SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 1993
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-5440
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AZTAR CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 86-0636534
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2390 East Camelback Road, Suite 400, Phoenix, Arizona 85016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 381-4100
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common stock, $.01 par value New York
Preferred share purchase rights New York
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
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Facing Page (Continued)
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [x]
The aggregate market value of the voting stock held by non-affiliates
of the registrant was $241,045,168 at February 18, 1994 and is based on a
closing price of $6.50 and 37,083,872 common shares outstanding.
At February 18, 1994, the registrant had outstanding 37,364,820 shares
of its common stock, $.01 par value.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information contained in the registrant's 1994 definitive Proxy
Statement, to be filed with the Commission, is incorporated by reference
into this Form 10-K. The following cross-referenced index details the page
location of such information. All other sections of the 1994 Proxy
Statement are not required in Form 10-K and should not be considered a part
thereof.
Part and Item of the Form 10-K 1994 Proxy Statement
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PART III
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ITEM 10. Directors and Executive
- ------- Officers of the Registrant Pages 1 and 2
ITEM 11. Executive Compensation Page 5 under caption
- ------- "Executive Compensation"
through page 8 except that
under caption "Board
Compensation Committee
Report" on Page 8
ITEM 12. Security Ownership of
- ------- Certain Beneficial Owners
and Management Page 3
ITEM 13. Certain Relationships
- ------- and Related Transactions Pages 4 and 5 under
caption "Transactions with
Management and Others"
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PART I
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ITEM 1. BUSINESS
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Aztar Corporation ("Aztar" or the "Company") was incorporated in Delaware
in June 1989 to operate the gaming business of Ramada Inc. ("Ramada") after
the restructuring of Ramada (the "Restructuring"). The Restructuring,which
was approved by Ramada's board of directors in October 1988 and
substantially completed December 20, 1989, involved the disposition of
Ramada's hotel and restaurant businesses with Ramada's shareholders
retaining their interest in the gaming business. As part of the
Restructuring, the gaming business and certain other assets and liabilities
of Ramada were transferred to Aztar, and a wholly-owned subsidiary of New
World Hotels (U.S.A.), Inc. was merged with Ramada (the "Merger"). In the
Merger, each share of Ramada common stock was converted into the right to
receive $1.00 and one share of Aztar common stock. For accounting purposes
Aztar is treated as the continuing accounting entity that is the successor
to the historical Ramada and that has discontinued the hotel and restaurant
businesses.
The Company operates in major domestic gaming markets with casino hotel
facilities in Atlantic City, New Jersey, and in Las Vegas and Laughlin,
Nevada. The strategy of the Company has been to develop facilities with
distinctive themes that are "must-see" attractions in their respective
gaming markets and provide a full entertainment experience to attract
gaming patrons. The Company believes that as the gaming industry becomes
increasingly competitive, casino operators that can best provide a broad
entertainment experience will be most successful. The Company targets
gaming customers in the high end of the middle market, with particular
emphasis on slot customers.
The Company has been pursuing the development of its business in various
gaming jurisdictions. An agreement was executed in September 1993 with the
City of Caruthersville, Missouri, to operate a casino riverboat there, and
an application was filed with the Missouri Gaming Commission for a gaming
license to operate the Caruthersville facility. In January 1994, the
Company took delivery of a vessel and began renovation with the intent for
it to be used in Caruthersville. The Company hopes to begin operations in
Caruthersville in 1994. However, the timing of this is dependent on
several factors that are beyond the Company's control. One of these
factors is the granting of a gaming license by the Missouri Gaming
Commission. Another possible factor is a ruling by the Missouri Supreme
Court holding unconstitutional some portions of the Missouri gaming law. A
statewide election to amend the constitution was scheduled to be held
April 5, 1994.
During 1993, a proposal was submitted to the City of Evansville, Indiana,
for a casino riverboat there and an application was filed for a riverboat
gaming license with the Indiana Gaming Commission. In 1994, the Company
plans to continue to explore opportunities in new jurisdictions as they
become interested in gaming.
The TropWorld complex encompasses 10 acres and has 220 yards of ocean beach
frontage along the Boardwalk in Atlantic City. In July 1993, the TropWorld
building became wholly-owned by the Company upon the acquisition by the
Company of the partnership interests in Ambassador Real Estate Investors,
L.P. ("AREI") and Ambassador General Partnership ("AGP"). AREI owned a
99.9 percent general partnership interest in AGP, which acquired a
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substantial interest in TropWorld in a sale-leaseback transaction in 1984.
TropWorld's 92,191 square foot casino (the second largest in Atlantic City)
contains 2,780 slot machines, including a wide variety of progressive
jackpot machines and video poker machines, and contains 95 table games,
including blackjack, craps, roulette, baccarat, pai gow poker, big six, sic
bo and red dog. The TropWorld complex contains 1,020 hotel rooms, 80,000
square feet of meeting, convention and banquet space, a 1,700 seat
theatrical showroom, the largest in Atlantic City, and parking facilities
for over 2,700 vehicles. There is a wide variety of food and beverage
facilities at TropWorld, including gourmet restaurants, several medium-
priced restaurants and a food court offering a large choice of convenient
and moderately priced items. Recreational facilities at TropWorld include
indoor and outdoor swimming pools, tennis courts, a health and fitness club
and a jogging track. TropWorld operates the casino 24 hours a day, seven
days a week.
The theme of TropWorld recalls the heyday of the Atlantic City Boardwalk
Piers with their amusement rides, carnival games and strolling
entertainers. TropWorld offers daily live musical entertainment in its
atrium, which contains a spectacular four-story-high operating ferris
wheel. TropWorld boasts an indoor roller coaster, bumper cars, and other
attractions reminiscent of the old Boardwalk in Atlantic City.
Tropicana is located on a 34-acre site on the southeast corner of the Strip
and Tropicana Avenue in Las Vegas, Nevada. The Tropicana casino occupies
45,000 square feet and contains 1,510 slot machines and 52 table games.
Tropicana has a tropical island theme and is promoted as "The Island of Las
Vegas." It has one of the world's largest swimming pools and a five-acre
water park and tropical garden area. Tropicana has 1,907 hotel rooms and
suites and approximately 100,000 square feet of convention and exhibit
space. The tropical theme is apparent in the decor of the property, which
includes a large collection of tropical birds and fish. Tropicana offers
its guests a variety of entertainment including laser light shows, a comedy
club, lounge shows and the Folies Bergere revue, which is the longest-
running production show in Las Vegas. At the end of 1993, the Company was
in the process of constructing at Tropicana a new main entrance and a new
building facade that will create a colorful Caribbean Village motif. The
Company expects to complete construction of these enhancements during the
first quarter of 1994.
Throughout most of its history, Tropicana, with its upscale decor and
location as the sole major casino hotel on the southern end of the Strip,
catered to high end table games customers with particular emphasis on
baccarat. This strategy allowed for significant gaming revenues without
substantial walk-in traffic. However, beginning in late 1989 with the
opening of the Mirage, competition for this small group of premium table
games customers, dominated by players from the Far East, increased
significantly. The center portion of the Strip, highlighted by Ceasars
Palace and the Mirage, became the focal point of the high end table games
market. As heavy promotion and complimentary expenditures ensued, profit
margins in this segment declined. As a result, management decided to
curtail its emphasis on premium table games and focus on slot revenue from
the high end of the middle market.
Tropicana is located at an intersection which is now referred to as "The
New Four Corners" of Las Vegas. There are three other major casino hotel
properties located at this intersection, two of which, Luxor and MGM Grand,
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opened during the fourth quarter of 1993, and the other, Excalibur, opened
June 1990. The increase in total casino and hotel capacity with the
opening of Luxor and MGM Grand has increased the level of activity and
visitor traffic around Tropicana. Pedestrian traffic around "The New Four
Corners" will be made faster, safer and more convenient upon completion of
an elevated pedestrian bridge system under construction by the State of
Nevada. The bridge system will connect the four corners of the
intersection and will have elevators and escalators set back from all four
corners. The Company is funding a portion of the construction costs for
this project which is scheduled for completion in early 1994. Upon
completion of this project, the Company plans to construct a connecting
bridge into the Tropicana casino in order to facilitate access from the MGM
Grand.
Management believes that the new properties located at "The New Four
Corners" have stimulated and will continue to stimulate additional walk-in
traffic that provides increased opportunities for Tropicana to attract its
target customers and retain them through the Company's proprietary database
marketing system. There can be no assurance, however, that the increased
competition from these new properties will not have an adverse effect on
Tropicana.
Ramada Express is located on 28 acres in Laughlin, Nevada. Laughlin is
situated on the Colorado River at Nevada's southern tip. The facility
features a Victorian-era railroad theme, including a train that carries
guests between the parking areas and the casino hotel. In September 1993,
the Company completed a $75 million expansion of Ramada Express, on
schedule and within budget. The expansion was financed primarily out of
the Company's cash and cash flow. During the fourth quarter 1993, the
Company borrowed $25 million against its $50 million construction and term
loan credit facility which was converted into a $50 million revolving line
of credit in December 1993. The expansion of Ramada Express included a new
1,100-room tower, increasing the property to a total of 1,500 rooms; a
casino expansion of 20,000 square feet, bringing the total to 50,000 square
feet; a 1,100-vehicle parking garage, bringing the total parking capacity
to 2,300 vehicles; and additional restaurant, special event and retail
space. The expanded casino contains 33 gaming tables and 1,545 slot
machines and is utilized 24 hours a day, seven days a week.
COMPETITION AND SEASONALITY
Competition
Although the Company has been able to compete successfully in its gaming
markets in the past, there can be no assurance that the Company will be
able to continue to compete successfully in these markets.
The Company faces intense competition in each of the markets in which its
gaming facilities are located from other companies in the gaming industry,
some of which have significantly greater financial resources than the
Company. Such competition results, in part, from the geographic
concentration of competitors. All of the Company's casinos primarily
compete with other casinos in their immediate geographic area and, to a
lesser extent, with casinos in other locations, including Native American
lands, and on cruise ships and riverboats, and with other forms of
legalized gaming in the United States, including state-sponsored lotteries,
off-track wagering and card parlors. Certain states have recently
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legalized, and several other states are currently considering legalizing,
casino gaming in specific geographic areas within those states.
Legalization of large-scale, unlimited casino gaming in or near any major
metropolitan area or increased gaming in other areas could have an adverse
economic impact on the business of any or all of the Company's gaming
facilities.
As of December 30, 1993, there were 11 casino hotel facilities operating in
Atlantic City in competition with TropWorld. Presently, there is no new
casino hotel supply anticipated in the Atlantic City market for the next
several years.
During 1993, three major casino hotels opened in the Las Vegas market, two
of which, Luxor and MGM Grand, are located adjacent to the Tropicana near
the intersection of Tropicana Avenue and the Strip, which is now referred
to as "The New Four Corners". Circus Circus opened its 2,500-room Luxor in
October 1993. The 5,000-room MGM Grand opened in December 1993. The third
casino, Mirage's 3,000-room Treasure Island, also opened in October 1993
and is located in the middle of the Strip. These newly opened casinos
added a total of approximately 10,500 rooms to an existing Las Vegas market
base of approximately 77,000 rooms, representing an increase of 14%. In
addition, there has been a significant increase in room supply and casino
space in recent years, including the opening of the 3,000-room Mirage in
November 1989 and the 4,000-room Excalibur in June 1990. Management
believes that the MGM Grand and the Luxor have stimulated and will continue
to stimulate additional walk-in traffic that provides increased
opportunities for Tropicana to attract its target customers and retain them
through the Company's proprietary database marketing system. There can be
no assurance, however, that the increased competition from the new casinos
will not have an adverse effect on Tropicana.
In the Laughlin market, in addition to the Company's expansion completed in
September 1993, the Riverside is in the process of obtaining building
permits for its 792-room tower expansion which it expects to open in
December 1994, and has announced a management agreement with the Mohave
Indian Tribe to build and operate a small facility (approximately 250
gaming positions) in Arizona roughly twenty-five miles south of Laughlin to
open in the fall of 1994. Separately, the Golden Nugget is reportedly
planning to add several hundred additional hotel rooms. Another entity is
reportedly planning two projects in Laughlin consisting of 1,800 rooms and
70,000 square feet of casino space north of Ramada Express and 1,000 rooms
and 50,000 square feet of casino space south of Ramada Express. Sewer
permits are available for new sewer capacity that was recently completed
and is currently in a test phase. The new sewer capacity is expected to be
available for use in the summer of 1994.
Competition involves not only the quality of casino, room, restaurant,
entertainment and convention facilities, but also room, food and beverage
prices. The level of gaming activity also varies significantly from time
to time depending on general economic conditions, marketing efforts, hotel
occupancies and the offering of special events and promotions. The extent
and quality of complimentary services to attract high-stakes players and,
in Atlantic City, casino customers arriving under bus programs, the
personal attention offered to guests and casino customers, advertising,
entertainment, slot machine pay-out rates and credit policies with respect
to high-stakes players are also important competitive factors. As a
result, operating results can be adversely affected by significant cash
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outlays for advertising and promotion and complimentary services to
patrons, the amount and timing of which are partially dictated by the
policies of competitors. If operating revenues are insufficient to allow
management the flexibility to match the promotions of competitors, the
number of the Company's casino patrons may decline, with an adverse effect
on its financial performance.
Seasonality
TropWorld experiences seasonal fluctuations in casino play that management
believes are typical of casino hotel operations in Atlantic City.
Operating results indicate that casino play is seasonally higher during the
months of May through October; consequently the Company's revenues during
the first and fourth quarters have generally been lower than for the second
and third quarters and from time to time the Company has experienced losses
in the first and fourth quarters. Because TropWorld's operating results
are especially dependent upon operations in the summer months, any event
that adversely affects the operating results of TropWorld during such
period could have a material adverse effect on the Company's operations and
financial condition. Given Atlantic City's location, it is also subject to
occasional adverse weather conditions such as storms and hurricanes that
would impede access to Atlantic City, thus adversely impacting operations.
The gaming markets in Las Vegas and Laughlin experience a slight decrease
in gaming activity in the hot summer months and during the holiday period
between Thanksgiving and Christmas.
CREDIT POLICY AND CONTROL PROCEDURES
As is customary in the gaming industry and necessitated by competitive
factors, the Company's gaming activities are conducted on a credit as well
as a cash basis. Credit policies vary widely from one operator to another
and are largely dependent on the profile of the targeted customers. Table
games players, for example, are typically extended more credit than slot
players, and high-stakes players are typically extended more credit than
patrons who tend to wager lower amounts. The Company currently markets to
customers in all gaming segments; however, its credit policy will vary from
facility to facility based upon the various types of customers at each
facility. Gaming debts are legally enforceable under the current laws of
both New Jersey and Nevada; it is not clear, however, that all other states
will honor these policies. The uncollectibility of gaming receivables
could have a material adverse effect on results of operations. Provisions
for estimated uncollectible gaming receivables have been made in order to
reduce gaming receivables to amounts deemed to be collectible.
Gaming operations at the casinos are subject to risk of substantial loss as
a result of employee or patron dishonesty, credit fraud or illegal slot
machine manipulation. The Company has in place stringent control
procedures to minimize such risks; however, there can be no assurance that
losses will not occur. Current controls include supervision of employees,
monitoring by electronic surveillance equipment and use of two-way mirrors
and overhead catwalks. In New Jersey, the Company's activities are
observed and monitored on an ongoing basis by agents of both the New Jersey
Casino Control Commission (the "New Jersey Commission") and the New Jersey
Division of Gaming Enforcement (the "New Jersey Division"), each of which
maintains a staff on the premises of TropWorld. Similarly, in Nevada the
Company's gaming subsidiaries must comply with certain regulatory
requirements concerning casino and game security and surveillance, and the
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gaming operations of Tropicana and Ramada Express are subject to routine
audit and supervision by agents of the Nevada State Gaming Control Board
(the "Nevada Board").
REGULATION
General
Regulatory aspects of the gaming business in both Nevada and New Jersey are
pervasive in nature and the following description should not be construed
as a complete summary of all the regulatory requirements faced by the
Company. In both states, gaming authorizations, once obtained, can be
suspended or revoked for a variety of reasons. If the Company were ever
precluded from operating one of its gaming facilities, it would, to the
extent permitted by law, seek to recover its investment by sale of the
property affected, but there can be no assurance that the Company would
recover its full investment. In addition, the Nevada Gaming Commission
(the "Nevada Commission") and the New Jersey Commission have the authority
to require a holder or beneficial owner of the Company's securities to be
found to be suitable or to qualify under applicable laws or regulations.
From time to time, legislative and regulatory changes are proposed that
could be adverse to the Company. In addition, from time to time,
investigations are conducted relating to the gaming industry. TropWorld is
required to report certain cash transactions to the U.S. Department of the
Treasury pursuant to the Bank Secrecy Act. Violation of the reporting
requirements of the Bank Secrecy Act could result in civil as well as
criminal penalties including fines and/or imprisonment. The State of
Nevada has adopted a regulation similar to the Bank Secrecy Act which
requires the Nevada facilities to document and/or report certain currency
transactions to the Nevada Board. Violation of this regulation could
result in action by the Nevada authorities to fine or revoke, suspend,
condition or fail to renew the Nevada facilities' licenses and/or the
Company's licensing approval. These reporting requirements are not
expected to have any adverse effects on the Company's casino operations.
Regulation and Licensing - Nevada
The ownership and operation of casino gaming facilities in Nevada are
subject to: (i) the Nevada Gaming Control Act and the regulations
promulgated thereunder (collectively, "Nevada Act"); and (ii) various local
regulation. The gaming operations of Tropicana and Ramada Express are
subject to the licensing and regulatory control of the Nevada Commission,
the Nevada Board and the Clark County Liquor and Gaming Licensing Board
(the "Clark County Board") (collectively, the "Nevada Gaming Authorities").
The laws, regulations and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy which are
concerned with, among other things; (i) the prevention of unsavory or
unsuitable persons from having a direct or indirect involvement with gaming
at any time or in any capacity; (ii) the establishment and maintenance of
responsible accounting practices and procedures; (iii) the maintenance of
effective controls over the financial practices of licensees, including the
establishment of minimum procedures for internal fiscal affairs and the
safeguarding of assets and revenues, providing reliable record keeping and
requiring the filing of periodic reports with the Nevada Gaming
Authorities; (iv) the prevention of cheating and fraudulent practices; and
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(v) the provision of a source of state and local revenues though taxation
and licensing fees. Change in such laws, regulations and procedures could
have an adverse effect on the Company.
Hotel Ramada of Nevada ("HRN") is the Company's wholly-owned subsidiary
which operates the casino at Tropicana and Ramada Express, Inc. ("Express")
is the Company's wholly-owned subsidiary which operates the casino at
Ramada Express. HRN and Express are both required to be licensed by the
Nevada Gaming Authorities. The gaming license requires the periodic
payment of fees and taxes and is not transferable. The Company is
registered by the Nevada Commission as a publicly traded corporation
("Registered Corporation") and as such, it is required periodically to
submit detailed financial and operating reports to the Nevada Commission
and furnish any other information which the Nevada Commission may require.
No person may become a stockholder of, or receive any percentage of profits
from HRN or Express without first obtaining licenses and approvals from the
Nevada Gaming Authorities. The Company, HRN and Express have obtained from
the Nevada Gaming Authorities the various registrations, approvals, permits
and licenses required in order to engage in gaming activities in Nevada.
The Nevada Gaming Authorities may investigate any individual who has a
material relationship to, or material involvement with, the Company, HRN or
Express in order to determine whether such individual is suitable or should
be licensed as a business associate of a gaming licensee. Officers,
directors and certain key employees of HRN and Express must file
applications with the Nevada Gaming Authorities and may be required to be
licensed or found suitable by the Nevada Gaming Authorities. Officers,
directors and key employees of the Company who are actively and directly
involved in gaming activities of HRN and Express may be required to be
licensed or found suitable by the Nevada Gaming Authorities. The Nevada
Gaming Authorities may deny an application for licensing for any cause
which they deem reasonable. A finding of suitability is comparable to
licensing, and both require submission of detailed personal and financial
information followed by a thorough investigation. The applicant for
licensing or a finding of suitability must pay all the costs of the
investigation. Changes in licensed positions must be reported to the
Nevada Gaming Authorities and in addition to their authority to deny an
application for a finding of suitability or licensure, the Nevada Gaming
Authorities have jurisdiction to disapprove a change in a corporate
position.
If the Nevada Gaming Authorities were to find an officer, director or key
employee unsuitable for licensing or unsuitable to continue having a
relationship with the Company, HRN or Express the companies involved would
have to sever all relationships with such person. In addition, the Nevada
Commission may require the Company, HRN or Express to terminate the
employment of any person who refuses to file appropriate applications.
Determinations of suitability or of questions pertaining to licensing are
not subject to judicial review in Nevada.
The Company, HRN and Express are required to submit detailed financial and
operating reports to the Nevada Commission. Substantially all material
loans, leases, sales of securities and similar financing transactions by
HRN and Express must be reported to, or approved by, the Nevada Commission.
If it were determined that the Nevada Act was violated by HRN or Express,
the gaming licenses held by HRN or Express could be limited, conditioned,
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suspended or revoked, subject to compliance with certain statutory and
regulatory procedures. In addition, HRN, Express, the Company and the
persons involved could be subject to substantial fines for each separate
violation of the Nevada Act at the discretion of the Nevada Commission.
Further, a supervisor could be appointed by the Nevada Commission to
operate the Company's Nevada gaming properties and, under certain
circumstances, earnings generated during the supervisor's appointment
(except for the reasonable rental value of the Company's Nevada gaming
properties) could be forfeited to the State of Nevada. Limitation,
conditioning or suspension of any gaming license or the appointment of a
supervisor could (and revocation of any gaming license would) materially
adversely affect the Company.
Any beneficial holder of the Company's voting securities, regardless of the
number of shares owned, may be required to file an application, be
investigated, and have his suitability as a beneficial holder of the
Company's voting securities determined if the Nevada Commission has reason
to believe that such ownership would otherwise be inconsistent with the
declared policies of the State of Nevada. The applicant must pay all costs
of investigation incurred by the Nevada Gaming Authorities in conducting
any such investigation.
The Nevada Act requires any person who acquires more than 5% of the
Company's voting securities to report the acquisition to the Nevada
Commission. The Nevada Act requires that beneficial owners of more than
10% of the Company's voting securities apply to the Nevada Commission for a
finding of suitability within thirty days after the Chairman of the Nevada
Board mails the written notice requiring such filing. Under certain
circumstances, an "institutional investor," as defined in the Nevada Act,
which acquires more than 10%, but not more than 15%, of the Company's
voting securities may apply to the Nevada Commission for a waiver of such
finding of suitability if such institutional investor holds the voting
securities for investment purposes only. An institutional investor shall
not be deemed to hold voting securities for investment purposes unless the
voting securities were acquired and are held in the ordinary course of
business as an institutional investor and not for the purpose of causing,
directly or indirectly, the election of a majority of the members of the
board of directors of the Company, any change in the Company's corporate
charter, bylaws, management, policies or operations of the Company, or any
of its gaming affiliates, or any other action which the Nevada Commission
finds to be inconsistent with holding the Company's voting securities for
investment purposes only. Activities which are not deemed to be
inconsistent with holding voting securities for investment purposes only
include: (i) voting on all matters voted on by stockholders; (ii) making
financial and other inquiries of management of the type normally made by
securities analysts for informational purposes and not to cause a change in
its management, policies or operations; and (iii) such other activities as
the Nevada Commission may determine to be consistent with such investment
intent. If the beneficial holder of voting securities who must be found
suitable is a corporation, partnership or trust, it must submit detailed
business and financial information including a list of beneficial owners.
The applicant is required to pay all costs of investigation.
Any person who fails or refuses to apply for a finding of suitability or a
license within thirty days after being ordered to do so by the Nevada
Commission or the Chairman of the Nevada Board, may be found unsuitable.
The same restrictions apply to a record owner if the record owner, after
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request, fails to identify the beneficial owner. Any stockholder found
unsuitable and who holds, directly or indirectly, any beneficial ownership
of the common stock of a Registered Corporation beyond such period of time
as may be prescribed by the Nevada Commission may be guilty of a criminal
offense. The Company is subject to disciplinary action if, after it
receives notice that a person is unsuitable to be a stockholder or to have
any other relationship with the Company, HRN or Express, the Company (i)
pays that person any dividend or interest upon voting securities of the
Company, (ii) allows that person to exercise, directly or indirectly, any
voting right conferred through securities held by that person, (iii) pays
remuneration in any form to that person for services rendered or otherwise,
or (iv) fails to pursue all lawful efforts to require such unsuitable
person to relinquish his voting securities for cash at fair market value.
Additionally, the Clark County Board has taken the position that it has the
authority to approve all persons owning or controlling the stock of any
corporation controlling a gaming license.
The Nevada Commission may, in its discretion, require the holder of any
debt security of a Registered Corporation to file applications, be
investigated and be found suitable to own the debt security of a Registered
Corporation. If the Nevada Commission determines that a person is
unsuitable to own such security, then pursuant to the Nevada Act, the
Registered Corporation can be sanctioned, including the loss of its
approvals, if without the prior approval of the Nevada Commission, it: (i)
pays to the unsuitable person any dividend, interest, or any distribution
whatsoever; (ii) recognizes any voting right by such unsuitable person in
connection with such securities; (iii) pays the unsuitable person
remuneration in any form; or (iv) makes any payment to the unsuitable
person by way of principal, redemption, conversion, exchange, liquidation,
or similar transaction.
The Company is required to maintain a current stock ledger in Nevada which
may be examined by the Nevada Gaming Authorities at any time. If any
securities are held in trust by an agent or by a nominee, the record
holder may be required to disclose the identity of the beneficial owner to
the Nevada Gaming Authorities. A failure to make such disclosure may be
grounds for finding the record holder unsuitable. The Company is also
required to render maximum assistance in determining the identity of the
beneficial owner. The Nevada Commission has the power to require the
Company's stock certificates to bear a legend indicating that the
securities are subject to the Nevada Act. However, to date, the Nevada
Commission has not imposed such a requirement on the Company.
The Company may not make a public offering of its securities without the
prior approval of the Nevada Commission if the securities or the proceeds
therefrom are intended to be used to construct, acquire or finance gaming
facilities in Nevada, or to retire or extend obligations incurred for such
purposes. On June 24, 1993, the Nevada Commission granted the Company
prior approval to make public offerings for a period of one year, subject
to certain conditions ("Shelf Approval"). However, the Shelf Approval may
be rescinded for good cause without prior notice upon the issuance of an
interlocutory stop order by the Chairman of the Nevada Board. The Shelf
Approval does not constitute a finding, recommendation or approval by the
Nevada Commission or the Nevada Board as to the accuracy or adequacy of the
prospectus or the investment merits of the securities. Any representation
to the contrary is unlawful.
11
<PAGE>
Changes in control of the Company through merger, consolidation, stock or
asset acquisitions, management or consulting agreements, or any act or
conduct by a person whereby he obtains control, may not occur without the
prior approval of the Nevada Commission. Entities seeking to acquire
control of a Registered Corporation must satisfy the Nevada Board and
Nevada Commission in a variety of stringent standards prior to assuming
control of such Registered Corporation. The Nevada Commission may also
require controlling stockholders, officers, directors and other persons
having a material relationship or involvement with the entity proposing to
acquire control, to be investigated and licensed as part of the approval
process relating to the transaction.
The Nevada legislature has declared that some corporate acquisitions
opposed by management, repurchases of voting securities and corporate
defense tactics affecting Nevada gaming licensees, and Registered
Corporation, that are affiliated with those operations, may be injurious to
stable and productive corporate gaming. The Nevada Commission has
established a regulatory scheme to ameliorate the potentially adverse
effects of these business practices upon Nevada's gaming industry and to
further Nevada's policy to: (i) assure the financial stability of corporate
gaming operators and their affiliates; (ii) preserve the beneficial aspects
of conducting business in the corporate form; and (iii) promote a neutral
environmental for the orderly governance of corporate affairs. Approvals
are, in certain circumstances, required from the Nevada Commission before
the Company can make exceptional repurchases of voting securities above the
current market price thereof and before a corporate acquisition opposed by
management can be consummated. The Nevada Act also requires prior approval
of a plan of recapitalization proposed by the Company's Board of Directors
in response to a tender offer made directly to the Registered Corporation's
stockholders for the purposes of acquiring control of the Registered
Corporation.
License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the State of Nevada and to the
counties and cities in which the Nevada licensee's respective operations
are conducted. Depending upon the particular fee or tax involved, these
fees and taxes are payable either monthly, quarterly or annually and are
based upon either: (i) a percentage of the gross revenues received; (ii)
the number of gaming devices operated; or (iii) the number of table games
operated. A casino entertainment tax is also paid by casino operations
where entertainment is furnished in connection with the selling of food or
refreshments.
Any person who is licensed, required to be licensed, registered, required
to be registered, or is under common control with such persons
(collectively, "Licensees"), and who proposes to become involved in a
gaming venture outside of Nevada is required to deposit with the Nevada
Board, and thereafter maintain, a revolving fund in the amount of $10,000
to pay the expenses of investigation of the Nevada Board of their
participation in such foreign gaming. The revolving fund is subject to
increase or decrease in the discretion of the Nevada Commission.
