIBO Rate and Base Rate shall be
determined by the Agent Bank, and notice thereof shall be given promptly to
Borrowers and Lenders. Each determination of the applicable Base Rate and LIBO
Rate shall be conclusive and binding upon the Borrowers, in the absence of
manifest or demonstrable error. The Agent Bank shall, upon written request of
Borrowers or any Lender, deliver to Borrowers or such Lender, as the case may
be, a
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statement showing the computations used by the Agent Bank in determining
any rate hereunder.
f. Computation of interest on all Base Rate Loans
and LIBOR Loans shall be calculated on the basis of a year of three hundred
sixty (360) days and the actual number of days elapsed. The applicable Base Rate
shall be effective the same day as a change in the Base Rate is announced by WFB
as being effective.
g. If with respect to any Interest Period, (a) the
Agent Bank reasonably determines (which determination shall be binding and
conclusive on Borrowers) that by reason of circumstances affecting the
inter-bank eurodollar market adequate and reasonable means do not exist for
ascertaining the applicable LIBO Rate, or (b) Requisite Lenders advise Agent
Bank that the LIBO Rate as determined by Agent Bank will not adequately and
fairly reflect the cost to such Lenders of maintaining or funding, for such
Interest Period, a LIBOR Loan under the Credit Facility, then so long as such
circumstances shall continue: (i) Agent Bank shall promptly notify Borrowers
thereof, (ii) the Lenders shall not be under any obligation to make a LIBOR Loan
or Convert a Base Rate Loan into a LIBOR Loan for which such circumstances
exist, and (iii) on the last day of the then current Interest Period, the LIBOR
Loan for which such circumstances exist shall, unless then repaid in full,
automatically Convert to a Base Rate Loan.
h. Notwithstanding any other provisions of the
Credit Agreement, if, after the Closing Date, any law, rule, regulation, treaty,
interpretation or directive (whether having the force of law or not) or any
change therein shall make it unlawful for any Lender to make or maintain LIBOR
Loans, then (i) the commitment and agreement to maintain LIBOR Loans as to such
Lender shall immediately be suspended, and (ii) unless required to be terminated
earlier, LIBOR Loans as to such Lender, if any, shall be Converted on the last
day of the then current Interest Period applicable thereto to Base Rate Loans.
If it shall become lawful for such Lender to again maintain LIBOR Loans,
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then Borrowers may once again as to such Lender request Conversions to the LIBO
Rate. During any period of such suspension, such Lender shall make Base Rate
Loans.
i. The Borrowers agree that upon written notice by:
(y) Agent Bank or (z) any Lender to the Borrowers (with a copy of such notice
concurrently delivered to Agent Bank) to the effect that a promissory note or
other evidence of indebtedness is required for such Lender by a Governmental
Authority, banking regulatory agency or regulatory audit in order for such
Lender to evidence (whether for the purposes of pledge, enforcement or
otherwise) the Borrowings owing to, or to be made by, such Lender:
(i) The Borrowers shall promptly execute
and deliver to each Lender a promissory note payable to the
order of each such Lender (each individually a "Replacement
Note" and collectively the "Replacement Notes") in the form of
the Revolving Credit Note in the amount of each Lender's
respective Syndication Interest in the Credit Facility subject
to Scheduled Reductions to be allocated amongst Lenders in
accordance with their respective Syndication Interests;
(ii) The Replacement Notes shall, in the
aggregate, fully replace the Revolving Credit Note and each
reference to the Revolving Credit Note in this Credit
Agreement and each of the Loan Documents shall be deemed to be
a collective reference to the Replacement Notes;
(iii) Borrowings, Interest Rate Options,
Construction/Conversion Notices and all other provisions for
the disbursement of funds, setting of interest rates and
collection of repayments of interest and principal shall
continue to be made by Agent Bank as the administrative and
collateral agent for the Lenders in the same manner and to the
same extent as provided in the Revolving Credit Note
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and this Credit Agreement as fully applicable to each of the
Replacement Notes;
(iv) the Agent Bank, upon the consent of
Requisite Lenders, shall cause the Title Insurance Company to
issue, at the expense of Lenders, such endorsements to the
Title Insurance Policies as may be reasonably necessary to
assure the aggregate obligation evidenced by the Replacement
Notes is secured by the Deed of Trust with the same coverage
and priority as the obligation evidenced by the Revolving
Credit Note; and
(v) Concurrently with the delivery of the
Replacement Notes, Agent Bank shall return the original
Revolving Credit Note to Borrower marked as superseded and
replaced by the Replacement Notes.
Section 2.06. SECURITY FOR THE CREDIT FACILITY. As security
for the due and punctual payment and performance of the terms and provisions of
this Credit Agreement, the Revolving Credit Note and all of the other Loan
Documents, the Security Documentation shall be executed and delivered to Agent
Bank, as of the Closing Date, by the respective parties to each of the Security
Documentation and recorded and/or filed as required by the Closing Instructions.
Section 2.07. PLACE AND MANNER OF PAYMENT.
a. All amounts payable by Borrowers to the Lenders
shall be made to Agent Bank on behalf of Lenders pursuant to the terms of the
Credit Agreement and the Revolving Credit Note and shall be made on a Banking
Business Day in lawful money of the United States of America and in immediately
available funds. Other than in connection with: (i) the Scheduled Reductions of
principal, or (ii) principal payments which may be required to decrease the
Funded Outstandings to an amount equal to or less than the Maximum Permitted
Balance, Borrowers shall not make repayments ("Principal Prepayments") of the
outstanding
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balance of principal owing under the Revolving Credit Note more frequently than
three (3) such Principal Prepayments during each calendar month. Each such
Principal Prepayment of a Base Rate Loan shall be in a minimum amount of One
Million Dollars ($1,000,000.00) (or, if less, the outstanding principal amount
of Base Rate Loans) and in increments of One Hundred Thousand Dollars
($100,000.00) in excess thereof. Each such Principal Prepayment of a LIBOR Loan
shall be in a minimum amount of Five Million Dollars ($5,000,000.00) and in
increments of One Million Dollars ($1,000,000.00) in excess thereof; provided,
that in no event shall any outstanding LIBOR Loan have a principal balance of
less then Five Million Dollars ($5,000,000.00).
b. All such amounts payable by Borrowers shall be
made to Agent Bank at its office located at Wells Fargo Bank, Syndications
Division, 201 Third Street, Eighth Floor, San Francisco, California 94103, or at
such other address as may be directed in writing by Agent Bank from time to
time. If such payment is received by Agent Bank prior to 11:00 a.m., Agent Bank
shall credit Borrowers with such payment on the day so received and shall
promptly disburse to the appropriate Lenders on the same day the Pro Rata Share
of payments relating to the Credit Facility, in immediately available funds. If
such payment is received by Agent Bank after 11:00 a.m., Agent Bank shall credit
Borrowers with such payment as of the next Banking Business Day and disburse to
the appropriate Lenders on the next Banking Business Day such Pro Rata Share of
such payment relating to the Credit Facility in immediately available funds. Any
payment on the Credit Facility made by Borrowers to Agent Bank pursuant to the
terms of this Credit Agreement or the Revolving Credit Note for the account of
Lenders shall constitute payment to the appropriate Lenders. If the Revolving
Credit Note or any payment required to be made thereon or hereunder, is or
becomes due and payable on a day other than a Banking Business Day, the due date
thereof shall be extended to the next succeeding Banking Business Day and
interest thereon shall be payable at the then applicable rate during such
extension.
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c. Subject to Section 2.07(a), the outstanding
principal owing under the Credit Facility and the Revolving Credit Note may be
prepaid at any time in whole or in part without penalty; provided, however, that
any portion or portions of the unpaid principal balance which is accruing
interest at a LIBO Rate may only be prepaid or repaid on the last day of the
applicable Interest Period unless Borrowers give three (3) days prior written
notice to Agent Bank and additionally pay concurrently with such prepayment or
repayment such additional amount or amounts as will compensate Lenders for any
losses, costs or expenses which they may incur as a result of such payment,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund or maintain such LIBOR Loan ("Breakage
Charges"). A certificate of a Lender as to amounts payable hereunder shall be
conclusive and binding on Borrowers for all purposes, absent manifest or
demonstrable error. Any calculation hereunder shall be made on the assumption
that each Lender has funded or will fund each LIBOR Loan in the London interbank
market; PROVIDED that no Lender shall have any obligation to actually fund any
LIBOR Loan in such manner.
d. Unless the Agent Bank receives notice from an
Authorized Officer prior to the date on which any payment is due to the Lenders
that the Borrowers will not make such payment in full as and when required, the
Agent Bank may assume that the Borrowers have made such payment in full to the
Agent Bank on such date in immediately available funds and the Agent Bank may
(but shall not be so required), in reliance upon such assumption, distribute to
each Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent the Borrowers have not made such payment in full to the
Agent Bank, each Lender shall repay to the Agent Bank on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Lender until
the date repaid.
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e. If, other than as expressly provided elsewhere
herein, any Lender shall obtain any payment with respect to the Credit Facility
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its Syndication Interest, such Lender shall
immediately (a) notify the Agent Bank of such fact, and (b) purchase from the
other Lenders such participations in the Credit Facility as shall be necessary
to cause such purchasing Lender to share the excess payment with each of them in
proportion to their respective Syndication Interests; PROVIDED, however, that if
all or any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and each
other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's ratable share
(according to the proportion of (i) the amount of such paying Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrowers agree that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation. The Agent Bank will keep records
(which shall be conclusive and binding in the absence of manifest or
demonstrable error) of each participation purchased under this section and will
in each case notify the Lenders following any such purchases or repayments.
Section 2.08. FEES.
a. On the Closing Date and on each other applicable
date, Borrowers shall pay the fees as required in the Fee Side Letter, each of
such fees to be retained by Agent Bank or distributed to Lenders as agreed
between Agent Bank and each Lender.
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b. Commencing on the Closing Date, Borrowers shall
be obligated to pay a quarterly nonusage fee (the "Nonusage Fee") to the Agent
Bank for the account of Lenders in the proportions of their respective
Syndication Interests calculated at the rate of one-half of one percent (.50%)
per annum from the Closing Date until the Rate Adjustment Date and on and after
the Rate Adjustment Date based on the Leverage Ratio, in each case determined as
of the end of the immediately prior Fiscal Quarter with reference to the
Borrower Consolidation, in accordance with the following schedule:
<TABLE>
<CAPTION>
LEVERAGE NONUSAGE
RATIO PERCENTAGE
<S> <C>
Greater than 2.5 to 1.0 .500%
Equal to or
less than 2.5 to 1.0 .375%
</TABLE>
The Nonusage Fee shall begin to accrue on the Closing Date and shall be
calculated as of the last day of each Fiscal Quarter thereafter occurring as the
product of (i) .50% commencing as of the Closing Date and continuing until the
Rate Adjustment Date, and on and after the Rate Adjustment Date the applicable
Nonusage Percentage determined as set forth above, multiplied by (ii) as of the
end of such Fiscal Quarter, the daily average during such Fiscal Quarter (except
with respect to the Fiscal Quarter in which the Closing Date occurs, which shall
be calculated with reference to the daily average during such Fiscal Quarter
only for those number of days following the Closing Date) of the Maximum
Permitted Balance less the daily average during such Fiscal Quarter of the
Funded Outstandings, all on the basis of a three hundred sixty (360) day year.
Each Nonusage Fee shall be payable in arrears on a quarterly basis on or before
the Rate Adjustment Date and thereafter on or before the first (1st) day of the
third (3rd) month following the end of each Fiscal Quarter commencing with the
Fiscal Quarter in which the Closing Date occurs, and upon termination of this
Credit Agreement, whether at maturity, by acceleration or otherwise. Each
Nonusage Fee shall be promptly distributed by Agent Bank to Lenders in
proportion to their respective Syndication Interests in the Credit Facility.
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Section 2.09. LATE CHARGES AND DEFAULT RATE.
a. If any payment due under the Revolving Credit
Note is not paid within three (3) Banking Business Days after receipt by
Borrowers of written notice of such nonpayment from Agent Bank, Borrowers
promise to pay a late charge in the amount of three percent (3%) of the amount
of such delinquent payment and Agent Bank need not accept any late payment made
unless it is accompanied by such three percent (3%) late payment charge. Any
late charge shall be paid to Lenders in proportion to their respective
Syndication Interests.
b. In the event of the existence of an Event of
Default, commencing on the first (1st) Banking Business Day following the
receipt by Borrowers of written notice of the occurrence of such Event of
Default from Agent Bank, the total of the unpaid balance of the principal and
the then accrued and unpaid interest owing under the Revolving Credit Note shall
commence accruing interest at a rate equal to two percent (2.0%) over the
interest rate otherwise applicable to the Revolving Credit Note (the "Default
Rate") until all Events of Default which may exist have been cured, at which
time the interest rate shall revert to the rate of interest otherwise accruing
pursuant to the terms of the Revolving Credit Note.
c. In the event of the occurrence of an Event of
Default, Borrowers agree to pay all reasonable costs of collection, including
the reasonable attorneys' fees incurred by Agent Bank, in addition to and at the
time of the payment of such sum of money and/or the performance of such acts as
may be required to cure such Event of Default. In the event legal action is
commenced for the collection of any sums owing hereunder or under the terms of
the Revolving Credit Note, the Borrowers agree that any judgment issued as a
consequence of such action against Borrowers shall bear interest at a rate equal
to the Default Rate until fully paid.
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Section 2.10. NET PAYMENTS. All payments under this Credit
Agreement and/or the Revolving Credit Note shall be made without set-off,
counterclaim, recoupment or defense of any kind and in such amounts as may be
necessary in order that all such payments, after deduction or withholding for or
on account of any future taxes, levies, imposts, duties or other charges of
whatsoever nature imposed by the United States or any Governmental Authority,
other than franchise taxes or any tax on or measured by the gross receipts or
overall net income of any Lender pursuant to the income tax laws of the United
States or any State, or the jurisdiction where each Lender's principal office is
located (collectively "Taxes"), shall not be less than the amounts otherwise
specified to be paid under this Credit Agreement and the Revolving Credit Note.
A certificate as to any additional amounts payable to the Lenders under this
Section 2.10 submitted to the Borrowers by the Lenders shall show in reasonable
detail an accounting of the amount payable and the calculations used to
determine in good faith such amount and shall be conclusive absent manifest or
demonstrable error. Any amounts payable by the Borrowers under this Section 2.10
with respect to past payments shall be due within ten (10) days following
receipt by the Borrowers of such certificate from the Lenders; any such amounts
payable with respect to future payments shall be due within ten (10) days after
demand with such future payments. With respect to each deduction or withholding
for or on account of any Taxes, the Borrowers shall promptly furnish to the
Lenders such certificates, receipts and other documents as may be required (in
the reasonable judgment of the Lenders) to establish any tax credit to which the
Lenders may be entitled.
Section 2.11. INCREASED COSTS. If after the date hereof the
adoption of, or any change in, any applicable law, rule or regulation (including
without limitation Regulation D of the Board of Governors of the Federal Reserve
System and any successor thereto), or any change 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 with any future request or
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future directive (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency:
a. Shall subject any Lender to any tax, duty or
other charge with respect to the Credit Facility and/or the Revolving Credit
Note or such Lender's obligation to make any funding of the Credit Facility, or
shall change the basis of taxation of payments to such Lender of the principal
of, or interest on, the Credit Facility or any other amounts due under the
Revolving Credit Note in respect of the Credit Facility or such Lender's
obligation to fund the Credit Facility (except for changes in the rate of tax on
the overall net income of such Lender imposed by the United States or any
Governmental Authority pursuant to the income tax laws of the United States or
any State, or the jurisdiction where each Lender's principal office is located);
or
b. With respect to the Credit Facility or the
obligation of the Lenders to advance Borrowings under the Credit Facility shall
impose, modify or deem applicable any reserve imposed by the Board of Governors
of the Federal Reserve System, special deposit, capitalization, capital adequacy
or similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender; or
c. Shall impose on any Lender any other condition
affecting the Credit Facility, the Revolving Credit Note or such Lender's
obligation to advance Borrowings under the Credit Facility;
and the result of any of the foregoing, as set forth in subsections (a), (b) or
(c) is to increase the cost to (or in the case of Regulation D or reserve
requirements referred to above or a successor thereto, to impose a cost on) such
Lender of making or maintaining the Credit Facility, or to reduce the amount of
any sum or rate of return received or receivable by such Lender under the
Revolving Credit Note, then within ten (10) days after demand by such Lender
(which demand shall
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be accompanied by a certificate setting forth the basis of such demand), the
Borrowers shall pay directly to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost (or in the case of
Regulation D or reserve requirements referred to above or a successor thereto,
such costs which may be imposed upon such Lender) or such reduction of any sum
or rate of return received or receivable under the Revolving Credit Note less
the amount, if any, of the reduction of the Lenders' tax liability to another
taxing authority resulting from the payment of such taxes. A certificate as to
any additional amounts payable to any Lender under this Section 2.11 submitted
to the Borrowers by such Lender shall show in reasonable detail an accounting of
the amount payable and the calculations used to determine in good faith such
amount and shall be conclusive absent manifest or demonstrable error.
Section 2.12. MITIGATION; EXCULPATION.
a. Each Lender agrees that it will promptly notify
the Borrowers in writing upon its becoming aware that any payments are to become
due to it under this Credit Agreement pursuant to Section 2.10 or 2.11. Each
Lender further agrees that it will use reasonable efforts not materially
disadvantageous to it (in its reasonable determination) in order to avoid or
minimize, as the case may be, the payment by the Borrowers of any additional
amounts pursuant to Section 2.10 or 2.11. Each Lender represents, to the best of
its knowledge, that as of the Closing Date no such amounts are payable to it.
b. Borrowers shall not be liable to any Lender for
any payments under Section 2.10 or 2.11 arising to the extent of such Lender's
gross negligence or wilful misconduct or breach of any laws (other than as a
result of Borrowers' breach), or for amounts which were incurred more than
ninety (90) days prior to the date Borrowers are notified of the incurrence of
such amount.
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ARTICLE III.
CONDITIONS PRECEDENT TO THE CLOSING DATE
A. CLOSING CONDITIONS. The obligation of each of the Banks to
fund any Closing Disbursement under the Credit Facility is subject to the
following conditions precedent, each of which shall be satisfied on or before
December 31, 1999 (unless all of the Banks, in their sole and absolute
discretion, shall agree otherwise). The occurrence of the Closing Date is
subject to and contingent upon Agent Bank having received, in each case in form
and substance reasonably satisfactory to Agent Bank, or in the case of an
occurrence, action or event, the occurrence of, each of the following:
Section 3.01. CREDIT AGREEMENT. Executed counterparts of
this Credit Agreement in sufficient duplicate originals for Borrowers and
each of the Banks.
Section 3.02. THE REVOLVING CREDIT NOTE. The Revolving Credit
Note duly executed by the Borrowers, payable to the order of Agent Bank, on
behalf of the Lenders.
Section 3.03. SECURITY DOCUMENTATION. The Security
Documentation duly executed by each applicable Borrowers or other party thereto,
consisting of the following:
WITH RESPECT TO THE MPI HOTEL/CASINO FACILITIES
a. MPI Deed of Trust;
b. MPI Financing Statements;
c. MPI Assignment of Entitlements, Contracts, Rents
and Revenues;
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d. Woodview Hillis Estoppel Certificate; and
e. Woodview Citizens Bank Estoppel.
WITH RESPECT TO THE SGLVI HOTEL/CASINO FACILITY
f. SGLVI Deed of Trust;
g. SGLVI Financing Statements; and
h. SGLVI Assignment of Entitlements, Contracts,
Rents and Revenues;
WITH RESPECT TO THE SGRI HOTEL/CASINO FACILITY
i. SGRI Deed of Trust;
j. SGRI Financing Statements; and
k. SGRI Assignment of Entitlements, Contracts, Rents
and Revenues.
WITH RESPECT TO THE HOTEL/CASINO FACILITIES AND
BORROWERS
l. Stock Pledge of all issued and outstanding stock
of MPI, together with the delivery to Agent Bank, or into an escrow pending
approval of the West Virginia Gaming Authorities, if such approval is required,
of an Irrevocable Stock Power and the originals of all stock certificates which
are pledged thereunder;
m. Stock Pledge of all issued and outstanding stock
of SGLVI, together with the delivery to Agent Bank, or into an escrow pending
approval of the Nevada Gaming Authorities, of an Irrevocable Stock Power and the
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originals of all stock certificates which are pledged thereunder;
n. Stock Pledge of all issued and outstanding stock
of SGRI, together with the delivery to Agent Bank of an Irrevocable Stock Power
and the originals of all stock certificates which are pledged thereunder;
o. MTRI Security Agreement;
p. MTRI Financing Statements;
q. Trademark Security Agreement.
Section 3.04. OTHER LOAN DOCUMENTS. The following Loan
Documents duly executed by Borrowers and each other applicable party thereto
consisting of the following:
a. Environmental Certificate.