Thereafter, Licensees are required to comply with certain reporting
requirements imposed by the Nevada Act. Licensees are also subject to
disciplinary action by the Nevada Commission if it knowingly violates any
laws of the foreign jurisdiction pertaining to the foreign gaming
operation, fails to conduct the foreign gaming operation in accordance with
12
<PAGE>
the standards of honesty and integrity required of Nevada gaming
operations, engages in activities that are harmful to the State of Nevada
or its ability to collect gaming taxes and fees, or employs a person in the
foreign operation who has been denied a license or finding of suitability
in Nevada on the ground of personal unsuitability.
The sale of alcoholic beverages is also subject to licensing, control and
regulation by the Clark County Board. All licenses are revokable and are
not transferable. The Clark County Board has full power to limit,
condition, suspend or revoke any such license and any such disciplinary
action could (and revocation would) have a material adverse effect upon the
operations of the Company.
Regulation and Licensing - New Jersey
Regulation.
The ownership and operation of casino hotel facilities and gaming
activities in Atlantic City, New Jersey, are subject to extensive state
regulation under the New Jersey Casino Control Act (the "New Jersey Act")
and the regulations of the New Jersey Commission. In general, the New
Jersey Act and regulations provide for more extensive controls over a
broader scope of gaming-related activities than does the Nevada regulatory
system.
The New Jersey Act and regulations concern primarily the financial
stability and character of casino licensees, their intermediary and holding
companies, their employees, their security holders and others financially
interested in casino operations, the nature of hotel and casino facilities
and a wide range of gaming and non-gaming related operations. The New
Jersey Act and regulations include detailed provisions concerning, among
other things, financial and accounting practices used in connection with
casino operations, residence and equal employment opportunities for
employees of casino operators, contractors for casino facilities and
others; rules of games, levels of supervision of games and methods of
selling and redeeming chips; manner of granting credit, duration of credit
and enforceability of gaming debts; manufacture, distribution and sale of
gaming equipment; security standards, management control procedures,
accounting and cash control methods and reports to gaming authorities;
advertising of casinos and standards for entertainment and distribution of
alcoholic beverages in casinos. A number of these provisions require
practices which are different from those in Nevada and some of them result
in casino operating costs being higher than those in comparable facilities
in Nevada.
The New Jersey Act also established the New Jersey Division to investigate
all license applications, enforce the provisions of the New Jersey Act and
attendant regulations and prosecute all proceedings for violations of the
New Jersey Act and regulations before the New Jersey Commission. The New
Jersey Division also conducts audits and continuing reviews of all casino
operations.
Licensing.
Adamar of New Jersey, Inc. ("Adamar"), the Company's New Jersey gaming
subsidiary, has been licensed (subject to biennial renewal) by the New
13
<PAGE>
Jersey Commission to operate TropWorld. In November 1982, the New Jersey
Commission granted a plenary license to Adamar. In November 1993, the
license was renewed for a period of two years. The Company and Ramada New
Jersey Holdings Corporation ("Holdings"), another of the Company's New
Jersey gaming subsidiaries, have been approved as qualified holding
companies for Adamar's casino license. Officers and directors of the
Company and Adamar and employees who work at casino hotel facilities
operated by Adamar also have been or must be approved or licensed. In
addition, all contracts affecting the facilities have been or must be
approved, and all enterprises that conduct business with Adamar must
register with the New Jersey Commission and those enterprises that conduct
gaming related businesses or that conduct business on a regular and
continuing basis, as defined by the regulations under the New Jersey Act,
must be licensed by the New Jersey Commission.
The New Jersey Commission has broad discretion regarding the issuance,
renewal, revocation and suspension of casino licenses. Casino licenses are
not transferable. A casino hotel facility must also continually satisfy
certain requirements concerning, among other things, the number of
qualifying sleeping units and the relationship between the number of
qualifying sleeping units and the square footage of casino space. The
Company believes that TropWorld continues to meet such requirements.
The New Jersey Act further provides that each person who directly or
indirectly holds any beneficial interest or ownership of the securities
issued by a casino licensee or any of its intermediary or holding
companies, those persons who, in the opinion of the New Jersey Commission,
have the ability to control the casino licensee or its intermediary or
holding companies or elect a majority of the board of directors of said
companies, other than a banking or other licensed lending institution which
makes a loan or holds a mortgage or other lien acquired in the ordinary
course of business, lenders and underwriters of said companies may be
required to seek qualification from the New Jersey Commission. However,
because the Company is a publicly traded holding company, in accordance
with the provisions of the New Jersey Act, a waiver of qualification may be
granted by the New Jersey Commission, with the concurrence of the Director
of the Division, if it is determined that said persons or entities are not
significantly involved in the activities of Adamar and, in the case of
security holders, do not have the ability to control the Company or elect
one or more of its directors. There exists a rebuttable presumption that
any person holding 5% or more of the equity securities of a casino
licensee's intermediary or holding company or a person having the ability
to elect one or more of the directors of such a company has the ability to
control the company and thus must obtain qualification from the New Jersey
Commission.
Notwithstanding this presumption of control, the New Jersey Act provides
for a waiver of qualification for passive "institutional investors," as
defined by the New Jersey Act, if the institutional investor purchased the
securities for investment purposes only and where such securities
constitute (i) less than 10% of the equity securities of a casino
licensee's holding or intermediary company or (ii) debt securities of a
casino licensee's holding or intermediary company representing a percentage
of the outstanding debt of such company not exceeding 20% or a percentage
of any issue of the outstanding debt of such company not exceeding 50%.
The waiver of qualification is subject to certain conditions including,
14
<PAGE>
upon request of the New Jersey Commission, filing a certified statement
that the institutional investor has no intention of influencing or
affecting the affairs of the issuer. Additionally, a waiver of
qualification may also be granted to institutional investors holding a
higher percentage of securities of a casino licensee's holding or
intermediary company upon a showing of good cause.
If the institutional investor is granted such a waiver and subsequently
determines to influence or affect the affairs of the issuer, it must
provide not less than 30 days notice of such intent and file with the New
Jersey Commission an application for qualification before taking any action
which may influence or affect the affairs of the issuer, except that an
institutional investor holding voting securities shall be permitted to vote
on matters put to the vote of the holders of outstanding voting securities.
If an institutional investor that has been granted a waiver subsequently
changes its investment intent, or if the New Jersey Commission finds
reasonable cause to believe that the institutional investor may be found
unqualified, no action other than divestiture shall be taken by the
investor with respect to the security holdings until there has been
compliance with the provisions of the New Jersey Act concerning Interim
Casino Authorization. The provisions of the New Jersey Act concerning
Interim Casino Authorization provide that whenever a security holder of
either equity or debt is required to qualify pursuant to the New Jersey
Act, the security holder shall, within 30 days after the New Jersey
Commission determines that qualification is required or declines to waive
qualification, (i) file a completed application for qualification, along
with an executed and approved Trust Agreement, wherein all securities of
the holding or intermediary company held by that security holder are placed
in trust pending qualification, or (ii) file a notice of intent to divest
itself of such securities as the New Jersey Commission may require so as to
remove the need for qualification, which securities must be divested within
120 days from the date such determination was made.
The New Jersey Act further requires that corporate licensees and their
subsidiaries, intermediaries and holding companies adopt certain provisions
in their certificates of incorporation that require certain remedial action
in the event that an individual owner of any security of such company is
found disqualified under the New Jersey Act. The required certificate of
incorporation provisions vary depending on whether the stock of the company
subject to the requirements of the New Jersey Act is publicly or privately
traded. Pursuant to the New Jersey Act, the certificate of incorporation
of a publicly held company must provide that any securities of such
corporation are held subject to the condition that if a holder is found to
be disqualified by the New Jersey Commission pursuant to the New Jersey Act
such holder shall dispose of his interest in such company. The certificate
of incorporation of a privately held company must create the absolute right
of the company to repurchase at the market price or purchase price,
whichever is the lesser, any security, share or other interest in the
company in the event the New Jersey Commission disapproves a transfer in
accordance with the provisions of the New Jersey Act.
The Company is a publicly held company and, accordingly, a provision has
been placed in the Company's Restated Certificate of Incorporation which
provides that a holder of the Company's securities must dispose of such
securities if the holder is found disqualified under the New Jersey Act.
In addition, the Restated Certificate of Incorporation for the Company
provides that the Company may redeem the stock of any holder found to be
disqualified.
15
<PAGE>
If, at any time, it is determined that Adamar has violated the New Jersey
Act or regulations, or if any security holder of the Company, Adamar or
Holdings who is required to be qualified under the New Jersey Act is found
disqualified but does not dispose of the securities, Adamar could be
subject to fines or its license could be suspended or revoked. If Adamar's
license is revoked, the New Jersey Commission could appoint a conservator
to operate and to dispose of any casino hotel facilities of Adamar. Net
proceeds of a sale by a conservator and net profits of operations by a
conservator (at least up to an amount equal to a fair return on Adamar's
investment which is reasonable for casinos or hotels) would be paid to
Adamar.
The subsidiaries which conduct the Company's gaming operations in Las Vegas
and Laughlin are not required to apply for licensure or qualification under
the New Jersey Act, but their certificates of incorporation are required
under the New Jersey Act to contain a provision granting them an absolute
right to repurchase at the market price or purchase price, whichever is
less, any of their respective securities in the event that the New Jersey
Commission disapproves a transfer of any such securities.
In addition to compliance with the New Jersey Act and regulations relating
to gaming, any facility built in Atlantic City by Adamar or any other
subsidiary of the Company must comply with the New Jersey and Atlantic City
laws and regulations relating to, among other things, the Coastal Area
Facilities Review Act, construction of buildings, environmental
considerations, operation of hotels and the sale of alcoholic beverages.
Gaming Fees and Taxes.
The New Jersey Commission is authorized to establish fees for the issuance
or renewal of casino licenses. Yearly casino hotel alcoholic beverage
license fees are payable for each facility in any of five specified
categories in any licensed casino hotel. There is also an annual license
fee on each slot machine. The New Jersey Commission is also authorized by
regulation to establish annual fees for the issuance and renewal of
licenses other than casino licenses.
The New Jersey Act imposes an annual tax of eight percent on gross revenues
(as defined in the New Jersey Act). In addition, casino licensees are
required to invest one and one-quarter percent of gross revenues for the
purchase of bonds to be issued by the Casino Reinvestment Development
Authority or make other approved investments equal to that amount; in the
event the investment requirement is not met, the casino licensee is subject
to a tax in the amount of two and one-half percent on gross revenues.
EMPLOYEES
The Company employs approximately 8,200 people of which approximately 2,700
employees are represented by unions. Of the approximately 4,300 employees
at TropWorld, approximately 1,300 are covered by collective bargaining
contracts. Substantially all of such employees are covered by a contract
that expires in 1994 and the remainder are covered by contracts that expire
in 1996. At Tropicana, approximately 1,400 of the 2,400 employees are
covered by collective bargaining contracts. Substantially all of such
employees are covered by contracts that expire in 1994 and the remainder
are covered by contracts that expire in 1995.
16<PAGE>
TRADEMARKS
The Company and Adamar of Nevada are the beneficiaries of an agreement with
Tropicana Enterprises, the owner of certain properties related to
Tropicana, and the Jaffe family regarding the use of the name "Tropicana"
for the operation of a casino hotel in Atlantic City and in connection with
the operation of a casino hotel in New York State (if gaming were to be
authorized in New York State). Pursuant to such agreement, the Company has
registered the name under the Lanham Act. Upon the occurrence of certain
events, the right to use the name reverts to Tropicana Enterprises.
Ramada has licensed the Company to use the name "Ramada" in conjunction
with the operation of Ramada Express, and will not use or permit the use of
the name "Ramada" in Laughlin, Nevada by any other person or entity.
The following trademarks are important to the Company: Aztar, Trop,
TropWorld, Trop Park, Tropicana, Tivoli Pier, TropWorld Casino and
Entertainment Resort, Ramada Express and Express. There are no other
trademarks the use of which is material to the conduct of the Company's
business as a whole.
ITEM 2. PROPERTIES
- -------------------
TROPWORLD.
TropWorld is located on a 10-acre site in Atlantic City, New Jersey. In
July 1993, the TropWorld building became wholly-owned by the Company upon
the acquisition by the Company of the partnership interests in AREI and
AGP. AREI owned a 99.9 percent general partnership interest in AGP, which
acquired a substantial interest in TropWorld in a sale-leaseback
transaction in 1984. Adamar owns the land on which the TropWorld
facilities prior to a 1988 expansion are located, and Atlantic-Deauville
owns the land under the expanded facilities.
TROPICANA.
Tropicana is located on a 34-acre site in Las Vegas, Nevada. Tropicana is
owned by Tropicana Enterprises and is leased to HRN, which operates the
casino and hotel under the lease ( the "Tropicana Lease") that expires in
2011. The Company, through its wholly-owned subsidiary, Adamar of Nevada,
owns a noncontrolling 50% general partnership interest in Tropicana
Enterprises. The remaining 50% general partnership interest in Tropicana
Enterprises is held by various individuals and trusts associated with the
Jaffe family and is entitled to certain preferences on distributions and
liquidations. The Company does not have the right to purchase Tropicana
from Tropicana Enterprises and does not have the right to purchase the
remaining partnership interest in Tropicana Enterprises that is not owned
by Adamar of Nevada.
RAMADA EXPRESS.
Ramada Express is located on a 28-acre site in Laughlin, Nevada. The
Company completed in September 1993 a $75 million expansion of Ramada
Express.
17
<PAGE>
NEW GAMING JURISDICTIONS
In connection with the Company's development of its business in new gaming
jurisdictions, the Company has options to purchase various parcels of land
in Caruthersville, Missouri and Evansville, Indiana.
GENERAL.
The Company leases its corporate headquarters located in Phoenix, Arizona
and owns or leases certain other facilities which are not material to the
Company's operations.
Substantially all land, casino hotel buildings, furnishings and equipment
owned by the Company are pledged as collateral under long-term debt
agreements.
ITEM 3. LEGAL PROCEEDINGS
- --------------------------
The Company is a party to various claims, legal actions and complaints
arising in the ordinary course of business or asserted by way of defense or
counterclaim in actions filed by the Company. Management believes that its
defenses are substantial in each of these matters and that the legal
posture of the Company can be successfully defended or satisfactorily
settled without material adverse effect on its consolidated financial
statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None
18
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------
The registrant has elected not to include information concerning its
executive officers in its 1993 Proxy Statement, as allowed by the Proxy
Statement instructions. The registrant relies on General Instruction G(3)
of this report on Form 10-K in presenting the following information on its
executive officers.
Tenure
-----------------
With Present
Name Office Age Company Position
- ------------------- ---------------------------- --- -------- --------
Paul E. Rubeli Chairman of the Board, 50 15 years 2 years
President and Chief
Executive Officer
Robert M. Haddock Executive Vice President 49 13 years 7 years
and Chief Financial
Officer
Nelson W. Armstrong,
Jr. Vice President, 52 21 years 4 years
Administration and Secretary
Joe C. Cole Vice President, 55 6 years 6 years
Corporate Communications
Meridith P. Sipek Controller 47 16 years 4 years
Craig F. Sullivan Treasurer 47 16 years 4 years
Paul E. Rubeli. Mr. Rubeli joined Ramada in 1979 as Group Vice President,
Industrial Operations. He served as Executive Vice President, Gaming, of
Ramada from 1982 to December 1989, when he was appointed President and
Chief Operating Officer of the Company in the Restructuring. He was
appointed Chief Executive Officer in February 1990 and Chairman of the
Board in addition to his other positions in February 1992.
Robert M. Haddock. Mr. Haddock joined Ramada in 1980 and held various
positions before becoming Executive Vice President and Chief Financial
Officer in March 1987, serving in that capacity until the Restructuring,
when he assumed the same position with the Company.
Nelson W. Armstrong, Jr. Mr. Armstrong joined Ramada in 1973 as an
accounting supervisor and held various positions on the corporate
accounting staff, serving as Vice President and Controller of Ramada and
then of the Company after the Restructuring until he was appointed Vice
President, Administration and Secretary of the Company in March 1990.
Joe C. Cole. Mr. Cole joined Ramada in March 1988 as Vice President,
Corporate Communications after having been affiliated with Phoenix
Newspapers Inc. for 26 years as a reporter, columnist and editor. He
became Vice President, Corporate Communications, of the Company in the
Restructuring.
19
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
- ------------------------------------------------
Meridith P. Sipek. Mr. Sipek joined Ramada's corporate accounting staff in
1977 as a manager and held various positions in corporate and hotel
accounting, serving as Hotel Group Controller before being named Assistant
Corporate Controller of Ramada and then of the Company after the Restructuring
until he was appointed Controller of the Company in March 1990.
Craig F. Sullivan. Mr. Sullivan joined Ramada in 1978 as a treasury analyst
and held various Treasury Department positions before being named Assistant
Treasurer in May 1982, serving in that capacity in Ramada and in the Company
after the Restructuring until he was appointed Treasurer of the Company in
March 1990.
PART II
-------
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- ------------------------------------------------------------------------------
Aztar had 12,588 shareholders of record as of February 18, 1994.
The additional information required by this Item 5 is included in this report
on F-15, F-25 and F-37.
ITEMS 6, 7, and 8
- -----------------
The information required by Item 6 is included in this report on F-37; by Item
7, on F-26 through F-36; and by Item 8, on F-1 through F-25.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------------------------------------------------------------------------
FINANCIAL DISCLOSURE
- --------------------
None.
PART III
ITEMS 10, 11, 12 and 13 --------
- -----------------------
The information required by Items 10, 11, 12 and 13 is incorporated by
reference to the registrant's definitive Proxy Statement to be filed with the
Commission. A cross-referenced index is located on the facing page of this
report. Information concerning the registrant's executive officers is
presented above under a separate caption in Part I of this report.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------
Page No.
(a) 1. Financial Statements: --------
Report of Independent Accountants F-1
Consolidated Balance Sheets, December 30, 1993 and
December 31, 1992 F-2
Consolidated Statements of Operations for the years ended
December 30, 1993, December 31, 1992 and January 2, 1992 F-4
Consolidated Statements of Cash Flows for the years ended
December 30, 1993, December 31, 1992 and January 2, 1992 F-6
Consolidated Statements of Shareholders' Equity for the
years ended December 30, 1993, December 31, 1992 and
January 2, 1992 F-8
Notes to Consolidated Financial Statements F-9
20<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
- --------------------------------------------------------------------------
(Continued)
- -----------
Page No.
--------
2. Financial Statement Schedules:
Report of Independent Accountants S-1
V - Property, Plant and Equipment S-2
VI - Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment S-3
VIII - Valuation and Qualifying Accounts S-4
X - Supplementary Income Statement Information S-5
All other schedules are omitted because the required
information is either presented in the financial
statements or notes thereto, or is not present in amounts
sufficient to require submission of the schedules.
3. Exhibits:
3 Articles of Incorporation and By-Laws *
4 Instruments Defining the Rights of Security
Holders, Including Indentures *
10 Material Contracts *
11 Statement Regarding Computation of Per Share Earnings *
21 Subsidiaries of the Registrant *
23 Consents of Experts and Counsel *
* See exhibit index at page E-1 of this report for a listing of
exhibits filed with this report and those incorporated by
reference.
All other exhibits have been omitted because the information
is not required or is not applicable.
(b) Reports on Form 8-K:
The Company did not file any report on Form 8-K during the
quarter ended December 30, 1993.
For the purposes of complying with the amendments to the rules
governing Form S-8 (effective July 13, 1990) under the Securities Act
of 1933, the undersigned registrant hereby undertakes as follows, which
undertaking shall be incorporated by reference into registrant's
Registration Statements on Form S-8 No. 33-32399 and No. 33-44794
(filed January 5, 1990 and December 24, 1991, respectively):
21
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
22
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
AZTAR CORPORATION By /s/ Robert M. Haddock March 11, 1994
----------------- ------------------------- ------------------
Registrant Robert M. Haddock Date
Executive Vice President
(Chief Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Paul E. Rubeli Chairman of the Board, March 11, 1994
- ------------------------- President and Chief ----------------
Paul E. Rubeli Executive Officer
/s/ Robert M. Haddock Executive Vice President, March 11, 1994
- ------------------------- Chief Financial Officer ----------------
Robert M. Haddock and Director
/s/ Meridith P. Sipek Controller March 11, 1994
- ------------------------- ----------------
Meridith P. Sipek
/s/ John B. Bohle Director March 11, 1994
- ------------------------- ----------------
John B. Bohle
/s/ E. M. Carson Director March 11, 1994
- ------------------------- ----------------
Edward M. Carson
/s/ A. S. Gittlin Director March 11, 1994
- ------------------------- ----------------
A. Sam Gittlin
/s/ John R. Norton, III Director March 11, 1994
- ------------------------- ----------------
John R. Norton, III
/s/ Robert S. Rosow Director March 11, 1994
- ------------------------- ----------------
Robert S. Rosow
/s/ R. Snell Director March 11, 1994
- ------------------------- ----------------
Richard Snell
/s/ Terence W. Thomas Director March 11, 1994
- ------------------------- ----------------
Terence W. Thomas
/s/ Carroll V. Willoughby Director March 11, 1994
- ------------------------- ----------------
Carroll V. Willoughby
23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Aztar Corporation
We have audited the consolidated balance sheets of Aztar Corporation and
Subsidiaries as of December 30, 1993 and December 31, 1992, and the related
consolidated statements of operations, cash flows and shareholders' equity
for each of the three years in the period ended December 30, 1993. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Aztar Corporation and Subsidiaries as of December 30, 1993 and
December 31, 1992, and the consolidated results of their operations and
their cash flows for each of the three years in the period ended December
30, 1993 in conformity with generally accepted accounting principles.
As discussed in Note 16 to the consolidated financial statements, the
Company changed its method of accounting for income taxes in 1992.
COOPERS & LYBRAND
Phoenix, Arizona
February 11, 1994
F-1
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 30, 1993 and December 31, 1992
----------------------------------------
(in thousands, except share data)
1993 1992
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 39,551 $ 100,403
Accounts and notes receivable, net 19,170 28,601
Refundable income taxes 2,062 2,062
Inventories 5,564 5,144
Prepaid expenses 9,206 8,208
Deferred income taxes 6,566 13,353
--------- ---------
Total current assets 82,119 157,771
Investments in and advances to unconsolidated
partnership 13,776 15,225
Other investments 22,131 19,250
Notes receivable -- 246,310
Property and equipment:
Buildings and equipment, net 648,139 287,228
Land 81,795 78,853
Construction in progress 6,701 15,718
Leased under capital leases, net 1,043 9,262
--------- ---------
737,678 391,061
Other assets 21,467 19,948
--------- ---------
$ 877,171 $ 849,565
========= =========
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
December 30, 1993 and December 31, 1992
----------------------------------------
(in thousands, except share data)
1993 1992
--------- ---------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $ 39,515 $ 39,749
Accrued payroll and employee benefits 15,823 17,854
Accrued interest payable 13,714 13,365
Income taxes payable 2,633 2,757
Current portion of long-term debt 2,499 3,508
--------- ---------
Total current liabilities 74,184 77,233
Long-term debt 404,086 378,058
Other long-term liabilities 21,882 23,334
Deferred income taxes 26,126 34,193
Contingencies and commitments
Series B ESOP convertible preferred stock
(redemption value $4,295 and $3,118) 3,905 2,998
Shareholders' equity:
Common stock, $.01 par value (37,359,011
and 36,977,662 shares outstanding) 414 410
Paid-in capital 346,965 344,574
Retained earnings 16,559 5,787
Less: Treasury stock (16,885) (16,885)
Unearned compensation (65) (137)
--------- ---------
Total shareholders' equity 346,988 333,749
--------- ---------
$ 877,171 $ 849,565
========= =========
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
-----------------------------------
(in thousands, except per share data)
1993 1992 1991
Revenues --------- --------- ---------
Casino $439,294 $431,831 $392,917
Rooms 32,248 32,651 36,577
Food and beverage 36,357 37,519 42,040
Other 10,863 10,044 9,751
-------- -------- --------
518,762 512,045 481,285
Costs and expenses
Casino 217,087 202,747 187,189
Rooms 19,495 19,527 21,598
Food and beverage 34,773 35,008 39,229
Other 6,737 6,827 7,211
Marketing 45,427 45,705 41,385
General and administrative 46,849 46,399 46,190
Utilities 12,328 11,617 11,227
Repairs and maintenance 19,953 18,544 18,064
Provision for doubtful accounts 1,566 2,622 4,763
Property taxes and insurance 16,729 16,108 15,391
Net rent 27,747 45,653 47,193
Depreciation and amortization 32,652 28,679 28,191
-------- -------- --------
481,343 479,436 467,631
-------- -------- --------
Operating income 37,419 32,609 13,654
Interest income 24,172 28,655 26,245
Interest expense (45,363) (31,132) (32,101)
-------- -------- --------
Income from continuing operations before
other items, income taxes, extraordinary
items and cumulative effect of accounting
change 16,228 30,132 7,798
Equity in unconsolidated partnership's loss (3,822) (4,125) (5,030)
-------- -------- --------
Income from continuing operations before
income taxes, extraordinary items and
cumulative effect of accounting change 12,406 26,007 2,768
Income taxes (1,024) (9,629) (60)
-------- -------- --------
Income from continuing operations before
extraordinary items and cumulative effect
of accounting change 11,382 16,378 2,708
Discontinued operations -- 1,262 2,553
Extraordinary items -- (5,335) 1,237
Cumulative effect of accounting change -- 7,500 --
-------- -------- --------
Net income $ 11,382 $ 19,805 $ 6,498
======== ======== ========
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
-----------------------------------
(in thousands, except per share data)
1993 1992 1991
-------- -------- --------
Earnings per common and common equivalent
share:
Income from continuing operations before
extraordinary items and cumulative
effect of accounting change $ .28 $ .41 $ .05
Discontinued operations -- .03 .07
Extraordinary items -- (.14) .03
Cumulative effect of accounting change -- .20 --
-------- -------- --------
Net income $ .28 $ .50 $ .15
======== ======== ========
Earnings per common share assuming full
dilution:
Income from continuing operations before
extraordinary items and cumulative
effect of accounting change $ .27 $ .40 $ .05
Discontinued operations -- .03 .06
Extraordinary items -- (.13) .03
Cumulative effect of accounting change -- .19 --
-------- -------- --------
Net income $ .27 $ .49 $ .14
======== ======== ========
Weighted average common shares
applicable to:
Earnings per common and common
equivalent share 38,367 38,212 38,782
Earnings per common share assuming
full dilution 39,429 39,311 39,939
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
--------------
(in thousands)
1993 1992 1991
---------- ---------- ----------
Cash Flows from Operating Activities
Net income $ 11,382 $ 19,805 $ 6,498
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 34,577 30,639 31,048
Provision for losses on accounts
receivable 1,566 2,622 4,763
Loss on reinvestment obligation 991 1,103 1,060
Interest income 1,889 (4,389) (2,144)
Rent expense (880) (2,537) (2,527)
Distribution in excess of equity in
income of partnership 1,449 1,355 1,393
Deferred income taxes (1,280) (1,556) (41)
Change in assets and liabilities:
(Increase) decrease in accounts
receivable (1,442) (1,372) (15)
(Increase) decrease in refundable
income taxes -- (2,062) --
(Increase) decrease in inventories
and prepaid expenses (1,969) (1,582) (1,332)
Increase (decrease) in accounts payable,
accrued expenses and income taxes
payable 1,955 (12,745) (2,776)
Other items, net 2,087 2,502 3,245
--------- --------- ---------
Net cash provided by (used in) operating
activities 50,325 31,783 39,172
--------- --------- ---------
Cash Flows from Investing Activities
Reduction (increase) in invested funds -- 5,075 (5,075)
Payments received on TropWorld second
mortgage 24,400 51,450 45,900
Payments received on other notes receivable 2,191 2,383 3,075
Increase in TropWorld second mortgage (24,400) (51,450) (45,900)
Increase in other notes receivable (419) (174,678) (3,252)
Purchases of property and equipment (77,804) (20,607) (18,400)
Acquisition of AREI/AGP partnership
interests, net of cash acquired (61,859) -- --
Additions to other long-term assets (7,360) (10,893) (3,489)
--------- --------- ---------
Net cash provided by (used in) investing
activities $(145,251) $(198,720) $ (27,141)
-------- -------- --------
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
--------------
(in thousands)
1993 1992 1991
Cash Flows from Financing Activities --------- --------- ---------
Proceeds from issuance of long-term debt $ 35,000 $200,000 --
Proceeds from issuance of common stock 2,149 261 $ 35
Principal payments on long-term debt (2,157) (3,787) (3,902)
Repurchase of common stock -- (5,364) (224)
Preferred stock dividend (787) (797) (800)
Redemption of preferred stock (131) (90) (24)
Redemption of Holdings preferred stock -- -- (4,131)
-------- -------- --------
Net cash provided by (used in)
financing activities 34,074 190,223 (9,046)
-------- -------- --------
Net increase (decrease) in cash and
cash equivalents (60,852) 23,286 2,985
Cash and cash equivalents at beginning
of year 100,403 77,117 74,132
-------- -------- --------
Cash and cash equivalents at end
of year $ 39,551 $100,403 $ 77,117
======== ======== ========
Supplemental Cash Flow Disclosures
Acquisition of AREI/AGP partnership interests:
Working capital, other than cash $ 3,370 $ -- $ --
Notes receivable 242,605 -- --
Building and equipment (307,582) -- --
Capital lease assets, net 6,703 -- --
Long-term debt (5,682) -- --
Other long-term liabilities (1,273) -- --
-------- -------- --------
Net cash used in acquisition (61,859) -- --
Summary of non-cash investing and
financing activities:
Capital lease obligations incurred
for property and equipment $ 385 $ 3,687 $ 3,282
Note received in sale of
property and equipment -- 225 --
Tax benefit from stock options
and preferred stock dividend 431 290 --
Issuance of restricted stock -- -- 210
Forfeiture of restricted stock -- 30 --
Cash paid (refunded) during the
year for the following for continuing
and discontinued operations:
Interest, net of amount capitalized $ 43,160 $ 31,905 $ 28,883
Income taxes 1,997 8,165 (408)
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
-------------
(in thousands)
Retained Unearned
Common Paid-in Earnings Treasury Compen-
Stock Capital (Deficit) Stock sation Total
Balance, -------- -------- --------- --------- --------- --------
January 3, 1991 $ 409 $343,990 $(19,130) $(11,267) $(1,231) $312,771
Stock options
exercised 35 35
Issuance of
restricted stock 210 (210) --
Repurchase of
common stock (224) (224)
Preferred stock
dividend (800) (800)
Amortization of
unearned
compensation 620 620
Net income 6,498 6,498
Balance, -------- -------- -------- -------- -------- --------
January 2, 1992 409 344,235 (13,432) (11,491) (821) 318,900
Stock options
exercised 1 260 261
Tax benefit
from stock
options exercised 79 79
Repurchase of
common stock (5,364) (5,364)
Preferred stock
dividend, net of
income tax benefit (586) (586)
Forfeitures of
restricted stock (30) 30 --
Amortization of
unearned
compensation 654 654
Net income 19,805 19,805
Balance, -------- -------- -------- -------- -------- --------
December 31, 1992 410 344,574 5,787 (16,885) (137) 333,749
Stock options
exercised 4 2,145 2,149
Tax benefit
from stock
options exercised 246 246
Preferred stock
dividend, net of
income tax benefit (610) (610)
Amortization of
unearned
compensation 72 72
Net income 11,382 11,382
Balance, -------- -------- -------- -------- -------- --------
December 30, 1993 $ 414 $346,965 $ 16,559 $(16,885) $ (65) $346,988
======== ======== ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
F-8<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidated Statements
Aztar Corporation ("Aztar" or the "Company") was incorporated in Delaware
in June 1989 to operate the gaming business of Ramada Inc. ("Ramada") after
the restructuring of Ramada (the "Restructuring"). The Restructuring
involved the disposition of Ramada's hotel and restaurant businesses with
Ramada's shareholders retaining their interest in the gaming business. As
part of the Restructuring, the gaming business and certain other assets and
liabilities of Ramada were transferred to Aztar, and a wholly-owned
subsidiary of New World Hotels (U.S.A.), Inc. was merged with Ramada (the
"Merger"). In the Merger, each share of Ramada common stock was converted
into the right to receive $1.00 and one share of Aztar common stock. For
accounting purposes Aztar is treated as the continuing accounting entity
that is the successor to the historical Ramada and that has discontinued
the hotel and restaurant businesses.