Section 3.05. ARTICLES OF INCORPORATION, BYLAWS, CORPORATE
RESOLUTIONS, CERTIFICATES OF GOOD STANDING AND CLOSING CERTIFICATE. On or before
the Closing Date, Agent Bank shall have received from each of the Borrowers: (i)
a Certificate of Good Standing issued by the Secretary of State of the
applicable state of incorporation and dated within thirty (30) Banking Business
Days of the Closing Date, (ii) a copy of the articles of incorporation and
by-laws certified to be true and correct by a duly Authorized Officer of each
respective Borrower, (iii) an original Certificate of Corporate Resolution and
Certificate of Incumbency executed by the Secretary of each respective Borrower
and attested to by its President, Vice President, or Treasurer authorizing
Borrowers to enter into all documents and
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agreements to be executed by it pursuant to this Credit Agreement and further
authorizing and empowering the officer or officers who will execute such
documents and agreements with the authority and power to execute such documents
and agreements on behalf of each respective Borrower, (iv) designation by
corporate certificate ("Authorized Officer Certificate"), substantially in the
form of the Authorized Officer Certificate marked "Exhibit F", affixed hereto
and by this reference incorporated herein and made a part hereof, of the
officers of each respective Borrower who are authorized to give Notices of
Borrowing, Continuation/ Conversion Notices, Pricing Certificates, Compliance
Certificates and all other notices, requests, reports, consents, certifications
and authorizations on behalf of each of the Borrowers and the Borrower
Consolidation, each individually an "Authorized Officer" and collectively the
"Authorized Officers", and (v) an original closing certificate ("Closing
Certificate"), substantially in the form of the Closing Certificate marked
"Exhibit G", affixed hereto and by this reference incorporated herein and made a
part hereof, duly executed by an Authorized Officer of Borrowers.
Section 3.06. OPINION OF COUNSEL. One or more opinions of
counsel to the Borrowers, dated as of the Closing Date and addressed to the
Agent Bank on behalf of itself and each of the Banks, together with their
respective successors and assigns, substantially in the form of the legal
opinion marked "Exhibit I", affixed hereto and by this reference incorporated
herein and made a part hereof.
Section 3.07. TITLE INSURANCE POLICIES. As of the Closing
Date, the Title Insurance Policies (or proforma commitment for the issuance
thereof) consistent with the requirements of the Closing Instructions.
Section 3.08. SURVEY. If required by Title Insurance Company
as a condition for the issuance of the MPI Title Insurance Policy, a current
boundary and location survey for the MPI Real Property, subject to exceptions
approved by Lenders prior to the Closing Date, delivered to Agent Bank no less
than ten (10) Banking Business Days prior to the Closing Date, which, if so
required, must (a) be certified to Agent Bank and the MPI Title Insurance
Company,
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(b) show the MPI Real Property to be free of encroachments, overlaps, and other
survey defects, (c) show the courses and distances of the lot lines for the MPI
Real Property, (d) show that all existing improvements are located within said
lot and building lines, and (e) show the location of all above and below ground
easements, improvements, appurtenances, utilities, rights-of-way, water rights
and ingress and egress, by reference to book and page numbers and/or filed map
reference. On or before the Closing Date, Borrowers shall comply with all other
survey requirements of Title Insurance Companies for the issuance of the Title
Insurance Policies without reference to any exception of title based on any
survey requirement.
Section 3.09. PAYMENT OF TAXES. Evidence satisfactory to Agent
Bank that all past and current real and personal property taxes and assessments
which are presently due and payable applicable to the Collateral Properties have
been paid in full.
Section 3.10. INSURANCE. Copies of declaration pages of each
insurance policy, certified to be true and correct in all respects by an
Authorized Officer of Borrowers, together with original binders evidencing
Borrowers as the named insured, and original certificates of insurance, loss
payee and mortgagee endorsements naming Agent Bank as mortgagee, loss payee and
additional insured as required by the insurance provisions set forth in Section
5.09 of this Credit Agreement.
Section 3.11. PAYMENT OF FEES AND EXISTING SECURED LOAN.
Payment by Borrowers to Agent Bank of the fees to the extent then due and
payable on the Closing Date as provided in Section 2.10(a) hereinabove. Payment
in full of the Existing Secured Loan from the Closing Disbursement and other
funds of the Borrower Consolidation. As of the Closing Date, all Existing
Secured Loan Security Documents shall be fully released and reconveyed.
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Section 3.12. REIMBURSEMENT FOR EXPENSES AND FEES.
Reimbursement by Borrowers for all reasonable fees and out-of-pocket expenses
incurred by Agent Bank in connection with the Credit Facility, excluding,
however, all Syndication Costs, but including, but not limited to, escrow
charges, title insurance premiums, environmental examinations, recording fees,
appraisal fees, reasonable attorney's fees of Henderson & Morgan, LLC and
insurance consultant fees, and all other like fees and expenses remaining unpaid
as of the Closing Date to the extent then due and payable on the Closing Date,
provided that the amount then invoiced shall not thereafter preclude Borrowers'
obligation to pay such costs and expenses relating to the closing of the Credit
Facility following the Closing Date or to reimburse Agent Bank for the payment
thereof.
Section 3.13. SCHEDULES OF SPACELEASES AND EQUIPMENT LEASES
AND CONTRACTS. The Schedules of Spaceleases (Schedules 4.15(A), (B) and (C)) and
Equipment Leases and Contracts (Schedules 4.16(A), (B) and (C)) in each instance
setting forth the name of the other party thereto, a brief description of each
spacelease, equipment lease and contract and the commencement and ending date
thereof.
Section 3.14. PHASE I ENVIRONMENTAL SITE ASSESSMENTS.
a. A Phase I Environmental Site Assessment or
Assessments of the Collateral Properties prepared in conformance with the scope
and limitations of ASTM Standard Designation E1527-93 and approved by Agent
Bank. Any recommended action shall have been completed by Borrowers.
b. Borrowers hereby confirm the representations
contained in Sections 2.1 and 2.2 of the Environmental Certificate are true and
correct in all respects.
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Section 3.15. EVIDENCE OF RIGHT TO OCCUPANCY OF COLLATERAL
PROPERTIES. A copy of the permanent certificate of occupancy issued by each
applicable Governmental Authority, evidencing the right of the Borrower
Consolidation to use and hold open for the use and occupancy of the public of
the Hotel/Casino Facilities.
Section 3.16. GAMING PERMITS. Copies of those Gaming Permits
issued by each applicable Gaming Authority evidencing the right of the Borrower
Consolidation to conduct pari-mutuel wagering on live horseracing and simulcast
horse and greyhound racing at the MPI Hotel/Casino Facilities and to conduct
gaming activities and games of chance at each of the Hotel/Casino Facilities.
Section 3.17. FINANCIAL STATEMENTS. Audited financial
statements of the Borrower Consolidation for the most recently ended Fiscal
Year, to the extent the same have been prepared and are available.
Section 3.18. SCHEDULE OF ALL SIGNIFICANT LITIGATION. A
Schedule of Significant Litigation (Schedule 3.18) involving any member of the
Borrower Consolidation, in each instance setting forth the names of the other
parties thereto, a brief description of such litigation, whether or not such
litigation is covered by insurance and, if so, whether the defense thereof and
liability therefor has been accepted by the applicable insurance company
indicating whether such acceptance of such defenses with or without a
reservation of rights, the commencement date of such litigation and the amount
sought to be recovered by the adverse parties thereto or the amount which is
otherwise in controversy.
Section 3.19. NO INJUNCTION OR OTHER LITIGATION. No law or
regulation shall prohibit, and no order, judgment or decree of any Governmental
Authority shall, and no litigation shall be pending or threatened which in the
reasonable judgment of the Agent Bank would or would reasonably be expected to,
enjoin, prohibit, limit or
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restrain the execution and delivery of this Credit Agreement or the making of
any advance under the Credit Facility.
Section 3.20. ADDITIONAL DOCUMENTS AND STATEMENTS. As of the
Closing Date such additional documents, affidavits, certificates and opinions as
Requisite Lenders may reasonably require to insure compliance with this Credit
Agreement. The statements set forth in Section 3.23 shall be true and correct.
Section 3.21. WOODVIEW LOAN DOCUMENTS AND LOGAN PURCHASE
AGREEMENTS.
a. A true and correct copy of the Woodview Loan
Documents and of all amendments and modifications thereto; and
b. A true and correct copy of the Logan Purchase
Agreements and of all amendments and modifications thereto.
B. CONDITIONS PRECEDENT TO ALL BORROWINGS. The obligation of
each Lender and Agent Bank to make any Borrowing requested to be made on any
Funding Date is subject to the occurrence of each of the following conditions
precedent as of such Funding Date:
Section 3.22. NOTICE OF BORROWING. With respect to any
Borrowing, the Agent Bank shall have received in accordance with Section 2.03
on or before such Funding Date an original and duly executed Notice of
Borrowing or facsimile copy thereof, to be promptly followed by an original.
Section 3.23. CERTAIN STATEMENTS. On the Closing Date and as
of the Funding Date the following statements shall be true and correct:
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a. The representations and warranties with respect
to the Borrowers contained in Article IV hereof (other than representations and
warranties which expressly speak only as of a different date which shall be true
and correct as of such date) are true and correct on and as of the Funding Date
and as of the Closing Date in all material respects as though made on and as of
that date, except to the extent that such representations and warranties are not
true and correct as a result of a change which is permitted by this Credit
Agreement or by any other Loan Document, or which is otherwise consented to by
Requisite Lenders;
b. The representations and certifications contained
in the Environmental Certificate are true and correct in all material respects
(other than representations and warranties which expressly speak only as of a
different date which shall be true and correct as of such date);
c. Since the date of the most recent financial
statements referred to in Section 3.17 and 5.08(b), no Material Adverse Change
shall have occurred; and
d. No event has occurred or as a result of any
Borrowings contemplated hereby would occur and is continuing, or would result
from the making thereof, which constitutes a Default or Event of Default
hereunder.
Section 3.24. GAMING PERMITS. The Borrower Consolidation shall
have all Gaming Permits material to or required for the conduct of its gaming
businesses and the conduct of games of chance at the Hotel/Casino Facilities and
such Gaming Permits shall not then be suspended, enjoined or prohibited (for any
length of time) by any Gaming Authority or any other Governmental Authority.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
To induce Banks to enter into this Credit Agreement, Borrowers
make the following representations and warranties:
Section 4.01. ORGANIZATION; POWER AND AUTHORIZATION. MTRI is a
corporation duly organized and validly existing under the laws of the State of
Delaware. SGLVI and SGRI are each a corporation duly organized and validly
existing under the laws of the State of Nevada. MPI is a corporation duly
organized and validly existing under the laws of the State of West Virginia.
Each Borrower (i) has all requisite corporate power, authority and legal right
to execute and deliver each document, agreement or certificate to which it is a
party or by which it is bound in connection with the Credit Facility, to
consummate the transactions and perform its obligations hereunder and
thereunder, and to own its properties and assets and to carry on and conduct its
business as presently conducted or proposed to be conducted, and (ii) has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Credit Agreement and the other Loan Documents to which it is
a party or by which it is bound and to consummate the transactions contemplated
hereunder and thereunder.
Section 4.02. NO CONFLICT WITH, VIOLATION OF OR DEFAULT UNDER
LAWS OR OTHER AGREEMENTS. Neither the execution and delivery of this Credit
Agreement, the Revolving Credit Note or any other Loan Document, or any other
agreement, certificate or instrument to which any Borrower is a party or by
which it is bound in connection with the Credit Facility, nor the consummation
of the transactions contemplated hereunder or thereunder, nor the compliance
with or performance of the terms and conditions herein or therein, is prevented
by, limited by, conflicts in any material respect with, or will result in a
material breach or violation of, or a material default (with due notice or lapse
of time or both) under, or the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever upon any of their respective property or
assets by virtue of, the terms, conditions or provisions of (a) any
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indenture, evidence of indebtedness, loan or financing agreement, or other
agreement or instrument of whatever nature to which any Borrower is bound, or
(b) any provision of any existing law, rule, regulation, order, writ, injunction
or decree of any court or Governmental Authority to which Borrowers are subject.
Section 4.03. LITIGATION. Except as disclosed on the Schedule
of Significant Litigation delivered in connection with Section 3.18, to the best
knowledge of Borrowers, after due inquiry and investigation, there is no action,
suit, proceeding, inquiry, hearing or investigation pending or threatened, in
any court of law or in equity, or before any Governmental Authority, which
reasonably would be expected to (a) result in any Material Adverse Change in the
operation of the Hotel/Casino Facilities or in its business, financial
condition, properties or operations, (b) materially adversely affect the
Borrowers' ability to perform their respective obligations under the Credit
Agreement and the other Loan Documents, or (c) materially adversely affect the
validity or enforceability of this Credit Agreement and the other Loan
Documents. To the best knowledge of Borrowers, after due inquiry and
investigation, no Borrower is in violation of or default with respect to any
order, writ, injunction, decree or demand of any Governmental Authority.
Section 4.04. AGREEMENTS LEGAL, BINDING, VALID AND
ENFORCEABLE. This Credit Agreement, the Revolving Credit Note, the Security
Documentation and all other Loan Documents, when executed and delivered by
Borrowers in connection with the Credit Facility will constitute legal, valid
and binding obligations of Borrowers, enforceable against Borrowers in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
relating to or affecting the enforcement of creditors' rights and the exercise
of judicial discretion in accordance with general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
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Section 4.05. INFORMATION AND FINANCIAL DATA ACCURATE;
FINANCIAL STATEMENTS; NO ADVERSE EVENT. To the best of Borrowers' knowledge,
information and belief, all information and financial and other data previously
furnished in writing by Borrowers in connection with the Credit Facility was
true, correct and complete in all material respects as of the date furnished
(unless subsequently corrected prior to the date hereof), and there has been no
Material Adverse Change with respect thereto to the date of this Credit
Agreement since the dates thereof. No information has been omitted which would
make the information previously furnished in such financial statements to Banks
misleading or incorrect in any material respect to the date of this Credit
Agreement. Any and all financial statements heretofore furnished to Banks by
Borrowers: (a) present fairly the financial position of Borrowers as of their
respective dates and the results of operations and changes in financial position
for the periods to which they apply, and (b) have been prepared in conformity
with GAAP applied on a consistent basis throughout the periods involved. Since
the date of the financial statements referred to in this Section 4.05, there has
been no Material Adverse Change in the financial condition, assets, liabilities,
business or operations of Borrowers.
Section 4.06. GOVERNMENTAL APPROVALS. All timely consents,
approvals, orders or authorizations of, or registrations, declarations, notices
or filings with any Governmental Authority which are required in connection with
the valid execution and delivery of this Credit Agreement and the other Loan
Documents by Borrowers and the carry-out or performance of any of the
transactions required or contemplated hereunder, or thereunder, by Borrowers,
have been obtained or accomplished and are in full force and effect, or can be
obtained or accomplished by Borrowers. To the best of Borrowers' knowledge, all
timely consents, approvals, orders or authorizations of, or registrations,
declarations, notices or filings with any Governmental Authority which are
required by Borrowers in connection with the use and operation of the
Hotel/Casino Facilities have
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been obtained or accomplished and are in full force and effect.
Section 4.07. PAYMENT OF TAXES. To the best of Borrowers'
knowledge, Borrowers have duly filed or caused to be filed all federal, state
and local tax reports and returns which are required to be filed by them and
have paid or made provisions for the payment of, all material taxes,
assessments, fees and other governmental charges which have or may have become
due pursuant to said returns or otherwise pursuant to any assessment received by
Borrowers except such taxes, assessments, fees or other governmental charges, if
any, as are being contested in good faith by Borrowers by appropriate
proceedings and for which Borrowers have maintained adequate reserves for the
payment thereof in accordance with GAAP.
Section 4.08. TITLE TO PROPERTIES. To the best of Borrowers'
knowledge, Borrowers shall have good and marketable title to the Collateral
Properties as of the Closing Date and at all times during the term of the Credit
Facility (including, without limitation, the Logan Primary Parcel subsequent to
the Logan Primary Parcel Closing and the Logan Filly Parcel subsequent to the
Logan Filly Parcel Closing). Each of the Borrowers has good and marketable title
to: (a) all of its properties and assets reflected in the most recent financial
statements referred to in Section 4.05 hereof as owned by them (except those
properties and assets disposed of since the date of said financial statements in
the ordinary course of business or those properties and assets which are no
longer used or useful in the conduct of its businesses), including, but not
limited to, Borrowers' interest in patents, trademarks, tradenames,
servicemarks, and licenses relating to or pertaining to the Collateral
Properties or the Hotel/Casino Facilities, and (b) all properties and assets
acquired by them subsequent to the date of the most recent financial statements
referred to in Section 4.05 hereof. All such properties and assets are not
subject to any liens, encumbrances or restrictions except Permitted
Encumbrances. All roads, easements and
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rights of way necessary for the full utilization of the Collateral Properties
have been completed and/or obtained.
Section 4.09. NO UNTRUE STATEMENTS. To the best of Borrowers'
knowledge, all statements, representations and warranties made by Borrowers in
this Credit Agreement, any other Loan Document and any other agreement,
document, certificate or instrument previously furnished or to be furnished by
Borrowers to Banks pursuant to the provisions of this Credit Agreement, at the
time they were made and on and as of the Closing Date: (a) are and shall be
true, correct and complete in all material respects, (b) do not and shall not
contain any untrue statement of a material fact, and (c) do not and shall not
omit to state a material fact, the absence of which makes the information
contained herein or therein materially misleading or incomplete. Borrowers
understand that all such statements, representations and warranties shall be
deemed to have been relied upon by Banks as a material inducement to establish
the Credit Facility.
Section 4.10. BROKERAGE COMMISSIONS. Other than with respect
to the fees to be paid by Borrowers to Friedman, Billings and Ramsey, no person
is entitled to receive any brokerage commission, finder's fee or similar fee or
payment in connection with the extensions of credit contemplated by this Credit
Agreement. No brokerage or other fee, commission or compensation is to be paid
by Banks with respect to the extensions of credit contemplated hereby and
Borrowers agree to indemnify Banks against any such claims for brokerage fees or
commissions and to pay all expenses including, without limitation, reasonable
attorney's fees incurred by Banks in connection with the defense of any action
or proceeding brought to collect any such brokerage fees or commissions.
Section 4.11. NO DEFAULTS. No Borrower has received any
notice, declaration or similar correspondence or communication, oral or written,
evidencing, declaring or claiming a violation of any applicable law and/or
regulations, the violation of which materially and adversely
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affects the business, financial condition or operations of the Hotel/Casino
Facilities. Borrowers are not in violation or default (nor is there any waiver
in effect which, if not in effect, would result in a violation or default) in
any material and adverse respect under any indenture, evidence of indebtedness,
loan or financing agreement or other agreement or instrument of whatever nature
to which they are a party or by which they are bound (except for any defaults
previously brought to Banks' attention in writing, for which Borrowers have
received a waiver from Requisite Lenders), a default under which would
reasonably be expected to result in a Material Adverse Change.
Section 4.12. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.
No Reportable Event has occurred and is continuing with respect to any Pension
Plan under ERISA, that gives rise to liabilities that would constitute a
Material Adverse Change.
Section 4.13. AVAILABILITY OF UTILITY SERVICES. All utility
services and facilities necessary for the Hotel/Casino Facilities and the
Collateral Properties including, without limitation, electrical, water, gas and
sewage services and facilities are available at the boundaries of the Collateral
Properties.
Section 4.14. POLICIES OF INSURANCE. As of the Closing Date,
each of the copies of the declaration pages, original binders and certificates
of insurance evidencing the Policies of Insurance relating to the Hotel/Casino
Facilities delivered to Agent Bank by Borrowers (i) 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 any of said documents or
instruments not included in such copies have been made, and (ii) has not been
terminated and is in full force and effect. Borrowers are not in default in the
observance or performance of their respective obligations under said documents
and instruments, and Borrowers have done all things required to be done as of
the Closing Date to keep unimpaired their respective rights thereunder.
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Section 4.15. SPACELEASES. Schedules of all executed
Spaceleases pertaining to the Hotel/Casino Facilities, or any portion thereof,
in existence as of the Closing Date, are set forth on Schedules 4.15(A), (B) and
(C) attached hereto.
Section 4.16. EQUIPMENT LEASES AND CONTRACTS. Schedules of all
executed Equipment Leases and Contracts pertaining to the Hotel/Casino
Facilities or any portion thereof, in existence as of the Closing Date, are set
forth on Schedules 4.16 (A), (B) and (C) attached hereto.
Section 4.17. GAMING PERMITS AND APPROVALS. All Gaming Permits
required to be held by Borrowers are current and in good standing and Borrowers
presently hold all Gaming Permits necessary for the continued operation of the
Hotel/Casino Facilities.
Section 4.18. ENVIRONMENTAL CERTIFICATE. The representations
and certifications contained in the Environmental Certificate are true and
correct in all material respects.
Section 4.19. INVESTMENT COMPANY ACT. Each Borrower is neither
an "investment company" nor a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Section 4.20. PUBLIC UTILITY HOLDING COMPANY ACT. Each
Borrower is neither a "holding company," nor a "subsidiary company" of a
"holding company," nor an "affiliate" of a "holding company" nor of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 4.21. LABOR RELATIONS. There is no strike or work
stoppage in existence, or to the best knowledge of Borrowers threatened,
involving any Borrower or
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the Hotel/Casino Facilities that reasonably would be expected to result in a
Material Adverse Change.
Section 4.22. TRADEMARKS, PATENTS, LICENSES, FRANCHISES,
FORMULAS AND COPYRIGHTS. Except as disclosed in Schedule 4.22, each of the
Borrowers owns all the patents, trademarks, permits, service marks, trade names,
copyrights, licenses, franchises and formulas, or has a valid license or
sublicense of rights with respect to the foregoing, and has obtained assignments
of all leases and other rights of whatever nature, necessary for the present
conduct of its respective businesses, without any known conflict with the rights
of others which, or the failure to obtain which, as the case may be, could
reasonably be expected to result in a Material Adverse Change on the business,
operations, property, assets or condition (financial or otherwise) of Borrowers.
Each of the patents, trademarks, servicemarks, tradenames and copyrights owned
by Borrowers under the common law or which is registered with any Governmental
Authority is set forth on Schedule 4.22, attached hereto.
Section 4.23. CONTINGENT LIABILITIES. As of the Closing Date,
Borrowers have incurred no material Contingent Liabilities (any Contingent
Liability in excess of One Million Dollars ($1,000,000.00) being deemed
material) other than those described on Schedule 4.23.
Section 4.24. SUBSIDIARIES. As of the Closing Date, no member
of the Borrower Consolidation has any Subsidiaries that are not members of the
Borrower Consolidation, other than those Subsidiaries existing as of the Closing
Date which are described on the Schedule of Existing Subsidiaries attached
hereto as Schedule 4.24.
Section 4.25. WOODVIEW LOAN DOCUMENTS AND LOGAN PURCHASE
AGREEMENTS. The copies of the Woodview Loan Documents and Logan Purchase
Agreements which have been delivered to Agent Bank in accordance with Section
3.21 are true and correct copies of the originals thereof. Said Woodview Loan
Documents and Logan Purchase Agreement are all
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in full force and effect, and none of them have been amended or otherwise
modified except as set forth by documents delivered to Agent Bank in accordance
with Section 3.21.
ARTICLE V.
GENERAL COVENANTS OF BORROWERS
To induce the Banks to enter into this Credit Agreement,
Borrowers covenant to Banks as follows: Section 5.01. FF&E. The Borrower
Consolidation shall furnish, fixture and equip the Hotel/Casino Facilities with
FF&E it reasonably deems appropriate for the operation of the Hotel/Casino
Facilities. All FF&E that is purchased and installed in the Hotel/Casino
Facilities shall be purchased free and clear of any liens, encumbrances or
claims, other than Permitted Encumbrances. If Borrowers should sell, transfer,
convey or otherwise dispose of any FF&E and not replace such FF&E with purchased
items of equivalent value and utility or replace said FF&E with leased FF&E of
equivalent value and utility, within the permissible leasing and purchase
agreement limitation set forth in Section 6.05(d) herein, to the extent the Net
Proceeds thereof not used to replace FF&E exceeds a cumulative aggregate value
of One Million Dollars ($1,000,000.00) during the term of the Credit Facility
(the "Excess Capital Proceeds"), Borrowers shall be required to permanently
reduce the Maximum Permitted Balance of the Credit Facility by a Voluntary
Permanent Reduction in the amount of the Excess Capital Proceeds of the FF&E so
disposed of, subject, however, to the right of Agent Bank to verify to its
reasonable satisfaction the amount of said Excess Capital Proceeds.
Section 5.02. PERMITS; LICENSES AND LEGAL REQUIREMENTS.
Borrowers shall comply in all material respects with and keep in full force and
effect, as and when required, all Gaming Permits and all material permits,
licenses and approvals obtained from any Governmental Authorities which are
required for the operation and use of the Hotel/Casino Facilities. Borrowers
shall comply in all material respects with all applicable material existing and
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future laws, rules, regulations, orders, ordinances and requirements of all
Governmental Authorities, and with all recorded restrictions affecting the
Collateral Properties.
Section 5.03. PROTECTION AGAINST LIEN CLAIMS. Borrowers shall
promptly pay and discharge or cause to be paid and discharged all claims and
liens for labor done and materials and services supplied and furnished in
connection with the Hotel/Casino Facilities in accordance with this Section
5.03, except such claims and liens, if any, as are being contested in good faith
by Borrowers by appropriate proceedings and for which Borrowers have maintained
adequate reserves for the payment thereof in accordance with GAAP. If any
mechanic's lien or materialman's lien shall be recorded, filed or suffered to
exist against the Collateral Properties or any of them or any interest therein
by reason of work, labor, services or materials supplied, furnished or claimed
to have been supplied and furnished in connection with the Hotel/Casino
Facilities, upon Borrowers receipt of written notice from Agent Bank demanding
the release and discharge of such lien, said lien or claim shall be paid,
released and discharged of record within ninety (90) days following its receipt
of such notice, or, in lieu of such payment Borrowers may (i) with respect to
the SGLVI Hotel/Casino Facility and/or SGRI Hotel/Casino Facility cause said
mechanic's lien or materialman's lien to be released of record pursuant to the
provisions set forth in the Nevada Revised Statutes 108.2413, et. seq., within
one hundred twenty (120) days of the date of such notice; and (ii) to the extent
that any such mechanic's lien or materialman's lien shall be recorded, filed or
suffered to exist in the State of West Virginia, Borrowers shall cause said
mechanic's lien to be released of record pursuant to a bonding or similar
statutory procedure under the laws of the State of West Virginia, which
statutory procedures shall be reasonably acceptable to Agent Bank and
accomplished within one hundred twenty (120) days of the date of such notice.
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Section 5.04. LOGAN PROPERTY.
a. Concurrently, or substantially concurrent, with
occurrence of the Logan Primary Parcel Closing, MPI shall execute and deliver,
or cause the execution and delivery of, such documents, and take such actions
(including without limitation the purchase of appropriate title insurance
coverage) as may be required in the reasonable discretion of Agent Bank in order
to: (i) cause the Logan Primary Parcel to be encumbered as Collateral hereunder
subject only to MPI Permitted Encumbrances; and (ii) provide Agent Bank with
adequate assurances of such encumbrance and priority.
b. Concurrently, or substantially concurrent, with
occurrence of the Logan Filly Parcel Closing, MPI shall execute and deliver, or
cause the execution and delivery of, such documents, and take such actions
(including without limitation the purchase of appropriate title insurance
coverage) as may be required in the reasonable discretion of Agent Bank in order
to: (i) cause the Logan Filly Parcel to be encumbered as Collateral hereunder
subject only to MPI Permitted Encumbrances; and (ii) provide Agent Bank with
adequate assurances of such encumbrance and priority.
Section 5.05. NO CHANGE IN CHARACTER OF BUSINESS OR LOCATION
OF CHIEF EXECUTIVE OFFICE. At all times throughout the term of the Credit
Facility (a) the chief executive office of Borrowers shall be located at State
Route 2, South, P.O. Box 356, Chester, West Virginia 26034; provided, however,
Borrowers shall be entitled to move their chief executive office to another
location upon no less than thirty (30) days prior written notice to Agent Bank,
(b) the Hotel/Casino Facilities shall be operated by the Borrower Consolidation,
and (c) Borrowers shall not effect a material change in the nature and character
of the business at the Hotel/Casino Facilities as presently conducted and as
presently contemplated and disclosed to Banks.
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Section 5.06. PRESERVATION AND MAINTENANCE OF PROPERTIES AND
ASSETS; ACQUISITION OF ADDITIONAL PROPERTY.
a. At all times throughout the term of the Credit
Facility, (i) the Borrower Consolidation shall operate, maintain and preserve
all rights, privileges, franchises, licenses, Gaming Permits and other
properties and assets necessary to conduct its businesses and the Hotel/Casino
Facilities, in accordance with all applicable governmental laws, ordinances,
approvals, rules and regulations and requirements, including, but not limited
to, zoning, sanitary, pollution, building, environmental and safety laws and
ordinances, rules and regulations promulgated thereunder, and (ii) Borrowers
shall not consolidate with, remove, demolish, materially alter, discontinue the
use of, sell, transfer, assign, hypothecate or otherwise dispose of to any
Person, any part of its properties and assets necessary for the continuance of
its business, as presently conducted and as presently contemplated, other than
in the normal course of business, alterations or modifications as are reasonably
expected to increase the value of the Collateral, or as otherwise permitted
pursuant to this Credit Agreement.
b. Furthermore, in the event any Borrower, or any
Affiliate and/or Related Entity thereof, shall acquire any other real property
or rights to the use of real property which is: (i) adjacent to any of the
Collateral Properties and used in a material manner in connection with the use
and/or operation at the Collateral Properties, the Hotel/Casino Facilities, or
any of them, or (ii) if not so adjacent, necessary and required for the use and
operation of such Collateral Property, Hotel/Casino Facilities, or any of them,
Borrowers shall concurrently with the acquisition of such real property or the
rights to the use of such real property, execute or cause the execution of such
documents as may be necessary to add such real property or rights to the use of
real property as Collateral under the Credit Facility.
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Section 5.07. REPAIR OF PROPERTIES AND ASSETS. At all times
throughout the term of the Credit Facility, Borrowers shall, at their own cost
and expense, (a) maintain, preserve and keep in a manner consistent with hotel
and gaming casino operating practices, as the case may be, applicable to
hotel/casino operations operating in the jurisdictions in which such properties
are located, its assets and properties, including, but not limited to, the
Collateral Properties and all FF&E owned or leased by Borrowers in good and
substantial repair, working order and condition, ordinary wear and tear
excepted, (b) from time to time, make or cause to be made, all necessary and
proper repairs, replacements, renewals, improvements and betterments thereto,
and (c) from time to time, make such substitutions, additions, modifications and
improvements as may be necessary and as shall not impair the structural
integrity, operating efficiency and economic value of said assets and
properties. All alterations, replacements, renewals, or additions made pursuant
to this Section 5.07 shall become and constitute a part of said assets and
property and subject, INTER ALIA, to the provisions of Section 5.01 and subject
to the lien of the Loan Documents.
Section 5.08. FINANCIAL STATEMENTS; REPORTS; CERTIFICATES AND
BOOKS AND RECORDS. Until Credit Facility Termination, Borrowers shall, unless
the Agent Bank (with the written approval of the Requisite Lenders) otherwise
consents, at Borrowers' sole expense, deliver to the Agent Bank and each of the
Lenders a full and complete copy of each of the following and shall comply with
each of the following financial requirements:
a. As soon as practicable, and in any event within
twenty-one (21) days after the end of each calendar month (including the last
calendar month in any Fiscal Year), the consolidated and consolidating balance
sheet, income statement, statement of cash flows, statement of retained earnings
and operating statement for the calendar month under review and reflecting
year-to-date performance of the Borrower Consolidation and a comparison of the
financial performance of the Borrower Consolidation to the
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prior Fiscal Year's operations and projected results from operations at the
Hotel/Casino Facilities (in each case reconciled with year end audited
statements and compared to budget and prior year period) of the Borrower
Consolidation all in reasonable detail. Such financial statements shall be
certified by an Authorized Officer of the Borrower Consolidation as fairly
presenting the financial condition, results of operations and cash flows of the
Borrower Consolidation in accordance with GAAP (other than footnote disclosures)
as at such date and for such periods, subject only to normal year-end accruals
and audit adjustments;
b. As soon as practicable, and in any event within
forty-five (45) days after the end of each Fiscal Quarter (including the fourth
(4th) Fiscal Quarter in any Fiscal Year), a pricing certificate in the form
marked "Exhibit E", affixed hereto and by this reference incorporated herein and
made a part hereof (the "Pricing Certificate") setting forth a preliminary
calculation of the Leverage Ratio as of the last day of such Fiscal Quarter, and
providing reasonable detail as to the calculation thereof, which calculations
shall be based on the preliminary unaudited financial statements of the Borrower
Consolidation for such Fiscal Quarter, and as soon as practicable thereafter, in
the event of any material variance in the actual calculation of the Leverage
Ratio from such preliminary calculation, a revised Pricing Certificate setting
forth the actual calculation thereof; provided, however, that in the event that
Borrowers do not deliver a Pricing Certificate when due, then until (but only
until) such Pricing Certificate is delivered as provided herein, the Leverage
Ratio shall be deemed, for the purpose of determining the Applicable Margin, to
be greater than 2.5 to 1.0 and the Applicable Margin determined with respect
thereto.
c. As soon as practicable, and in any event within
ninety (90) days after the end of each Fiscal Year, (i) the consolidated and
consolidating balance sheet, income statement, statement of retained earnings
and cash flows (reconciled with year end audited statements) of the
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Borrower Consolidation as at the end of such Fiscal year, all in reasonable
detail. Such financial statements shall be prepared in accordance with GAAP and
shall be accompanied by a report of independent public accountants of recognized
standing selected by Borrowers and reasonably satisfactory to the Agent Bank (it
being understood that BDO Seidman, LLP or any "Big 5" accounting firm shall be
automatically deemed satisfactory to the Agent Bank), which report shall be
prepared in accordance with generally accepted auditing standards as at such
date, and shall not be subject to any qualifications or exceptions as to the
scope of the audit nor to any other qualification or exception determined by the
Requisite Lenders in their good faith business judgment to be adverse to the
interests of the Banks. Such accountants' report shall be accompanied by a
certificate stating that, in making the examination pursuant to generally
accepted auditing standards necessary for the certification of such financial
statements and such report, such accountants have obtained no knowledge of any
Default or, if, in the opinion of such accountants, any such Default shall
exist, stating the nature and status of such Default, and stating that such
accountants have reviewed the Financial Covenants as at the end of such Fiscal
Year (which shall accompany such certificate) under Sections 6.01 through 6.07,
have read such Sections (including the definitions of all defined terms used
therein) and that nothing has come to the attention of such accountants in the
course of such examination that would cause them to believe that the same were
not calculated by the Borrower Consolidation in the manner prescribed by this
Credit Agreement. Such financial statements shall be certified by an Authorized
Officer of the Borrower Consolidation in the same manner as required with
respect to financial statements delivered pursuant to Section 5.08(a);
d. As soon as practicable, and in any event no later
than fifteen (15) days prior to the commencement of each Fiscal Year, a budget
(including a Capital Expenditure budget) and projection by Fiscal Quarter for
that Fiscal Year and by Fiscal Year for the next four (4) succeeding Fiscal
Years, INCLUDING for the first such Fiscal Year, projected consolidated and
consolidating balance sheets,
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statements of operations and statements of cash flow and, for the second (2nd)
and third (3rd) such Fiscal Years, projected consolidated and consolidating
condensed balance sheets and statements of operations and cash flows, of the
Borrower Consolidation, all in reasonable detail;
e. Concurrently with the financial statements and
reports required pursuant to Sections 5.08(a) and 5.08(c), Compliance
Certificate signed by an Authorized Officer;
f. Promptly after the same are available, copies of
each annual report, proxy or financial statement or other report or
communication that shall have been sent to the stockholders of MTRI, and copies
of all annual, regular, periodic and special reports (including, without
limitation, each 10Q and 10K report) and registration statements which MTRI
shall have filed or be required to file with the Securities and Exchange
Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, and not otherwise required to be delivered to the Banks pursuant to
other provisions of this Section 5.08.
g. Until Credit Facility Termination, Borrowers, and
each of them, shall keep and maintain complete and accurate books and records in
accordance with GAAP, consistently applied. Subject to compliance with all
applicable Gaming Laws and the Securities and Exchange Act of 1934, as amended,
Borrowers, and each of them, shall permit Banks and any authorized
representatives of Banks to have reasonable access to and to inspect, examine
and make copies of the books and records, any and all accounts, data and other
documents of Borrowers at all reasonable times upon the giving of reasonable
notice of such intent. In addition: (i) in the event of the occurrence of any
Default or Event of Default, or (ii) in the event any Material Adverse Change
occurs, Borrowers shall promptly, and in any event within three (3) days after
actual knowledge thereof, notify Agent Bank in writing of such occurrence; and
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h. Until Credit Facility Termination, Borrowers, and
each of them, shall furnish to Agent Bank, with sufficient copies for
distribution to each of the Banks, any financial information or other
information bearing on the financial status of the Borrowers, or any of them,
which is reasonably requested by Agent Bank or Requisite Lenders.
Section 5.09. INSURANCE. Until Credit Facility Termination,
Borrowers shall obtain, or cause to be obtained, and shall maintain or cause to
be maintained with respect to the Collateral, at their own cost and expense, and
shall deposit with Agent Bank on or before the Closing Date:
a. PROPERTY INSURANCE. Borrowers shall maintain a
special causes of loss ("All Risk" - ISO form or equivalent), perils policy
covering the buildings and improvements, and any other permanent structures for
one hundred percent (100%) of the replacement cost. Borrowers shall maintain a
Ten Million Dollar ($10,000,000.00) limit of coverage for the perils of flood
and earthquake covering the Collateral. Upon the request of Agent Bank,
replacement cost for insurance purposes will be established by an independent
appraiser mutually selected by Borrowers and Agent Bank. The policy will include
Agreed Amount (waiving co-insurance), replacement cost valuation and building
ordinance endorsements. The policy will include a standard mortgagee clause (ISO
form or equivalent, i.e. Borrower's acts will not impair mortgagee's right to
recover, exclusive payment of loss to mortgagee and automatic notice of
cancellation or non-renewal to mortgagee) and provide that all losses in excess
of Two Hundred Thousand Dollars ($200,000.00) be adjusted with the Agent Bank.
The Borrowers waive any and all rights of subrogation against Banks resulting
from losses to property.
b. PERSONAL PROPERTY (INCLUDING MACHINERY,
EQUIPMENT, FURNITURE, FIXTURES, STOCK). Borrowers shall maintain a special
causes of loss ("All Risk") perils property coverage for all personal property
owned, leased or
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for which Borrowers are legally liable. The coverage will include a lenders'
loss payable endorsement in favor of Agent Bank.
The policy providing real property and personal
property coverages, as specified in 5.09(a) and (b) hereinabove, may include a
deductible of no more than Twenty-Five Thousand Dollars ($25,000.00) for any
single occurrence. Flood and earthquake deductibles can be no more than Two
Hundred Fifty Thousand Dollars ($250,000.00), if a separate deductible applies.
c. BUSINESS INTERRUPTION/EXTRA EXPENSE. Borrowers
shall maintain combined Business Interruption/Extra Expense coverage for the
Hotel/Casino Facilities with a limit representing no less than eighty percent
(80%) of the net profit plus continuing expenses (including debt service) for
the race track, hotel and casino facilities (including all video lottery/slot
operations). Such coverage shall include an extensions for off premises power
losses at One Million Dollars ($1,000,000.00) and extended period of indemnity
of one hundred eighty (180) days endorsement. These coverages may have
deductible of no greater than twenty-four (24) hours, or Twenty-Five Thousand
($25,000.00), if a separate deductible applies. This coverage will be
specifically endorsed to include Agent Bank as loss payee.
d. BOILER AND MACHINERY. Borrowers shall maintain a
Boiler and Machinery policy for the Casino Facilities written on a Comprehensive
Form with a combined direct and indirect limit of no less than Ten Million
Dollars ($10,000,000.00). The policy shall include extensions for Agreed Amount
(waiving co-insurance) and Replacement Cost Valuation. The policy may contain
deductibles of no greater than Ten Thousand Dollars ($10,000.00) direct and
twenty-four (24) hours indirect.
e. CRIME INSURANCE. Borrowers shall obtain a
comprehensive crime policy, including the following coverages:
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(i) employee dishonesty - One Million
Dollars ($1,000,000.00);
(ii) money and securities (inside) - Five
Hundred Thousand Dollars ($500,000.00);
(iii) money and securities (outside) -
Five Hundred Thousand Dollars ($500,000.00);
(iv) depositor's forgery - One Million
Dollars ($1,000,000.00);
(v) computer fraud - One Million Dollars
($1,000,000.00).
The policy must be amended so that money is defined
to include "tokens and chips" (as defined in Regulation 12.010 of the Nevada
Gaming Authorities). The policy may contain deductibles of no greater than
Twenty-Five Thousand Dollars ($25,000,000.00) for all coverages listed above.
f. COMMERCIAL GENERAL LIABILITY (1998 FORM OR
EQUIVALENT). Borrowers shall maintain a Commercial General Liability policy with
a One Million Dollar ($1,000,000.00) combined single limit for bodily injury and
property damage, including Products Liability, Contractual Liability, and all
standard policy form extensions. The policy must provide a Two Million Dollar
($2,000,000.00) general aggregate (per location, if multi-location risk) and be
written on an "occurrence form". The policy will also include extensions for
Liquor Legal Liability, Employee Benefits Legal Liability, Innkeepers Legal and
Safe Deposit Legal coverages and Spectator Liability coverages (if necessary, a
separate policy can be secured for Spectator Liability). If the general
liability policy contains a self-insured retention, it shall be no greater than
Ten Thousand Dollars ($10,000,000.00) per occurrence, with an aggregate
retention of no more than Two Hundred Fifty Thousand Dollars ($250,000.00),
including expenses.
The policy shall be endorsed to include Agent Bank
as an additional insured on behalf of the Banks.
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Definition of additional insured shall include all officers, directors,
employees, agents and representatives of the additional insured. The coverage
for additional insured shall apply on a primary basis irrespective of any other
insurance whether collectible or not (ISO Form #CG20261185 Additional Insured
Designated Person or Organization, or Equivalent).
g. CARE, CUSTODY AND CONTROL LIABILITY. Borrowers
shall maintain a care, custody and control liability policy with a single limit
of no less than One Hundred Thousand Dollars ($100,000.00) (each horse)/One
Million Dollars ($1,000,000.00) (in the aggregate) per occurrence for any
injury, damage or death to horses in the care, custody and control of the
Borrowers. The Agent Bank shall be included as an additional insured under such
policy.
h. AUTOMOBILE. Borrowers shall maintain a
comprehensive Automobile Liability Insurance Policy written under coverage
"symbol 1", providing a One Million Dollar ($1,000,000.00) combined single limit
for bodily injury and property damage covering all owned, non-owned and hired
vehicles of the Borrowers. If the policy contains a self insured retention it
shall be no greater than Ten Thousand Dollars ($10,000.00) per occurrence with
an aggregate retention of no more than Two Hundred Fifty Thousand Dollars
($250,000.00), including expenses. The following additional coverages must be
purchased by Borrowers:
(i) GARAGE LIABILITY. A One Million Dollar
($1,000,000.00) combined single limit for bodily and property
damage for the garage operation.