The consolidated financial statements include the accounts of Aztar and all
of its controlled subsidiaries and partnerships. All subsidiary companies
are wholly owned. Ramada New Jersey Holdings Corporation ("Holdings") was
majority owned until January 4, 1991, when it redeemed its outstanding
shares of Convertible Class A Preferred Stock and became wholly owned. In
consolidating, all material intercompany transactions are eliminated. The
Company uses a 52/53 week fiscal year ending on the Thursday nearest
December 31, which includes 52 weeks in 1993, 1992 and 1991.
Cash and Cash Equivalents
Highly liquid investments purchased with an original maturity of three
months or less are classified as cash equivalents. These instruments are
stated at cost, which approximates fair value because of their short
maturity.
Inventories
Inventories, which consist primarily of food, beverage and operating
supplies, are stated at the lower of cost or market value. Costs are
determined using the first-in, first-out method.
Property and Equipment
Property and equipment are stated at cost. During construction, the
Company capitalizes interest and other direct and indirect development
costs. Interest is capitalized monthly by applying the effective interest
rate on certain borrowings to the average balance of expenditures.
Capitalized interest was $3,491,000 in 1993, $1,061,000 in 1992 and
$253,000 in 1991.
Depreciation and amortization are computed by the straight-line method
based upon the following useful lives: buildings and improvements, 3-40
years; furniture and equipment, 3-15 years; and leasehold improvements,
shorter of lease term or asset useful life. Accumulated depreciation and
amortization on buildings and equipment was $139,690,000 at December 30,
1993 and $112,442,000 at December 31, 1992.
F-9
<PAGE>
Improvements, renewals and extraordinary repairs that extend the life of
the asset are capitalized; other repairs and maintenance are expensed. The
cost and accumulated depreciation applicable to assets retired are removed
from the accounts and the gain or loss, if any, on disposition is
recognized in income as realized.
Deferred Charges
Note and loan issuance costs are amortized using the interest method.
Costs incurred to obtain initial gaming licenses to operate a casino are
capitalized and amortized over ten years; subsequent renewal costs are
amortized over the renewal period.
Preopening costs directly related to the opening of a gaming operation or
major addition to a gaming operation are capitalized as incurred and
expensed in the period the related facility commences operations.
Revenue Recognition
Casino revenue consists of gaming win net of losses. Revenues exclude the
retail value of complimentary food and beverage, accommodations and other
goods and services provided to customers. The estimated costs of providing
such complimentaries have been classified as casino expenses through
interdepartmental allocations as follows (in thousands):
1993 1992 1991
-------- -------- --------
Rooms $ 18,992 $ 14,930 $ 12,130
Food and beverage 33,287 30,568 26,795
Other 6,666 6,509 6,033
-------- -------- --------
$ 58,945 $ 52,007 $ 44,958
======== ======== ========
Interest Rate Swap Agreement
The differential to be paid or received is recognized in interest expense
as incurred.
Income Taxes
Deferred tax assets and liabilities are recognized for the expected future
tax consequences of events that have been included in the financial
statements or income tax returns. Deferred tax assets and liabilities are
determined based on the difference between the financial statement and tax
bases of assets and liabilities using enacted rates expected to apply to
taxable income in the years in which those differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes
the enactment date.
F-10
<PAGE>
Earnings Per Share
Earnings per common and common equivalent share are computed based on the
weighted average number of common shares outstanding after consideration of
the dilutive effect of stock options. Earnings per common share, assuming
full dilution, are computed based on the weighted average number of common
shares outstanding after consideration of the dilutive effect of stock
options and the assumed conversion of the preferred stock at the stated
rate.
In calculating the 1993, 1992 and 1991 earnings per share for both
computations, dividends of $610,000, $586,000 and $800,000, respectively,
on the Series B ESOP Convertible Preferred Stock are deducted in arriving
at income applicable to the common stock. The 1993 and 1992 dividends are
net of income tax benefits of $185,000 and $211,000, respectively.
Reclassifications
Certain reclassifications have been made in the 1992 Consolidated Balance
Sheet in order to be comparable with the 1993 presentation.
NOTE 2. ACCOUNTS RECEIVABLE
The Company's principal operations are conducted in Atlantic City, New
Jersey, at TropWorld and in Las Vegas and Laughlin, Nevada, at Tropicana
and Ramada Express. TropWorld has a concentration of credit risk in the
northeast region of the U.S. Approximately 50% of the receivables at the
Nevada operations are concentrated in Asian and Latin American customers
and the remainder of their receivables are concentrated in California and
the southwest region of the U.S. As a general policy, the Company does not
require collateral for these receivables. At December 30, 1993 and
December 31, 1992, the net receivables at TropWorld were $8,948,000 and
$10,372,000, respectively, and the net receivables at Tropicana and Ramada
Express combined were $10,175,000 and $10,575,000, respectively.
An allowance for doubtful accounts is maintained at a level considered
adequate to provide for possible future losses. At December 30, 1993 and
December 31, 1992, the allowance for doubtful accounts was $9,908,000 and
$13,124,000, respectively.
NOTE 3. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIP
The Company's investment in unconsolidated partnership is a noncontrolling
partnership interest of 50% in Tropicana Enterprises, a Nevada general
partnership that owns the real property and certain personal property that
the Company leases in the operation of Tropicana. The Company uses the
equity method of accounting for this investment and in connection with the
lease expensed rents of $12,684,000 in 1993, $12,815,000 in 1992 and
$14,545,000 in 1991, of which 50% was eliminated in consolidation.
F-11
<PAGE>
Summarized balance sheet information and operating results for the
unconsolidated partnership are as follows (in thousands):
1993 1992
-------- --------
Current assets $ 270 $ 272
Noncurrent assets 81,220 83,504
Current liabilities 1,516 1,320
Noncurrent liabilities 73,033 73,713
1993 1992 1991
-------- -------- --------
Revenues $ 12,815 $ 12,980 $ 14,717
Operating expenses (2,755) (2,836) (2,837)
-------- -------- --------
Operating income 10,060 10,144 11,880
Interest expense (3,793) (4,318) (6,129)
-------- -------- --------
Net income $ 6,267 $ 5,826 $ 5,751
======== ======== ========
The Company's share of the above operating results, after intercompany
eliminations, is as follows (in thousands):
1993 1992 1991
-------- -------- --------
Equity in unconsolidated
partnership's loss $ (3,822) $ (4,125) $ (5,030)
NOTE 4. OTHER INVESTMENTS
The Company satisfies a New Jersey assessment based upon its casino
revenues by purchasing bonds issued by the Casino Reinvestment Development
Authority ("CRDA"). Deposits with the CRDA bear interest at two-thirds of
market rates resulting in a fair value lower than cost. At December 30,
1993 and December 31, 1992, other investments consisted of the Company's
deposit with the CRDA of $31,726,000 and $27,853,000, respectively, net of
a valuation allowance of $9,595,000 and $8,603,000, respectively.
NOTE 5. NOTES RECEIVABLE
At December 30, 1993 and December 31, 1992, notes receivable consisted of
(in thousands):
1993 1992
-------- --------
First Mortgage $ -- $171,000
Second Mortgage -- 69,859
FF&E Mortgage -- 24,855
-------- --------
-- 265,714
Less: Deferred gain -- (12,966)
Current portion -- (6,438)
-------- --------
$ -- $246,310
======== ========
F-12
<PAGE>
In July 1993, the Company acquired the partnership interests in Ambassador
Real Estate Investors, L.P. ("AREI") and Ambassador General Partnership
("AGP"). AREI owned a 99.9% general partnership interest in AGP, which
acquired a substantial interest in TropWorld in a sale-leaseback
transaction in 1984. The above notes receivable from AGP together with the
cash paid by Aztar were replaced on Aztar's balance sheet by the assets
acquired.
In November 1992, the Company loaned $171,000,000 principal amount (the
"First Mortgage") to AGP. AGP used the funds to redeem $171,000,000 of its
outstanding 12% First Mortgage Notes Due 1996. As modified by another
agreement, the First Mortgage bore interest at a rate of 16% and was
payable quarterly. The Second Mortgage bore interest at 16 1/2% payable
annually. Under the terms of the Second Mortgage, the Company advanced
funds to AGP and AREI for cash flow shortfalls, including any unpaid
interest on the Second Mortgage. The Company funded AGP's purchase of
replacement furniture, fixtures and equipment by 5-year loans
collateralized by the FF&E Mortgage from AGP. Each loan accrued interest
at the rate of 16 1/2% compounded annually. No principal or interest
payments were made on such loans until maturity. The furniture, fixtures
and equipment were leased back to the Company by AGP under 5-year leases.
At December 31, 1992, the estimated cost for AGP to raise debt in the
public bond markets was approximately 13%. Based on a 13% interest rate,
the approximate fair values as of December 31, 1992 were $179,326,000 for
the First Mortgage, $81,129,000 for the Second Mortgage and $26,274,000 for
the FF&E Mortgage.
NOTE 6. LONG-TERM DEBT
At December 30, 1993 and December 31, 1992, long-term debt included (in
thousands):
1993 1992
13 1/2% First Mortgage Notes Due 1996 ($170,000 -------- --------
principal amount, 13.7% effective interest rate);
redeemable beginning September 15, 1994 at 100.00%;
net of unamortized discount $169,133 $168,882
11% Senior Subordinated Notes Due 2002; redeemable
beginning October 1, 1997 at 103.143% 200,000 200,000
$50 million revolving credit note; floating rate,
6.44% at December 30, 1993; matures June 30, 1996 25,000 --
$10 million revolving credit note; floating rate,
6 1/4 % at December 30, 1993; matures
December 31, 1994 10,000 --
Other mortgage loans; 7%; maturities to 1999 907 1,037
Notes payable, other; 7%; maturities to 1999 168 196
Obligations under capital leases 1,377 11,451
-------- --------
406,585 381,566
Less current portion (2,499) (3,508)
-------- --------
$404,086 $378,058
======== ========
F-13
<PAGE>
Maturities of long-term debt for the five years subsequent to December 30,
1993 are as follows (in thousands):
Year
1994 $ 2,499
1995 12,527
1996 191,357
1997 311
1998 331
On December 20, 1989, the Company, through a wholly-owned, special-purpose
subsidiary, issued $170,000,000 principal amount of 13 1/2% First Mortgage
Notes Due September 15, 1996 (the "First Mortgage Notes"). Interest on the
First Mortgage Notes is payable semiannually on March 15 and September 15.
The First Mortgage Notes are redeemable at par at the option of the
Company, in whole or in part, on or after September 15, 1994. Mandatory
annual sinking fund payments of $2,000,000, commencing September 15, 1994,
are calculated to retire $4,000,000 principal amount of the First Mortgage
Notes prior to maturity. Upon change of control of the Company, the
holders of the First Mortgage Notes would have the right to require the
First Mortgage Notes to be repurchased at par plus accrued interest.
Payment of principal and interest on the First Mortgage Notes is
unconditionally guaranteed by the Company and is collateralized by
TropWorld.
On October 8, 1992, the Company issued $200,000,000 principal amount of 11%
Senior Subordinated Notes Due October 1, 2002 (the "Subordinated Notes").
Interest on the Subordinated Notes is payable semiannually on April 1 and
October 1. The Subordinated Notes are redeemable at the option of the
Company, in whole or in part, on or after October 1, 1997, at prices from
103.143% of the principal amount plus interest declining to 100% plus
interest beginning October 1, 1999. The Subordinated Notes are general
unsecured obligations of the Company and are subordinated in right of
payment to all present and future Senior indebtedness (as defined) of the
Company. Upon change of control of the Company, the holders of the
Subordinated Notes would have the right to require repurchase of the
Subordinated Notes at par plus accrued interest but their rights would be
subordinated to the right of the holders of the First Mortgage Notes to
receive payment if the holders of the First Mortgage Notes exercise their
right to require repurchase.
In connection with an expansion of Ramada Express that was completed in
September 1993, the Company converted its construction and term loan credit
facility into a $50 Million Revolving Credit Note pursuant to the terms of
the First Amended and Restated Credit Agreement, dated December 28, 1993
(the "$50 Million Credit Facility"). The maximum principal amount that can
be outstanding may not exceed $50,000,000 at any one time. Interest is
payable monthly on the outstanding principal balance at a rate of prime
plus 1/2 %. The Company may elect to pay interest based on a one, two or
three month LIBOR rate plus 2 1/4%. The Company incurs a commitment fee of
0.5% per annum on the unused portion of this credit facility. The $50
Million Credit Facility matures on June 30, 1996 and is collateralized by
Ramada Express. The Company may request that the maturity date be extended
for one-year periods at the lenders' discretion. At the Company's option,
the credit facility can be converted to a three-year reducing revolving
credit facility whereby the maximum principal amount that can be
outstanding will be reduced by 1/12 each quarter.
F-14
<PAGE>
In connection with the AREI/AGP acquisition, the Company borrowed
$10,000,000 under a $10 million Revolving Credit Note pursuant to the
Revolving Credit Loan Agreement, dated July 29, 1993 (the "$10 Million
Credit Facility"). Borrowings under the $10 Million Credit Facility may
not exceed $10,000,000 principal amount at any one time. Interest is
payable monthly on the unpaid principal balance at a rate of prime plus
1/4%. The $10 Million Credit Facility matures on December 31, 1994.
Certain covenants in the First Mortgage Notes and the Subordinated Notes
limit the ability of the Company to incur indebtedness, sell or encumber
any of the applicable collateral or engage in mergers, consolidations or
sales of assets. A covenant related to the First Mortgage Notes limits the
amount of cash dividends that the Company may pay to $3,814,000 as of
December 30, 1993.
At December 30, 1993 and December 31, 1992, based on the bid prices in the
public bond markets, the fair value of the First Mortgage Notes was
105.125% and 107.25%, respectively, of the principal amount and the fair
value of the Subordinated Notes was 101.75% and 100%, respectively, of the
principal amount. The estimated fair value of both revolving credit notes
approximates the carrying amount due to the short maturity of these notes.
Substantially all of the Company's properties are pledged as collateral
under long-term debt agreements.
NOTE 7. INTEREST RATE SWAP AGREEMENT
The Company had outstanding an interest rate swap agreement with a
commercial bank. This agreement had a notional principal amount of
$50,000,000 and matured on December 31, 1991. Under the terms of the
agreement, the Company made annual interest payments to the bank based on a
fixed rate of 12.41%, and the bank made quarterly interest payments to the
Company based on the LIBOR rate.
NOTE 8. LEASE OBLIGATIONS
The Company is a lessee under a number of noncancelable lease agreements
involving land, buildings, leasehold improvements and equipment, some of
which provide for contingent rentals based on the consumer price index
and/or interest rate fluctuations. The leases extend for various periods
up to 18 years and generally provide for the payment of executory costs
(taxes, insurance and maintenance) by the Company. Certain of these leases
have provisions for renewal options ranging from 3 to 10 years, primarily
under similar terms, and/or options to purchase at various dates.
Properties leased under capital leases are as follows (in thousands):
1993 1992
-------- --------
Furniture and equipment $ 9,410 $ 54,751
Less accumulated amortization (8,367) (45,489)
-------- --------
$ 1,043 $ 9,262
======== ========
Amortization of furniture and equipment leased under capital leases,
computed on a straight-line basis, was $1,899,000 in 1993, $3,533,000 in
1992 and $3,667,000 in 1991.
F-15
<PAGE>
Minimum future lease obligations on long-term, noncancelable leases in
effect at December 30, 1993 are as follows (in thousands):
Year Capital Operating
---- -------- ---------
1994 $ 425 $ 8,147
1995 417 8,000
1996 214 7,856
1997 146 7,469
1998 146 7,347
Thereafter 330 87,086
-------- --------
1,678 $125,905
========
Amount representing interest (301)
--------
Net present value 1,377
Less current portion (331)
--------
Long-term portion $ 1,046
========
The above net present value is computed based on specific interest rates
determined at the inception of the leases.
Net rent expense is detailed as follows (in thousands):
1993 1992 1991
-------- -------- --------
Minimum rentals $ 30,565 $ 51,647 $ 51,133
Contingent rentals 7,512 12,377 14,118
Less: Minimum lease income (2,773) (5,544) (5,544)
Maintenance reimbursement (7,557) (12,827) (12,514)
-------- -------- --------
$ 27,747 $ 45,653 $ 47,193
======== ======== ========
NOTE 9. OTHER LONG-TERM LIABILITIES
At December 30, 1993 and December 31, 1992, other long-term liabilities
consisted of (in thousands):
1993 1992
-------- --------
Accrued rent expense $ 13,684 $ 15,837
Deferred compensation and
retirement plans 8,044 7,343
Deferred income 154 154
-------- --------
$ 21,882 $ 23,334
======== ========
F-16
<PAGE>
NOTE 10. REDEEMABLE PREFERRED STOCK
A series of preferred stock consisting of 100,000 shares has been
designated Series B ESOP Convertible Preferred Stock (the "ESOP Stock") and
those shares were issued on December 20, 1989, to the Company's Employee
Stock Ownership Plan (the "ESOP"). The ESOP purchased the shares for
$10,000,000 with funds borrowed from a subsidiary of the Company. These
funds are repayable in even semiannual payments of principal and interest
at 13 1/2% per year over a 10-year term. During 1993, 1992 and 1991,
respectively, 1,203 shares, 878 shares and 239 shares were redeemed
primarily in connection with employee terminations. The ESOP Stock has an
annual dividend rate of $8.00 per share per annum payable semiannually in
arrears. These shares have no voting rights except under certain limited,
specified conditions. Shares not allocated to participant accounts and
those shares not vested may be redeemed at $100 per share. Shares may be
converted into common stock at $9.46 and have a liquidation preference of
$100 per share.
The shares that have been allocated to the ESOP participant accounts and
have vested are redeemable at the higher of appraised value, conversion
value or $100 per share, by the participant upon termination. The excess
of the redemption value of the ESOP Stock over the carrying value is
charged to retained earnings upon redemption. In the event of default in
the payment of dividends on the ESOP Stock for six consecutive semiannual
periods, each outstanding share would have one vote per share of common
stock into which the preferred stock is convertible.
NOTE 11. CAPITAL STOCK
The Company is authorized to issue 10,000,000 shares of preferred stock,
par value $.01 per share, issuable in series as the Board of Directors may
designate. Approximately 40,000 shares of preferred stock have been
designated Series A Junior Participating Preferred Stock but none have been
issued.
The Company is authorized to issue 100,000,000 shares of common stock with
a par value of $.01 per share. Shares issued were 41,351,153 at
December 30, 1993 and 41,012,323 at December 31, 1992. Common stock
outstanding was net of 3,992,142 and 4,034,661 treasury shares at
December 30, 1993 and December 31, 1992, respectively. One preferred stock
purchase right (a "Right") is attached to each share of the Company's
common stock. Each Right will entitle the holder, subject to the
occurrence of certain events, to purchase a unit with no par value (a
"Unit") consisting of one one-thousandth of a share of Series A Junior
Participating Preferred Stock at a purchase price of $40.00 per Unit
subject to adjustment. The Rights will expire in December 1999 if not
earlier redeemed by the Company at $.01 per Right.
The Company issued 42,000 shares of restricted stock in 1991, on which the
restrictions will lapse over a three-year period, commencing on the date of
issuance, to certain executive officers and key employees. Compensation
expense in connection with these and prior issuances, recognized in 1993,
1992 and 1991, respectively, was $72,000, $654,000 and $620,000.
In accordance with the Merger agreement, 666,572 shares of common stock
that had not been claimed by the shareholders of Ramada were returned to
F-17
<PAGE>
the Company in December 1990 to be held as treasury shares until claimed.
During 1993, 1992 and 1991, respectively, 42,519, 60,179 and 117,117 shares
were claimed; the balance of unclaimed shares was 446,757 as of
December 30, 1993.
During 1990, the Board of Directors authorized the Company to make
discretionary repurchases of up to 4,000,000 shares of its common stock
from time to time in the open market or otherwise and at December 30, 1993,
there remains 591,900 shares that could be repurchased under this
authority. During 1992 the Company repurchased 1,025,100 shares of common
stock. None were repurchased under this program in 1993 or 1991. During
1991, under a separate odd-lot buyback program, the Company repurchased
49,857 shares of common stock. During 1992, 3,779 shares of restricted
stock that were issued in 1989 were forfeited. Repurchased and forfeited
shares are stated at cost and held as treasury shares to be used for
general corporate purposes.
Effective July 18, 1990, the Company adopted a stock option plan for
directors who are not employees of the Company ("Nonemployee Director Stock
Option Plan"). As of December 30, 1993, 71,000 common shares were reserved
under the Nonemployee Director Stock Option Plan. During 1993, options
were granted for 9,000 shares at $6.75 per share; during 1992, options were
granted for 5,000 shares at $6.75 per share and 9,000 shares at $5.50 per
share; during 1991, options were granted for 8,000 shares at $6.50 per
share. All options granted under the Nonemployee Director Stock Option
Plan are immediately exercisable on the date of grant and expire ten years
from the date of grant. At December 30, 1993, December 31, 1992 and
January 2, 1992, common shares reserved for future grants of options under
this plan were 179,000, 188,000 and 202,000, respectively.
Changes in the number of common shares reserved under the Company's
employee stock option plans are as follows (in thousands of shares):
Number of Price Range
Shares of Options
--------- -----------
Balance, January 3, 1991 2,992 $3.19-$8.15
Granted 900 $5.00
Exercised (11) $3.19
Cancelled, expired or surrendered (14) $5.83
--------
Balance, January 2, 1992 3,867 $3.19-$8.15
Granted 135 $6.88
Exercised (82) $3.19
Cancelled, expired or surrendered (87) $3.19-$8.15
--------
Balance, December 31, 1992 3,833 $3.19-$8.15
Granted 50 $7.63
Exercised (339) $3.19-$8.15
Cancelled, expired or surrendered (42) $6.49-$8.15
--------
Balance, December 30, 1993 3,502 $3.19-$8.15
========
At December 30, 1993, December 31, 1992 and January 2, 1992, options
exercisable under the Company's employee stock option plans were 3,077,000,
3,118,000 and 2,238,000, respectively; shares reserved for future grants
were 1,797,000, 1,805,000 and 1,849,000, respectively.
F-18
<PAGE>
In addition to the common shares reserved under stock option plans at
December 30, 1993, the Company has 1,033,000 common shares reserved for the
conversion of the ESOP Stock. The Company also has 40,563 shares of
preferred stock reserved for exercise of the Rights.
NOTE 12. BENEFIT PLANS
The Company has a pension plan, which is not currently funded, for certain
former executive employees. The Company has a nonqualified retirement
plan, which is not required to be funded by the Company, for certain senior
executives. The Company has a savings plan that covers substantially all
employees who are not covered by a collective bargaining unit.
Contributions to the savings plan are discretionary. Total pension and
savings plan expense was $689,000 for 1993, $662,000 for 1992 and $900,000
for 1991. The Company also contributed $1,990,000, $1,834,000 and
$1,881,000 in 1993, 1992 and 1991, respectively, to trusteed pension plans
under various collective bargaining agreements.
The Company has a deferred compensation plan for designated executives and
a similar plan for outside directors. The plans provide for the payment of
benefits commencing at retirement. The Company is substantially funding
the plans through the purchase of life insurance. Net expense recognized
in 1993, 1992 and 1991 was $180,000, $184,000 and $103,000, respectively.
In connection with Restructuring, the Company adopted the ESOP that covers
substantially all non-union employees. The Company will make contributions
to the ESOP so that, after the dividends are paid on the Company's ESOP
Stock, the ESOP can make its debt service payments to the Company. Cash
dividends and contributions, respectively, paid to the ESOP were $787,000
and $1,088,000 in 1993, $797,000 and $1,078,000 in 1992, and $800,000 and
$1,076,000 in 1991. Compensation expense recognized in 1993, 1992 and
1991, respectively, was $1,311,000, $1,400,000 and $1,482,000.
NOTE 13. INCOME TAXES
The (provision) benefit for income taxes for continuing operations before
extraordinary items and cumulative effect of accounting change is comprised
of (in thousands):
1993 1992 1991
Current: -------- -------- --------
Federal $ (2,231) $ (3,685) $ 1,136
State (73) -- --
--------- -------- --------
(2,304) (3,685) 1,136
Deferred: -------- -------- --------
Federal 378 (5,303) 41
State 902 (641) --
-------- -------- --------
1,280 (5,944) 41
-------- -------- --------
Charge in lieu of income taxes -- -- (1,237)
-------- -------- --------
$ (1,024) $ (9,629) $ (60)
======== ======== ========
The Company is responsible, with certain exceptions, for the taxes of
Ramada through December 20, 1989. In 1991, the Company settled the
Internal Revenue Service's examination of Ramada's income tax returns for
F-19
<PAGE>
the years 1984 and 1985 and paid taxes and interest of $17,495,000 in
January 1992. The tax liability was less than that provided and the
Company recorded a continuing operations benefit of $1,264,000 in 1991.
The Internal Revenue Service is examining the income tax returns for the
years 1986 through 1991. The New Jersey Division of Taxation is examining
the income tax returns for the years 1983 through 1988. Management
believes that adequate provision for income taxes and interest has been
made in the financial statements.
General business credits are taken as a reduction of the provision for
federal income taxes during the year such credits become available. The
following table provides a reconciliation between the federal statutory
rates and the (provision) benefit for income taxes when both are expressed
as a percentage of pretax income.
1993 1992 1991
-------- -------- --------
Tax (provision) benefit at statutory rate (35.0)% (34.0)% (34.0)%
(Increase) decrease in tax resulting from:
State income taxes 4.3 (6.1) --
Contributions and gifts (.6) (.5) (6.1)
Disallowance of business meals (4.1) (2.2) (11.1)
Capitalized restructuring costs .8 2.3 13.5
Restricted stock and non-qualified stock
options .7 -- (3.1)
Casino license amortization -- -- (3.1)
IRS examination (7.9) 3.6 42.2
Targeted jobs tax credit 4.2 1.5 --
Change in valuation allowance 30.3 -- --
Other, net (1.0) (1.6) (.5)
------- ------- -------
(8.3)% (37.0)% (2.2)%
======= ======= =======
The income tax effects of loss carryforwards, tax credit carryforwards and
temporary differences between financial and income tax reporting that give
rise to the deferred income tax assets and liabilities at December 30, 1993
and December 31, 1992, are as follows (in thousands):
1993 1992
--------- ---------
Net operating loss carryforward $ 21,902 $ 26,505
Accrued rent expense 4,818 11,856
Accrued bad debt expense 3,972 6,081
Accrued compensation 5,030 4,737
Accrued liabilities 2,396 1,205
General business credit carryforward 2,887 2,066
-------- --------
Gross deferred tax assets 41,005 52,450
-------- --------
Deferred tax asset valuation allowance (20,974) (24,732)
-------- --------
Other (1,528) (1,195)
Partnership investment (5,328) (4,704)
Depreciation and amortization (12,199) (20,544)
Ramada tax sharing agreement (20,536) (22,115)
-------- ---------
Gross deferred tax liabilities (39,591) (48,558)
-------- --------
Net deferred tax liabilities $(19,560) $(20,840)
======== ========
F-20<PAGE>
Included in the valuation allowance is $520,000 that will be allocated to
shareholders' equity when recognized.
The deferred tax amounts were adjusted in 1993 for the effect of
legislation that increased the federal income tax rate from 34% to 35%.
The net effect of this change was not significant. The December 31, 1992
valuation allowance was reduced during 1993 due to the generation of
taxable income that resulted in the utilization of a portion of the net
operating loss carryforward. The effect of this reduction was to decrease
the 1993 income tax expense by $3,878,000.
At December 30, 1993, tax benefits are available for federal income tax
purposes as follows (in thousands):
Net operating losses $ 40,466
General business credits 2,121
These tax benefits will expire in the years 2003 through 2008 if not used.
The Company also has alternative minimum tax credit carryforwards of
$766,000 that can be carried forward indefinitely and offset against the
regular federal income tax liability. In addition, the Company has net
operating loss carryforwards for state income tax purposes that will expire
in the following years if not used (in thousands):
1994 $13,705
1995 26,377
1996 13,300
1997 15,962
1998 6,334
2000 10,307
A valuation allowance has been established for those federal and state tax
benefits which are not expected to be realized.
NOTE 14. DISCONTINUED OPERATIONS
In 1989, the Company disposed of its hotel business and the following items
are related to this discontinued operation. In 1992, the Company reached a
settlement with Canadian tax authorities in relation to the 1988 and 1989
income tax returns of Ramada Inc. and received a refund of $1,262,000. In
1991, the Company recorded a tax benefit of $1,861,000 in connection with
the settlement discussed in "Note 13. Income Taxes". In another matter, but
also in 1991, the Company reached a settlement with Canadian tax
authorities and received a refund of $692,000.
NOTE 15. EXTRAORDINARY ITEMS
A substantial portion of the proceeds from the issuance of the Subordinated
Notes were loaned to AGP to redeem its 12% First Mortgage Notes Due 1996.
In connection with the debt redemption, the Company paid a prepayment
premium and expensed its remaining deferred financing costs. These items
were reflected in the 1992 Consolidated Statement of Operations as an
extraordinary loss of $5,335,000, net of an income tax benefit of
$2,749,000.
F-21
<PAGE>
The Company has a net operating loss carryforward from 1989. A portion of
the tax benefit of the 1989 loss was offset against the 1991 provision for
income taxes as an extraordinary item because the tax benefit of the 1989
loss could not have been recorded previously.
NOTE 16. CUMULATIVE EFFECT OF ACCOUNTING CHANGE
In February 1992, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes ("SFAS 109"), which superseded Statement of Financial Accounting
Standards No. 96 with the same title ("SFAS 96"). SFAS 96 was never
adopted by the Company. The Company adopted the provisions of SFAS 109 in
the first quarter of 1992 and elected not to restate prior year financial
statements. The effect from prior years of adopting SFAS 109 as of the
beginning of fiscal 1992 was a net deferred income tax benefit of
$7,500,000 and it was reflected in the 1992 Consolidated Statement of
Operations as the Cumulative effect of accounting change.
The income tax effects of loss carryforwards, tax credit carryforwards and
temporary differences between financial and income tax reporting that give
rise to the deferred income tax assets and liabilities at January 2, 1992,
under the provisions of SFAS 109, are as follows (in thousands):
Deferred Income Tax
--------------------------
Assets Liabilities
--------- ------------
Net operating loss carryforward $ 26,058
Accrued rent expense 12,914
Accrued bad debt expense 5,770
Accrued compensation 3,572
Accrued liabilities 2,199
General business credit carryforward 1,407
Other 618
Partnership investment $ 4,963
Depreciation and amortization 14,472
Ramada tax sharing agreement 22,437
-------- ---------
52,538 $ 41,872
=========
Valuation allowance (25,562)
--------
$ 26,976
========
Included in the valuation allowance is $505,000 that will be allocated to
shareholders' equity when recognized.
NOTE 17. CONTINGENCIES AND COMMITMENTS
The Company agreed to indemnify Ramada against all monetary judgments in
lawsuits pending against Ramada and its subsidiaries as of the conclusion
of the Restructuring on December 20, 1989, as well as all related
attorneys' fees and expenses not paid at that time, except for any
judgments, fees or expenses accrued on the hotel business balance sheet and
except for any unaccrued and unreserved aggregate amount up to $5,000,000
of judgments, fees or expenses related exclusively to the hotel business.
Aztar is entitled to the benefit of any crossclaims or counterclaims
F-22
<PAGE>
related to such lawsuits and of any insurance proceeds received. In
addition, the Company agreed to indemnify Ramada for various lease
guarantees made by Ramada relating to the restaurant business conducted
through its Marie Callender Pie Shops, Inc. ("MCPSI") subsidiary. In
connection with these matters the Company has an accrued liability of
$3,980,000 and $4,256,000 at December 30, 1993 and December 31, 1992,
respectively.
The Company is a party to various other claims, legal actions and
complaints arising in the ordinary course of business or asserted by way of
defense or counterclaim in actions filed by the Company. Management
believes that its defenses are substantial in each of these matters and
that the Company's legal posture can be successfully defended without
material adverse effect on its consolidated financial statements.
The Company had commitments for capital expenditures of approximately
$13,000,000 at December 30, 1993.
NOTE 18. ACQUISITION
In July 1993, the Company acquired the partnership interests in Ambassador
Real Estate Investors, L.P. ("AREI") and Ambassador General Partnership
("AGP"). AREI owned a 99.9% general partnership interest in AGP, which
acquired a substantial interest in TropWorld in a sale-leaseback
transaction in 1984.
The acquisition has been accounted for as a purchase by the Company. The
aggregate consideration, including costs incurred to complete the
transaction, was approximately $62,000,000 in cash. The Company obtained
the $10 million Credit Facility to fund a portion of the purchase price.
This acquisition did not significantly change Aztar's total assets. The
cash paid by Aztar and notes receivable from AGP were replaced on Aztar's
balance sheet by the assets acquired, which consisted primarily of building
and equipment. The additional $10,000,000 of indebtedness incurred by
Aztar was more than offset by a reduction of indebtedness to AGP.
The Company's consolidated statement of operations for the year ended
December 30, 1993 includes the results of AGP since its acquisition. After
intercompany eliminations, the acquisition has the following effects on
consolidated results: Most of the reduction in Aztar interest income from
the replacement of the AGP notes receivable is offset by a reduction in
rent expense. Aztar's net income is affected negatively primarily by an
increase in depreciation expense.
F-23
<PAGE>
If the acquisition had occurred at the beginning of each of the years ended
December 30, 1993 and December 31, 1992, the Company's results of
operations would have been as follows (in thousands, except per share
data):
1993 1992
-------- --------
(unaudited)
Revenues $518,762 $512,045
Income from continuing operations before
extraordinary item and cumulative
effect of accounting change 7,846 8,332
Net income 7,846 11,759
Earnings per common and common equivalent
share:
Income from continuing operations before
extraordinary item and cumulative
effect of accounting change $ .19 $ .20
Net income .19 .29
Earnings per common share assuming full
dilution:
Income from continuing operations before
extraordinary item and cumulative
effect of accounting change $ .18 $ .20
Net income .18 .28
F-24
<PAGE>
NOTE 19. UNAUDITED QUARTERLY RESULTS/COMMON STOCK PRICES
The following unaudited information shows selected items in thousands,
except per share data, for each quarter in the years ended December 30,
1993 and December 31, 1992. The Company's common stock is listed on the
New York Stock Exchange.
First Second Third Fourth
1993 -------- -------- -------- --------
- ----
Revenues $122,322 $130,781 $144,038 $121,621
Operating income 3,517 6,869 19,576 7,457
Income (loss) before income taxes 2,542 6,078 8,859 (5,073)
Income taxes (958) (2,172) (3,526) 5,632
Net income 1,584 3,906 5,333 559
Earnings per common and common
equivalent share:
Net income .04 .10 .13 .01
Earnings per common share assuming
full dilution:
Net income .04 .09 .13 .01
1992
- ----
Revenues $117,669 $131,646 $141,225 $121,505
Operating income 2,995 10,400 15,147 4,067
Income from continuing
operations before income
taxes, extraordinary item
and cumulative effect of
accounting change 1,549 9,210 13,888 1,360
Income taxes (629) (3,158) (5,382) (460)
Discontinued operations -- -- -- 1,262
Extraordinary item -- -- -- (5,335)
Cumulative effect of accounting
change 7,500 -- -- --
Net income (loss) 8,420 6,052 8,506 (3,173)
Earnings per common and common
equivalent share:
Income from continuing operations
before extraordinary item and
cumulative effect of accounting
change .02 .16 .22 .02
Net income (loss) .21 .16 .22 (.09)
Earnings per common share assuming
full dilution:
Income from continuing operations
before extraordinary item and
cumulative effect of accounting
change .02 .15 .22 .02
Net income (loss) .21 .15 .22 (.09)
Common Stock Prices
- -------------------
1993 - High $ 8.88 $10.13 $ 9.63 $ 7.88
- Low 6.63 6.25 7.00 6.00
1992 - High 7.50 6.50 7.13 7.63
- Low 5.00 4.63 5.00 6.13
F-25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Financial Condition-Liquidity and Capital Resources
CASH FLOW AND COVERAGE The company's operating cash flow (measured
by adding net rent and depreciation and amortization to operating
income) was $97.8 million in 1993 compared to $106.9 million in
1992. Net financing charges were $48.9 million in 1993 compared to
$48.1 million in 1992. Even with a decrease in operating cash
flow, as defined, the company's coverage of its net financing
charges was 2.0 times.
RAMADA EXPRESS EXPANSION AND FINANCING One of the company's three
major capital expenditures in 1993 was the expansion of Ramada
Express, which was completed in September, on schedule and within
budget. The expansion included a new 1,100-room tower; 20,000
square feet of casino space, bringing the total to 50,000 square
feet; a 1,100-vehicle parking garage; additional restaurant and
event space; and other amenities. The company spent $60.0 million
on this project in 1993 for a total cost of $74.7 million.
Financing was provided primarily out of cash and cash flow. In the
fourth quarter 1993, the company borrowed $25 million under its $50
million construction and term loan credit facility that is
collateralized by Ramada Express. In December 1993, the company
entered into the First Amended and Restated Credit Agreement, which
converted the construction and term loan into a $50 million
revolving line of credit that matures in June 1996. This new
credit agreement can be used for general corporate purposes and may
be converted into a three-year reducing revolving line of credit.
PURCHASE OF THIRD PARTY PARTIAL INTEREST IN TROPWORLD A second
major capital expenditure in 1993 was the purchase in July of the
partnership interests in Ambassador Real Estate Investors, L.P.
("AREI") and Ambassador General Partnership ("AGP"). AREI owned a
99.9% general partnership interest in AGP, which acquired a
substantial interest in TropWorld in a sale-leaseback transaction
in 1984. The aggregate consideration, including costs incurred to
complete the transaction, was approximately $62 million. The
company funded the AREI/AGP acquisition using cash and a $10
million revolving credit loan obtained in July 1993. This
acquisition did not significantly change Aztar's total assets. The
cash paid by Aztar and notes receivable from AGP were replaced on
Aztar's balance sheet by the assets acquired. The additional $10
million of indebtedness incurred by Aztar was more than offset by
a reduction of indebtedness to AGP.
TROPICANA PROJECT At the end of 1993 at Tropicana, the company was
in the process of constructing a new main entrance, adding a new
building facade that will create a colorful Caribbean Village motif
facing "The New Four Corners" of Las Vegas and funding a portion of
F-26
<PAGE>
the construction by the State of Nevada of a four-way pedestrian
skywalk system at the intersection of Las Vegas Boulevard and
Tropicana Avenue. Expenditures in 1993 were approximately $5
million on this project and will be approximately $6 million in
1994. Funding for this project was and will be from available cash
balances and cash flow.
STOCK OPTIONS An additional source of funds in 1993 was $2.1
million from the exercise of stock options for approximately
339,000 shares of common stock.
DEBT PAYMENTS AND FUTURE REFINANCINGS The company's maturities of
long-term debt were $2.2 million in 1993 and are $2.5 million and
$12.5 million for 1994 and 1995, respectively. The 1994 and 1995
maturities of long-term debt include $2 million each year for
mandatory sinking fund payments on the 13 1/2% First Mortgage Notes
Due 1996 ("13 1/2% Notes"). These notes are redeemable at par at
the option of the company, in whole or in part, on or after
September 15, 1994. Also included in the 1995 maturities is the
$10 million revolving credit loan obtained in connection with the
AREI/AGP acquisition. If favorable interest rates continue, the
company intends to call the 13 1/2% Notes in 1994 and obtain a new
loan or loans secured by TropWorld that would provide sufficient
funds to pay off the 13 1/2% Notes, to pay off the $10 million
revolving credit loan and to provide some additional funds for
riverboat facilities or general corporate purposes. If the 13 1/2%
notes are redeemed in 1994, the company will expense the remaining
unamortized deferred financing costs and unamortized discount.
This expense would be presented as an extraordinary charge and
shown net of an income tax benefit. These unamortized items
totaled $4.8 million at December 30, 1993.
In October 1996, a balloon payment of $71.3 million is due on
Tropicana Enterprises' bank loan. This loan is serviced through
rent payments made by the Tropicana operation. The company is a
noncontrolling 50% partner in Tropicana Enterprises.
FUTURE DEVELOPMENTS AND FINANCING The company has been pursuing
the development of its business in various gaming jurisdictions.
An agreement was executed in September 1993 with the City of
Caruthersville, Missouri, to operate a casino riverboat there, and
an application was filed with the Missouri Gaming Commission for a
gaming license to operate the Caruthersville facility. In January
1994, the company took delivery of a vessel and began renovation
with the intent for it to be used in Caruthersville. On another
front, a proposal was submitted to the City of Evansville, Indiana,
for a casino riverboat there and an application was filed for a
riverboat gaming license with the Indiana Gaming Commission. In
the event that the company is granted approval by the applicable
jurisdictions to proceed with one or both of these riverboat
projects, financing may be required to fund the related capital
expenditures. One source of financing could come under the $50
million First Amended and Restated Credit Agreement discussed
previously, which provides a structure for an additional borrowing
capacity of $25 million for a total of $75 million. Under this
F-27
<PAGE>
structure, the maximum amount of additional borrowing that could be
outstanding would be tied to the cash flows of Ramada Express. Any
additional capacity will require additional lenders that may be
sought by the agent bank and the company.
COMMITMENTS AND ON-GOING CAPITAL EXPENDITURES At December 30,
1993, the company had commitments of approximately $13 million for
the purchase of fixed assets. In 1994, including the remaining
expenditures on the Tropicana project, the company plans to spend
approximately $33 million on routine capital expenditures at its
three land-based properties and the purchase and renovation of the
vessel acquired in January. In addition to this, expenditures will
be required for the Caruthersville facility; however, the timing of
these expenditures is uncertain. We believe that the company's
existing credit facilities, along with continuing cash flow from
operations and cash balances, will be sufficient to meet any
anticipated obligations as well as any working capital and
liquidity requirements.
Results of Operations - 1993 versus 1992
REVENUES AND OPERATING INCOME Aztar's consolidated revenues were
$518.8 million for 1993, an increase of 1% from $512.0 million in
1992. The increase came primarily from an increase in casino
revenue resulting from the expansion at Ramada Express and improved
market share in the slot segment at Tropicana. Casino revenue at
TropWorld was lower in 1993 than in 1992, partially resulting from
a $5.3 million year-over-year decrease in the reversal of
progressive jackpot accruals. The trend in the mix of consolidated
casino revenue that existed in 1992 continued into 1993 whereby the
table games revenue is decreasing and the slot revenue is
increasing. Rooms revenue and food and beverage revenue continued
to decline in 1993 as a result of a continuing strategy of using
rooms and food and beverage service as a means of promoting casino
activity. However, the expansion at Ramada Express caused
consolidated rooms revenue for 1993 to finish approximately even
with 1992.
Consolidated operating income was $37.4 million in 1993 compared
with $32.6 million in 1992. The primary reason for the increase
in consolidated operating income is the reduction in net rent.
This reduction was principally caused by the purchase of the
AREI/AGP partnership interests in July 1993, which eliminated the
rent we incurred for the portion of TropWorld that was owned by
AREI/AGP. The net rent reduction was partially offset by the
increase in depreciation and amortization that was caused primarily
by this purchase. Consolidated casino costs are higher because of
the increased use of rooms and food and beverage service as a means
of promoting casino activity and increased coin redemptions at
TropWorld. Since there is more credit business associated with
table games revenue than with slot revenue, the decrease in table
games revenue has allowed for a decrease of $1.1 million or 40% in
the provision for doubtful accounts. Additional analysis of the
performance of each of Aztar's three properties follows.
F-28
<PAGE>
TROPICANA Tropicana Resort and Casino in Las Vegas, Nevada,
continued to improve in 1993. Once again, an increase in revenue
contributed to improved operating income as Tropicana held the
increase in total operating costs to 1% or less. Total revenues
for Tropicana were up 3% to $134.9 million in 1993 compared to
$130.9 million in 1992 and operating income improved 68% to $7.2
million from $4.3 million. Operating income is after net rent of
$6.8 million in 1993 compared to $7.1 million in 1992 and
depreciation and amortization of $6.5 million in 1993 compared to
$7.1 million in 1992.
Casino revenue was up 7% in 1993 as Tropicana continued its shift
in the mix of table games revenue and slot revenue. The table
games revenue was down 8% in 1993 on top of a 7% decrease in 1992.
Table games revenue has been declining as a result of lower
baccarat revenue as we shift from a historical dependence on
premium table games to the slot segment of the business. Baccarat
revenue amounted to only 3% of casino revenue in 1993 compared to
7% in 1992 and 10% in 1991. Slot revenue, on the other hand,
increased 19% in 1993 on top of a 25% increase in 1992. The mix of
slot revenue to total casino revenue was 63% in 1993 compared to
56% in 1992 and 49% in 1991. This shift in the revenue mix allows
Tropicana to be a steady producer of operating income and less
subject to the volatility associated with baccarat revenue.
The number of rooms occupied in 1993 increased 6% over 1992 but the
revenues from rooms and food and beverage decreased in 1993 from
1992. This situation is a result of increased complimentaries as
we make greater use of our database targeted marketing strategy and
as our database increases. The increased complimentaries result in
higher casino costs since we charge the cost of complimentaries to
the casino department.
Major cost savings in 1993 compared to 1992 occurred in two
categories. One reduction was $1.1 million in marketing costs due
to less television advertising. The other reduction was also $1.1
million and it occurred in the provision for doubtful accounts.
This reduction is a benefit associated with the mix in revenue
toward more slot revenue and less table games revenue. With regard
to staffing, we operated in 1993 at about the same level as in
1992. However, our payroll and related taxes and benefits went up
about 4% in 1993 compared to 1992 primarily from a 9% increase in
taxes and benefits.
As we look to 1994, we continue to be optimistic about Tropicana's
prospects. With the opening of the approximate 2,500-room Luxor
resort in October 1993 and the approximate 5,000-room MGM Grand
resort in December 1993 on corners of the Las Vegas Strip and
Tropicana Avenue adjacent to our corner, "The New Four Corners" of
Las Vegas has become a reality. During the first quarter of 1994,
we plan to complete the colorful Caribbean Village motif
enhancement to Tropicana's facade that faces these two corners.
Customer access to Tropicana will be facilitated by an elevated
F-29
<PAGE>
pedestrian crosswalk system under construction by the State of
Nevada. This pedestrian bridge system, with elevators and
escalators set back from all four corners, will make pedestrian
traffic faster, safer and more convenient. Upon completion of this
project, we plan to construct a connecting bridge into the
Tropicana casino in order to facilitate access from the MGM Grand
resort. We believe that most visitors to Las Vegas will go to one
or more casinos besides the one where they are staying. Since we
believe this has been true of our customers all along, we welcome
the opportunity of having other casino customers so close to our
facility, especially those customers that are in the high end of
the middle market, which we believe to be the market targeted by
these two new resorts.
TROPWORLD TropWorld Casino and Entertainment Resort in Atlantic
City, New Jersey, had a difficult year in 1993 with the continuing
poor economic conditions in the Northeast, a very competitive local
market and increased competition from other gaming jurisdictions.
The rate of growth for casino revenue in the Atlantic City market
was anemic for the year. As participants in the market try to
maintain or increase market share in this environment, the costs
associated with attracting revenue go up, which causes pressure on
margins and profits.
TropWorld's revenues decreased 2% to $327.7 million in 1993 from
$334.3 million in 1992 while operating income increased 21% to
$33.5 million from $27.7 million. Casino revenue was down $5.1
million or 2% in 1993 compared to 1992. Continuing the trend from
prior years, table games revenue in 1993 was down $10.4 million
from 1992 while slot revenue was up $5.3 million in spite of a
year-over-year $5.3 million decrease in the reversal of slot
machine progressive jackpot accruals. The slot revenue percentage
of total casino revenue increased again in 1993 to 76% from 73% in
1992 and 69% in 1991. While the slot segment of the casino
business has a higher gross operating margin than the table games
segment, we believe the customers' desired casino experience
includes a certain level of tables games activity. We therefore
anticipate the slot revenue percentage of total casino revenue to
be maintained rather than to continue to increase.
The increase in slot revenue came at a high cost. We increased
promotional programs in anticipation of a greater market growth
rate than what actually occurred. Specifically, we increased the
number of rooms occupied on a complimentary basis by 11%. There
was also an increase in coin redemptions of $4.7 million in 1993
compared to 1992. These two items were the primary causes of a
$4.8 million or 3% increase in casino costs for 1993 compared to
1992.
Since payroll and related taxes and benefits are our largest cost
item, we continue to monitor the level of full-time equivalent
headcounts. These costs in 1993 were $0.3 million less than in
1992.
F-30
<PAGE>
Net rent in 1993 was $20.4 million compared to $38.2 million in
1992 and depreciation and amortization in 1993 was $20.4 million
compared to $17.3 million in 1992. The primary cause of both the
decrease in net rent and the increase in depreciation and
amortization was the purchase of the AREI/AGP partnership interests
as mentioned in the discussion of financial condition.
While the current slow growth in the Atlantic City market is a
cause for concern, we believe that infrastructure improvements
underway will boost Atlantic City's attractiveness as a
destination. Since TropWorld has substantial untapped capacity and
there is no significant new casino supply in sight in Atlantic
City, the improving economy and increased consumer confidence cause
us to be optimistic.
RAMADA EXPRESS Ramada Express Hotel and Casino in Laughlin,
Nevada started 1993 with approximately 400 hotel rooms, 30,000
square feet of casino space and surface parking for 1,500 vehicles.
The facility ended 1993 with approximately 1,500 hotel rooms,
50,000 square feet of casino space, parking for 2,300 vehicles with
about one-half in a garage, additional food and beverage
facilities, and additional special event and retail space.
The expansion began in September 1992 and was completed in
September 1993. Because of this expansion, the operating results
for 1993 are not comparable to 1992. Ramada Express revenues were
$56.2 million in 1993 compared to $46.8 million in 1992. Operating
income was $5.5 million in 1993 compared to $8.7 million in 1992.
Operating income is after depreciation and amortization of $5.4
million in 1993 compared to $3.9 million in 1992. Net rent was not
significant in either year.
All significant revenue components were higher in 1993 than in 1992
and all significant cost components were higher in 1993 than in
1992. Ramada Express operating income was lower in 1993 than in
1992 as a result of the disruption to its operations associated
with the construction activities and additional costs incurred so
as to minimize that disruption. In the third quarter 1993, we
expensed $1.4 million of costs associated with the opening of the
expanded facilities.
During December 1993, we lowered the Ramada Express room rates in
order to increase occupancy and to build our customer database.
This approach was successful as the Ramada Express occupied room
nights more than tripled in December 1993 compared to December
1992.
Now that the expansion is completed and we have one full quarter of
operating the expanded facility behind us, we expect improvements
in Ramada Express operating income in 1994.
NEW GAMING JURISDICTIONS In mid-1993, the company began pursuing
the development of its business in various gaming jurisdictions.
In addition to those jurisdictions mentioned in the analysis of
F-31
<PAGE>
financial condition, the company was one of four finalists but
unsuccessful in its proposal to develop and operate a casino
complex in Windsor, Ontario. We also investigated several other
locations in Missouri and Indiana. In connection with these
efforts, we expensed approximately $1.3 million in development
costs in 1993.
In 1994, we hope to begin the operation of a casino riverboat in
Caruthersville, Missouri. However, the timing of this is dependent
on several factors that are beyond our control. One of these
factors is the granting of a gaming license by the Missouri Gaming
Commission. The company applied for this license when the Missouri
Gaming Commission began taking applications. Another possible
factor is a ruling by the Missouri Supreme Court holding
unconstitutional some portions of the Missouri gaming law. A
statewide election to amend the constitution was scheduled to be
held April 5, 1994. We also plan to continue to explore
opportunities in new jurisdictions as they become interested in
gaming.
INTEREST INCOME AND EXPENSE Interest income declined by $4.5
million in 1993 compared to 1992. The replacement of the AGP notes
receivable on Aztar's balance sheet with the assets acquired in the
acquisition of the AREI/AGP partnership interests in July 1993
caused a net decrease of $2.9 million in 1993. Included in this
$2.9 million net decrease was an increase of $7.4 million as a
result of a $171 million 12 1/4% First Mortgage note receivable
from AGP. The company loaned AGP the $171 million in November 1992
so that AGP could redeem its outstanding 12% First Mortgage Notes
Due 1996. This note was one of the notes receivable that were
replaced in the AREI/AGP acquisition.
Interest expense increased by $14.2 million in 1993 compared to
1992. Interest incurred on the $200 million 11% Senior Subordinated
Notes Due 2002 that were issued in October 1992 was $17.2 million
higher in 1993 than in 1992. This increase in interest expense was
offset by $2.4 million of increased interest being capitalized in
1993 in association with construction projects.
DISCONTINUED OPERATIONS The company received a refund of $1.2
million in a settlement in 1992 with Canadian tax authorities
related to the 1988 and 1989 income tax returns of Ramada Inc.
involving the discontinued hotel business.
EXTRAORDINARY ITEMS The company had an extraordinary loss in 1992
of $5.3 million, net of an income tax benefit of $2.8 million,
related to the payment of a redemption premium and the writeoff of
deferred financing costs associated with the redemption of the $171
million outstanding of 12% First Mortgage Notes Due 1996 of AGP.
ACCOUNTING CHANGE In 1992, the company adopted Statement of
Financial Accounting Standards No. 109 related to the reporting of
income taxes. The effect of this action and the company's election
not to restate prior-year financial statements resulted in a net
deferred income tax benefit of $7.5 million.
F-32
<PAGE>
Results of Operations - 1992 versus 1991
Aztar's consolidated revenues were $512.0 million for 1992, an
increase of 6% from $481.3 million in 1991, reflecting higher
revenues from all three properties. The increase in revenues was
primarily as a result of increases in casino revenue at all three
properties resulting from market growth in the slot segment, added
slot machine capacity, improved market shares and the reversal of
$6.0 million of progressive jackpot accruals at TropWorld. Rooms
and food and beverage revenue declined at all three properties,
reflecting a continuing strategy of using rooms and food and
beverage service as a means of promoting casino activity.
Aztar's consolidated operating costs and expenses were $479.4
million in 1992, a 3% increase from $467.6 million in 1991. The
increase primarily reflects a larger volume of business.
Consolidated marketing expenses were higher, reflecting increased
marketing expenses at all three properties, as a result of
increased staffing, higher levels of expenses for entertainers, and
special promotions to stimulate incremental revenue.
Consolidated operating income was $32.6 million in 1992, a 138%
improvement over $13.7 million in 1991, reflecting improved
operating results at all three properties. Increased revenues from
the more profitable slot segment combined with relatively lower
increases in costs and expenses resulted in operating efficiencies
that led to higher operating margins at all three properties.
Operating income is after net rent of $45.7 million in 1992, down
$1.5 million from 1991 principally as a result of a $0.9 million
decline in the interest factor at Tropicana due to an overall
decline in interest rates in 1992.