(ii) GARAGEKEEPERS LEGAL LIABILITY. Five
Hundred Thousand Dollar ($500,000.00) limit for comprehensive
and collision coverages for physical damage to vehicles in the
Borrowers' care, custody and control. The policy can be
subject to a deductible of no greater than Two Thousand Five
Hundred Dollars ($2,500.00) for each auto and Ten Thousand
Dollars ($10,000.00) for each loss.
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i. WORKERS COMPENSATION AND EMPLOYERS LIABILITY
INSURANCE. Borrowers shall maintain a standard workers compensation policy
covering the states of Nevada, West Virginia (as West Virginia is a monopolistic
state coverage must be secured through the state fund) and any other state where
the company is operating, including employers liability coverage subject to a
limit of no less than One Million Dollars ($1,000,000.00) each employee, One
Million Dollars ($1,000,000.00) each accident, One Million Dollars
($1,000,000.00) policy limit. The policy shall include endorsements for
Voluntary Compensation, Stop Gap Liability, Long-Shoreman's and Harbors Workmans
Compensation Act and Maritime Coverages (as applicable). If the Borrowers have
elected to self-insure Workers Compensation coverage in the State of Nevada (or
any other state), the Agent Bank must be furnished with a copy of the
certificate from the state(s) permitting self-insurance and evidence of a Stop
Loss Excess Workers Compensation policy with a specific retention of no greater
than One Hundred Fifty Thousand Dollars ($150,000.00) per occurrence.
j. If Borrowers' general liability and automobile
policies include a self-insured retention, it is agreed and fully understood
that Borrowers are solely responsible for payment of all amounts due within said
self-insured retentions. Any Indemnification/Hold Harmless provision is extended
to cover all liabilities associated with said self-insured retentions.
k. UMBRELLA LIABILITY. An Umbrella Liability policy
shall be purchased with a limit of not less than Fifty Million Dollars
($50,000,000.00) providing excess coverage over all limits and coverages
indicated in paragraphs (f), (h) and (i) above. The limits can be obtained by a
combination of Primary and Excess Umbrella policies, provided that all layers
follow form with the underlying policies indicated in (f), (h) and (i) are
written on an "occurrence" form. This policy shall be endorsed to include the
Agent Bank as an additional insured on behalf of the Banks, in the same manner
set forth in Section 5.09(f) hereinabove.
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l. KEY MAN LIFE INSURANCE. The Borrower
Consolidation shall maintain key-man life insurance on the life of Arneault in
an aggregate amount of no less than Eight Million Dollars ($8,000,000.00). Each
such key man life insurance policy or policies shall designate MTRI as the
beneficiary thereof and shall provide that written notice shall be given to
Agent Bank no less than thirty (30) days prior to any cancellation or
termination thereof.
m. All policies indicated above shall be written
with insurance companies licensed and admitted to do business in all states
where the Borrower Consolidation, or any of them, is operating and shall be
rated no lower than "A XII" in the most recent addition of A.M. Best's and "AA"
in the most recent edition of Standard & Poor's, or such other carrier
reasonably acceptable to Agent Bank. All policies discussed above shall be
endorsed to provide that in the event of a cancellation, non-renewal or material
modification, Agent Bank shall receive thirty (30) days prior written notice
thereof. The Borrowers shall furnish Agent Bank with Certificates of Insurance
executed by an authorized agent evidencing compliance with all insurance
provisions discussed above on an annual basis. The Borrowers shall also furnish
actual policy endorsements evidencing appropriate status of Agent Bank (as
mortgagee, loss payee and additional insured). Certificates of Insurance
executed by an authorized agent of each carrier providing insurance evidencing
continuation of all coverages will be provided on the Closing Date and annually
on or before ten (10) days prior to the expiration of each policy. All
certificates and other notices related to the insurance program shall be
delivered to Agent Bank concurrently with the delivery of such certificates or
notices to such carrier or to Borrowers, or any of them, as applicable.
n. Any other insurance reasonably requested by Agent
Bank or Requisite Lenders in such amount and covering such risks as may be
reasonably required and customary in the race track hotel/casino industry in the
general location of the Hotel/Casino Facilities. Approval of any insurance by
Agent Bank shall not be a representation
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of solvency of any insurer or sufficiency of any coverage required under this
Credit Agreement. All requirements are considered minimum in terms of the
purchase and maintenance of insurance under this Credit Agreement.
Section 5.10. TAXES. Throughout the term of the Credit
Facility, Borrowers shall prepare and timely file or cause to be prepared and
timely filed all federal, state and local tax returns required to be filed by
it, and Borrowers shall pay and discharge prior to delinquency all taxes,
assessments and other governmental charges or levies imposed upon it, or in
respect of any of any of its properties and assets except such taxes,
assessments and other governmental charges or levies, if any, as are being
contested in good faith by Borrowers in the manner which is set forth for such
contests by Section 4.07 herein.
Section 5.11. PERMITTED ENCUMBRANCES ONLY. At all times
throughout the term of the Credit Facility, Borrowers shall not create, incur,
assume or suffer to exist any mortgage, deed of trust, pledge, lien, security
interest, encumbrance, attachment, levy, distraint, or other judicial process
and burdens of every kind and nature except the Permitted Encumbrances on or
with respect to the Collateral, except (a) with respect to matters described in
Sections 5.03 and 5.10 such items as are being contested in the manner described
therein, and (b) with respect to any other items, if any, as are being contested
in good faith by appropriate proceedings and for which Borrowers have maintained
adequate reserves for the payment thereof.
Section 5.12. ADVANCES. At any time during the term of the
Credit Facility, if Borrowers should fail (a) to perform or observe, or (b) to
cause to be performed or observed, any covenant or obligation of Borrowers under
this Credit Agreement or any of the other Loan Documents, then Agent Bank, upon
the giving of reasonable notice may (but shall be under no obligation to) take
such steps as are necessary to remedy any such non-performance or non-observance
and provide for payment thereof. All amounts advanced by Agent Bank or Lenders
pursuant to this Section
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5.12 shall become an additional obligation of Borrowers to Lenders secured by
the Deeds of Trust and other Loan Documents, shall reduce the amount of
Available Borrowings and shall become due and payable by Borrowers on the next
interest payment date, together with interest thereon at a rate per annum equal
to the Default Rate (such interest to be calculated from the date of such
advancement to the date of payment thereof by Borrowers).
Section 5.13. FURTHER ASSURANCES. Borrowers will 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 Requisite Lender or
Agent Bank may reasonably require for the curing of any defect in the execution
or acknowledgement hereof or in any of the Loan Documents, or in the description
of the Collateral Properties or other Collateral or for the proper evidencing of
giving notice of each lien or security interest securing repayment of the Credit
Facility. Further, upon the execution and delivery of the Deeds of Trust and
each of the Loan Documents and thereafter, from time to time, Borrowers shall
cause the Deeds of Trust 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 the Requisite Lenders or Agent Bank, in order to publish
notice of and fully protect the liens of the Deeds of Trust and the Loan
Documents and to protect or continue to perfect the security interests created
by the Deeds of Trust and Loan Documents in the Collateral Properties and
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.
Section 5.14. INDEMNIFICATION. Borrowers agree to and do
hereby jointly and severally indemnify, protect, defend and save harmless Agent
Bank and each of the Banks
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and their respective trustees, officers, employees, agents, attorneys and
shareholders (individually an "Indemnified Party" and collectively the
"Indemnified Parties") from and against any and all losses, damages, expenses or
liabilities of any kind or nature from any suits, claims, or demands, including
reasonable counsel fees incurred in investigating or defending such claim,
suffered by any of them and caused by, relating to, arising out of, resulting
from, or in any way connected with this Credit Agreement, with any other Loan
Document or with the transactions contemplated herein and thereby; provided,
however, Borrowers shall not be obligated to indemnify, protect, defend or save
harmless an Indemnified Party if, and to the extent, the loss, damage, expense
or liability was caused by (a) the gross negligence or intentional misconduct of
such Indemnified Party, or (b) the breach of this Credit Agreement or any other
Loan Document by such Indemnified Party or the breach of any laws, rules or
regulation by such Indemnified Party (other than those breaches of laws arising
from any Borrowers' default). In case any action shall be brought against any
Indemnified Party based upon any of the above and in respect to which indemnity
may be sought against Borrowers, Agent Bank shall promptly notify Borrowers in
writing, and Borrowers shall assume the defense thereof, including the
employment of counsel selected by Borrowers and reasonably satisfactory to
Indemnified Party, the payment of all costs and expenses and the right to
negotiate and consent to settlement upon the consent of the Indemnified Party.
Upon reasonable determination made by Indemnified Party that such counsel would
have a conflict representing such Indemnified Party and Borrowers, the
applicable Indemnified Party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof. Borrowers shall not
be liable for any settlement of any such action effected without their consent,
but if settled with Borrowers' consent, or if there be a final judgment for the
claimant in any such action, Borrowers agree to indemnify, defend and save
harmless such Indemnified Parties from and against any loss or liability by
reason of such settlement or judgment. The provisions of this Section 5.14 shall
survive the termination of this Credit Agreement and the repayment of the Credit
Facility and the assignment or subparticipation
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of all or any portion of the Syndication Interest held by any Lender pursuant to
Section 11.10.
Section 5.15. INSPECTION OF THE COLLATERAL AND APPRAISAL. At
all times during the term of the Credit Facility and subject to compliance with
all applicable Gaming Laws, Borrowers shall provide or cause to be provided to
Banks and any authorized representatives of Banks, accompanied by
representatives of Borrowers, the reasonable right of entry and free access to
the Collateral Properties to inspect same on reasonable prior notice to
Borrowers. Provided, however, Lenders shall use commercially reasonable efforts
to avoid undue interference with Borrowers' business operations. If at any time
any Qualified Appraisal of the Collateral Properties, or any of them, is
required to be made by any banking regulatory authority or determined to be
necessary by Agent Bank or Requisite Lenders after the occurrence of an Event of
Default, Borrowers agree to pay all fees, costs and expenses incurred by Agent
Bank in connection with the preparation of such Qualified Appraisal.
Section 5.16. COMPLIANCE WITH OTHER LOAN DOCUMENTS. Borrowers
shall comply with each and every term, condition and agreement contained in the
Loan Documents.
Section 5.17. SUITS OR ACTIONS AFFECTING BORROWERS. Throughout
the term of the Credit Facility, Borrowers shall promptly advise Agent Bank in
writing within ten (10) days after Borrowers obtain knowledge of (a) any claims,
litigation, proceedings or disputes (whether or not purportedly on behalf of
Borrowers) against, or to the actual knowledge of Borrowers, threatened or
affecting Borrowers which, if adversely determined, would result in a Material
Adverse Change in the Collateral Properties or the business, operations or
financial conditions of Borrowers, (b) any material labor controversy resulting
in or threatening to result in a strike against any of the Collateral Properties
or Hotel/Casino Facilities, or (c) any proposal by any Governmental Authority to
acquire any of the material assets or business of Borrowers.
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Section 5.18. CONSENTS OF AND NOTICE TO GAMING AUTHORITIES.
a. On or before the Closing Date, Borrowers shall
make all necessary applications to and procure all necessary consents and
approvals of the applicable Gaming Authorities to the: (i) pledge of the stock
of MPI, SGLVI and SGRI pursuant to the Stock Pledges, (ii) the restrictions on
transfer and hypothecation of the stock of MPI, SGLVI and SGRI contained in
Sections 6.12(a) and 7.01(s), and (iii) the terms set forth in the Credit
Agreement and each of the Loan Documents, to the extent which may be required by
the West Virginia Gaming Authorities; and
b. Borrowers shall comply in all material respects
with all applicable statutes, rules and regulations requiring reports and
disclosures to all applicable Gaming Authorities, including, but not limited to,
reporting this Credit Facility transaction, within the time period required by
Regulation 8.130(2) of the Regulations of Nevada Gaming Commission and State
Gaming Control Board and as may be required by the West Virginia Gaming
Authorities.
Section 5.19. TRADENAMES, TRADEMARKS AND SERVICEMARKS.
Borrowers shall not assign or in any other manner alienate their respective
interests in any material tradenames, trademarks or servicemarks relating or
pertaining to the Hotel/Casino Facilities during the term of the Credit
Facility. No Borrower shall change its name without first giving at least thirty
(30) days prior written notice to Agent Bank.
Section 5.20. NOTICE OF HAZARDOUS MATERIALS. Within ten (10)
days after an executive officer of any of the Borrowers shall have obtained
actual knowledge thereof, Borrowers shall promptly advise Agent Bank and each of
the Lenders in writing of and deliver a copy of: (a) any and all enforcement,
clean-up, removal or other governmental or regulatory actions instituted or
threatened by any
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Governmental Agency pursuant to any applicable federal, state or local laws,
ordinances or regulations relating to any Hazardous Materials (as defined in the
Environmental Certificate) affecting the Collateral Properties ("Hazardous
Materials Laws"); (b) all written claims made or threatened by any third party
against Borrowers, the Collateral Properties, the Hotel/Casino Facilities, or
any of them, relating to damage, contribution, cost recovery compensation, loss
or injury resulting from any Hazardous Materials (the matters set forth in
clauses (a) and (b) above are hereinafter referred to as "Hazardous Materials
Claims"); and (c) the discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Collateral Properties, the
Hotel/Casino Facilities, or any of them, that could cause any Borrower or any
part thereof to be held liable under the provisions of, or to be otherwise
subject to any restrictions on the ownership, occupancy, transferability or use
of the Collateral Properties or the Hotel/Casino Facilities under, any Hazardous
Materials Laws.
Section 5.21. COMPLIANCE WITH ACCESS LAWS.
a. Borrowers agree that Borrowers, the Hotel/Casino
Facilities and the Collateral Properties shall at all times strictly comply with
the requirements of the Americans with Disabilities Act of 1990; the Fair
Housing Amendments Act of 1988; and other federal, state or local laws or
ordinances related to disabled access; or any statute, rule, regulation,
ordinance, order of Governmental Authorities, or order or decree of any court
adopted or enacted with respect thereto, as now existing or hereafter amended or
adopted (collectively, the "Access Laws"), as may be applicable to the
respective Hotel/Casino Facilities. At any time, Agent Bank may require a
certificate of compliance with the Access Laws and indemnification agreement in
a form reasonably acceptable to Agent Bank. Agent Bank may also require a
certificate of compliance with the Access Laws from an architect, engineer, or
other third party acceptable to Agent Bank.
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b. Notwithstanding any provisions set forth herein
or in any other document, Borrowers shall not alter or permit any tenant or
other person to alter the Hotel/Casino Facilities or the Collateral Properties
in any manner which would increase Borrowers' responsibilities for compliance
with the Access Laws without the prior written approval of Agent Bank. In
connection with such approval, Agent Bank may require a certificate of
compliance with the Access Laws from an architect, engineer or other person
acceptable to Agent Bank.
c. Borrowers agree to give prompt written notice to
Agent Bank of the receipt by Borrowers of any claims of violation of any of the
Access Laws and of the commencement of any proceedings or investigations which
relate to compliance with any of the Access Laws.
d. Borrowers shall indemnify, defend and hold
harmless Indemnified Parties from and against any and all claims, demands,
damages, costs, expenses, losses, liabilities, penalties, fines and other
proceedings including, without limitation, reasonable attorneys' fees and
expenses arising directly or indirectly from or out of or in any way connected
with any failure of the Hotel/Casino Facilities or the Collateral Properties to
comply with any of the Access Laws as the same may have been applicable during
the term of the Credit Facility. The obligations and liabilities of Borrowers
under this section shall survive Credit Facility Termination, any satisfaction,
assignment, judicial or nonjudicial foreclosure proceeding, or delivery of a
deed in lieu of foreclosure.
Section 5.22. COMPLIANCE WITH WOODVIEW LOAN DOCUMENTS AND
LOGAN LOAN DOCUMENTS.
a. Until Credit Facility Termination, Borrowers
shall fully perform and comply with or cause to be performed and complied with
all of the respective material covenants, material terms and material conditions
imposed or assumed by them, or any of them, under each of the Woodview
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Loan Documents. Borrowers shall not amend, modify or terminate, or enter into
any agreement to amend, modify or terminate any of the Woodview Loan Documents
without the prior written consent of Requisite Lenders.
b. Upon occurrence of the Logan Primary Parcel
Closing, and until Credit Facility Termination, Borrowers shall fully perform
and comply with or cause to be performed and complied with all of the respective
material covenants, material terms and material conditions imposed or assumed by
them, or any of them, under each of the Logan Loan Documents. Borrowers shall
not amend, modify or terminate, or enter into any agreement to amend, modify or
terminate any of the Logan Loan Documents without the prior written consent of
Requisite Lenders.
Section 5.23. KEY MAN LIFE INSURANCE. In the event of the
death of Arneault prior to Credit Facility Termination, Borrowers shall cause a
Voluntary Permanent Reduction to be made to the Credit Facility in the amount of
Four Million Dollars ($4,000,000.00), which Voluntary Permanent Reduction shall
be made on or before the earlier to occur of (a) receipt by MTRI of the proceeds
of the key man life insurance required to be maintained by the Borrower
Consolidation under Section 5.09; or (b) one hundred twenty (120) days following
the death of Arneault.
ARTICLE VI.
FINANCIAL COVENANTS
Until payment in full of all sums owing hereunder and under
the Revolving Credit Note and the occurrence of Credit Facility Termination,
Borrowers agree, as set forth below, to comply or cause compliance with the
following Financial Covenants.
Section 6.01. LEVERAGE RATIO. Commencing as of the first
Fiscal Quarter ending subsequent to the Closing Date and continuing as of each
Fiscal Quarter end until Credit Facility Termination, the Borrower Consolidation
shall maintain a Leverage Ratio no greater than the ratios
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described hereinbelow to be calculated as of the end of each Fiscal Quarter in
accordance with the following schedule:
<TABLE>
<CAPTION>
MAXIMUM
FISCAL QUARTER END LEVERAGE RATIO
<S> <C>
As of the end of the first full
Fiscal Quarter ending subsequent
to the Closing Date and as of each
Fiscal Quarter end through the
Fiscal Quarter ending December 31, 2000 3.0 to 1.00
As of the Fiscal Quarter ending
March 31, 2001, through the Fiscal
Quarter ending December 31, 2001 2.5 to 1.00
As of the Fiscal Quarter ending
March 31, 2002, through Credit
Facility Termination 2.0 to 1.00
</TABLE>
Section 6.02. ADJUSTED FIXED CHARGE COVERAGE RATIO. Commencing
as of the first Fiscal Quarter ending subsequent to the Closing Date and
continuing as of each Fiscal Quarter end until Credit Facility Termination, the
Borrower Consolidation shall maintain an Adjusted Fixed Charge Coverage Ratio no
less than 2.00 to 1.00.
Section 6.03. MINIMUM TANGIBLE NET WORTH. The Borrower
Consolidation shall maintain as of the last day of each Fiscal Quarter a
Tangible Net Worth equal to or greater than the sum of (a) ninety percent (90%)
of the Tangible Net Worth of the Borrower Consolidation calculated as of the end
of the most recently ended Fiscal Quarter prior to the Closing Date, plus (b)
eighty-five percent (85.0%) of Net Income after taxes realized by the Borrower
Consolidation as of each Fiscal Quarter end occurring on and after the Closing
Date, without deduction for any net losses, plus (c) ninety percent (90.0%) of
the Net Proceeds received by the
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Borrower Consolidation all Equity Offerings made subsequent to the Closing Date.
Section 6.04. LIMITATION ON INDEBTEDNESS. The Borrower
Consolidation shall not owe or incur any Indebtedness, except as specifically
permitted hereinbelow:
a. Funded Outstandings under the Credit Facility;
b. Interest Rate Hedges up to the aggregate notional
amount of Thirty Million Dollars ($30,000,000.00);
c. Indebtedness owing by Borrowers as of the Closing
Date (exclusive of the Existing Secured Loan);
d. Secured purchase money Indebtedness and Capital
Lease Liabilities relating to FF&E used and to be used in connection with the
Hotel/Casino Facilities up to the maximum aggregate principal amount of Eight
Million Dollars ($8,000,000.00) at any time outstanding;
e. Unsecured trade payable incurred in the ordinary
course of business less than one hundred twenty (120) days past due;
f. Subordinated Debt up to the maximum aggregate
amount of Fifteen Million Dollars ($15,000,000.00), so long as the Net Proceeds
of such Subordinated Debt are used by Borrowers for either (i) Expansion Capital
Expenditures, and/or (ii) Voluntary Permanent Reduction of the Credit Facility;
and
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g. Indebtedness evidenced by the Logan Loan
Documents.
Section 6.05. RESTRICTION ON DISTRIBUTIONS. No member of the
Borrower Consolidation shall make any Distributions, other than: (a)
Distributions to other members of the Borrower Consolidation, and (b)
Distributions made in connection with Insider Cash Loans and Insider Non-Cash
Loans.
Section 6.06. CAPITAL EXPENDITURE REQUIREMENTS. During each
Fiscal Year, commencing with the Fiscal Year commencing January 1, 2000,
Borrowers shall make or cause to be made, Capital Expenditures to the
Hotel/Casino Facilities in a minimum aggregate amount equal to or greater than
two percent (2%) of net revenues ("Minimum Cap Ex Requirement") derived from the
Hotel/Casino Facilities by the Borrower Consolidation during the immediately
preceding Fiscal Year, but in no event greater than a maximum aggregate amount
equal to six percent (6%) of net revenues ("Maximum Cap Ex Limit") derived from
the Hotel/Casino Facilities by the Borrower Consolidation during the immediately
preceding Fiscal Year. Notwithstanding the foregoing, however, the Maximum Cap
Ex Limit shall be exclusive of the Expansion Capital Expenditures which are
funded from the Net Proceeds of Subordinated Debt.
Section 6.07. CONTINGENT LIABILITY(IES). The Borrower
Consolidation shall not directly or indirectly incur any Contingent
Liability(ies) without the prior written consent of Requisite Lenders. In no
event shall any Contingent Liabilities be secured by a Lien on any property or
assets of any member of the Borrower Consolidation.
Section 6.08. INVESTMENT RESTRICTIONS. Other than Investments
permitted herein or approved in writing by Requisite Lenders, the Borrower
Consolidation shall not make any Investments (whether by way of loan, stock
purchase, capital contribution, or otherwise) other than the following:
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a. Cash, Cash Equivalents and direct obligations of
the United States Government;
b. Prime commercial paper (AA rated or better);
c. Certificates of Deposit or Repurchase Agreement
issued by a commercial bank having capital surplus in excess of One Hundred
Million Dollars ($100,000,000.00);
d. Money market or other funds of nationally
recognized institutions investing solely in obligations described in (a), (b)
and (c) above;
e. Insider Cash Loans not exceeding One Million Five
Hundred Thousand Dollars ($1,500,000.00) in the aggregate during any Fiscal
Year, provided that each of such Insider Cash Loans shall bear interest at a
rate no less than the Prime Rate plus one percent (1.0%) per annum and shall in
each instance be fully due and payable on or before one (1) year from the date
such Insider Cash Loan is advanced by any member of the Borrower Consolidation;
f. Insider Non-Cash Loans;
g. Advances under the terms of the SABAL Loan; and
h. Capital Expenditures for the Hotel/Casino
Facilities to the extent permitted under Section 6.06.
Section 6.09. TOTAL LIENS. The Borrower Consolidation shall
not directly or indirectly, create, incur, assume or permit to exist any Lien on
or with respect to any of the Collateral, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or
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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:
a. Permitted Encumbrances;
b. Liens granted or permitted pursuant to the
Security Documentation;
c. Liens on the FF&E and other goods securing
Indebtedness to finance the purchase price thereof; PROVIDED that (i) such Liens
shall extend only to the equipment and other goods so financed and the proceeds
thereof, (ii) such Liens shall not secure Indebtedness in excess of Eight
Million Dollars ($8,000,000.00) in the aggregate at any time, and (iii) Agent
Bank, upon the written request of an Authorized Officer, shall confirm the
priority of such Liens as paramount to the Security Documentation to the extent
such Liens are permitted under this Section 6.10(c).
Section 6.10. NO CHANGE OF CONTROL. Until the occurrence of
Credit Facility Termination, no Change of Control shall occur.
Section 6.11. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Other than as approved in writing by Requisite Lenders, no member of the
Borrower Consolidation shall wind up, liquidate or dissolve its affairs or enter
into any transaction of merger or consolidation (except a merger or
consolidation with another entity within the Borrower Consolidation), or convey,
sell, lease or otherwise dispose of (or make an agreement to do any of the
foregoing at any time prior to Credit Facility Termination) all or any material
part of its respective property or assets (except to another entity within the
Borrower Consolidation), except that the following shall be permitted: (i) the
Borrowers may
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make sales of inventory and other assets in the ordinary course of business, and
(ii) so long as no Default or Event of Default shall have occurred and remains
continuing the Borrowers may, in the ordinary course of business, sell equipment
and FF&E as provided in Section 5.01.
Section 6.12. NO TRANSFER OF OWNERSHIP; EQUITY OFFERINGS.
a. MTRI shall not transfer or hypothecate its
ownership interests in MPI, SGLVI or SGRI except in connection with the Security
Documentation.
b. MTRI shall not make any Equity Offering, unless
one hundred percent (100%) of the Net Proceeds received by the Borrower
Consolidation in connection with such Equity Offering are used to make a
Voluntary Permanent Reduction in the amount of such Net Proceeds promptly
following receipt thereof.
Section 6.13. ERISA. No Borrower shall:
a. At any time, permit any Pension Plan which is
maintained by any Borrower or to which any Borrower is obligated to contribute
on behalf of its employees, in such case if to do so would constitute a Material
Adverse Change, to:
(i) engage in any non-exempt "prohibited
transaction", as such term is defined in Section 4975 of the
Code;
(ii) incur any material "accumulated
funding deficiency", as that term is defined in Section 302 of
ERISA; or
(iii) suffer a termination event to occur
which may reasonably be expected to result in liability of any
Borrower to the Pension Plan or to
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the Pension Benefit Guaranty Corporation or the imposition of
a lien on the Collateral pursuant to Section 4068 of ERISA.
b. Fail, upon any Borrower becoming aware thereof,
promptly to notify the Agent Bank of the occurrence of any Reportable Event with
respect to any Pension Plan or of any non-exempt "prohibited transaction" (as
defined in Section 4975 of the Code) with respect to any Pension Plan which is
maintained by any Borrower or to which Borrowers are obligated to contribute on
behalf of their employees or any trust created thereunder which Reportable Event
or prohibited transaction would constitute a Material Adverse Change.
c. At any time, permit any Pension Plan which is
maintained by any Borrower or to which any Borrower is obligated to contribute
on behalf of its employees to fail to comply with ERISA or other applicable laws
in any respect that would result in a Material Adverse Change.
Section 6.14. MARGIN REGULATIONS. No part of the proceeds of
the Credit Facility will be used by Borrowers to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock. Neither the making of such loans, nor the use of the proceeds
of such loans will violate or be inconsistent with the provisions of Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System.
Section 6.15. TRANSACTIONS WITH AFFILIATES. No Borrower shall
engage in any transaction with any Affiliate of Borrowers which is not a member
of the Borrower Consolidation, other than arms length transactions for fair
market value, except to the extent more favorable to the Borrower Consolidation.
Section 6.16. LIMITATION ON SUBSIDIARIES. No member of the
Borrower Consolidation shall create any Subsidiaries (other than subsidiaries
which are members of
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the Borrower Consolidation) without the prior written consent of Requisite
Lenders. In the event of Requisite Lenders consent to the creation of any
Subsidiary which is not a member of the Borrower Consolidation, such Subsidiary
shall execute a Subsidiary Guaranty promptly following its creation.
Section 6.17. LIMITATION ON CONSOLIDATED TAX LIABILITY. No
member of the Borrower Consolidation shall be liable for federal income taxes
relating to the taxable income of any Subsidiary or Affiliate of MTRI which is
not a member of the Borrower Consolidation, or any of them, in excess of the
amount of federal income taxes it would pay if reporting as a separate entity,
unless such member of the Borrower Consolidation is fully reimbursed by such
Subsidiary or Affiliate of MTRI on or before the payment of such taxes.
Section 6.18. CHANGE IN ACCOUNTING PRINCIPLES. Except as
otherwise provided herein, if any changes in accounting principles from those
used in the preparation of the most recent financial statements delivered to
Agent Bank pursuant to the terms hereof are hereinafter required or permitted by
the rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Borrowers with the agreement of their independent certified public accountants
and such changes result in a change in the method of calculation of any of the
financial covenants, standards or terms found herein, the parties hereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
the financial condition of Borrowers shall be the same after such changes as if
such changes had not been made; provided, however, that no change in GAAP that
would affect the method of calculation of any of the financial covenants,
standards or terms shall be given effect in such calculations until such
provisions are amended, in a manner
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satisfactory to Agent Bank and Requisite Lenders, to so reflect such change in
accounting principles.
ARTICLE VII.
EVENTS OF DEFAULT
Section 7.01. EVENTS OF DEFAULT. Any of the following events
and the passage of any applicable notice and cure periods shall constitute an
Event of Default hereunder:
a. Any representation or warranty made by Borrowers
pursuant to or in connection with this Credit Agreement, the Revolving Credit
Note, the Environmental Certificate, or any other Loan Document or in any
report, certificate, financial statement or other writing furnished by Borrowers
in connection herewith, shall prove to be false, incorrect or misleading in any
materially adverse aspect as of the date when made;
b. Borrowers shall have defaulted in the payment of
any principal or interest on the Revolving Credit Note when due, and such
default continues for a period of more than five (5) days;
c. Borrowers shall have defaulted under the terms of
any other obligation owing Agent Bank, which default continues beyond any
applicable grace period therein contained;
d. Borrowers shall have defaulted in the payment of
any late charge, Nonusage Fees, expenses, indemnities or any other amount owing
under any Loan Document or under the Fee Side Letter for a period of five (5)
days after notice thereof to Borrowers from Agent Bank;
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e. Borrowers shall fail duly and punctually to
perform or comply with: (i) any term, covenant, condition or promise contained
in Sections 6.01, 6.02, 6.03, 6.04, 6.05, 6.06, 6.07, 6.08, 6.09 or 6.10, or
(ii) any other term, covenant, condition or promise contained in this Credit
Agreement, the Revolving Credit Note, the Deeds of Trust or any other Loan
Document and, in the case of any term, covenant, condition or promise covered by
this clause (ii), such failure shall continue thirty (30) days after written
notice thereof is delivered to Borrowers by Agent Bank or any Lender of such
failure;
f. Any of the Security Documentation or any
provision thereof: (i) shall cease to be in full force and effect in any
material respect and such cessation results in a Material Adverse Change, or
(ii) shall cease to give the Agent Bank in any material respect the liens,
rights, powers and privileges purported to be created thereby, or (iii) the
Borrowers shall default in the due performance or observance of any term,
covenant or agreement on their part to be performed or observed pursuant to the
Security Documentation for a period of thirty (30) days after written notice
thereof is delivered to Borrowers by Agent Bank of such failure (or such shorter
period following such notice as may be specifically required in any Loan
Document), provided, however, that in the event the cure for such Event of
Default reasonably requires more than thirty (30) days, the cure period shall be
extended for an additional period so long as Borrowers diligently and promptly
undertake such cure and in no event shall the default remain uncured for a
period in excess of ninety (90) days following such written notice;
g. Any Borrower shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to it or its debts under the Bankruptcy Code or any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official, for all or substantially all of its property, or shall consent to any
such relief or to the
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appointment or taking possession by any such official in any involuntary case or
other proceeding against it;
h. An involuntary case or other proceeding shall be
commenced against any Borrower seeking liquidation, reorganization or other
relief with respect to itself or its debts under the Bankruptcy Code or any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official, for all or substantially all of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of ninety (90) days;
i. Any Borrower makes an assignment for the benefit
of its creditors or admits in writing its inability to pay its debts generally
as they become due;
j. Borrowers shall fail to make any payment when due
(whether by scheduled maturity, required prepayment, offer to purchase,
redemption, acceleration, demand or otherwise, in each case beyond the grace
period provided with respect to such Indebtedness) on the Indebtedness evidenced
by the Woodview Loan Documents or on any other Indebtedness, if the aggregate
amount of such Indebtedness is Two Million Five Hundred Thousand Dollars
($2,500,000.00), or more, or any breach, default or event of default shall
occur, or any other event shall occur or condition shall exist, under any
instrument, agreement or indenture pertaining thereto if the effect thereof is
to accelerate, the maturity of any such Indebtedness; or any such Indebtedness
shall be declared to be due and payable or shall be required to be prepaid,
purchased or redeemed (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof, or the holder of any lien in any amount,
shall commence foreclosure of such lien upon property of Borrowers having a
value in excess of One Million Dollars ($1,000,000.00) and such foreclosure
shall continue against such property to a date less than thirty (30) days prior
to the date of the proposed foreclosure sale;
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k. The occurrence of any event of default, beyond
any applicable grace period, under the terms of any agreement with any Lender in
connection with a Secured Interest Rate Hedge relating to the Credit Facility;
l. Any Borrower shall be voluntarily or
involuntarily divested of title or possession of any Collateral Property or
shall lease or in any other manner, voluntarily or involuntarily alienate any of
its interest in any Collateral Property or any portion of the Hotel/Casino
Facilities, other than the Permitted Encumbrances and as permitted in Section
5.01 or other than within the Borrower Consolidation;
m. The occurrence of any Reportable Event with
respect to a Pension Plan which Agent Bank determines in good faith constitutes
proper grounds for the termination of any Pension Plan by the Pension Benefit
Guaranty Corporation or for the appointment by an appropriate United States
District Court of a trustee to administer any such plan that would result in a
Material Adverse Change, should occur and should continue for thirty (30) days
after written notice of such determination shall have been given to Borrowers by
Agent Bank;
n. Commencement against any Borrower, any time after
the execution of this Credit Agreement, of any litigation which is not stayed,
bonded, dismissed, terminated or disposed of to the satisfaction of Agent Bank
within ninety (90) days after its commencement, and which (i) has a reasonable
probability of success, and could, if successful, in the reasonable opinion of
Agent Bank, materially and adversely affect the priority of the Liens granted
Agent Bank by the Deeds of Trust in the Collateral Properties, or (ii) results
in the issuance of a preliminary or permanent injunction which is not dissolved
or stayed pending appeal within sixty (60) days of its issuance and which
preliminary or permanent injunction materially adversely affects any Borrowers'
right to use the Collateral Properties as the Hotel/Casino Facilities;
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o. The loss or suspension, other than on account of
forces majeure, of any Borrower's unrestricted Gaming Permits or the failure of
any Borrower to maintain gaming activities at the Hotel/Casino Facilities other
than on account of forces majeure at least to the same general extent as is
presently conducted thereon for a period in excess of thirty (30) consecutive
days;
p. Any money judgment, writ or warrant of attachment
or similar process involving (i) in any individual case an amount in excess of
One Million Dollars ($1,000,000.00) or (ii) in the aggregate at any time an
amount in excess of Two Million Dollars ($2,000,000.00) (in either case not
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage) shall be entered or filed against any
Borrower or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of sixty (60) days (or in any event
later than five (5) days prior to the date of any proposed sale thereunder);
q. Any order, judgment or decree shall be entered
against any Borrower decreeing its involuntary dissolution or split up and such
order shall remain undischarged and unstayed for a period in excess of thirty
(30) days, or Borrowers shall otherwise dissolve or cease to exist;
r. The occurrence of any Change of Control;
s. MTRI sells, transfers, assigns, hypothecates or
otherwise alienates its interest in all or any portion of the common voting
stock of MPI, SGLVI or SGRI (subject to this provision being first approved by
all necessary Gaming Authorities), other than in connection with the Stock
Pledges;
t. The occurrence of any default under any
Subsidiary Guaranty delivered to Agent Bank or the
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revocation, termination or repudiation of such Subsidiary Guaranty by any
Subsidiary prior to Credit Facility Termination; or
u. The occurrence of any Material Adverse Change.
Section 7.02. DEFAULT REMEDIES. Upon the occurrence of any
Event of Default, Agent Bank, upon the consent or direction of Requisite
Lenders, shall declare the unpaid balance of the Revolving Credit Note, together
with the interest thereon, to be fully due and payable, and Agent Bank shall,
upon the consent or direction of Requisite Lenders, exercise any or all of the
following remedies:
a. Terminate the obligation of Lenders to make any
advances for Borrowings and may declare all outstanding unpaid Indebtedness
hereunder and under the Revolving Credit Note and other Loan Documents together
with all accrued interest thereon immediately due and payable without
presentation, demand, protest or notice of any kind. This remedy will be deemed
to have been automatically exercised on the occurrence of any event set out in
Sections 7.01 (g), (h) or (i).
b. The Banks and/or Agent Bank may exercise any and
all remedies available to Banks or Agent Bank under the Loan Documents.
c. In the event Borrowers have failed to provide any
insurance required under Section 5.09 after the lapse of all applicable notice
and cure periods, Agent Bank may elect at its discretion to purchase such
insurance. All payments made by Agent Bank for the purpose of providing the
insurance coverages required under Section 5.09 shall be deemed amounts advanced
under Section 5.12 of this Credit Agreement.
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d. The Banks and/or Agent Bank may exercise any
other remedies available to Banks or Agent Bank at law or in equity, including
requesting the appointment of a receiver to perform any acts required of
Borrowers under this Credit Agreement, and Borrowers hereby specifically consent
to any such request by Banks.
For the purpose of carrying out this section and exercising
these rights, powers and privileges and subject to all applicable Gaming Laws,
Borrowers hereby irrevocably constitute and appoint Agent Bank as their true and
lawful attorney-in-fact to execute, acknowledge and deliver any instruments and
do and perform any acts such as are referred to in this paragraph in the name
and on behalf of Borrowers. Agent Bank on behalf of Lenders may exercise one or
more of Lenders' remedies simultaneously and all its remedies are nonexclusive
and cumulative. Agent Bank and Lenders shall not be required to pursue or
exhaust any Collateral or remedy before pursuing any other Collateral or remedy.
Agent Bank and Lenders' failure to exercise any remedy for a particular default
shall not be deemed a waiver of (i) such remedy, nor their rights to exercise
any other remedy for that default, nor (ii) their right to exercise that remedy
for any subsequent default.
Section 7.03. APPLICATION OF PROCEEDS. All payments and
proceeds received and all amounts held or realized from the sale or other
disposition of the Collateral Properties and/or Collateral, which are to be
applied hereunder towards satisfaction of Borrowers' obligations under the
Credit Facility, shall be applied in the following order of priority:
a. First, to the payment of all reasonable fees,
costs and expenses (including reasonable attorney's fees and expenses) incurred
by Agent Bank and Banks, their agents or representatives in connection with the
realization upon any of the Collateral;
b. Next, to the payment in full of any other amounts
due under this Credit Agreement, the Deeds of
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Trust, or any other Loan Documents (other than the Revolving Credit Note);
c. Next, to the balance of interest remaining unpaid
on the Revolving Credit Note;
d. Next, to the balance of principal remaining
unpaid on the Revolving Credit Note;
e. Next, the balance, if any, of such payments or
proceeds to whomever may be legally entitled thereto.
Section 7.04. NOTICES. In order to entitle Agent Bank and/or
Banks to exercise any remedy available hereunder, it shall not be necessary for
Agent Bank and/or Banks to give any notice, other than such notice as may be
required expressly herein or by applicable law.
Section 7.05. AGREEMENT TO PAY ATTORNEY'S FEES AND EXPENSES.
Subject to the provisions of Section 11.14, upon the occurrence of an Event of
Default, as a result of which Agent Bank shall require and employ attorneys or
incur other expenses for the collection of payments due or to become due or the
enforcement or performance or observance of any obligation or agreement on the
part of Borrowers contained herein, Borrowers shall, on demand, pay to Agent
Bank the reasonable fees of such attorneys and such other reasonable expenses so
incurred by Agent Bank.
Section 7.06. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In
the event any agreement contained in this Credit Agreement should be breached by
either party and thereafter waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder.
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Section 7.07. LICENSING OF AGENT BANK AND LENDERS. In the
event of the occurrence of an Event of Default hereunder or under any of the
Loan Documents and it shall become necessary, or in the opinion of Requisite
Lenders advisable, for an agent, supervisor, receiver or other representative of
Agent Bank and Banks to become licensed under the provisions of the laws and/or
regulations of any Gaming Authority as a condition to receiving the benefit of
any Collateral encumbered by the Deeds of Trust or other Loan Documents for the
benefit of Lenders or otherwise to enforce their rights hereunder, Borrowers
hereby give their consent to the granting of such license or licenses and agree
to execute such further documents as may be required in connection with the
evidencing of such consent.
Section 7.08. EXERCISE OF RIGHTS SUBJECT TO APPLICABLE LAW.
All rights, remedies and powers provided by this Article VII may be exercised
only to the extent that the exercise thereof does not violate any applicable
provision of the laws of any Governmental Authority and all of the provisions of
this Article VII are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to the extent
necessary so that they will not render this Credit Agreement invalid,
unenforceable or not entitled to be recorded or filed under the provisions of
any applicable law.
Section 7.09. DISCONTINUANCE OF PROCEEDINGS. In case Agent
Bank and/or Banks shall have proceeded to enforce any right, power or remedy
under this Credit Agreement, the Revolving Credit Note, the Deeds of Trust or
any other Loan Document by foreclosure, entry or otherwise, and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to Banks, then and in every such case Borrowers, Agent Bank
and/or Banks shall be restored to their former positions and rights hereunder
with respect to the Collateral, and all rights, remedies and powers of Agent
Bank and Banks shall continue as if such proceedings had not been taken, subject
to any
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binding rule by the applicable court or other tribunal in any such proceeding.
ARTICLE VIII.
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 8.01. NO ABATEMENT OF PAYMENTS. If all or any part of
the Collateral Properties shall be materially damaged or destroyed, or if title
to or the temporary use of the whole or any part of any of the Collateral
Properties shall be taken or condemned by a competent authority for any public
use or purpose, there shall be no abatement or reduction in the amounts payable
by Borrowers hereunder or under the Revolving Credit Note, and Borrowers shall
continue to be obligated to make such payments.