TROPWORLD TropWorld had a successful year in 1992 despite
continuing poor economic conditions in the Northeast and a very
competitive market. TropWorld revenues rose 8% to $334.3 million
in 1992 from $310.3 million in 1991, while the increase in costs
and expenses was proportionally less, 3% to $306.6 million from
$298.1 million. The most important source of the resulting
excellent operating flow-throughs was in the casino, where total
revenues increased 9% while associated casino and marketing
expenses increased 7%. TropWorld's use of rooms and food and
beverage services as a way to promote casino activity resulted in
a 10% decrease in revenue in those categories, with a corresponding
9% decrease in rooms and food and beverage costs.
The Atlantic City market recorded strong growth in 1992 with $3.2
billion of casino win*, an increase of 7.5% from 1991. TropWorld's
growth exceeded the market's with casino revenue up 8% to $310
million, its highest ever, from $287 million in 1991. Slot
operations were the driving force at TropWorld in 1992. Slot win
for 1992 was $227.5 million, a 15% increase over $198.4 million in
1991 due to a targeted marketing and product strategy and growth in
* Market comparisons are stated on a calendar basis for the market
and the property.
F-33
<PAGE>
the market. The Atlantic City slot market grew 14% during 1992,
reaching $2.114 billion in slot win, up from $1.851 billion in
1991. TropWorld captured 10.8% of the slot market in 1992,
compared with a 10.7% share in 1991 and 10.3% in 1990. Atlantic
City market-wide table games revenue declined approximately 3% in
1992, to $1.102 billion from $1.140 billion in 1991. TropWorld's
table games revenue dropped to $83 million in 1992, a 7% decrease.
The decline in table games revenue in 1992 was the fourth
consecutive year of decline in the Atlantic City market and the
third consecutive year of decline at TropWorld, in both cases
somewhat by design. With the easing of restrictions on the
allocation of casino floor space, operators are dedicating more
floor space to the more profitable slot segment, thereby reducing
the number of table games units.
TropWorld's improvements in operating efficiencies, partially a
result of the change in the mix of revenue toward higher-margin
slots from table games, were reflected in a 127% improvement in
operating income, to $27.7 million from $12.2 million. The
decrease in table games revenue together with the issuance of less
credit has allowed for a decrease in the provision for doubtful
accounts of 75% to $0.5 million in 1992 from $2.0 million in 1991.
Operating income is after net rent of $38.2 million in 1992, down
from $38.6 million in 1991. Depreciation and amortization was
$17.3 million in both years. To some extent the year-over-year
comparison favors 1992 because of the negative effects the Persian
Gulf War had on operations at TropWorld in the first quarter of
1991.
TROPICANA Tropicana reported improved results for 1992 despite
external factors including a highly competitive market due to
unabsorbed capacity and to negative economic conditions,
particularly in southern California. The Las Vegas market in 1992
experienced visitor growth that was weak by Las Vegas standards
early in the year, countered in part by a boost due to deep air
fare discounting during the summer.
Tropicana revenues for 1992 were $130.9 million, a gain of 1% from
$129.4 million in 1991. Casino revenue was 8% higher in 1992 than
in 1991. Tropicana made significant progress in 1992 in the
continuing shift from its historical dependence on premium table
games to the slot segment, which has higher growth rates and better
profit margins. Slot revenue growth at Tropicana was significantly
higher than growth in the market as a result of increased slot
machine capacity and improved slot machine product in the casino,
coupled with increased slot marketing efforts. Slot revenue at
Tropicana rose 27%* in 1992 while Las Vegas market slot revenues
rose 9%. Tropicana win from games excluding baccarat was down 3%
in 1992. Total games revenue, including baccarat, was down 7%.
The games hold percentage was basically unchanged in 1992 from
1991. The decrease in games revenue allowed for a decrease in the
provision for doubtful accounts of 25%, to $2.1 million in 1992
from $2.8 million in 1991.
* Market comparisons are stated on calendar basis for the market
and the property.
F-34
<PAGE>
Occupancy at Tropicana was higher in 1992 than in 1991 by more than
two occupancy points. But continuing pressure on room rates in Las
Vegas and greater utilization of Tropicana's rooms to promote its
casino games resulted in an 8% reduction in rooms revenue. Food
and beverage revenue was also lower, by 13%, because of lower
demand for banquets and the closing of Tropicana's buffet. Food
and beverage costs were correspondingly 14% lower in 1992 than in
1991.
Cost and expenses were $126.6 million in 1992, less than 1% higher
than the level of $126.2 million in 1991. Costs and expenses in
1992 included $7.1 million of net rent, compared with $8.0 million
in 1991, and depreciation and amortization of $7.1 million in 1992,
compared with $6.9 million in 1991. Operating income was $4.3
million in 1992, an increase of 34% from $3.2 million in 1991.
RAMADA EXPRESS Ramada Express revenues for 1992 were $46.8
million, a 13% increase from $41.6 million in 1991. Costs and
expenses rose less than half of the revenue increase, creating good
flow-through to profit and higher overall operating margins. Costs
and expenses included $3.9 million of depreciation and amortization
in 1992, compared with $3.7 million in 1991. Net rent was not
significant in either year. Operating income was $8.7 million in
1992, an increase of 45% from $6.0 million in 1991.
Ramada Express turned in a strong operating performance in 1992,
improving its market position in a highly competitive atmosphere
even as the company commenced in September a $75 million expansion
of the property. Despite some negative impact from the woes of the
southern California economy, the Laughlin market grew strongly in
1992. Casino revenues* for the market were $506.9 million for
1992, a 9% increase from $463.4 million in 1991. Slot revenue
growth for the Laughlin market was particularly strong, with slot
revenues growing 12% during 1992, while Ramada Express slot revenue
grew 22% in the same period. Rooms occupancy for the Laughlin
market was 91% for 1992 compared with 90% in 1991. Occupancy at
Ramada Express was 90% in 1992, 2.5 occupancy points higher than
the previous year.
INTEREST INCOME AND EXPENSE Interest income increased $2.5
million in 1992 from 1991, due principally to the $171 million note
receivable from AGP. Consolidated interest expense in 1992 was
$31.1 million, down $1.0 million from the prior year. The company
incurred $5.2 million of interest expense in 1992 in connection
with the $200 million 11% Senior Subordinated Notes Due 2002 issued
in October 1992. That increase was offset by decreases in interest
expense that occurred principally as a result of three factors, the
primary factor being the expiration on December 31, 1991 of an
interest rate swap agreement. The other factors were the payment
in January 1992 of a settlement with the Internal Revenue Service
on which interest had been accrued in 1991 and the capitalization
of interest on the Ramada Express expansion.
* Market comparisons are stated on a calendar basis for the market
and the property.
F-35
<PAGE>
UNCONSOLIDATED PARTNERSHIP The company's loss on its equity share
in Tropicana Enterprises, the partnership that owns the Tropicana
land and improvements, declined as a result of lower interest
expense due to an overall decline in interest rates in 1992 on the
floating rate bank financing of Tropicana Enterprises. Aztar is a
noncontrolling 50% partner in Tropicana Enterprises.
F-36
<PAGE>
SUMMARY OF SELECTED FINANCIAL DATA
Aztar Corporation and Subsidiaries
For the Five Years Ended December 30, 1993
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
Statement of Operations
Data (in thousands)
Revenues $518,762 $512,045 $481,285 $515,060 $522,255
Operating income (loss)(a) 37,419 32,609 13,654 (3,574) (33,812)
Net interest income and
expense (a) (21,191) (2,477) (5,856) (4,480) (20,950)
Other, net (3,822) (4,125) (5,030) (6,905) (7,422)
Income (loss) from
continuing operations
before extraordinary
items and cumulative
effect of accounting
change 11,382 16,378 2,708 (15,922) (47,689)
Discontinued operations -- 1,262 2,553 -- 127,130
Extraordinary items -- (5,335) 1,237 963 --
Cumulative effect of
accounting change (b) -- 7,500 -- -- --
Net income (loss) 11,382 19,805 6,498 (14,959) 79,441
Common Stock Data
(per share)
Income (loss) from
continuing operations
before extraordinary
items and cumulative
effect of accounting
change:
Earnings per common
and common
equivalent share $ .28 $ .41 $ .05 $ (.42) $ (1.17)
Earnings per common
share assuming
full dilution .27 .40 .05 * (1.15)
Cash dividends declared -- -- -- -- 1.00
Equity 9.29 9.03 8.42 8.29 8.28
* Anti-dilutive
Balance Sheet Data
(in thousands at
year end)
Total assets $877,171 $849,565 $638,474 $641,905 $678,476
Long-term debt 404,086 378,058 176,693 180,391 181,102
Series B ESOP convertible
preferred stock 3,905 2,998 2,059 1,056 --
Shareholders' equity 346,988 333,749 318,900 312,771 338,528
(a) See "Note 18. Acquisition" of the Notes to Consolidated Financial
Statements.
(b) See "Note 16. Cumulative Effect of Accounting Change" of the Notes to
Consolidated Financial Statements.
F-37
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Shareholders and Board of Directors
Aztar Corporation
Our report on the consolidated financial statements of Aztar Corporation and
Subsidiaries is included in this report on Form 10-K on page F-1. In
connection with our audits of such consolidated financial statements, we have
also audited the related financial statement schedules listed in the index on
page 21 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic consolidated financial statements taken
as a whole, present fairly, in all material respects, the information required
to be included therein.
COOPERS & LYBRAND
Phoenix, Arizona
February 11, 1994
S-1
<PAGE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
AZTAR CORPORATION AND SUBSIDIARIES
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
(in thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- -------------- -------- -------- -------- -------- --------
Balance at Retire- Balance
Beginning Additions ments or Other at End of
Description of Year at Cost Sales Changes Year
- -------------- --------- --------- -------- --------- ---------
1993
- ----
Buildings and
equipment $399,670 $ 83,851 $ 3,352 $306,841 (a)
819 (b) $787,829
Land 78,853 2,942 -- -- 81,795
Leased under
capital leases 54,751 385 459 (45,267)(a) 9,410
Construction in
progress 15,718 (8,989) -- 741 (a)
(769)(b) 6,701
-------- -------- -------- -------- --------
$548,992 $ 78,189 $ 3,811 $262,365 $885,735
======== ======== ======== ======== ========
1992
- ----
Buildings and
equipment $394,035 $ 11,339 $ 5,704 $ -- $399,670
Land 78,735 118 -- -- 78,853
Leased under
capital leases 51,727 3,687 663 -- 54,751
Construction in
progress 6,568 9,150 -- -- 15,718
-------- -------- -------- -------- --------
$531,065 $ 24,294 $ 6,367 $ -- $548,992
======== ======== ======== ======== ========
1991
- ----
Buildings and
equipment $385,096 $ 20,071 $ 9,082 $ (2,050)(b) $394,035
Land 76,181 2,554 -- -- 78,735
Leased under
capital leases 50,276 3,282 1,684 (147)(b) 51,727
Construction in
progress 10,883 (4,225) 90 -- 6,568
-------- -------- -------- -------- --------
$522,436 $ 21,682 $ 10,856 $ (2,197) $531,065
======== ======== ======== ======== ========
(a) Acquisition of AREI/AGP partnership interests.
(b) Primarily transfers and reclassifications.
S-2
<PAGE>
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
AZTAR CORPORATION AND SUBSIDIARIES
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
(in thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ------------------ ---------- ---------- ---------- ---------- ----------
Balance at Additions Retire- Balance at
Beginning Charged to ments or Other End of
Description of Year Expense Sales Changes Year
- ------------------ ---------- ---------- ---------- ---------- ----------
1993
- ----
Buildings and
equipment $112,442 $ 29,672 $ 2,424 $ -- $139,690
Leased under
capital leases 45,489 1,899 457 (38,564)(a) 8,367
-------- -------- -------- -------- --------
$157,931 $ 31,571 $ 2,881 $(38,564) $148,057
======== ======== ======== ======== ========
1992
- ----
Buildings and
equipment $ 93,689 $ 24,111 $ 5,358 $ -- $112,442
Leased under
capital leases 42,524 3,533 568 -- 45,489
-------- -------- -------- -------- --------
$136,213 $ 27,644 $ 5,926 $ -- $157,931
-------- -------- -------- -------- --------
1991
- ----
Buildings and
equipment $ 78,072 $ 23,282 $ 6,496 $ (1,169)(b) $ 93,689
Leased under
capital leases 39,671 3,668 668 (147)(b) 42,524
-------- -------- -------- -------- --------
$117,743 $ 26,950 $ 7,164 $ (1,316) $136,213
======== ======== ======== ======== ========
(a) Acquisition of AREI/AGP partnership interests.
(b) Primarily transfers and reclassifications.
S-3
<PAGE>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
AZTAR CORPORATION AND SUBSIDIARIES
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
(in thousands)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ------------------ ------------ ------------ ------------ ------------
Balance at Balance at
Beginning End of
Description of Year Additions Deductions Year
- ------------------- ------------ ------------ ---------- ------------
Allowance for
doubtful accounts
receivable:
1993 $ 13,124 $ 1,566(a) $ 4,782(d) $ 9,908
1992 14,349 2,622(a) 3,847(d) 13,124
1991 15,126 4,763(a) 5,540(d) 14,349
Deferred income
tax asset
valuation
allowance:
1993 $ 24,732 $ 479(b) $ 4,237(e) $ 20,974
1992 -- 25,562(a)(c) 830(d) 24,732
(a) Charged to costs or expenses.
(b) Reflects an adjustment to the deferred income tax asset account for the
effect of legislation that increased the federal income tax rate from 34%
to 35%.
(c) Allowance established in 1992 in connection with the adoption of
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes.
(d) Related assets charged against allowance account.
(e) Reflects a reduction of $3,878,000, with a corresponding decrease to the
1993 income tax expense, due to the generation of taxable income that
resulted in the utilization of a portion of a net operating loss
carryforward. The remainder of the reduction represented charges of
deferred tax assets against the valuation allowance account.
S-4
<PAGE>
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
AZTAR CORPORATION AND SUBSIDIARIES
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
(in thousands)
COLUMN A COLUMN B
------------------------------------- ------------------
Charged to
Item Costs and Expenses
------------------------------------- ------------------
1993
----
Advertising $ 5,714 (a)
Property taxes 14,183
Gaming revenue taxes 34,758
1992
----
Advertising $ 7,484 (a)
Property taxes 13,692
Gaming revenue taxes 33,647
1991
----
Advertising $ 7,082 (a)
Property taxes 12,905
Gaming revenue taxes 30,493
(a) Includes only direct media costs paid by the Company.
S-5
<PAGE>
EXHIBIT INDEX
- -------------
3.1 Restated Certificate of Incorporation, filed as Exhibit 3.1 to Aztar
Corporation's Registration Statement No. 33-32009 and incorporated
herein by reference.
3.2 By-Laws, as amended and restated May 9, 1991, filed as Exhibit 1 to
Aztar Corporation's Form 8-K dated May 9, 1991 and incorporated
herein by reference.
4.1 Rights Agreement between Aztar Corporation and First Interstate Bank
of Arizona, N.A. as Rights Agent, filed as Exhibit 4.1 to Aztar
Corporation's Registration Statement No. 33-51008 and incorporated
herein by reference.
4.2(a) Indenture, dated as of December 15, 1989, among Aztar Mortgage
Funding, Inc., Ramada Inc., as guarantor, and First Interstate Bank
of Arizona, N.A., as Trustee, relating to the First Mortgage Notes
Due 1996, filed as Exhibit 4.2 to Aztar Corporation's Registration
Statement No. 33-51008 and incorporated herein by reference.
4.2(b) Instrument of Appointment and Acceptance of Successor Trustee dated
as of January 26, 1993, among Aztar Mortgage Funding, Inc., as
Issuer, Aztar Corporation, as Guarantor, First Interstate Bank of
Arizona N.A., as resigning Trustee, and First Bank National
Association, as successor Trustee.
4.3 Indenture, dated as of October 8, 1992, between Aztar Corporation
and Bank of America National Trust & Savings Association, as
Trustee, relating to the Senior Subordinated Notes due 2002 of Aztar
Corporation, filed as Exhibit 4.1 to Aztar Corporation's Form 10-Q
for the quarter ended October 1, 1992 and incorporated herein by
reference.
10.1 Amended and Restated Lease (Tropicana Hotel/Casino) between
Tropicana Enterprises and Hotel Ramada of Nevada, dated November 1,
1984, filed as Exhibit 10.20 to Ramada Inc.'s 1984 Form 10-K
(Commission File Reference Number 1-5440) and incorporated herein
by reference.
10.2 Amended and Restated Partnership Agreement by and between the Jaffe
Group and Adamar of Nevada, entered into as of November 1, 1984,
filed as Exhibit 10.22 to Ramada Inc.'s 1984 Form 10-K (Commission
File Reference Number 1-5440) and incorporated herein by reference.
*10.3(a) Management (Severance) Agreement, dated December 30, 1981, by and
between Ramada Inc. and Paul E. Rubeli, filed as Exhibit 10(l) to
Ramada Inc.'s 1981 Form 10-K (Commission File Number 1-5440) and
incorporated herein by reference.
*10.3(b) Management (Severance) Agreement, dated October 30, 1985, by and
between Ramada Inc. and Robert M. Haddock, filed as Exhibit 10.29
to Ramada Inc.'s 1985 Form 10-K (Commission File Number 1-5440) and
incorporated herein by reference.
*Indicates a management contract or compensatory plan or arrangement.
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EXHIBIT INDEX
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*10.3(c) Severance Agreements by and between Ramada Inc. and 2 executives of
Ramada Inc. prior to the Restructuring, filed as Exhibit 10.18(a)
and (b) to Aztar Corporation's Registration Statement No. 33-51008
and incorporated herein by reference.
*10.3(d) Severance Agreements by and between Ramada Inc. and certain
executives of Ramada Inc. prior to the Restructuring, filed as
Exhibit 10.18(c),(d),(e),(f),(g),(h) and (i) to Aztar Corporation's
Registration Statement No. 33-51008 and incorporated herein by
reference.
*10.3(e) Amendment to Severance Agreement by and between Ramada Inc. and Paul
E. Rubeli prior to the Restructuring, filed as Exhibit 10.18(j) to
Aztar Corporation's Registration Statement No. 33-51008 and
incorporated herein by reference.
*10.3(f) Amendment to Severance Agreements by and between Ramada Inc. and
certain executives of Ramada Inc. prior to the Restructuring, filed
as Exhibit 10.18(k),(l),(m),(n) and (o) to Aztar Corporation's
Registration Statement No. 33-51008 and incorporated herein by
reference.
10.4 Ramada Express Expansion Design-Build Construction Agreement, dated
as of August 24, 1992, by and between Mardian Construction Company
and Ramada Express, Inc., filed as Exhibit 10.32 to Aztar
Corporation's Registration Statement No. 33-51008 and incorporated
herein by reference.
*10.5 Aztar Corporation 1989 Stock Option and Incentive Plan filed as
Exhibit 4 to Aztar Corporation's Registration Statement No. 33-32399
and incorporated herein by reference.
10.6 Master Consent Agreement, dated July 18, 1989, by and among Ramada
Inc., Adamar of Nevada, Hotel Ramada of Nevada, Adamar of New
Jersey, Inc., Aztar Corporation, Tropicana Enterprises, Trop C.C.
and the Jaffe Group, with attached exhibits, filed as Exhibit 10.50
to Aztar Corporation's Registration Statement No. 33-29562 and
incorporated herein by reference.
10.7 Mortgage and Fixture Security Agreement, dated December 15, 1989,
made by Ambassador General Partnership, Adamar of New Jersey, Inc.,
Atlantic-Deauville Inc. and Aztar Mortgage Funding, Inc., covering
TropWorld, filed as Exhibit 10.38 to Aztar Corporation's
Registration Statement No. 33-51008 and incorporated herein by
reference.
10.8 Mortgage and Fixture Security Agreement, dated December 15, 1989,
made by Adamar of New Jersey, Inc., Atlantic-Deauville Inc., Adamar
Garage Corporation and Aztar Mortgage Funding, Inc., covering the
Barbun Parking Garage, filed as Exhibit 10.39 to Aztar Corporation's
Registration Statement No. 33-51008 and incorporated herein by
reference.
*Indicates a management contract or compensatory plan or arrangement.
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EXHIBIT INDEX
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10.9 Mortgage and Fixture Security Agreement, dated December 15, 1989,
made by Adamar of New Jersey, Inc., Atlantic-Deauville Inc., Adamar
Garage Corporation and Aztar Mortgage Funding, Inc., covering the
Transportation Center, filed as Exhibit 10.40 to Aztar Corporation's
Registration Statement No. 33-51008 and incorporated herein by
reference.
10.10 Mortgage and Collateral Assignment, dated December 15, 1989, made
by Adamar of New Jersey, Inc., Adamar Garage Corporation and First
Fidelity Bank of New Jersey, National Association, as Trustee,
covering the Barbun Parking Garage, filed as Exhibit 10.41 to Aztar
Corporation's Registration Statement No. 33-51008 and incorporated
herein by reference.
10.11 Security Agreement and Assignment of Contracts, dated December 15,
1989, by and among Adamar of New Jersey, Inc., Ambassador General
Partnership, Atlantic-Deauville Inc. and Aztar Mortgage Funding,
Inc., covering TropWorld, filed as Exhibit 10.44 to Aztar
Corporation's Registration Statement No. 33-51008 and incorporated
herein by reference.
10.12 Collateral Assignment of Commercial Leases, dated December 15, 1989,
made by Adamar of New Jersey, Inc. and Aztar Mortgage Funding, Inc.,
covering the Expansion, filed as Exhibit 10.46 to Aztar
Corporation's Registration Statement No. 33-51008 and incorporated
herein by reference.
10.13 Collateral Assignment of Option to Purchase, dated December 19,
1989, made by Ambassador General Partnership to Aztar Mortgage
Funding, Inc., covering the Transportation Center Air Space Parcel
and the Barbun Parking Garage, filed as Exhibit 10.47 to Aztar
Corporation's Registration Statement No. 33-51008 and incorporated
herein by reference.
10.14 Assignment and Agreement, dated December 15, 1989, made by Adamar
of New Jersey, Inc., Ambassador General Partnership, Atlantic-
Deauville Inc., Adamar Garage Corporation and First Interstate Bank
of Arizona, N.A., filed as Exhibit 10.48 to Aztar Corporation's
Registration Statement No. 33-51008 and incorporated herein by
reference.
10.15 Subordination Agreement, among Aztar Corporation, Adamar of New
Jersey, Inc., Aztar Mortgage Funding, Inc. and Ambassador General
Partnership, filed as Exhibit 4.15 to Aztar Mortgage Funding, Inc.
and Aztar Corporation's Registration Statement No. 33-29701 and
incorporated herein by reference.
*10.16(a) Employee Stock Ownership Plan of Aztar Corporation, as amended and
restated effective December 19, 1989, dated December 12, 1990, filed
as Exhibit 10.60(a) to Aztar Corporation's 1990 Form 10-K and
incorporated herein by reference.
*Indicates a management contract or compensatory plan or arrangement.
E-3
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EXHIBIT INDEX
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10.16(b) Term Loan Agreement, dated as of December 19, 1989, by and among
State Street Bank and Trust Company, as Trustee, Adamar Garage
Corporation, as lender, and Aztar Corporation, filed as Exhibit
10.50(b) to Aztar Corporation's Registration Statement No. 33-51008
and incorporated herein by reference.
10.16(c) Preferred Stock Purchase Agreement, dated as of December 19, 1989,
between Ramada Inc. and State Street Bank and Trust Company, as
Trustee, filed as Exhibit 10.50(c) to Aztar Corporation's
Registration Statement No. 33-51008 and incorporated herein by
reference.
10.16(d) Letter Agreement, dated as of December 19, 1989, between Aztar
Corporation and State Street Bank and Trust Company, as Trustee,
relating to the Employee Stock Ownership Plan of Aztar Corporation,
filed as Exhibit 10.50(d) to Aztar Corporation's Registration
Statement No. 33-51008 and incorporated herein by reference.
10.17(a) Agreement and Plan of Merger, dated as of April 17, 1989, among New
World Hotels (U.S.A.), Inc., RI Acquiring Corp. and Ramada Inc., as
amended and Restated as of October 23, 1989, filed as Exhibit 2.1
to Aztar Corporation's Registration Statement No. 33-32009 and
incorporated herein by reference.
10.17(b) Letter, dated as of October 23, 1989, from Ramada Inc. to New World
Hotels (U.S.A.), Inc. regarding "Net Cash Flows from Investing
Activities", filed as Exhibit 2.1(a) to Aztar Corporation's
Registration Statement No. 33-32009 and incorporated herein by
reference.
10.17(c) Letter, dated as of October 23, 1989, from Ramada Inc. to New World
Hotels (U.S.A.), Inc. regarding certain franchising matters and
hotel projects, filed as Exhibit 2.1(b) to Aztar Corporation's
Registration Statement No. 33-32009 and incorporated herein by
reference.
10.18 Reorganization Agreement, dated as of April 17, 1989, between Ramada
Inc. and Aztar Corporation, as amended and restated as of October
23, 1989, filed as Exhibit 2.2 to Aztar Corporation's Registration
Statement No. 33-32009 and incorporated herein by reference.
10.19 Tax Sharing Agreement, dated as of April 17, 1989, among New World
Hotels (U.S.A), Inc., Ramada Inc. and Aztar Corporation, as amended
and restated as of October 23, 1989, filed as Exhibit 2.3 to Aztar
Corporation's Registration Statement No. 33-32009 and incorporated
herein by reference.
10.20 Guaranty and Acknowledgement Agreement, dated as of April 17, 1989,
among New World Development Company Limited, New World Hotels
(Holdings) Limited, New World Hotels (U.S.A.), Inc. and RI Acquiring
Corp., filed as Exhibit 2.4 to Aztar Corporation's Registration
Statement No. 33-29562 and incorporated herein by reference.
E-4
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EXHIBIT INDEX
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*10.21 Aztar Corporation 1990 Nonemployee Directors Stock Option Plan, as
amended and restated effective March 15, 1991, filed as Exhibit A
to Aztar Corporation's 1991 definitive Proxy Statement and
incorporated herein by reference.
*10.22 Aztar Corporation Nonqualified Retirement Plan for Senior
Executives, dated September 5, 1990, filed as Exhibit 10.2 to Aztar
Corporation's Form 10-Q for the quarter ended September 27, 1990 and
incorporated herein by reference.
10.23 First Amended and Restated Credit Agreement, dated December 28,
1993, by and among Ramada Express, Inc., Aztar Corporation, First
Interstate Bank of Nevada, N.A., as agent, Midlantic National Bank,
The Daiwa Bank, Limited, NBD Bank, N.A. and First Security Bank of
Idaho, N.A., and the Lenders listed therein.
10.24 Loan Agreement by and between Tropicana Enterprises, Hotel Ramada
of Nevada, Ramada Inc. and Lenders made and entered into November
19, 1984, as amended, filed as Exhibit 10.23 to Ramada Inc.'s 1984
Form 10-K (Commission File Reference Number 1-5440) and incorporated
herein by reference.
*10.25 Summary of deferred compensation program for designated executives
of Ramada, dated November 10, 1983, filed as Exhibit 10(r) to Ramada
Inc.'s 1983 Form 10-K (Commission File Reference Number 1-5440) and
incorporated herein by reference.
*10.26 Deferred Compensation Agreements entered into by and between Ramada
and designated executives (including each Executive Officer), dated
December 1, 1983, 1984 or 1985, filed as Exhibits 10.60(a) through
(w) to Aztar Corporation's Registration Statement No. 33-51008 and
incorporated herein by reference.
*10.27 Deferred Compensation Plan for Directors, dated December 1, 1983,
filed as Exhibit 10(t) to Ramada Inc.'s 1983 Form 10-K (Commission
File Reference Number 1-5440) and incorporated herein by reference.
*10.28 Deferred Compensation Agreements entered into by and between Ramada
and certain outside Directors as of December 1, 1983, filed as
Exhibits 10.62(a),(b),(c) and (d) to Aztar Corporation's
Registration Statement No. 33-51008 and incorporated herein by
reference.
11. Statement Regarding Computation of Per Share Earnings.
21. Subsidiaries of Aztar Corporation.
23. Consent of Coopers & Lybrand.
*Indicates a management contract or compensatory plan or arrangement.
E-5
<PAGE>
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------------
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT
("Credit Agreement") is made and entered into as of the 28th
day of December, 1993, by and among RAMADA EXPRESS, INC., a
Nevada corporation ("Borrower"), AZTAR CORPORATION, a Delaware
corporation ("Guarantor") and FIRST INTERSTATE BANK OF NEVADA,
N.A., MIDLANTIC NATIONAL BANK, a national banking association,
THE DAIWA BANK, LIMITED, a Japanese corporation, NBD BANK,
N.A. and FIRST SECURITY BANK OF IDAHO, N.A., hereinafter
collectively the "Closing Lenders" and together with the "Post
Closing Lenders", defined hereinbelow, herein collectively
"Lenders", and First Interstate Bank of Nevada, N.A., as
administrative and collateral agent for the Lenders, 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 word
and terms shall have the respective meanings and be construed
herein as hereinafter provided in Section 1.01 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 restated verbatim in each instance.