Section 8.02. DISTRIBUTION OF CAPITAL PROCEEDS UPON OCCURRENCE
OF FIRE, OTHER PERILS OR CONDEMNATION. All monies received from "All Risk"
including flood and earthquake insurance policies covering any of the Collateral
Properties or from condemnation or similar actions in regard to said Collateral
Properties, shall be paid directly to Agent Bank. However, in the event the
amount paid to Agent Bank is equal to or less than One Million Dollars
($1,000,000.00), such amount shall be paid directly to Borrowers unless an Event
of Default (other than non-monetary Events of Default occurring as a direct
consequence of such casualty loss or condemnation) shall have occurred and then
be continuing. In the event the amount paid to Agent Bank is greater than One
Million Dollars ($1,000,000.00), then at the option of Borrowers, unless an
Event of Default (other than non-monetary Events of Default occurring as a
direct consequence of such casualty loss or condemnation) has occurred hereunder
and is then continuing, in which case at the option of Requisite Lenders, such
amount may be applied to pay the outstanding balance of the Credit Facility or
the entire amount so collected, or any part thereof, may be released to
Borrowers for repair or replacement of the property destroyed or condemned or to
reimburse Borrowers for the costs of such repair or replacement incurred prior
to the date of such release. In the event the amount so collected is applied to
reduce the
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outstanding balance of the Credit Facility as a consequence of an existing Event
of Default, such reduction shall be made as a Voluntary Permanent Reduction. In
the event the Borrowers elect to, or Lenders are required to, release all or a
portion of the collected funds to Borrowers for such repair or replacement of
the property destroyed or condemned, such release of funds shall be made in
accordance with the following terms and conditions:
a. The repairs, replacements and rebuilding shall be
made in accordance with plans and specifications approved by Requisite Lenders
and in accordance with all applicable laws, ordinances, rules, regulations and
requirements of Governmental Authorities;
b. Borrowers shall provide Agent Bank with a
detailed estimate of the costs of such repairs or restorations;
c. Borrowers shall satisfy the Requisite Lenders
that after the reconstruction is completed, the value of the Collateral
Properties, as determined by the Requisite Lenders in their reasonable
discretion, will not be less than the value of the Collateral Properties prior
to such destruction or condemnation as determined by the Requisite Lenders
pursuant to this Credit Agreement;
d. In the Requisite Lenders' sole reasonable
opinion, any undisbursed portion of the Available Borrowings contemplated
hereunder, after deposit of such proceeds, is sufficient to pay all costs of
reconstruction of the Hotel/Casino Facility or other Collateral Property
damaged, destroyed or condemned; or if the undisbursed portion of such Credit
Facility is not sufficient, Borrowers shall deposit additional funds with the
Agent Bank, sufficient to pay such additional costs of reconstructing the
Collateral Property;
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e. Borrowers have delivered to the Agent Bank a
construction contract for the work of reconstruction in form and content,
including insurance requirements, acceptable to the Requisite Lenders with a
contractor acceptable to the Requisite Lenders;
f. The Requisite Lenders in their reasonable
discretion have determined that after the work of reconstruction is completed,
the Hotel/Casino Facilities or Collateral Property damaged, destroyed or
condemned will produce income sufficient to pay all costs of operations and
maintenance of the applicable Collateral Property with a reasonable reserve for
repairs, and service all debts secured by the applicable Collateral Property;
g. No Default or Event of Default has occurred and
is continuing hereunder;
h. Borrowers have deposited with the Agent Bank that
amount reasonably determined by the Requisite Lenders (taking into consideration
the amount of Borrowings available and the amount of proceeds, if any, of
insurance policies covering property damage and business interruption, loss or
rental income in connection with the Hotel/Casino Facility or Collateral
Property damaged, destroyed or condemned accruing and immediately forthcoming to
the Agent Bank) to be sufficient to service no less than seventy-five percent
(75.0%) of the Indebtedness secured hereby during the period of reconstruction,
as reasonably estimated by the Requisite Lenders;
i. Before commencing any such work, Borrowers shall,
at their own cost and expense, furnish Agent Bank with appropriate endorsements,
if needed, to the "All Risk" insurance policy which Borrowers are then presently
maintaining, and course of construction insurance to cover all of the risks
during the course of such work;
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j. Such work shall be commenced by Borrowers within
one hundred twenty (120) days after (i) settlement shall have been made with the
insurance companies or condemnation proceeds shall have been received, and (ii)
all the necessary governmental approvals shall have been obtained, and such work
shall be completed within a reasonable time, free and clear of all liens and
encumbrances so as not to interfere with the lien of the Deeds of Trust;
k. Disbursements of such insurance or condemnation
proceeds shall be made in the customary manner used by Agent Bank for the
disbursement of construction loans; and
l. That in the event the insurance or condemnation
proceeds are inadequate to repair or replace the property destroyed or condemned
and Requisite Lenders elect to, or are required to release all or a portion of
the funds collected for such repair or replacement, Borrowers agree to deposit
with Agent Bank sufficient funds to cover the difference between the costs of
repair or replacement and the funds released by Requisite Lenders to Borrowers
for such repair or replacement of the property destroyed.
ARTICLE IX.
AGENCY PROVISIONS
Section 9.01. APPOINTMENT.
a. Each Lender hereby (i) designates and appoints
WFB as the Agent Bank of such Lender under this Credit Agreement and the Loan
Documents, (ii) authorizes and directs Agent Bank to enter into the Loan
Documents other than this Credit Agreement for the benefit of Lenders, and (iii)
authorizes Agent Bank to take such action on its behalf under the provisions of
this Credit Agreement and the Loan Documents and to exercise such powers as are
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, subject to the limitations
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referred to in Sections 9.10(a) and 9.10(b). Agent Bank agrees to act as such on
the express conditions contained in this Article IX.
b. The provisions of this Article IX are solely for
the benefit of Agent Bank and Lenders, and Borrowers shall not have any rights
to rely on or enforce any of the provisions hereof (other than as set forth in
the provisions of Sections 9.03, 9.09 and 10.10), provided, however, that the
foregoing shall in no way limit Borrowers' obligations under this Article IX. In
performing its functions and duties under this Credit Agreement, Agent Bank
shall act solely as Agent Bank of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for Borrowers or any other Person.
Section 9.02. NATURE OF DUTIES. Agent Bank shall not have any
duties or responsibilities except those expressly set forth in this Credit
Agreement or in the Loan Documents. The duties of Agent Bank shall be
administrative in nature. Subject to the provisions of Sections 9.05 and 9.07,
Agent Bank shall administer the Credit Facility in the same manner as it
administers its own loans. Promptly following the effectiveness of this Credit
Agreement, Agent Bank shall send to each Lender a duplicate executed original,
to the extent the same are available in sufficient numbers, of the Credit
Agreement and a copy of each other Loan Document in favor of Lenders and a copy
of the filed or recorded Security Documentation, with the originals of the
latter to be held and retained by Agent Bank for the benefit of all Lenders.
Agent Bank shall not have by reason of this Credit Agreement a fiduciary
relationship in respect of any Lender. Nothing in this Credit Agreement or any
of the Loan Documents, expressed or implied, is intended or shall be construed
to impose upon Agent Bank any obligation in respect of this Credit Agreement or
any of the Loan Documents except as expressly set forth herein or therein. Each
Lender shall make its own independent investigation of the financial condition
and affairs of the Borrowers and the Collateral in connection with the making
and the continuance
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of the Credit Facility hereunder and shall make its own appraisal of the
creditworthiness of the Borrowers and the Collateral, and, except as
specifically provided herein, Agent Bank shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the Closing Date or at any time or times thereafter.
Section 9.03. DISBURSEMENT OF BORROWINGS.
a. Not later than the next Banking Business Day
following receipt of a Notice of Borrowing, Agent Bank shall send a copy thereof
by facsimile to each other Lender and shall otherwise notify each Lender of the
proposed Borrowing and the Funding Date. Each Lender shall make available to
Agent Bank (or the funding bank or entity designated by Agent Bank), the amount
of such Lender's Pro Rata Share of such Borrowing in immediately available funds
not later than the times designated in Section 9.03(b). Unless Agent Bank shall
have been notified by any Lender not later than the close of business (San
Francisco time) on the Banking Business Day immediately preceding the Funding
Date in respect of any Borrowing that such Lender does not intend to make
available to Agent Bank such Lender's Pro Rata Share of such Borrowing, Agent
Bank may assume that such Lender shall make such amount available to Agent Bank.
If any Lender does not notify Agent Bank of its intention not to make available
its Pro Rata Share of such Borrowing as described above, but does not for any
reason make available to Agent Bank such Lender's Pro Rata Share of such
Borrowing, such Lender shall pay to Agent Bank forthwith on demand such amount,
together with interest thereon at the Federal Funds Rate. In any case where a
Lender does not for any reason make available to Agent Bank such Lender's Pro
Rata Share of such Borrowing, Agent Bank, in its sole discretion, may, but shall
not be obligated to, fund to Borrowers such Lender's Pro Rata Share of such
Borrowing. If Agent Bank funds to Borrowers such Lender's Pro Rata Share of such
Borrowing and if such Lender subsequently pays to Agent Bank such corresponding
amount, such amount so paid
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shall constitute such Lender's Pro Rata Share of such Borrowing. Nothing in this
Section 9.03(a) shall alter the respective rights and obligations of the parties
hereunder in respect of a Defaulting Lender or a Non-Pro Rata Borrowing.
b. Requests by Agent Bank for funding by Lenders of
Borrowings will be made by telecopy. Each Lender shall make the amount of its
Pro Rata Share of such Borrowing available to Agent Bank in Dollars and in
immediately available funds, to such bank and account, in San Francisco,
California as Agent Bank may designate, not later than 9:00 a.m. (San Francisco
time) on the Funding Date designated in the Notice of Borrowing with respect to
such Borrowing.
c. Nothing in this Section 9.03 shall be deemed to
relieve any Lender of its obligation hereunder to make its Pro Rata Share of
Borrowings on any Funding Date, nor shall any Lender be responsible for the
failure of any other Lender to perform its obligations to advance its Pro Rata
Share of any Borrowing hereunder, and the Pro Rata Share of the Aggregate
Commitment of any Lender shall not be increased or decreased as a result of the
failure by any other Lender to perform its obligation to advance its Pro Rata
Share of any Borrowing.
Section 9.04. DISTRIBUTION AND APPORTIONMENT OF PAYMENTS.
a. Subject to Section 9.04(b), payments actually
received by Agent Bank for the account of Lenders shall be paid to them promptly
after receipt thereof by Agent Bank, but in any event within one (1) Banking
Business Day, provided that Agent Bank shall pay to Lenders interest thereon, at
the Federal Funds Rate from the Banking Business Day following receipt of such
funds by Agent Bank until such funds are paid in immediately available funds to
Lenders. Subject to Section 9.04(b), all payments of principal and interest in
respect of Funded Outstandings, all payments of
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the fees described in this Credit Agreement, and all payments in respect of any
other Obligations shall be allocated among such other Lenders as are entitled
thereto, in proportion to their respective Pro Rata Shares or otherwise as
provided herein. Agent Bank shall promptly distribute, but in any event within
one (1) Banking Business Day, to each Lender at its primary address set forth on
the appropriate signature page hereof or on the applicable Assignment and
Assumption Agreement, or at such other address as a Lender may request in
writing, such funds as it may be entitled to receive, provided that Agent Bank
shall in any event not be bound to inquire into or determine the validity, scope
or priority of any interest or entitlement of any Lender and may suspend all
payments and seek appropriate relief (including, without limitation,
instructions from Requisite Lenders or all Lenders, as applicable, or an action
in the nature of interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby. The order of priority herein
is set forth solely to determine the rights and priorities of Lenders as among
themselves and may at any time or from time to time be changed by Lenders as
they may elect, in writing in accordance with Section 10.01, without necessity
of notice to or consent of or approval by Borrowers or any other Person. All
payments or other sums received by Agent Bank for the account of Lenders
(including, without limitation, principal and interest payments, the proceeds of
any and all insurance maintained with respect to any of the Collateral, and any
and all condemnation proceeds with respect to any of the Collateral) shall not
constitute property or assets of the Agent Bank and shall be held by Agent Bank,
solely in its capacity as administrative and collateral agent for itself and the
other Lenders, subject to the Loan Documents.
b. Notwithstanding any provision hereof to the
contrary, until such time as a Defaulting Lender has funded its Pro Rata Share
of Borrowing which was previously a Non Pro Rata Borrowing, or all other Lenders
have received payment in full (whether by repayment or prepayment) of the
principal due in respect of such Non Pro Rata Borrowing, all principal sums
owing to such Defaulting Lender hereunder
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shall be subordinated in right of payment to the prior payment in full of all
principal, in respect of all Non Pro Rata Borrowing in which the Defaulting
Lender has not funded its Pro Rata Share. This provision governs only the
relationship among Agent Bank, each Defaulting Lender, and the other Lenders;
nothing hereunder shall limit the obligation of Borrowers to repay all
Borrowings in accordance with the terms of this Credit Agreement. The provisions
of this section shall apply and be effective regardless of whether an Event of
Default occurs and is then continuing, and notwithstanding (i) any other
provision of this Credit Agreement to the contrary, (ii) any instruction of
Borrowers as to their desired application of payments or (iii) the suspension of
such Defaulting Lender's right to vote on matters which are subject to the
consent or approval of Requisite Lenders or all Lenders. No Nonusage Fee shall
accrue in favor of, or be payable to, such Defaulting Lender from the date of
any failure to fund Borrowings or reimburse Agent Bank for any Liabilities and
Costs as herein provided until such failure has been cured, and Agent Bank shall
be entitled to (A) withhold or setoff, and to apply to the payment of the
defaulted amount and any related interest, any amounts to be paid to such
Defaulting Lender under this Credit Agreement, and (B) bring an action or suit
against such Defaulting Lender in a court of competent jurisdiction to recover
the defaulted amount and any related interest. In addition, the Defaulting
Lender shall indemnify, defend and hold Agent Bank and each of the other Lenders
harmless from and against any and all Liabilities and Costs, plus interest
thereon at the Default Rate, which they may sustain or incur by reason of or as
a direct consequence of the Defaulting Lender's failure or refusal to abide by
its obligations under this Credit Agreement.
Section 9.05. RIGHTS, EXCULPATION, ETC. Neither Agent Bank,
any Affiliate of Agent Bank, nor any of their respective officers, directors,
employees, agents, attorneys or consultants, shall be liable to any Lender for
any action taken or omitted by them hereunder or under any of the Loan
Documents, or in connection herewith or therewith, except that Agent Bank shall
be liable for its gross negligence or willful misconduct. In the absence of
gross negligence or
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willful misconduct, Agent Bank shall not be liable for any apportionment or
distribution of payments made by it in good faith pursuant to Section 9.04, and
if any such apportionment or distribution is subsequently determined to have
been made in error the sole recourse of any Person to whom payment was due, but
not made, shall be to recover from the recipients of such payments any payment
in excess of the amount to which they are determined to have been entitled.
Agent Bank shall not be responsible to any Lender for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Credit Agreement, any of the Security Documentation or any of the other Loan
Documents, or any of the transactions contemplated hereby and thereby; or for
the financial condition of the Borrowers or any of their Affiliates. Agent Bank
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Credit
Agreement or any of the Loan Documents or the financial condition of the
Borrowers or any of their Affiliates, or the existence or possible existence of
any Default or Event of Default.
Section 9.06. RELIANCE. Agent Bank shall be entitled to rely
upon any written notices, statements, certificates, orders or other documents,
telecopies or any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person, and with
respect to all matters pertaining to this Credit Agreement or any of the Loan
Documents and its duties hereunder or thereunder, upon advice of legal counsel
(including counsel for Borrowers), independent public accountant and other
experts selected by it.
Section 9.07. INDEMNIFICATION. To the extent that Agent Bank
is not reimbursed and indemnified by Borrowers, Lenders will reimburse, within
ten (10) Banking Business Days after notice from Agent Bank, and indemnify and
defend Agent Bank for and against any and all Liabilities and Costs which may be
imposed on, incurred by, or asserted against it in any way relating to or
arising out
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of this Credit Agreement, the Security Documentation or any of the other Loan
Documents or any action taken or omitted by Agent Bank or under this Credit
Agreement, the Security Documentation or any of the other Loan Documents, in
proportion to each Lender's Pro Rata Share; provided that no Lender shall be
liable for any portion of such Liabilities and Costs resulting from Agent Bank's
gross negligence or willful misconduct. The obligations of Lenders under this
Section 9.07 shall survive the payment in full of all Obligations and the
termination of this Credit Agreement. In the event that after payment and
distribution of any amount by Agent Bank to Lenders, any Lender or third party,
including Borrowers, any creditor of Borrowers or a trustee in bankruptcy,
recovers from Agent Bank any amount found to have been wrongfully paid to Agent
Bank or disbursed by Agent Bank to Lenders, then Lenders, in proportion to their
respective Pro Rata Shares, shall reimburse Agent Bank for all such amounts.
Notwithstanding the foregoing, Agent Bank shall not be obligated to advance
Liabilities and Costs and may require the deposit by each Lender of its Pro Rata
Share of any material Liabilities and Costs anticipated by Agent Bank before
they are incurred or made payable.
Section 9.08. AGENT INDIVIDUALLY. With respect to its Pro Rata
Share of the Aggregate Commitment hereunder and the Borrowings made by it, Agent
Bank shall have and may exercise the same rights and powers hereunder and is
subject to the same obligations and liabilities as and to the extent set forth
herein for any other Lender. The terms "Lenders", "Requisite Lenders" or any
similar terms may include Agent Bank in its individual capacity as a Lender or
one of the Requisite Lenders, but Requisite Lenders shall not include Agent Bank
solely in its capacity as Agent Bank and need not necessarily include Agent Bank
in its capacity as a Lender. Agent Bank and any Lender and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with Borrowers or any of their Affiliates as if
it were not acting as Agent Bank or Lender pursuant hereto.
Section 9.09. AGENT BANK NEGATIVE COVENANTS.
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a. WFB shall not resign or remove itself as the
Agent Bank hereunder prior to Credit Facility Termination; and
b. WFB shall not hold less than a sixty-six and
two-thirds percent (66-2/3%) Syndication Interest hereunder prior to Credit
Facility Termination.
Section 9.10. CONSENT AND APPROVALS.
a. Each consent, approval, amendment, modification
or waiver specifically enumerated in this Section 9.10(a) shall require the
consent of Requisite Lenders:
(i) Approval of Borrowings with less than
full compliance with requirements of Article IIIB (Section
2.04);
(ii) Consent to modification to financial
reporting requirements or production of additional financial
or other information (Section 5.08);
(iii) Approval of Investments (Section 6.09);
(iv) Approval of a change in the method of
calculation of any financial covenants, standards or terms as
a result of a change in accounting principle (Section 6.17);
(v) Direct Agent Bank to declare the unpaid
balance of the Credit Facility fully due and payable (Section
7.02);
(vi) Direct the disposition of insurance
proceeds or condemnation awards under certain circumstances
(Section 8.02);
(vii) Approval of appointment of successor
Agent Bank (Section 9.09);
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(viii) Approval of certain Protective
Advances (Section 9.11(a));
(ix) Approval of a Post-Foreclosure Plan and
related matters (Section 9.11(e));
(x) Consent to action or proceeding against
Borrowers or the Collateral by any Lender (Section 9.12);
(xi) Except as referred to in subsection (b)
below, approval of any amendment, modification or termination
of this Credit Agreement, or waiver of any provision herein
(Section 10.01).
b. Each consent, approval, amendment, modification
or waiver specifically enumerated in Section 10.01 shall require the consent of
all Lenders.
c. In addition to the required consents or approvals
referred to in subsection (a) above, Agent Bank may at any time request
instructions from Requisite Lenders with respect to any actions or approvals
which, by the terms of this Credit Agreement or of any of the Loan Documents,
Agent Bank is permitted or required to take or to grant without instructions
from any Lenders, and if such instructions are promptly requested, Agent Bank
shall be absolutely entitled to refrain from taking any action or to withhold
any approval and shall not be under any liability whatsoever to any Person for
refraining from taking any action or withholding any approval under any of the
Loan Documents until it shall have received such instructions from Requisite
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent Bank as a result of Agent Bank acting or
refraining from acting under this Credit Agreement, the Security Documentation
or any of the other Loan Documents in accordance with the instructions of
Requisite Lenders or, where applicable, all Lenders. Agent Bank shall promptly
notify each Lender at any time that the Requisite Lenders
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have instructed Agent Bank to act or refrain from acting pursuant hereto.
d. Each Lender agrees that any action taken by Agent
Bank at the direction or with the consent of Requisite Lenders in accordance
with the provisions of this Credit Agreement or any Loan Document, and the
exercise by Agent Bank at the direction or with the consent of Requisite Lenders
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all
Lenders, except for actions specifically requiring the approval of all Lenders.
All communications from Agent Bank to Lenders requesting Lenders' determination,
consent, approval or disapproval (i) shall be given in the form of a written
notice to each Lender, (ii) shall be accompanied by a description of the matter
or thing as to which such determination, approval, consent or disapproval is
requested, or shall advise each Lender where such matter or thing may be
inspected, or shall otherwise describe the matter or issue to be resolved, (iii)
shall include, if reasonably requested by a Lender and to the extent not
previously provided to such Lender, written materials and a summary of all oral
information provided to Agent Bank by Borrowers in respect of the matter or
issue to be resolved, and (iv) shall include Agent Bank's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event within ten (10) Banking Business Days (the "Lender Reply
Period"). Unless a Lender shall give written notice to Agent Bank that it
objects to the recommendation or determination of Agent Bank (together with a
written explanation of the reasons behind such objection) within the Lender
Reply Period, such Lender shall be deemed to have approved of or consented to
such recommendation or determination. With respect to decisions requiring the
approval of Requisite Lenders or all Lenders, Agent Bank shall submit its
recommendation or determination for approval of or consent to such
recommendation or determination to all Lenders and upon receiving the required
approval or consent shall follow the course of action or determination
recommended to Lenders by Agent Bank or such other course of action recommended
by Requisite Lenders, and
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each non-responding Lender shall be deemed to have concurred with such
recommended course of action.