B. Under the terms of the Construction and Term
Loan Agreement dated August 27, 1992, as amended by the First
Additional Funding Addendum to Construction and Term Loan
Agreement dated March 31, 1993 (the "C/T Loan Agreement"), the
Existing Bank Group established a construction loan in favor
of Borrower and Guarantor up to the aggregate principal amount
of Fifty Million Dollars ($50,000,000.00) for the construction
and term financing of certain expansion and remodeling
improvements to the Hotel/Casino Operation.
C. The expansion and remodeling improvements to
the Hotel/Casino Operation have been completed by Borrower at
a total cost in excess of Seventy Million Dollars
($70,000,000.00). As of the date hereof, the outstanding
principal balance of the Existing Bank Debt is Twenty-Five
Million Dollars ($25,000,000.00).
D. Borrower desires to fully amend and restate
the C/T Loan Agreement as a revolving line of credit upon
which Borrower may draw advances up to Fifty Million Dollars
($50,000,000.00) outstanding at any one time, repay and
reborrow without any required principal reduction during the
Level Revolving Period, which may be extended, at Lenders'
discretion, upon the request of Borrower at one (1) year
intervals as hereinafter provided (the "Level Revolving
Period"), and at the end of the Level Revolving Period extend
the RLC Maturity Date at the option of Borrower for an
additional three (3) year period as a reducing revolving line
of credit to be reduced to zero in twelve (12) equal quarterly
principal reduction amounts (the "Reducing Revolving Period").
E. Borrower also desires to establish a line of
credit up to the maximum amount of Twenty-Five Million Dollars
($25,000,000.00) to enable Borrower to fund a construction and
term loan up to that amount, to be made by Borrower to AMGC
for the construction and financing of the Riverboat Project.
F. Closing Lenders are willing to establish the
RLC Facility on the terms and conditions hereinafter set forth
in the amount of the Closing Commitment.
NOW, THEREFORE, in consideration of the foregoing
and other valuable considerations 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:
"AGP" shall mean Ambassador General Partnership, a
New Jersey general partnership.
"AMGC" shall mean Aztar Missouri Gaming Corporation,
a Missouri corporation, or other entity as may be established
from time to time, upon the prior written consent of Lenders,
to own and operate the Riverboat Project.
"A/R Loan Documents" shall mean collective reference
to this Credit Agreement, the Additional Funding Addendum,
each Syndication Adjustment Addendum, the Notes, the Nevada
Security Documentation, Subleases Estoppel Certificate,
Equipment Leases Estoppel Certificate, Continuing Guaranty,
Environmental Certificate and all other instruments and
agreements required to be executed by or on behalf of Borrower
in connection with establishing the Credit Facilities and the
making of Borrowings and NRL Disbursements thereunder,
together with any and all rearrangements, extensions,
renewals, substitutions, replacements, modifications,
restatements or amendments thereof or thereto.
"Acquiring Lenders" shall have the meaning set forth
in Section 2.05f.
"Adamar - NJ" shall mean Adamar of New Jersey, Inc.,
a New Jersey corporation, which is the operator of the
TropWorld Casino and Entertainment Resort in Atlantic City,
New Jersey, together with any successor operator thereof which
is a Subsidiary or Related Entity.
"Additional Funding Addendum" shall mean the
instrument that shall be executed (assuming Agent Bank
syndicates the balance of the Credit Facilities or any portion
thereof) by Borrower, Guarantor, Closing Lenders, Agent Bank
and Post Closing Lenders as of the NRL Syndication Termination
Date which shall act as an addendum to this Credit Agreement
for the purposes set forth in Section 2.09 setting forth the
then proportionate Syndication Interests of each of the
Lenders in the Credit Facilities, substantially in the form of
the Additional Funding Addendum to Credit Agreement, a copy of
which is marked "Exhibit B", affixed hereto and by this
reference incorporated herein and made a part hereof.
"Affiliate(s)" of any Person means any other Person
which, directly or indirectly, controls, is controlled by or
is under common control with such Person. A Person shall be
deemed to be "controlled by" any other Person if such other
Person possesses, directly or indirectly, power to:
(a) vote more than fifty percent (50%) or
more of the equity securities (on a fully diluted
basis) having ordinary voting power for the
election of directors or managing general partners;
or
(b) direct or cause the direction of the
management and policies of such Person whether by
contract or otherwise; provided, however, that
shareholders of Guarantor shall not be deemed to be
Affiliates of Borrower, Guarantor or Aztar
Consolidation.
"Agency Fee" shall mean the fee to be paid to Agent
Bank annually as provided in Section 2.20c in the annual
amounts as previously agreed upon by side letter executed by
and between Borrower and Agent Bank.
"Agent Bank" shall mean First Interstate Bank of
Nevada, N.A., in its capacity as administrative and collateral
agent for the Lenders.
"Architect" shall mean the architectural company
engaged by AMGC for the architectural design of the Riverboat
Project and the Riverboat Plans and Specifications, or such
other architects as shall be employed by AMGC and approved by
REI and Agent Bank in connection with the Riverboat Loan.
"Annual Audited Statements" shall have the meaning
set forth in Section 5.08b.
"Approving RLC Lenders" shall mean collective
reference to the RLC Lenders which approve a RLC Extension
Request pursuant to Section 2.05c.
"Assignment of Equipment Leases, Contracts and
Subleases" shall mean the assignment executed by Borrower
approximately simultaneously herewith, amending and restating
the Assignment of Equipment Leases, Contracts and Subleases
recorded August 28, 1992, in Book 920828, as Instrument No.
01121, Clark County Official Records, pursuant to which
Borrower assigns to Agent Bank on behalf of the Lenders all of
its right, title and interest as lessee under the Equipment
Leases and Subleases together with any and all rearrangements,
extensions, renewals, substitutions, replacements,
modifications, restatements or amendments thereof or thereto.
"Assignment of Permits, Licenses and Contracts"
shall mean the assignment duly executed by Borrower
approximately simultaneously herewith, amending and restating
the Assignment of Permits, Licenses and Contracts, recorded
August 28, 1992, in Book 920828, as Instrument 01122, Clark
County Official Records, whereby Borrower assigns to Agent
Bank on behalf of Lenders all of its right, title and interest
in and to all permits, licenses and contracts relating to the
Hotel/Casino Operation except those gaming permits and
licenses which are unassignable together with any and all
rearrangements, extensions, renewals, substitutions,
replacements, modifications, restatements or amendments
thereof or thereto.
"Assignment of Rents and Revenues" shall mean the
Assignment duly executed by Borrower approximately
simultaneously herewith, amending and restating the Assignment
of Rents and Revenues recorded August 28, 1992, in Book
920828, as Instrument No. 01123, Clark County Official
Records, whereby Borrower assigns to Agent Bank on behalf of
Lenders as additional security for the Credit Facilities all
rents, issues, profits, revenues and income from the Real
Property and the Hotel/Casino Operation and any other business
activity conducted on the Real Property or in connection with
the Hotel/Casino Operation together with any and all
rearrangements, extensions, renewals, substitutions,
replacements, modifications, restatements or amendments
thereof or thereto.
"Authorized Officer(s)" shall have the meaning set
forth in Section 3.04d.
"Available Borrowings" shall mean at any time, and
from time to time, the aggregate amount available to Borrower
for Borrowing under the RLC Facility, consisting of the
difference between the Maximum Principal Balance, which may be
outstanding at any specified date, less the actual amount of
the unpaid principal balance of the RLC Facility as of such
date, less the actual Stated Amount of the undrawn portions of
outstanding Letters of Credit.
"Aztar" shall mean Aztar Corporation, a Delaware
corporation.
"Aztar Consolidation" shall mean reference to Aztar
and all of its Subsidiaries, including, without limitation,
AMGC, AGP, Adamar-NJ, REI and HRN on a consolidated basis.
"Aztar Distribution Times Fixed Charge Coverage
Ratio" shall have the meaning set forth in Section 6.03.
"Aztar Operating Times Fixed Charge Coverage Ratio"
shall have the meaning set forth in Section 6.02.
"Balance of the Loan" shall have the meaning set
forth in Section 8.02.
"Banking Business Day" shall mean a day upon which
the principal administrative offices (or any successor
offices) of each of the Lenders, and, for determinations of
LIBOR, banking associations in London, England, are open to
conduct regular banking business.
"Bankruptcy Code" shall mean the United States
Bankruptcy Code, as amended, 11 U.S.C. Par. 101 ET SEQ.
"Banks" shall have the meaning set forth in the
Preamble to this Credit Agreement.
"Borrower" shall have the meaning set forth in the
Preamble to this Credit Agreement.
"Borrowing(s)" shall mean: (i) such amount as may be
advanced by RLC Lenders under the RLC Facility to Borrower
pursuant to its request by Notice of Borrowing to Agent Bank
from time to time the aggregate of which shall not exceed at
any given time the Available Borrowings, or (ii) amounts
advanced by RLC Lenders upon request of Agent Bank in the
event of a funding of a Letter of Credit as provided in
Section 2.06b, the aggregate of which shall not exceed at any
given time the Maximum Principal Balance less the then
outstanding principal balance under the RLC Facility.
"Capital Expenditures" shall mean, for any period,
without duplication, the sum of:
(a) the aggregate amount of all expenditures
of the Borrower or the Aztar Consolidation, as
applicable, for fixed assets made during such
period which, in accordance with GAAP (without
regard to capitalized interest), would be
classified as capital expenditures; and
(b) the aggregate amount of all Capitalized
Lease Liabilities incurred by Borrower or the Aztar
Consolidation, as applicable, during such period.
"Capital Proceeds" shall mean the net proceeds
(after deducting all expenses incurred in connection
therewith) available to Borrower from (i) partial or total
condemnation or destruction of any part of the Premises,
(ii) sales of easements, rights-of-way or similar interest in
any portion of the Premises, (iii) casualty insurance proceeds
(other than liability insurance) received in connection with
the Premises, (iv) the sale or other disposition of any
portion of the Premises in accordance with the provisions of
this Credit Agreement (not including, however, any proceeds
received by Borrower from a sale of FF&E if such FF&E is
replaced by items of equivalent value and utility, in each
case such exclusion to apply only during any period in which
no Event of Default has occurred and is continuing), and
(v) any other extraordinary receipt of proceeds relating to
the Premises not in the ordinary course of business and
treated, for accounting purposes, as capital in nature,
excluding, however, any capital contribution or loan to
Borrower by Guarantor.
"Capitalized Lease Liabilities" shall mean all
monetary obligations of Borrower under any leasing or similar
arrangement which, in accordance with GAAP, would be
classified as capitalized leases, and, for purposes of this
Credit Agreement and each of the A/R Loan Documents, the
amount of such obligation 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 Collateral Account" shall mean the restricted
depository savings account number 002-208-6347, established by
Borrower with Agent Bank at its offices located at One East
First Street, Reno, Nevada.
"Closing Commitments" shall mean the commitment of
Closing Lenders to disburse up to Fifty Million Dollars
($50,000,000.00), under the RLC Facility as RLC Lenders.
"Closing Date" shall mean the date upon which:
(i) each of the Conditions Precedent to Closing Date set forth
in Article III A herein shall have occurred, (ii) Title
Insurance Company shall have complied with each requirement
set forth on the Depository Closing Instructions, and
(iii) the First Amendment to the Deed of Trust is recorded in
the Official Records of Clark County, Nevada.
"Closing Lenders" shall have the meaning set forth
in the Preamble to this Credit Agreement.
"Collateral" shall mean collective reference to the
Nevada Collateral and the Riverboat Loan Documentation pledged
and assigned pursuant to the REI Pledge Documents.
"Collateral Liquidation" shall mean, subsequent to
an Event of Default, the sale of all or any portion of the
Collateral by Agent Bank on behalf of Lenders either at a
Foreclosure Proceeding or after Agent Bank on behalf of
Lenders has acquired title to such Collateral.
"Collections" shall mean the collective reference to
RLC Collections and NRL Collections.
"Combined Voting Interests" shall mean the interests
of each of the Lenders to vote on matters as set forth in
Section 10.08 in the percentages set forth on the Schedule of
Lenders Proportions in Credit Facilities.
"Compliance Certificate" shall mean a compliance
certificate as described in Section 5.08b which is more
particularly described on "Exhibit P", affixed hereto and by
this reference incorporated herein and made a part hereof.
"Consolidated Tangible Net Worth" means at any time
Aztar Consolidation's net worth, determined in accordance with
GAAP, after subtracting therefrom the aggregate amount of any
intangible assets of Aztar Consolidation, including in such
subtraction, without limitation, goodwill, franchises,
licenses, patents, trademarks, trade names, copyrights,
service marks and brand names, all as determined by GAAP
consistently applied.
"Construction Agreement" shall mean the agreement
between AMGC and Contractor which is first approved by Agent
Bank (which approval will not be unreasonably withheld or
delayed), for the construction, equipping and furnishing of
the Riverboat Project as more particularly described in the
Construction Cost Breakdown and Riverboat Plans and
Specifications.
"Construction Cost Breakdown" shall mean the line
item breakdown for construction costs under the Construction
Agreement, together with all amendments, revisions and
modifications thereto.
"Construction Period" shall mean the period
commencing on the Closing Date and terminating on the
Riverboat Completion Date.
"Construction Schedule" shall mean the schedule
depicting the anticipated time for completion of the Riverboat
Project.
"Continuation/Conversion Notice" shall mean a notice
of continuation or conversion of or to a LIBO Loan under the
RLC Note or the NRL Note, as the case may be, and
substantially in the form of that certain exhibit marked
"Exhibit J", affixed hereto and by this reference incorporated
herein and made a part hereof.
"Continuing Guaranty" shall mean the General
Continuing Guaranty to be executed by Guarantor in favor of
Lenders, under the terms of which Guarantor irrevocably and
unconditionally guaranties the prompt payment and performance
of Borrower's promises, covenants and agreements under this
Credit Agreement, the Notes and each of the A/R Loan Documents
and the REI Pledge Documents, a copy of which is marked
"Exhibit K", affixed hereto and by this reference incorporated
herein and made a part hereof.
"Contractor" shall mean the Person engaged by AMGC
for the construction, equipping and furnishing of the
Riverboat Project in accordance with the terms of the
Construction Agreement.
"Credit Agreement" shall mean this Credit Agreement
to be executed by and among Borrower, Guarantor and Closing
Lenders on the Closing Date setting forth the terms and
conditions of the Credit Facilities, as may be amended,
modified or restated from time to time by amendment,
Additional Funding Addendum and/or Syndication Adjustment
Addendum, together with any and all rearrangements,
extensions, renewals, substitutions, replacements,
modifications, restatements and amendments thereof or thereto.
"Credit Facilities" shall mean collective reference
to the RLC Facility and the NRL Facility.
"Deed of Trust" shall mean the Deed of Trust,
Fixture Filing and Security Agreement With Assignment of Rents
recorded August 28, 1992, in Book 920828, as Instrument 01119,
Clark County Official Records, as Amended by First Amendment
to Deed of Trust, Fixture Filing and Security Agreement with
Assignment of Rents dated concurrently herewith, each executed
by REI, as Trustor and Debtor, encumbering the Real Property
in favor of Agent Bank on behalf of Lenders as beneficiary for
the purpose of securing Borrowers' performance of the terms
and provisions contained in the Notes, this Credit Agreement
and each of the A/R Loan Documents together with any and all
rearrangements, extensions, renewals, substitutions,
replacements, modifications, restatements or amendments
thereof or thereto.
"Default" shall mean an occurrence of an event with
which the giving of notice or the passage of time or both
would constitute an Event of Default.
"Default Notice Recording" shall mean either:
(i) the recordation of a Notice of Default
and Election to sell by Agent Bank on behalf of
Lenders in the office of the County Recorder, Clark
County, Nevada, under which a nonjudicial
foreclosure proceeding under NRS Chapter 107 is
initiated by Agent Bank as beneficiary under the
Deed of Trust, or
(ii) the commencement of a judicial
foreclosure action in the Eighth Judicial District
Court of Nevada, in and for the County of Clark,
pursuant to which Agent Bank on behalf of Lenders
seeks judicial foreclosure under NRS Chapter 106 of
the Deed of Trust.
"Default Rate" shall have the meaning set forth in
Section 2.21(b).
"Depository Closing Instructions" shall mean the
Depository Closing Instructions to be given by Agent Bank to
Title Insurance Company at or prior to the Closing Date
setting forth the requirement of Closing Lenders for the Title
Insurance Policy and other conditions for the closing of the
Credit Facilities, a copy of which Depository Closing
Instructions are marked "Exhibit L", affixed hereto and by
this reference incorporated herein and made a part hereof
"Disapproving RLC Lenders" shall mean collective
reference to the RLC Lenders which do not agree to an
extension of the then applicable RLC Maturity Date pursuant to
an RLC Extension Request as provided in Section 2.05c.
"Dispute" shall have the meaning set forth in
Section 9.14a.
"Documents" shall mean collective reference to the
term as defined in Section 9.14a.
"EBITDAR" shall mean with reference to Borrower -
earnings before interest expense, taxes, depreciation,
amortization and rent expense.
"ERISA" shall mean the Employees Retirement Income
Security Act of 1974, as amended from time to time.
"Effective Limitation Date" shall have the meaning
set forth in Section 2.22F.
"Environmental Certificate" shall mean the unsecured
Certificate and Indemnification Regarding Hazardous Substances
to be executed by Borrower and Guarantor as further inducement
to the Lenders to establish the Credit Facilities amending and
restating the Certificate and Indemnification Regarding
Hazardous Substances dated August 28, 1992, together with any
and all rearrangements, extensions, renewals, substitutions,
replacements, modifications, restatements or amendments
thereof or thereto.
"Equipment Lease Estoppel Certificate" shall mean an
estoppel certificate duly executed by Borrower as lessee under
each of the Equipment Leases wherein Borrower certifies and
represents that: (i) each of the Equipment Leases represent
the entire agreement between Borrower and the respective
equipment lessor thereof; (ii) that there have been no
modifications, supplements or amendments to any of the
Equipment Leases except as therein described; and (iii) to the
best of Borrower's knowledge there are no defaults presently
existing or continuing under any of the terms and provisions
of any of the Equipment Leases.
"Equipment Leases" shall mean: (i) the executed
leases and instalment purchase contracts for which total
payments over the life of each of such lease or instalment
purchase contract are in an aggregate amount in excess of
Fifteen Thousand Dollars ($15,000.00) pertaining to FF&E
wherein Borrower is the lessee or vendee, as the case may be,
as set forth on that certain exhibit marked "Exhibit M",
affixed hereto and by this reference incorporated herein and
made a part hereof; and (ii) such other leases and installment
purchase contracts that may be entered into after the Closing
Date hereof wherein Borrower is the lessee or vendee, as the
case may be.
"Event of Default" shall mean any event of default
as defined in Section 7.01 hereof.
"Existing Bank Debt" shall mean all Indebtedness
owing by Borrower and Guarantor to the Existing Bank Group
under the terms of the C/T Loan Agreement.
"Existing Bank Group" shall mean collective
reference to First Interstate Bank of Nevada, National
Association, Midlantic National Bank, The Daiwa Bank, Limited,
a Japanese corporation, NBD Bank, N.A. and First Security Bank
of Idaho, N.A., as lenders under the C/T Loan Agreement.
"Extension Approval Period" shall have the meaning
set forth in Section 2.05a.
"Extension Fee" shall have the meaning set forth in
Section 2.20d.
"FF&E" shall mean any furnishings, fixtures and
equipment, including, without limitation, all Gaming Devices,
slots and associated equipment, which has been installed or is
to be installed and used in connection with the operation of
the Premises and/or the Hotel/Casino Operation, including
those items of furnishings, fixtures and equipment which have
been purchased or leased or are hereafter purchased or leased
by Borrower.
"FINV" shall mean First Interstate Bank of Nevada,
National Association, which is acting as Agent Bank on behalf
of itself and the other Lenders.
"Financing Statements" shall mean the Uniform
Commercial Code financing statements required to be filed with
(i) the Office of the Secretary of State of Nevada, and
(ii) the Office of the Recorder of Clark County, in order to
perfect the security interest granted to Agent Bank on behalf
of Lenders under the Deed of Trust and other Nevada Security
Documentation, in accordance with the requirements of the
Nevada Uniform Commercial Code together with any and all
rearrangements, extensions, renewals, substitutions,
replacements, modifications, restatements or amendments
thereof or thereto.
"Fiscal Quarter" shall mean reference to each
consecutive thirteen (13) week period (and the fourteen (14)
week period in each fifty-three (53) week Fiscal Year) in each
case commencing on the first day of the Fiscal Year.
"Fiscal Year" shall mean the 52/53 week period
ending on the Thursday nearest December 31st of each calendar
year.
"Fiscal Year End" shall mean the Thursday nearest
December 31 of each calendar year.
"Foreclosure Proceeding" shall mean: (i) a judicial
or non-judicial sale held pursuant to the terms of the Deed of
Trust, (ii) any private or public sale held pursuant to the
provisions Chapter 104 of Nevada Revised Statutes, or
(iii) otherwise under the terms of any of the A/R Loan
Documents or REI Pledge Documents for the sale of or
forfeiture of title to Agent Bank of all or any portion of the
Collateral.
"Funding Date" shall mean: (i) each date upon which
Borrower requests the RLC Lenders to fund a Borrowing in
accordance with provisions of Section 2.03, (ii) each date
upon which Agent Bank requests RLC Lenders to fund a Borrowing
in accordance with the provisions of Section 2.06, or
(iii) each date upon which Borrower requests the NRL Lenders
to fund an NRL Disbursement in accordance with the provisions
of Section 2.12, as applicable.
"GAAP" shall mean generally accepted accounting
principles, consistently applied.
"Gaming Authority" shall mean with reference to the
Real Property and the Hotel/Casino Operation the Nevada Gaming
Authorities, and any agency of the State of Nevada, Clark
County or other political subdivision which has jurisdiction
over the gaming activities of Borrower at the Hotel/Casino
Operation and with reference to the Missouri Properties and
the Riverboat Project the Missouri Gaming Commission and any
agency of the State of Missouri, county, city or other
political subdivision which has jurisdiction over the gaming
activities of AMGC at the Riverboat Project.
"Gaming Devices" shall mean slot machines and other
devices which constitute gaming devices and related equipment
as defined in Nevada Revised Statute Chapter 463 and Nevada
Gaming Commission Regulations.
"Gaming Permits" shall mean collective reference to
every license, permit or other authorization required to own,
operate and otherwise conduct gaming operations at the
Hotel/Casino Operation, including, without limitation, all
licenses granted by the Nevada Gaming Authorities and all
other applicable Governmental Authorities and with reference
to the Missouri Properties and Riverboat Project every
license, permit or other authorization required to own,
operate and otherwise conduct gaming operations at the
Riverboat Facilities, including, without limitation, all
licenses granted by the Gaming Authorities of the State of
Missouri and all other applicable Governmental Authorities.
"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 Real Property and the
Hotel/Casino Operation, (ii) the construction, development,
occupation and occupancy of the Riverboat Project and
Riverboat Facilities, or (iii) the performance of any act or
obligation or the observance of any agreement, provision or
condition of whatever nature herein contained.
"Guarantor" shall mean Aztar Corporation, a Delaware
corporation.
"HRN" shall mean Hotel Ramada of Nevada, a Nevada
corporation, which is the operator of the Tropicana Hotel and
Casino in Las Vegas, Nevada, together with any successor
operator thereof which is a Subsidiary or Related Entity.
"Hazardous Materials Claims" shall have the meaning
set forth in Section 5.20.
"Hazardous Materials Laws" shall have the meaning
set forth in Section 5.20.
"Hotel/Casino Operation" shall mean the hotel and
casino business and related activities conducted on the Real
Property and the Premises under the name of Ramada Express
Hotel & Casino, together with any future expansions thereof,
related thereto or used in connection therewith.
"Indebtedness" of any Person includes all
obligations, contingent or otherwise, which in accordance with
GAAP should be classified upon such Person' balance sheet as
liabilities, but in any event including liabilities secured by
any lien existing on property owned or acquired by such Person
(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.
"Initial NRL Disbursement" shall mean the first NRL
Disbursement under the NRL Facility which shall not be made:
(a) until the occurrence of the NRL
Syndication Termination Date; and
(b) until each of the conditions precedent
set forth in Article III B shall have been fully
satisfied.
"Investment" means, relative to any Person:
(a) any loan or advance made by such Person
to any other Person (excluding commission, travel
and similar advances to officers and employees made
in the ordinary course of business);
(b) any contingent liability of such Person;
and
(c) any ownership or similar interest held by
such Person in any other Person.
"L/C Agreement(s)" shall mean collective reference
to the clean Letter of Credit application(s), agreement(s) and
addendum(s) thereto, executed by Borrower in favor of Agent
Bank in Agent Bank's then standard form, setting forth the
terms and conditions upon which Agent Bank shall issue a
Letter of Credit or Letters of Credit, as the same may be
amended or modified from time to time.
"L/C Exposure" shall mean the aggregate amount which
Agent Bank may be required to fund or is contingently liable
for disbursement under Letters of Credit, which amount shall
be determined by subtracting from the Stated Amount, the
principal amount of all L/C Reimbursement Obligations which
have occurred and have been fully satisfied as of the date of
determination.
"L/C Fee" shall have the meaning set forth in
Section 2.20f.
"L/C Pledge Agreement" shall mean the Pledge and
Assignment of Savings Account Agreement executed by Borrower
in favor of Agent Bank on the Closing Date as the same may be
amended or modified from time to time, under the terms of
which all sums held from time to time in the Cash Collateral
Account are pledged in favor of Agent Bank to secure any
funding required under any outstanding Letters of Credit.
"L/C Reimbursement Obligations" shall mean the
obligation of Borrower to reimburse Agent Bank for amounts
funded or disbursed under a Letter of Credit, together with
accrued interest thereon and all fees and other amounts owing
with respect thereto.
"LIBO Loan" shall mean reference to each portion of
the principal balance of the Credit Facility bearing interest
with reference to a LIBO Rate.
"LIBO Loan Interest Period" shall mean each portion
of the Credit Facility bearing interest with reference to a
Libo Rate which shall in each instance be fixed for either a
one (1), two (2) or three (3) month period.
"LIBO Rate" shall mean, with respect to any LIBO
Loan for any LIBO Loan Interest Period, the rate per annum as
published on the applicable Banking Business Day in "Telerate
System Reports" by the British Bankers Association for
interest settlement rates relating to London Interbank
Offerings as of 11:00 a.m., London, England time, on the date
of each such quote (Fixed USD) for the applicable LIBO Loan
Interest Period for delivery on the first day of such LIBO
Loan Interest Period, for the number of months comprised
therein and in a minimum amount and multiples as set forth
hereinabove to which rate shall be added 2.25% per annum.
"Lenders" shall mean collective reference to the RLC
Lenders and the NRL Lenders, which shall consist of the
Closing Lenders together with such Post Closing Lenders as may
commit to fund portions of the Credit Facilities as evidenced
by the Additional Funding Addendum and as set forth in the
preamble of this Credit Agreement, and as may be further
modified by Syndication Adjustment Addendum, from time to time
and in each case shall include a Lender's permitted successors
and assigns.
"Letter of Credit" shall mean reference to a clean
standby letter of credit issued by Agent Bank at the request
and for the account of Borrower pursuant to Section 2.06.
"Letters of Credit" shall mean collective reference
to all issued and outstanding Letters of Credit.
"Level Revolving Period" shall mean the period
commencing on the Closing Date and terminating no later than
June 30, 1996, as may be extended, at Lenders' discretion,
upon request of Borrower at one (1) year intervals pursuant to
RLC Extension Request in accordance with Section 2.05.
"Level Revolving Period Termination Date" shall mean
the date selected by Borrower, which date shall not be later
than the scheduled last day of the Level Revolving Period, as
the date upon which the Level Revolving Period ends and the
Reducing Revolving Period commences pursuant to exercise of
the RLC Reducing Revolving Option as set forth in
Section 2.05f.
"Margin Stock" shall have the meaning provided in
Regulation U of the Board of Governors of the Federal Reserve
System.
"Material Adverse Effect" means any set of
circumstances or events which (a) has or would reasonably be
expected to have any material adverse effect whatsoever upon
the validity or enforceability of any A/R Loan Document or REI
Pledge Document, (b) is or would reasonably be expected to be
material and adverse to the condition (financial or otherwise)
or business operations or to the prospects of Borrower or
Guarantor, (c) materially impairs or would reasonably be
expected to materially impair the ability of Borrower or
Guarantor to perform their respective obligations under the
Credit Facilities or (d) materially impairs or would
reasonably be expected to materially impair the ability of the
Lenders to enforce their legal remedies pursuant to the A/R
Loan Documents or the REI Pledge Documents.
"Maximum Principal Balance" shall mean the aggregate
commitment (whether funded, or unfunded) of all of the RLC
Lenders at any time and from time to time as such commitment
may be further reduced: (i) by the amount of the commitments
of any Disapproving RLC Lenders as provided in Section 2.05d,
(ii) by the provisions set forth in Sections 2.23, 5.01 and/or
8.02, and (iii) during the Reducing Revolving Period as set
forth in Section 2.05f.
"Missouri FF&E" shall mean any and all furnishings,
fixtures and equipment, including without limitation, all
gaming devices, slots and associated equipment, which have
been installed or are to be installed and used in connection
with the operation of the Riverboat Project and those items of
furniture, fixtures and equipment which have been purchased or
leased or are hereafter purchased or leased by AMGC in
connection with the Riverboat Project.
"Missouri Collateral" shall mean collective
reference to:
(a) all of the Missouri Properties and the
personal property, Missouri FF&E, contracts rights,
leases, intangibles and other interests of AMGC
which are subject to the liens and security
interest of the Riverboat Loan Documents and
Riverboat Security Documents;
(b) all rights of AMGC assigned as additional
security pursuant to the terms of the Riverboat
Loan Documents and Riverboat Security Documents in
favor of REI; and
(c) any and all other property and/or
intangible rights, interest or benefits inuring to
or in favor of AMGC which are in any manner
assigned, pledged, encumbered or otherwise
hypothecated in favor of REI to secure repayment of
the Riverboat Loan.
"Missouri Properties" shall mean reference to the
real property and appurtenances to be used, owned and operated
by AMGC in connection with the Riverboat Project.
"NRL Collections" shall refer to and include all
monies received by Agent Bank as principal or interest on
account of the NRL Facility prior to Collateral Liquidation,
together with the Post Closing Loan Fee as may be due and
owing to each of the Post Closing Lenders.
"NRL Disbursement" shall mean reference to the
proceeds of the NRL Facility which are disbursed to Borrower
and reloaned by Borrower to AMGC for financing development,
furnishing equipment and construction of the Riverboat
Project.
"NRL Disbursement Period" shall mean the period
commencing on the NRL Syndication Termination Date and
terminating on June 30, 1995.
"NRL Disbursement Request" shall mean the form to be
executed and appropriately completed by Borrower and submitted
to Agent Bank concurrently with each request for the advance
by Lenders of a NRL Disbursement, a copy of which form is
marked "Exhibit I", affixed hereto and by this reference
incorporated herein and made a part hereof.
"NRL Facility" shall mean the agreement of NRL
Lenders, as set forth in the Additional Funding Addendum, if
executed prior to the NRL Syndication Termination Date, to
fund a non-revolving line of credit, subject to the terms and
conditions set forth in this Credit Agreement and NRL Note, up
to the maximum aggregate amount of Twenty-Five Million Dollars
($25,000,000.00).
"NRL Lenders" shall mean the Lenders which have
committed to fund the respective Syndication Interests in the
NRL Facility as herein provided.
"NRL Maturity Date" shall mean the earlier to occur
of: (i) July 1, 1998, or (ii) the RLC Maturity Date.
"NRL Note" shall mean the Promissory Note executed
by Borrower concurrently herewith, payable to the order of
Agent Bank on behalf of the Lenders up to the aggregate
principal amount of Twenty-Five Million Dollars
($25,000,000.00) as herein provided, a copy of which is marked
"Exhibit H", affixed hereto and by this reference incorporated
herein and made a part hereof, evidencing the terms of
repayment of the NRL Facility, together with any and all
rearrangements, extensions, renewals, substitutions,
replacements, modifications, restatements and amendments
thereof or thereto.
"NRL Syndication Termination Date" shall mean the
earlier of: (i) the date upon which Borrower, Agent Bank,
Closing Lenders and each Post Closing Lender shall have
executed the Additional Funding Addendum pursuant to Section
2.09, or (ii) December 31, 1994.
"NRL Term Period" shall mean the period commencing
on July 1, 1995 and terminating on the NRL Maturity Date.
"NRL Termination Notice" shall have the meaning set
forth in Section 2.09.
"NRL Voting Interests" shall mean the voting
interests of each of the NRL Lenders to vote as set forth in
Section 10.08 in the percentages set forth on the Schedule of
Lenders Proportions in Credit Facilities.
"Nevada Collateral" shall mean (i) all the Real
Property and personal property, FF&E, contract rights, leases,
intangibles and other interests of Borrower which are subject
to the lien and security interest of the Deed of Trust and
Financing Statements; (ii) all rights of Borrower assigned or
otherwise granted in favor of Lenders pursuant to the terms of
the Nevada Security Documentation; and (iii) any and all other
property and/or intangible rights, interests or benefits
inuring to or in favor of Borrower which are in any manner
assigned, pledged, encumbered or otherwise hypothecated in
favor of Lenders to secure repayment of the Credit Facilities
(other than in connection with the Missouri Collateral)
excepting, however, the rights and benefits in favor of Agent
Bank and Lenders in the Environmental Certificate which shall
be deemed unsecured and shall vest independently of any
Collateral or security interests in such Collateral.
"Nevada Gaming Authority" means collective reference
to the Nevada Gaming Commission, the State Gaming Control
Board or any agency of any state, county, city or other
political subdivision which has jurisdiction over the gaming
activities of Borrower at the Hotel/Casino Operation.
"Nevada Security Documentation" shall mean
collective reference to the Deed of Trust, Financing
Statements, Assignment of Equipment Leases, Contracts and
Subleases, Assignment of Permits, Licenses and Contracts,
Assignment of Rents and Revenues, L/C Pledge Agreement, and
all other instruments and agreements to be executed by or on
behalf of Borrower in favor of Agent Bank securing repayment
of the Credit Facilities other than in connection with the
Missouri Collateral.
"Nonusage Fee" shall have the meaning set forth
in Section 2.20b.
"Notes" shall mean collective reference to the RLC
Note and the NRL Note.
"Notice of Borrowing" shall have the meaning set
forth in Section 2.03.
"Pension Plan" means any "employee pension benefit
plan" that is subject to Title IV of ERISA and which is
maintained for employees of Borrower or any of its ERISA
Affiliates.
"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) liens for taxes, assessments or governmental
charges the validity of which are being contested in good
faith by Borrower by appropriate proceedings, provided that
REI shall have maintained adequate reserves in cash or cash
equivalent for the payment of same, (iii) liens created or
contemplated by the A/R Loan Documents or otherwise permitted
hereunder, (iv) the liens, encumbrances and restrictions on
the Real Property which are allowed by Lenders to appear in
Schedule B, Part I and II of the Title Insurance Policy at the
Closing Date, (v) liens in favor of or consented to in writing
by Agent Bank on behalf of the Lenders, (vi) purchase money
security interests and Equipment Leases for FF&E heretofore
acquired, without limitation, and purchase money security
interests for FF&E hereafter acquired, subject to the Five
Million Five Hundred Thousand Dollar ($5,500,000.00)
limitation hereinafter set forth in Section 6.14,
(vii) subleases and concessions permitted hereunder, and
(viii) easements, licenses or rights-of-way, hereafter granted
to any Governmental Authority or public utility providing
services to the Premises incident to the development,
equipping and furnishing and operation of the Hotel/Casino
Operation.
"Person" means any individual, firm, corporation,
trust, association, partnership, joint venture, tribunal or
other entity.
"Policies of Insurance" shall mean the insurance to
be obtained and maintained by Borrower as provided by Section
5.09 herein.
"Post Closing Lenders" shall have the meaning set
forth in Section 2.08.
"Post Closing Loan Fee" shall mean the fee to be
paid to Agent Bank on the NRL Syndication Termination Date as
provided in Section 2.20(e) in the amount as previously agreed
upon by side letter executed by and between Borrower and Agent
Bank.
"Post-Collateral Liquidation Collections" shall
refer to and include all monies received by Agent Bank on
account of the Credit Facilities or as proceeds of the
Collateral encumbered by the A/R Loan Documents or REI Pledge
Documents at Collateral Liquidation.
"Post-Collateral Liquidation Distributions" shall
mean distribution of Post-Collateral Liquidation Collections
by Agent Bank, RLC Lenders and NRL Lenders in the respective
proportions that the total amount of principal then owing each
of the RLC Lenders on the RLC Facility and each of the NRL
Lenders on the NRL Facility has to the total aggregate
principal amount owing on the RLC Facility and NRL Facility
prior to the Collateral Liquidation.
"Pre-Collateral Liquidation Distributions" shall
mean: (i) distribution of the RLC Collections by Agent Bank to
the RLC Lenders in the respective proportions that the total
amount of principal then owing each of the RLC Lenders on the
RLC Facility has to the total aggregate principal amount owing
on the RLC Facility prior to Collateral Liquidation, and
(ii) distribution of the NRL Collections by Agent Bank to the
NRL Lenders in the respective proportions that the total
amount of principal then owing each of the NRL Lenders on the
NRL Facility has to the total aggregate principal amount owing
on the NRL Facility prior to Collateral Liquidation.
"Premises" shall mean the Real Property, existing
improvements and all other improvements or property, both
personal and real which now are or hereafter are situate upon
the Real Property or used in connection with the Hotel/Casino
Operation.
"Pre-Tax Net Profit" shall mean income from
continuing operations before equity in unconsolidated
partnerships' losses and income, income taxes, extraordinary
items and the cumulative effect of accounting changes.
"Prime Rate" shall mean the rate of interest which
Agent Bank from time to time identifies and publicly announces
as its prime rate and is not necessarily, for example, the
lowest prime rate of interest which Agent Bank collects from
any borrower or group of borrowers.
"Prime Rate Loan" shall mean reference to that
portion of the unpaid principal balance of the Credit
Facilities bearing interest with reference to the Prime Rate,
plus one half of one percent (.5%) per annum.
"Project Development Budget" shall mean the line
item budget for the Riverboat Project to be delivered by AMGC
to REI and Agent Bank prior to the Initial NRL Disbursement
Funding Date, showing in detail to the reasonable satisfaction
of REI and Lenders the anticipated cost of the Riverboat
Project.
"REI" shall mean Ramada Express, Inc., a Nevada
corporation, which is a wholly owned subsidiary of Aztar.
"REI Operating Times Fixed Charge Coverage Ratio"
shall have the meaning set forth in Section 6.07.
"REI Pledge Documents" shall mean collective
reference to the Riverboat Loan Documents and the collateral
assignment and security agreement, financing statements, note
endorsement and pledges of the Riverboat Loan Documents,
executed by Borrower in favor of Agent Bank on behalf of
Lenders, for the purpose of perfecting a security interest in
the Riverboat Loan Documents in favor of Agent Bank on behalf
of Lenders.
"RLC Collections" shall refer to and include all
monies received by Agent Bank as principal or interest on
account of the RLC Facility prior to Collateral Liquidation,
together with the Replacement Fee, Non-Usage Fee, Extension
Fees, Post Closing Fee and L/C Fees as may be due and owing to
each of such RLC Lenders.
"RLC Extension Request" shall mean the written
request of Borrower for an extension of the RLC Maturity Date
as provided in Section 2.05, a copy of the form of which is
marked "Exhibit F", affixed hereto and by this reference
incorporated herein and made a part hereof.
"RLC Facility" shall mean the agreement of RLC
Lenders to fund a reducing revolving line of credit, subject
to the terms and conditions set forth in this Credit Agreement
and the RLC Note, up to the Maximum Principal Balance as
reduced from time to time in accordance with the terms of this
Credit Agreement and the RLC Note.
"RLC Lenders" shall mean the Lenders which have
committed to fund the RLC Facility up to their respective
Syndication Interests as may be modified by Additional Funding
Addendum and/or Syndication Adjustment Addendum as herein
provided.
"RLC Maturity Date" shall mean June 30, 1996 as may
be extended from time to time pursuant to an RLC Extension
Request as set forth in Section 2.05a through d and/or by the
giving of the RLC Reducing Revolving Option Exercise Notice as
set forth in Section 2.05f.
"RLC Note" shall mean the Revolving Credit
Promissory Note executed by Borrower concurrently herewith,
payable to the order of Agent Bank on behalf of the Lenders,
in the original aggregate principal amount of Fifty Million
Dollars ($50,000,000.00), a copy of which is marked
"Exhibit D", affixed hereto and by this reference incorporated
herein and made a part hereof, evidencing the terms of
repayment of the RLC Facility, together with any and all
rearrangements, extensions, renewals, substitutions,
replacements, modifications, restatements and amendments
thereof or thereto.
"RLC Reducing Revolving Option" shall mean the
option of Borrower to extend the RLC Maturity Date for an
additional three (3) year period during which the Maximum
Principal Balance of the RLC Facility permitted as of the end
of the Level Revolving Period shall be reduced quarterly by
the Reducing Revolving Reduction Amount, each such reduction
to be effective as of the first (1st) day of each Fiscal
Quarter, all as provided in Section 2.05f.
"RLC Reducing Revolving Option Exercise Notice"
shall mean the notice which may be given at Borrower's Option
for an extension of the RLC Maturity Date during the Reducing
Revolving Period as more particularly described in
Section 2.05f.
"RLC Voting Interests" shall mean the voting
interests of each of the RLC Lenders to vote as set forth in
Section 10.08 in the percentages set forth on the Schedule of
Lenders Proportions in Credit Facilities.
"Real Property" shall mean that certain real
property situate in the City of Laughlin, County of Clark,
State of Nevada that is more particularly described on that
certain exhibit marked "Exhibit O", affixed hereto and by this
reference incorporated herein and made a part hereof, together
with all improvements and appurtenances situate thereon.
"Reducing Revolving Period" shall mean the period
commencing on the Level Revolving Period Termination Date and
terminating on the RLC Maturity Date as provided in
Section 2.05f.
"Reducing Revolving Reduction Amount" shall have the
meaning set forth in Section 2.05f.
"Related Entities" shall mean reference to any
corporation, partnership or other Person owned or controlled
by Borrower or any Subsidiary or Affiliate of Aztar,
including, without limitation, AMGC, AGP, Adamar-NJ and HRN.
"Replacement Fee" shall have the meaning set forth
in Section 2.20a.
"Reportable Event" shall mean a reportable event as
defined in Title IV of ERISA, except actions of general
applicability by the Secretary of Labor under Section 110 of
ERISA.
"Riverboat" shall mean the Riverboat Facilities to
be constructed on the Vessel.
"Riverboat Completion Date" shall mean the date upon
which: (i) the Riverboat Project has been completed in
substantial accordance and compliance with the Riverboat Plans
and Specifications and in accordance and compliance with the
terms and conditions of all Governmental Authorities, (ii) the
Riverboat Project has received a final completion
certification from all applicable Governmental Authorities and
is open to the public, and (iii) no mechanics or materialman
liens, claims or encumbrances exist against the Riverboat
Project, other than those of which are being contested in good
faith and are bonded in accordance with applicable law.
"Riverboat Construction Loan Agreement" shall mean
the Construction Loan Agreement to be executed by and between
REI, as lender, and AMGC, as borrower, under the terms of
which REI agrees to make the Riverboat Loan to AMGC.
"Riverboat Deed of Trust" shall mean the deed of
trust or mortgage to be executed by AMGC in favor of REI
securing repayment of the Riverboat Loan, under which all real
property and improvements situate thereon relating to the
Riverboat Facilities are encumbered to secure repayment of the
Riverboat Loan.
"Riverboat Default Event" shall mean the occurrence
of a default or an event of default, after the lapse of any
applicable grace period, under the terms of the Riverboat Loan
Documents.
"Riverboat Disbursements" shall mean disbursements
and advances made by REI to AMGC under the Riverboat Loan.
"Riverboat Facilities" shall mean the casino
business, table games and related activities to be conducted
on the Riverboat to be located on the Missouri Properties,
together with any future expansions thereof, related thereto
or used in connection therewith.
"Riverboat Loan" shall mean the loan to be made by
Borrower to AMGC, up to the maximum principal amount of
Twenty-Five Million Dollars ($25,000,000.00) to be secured by
the Riverboat Loan Documents.
"Riverboat Loan Documents" shall mean collective
reference to the Riverboat Construction Loan Agreement, Term
Promissory Note in the original principal sum of no less than
Twenty-Five Million Dollars ($25,000,000.00), executed by
AMGC, payable to the order of REI, the Riverboat Security
Documents, and all other instruments and agreements required
to be executed by or on behalf of AMGC or any other Person in
favor of REI in connection with the Riverboat Loan.
"Riverboat Plans and Specifications" shall mean
collective reference to the plans and specifications for the
development, construction, equipping and furnishing of the
Riverboat Project and Riverboat Facilities prepared by
Architect and others as indicated below, as such plans and
specifications may be amended from time to time.
"Riverboat Project" shall mean construction of the
Riverboat and Riverboat Facilities in accordance with the
Riverboat Plans and Specifications, together with the on shore
parking and other related structures and improvements to be
used in connection with the Riverboat Facilities.
"Riverboat Security Documents" shall mean collective
reference to the Riverboat Deed of Trust under the terms of
which all of AMGC's right, title and interest in and to the
Missouri Properties are encumbered in favor of REI, ship
mortgage under the terms of which all AMGC's right, title and
interest in and to the Riverboat is encumbered in favor of
REI, Security Agreement under which all of AMGC's right, title
and interest in and to the Missouri Collateral therein
described is pledged and encumbered in favor of REI, UCC-1
Financing Statements in favor of REI, collateral assignment of
contracts in favor of REI, environmental certificate,
environmental audits and all other instruments and agreements
to be executed by or on behalf of AMGC in favor of REI,
securing repayment of the Riverboat Loan.
"Schedule of Lender Proportions in Credit
Facilities" shall mean the schedule as may be amended from
time to time pursuant to an Additional Funding Addendum or
Syndication Adjustment Addendum, setting forth the proportions
in which each RLC Lender and each NRL Lender has committed to
fund the RLC Facility and NRL Facility, respectively, a copy
of which reflecting the proportionate Syndication Interests of
Closing Lenders in the Credit Facilities is marked
"Exhibit A", affixed hereto and by this reference incorporated
herein and made a part hereof.
"Scheduled Payments" shall mean the principal
reductions and/or instalment payments of principal and/or
interest, late charges, fees and other voluntary payments made
by Borrower pursuant to the terms of the RLC Note and the NRL
Note.
"Security Documentation" shall mean collective
reference to the Nevada Security Documentation, the REI Pledge
Documents and the Riverboat Loan Documents.
"Stated Amount" shall mean the maximum amount which
Agent Bank may be required to disburse to the beneficiaries of
Letters of Credit under the terms thereof.
"Stated Expiry Date" shall mean the date set forth
on the face of each Letter of Credit as the date when
obligations of Agent Bank to advance funds thereunder will
terminate, as the same may be extended from time to time.
"Subleases" shall mean: (i) the executed subleases
pertaining to the Premises, or any portion thereof, wherein
REI is the sublessor, as set forth on that certain exhibit
marked "Exhibit N", affixed hereto and by this reference
incorporated herein and made a part hereof and (ii) such other
subleases and concession agreements as may be entered into
after the date hereof in the ordinary course of Borrower's
business.
"Subleases Estoppel Certificate" shall mean an
estoppel certificate duly executed by Borrower as sublandlord
under each of the Subleases wherein Borrower certifies and
represents that: (i) each of the Subleases represent the
entire agreement between Borrower and the respective sub-
lessees thereof; (ii) that there have been no modifications,
supplements or amendments to any of the Subleases except as
therein described; and (iii) to the best of Borrower's
knowledge there are no defaults presently existing or
continuing under any of the terms and provisions of any of the
Subleases.
"Subsidiary" means, on the date in question any
Person of which an aggregate of fifty percent (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 specified 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.
"Syndication Adjustment Addendum" shall mean the
instrument to be executed pursuant to Section 2.05(d) by
Borrower, Guarantor, Agent Bank and each of the Approving RLC
Lenders for the purpose of adjusting the respective
proportions of the Syndication Interest of the Approving RLC
Lenders in the RLC Facility and reducing the Maximum Principal
Balance by the total commitment amounts of the Syndication
Interests of the Disapproving RLC Lenders.
"Syndication Interest" shall mean the proportionate
interest of each Closing Lender in the Credit Facilities as
set forth on the Schedule of Closing Lenders' Proportions in
Credit Facilities, a copy of which is marked Exhibit A,
affixed hereto and by this reference incorporated herein and
made a part hereof as may be modified from time to time by
execution of the Additional Funding Addendum or a Syndication
Adjustment Addendum, in which event the term "Syndication
Interest" shall mean the proportionate interest of each Lender
in the Credit Facilities as set forth on the Schedule of
Lenders' Proportions in Credit Facilities as set forth on the
Additional Funding Addendum and each Syndication Adjustment
Addendum.
"Taxes" shall have the meaning set forth in
Section 2.22.
"Termination Certificate" shall mean the Certificate
and Acknowledgement of Termination of Syndication Interest in
RLC Facility to be executed pursuant to Section 2.05(d)(i) by
Borrower, Guarantor, the Approving RLC Lenders, Disapproving
RLC Lenders and Agent Bank for the purpose of evidencing the
termination of the RLC Facility as to each Disapproving RLC
Lender.
"Title Insurance Company" shall mean Lawyers Title
Insurance Company and its issuing agent, Lawyers Title of
Nevada, Inc., 333 S. Third Street, Las Vegas, Nevada 89101,
together with such reinsurers with direct access as are
requested by Lenders on or before the Closing Date or other
title insurance company or companies as may be acceptable to
Lenders.
"Title Insurance Indorsements" shall mean collective
reference to the 101.2, 110.5 and Revolving Credit
Endorsements, each in form and content acceptable to Lenders,
to be attached to the Title Insurance Policy as of the Closing
Date.
"Title Insurance Policy" shall mean the ALTA
Extended Coverage Lender's Policy of Title Insurance dated
August 28, 1992, at 11:47 a.m., Policy No. 82-02-929620, Order
No. 9204042 RM/LP, together with the Title Insurance
Indorsements issued by Title Insurance Company in the amount
of Fifty Million Dollars ($50,000,000.00) insuring Agent Bank
on behalf of the Lenders that the Deed of Trust is a first
mortgage lien on the Premises without exception as to the
condition of title or priority other than the exceptions which
are permitted to be shown as set forth on the Depository
Closing Instructions.
"Total Revenues" shall mean gross revenues less
complimentaries.
"Vessel" shall mean the barges or other vessels upon
which the Riverboat Facilities will be constructed.
Section 1.02. INTERPRETATION AND CONSTRUCTION. In
this Credit Agreement, unless the context otherwise requires:
(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) Words importing persons mean and include
firms, associations, partnerships (including limited partner-
ships), societies, trusts, corporations or other legal
entities, including public or governmental bodies, as well as
natural persons;
(d) Every affirmative duty, covenant and
obligation of Borrower and Guarantor hereunder shall be
equally applicable to each of the Borrower and Guarantor
individually and where the context would result in the best
interests or rights of Lenders shall be construed to mean
"Borrower and Guarantor or either of them";
(e) 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;
(f) 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;
(g) 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;
(h) This Credit Agreement and all matters re-
lating hereto shall be governed by and construed and inter-
preted in accordance with the laws of the State of Nevada;
(i) If any clause, provision or Section of
this Credit Agreement shall be determined to be apparently
contrary to or conflicting with any other clause, provision or
Section of this Credit Agreement, then the clause, provision
or Section containing the more specific provisions shall
control and govern with respect to such apparent conflict.
The parties hereto agree that each has contributed to the
drafting of this Credit Agreement and in all A/R Loan
Documents and that the provisions herein contained shall not
be construed against either Borrower, Guarantor or Lenders as
having been the person or persons responsible for the
preparation thereof;
(j) All accounting terms used herein which are
not otherwise specifically defined shall be used in accordance
with GAAP;
(k) All references to time in this Credit
Agreement shall refer to the time in Reno, Nevada; and
(l) Any reference to an A/R Loan Document
and/or REI Pledge Documents contained in this Credit Agreement
or any other A/R Loan Document and/or REI Pledge Documents
shall be deemed to include, together with such A/R Loan
Document and/or REI Pledge Documents, any and all
rearrangements, extensions, renewals, substitutions,
replacements, modifications, restatements and amendments
thereof or thereto.
Section 1.03. USE OF DEFINED TERMS. Unless
otherwise defined or the context otherwise requires, the terms
for which meanings are provided in this Credit Agreement shall
have such meanings when used in the Notes, the A/R Loan
Documents and/or REI Pledge Documents and each notice and
other communication delivered from time to time in connection
with this Credit Agreement, the Notes or any of the A/R Loan
Documents or any REI Pledge Document.
Section 1.04. CROSS-REFERENCES. Unless otherwise
specified, references in this Credit Agreement and in each
other A/R Loan Document to any Article or Section are
references to such Article or Section of this Credit Agreement
or such other A/R 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.
ARTICLE II
AMOUNT, TERMS AND SECURITY OF THE CREDIT FACILITIES
---------------------------------------------------
A. THE RLC FACILITY.
----------------
Section 2.01. COMMITMENT TO ADVANCE BORROWINGS.
Subject to the conditions and upon the terms hereinafter set
forth and in accordance with the terms and provisions of the
RLC Note, RLC Lenders severally agree in the proportions set
forth on the Schedule of Lenders' Proportions in Credit
Facilities to lend and advance to Borrower up to the Maximum
Principal Balance, such amounts as Borrower may request by
Notice of Borrowing to Agent Bank from time to time as
provided in Section 2.03 or as may be requested by Agent Bank
from time to time to fund disbursements under Letters of
Credit as provided in Section 2.06. Borrower may borrow,
repay and reborrow the Available Borrowings up to the Maximum
Principal Balance as provided herein.
Section 2.02. USE OF PROCEEDS OF THE RLC FACILITY.
Proceeds of the RLC Facility shall be used for the purposes
of: (i) paying costs and expenses incurred by Borrower in
connection with the maintenance, refurbishment, improvement,
construction and expansion of the Hotel/Casino Operation,
(ii) fully refinancing and paying all sums owing under the
Existing Bank Debt, including, without limitation, such costs
and expenses incurred in connection with the Expansion and
Remodeling Project described in the C/T Loan Agreement,
(iii) general corporate purposes and working capital
requirements of Borrower relating to the Hotel/Casino
Operation, (iv) funding loans, advances and other
distributions to Guarantor and its Affiliates and
Subsidiaries, and (v) reimbursement of Agent Bank for amounts
drawn under Letters of Credit issued pursuant to Article II B
hereinbelow.
Section 2.03. NOTICE OF BORROWINGS. Borrower shall
give Agent Bank, no later than 10:00 a.m. of the date of
delivery thereof, at Agent Bank's office specified in Section
2.19, 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 E", 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 Funding Date and amount of each proposed
Borrowing. Agent Bank shall give at least two (2) Banking
Business Days notice in the case of each Borrowing made with
reference to a LIBO Rate and at least one (1) Banking Business
Day notice for all other Borrowings to RLC Lenders of the
amount to be funded and specifying the Funding Date on which
the funds are to be made available. Not later than 11:00
o'clock a.m. on the Funding Date specified, each RLC Lender
shall disburse to Agent Bank the amount to be advanced by each
such RLC Lender in lawful money of the United States of
America and in immediately available funds. Agent Bank shall
make the proceeds of such fundings received by it on or before
11:00 o'clock a.m. from the RLC Lenders available to Borrower
by depositing, prior to 1:00 o'clock p.m. on the day so
received (but not prior to the Funding Date), in the general
deposit account of Borrower maintained with Agent Bank the
amounts received from the RLC Lenders. Each Borrowing made at
the request of Borrower shall be in a minimum amount of One
Million Dollars ($1,000,000.00) and in increments of One
Hundred Thousand Dollars ($100,000.00) provided that Borrower
shall be entitled to no more than three (3) Borrowings during
each calendar month.
Section 2.04. CONDITIONS OF BORROWINGS. Borrowings
will only be made so long as Borrower and Guarantor are in
full compliance with each of the requirements and conditions
precedent set forth in Article III C of this Credit Agreement.
Provided, however, RLC Lenders may, in their sole and absolute
discretion and pursuant to the provisions set forth in Article
X of this Credit Agreement, advance Borrowings notwithstanding
the existence of less than full compliance with the
requirements of Article III C and Borrowings so made shall be
deemed to have been made pursuant to this Credit Agreement.
Section 2.05. TERM OF THE RLC FACILITY. The RLC
Facility shall be evidenced by the RLC Note, a copy of which
is marked "Exhibit D", affixed hereto and by this reference
incorporated herein and made a part hereof. The term of the
RLC Facility shall commence as of the Closing Date and shall
terminate on the RLC Maturity Date as may be extended from
time to time pursuant to an RLC Extension Request or exercise
of the RLC Reducing Revolving Option as provided hereinbelow:
RLC EXTENSION REQUEST
---------------------
a. So long as no Default or Event of Default
shall have occurred and is continuing, the RLC Maturity Date
and the Level Revolving Period may be extended at the request
of Borrower, subject to the written approval of RLC Lenders
(which may be withheld in the sole and absolute discretion of
each Lender) by delivery to Agent Bank of an RLC Extension
Request, in the form of Exhibit F hereto. The RLC Extension
Request may be delivered by Borrower to Agent Bank during each
Fiscal Year occurring after December 31, 1994, no earlier than
the date upon which Agent Bank receives the Annual Audited
Statements for the prior Fiscal Year and no later than sixty
(60) days following the date Agent Bank receives such Annual
Audited Statements. RLC Lenders shall have forty-five (45)
days from the date of Agent Bank's receipt of each RLC
Extension Request (the "Extension Approval Period") to
approve, in the sole and absolute discretion of each RLC
Lender, such RLC Extension Request.
b. If approved by each of the RLC Lenders,
the RLC Maturity Date and the Level Revolving Period shall be
deemed extended for an additional one (1) year period. For
example, if the Annual Audited Statements relating to the
Fiscal Year ending December 31, 1994, are delivered to Agent
Bank on March 1, 1995, and concurrently with such delivery
Borrower makes an RLC Extension Request and such RLC Extension
Request is approved by each of the RLC Lenders, the RLC
Maturity Date and the Level Revolving Period shall be deemed
extended from June 30, 1996, to June 30, 1997. Any RLC Lender
not approving an RLC Extension Request on or before the
expiration of the Extension Approval Period shall be deemed to
have disapproved the applicable RLC Extension Request.
c. In the event any RLC Lender does not
approve a RLC Extension Request (a "Disapproving RLC Lender"),
Borrower shall have fifteen (15) days following the expiration
of the Extension Approval Period within which to elect to
either:
(i) retract the RLC Extension Request,
which retraction shall be made in writing and shall
be effective upon receipt by Agent Bank, or
(ii) proceed with the extension of the
RLC Maturity Date and the Level Revolving Period as
to the RLC Lenders which approve the RLC Extension
Request (the "Approving RLC Lenders"), which
election to proceed shall be made in writing and
shall be effective upon receipt by Agent Bank.