Section 9.11. AGENCY PROVISIONS RELATING TO COLLATERAL.
a. Agent Bank is hereby authorized on behalf of all
Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default, to take any action with
respect to any Collateral or Loan Document which may be necessary to perfect and
maintain Liens of the Security Documentation upon the Collateral granted
pursuant to the Loan Documents. Agent Bank may make, and shall be reimbursed by
Lenders (in accordance with their Pro Rata Shares), to the extent not reimbursed
by Borrowers, for, Protective Advance(s) during any one (1) calendar year with
respect to the Collateral up to the sum of (i) amounts expended to pay real
estate taxes, assessments and governmental charges or levies imposed upon such
Collateral, (ii) amounts expended to pay insurance premiums for policies of
insurance related to such Collateral, and (iii) One Hundred Thousand Dollars
($100,000.00). Protective Advances in excess of said sum during any calendar
year for any Collateral shall require the consent of Requisite Lenders. In
addition, Agent Bank is hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, to waive the
imposition of the late fees provided for in Section 2.09(a) up to a maximum of
two (2) times per calendar year, including any extensions.
b. Lenders hereby irrevocably authorize Agent Bank,
at its option and in its discretion, to release any Security Documentation
granted to or held by Agent Bank upon any Collateral (i) upon Credit Facility
Termination and repayment and satisfaction of all Borrowings, and all other
Obligations and the termination of this Credit Agreement, or (ii) if approved,
authorized or ratified in writing by Agent Bank at the direction of all Lenders.
Agent Bank shall not be required to execute any document to evidence the release
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of the Security Documentation granted to Agent Bank for the benefit of Lenders
herein or pursuant hereto upon any Collateral if, in Agent Bank's opinion, such
document would expose Agent Bank to liability or create any obligation or entail
any consequence other than the release of such Security Documentation without
recourse or warranty, and such release shall not in any manner discharge, affect
or impair the Obligations or any Security Documentation upon (or obligations of
Borrowers in respect of) any property which shall continue to constitute part of
the Collateral.
c. Except as provided in this Credit Agreement,
Agent Bank shall have no obligation whatsoever to any Lender or to any other
Person to assure that the Collateral exists or is owned by Borrowers or is cared
for, protected or insured or has been encumbered or that the Security
Documentation granted to Agent Bank herein or in any of the other Loan Documents
or pursuant hereto or thereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority.
d. Should Agent Bank (i) employ counsel for advice
or other representation (whether or not any suit has been or shall be filed)
with respect to any Collateral or any part thereof, or any of the Loan
Documents, or the attempt to enforce any security interest or Security
Documentation on any of the Collateral, or (ii) commence any proceeding or in
any way seek to enforce its rights or remedies under the Loan Documents,
irrespective of whether as a result thereof Agent Bank shall acquire title to
any Collateral, either through foreclosure, deed in lieu of foreclosure or
otherwise, each Lender, upon demand therefor from time to time, shall contribute
its share (based on its Pro Rata Share) of the reasonable costs and/or expenses
of any such advice or other representation, enforcement or acquisition,
including, but not limited to, fees of receivers or trustees, court costs, title
company charges, filing and recording fees, appraisers' fees and fees and
expenses of attorneys to the extent not otherwise reimbursed by Borrowers;
provided that Agent Bank shall not be entitled
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to reimbursement of its attorneys' fees and expenses incurred in connection with
the resolution of disputes between Agent Bank and other Lenders unless Agent
Bank shall be the prevailing party in any such dispute. Any loss of principal
and interest resulting from any Event of Default shall be shared by Lenders in
accordance with their respective Pro Rata Shares. It is understood and agreed
that in the event Agent Bank determines it is necessary to engage counsel for
Lenders from and after the occurrence of an Event of Default, said counsel shall
be selected by Agent Bank.
e. In the event that all or any portion of the
Collateral is acquired by Agent Bank as the result of a foreclosure or the
acceptance of a deed or assignment in lieu of foreclosure, or is retained in
satisfaction of all or any part of Borrowers' obligations, title to any such
Collateral or any portion thereof shall be held in the name of Agent Bank or a
nominee or subsidiary of Agent Bank, as agent, for the ratable benefit of Agent
Bank and Lenders. Agent Bank shall prepare a recommended course of action for
such Collateral (the "Post-Foreclosure Plan"), which shall be subject to the
approval of the Requisite Lenders. Unless a Lender shall give written notice to
Agent Bank that it objects to the recommended Post-Foreclosure Plan or any
alternative Post-Foreclosure Plan as set forth below, within the Lender Reply
Period, such Lender shall be deemed to have approved such Post-Foreclosure Plan.
In the event that Requisite Lenders do not approve such Post-Foreclosure Plan,
any Lender shall be permitted to submit an alternative Post-Foreclosure Plan to
Agent Bank, and Agent Bank shall submit any and all such additional
Post-Foreclosure Plans to the Lenders for evaluation and the approval of
Requisite Lenders. In accordance with the approved Post-Foreclosure Plan, Agent
Bank shall manage, operate, repair, administer, complete, construct, restore or
otherwise deal with the Collateral acquired and administer all transactions
relating thereto, including, without limitation, employing a management agent,
leasing agent and other agents, contractors and employees, including agents of
the sale of such Collateral, and the collecting of rents and other sums from
such Collateral and paying the expenses of such
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Collateral; actions taken by Agent Bank with respect to the Collateral, which
are not provided for in the approved Post-Foreclosure Plan or reasonably
incidental thereto, shall require the consent of Requisite Lenders by way of
supplement to such Post-Foreclosure Plan. Upon demand therefor from time to
time, each Lender will contribute its share (based on its Pro Rata Share) of all
reasonable costs and expenses incurred by Agent Bank pursuant to the
Post-Foreclosure Plan in connection with the construction, operation,
management, maintenance, leasing and sale of such Collateral. In addition, Agent
Bank shall render or cause to be rendered by the managing agent, to each of the
Lenders, monthly, an income and expense statement for such Collateral, and each
of the Lenders shall promptly contribute its Pro Rata Share of any operating
loss for such Collateral, and such other expenses and operating reserves as
Agent Bank shall deem reasonably necessary pursuant to and in accordance with
the Post-Foreclosure Plan. To the extent there is net operating income from such
Collateral, Agent Bank shall, in accordance with all applicable Gaming Laws and
the Post-Foreclosure Plan, determine the amount and timing of distributions to
Lenders. All such distributions shall be made to Lenders in accordance with
their respective Pro Rata Shares. Lenders acknowledge that if title to any
Collateral is obtained by Agent Bank or its nominee, such Collateral will not be
held as a permanent investment but will be liquidated as soon as practicable.
Agent Bank shall undertake to sell such Collateral, at such price and upon such
terms and conditions as the Requisite Lenders shall reasonably determine to be
most advantageous. Any purchase money mortgage or deed of trust taken in
connection with the disposition of such Collateral in accordance with the
immediately preceding sentence shall name Agent Bank, as agent for Lenders, as
the beneficiary or mortgagee. In such case, Agent Bank and Lenders shall enter
into an agreement with respect to such purchase money mortgage defining the
rights of Lenders in the same Pro Rata Shares as provided hereunder, which
agreement shall be in all material respects similar to this Article IX insofar
as the same is appropriate or applicable.
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Section 9.12. LENDER ACTIONS AGAINST COLLATERAL. Each Lender
agrees that it will not take any action, nor institute any actions or
proceedings, against Borrowers or any other obligor hereunder, under the
Security Documentation or under any other Loan Documents with respect to
exercising claims against or rights in any Collateral without the consent of
Requisite Lenders.
Section 9.13. RATABLE SHARING. Subject to Section 9.03 and
9.04, Lenders agree among themselves that (i) with respect to all amounts
received by them which are applicable to the payment of the Obligations,
equitable adjustment will be made so that, in effect, all such amounts will be
shared among them ratably in accordance with their Pro Rata Shares, whether
received by voluntary payment, by counterclaim or cross action or by the
enforcement of any or all of the Obligations, or the Collateral, (ii) if any of
them shall by voluntary payment or by the exercise of any right of counterclaim
or otherwise, receive payment of a proportion of the aggregate amount of the
Obligations held by it which is greater than its Pro Rata Share of the payments
on account of the Obligations, the one receiving such excess payment shall
purchase, without recourse or warranty, an undivided interest and participation
(which it shall be deemed to have done simultaneously upon the receipt of such
payment) in such Obligations owed to the others so that all such recoveries with
respect to such Obligations shall be applied ratably in accordance with their
Pro Rata Shares; provided, that if all or part of such excess payment received
by the purchasing party is thereafter recovered from it, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to that party to the extent necessary to adjust for such recovery, but
without interest except to the extent the purchasing party is required to pay
interest in connection with such recovery. Borrowers agree that any Lender so
purchasing a participation from another Lender pursuant to this Section 9.13
may, to the fullest extent permitted by law, exercise all its rights of payment
with respect to such participation as fully as if such Lender were the direct
creditor of Borrowers in the amount of such participation. No Lender shall
exercise any setoff, banker's lien or other
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similar right in respect to any Obligations without the prior written approval
by Agent Bank.
Section 9.14. DELIVERY OF DOCUMENTS. Agent Bank shall as soon
as reasonably practicable distribute to each Lender at its primary address set
forth on the appropriate counterpart signature page hereof, or at such other
address as a Lender may request in writing, (i)copies of all documents to which
such Lender is a party or of which is executed or held by Agent Bank on behalf
of such Lender, (ii) all documents of which Agent Bank receives copies from
Borrowers pursuant to Article VI and Section 10.03, (iii) all other documents or
information which Agent Bank is required to send to Lenders pursuant to the
terms of this Credit Agreement, (iv) other information or documents received by
Agent Bank at the request of any Lender, and (v) all notices received by Agent
Bank pursuant to Section 5.20. In addition, within fifteen (15) Banking Business
Days after receipt of a request in writing from a Lender for written information
or documents provided by or prepared by Borrowers, Agent Bank shall deliver such
written information or documents to such requesting Lender if Agent Bank has
possession of such written information or documents in its capacity as Agent
Bank or as a Lender.
Section 9.15. NOTICE OF EVENTS OF DEFAULT. Agent Bank shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default (other than nonpayment of principal of or interest on the
Credit Facility) unless Agent Bank has received notice in writing from a Lender
or Borrowers referring to this Credit Agreement or the other Loan Documents,
describing such event or condition and expressly stating that such notice is a
notice of a Default or Event of Default. Should Agent Bank receive such notice
of the occurrence of a Default or Event of Default, or should Agent Bank send
Borrowers a notice of Default or Event of Default, Agent Bank shall promptly
give notice thereof to each Lender.
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ARTICLE X.
GENERAL TERMS AND CONDITIONS
The following terms and conditions shall be applicable
throughout the term of this Credit Agreement:
Section 10.01. AMENDMENTS AND WAIVERS. (a) No amendment or
modification of any provision of this Credit Agreement shall be effective
without the written agreement of Requisite Lenders (after notice to all Lenders)
and Borrowers (except for rights and priorities of Lenders as amongst themselves
as provided in Section 9.04(a) which do not require the consent of Borrowers),
and (b) no termination or waiver of any provision of this Credit Agreement, or
consent to any departure by Borrowers therefrom (except as expressly provided in
Section 9.11(a) with respect to waivers of late fees), shall in any event be
effective without the written concurrence of Requisite Lenders (after notice to
all Lenders), which Requisite Lenders shall have the right to grant or withhold
at their sole discretion, except that the following amendments, modifications or
waivers shall require the consent of all Lenders:
(i) modify any requirement hereunder that any
particular action be taken by all the Lenders or by the Requisite Lenders,
modify this Section 10.01 or change the definition of "Requisite Lenders", or
remove Agent Bank under Section 9.09(a), shall be effective unless consented to
by all of the Lenders, without regard to the vote of Agent Bank as a Lender;
(ii) increase the Aggregate Commitment or the
Syndication Interest of any Lender, release any Collateral except as
specifically provided in the Credit Agreement, extend the Maturity Date, release
any Subsidiary that has executed a Subsidiary Guaranty or change any provision
expressly requiring the consent of all Lenders shall be made without the consent
of each Lender; or
(iii) reduce any fees described in Section 2.10 or
extend the due date for, or reduce or postpone the amount of, any Scheduled
Reductions on the Credit
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Facility, or reduce the rate of interest or postpone the payment of interest
on the Credit Facility, shall be made without the consent of all of the
Lenders.
No amendment, modification, termination or waiver of any provision of Article IX
or any other provision referring to Agent Bank shall be effective without the
written concurrence of Agent Bank, but only if such amendment, modification,
termination or waiver alters the obligations or rights of Agent Bank. 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 Borrowers in any case
shall entitle Borrowers to any other further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.01 shall be binding on each
assignee, transferee or recipient of Agent Bank's or any Lender's Syndication
Interest under this Credit Agreement or the Credit Facility at the time
outstanding.
Section 10.02. FAILURE TO EXERCISE RIGHTS. Nothing herein
contained shall impose upon Banks or Borrowers any obligation to enforce any
terms, covenants or conditions contained herein. Failure of Banks or Borrowers,
in any one or more instances, to insist upon strict performance by Borrowers or
Banks of any terms, covenants or conditions of this Credit Agreement or the
other Loan Documents, shall not be considered or taken as a waiver or
relinquishment by Banks or Borrowers of their right to insist upon and to
enforce in the future, by injunction or other appropriate legal or equitable
remedy, strict compliance by Borrowers or Banks with all the terms, covenants
and conditions of this Credit Agreement and the other Loan Documents. The
consent of Banks or Borrowers to any act or omission by Borrowers or Banks shall
not be construed to be a consent to any other or subsequent act or omission or
to waive the requirement for Banks' or Borrowers' consent to be obtained in any
future or other instance.
Section 10.03. NOTICES AND DELIVERY. Unless otherwise
specifically provided herein, any consent, notice
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or other communication herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by courier service or
United States mail and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of a telecopy (or on the next Banking
Business Day if such telecopy is received on a non-Banking Business Day or after
5:00 p.m. on a Banking Business Day) or four (4) Banking Business Days after
deposit in the United States mail (registered or certified, with postage prepaid
and properly addressed). Notices to Agent Bank pursuant to Article II shall not
be effective until received by Agent Bank. For the purposes hereof, the
addresses of the parties hereto (until notice of a change thereof is delivered
as provided in this Section 10.03) shall be as set forth below each party's name
on the signature pages hereof, or, as to each party, at such other address as
may be designated by such party in an Assignment and Assumption Agreement or in
a written notice to all of the other parties. All deliveries to be made to Agent
Bank for distribution to the Lenders shall be made to Agent Bank at the
addresses specified for notice on the signature page hereto and in addition, a
sufficient number of copies of each such delivery shall be delivered to Agent
Bank for delivery to each Lender at the address specified for deliveries on the
signature page hereto or such other address as may be designated by Agent Bank
in a written notice.
Section 10.04. MODIFICATION IN WRITING. This Credit Agreement
and the other Loan Documents constitute the entire agreement between the parties
and supersede all prior agreements whether written or oral with respect to the
subject matter hereof, including, but not limited to, any term sheets furnished
by any of the Banks to Borrowers. Neither this Credit Agreement, nor any other
Loan Documents, nor any provision herein, or therein, may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.
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Section 10.05. OTHER AGREEMENTS. If the terms of any
documents, certificates or agreements delivered in connection with this Credit
Agreement are inconsistent with the terms of the Loan Documents, Borrowers shall
use their best efforts to amend such document, certificate or agreement to the
satisfaction of Agent Bank to remove such inconsistency.
Section 10.06. COUNTERPARTS. This Credit Agreement may be
executed by the parties hereto in any number of separate counterparts with the
same effect as if the signatures hereto and hereby were upon the same
instrument. All such counterparts shall together constitute but one and the same
document.
Section 10.07. RIGHTS, POWERS AND REMEDIES ARE CUMULATIVE.
None of the rights, powers and remedies conferred upon or reserved to Agent
Bank, Banks or Borrowers in this Credit Agreement are intended to be exclusive
of any other available right, power or remedy, but each and every such right,
power and remedy shall be cumulative and not alternative, and shall be in
addition to every right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute. Any forbearance, delay or
omission by Agent Bank, Banks or Borrowers in the exercise of any right, power
or remedy shall not impair any such right, power or remedy or be considered or
taken as a waiver or relinquishment of the right to insist upon and to enforce
in the future, by injunction or other appropriate legal or equitable remedy, any
of said rights, powers and remedies given to Agent Bank, Banks or Borrowers
herein. The exercise of any right or partial exercise thereof by Agent Bank,
Banks or Borrowers shall not preclude the further exercise thereof and the same
shall continue in full force and effect until specifically waived by an
instrument in writing executed by Agent Bank or Banks, as the case may be.
Section 10.08. CONTINUING REPRESENTATIONS. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Credit Agreement,
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the making of the Credit Facility hereunder and the execution and delivery of
each other Loan Document until and final payment of all sums owing under the
Credit Facility and the occurrence of Credit Facility Termination.
Section 10.09. SUCCESSORS AND ASSIGNS. All of the terms,
covenants, warranties and conditions contained in this Credit Agreement shall be
binding upon and inure to the sole and exclusive benefit of the parties hereto
and their respective successors and assigns.
Section 10.10. ASSIGNMENT OF LOAN DOCUMENTS BY BORROWERS OR
SYNDICATION INTERESTS BY LENDERS.
a. This Credit Agreement and the other Loan
Documents to which Borrowers are a party will be binding upon and inure to the
benefit of Borrowers, the Agent Bank, each of the Banks, and their respective
successors and assigns, EXCEPT that, Borrowers may not assign their rights
hereunder or thereunder or any interest herein or therein without the prior
written consent of all the Lenders. Any attempted assignment or delegation in
contravention of the foregoing shall be null and void. Any Lender may at any
time pledge its Syndication Interest in the Credit Facility, the Credit
Agreement and the Loan Documents to a Federal Reserve Bank, but no such pledge
shall release that Lender from its obligations hereunder or grant to such
Federal Reserve Bank the rights of a Lender hereunder absent foreclosure of such
pledge.
b. Each Lender may assign all or any part of its
Syndication Interest in the Credit Facility to any Affiliate of such Lender
which is an Eligible Assignee or to any other Lender without consent and to one
or more financial institutions that are Eligible Assignees with the prior
consent of the Agent Bank and Borrowers (so long as no Event of Default has
occurred and remains continuing), which consents shall not be unreasonably
withheld or delayed; PROVIDED, however, that the minimum amount of each such
assignment shall be One Million Dollars ($1,000,000.00), or
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such lesser amount as constitutes the remaining amount of a Lender's Syndication
Interest in the Credit Facility (except that there shall be no minimum
assignment among the Lenders or to their Affiliates), and each assignee Lender
(or assignor if so agreed between the assignee Lender and such assignor) shall
pay to the Agent Bank an assignment fee of Three Thousand Five Hundred Dollars
($3,500.00) with respect to each such assignment. Each such assignment shall be
evidenced by an assignment substantially in the form of the Assignment and
Assumption Agreement. Upon any such assignment, the assignee financial
institution shall become a Lender for all purposes under the Credit Agreement
and each of the Loan Documents and the assigning Lender shall be released from
its further obligations hereunder to the extent of such assignment. Agent Bank
agrees to give prompt notice to Borrowers of each assignment made under this
Section 10.10(b) and to deliver to Borrowers each revision to the Schedule of
Lenders' Proportions in Credit Facility made as a consequence of each such
assignment.
c. Each Lender may sell participations for all or
any part of its Syndication Interest in the Credit Facility; PROVIDED, however,
that (i) such Lender shall remain responsible for its total obligations under
the Credit Agreement and each of the Loan Documents, (ii) the Borrowers and the
Agent Bank shall continue to deal solely with such Lender in connection with
such Lender's rights and obligations under the Credit Agreement and each of the
Loan Documents, and (iii) such Lender shall not sell any participation under
which the participant would have rights to approve any amendment or waiver
relating to the Credit Agreement or any Loan Document except to the extent any
such amendment or waiver would (w) extend the final Maturity Date or the date
for the payment or any installments of fees, principal or interest due in
respect of the Credit Facility, (x) reduce the amount of any Scheduled Reduction
in respect to the Credit Facility, (y) reduce the interest rates or fees
applicable to the Credit Facility or (z) release any material portion of the
Collateral. Notwithstanding the foregoing, the rights of the Lenders to make
assignments and to grant participations shall be subject to the approval by the
Gaming Authorities of the assignee or participant, to
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the extent required by applicable Gaming Laws, and to applicable securities
laws.
d. In the event any Lender is found unsuitable as a
Lender under the Credit Facility by the Nevada Gaming Authorities ("Unsuitable
Lender"), then to the extent permitted by applicable Laws: (a) Agent Bank shall
use its best efforts to find a replacement Lender, (b) Borrowers shall have the
right to make a Voluntary Permanent Reduction in the amount necessary to reduce
the Aggregate Commitment by the amount of the Syndication Interest held by the
Unsuitable Lender, and any payments required in connection with such Voluntary
Permanent Reduction shall be made to the Unsuitable Lender and not on a pro rata
basis to all Lenders, (without any penalties, including any Breakage Charges)
until a replacement Lender, if any, commits to acquire the Syndication Interest
of the Unsuitable Lender, at which time the Aggregate Commitment shall be
increased by the amount of the Voluntary Permanent Reduction, and (c) upon full
payment of all outstanding amounts of principal and interest owing it, such
Unsuitable Lender shall execute such documents as may be required by Agent Bank,
Borrowers or any applicable gaming authorities to evidence the termination of
its Syndication Interest in the Credit Facility.
Section 10.11. ACTION BY LENDERS. Whenever Banks shall have
the right to make an election, or to exercise any right, or their consent shall
be required for any action under this Credit Agreement or the Loan Documents,
then such election, exercise or consent shall be given or made for all Banks by
Agent Bank in accordance with the provisions of Section 10.01. Notices, reports
and other documents required to be given by Borrowers to Banks hereunder may be
given by Borrowers to Agent Bank on behalf of Banks, with sufficient copies for
distribution to each of the Banks, and the delivery to Agent Bank shall
constitute delivery to Banks. In the event any payment or payments are received
by a Lender other than Agent Bank, Borrowers consent to such payments being
shared and distributed as provided herein.
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Section 10.12. TIME OF ESSENCE. Time shall be of the essence
of this Credit Agreement.
Section 10.13. CHOICE OF LAW AND FORUM. This Credit Agreement
and each of the Loan Documents shall be governed by and construed in accordance
with the internal laws of the State of Nevada without regard to principles of
conflicts of law. Borrowers further agree that the full and exclusive forum for
the determination of any action relating to this Credit Agreement, the Loan
Documents, or any other document or instrument delivered in favor of Banks
pursuant to the terms hereof shall be either an appropriate Court of the State
of Nevada or the United States District Court or United States Bankruptcy Court
for the District of Nevada.
Section 10.14. ARBITRATION.
a. Upon the request of any party, whether made
before or after the institution of any legal proceeding, any action, dispute,
claim or controversy of any kind (e.g., whether in contract or in tort,
statutory or common law, legal or equitable) ("Dispute") now existing or
hereafter arising between the parties in any way arising out of, pertaining to
or in connection with the Credit Agreement, Loan Documents or any related
agreements, documents, or instruments (collectively the "Documents"), may, by
summary proceedings (e.g., a plea in abatement or motion to stay further
proceedings), bring an action in court to compel arbitration of any Dispute.
b. All Disputes between the parties shall be
resolved by binding arbitration governed by the Commercial Arbitration Rules of
the American Arbitration Association. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction.
c. No provision of, nor the exercise of any rights
under this arbitration clause shall limit the rights of any party, and the
parties shall have the right during
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any Dispute, to seek, use and employ ancillary or preliminary remedies, judicial
or otherwise, for the purposes of realizing upon, preserving, protecting or
foreclosing upon any property, real or personal, which is involved in a Dispute,
or which is subject to, or described in, the Documents, including, without
limitation, rights and remedies relating to: (i) foreclosing against any real or
personal property collateral or other security by the exercise of a power of
sale under the Security Documentation or other security agreement or instrument,
or applicable law, (ii) exercising self-help remedies (including setoff rights)
or (iii) obtaining provisional or ancillary remedies such as injunctive relief,
sequestration, attachment, garnishment or the appointment of a receiver from a
court having jurisdiction before, during or after the pendency of any
arbitration. The institution and maintenance of an action for judicial relief or
pursuit of provisional or ancillary remedies or exercise of self-help remedies
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the Dispute to arbitration nor render inapplicable the
compulsory arbitration provision hereof.
Section 10.15. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, BORROWERS AND EACH OF THE BANKS EACH MUTUALLY HEREBY EXPRESSLY
WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND,
OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS CREDIT AGREEMENT, THE
REVOLVING CREDIT NOTE OR ANY OF THE LOAN DOCUMENTS, OR IN ANY WAY CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF BORROWERS AND BANKS WITH
RESPECT TO THIS CREDIT AGREEMENT, THE REVOLVING CREDIT NOTE, OR ANY OF THE LOAN
DOCUMENTS, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWERS AND EACH OF THE
BANKS EACH MUTUALLY AGREE THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND,
OR PROCEEDINGS SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT THE
DEFENDING PARTY MAY FILE AN ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT
OR OTHER TRIBUNAL AS WRITTEN EVIDENCE
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OF THE CONSENT OF THE COMPLAINING PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY.
Section 10.16. SCOPE OF APPROVAL AND REVIEW. Any inspection of
the Hotel/Casino Facilities or other documents shall be deemed to be made solely
for Banks' internal purposes and shall not be relied upon by the Borrowers or
any third party. In no event shall Lenders be deemed or construed to be joint
venturers or partners of Borrowers.
Section 10.17. SEVERABILITY OF PROVISIONS. In the event any
one or more of the provisions contained in this Credit Agreement shall be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
Section 10.18. CUMULATIVE NATURE OF COVENANTS. All covenants
contained herein are cumulative and not exclusive of each other covenant. Any
action allowed by any covenant shall be allowed only if such action is not
prohibited by any other covenant.
Section 10.19. COSTS TO PREVAILING PARTY. If any action or
arbitration proceeding is brought by any party against any other party under
this Credit Agreement or any of the Loan Documents, the prevailing party shall
be entitled to recover such costs and attorney's fees as the court in such
action or proceeding may adjudge reasonable.
Section 10.20. EXPENSES.
a. GENERALLY. Borrowers agree upon demand to pay, or
reimburse Agent Bank for, all of Agent Bank's documented reasonable
out-of-pocket costs and expenses of every type and nature (excluding, however,
all Syndication Costs) incurred by Agent Bank at any time (whether prior to, on
or after the date of this Credit Agreement) in connection
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with (i) any requests for consent, waiver or other modification of any Loan
Document made by Borrowers; (ii) the negotiation, preparation and execution of
this Credit Agreement (including, without limitation, the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III), the
Security Documentation and the other Loan Documents and the advance of
Borrowings; (iii) the subordination of any Collateral, including title charges,
recording fees and reasonable attorneys' fees and costs incurred in connection
therewith; (iv) any appraisals performed after the occurrence of an Event of
Default; (v) the creation, perfection or protection of the Security
Documentation on the Collateral (including, without limitation, any fees and
expenses for title and lien searches, local counsel in various jurisdictions,
filing and recording fees and taxes, duplication costs and corporate search
fees); and (vi) the protection, collection or enforcement of any of the
Obligations or the Collateral, including Protective Advances.
b. AFTER EVENT OF DEFAULT. Borrowers further agree
to pay, or reimburse Agent Bank and Lenders, for all reasonable out-of-pocket
costs and expenses, including without limitation reasonable attorneys' fees and
disbursements incurred by Agent Bank or Lenders after the occurrence of an Event
of Default (i) in enforcing any Obligation or in foreclosing against the
Collateral or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Credit Agreement in
the nature of a "work-out" or in any insolvency or bankruptcy proceeding; (iii)
in commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to Borrowers and related to or arising out of the transactions
contemplated hereby; (iv) in taking any other action in or with respect to any
suit or proceeding (whether in bankruptcy or otherwise); (v) in protecting,
preserving, collecting, leasing, selling, taking possession of, or liquidating
any of the Collateral; or (vi) in attempting to
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enforce or enforcing any lien in any of the Collateral or any other rights under
the Security Documentation.
Section 10.21. SETOFF. In addition to any rights and remedies
of the Agent Bank provided by law, if any Event of Default exists, Agent Bank is
authorized at any time and from time to time, without prior notice to any
Borrower, any such notice being waived by the Borrowers to the fullest extent
permitted by law, to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by Agent Bank to or for
the credit or the account of Borrowers against any and all obligations of
Borrowers under the Credit Facility, now or hereafter existing, irrespective of
whether or not the Agent Bank shall have made demand under this Credit Agreement
or any Loan Document and although such amounts owed may be contingent or
unmatured. Agent Bank agrees promptly to notify the Borrowers (and Agent Bank
shall promptly notify each other Lender) after any such setoff and application
made by Agent Bank; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
Agent Bank under this Section 10.21 are in addition to the other rights and
remedies which Agent Bank may have.
Section 10.22. BORROWER WAIVERS AND CONSENTS.
a. Each Borrower shall be jointly and severally
liable for the repayment of all sums owing under the terms of this Credit
Agreement and each the Loan Documents.
b. Each Borrower agrees that neither the Agent Bank
nor any Bank shall have any responsibility to inquire into the apportionment,
allocation or disposition of any Borrowings as among the Borrowers or within the
Borrower Consolidation.
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c. For the purpose of implementing the joint
borrower provisions of this Credit Agreement and each of the Loan Documents,
each Borrower and the Collateral Affiliate hereby irrevocably appoints each
Authorized Officer as its agent and attorney-in-fact for all purposes of this
Credit Agreement and each of the Loan Documents, including without limitation
the giving and receiving of notices and other communications, the making of
requests for, or conversions or continuations of, Borrowings, the execution and
delivery of certificates and the receipt and allocation of disbursements from
the Banks.
d. Each Borrower acknowledges that the handling of
the Credit Facility on a joint borrowing basis as set forth in this Credit
Agreement is solely an accommodation to Borrowers and is done at their request.
Each Borrower agrees that neither the Agent Bank, nor any Lender, shall incur
any liability to any Borrower as a result thereof. To induce the Agent Bank and
the Lenders to enter into this Credit Agreement, and in consideration thereof,
in accordance with the provisions set forth in Section 5.14 of this Credit
Agreement, each Borrower hereby agrees to indemnify the Agent Bank and each
Lender and hold each such entity harmless from and against any and all
liabilities, expenses, losses, damages and/or claims of damage or injury
asserted against such entity by any Borrower or by any other Person arising from
or incurred by reason of the structuring of the Credit Facility as herein
provided, reliance by the Agent Bank or the Lenders on any requests or
instructions from any Borrower or any Authorized Officer, or any other action
taken by the Agent Bank or a Lender under the terms of this Credit Agreement or
any of the Loan Documents at the request of any Borrower or Authorized Officer.
This Section 10.22(d) shall survive termination of this Credit Agreement.
e. Each Borrower represents and warrants to the
Agent Bank and the Lenders that (i) it has established adequate means of
obtaining from each Borrower on a continuing basis financial and other
information pertaining to the business, operations and condition (financial and
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otherwise) of each of the Borrowers and its respective property, and (ii) each
Borrower now is and hereafter will be completely familiar with the business,
operations and condition (financial and otherwise) of each Borrower, and its
property. Each Borrower hereby waives and relinquishes any duty on the part of
the Agent Bank or any Lender to disclose to such Borrower any matter, fact or
thing relating to the business, operations or condition (financial or otherwise)
of any Borrower, or the property of any Borrower, whether now or hereafter known
by the Agent Bank or any Lender at any time through Credit Facility Termination.
f. Each Borrower acknowledges that the Funded
Outstandings, or portions thereof, may derive from value provided directly to
another Borrower and, in full recognition of that fact, each Borrower consents
and agrees that the Agent Bank and any Lender may, at any time and from time to
time, without notice or demand, and without affecting the enforceability or
security of the Loan Documents:
(i) accept partial payments on the Credit Facility;
(ii) receive and hold additional security or
guaranties for the Credit Facility or any part thereof;
(iii) release, reconvey, terminate, waive, abandon,
subordinate, exchange, substitute, transfer and enforce any
security or guaranties, and apply any security and direct the
order or manner of sale thereof, as the Agent Bank or
Requisite Lenders in their sole and absolute discretion may
determine;
(iv) release any party or any guarantor from any
personal liability with respect to the Credit Facility or any
part thereof;
(v) settle, release on terms satisfactory to the
Agent Bank or Requisite Lenders or by operation of applicable
laws or otherwise liquidate or enforce
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the Credit Facility and any security or guaranty in any
manner, consent to the transfer of any security and bid and
purchase at any sale; and/or
(vi) consent to the merger, change or any other
restructuring or termination of the corporate existence of any
other Borrower or any other Person, and correspondingly
restructure the Credit Facility, continuing existence of any
lien or encumbrance under any other Loan Document to which any
Borrower is a party or the enforceability hereof or thereof
with respect to all or any part of the Credit Facility.
Each Borrower expressly waives any right to require
the Agent Bank or any Lender to marshal assets in favor of any
Borrower, any other party or any other Person or to proceed
against any other Borrower or any other party or any
Collateral provided by any Borrower or any other party, and
agrees that the Agent Bank and Lenders may proceed against
Borrowers and/or the Collateral in such order as they shall
determine in their sole and absolute discretion. The Agent
Bank and Lenders may file a separate action or actions against
any Borrower, whether action is brought or prosecuted with
respect to any other security or against any other Person, or
whether any other Person is joined in any such action or
actions. Each Borrower agrees that the Agent Bank or Lenders
and any other Borrower may deal with each other in connection
with the Credit Facility or otherwise, or alter any contracts
or agreements now or hereafter existing between any of them,
in any manner whatsoever, all without in any way altering or
affecting the obligations of such Borrower under the Loan
Documents or the perfection of the Security Documentation.
Each Borrower expressly waives any and all defenses now or
hereafter arising or asserted by reason of: (a) any disability
or other defense of any Borrower or any other party with
respect to the Credit Facility, (b) the unenforceability or
invalidity as to any Borrower,
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or any other party of the Credit Facility, (c) intentionally
omitted, (d) the cessation for any cause whatsoever of the
liability of any Borrower or any other party (other than by
reason of the full payment and performance of the Credit
Facility and the occurrence of Credit Facility Termination),
(e) any failure of the Agent Bank or any Lender to give notice
of sale or other disposition to any Borrower or any defect in
any notice that may be given in connection with any sale or
disposition, (f) any act or omission of the Agent Bank or any
Lender or others that directly or indirectly results in or
aids the discharge or release of any Borrower or any other
Person or the Credit Facility or any other security or
guaranty therefor by operation of law or otherwise, (g) any
law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other
respects more burdensome than that of the principal or which
reduces a surety's or guarantor's obligation in proportion to
the principal obligation, (h) any failure of the Agent Bank or
any Lender to file or enforce a claim in any bankruptcy or
other proceeding with respect to any Person, (i) the election
by the Agent Bank or any Lender, in any bankruptcy proceeding
of any Person, of the application or non-application of
Section 1111(b)(2) of the United States Bankruptcy Code, (j)
any extension of credit or the grant of any lien or
encumbrance under Section 364 of the United States Bankruptcy
Code, (k) any use of cash collateral under Section 363 of the
United States Bankruptcy Code, (l) any agreement or
stipulation with respect to the provision of adequate
protection in any bankruptcy proceeding of any Person, (m) the
avoidance of any lien or encumbrance in favor of the Agent
Bank or any Lender for any reason, (n) any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
liquidation or dissolution proceeding commenced by or against
any Person, including any discharge of, or bar or stay against
collecting, all or any of the obligations (or any interest
thereon) in or as a result of any such
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proceeding, or (o) any election of remedies by the Agent Bank
or any Lender, even if the effect thereof is to destroy or
impair any Borrower's right to subrogation, reimbursement,
exoneration, indemnification or contribution.
g. Each Borrower authorizes the Agent Bank and any
Lender, upon the occurrence of any acceleration of the Indebtedness then owing
under the Credit Facility, at their sole option, without any other notice or
demand and without affecting any of the Credit Facility or the validity or
enforceability of any liens or encumbrance in favor of the Agent Bank or any
Lender on any Collateral, to foreclose any or all of the Deeds of Trust by
judicial or nonjudicial sale. To the extent permitted by applicable law, each
Borrower expressly waives any defenses to the enforcement of the Loan Documents
or any liens or encumbrances created or granted under the Loan Documents or to
the recovery by the Agent Bank or any Lender against any other Borrower or any
guarantor or any other Person liable therefor of any deficiency after a judicial
or nonjudicial foreclosure or sale, even though such a foreclosure or sale may
impair the subrogation rights of a Borrower and may preclude a Borrower from
obtaining reimbursement or contribution from any other Borrower.
h. Notwithstanding anything to the contrary
elsewhere contained herein or in any other Loan Document to which any Borrower
is a party, each Borrower hereby expressly agrees with respect to the Borrowers
and their successors and assigns (including any surety) and any other Person
which is directly or indirectly a creditor of the other Borrowers or any surety
for any other Borrower, not to exercise, until Credit Facility Termination has
irrevocably occurred, any rights at law or in equity to subrogation, to
reimbursement, to exoneration, to contribution, to setoff or to any other rights
that could accrue to a surety against a principal, to a guarantor against a
maker or obligor, to an accommodation party against the party accommodated, or
to a holder or transferee against a maker, and which such Borrower may have or
hereafter acquire against any of the Borrowers or any other such Person in
connection with or as
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a result of such Borrower's execution, delivery and/or performance of this
Credit Agreement or any other Loan Document to which such Borrower is a party.
Section 10.23. CONFIDENTIALITY. Each of the Banks agrees to
hold any non-public information that it may receive from Borrowers pursuant to
this Credit Agreement (or pursuant to any other Loan Document) in confidence and
consistent with their respective policies for handling material non-public
information, EXCEPT for disclosure: (a) To the other Banks; (b) To legal counsel
and accountants for Borrowers or any of the Banks; (c) To the other professional
advisors to Borrowers or any of the Banks, provided that the recipient has
accepted such information subject to a confidentiality agreement substantially
similar to this Section 10.23; (d) To regulatory officials having jurisdiction
over that Bank; (e) To any Gaming Authority having regulatory jurisdiction over
Borrowers or their respective Subsidiaries, provided that each of the Banks
agrees to endeavor to notify Borrowers of any such disclosure; (f) As required
by law or legal process or in connection with any legal proceeding, provided
that such disclosing Bank uses reasonable efforts to notify Borrowers prior to
any such disclosure; and (g) To another financial institution in connection with
a disposition or proposed disposition to that financial institution of all or
part of that Lender's Syndication Interest hereunder or in the Revolving Credit
Note, provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 10.23. For
purposes of the foregoing, "non-public information" shall mean any information
respecting Borrowers or their respective Subsidiaries reasonably considered by
Borrowers to be material and not available to the public, OTHER THAN (i)
information previously filed with any governmental agency and available to the
public, (ii) information which is available to the general public at the time of
use or disclosure, (iii) information which becomes available to the general
public, other than by manner of unauthorized disclosure or use, or (iv)
information previously published in any public medium from a source other than,
directly or indirectly, that Bank. Nothing in this Section shall be
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construed to create or give rise to any fiduciary duty on the part of the Agent
Bank or the Banks to Borrowers.
Section 10.24. SCHEDULES ATTACHED. Schedules are attached
hereto and incorporated herein and made a part hereof as follows:
Schedule 2.01(a) - Schedule of Lenders' Proportions in Credit
Facility
Schedule 2.01(c) - Aggregate Commitment Reduction Schedule
Schedule 3.11(a) - Schedule of Existing Loan Documents
Schedule 3.18 - Schedule of Significant Litigation
Schedule 4.15 - Schedules of Spaceleases
(A) MPI Schedule of Spaceleases
(B) SGLVI Schedule of Spaceleases
(C) SGRI Schedule of Spaceleases
Schedule 4.16 - Schedules of Equipment Leases and
Contracts
(A) MPI Schedule of Equipment Leases
and Contracts
(B) SGLVI Schedule of Equipment
Leases and Contracts
(C) SGRI Schedule of Equipment Leases
and Contracts
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Schedule 4.22 - Schedule of Trademarks, Patents, Licenses,
Franchises, Formulas and Copyrights
Schedule 4.23 - Schedule of Contingent Liabilities
Schedule 4.24 - Schedule of Existing Subsidiaries
Section 10.25. EXHIBITS ATTACHED. Exhibits are attached hereto
and incorporated herein and made a part hereof as follows:
Exhibit A - Revolving Credit Note
Exhibit B - Notice of Borrowing - Form
Exhibit C - Continuation/Conversion Notice -Form
Exhibit D - Compliance Certificate - Form
Exhibit E - Pricing Certificate - Form
Exhibit F - Authorized Officer Certificate -Form
Exhibit G - Closing Certificate - Form
Exhibit H - Assignment and Assumption Agreement - Form
Exhibit I - Legal Opinion - Form
Exhibit J - Subsidiary Guaranty - Form
Exhibit K - MPI Real Property Description
Exhibit L - SGLVI Real Property Description
Exhibit M - SGRI Real Property Description
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Exhibit N - Logan Primary Parcel Description
Exhibit O - Logan Filly Parcel Description
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed as of the day and year first above written.
BORROWERS:
MTR GAMING GROUP, INC.,
a Delaware corporation
By /s/ Edson R. Arneault
---------------------------
Edson R. Arneault,
President
MOUNTAINEER PARK, INC.,
a West Virginia corporation
By /s/ Edson R. Arneault
---------------------------
Edson R. Arneault,
President
SPEAKEASY GAMING OF LAS VEGAS,
INC., a Nevada corporation
By /s/ Edson R. Arneault
---------------------------
Edson R. Arneault,
President
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SPEAKEASY GAMING OF RENO,
INC., a Nevada corporation
By /s/ Edson R. Arneault
---------------------------
Edson R. Arneault,
President
Address for Borrowers:
State Route 2, South
P.O. Box 356
Chester, West Virginia 26034
Attn: Edson R. Arneault
Telephone: ________________
Facsimile: ________________
BANKS:
WELLS FARGO BANK,
National Association,
Agent Bank and Lender
By /s/ Virginia Christenson
---------------------------
Virginia Christenson,
Assistant Vice President
Address:
P.O. Box 98588
Las Vegas, NV 89193-8588
Telephone: (702) 791-3511
Facsimile: (702) 791-6248
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