Failure of Borrower to give written notice to
Agent Bank under either (i) or (ii) immediately above within
fifteen (15) days following the expiration of the Extension
Approval Period as provided hereinabove, shall be deemed to be
Borrower's election to retract the applicable RLC Extension
Request as provided in subsection (i).
d. In the event Borrower elects to proceed
with the RLC Extension Request with the Approving RLC Lenders,
on the RLC Maturity Date, without regard to such extension:
(i) Borrower shall fully pay all outstanding
principal and accrued interest and all other
amounts owing each Disapproving RLC Lender on the
RLC Facility;
(ii) the RLC Facility shall be deemed
terminated as to such Disapproving RLC Lender and
such Disapproving RLC Lender shall owe no further
duty or obligation or be entitled to any further
rights or interests as an RLC Lender under the RLC
Facility which shall be confirmed and evidenced by
the execution of a Termination Certificate by
Borrower, Guarantor, Approving RLC Lenders and the
Disapproving RLC Lenders;
(iii) the Maximum Principal Balance shall be
reduced by the total commitment amount of the
Syndication Interest of each Disapproving RLC
Lender, and
(iv) Borrower, Guarantor, Agent Bank and each
of the Approving RLC Lenders shall execute a
Syndication Adjustment Addendum under the terms of
which: (x) the Schedule of Lenders' Proportions in
Credit Facility shall be modified to reflect the
respective proportions of the Syndication Interests
of the Approving RLC Lenders in the RLC Facility
during the applicable extension period and (y)
affirmation of the Maximum Principal Balance as
reduced by the amounts of the total commitment
amount of the Syndication Interests of the
Disapproving RLC Lenders.
From and after compliance with the requirements
of Section 2.05d(i) through (iv) above, the RLC Maturity Date
and the Level Revolving Period shall be extended for one (1)
year with respect to the Approving RLC Lenders.
e. Notwithstanding the provisions set forth
in Section 2.05d hereinabove, any Approving RLC Lender shall
have the right to acquire the Syndication Interest of any
Disapproving RLC Lender (or prorata portion thereof if more
than one Approving RLC Lender desires to increase its
respective Syndication Interest). If none of the Approving
RLC Lenders desire to so acquire the Syndication Interest of
any Disapproving RLC Lender, Borrower shall have the right to
seek a recognized financial institution, subject to the
reasonable approval of the Approving RLC Lenders, to purchase
the Syndication Interest of such Disapproving RLC Lender. In
the event any Approving RLC Lender or other recognized
financial institution reasonably acceptable to Approving RLC
Lenders (the "Acquiring Lenders") desire to acquire the
Syndication Interest of the Disapproving RLC Lender, on the
RLC Maturity Date, without regard to such extension:
(i) the Acquiring Lenders shall fully pay all
outstanding principal and accrued interest and all
other amounts owing each Disapproving RLC Lender on
the RLC Facility; and
(ii) the Disapproving RLC Lenders shall assign
all of their right, title and interest in and to
the RLC Facility to Acquiring Lenders and Acquiring
Lenders shall assume each and every duty and
obligation of each Disapproving RLC Lender in the
RLC Facility. Upon completion of the assignment
and assumption as set forth above, the RLC Maturity
Date and the Level Revolving Period shall be deemed
extended for an additional one (1) year period as
if the RLC Extension Request had been approved by
each of the RLC Lenders as provided in Section
2.05b hereinabove.
RLC REDUCING REVOLVING OPTION
-----------------------------
f. Borrower may exercise the RLC Reducing
Revolving Option at any time prior to the scheduled expiration
of the then applicable Level Revolving Period by delivering
irrevocable written notice of the exercise of the RLC Reducing
Revolving Option to Agent Bank at least sixty (60) days prior
to the scheduled expiration of the Level Revolving Period, in
the form of the RLC Reducing Revolving Option Exercise Notice,
a copy of which is marked "Exhibit G", affixed hereto and by
this reference incorporated herein and made a part hereof.
The RLC Reducing Revolving Option Exercise Notice shall
specify the Level Revolving Termination Date, which shall not
be later than the then scheduled expiration of the Level
Revolving Period. Upon such exercise, the Maximum Principal
Balance of the RLC Facility permitted as of the Level
Revolving Period Termination Date shall be reduced by one-
twelfth (1/12) of that amount (the "Reducing Revolving
Reduction Amount") on the first day of each Fiscal Quarter
commencing on the first (1st) day of the second (2nd) full
Fiscal Quarter following the Level Revolving Period
Termination Date and continuing during the Reducing Revolving
Period in a like amount on the first day of each Fiscal
Quarter until the RLC Maturity Date, which shall be deemed
extended for an additional three (3) year period upon exercise
of the RLC Reducing Revolving Option, on which date the
Maximum Principal Balance of the RLC Facility shall be reduced
to Zero ($.00) and the RLC Facility shall be deemed
terminated.
B. Letters of Credit.
Section 2.06. Issuance of Letters of Credit.
a. Borrower may from time to time request
that Letters of Credit be issued by delivering to Agent Bank
on a Banking Business Day, at least five (5) Banking Business
Days prior to the date of such proposed issuance, the L/C
Agreements in Agent Bank's then standard form, completed to
the satisfaction of Agent Bank and such other certificates as
the Agent Bank may reasonably request; provided, however, that
no Letter of Credit shall be issued if after giving effect to
the issuance thereof, the aggregate Stated Amount of
outstanding Letters of Credit would exceed the lesser of (i)
Five Million Dollars ($5,000,000.00), or (ii) the Maximum
Principal Balance less the amount of outstanding Borrowings
and less the Stated Amount of all outstanding Letters of
Credit. On the terms and subject to the conditions set forth
in this Credit Agreement, each Letter of Credit shall be
issued by the Agent Bank on the Banking Business Day specified
in the Borrower's application therefor. Each request for a
Letter of Credit and each Letter of Credit shall be subject to
the Uniform Customs and Practice for Documentary Credit (1983
Revision), International Chamber of Commerce Publication No.
400, as the same may be amended or replaced from time to time.
Each Letter of Credit will be issued upon payment of the
applicable L/C Fee for a term not greater than one (1) year or
such longer term as may be acceptable to the RLC Lenders;
provided, however, in no event shall any Letter of Credit have
a Stated Expiry Date later than sixty (60) days prior to the
RLC Maturity Date.
b. Upon the occurrence of any Default Notice
Recording, Agent Bank shall, without notice or further
authorization or consent of Borrowers whatsoever, be
authorized to immediately cause the Cash Collateral Account to
be funded with a Borrowing equal to the aggregate amount of
the L/C Exposure then outstanding. All amounts held by Agent
Bank in the Cash Collateral Account shall be held as security
for the repayment of any drafts drawn on or disbursements
required under any Letters of Credit pursuant to the terms of
the Letters of Credit, L/C Agreements and the L/C Pledge
Agreement.
c. Upon presentation of a draft drawn under
any Letter of Credit or the occurrence of a Default Notice
Recording, Agent Bank shall promptly notify the RLC Lenders of
the amount under such draft or the amount of the L/C Exposure
then outstanding, as the case may be, of each such RLC
Lender's proportionate amount and the Funding Date. Each of
the RLC Lenders shall advance a Borrowing in an amount equal
to such Lender's Syndication Interest in the amount of such
payment to be made by the Agent Bank or the amount of the L/C
Exposure then outstanding, as applicable. Each RLC Lender
shall advance its proportionate share of such Borrowing in
immediately available funds, directly to Agent Bank (i) not
later than 1:00 o'clock p.m. on the following Banking Business
Day if the Agent Bank shall have provided notice prior to
11:00 a.m., and (ii) the Agent Bank shall have provided notice
after 11:00 a.m., not later than 1:00 p.m. on the second (2nd)
following Banking Business Day. Advances made by RLC Lenders
to repay or secure amounts under Letters of Credit pursuant to
this subsection shall constitute Borrowings under the RLC
Facility, initially shall be Prime Rate Loans and shall be
subject to all of the provisions of this Credit Agreement
concerning Borrowings under the RLC Facility, except that such
Borrowings shall be made upon demand of the Agent Bank as set
forth above rather than upon Notice of Borrowing by Borrower
and shall be made, notwithstanding anything in this Credit
Agreement to the contrary, without regard to satisfaction of
conditions precedent to the making of Borrowings under the RLC
Facility as set forth in Article III B and notwithstanding any
Default or Event of Default hereunder or any other section of
this Credit Agreement.
d. Each RLC Lender's obligation to advance
Borrowings in the proportionate amount of its Syndication
Interest in the RLC Facility of any L/C Exposure outstanding
under any Letter of Credit pursuant hereto is several, and not
joint or joint and several. The failure of any RLC Lender to
perform its obligation to advance a Borrowing in a
proportionate amount of such RLC Lender's Syndication Interest
of any L/C Exposure outstanding under a Letter of Credit will
not relieve any other RLC Lender of its obligation hereunder
to advance such Borrowing in the amount of such other RLC
Lender's proportionate Syndication Interest of such amount.
The Borrower agrees to accept the Borrowings for payment of
Letters of Credit as provided hereinabove, whether or not such
Borrowings could have been made pursuant to the terms of
Article III B, or any other section of this Credit Agreement.
Section 2.07. USE OF LETTERS OF CREDIT. Letters of
Credit shall be used and issued for the account of Borrower
for the general corporate purposes of Borrower.
C. NRL FACILITY
------------
Section 2.08. COMMITMENT TO ADVANCE DISBURSEMENTS.
Subject to the terms and conditions herein contained and in
accordance with the terms and provisions of the NRL Note, and
on the condition that Agent Bank syndicates the NRL Facility,
in whole or in part, and the Additional Funding Addendum is
executed by Lenders prior to the occurrence of the NRL
Syndication Termination Date, Closing Lenders and Post Closing
Lenders shall have committed and shall, by execution of the
Additional Funding Addendum, commit, in the proportions set
forth on the Schedule of Lenders' Proportions in Credit
Facilities to be attached to the Additional Funding Addendum
with respect to such Closing Lenders and Post Closing Lenders,
up to the aggregate amount set forth in the Additional Funding
Addendum but in no event in excess of Seventy-Five Million
Dollars ($75,000,000.00) for funding under the Credit
Facilities. Until the NRL Syndication Termination Date, Agent
Bank shall use its best efforts to procure an aggregate amount
of up to Twenty-Five Million Dollars ($25,000,000.00) in
syndication commitments from financial institutions
(collectively the "Post Closing Lenders") acceptable to
Closing Lenders and Borrower in their reasonable discretion.
NRL Disbursements under the NRL Facility shall be made in such
amounts as Borrower may request by written NRL Disbursement
Requests, Exhibit I hereto, to Agent Bank from time to time as
provided and subject to the provisions set forth hereinbelow
during the NRL Disbursement Period. Borrower may not reborrow
any amounts repaid or prepaid on the NRL Facility.
Section 2.09. ADJUSTMENT OF SYNDICATION INTEREST.
The amounts committed by Post Closing Lenders and the
respective Syndication Interests then held by the Closing
Lenders shall be apportioned between each of the Credit
Facilities on a pro rata basis as of the NRL Syndication
Termination Date. Borrower, Agent Bank, Closing Lenders and
each Post Closing Lender shall on the NRL Syndication
Termination Date execute an Additional Funding Addendum
substantially in the form of Exhibit B hereto for the purpose
of evidencing: (a) each Post Closing Lender's commitment to
fund its applicable Syndication Interest in the Credit
Facilities, (b) the then aggregate amount of the Credit
Facilities available to Borrower for Borrowing with respect to
the RLC Facility and NRL Disbursement with respect to the NRL
Facility, (c) Restatement of the Schedule of Lender's
Proportion in Credit Facilities evidencing the pro rata
Syndication Interests of each of the Lenders in the RLC
Facility and NRL Facility, (d) that each such Post Closing
Lender shall be entitled to each and every benefit and right
and shall be subject to each duty and obligation as a Lender
under each of the Credit Facilities, (e) payment of such
amounts as may be necessary by Post Closing Lenders to Agent
Bank for distribution to the Closing Lenders for the purpose
of adjusting the outstanding principal amounts advanced by
each Closing Lender under the Credit Facilities in accordance
with the respective Syndication Interests as set forth in the
Additional Funding Addendum and Schedule of Lenders
Proportions in Credit Facilities, as so adjusted, (f) the
collection by Agent Bank from Borrower and distribution to the
Post Closing Lenders which have committed to fund their
proportionate Syndication Interests in the RLC Facility and
NRL Facility the amount of the applicable Post Closing Loan
Fee, and (g) such other matters as may be required by
Borrower, Agent Bank, Closing Lenders or any Post Closing
Lender or their respective attorneys. If less than the
aggregate amount of Seventy-Five Million Dollars
($75,000,000.00) in syndication commitments are procured as of
the NRL Syndication Termination Date, the shortfall shall
reduce the NRL Facility. In the event of such shortfall
Borrower shall have the right to either proceed with the
funding of the NRL Facility or terminate the NRL Facility by
giving irrevocable written notice thereof to Agent Bank on the
NRL Syndication Termination Date (the "NRL Termination
Notice"). If and to the extent that the REI Pledge Documents
have been executed, Agent Bank agrees to release all REI
Pledge Documents on or before ten (10) Banking Business Days
following its receipt of the NRL Termination Notice.
Section 2.10. PROCEEDS OF THE NRL FACILITY.
Proceeds of the NRL Facility shall be used for the purpose of
providing up to Twenty Five Million Dollars ($25,000,000.00)
for advance by Borrower to AMGC under: (a) the Riverboat Loan
as Riverboat Disbursements to AMGC to enable AMGC to pay for
the construction costs and expenses relating to the Riverboat
Project in accordance with the Riverboat Development Budget,
or (b) such other projects or loans by Borrower as may be
approved by Lenders in their reasonable discretion as provided
in Section 10.08(c), and upon such terms and subject to such
conditions, collateral documentation and funding requirements
as may be required by Lenders in their reasonable discretion.
Section 2.11. TERM OF NRL FACILITY. The NRL Loan
shall be evidenced by the NRL Note, a copy of which is marked
"Exhibit D", affixed hereto and by this reference incorporated
herein and made a part hereof. The NRL Facility shall be for
a term commencing on the Closing Date and shall terminate on
the NRL Maturity Date and shall be disbursed in accordance
with the disbursement procedures set forth hereinbelow.
Section 2.12. ADVANCE OF NRL DISBURSEMENTS. No NRL
Disbursements shall be made prior to the occurrence of the NRL
Syndication Termination Date nor subsequent to the expiration
of the NRL Disbursement Period. Borrower shall submit NRL
Disbursement Requests to Agent Bank for NRL Disbursements in
no event more than once a month in anticipation of the
completion of the Riverboat Project by the end of the NRL
Disbursement Period. Borrower shall give Agent Bank, no later
than 10:00 a.m. of the date of delivery thereof, at Agent
Bank's office specified in Section 2.19, three (3) full
Banking Business Days prior written notice in the form of the
NRL Disbursement Request for each proposed NRL Disbursement to
be made with reference to a LIBO Rate and at least two (2)
full Banking Business Days prior notice for all other NRL
Disbursements specifying the Funding Date and amount of each
proposed NRL Disbursements. Agent Bank shall give at least
two (2) Banking Business Days notice in the case of each NRL
Disbursement made with reference to a LIBO Rate and at least
one (1) Banking Business Day notice for all other NRL
Disbursements to NRL Lenders of the amount to be funded and
specifying the Funding Date on which the funds are to be made
available. Not later than 11:00 o'clock a.m. on the Funding
Date specified, each NRL Lender shall disburse to Agent Bank
the amount to be advanced by each such NRL Lender in lawful
money of the United States of America and in immediately
available funds. Agent Bank shall make the proceeds of such
fundings received by it on or before 11:00 o'clock a.m. from
the NRL Lenders available to Borrower by depositing, prior to
1:00 o'clock p.m. on the day so received (but not prior to the
Funding Date), in the general deposit account of Borrower
maintained with Agent Bank the amounts received from the NRL
Lenders. Each NRL Disbursement shall be in a minimum amount
of One Million Dollars ($1,000,000.00) and in increments of
One Hundred Thousand Dollars ($100,000.00) provided that
Borrower shall be entitled to no more than one (1) Borrowing
during each calendar month.
Section 2.13. NO OBLIGATION TO SEE TO PROPER
APPLICATION OF NRL DISBURSEMENTS. Nothing contained herein or
in any other documents and agreements contemplated hereby or
executed approximately simultaneously herewith shall impose
upon Banks any obligation to see to the proper application of
any NRL Disbursements by Borrower or AMGC and nothing shall
prevent Lenders, at their option, from deducting from any NRL
Disbursements any sums owed to them by Borrower for unpaid
interest or principal, or for sums paid and expended by Banks
for taxes, assessments, insurance and other like payments
(after the expiration of any applicable notice and cure
period), pursuant to their rights under the terms of this
Credit Agreement, the Notes, the Deed of Trust or other A/R
Loan Documents.
Section 2.14. NRL DISBURSEMENTS IF A NRL LENDER
FALIS TO PROVIDE FUNDS. Borrower acknowledges and agrees that
each of the NRL Lenders shall only be responsible for funding
its Syndication Interest in the NRL Facility as set forth on
the Schedule of Lenders Proportions in Credit Facilities. In
the event any NRL Lender fails to provide its prorata share of
its Syndication Interest, then the remaining NRL Lenders'
obligations to provide their respective Syndication Interest
shall not terminate.
Section 2.15. NO NRL DISBURSEMENTS REQUIRED IN
EVENT OF DEFAULT. NRL Lenders shall not be required to make
any NRL Disbursements hereunder if, at the time when the
request for such NRL Disbursement is made, there exists a
Default or Event of Default hereunder or under any of the
other A/R Loan Documents or REI Pledge Documents; provided,
however, NRL Lenders may, in their sole discretion, advance
NRL Disbursements notwithstanding the existence of a Default
or Event of Default and any NRL Disbursements so made shall be
deemed to have been made pursuant to the NRL Facility.
Section 2.16. ACCURACY OF REPRESENTATIONS AND
WARRANTIES. Agent Bank and NRL Lenders shall not be required
to make any NRL Disbursements unless and until the
representations and warranties contained in Article IV of this
Credit Agreement (except for (a) the representations and
warranties contained in section 4.05 which shall be deemed
superseded by the Financial Covenants set forth in Article VI;
(b) litigation disclosed pursuant to Section 5.17; and
(c) defaults under other Indebtedness that do not violate
Section 6.09) are true and correct in all material respects on
and as of the date of each NRL Disbursement Request as though
made on and as of such date.
Section 2.17. WAIVER OF REQUIREMENTS BY NRL
LENDERS. Agent Bank and NRL Lenders reserve the right, in
their sole discretion, from time to time to make any NRL
Disbursements without regard to any condition herein.
D. SECURITY AND MANNER OF PAYMENT.
------------------------------
Section 2.18. SECURITY FOR THE CREDIT FACILITIES.
As security for the due and punctual payment and performance
of the Notes and all of the other A/R Loan Documents and the
REI Pledge Documents, the Nevada Security Documentation shall
each be executed and delivered, approximately simultaneously
herewith, by the respective parties to the Nevada Security
Documentation and each of the REI Pledge Documents shall be
executed and delivered prior to the Initial NRL Disbursement,
by the respective parties to each REI Pledge Document.
Section 2.19. PLACE AND MANNER OF PAYMENT. All
amounts payable by Borrower to the Lenders pursuant to this
Credit Agreement shall be made in lawful money of the United
States of America and in immediately available funds. All
such amounts payable by Borrower to the Lenders shall be made
to Agent Bank at its office located at First Interstate Bank
of Nevada, N.A., Gaming Division, One East First Street, Reno,
Nevada 89501, Att'n: Joseph Brady, V.P. Borrower shall
designate in writing concurrently with the making of each
payment whether the principal portion of such payment is to be
applied toward payment of amounts outstanding on the RLC
Facility or the NRL Facility. If such payment is received by
Agent Bank prior to 11:00 o'clock a.m. Agent Bank shall credit
Borrower with such payment on the day so received and shall
disburse to the appropriate Lenders on the same day such pro
rata amounts of such payment, as is set forth on the Schedule
of Lender Proportions in Credit Facilities, in immediately
available funds. If such payment is received by Agent Bank
after 11:00 o'clock a.m., Agent Bank shall credit Borrower
with such payment as of the next Banking Business Day and
shall disburse to the appropriate Lenders on the next Banking
Business Day such pro rata amounts of such payment as is set
forth on the Schedule of Lender Proportions in Credit
Facilities, in immediately available funds. Any payment made
by Borrower to Agent Bank pursuant to the terms of this Credit
Agreement or the Notes for the account of Lenders shall
constitute payment to the appropriate Lenders. If the Notes,
or any payment required to be made thereon, 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 or rates during such extension.
E. FEES, LATE CHARGES AND NET PAYMENTS.
-----------------------------------
Section 2.20. FEES.
a. Members of the Existing Bank Group which
agree to fund a Syndication Interest hereunder shall receive
a replacement fee ("Replacement Fee") on the Closing Date
equal to one-half of one percent (.50 of 1%) of the aggregate
amount of their respective commitments under Existing Bank
Debt as of the Closing Date which is committed by such
Existing Bank Group member for funding as a Lender hereunder.
b. Borrower shall pay to Agent Bank for
disbursement to Lenders in proportion to their respective
Syndication Interests in the RLC Loan and in consideration for
the making of the RLC Loan a fee (the "Nonusage Fee") in the
amount of one-half of one percent (.50 of 1%) per annum of the
daily average of the Available Borrowings computed on the
basis of a 360 day year. The Nonusage Fee will be payable on
the last Banking Business Day of each Fiscal Quarter
commencing in the Fiscal Quarter in which the Closing Date
occurs.
c. On the first annual anniversary of the
Closing Date and on each annual anniversary of the Closing
Date, Borrower shall pay or cause to be paid to Agent Bank the
Agency Fee to be retained by Agent bank for its own account.
d. On the date each of the RLC Lenders have
approved an extension of the RLC Maturity Date pursuant to a
RLC Extension Request, or if less than all of the RLC Lenders
approve an RLC Extension Request, then on the date all of the
Approving RLC Lenders execute a Syndication Adjustment
Addendum pursuant to Section 2.05(d)(iii) (but not on the
extension of the RLC Maturity Date pursuant to an RLC Reducing
Revolving Option Exercise Notice), Borrower shall pay to Agent
Bank for pro rata distribution to the Approving RLC Lenders,
an extension fee ("Extension Fee") in the amount of one-
quarter of one percent (.25 of 1%) of the aggregate amount
committed by the approving RLC Lenders for advance under the
RLC Facility as of such extension date.
e. On NRL Syndication Termination Date,
Borrower shall pay the Post Closing Loan Fee to Agent Bank to
be distributed by Agent Bank as agreed among Agent Bank and
Post Closing Lenders.
f. Prior to the issuance of any Letter of
Credit, Borrower shall pay an issuance fee (the "L/C Fee") to
Agent Bank in the amount of one and half percent (1.50%) per
annum of the Stated Amount of each such Letter of Credit. In
the event any Letter of Credit has a Stated Expiry Date of
less than one (1) full year, the L/C Fee shall be prorated for
the number of days occurring between the date of issuance and
the Stated Expiry Date, but in no event shall any L/C Fee be
less than One Thousand Dollars ($1,000.00). Each L/C Fee
shall be distributed by Agent Bank as follows: (i) one and one
quarter percent (1.25%) per annum of the applicable Stated
Amount to the then RLC Lenders in the proportion of their
respective Syndication Interests in the RLC Facility, and
(ii) one quarter of one percent (.25%) per annum of the
applicable Stated Amount to Agent Bank to be retained by Agent
Bank for its own account.
Section 2.21. LATE CHARGES AND DEFAULT RATE.
-----------------------------
a. If any of said instalment payments or
reductions of principal and/or interest as set forth in the
Note are not paid within five (5) Banking Business Days of the
date such payments are due, Borrower promises to pay a late
charge in the amount of one percent (1%) of the amount of such
delinquent instalment and Agent Bank need not accept any late
instalment paid hereunder unless it is accompanied by such one
percent late payment charge.
b. In the event of the occurrence of an Event
of Default, commencing on the fifth (5th) day following the
mailing of written notice thereof by Agent Bank, the total of
the unpaid balance of the principal and the then accrued and
unpaid interest shall collectively commence accruing interest
at a rate equal to three percent (3%) over the daily Prime
Rate of Agent Bank (the "Default Rate") until such time as all
payments then due and additional interest are paid, together
with the curing of any other Event of Default which may have
occurred, at which time the interest rate shall revert to that
rate of interest otherwise accruing pursuant to the terms of
the Notes.
c. In the event of the occurrence of an Event
of Default, Borrower agrees to pay all costs of collection
incurred by Agent Bank, including a reasonable attorney's fee,
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 the
undersigned agrees that any judgment issued as a consequence
of such action against Borrower or Guarantor shall bear
interest at a rate equal to the Default Rate until fully paid.
Section 2.22. NET PAYMENTS. All payments under
this Credit Agreement and the Note shall be made without set-
off or counterclaim by the Borrower or Guarantor and in such
amounts as may be necessary in order that all such payments,
after deduction or withholding for or on account of any
present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by the United States or
any Governmental Authority, other than any tax on or measured
by the overall net income of the Lenders pursuant to the
income tax laws of the United States or any State, or the
jurisdiction where each Lenders' principal office is located
(collectively the "Taxes"), shall not be less than the amounts
otherwise specified to be paid under this Credit Agreement and
the Notes. A certificate as to any additional amounts payable
to the Lenders under this Section 2.22 submitted to the
Borrower by the Lenders shall show in reasonable detail an
accounting of the amount payable and the calculations used to
determined in good faith such amount and shall be conclusive
absent manifest error. Any amounts payable by the Borrower
under this Section 2.22 with respect to past payments shall be
due within twenty (20) Banking Business Days following receipt
by the Borrower of such certificate from the Lenders; any such
amounts payable with respect to future payments shall be due
concurrently with such future payments. With respect to each
deduction or withholding for or on account of any Taxes, the
Borrower 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. Without in
any way affecting any of its rights under this Section 2.22,
each Lender agrees that, upon its becoming aware that any of
the present or future payments due it under this Credit
Agreement would be subject to deduction for Taxes, it will
notify the Borrower in writing and each Lender further agrees
that it will use reasonable efforts not disadvantageous to it
(in its reasonable determination) in order to avoid or
minimize, as the case may be, the payment by the Borrower of
any additional amounts for Taxes pursuant to this Section
2.22. Lenders represent, to the best of their knowledge, that
as of the Closing Date no Taxes are being imposed by the
United States or any Governmental Authority in respect of
which the Borrower would be responsible for making any
additional payment pursuant to this Section 2.22.
F. LIMITATION OF AGGREGATE ADVANCES AND L/C
----------------------------------------
Exposure.
- --------
Section 2.23. FUNDING LIMITATION. Notwithstanding
anything herein contained to the contrary, at no time during
any Fiscal Quarter shall the aggregate of the outstanding
balance of principal on the RLC Facility, plus the Stated
Amount of all outstanding Letters of Credit, plus the
outstanding balance of principal on the NRL Facility exceed
Seventy-Five Percent (75%) of the Aggregate Funding Limitation
Amount, provided that at no time shall the aggregate amount
available to Borrower under the Credit Facilities be less than
Fifty Million Dollars ($50,000,000.00) or more than Seventy-
Five Million Dollars ($75,000,000.00).
For the purpose of this covenant "Aggregate Funding
Limitation Amount" shall mean Borrower's EBITDAR, less
interest income to be determined as of the end of each Fiscal
Quarter of Borrower as follows: (a) during the first full four
(4) Fiscal Quarters following the Closing Date, the greater of
either: (i) the most recently ended two (2) Fiscal Quarters
multiplied by 2 and the product thereof multiplied by 5.2, or
(ii) the most recently ended four (4) Fiscal Quarters
multiplied by 5.2, and (b) for each Fiscal Quarter thereafter
occurring, the most recently ended four (4) Fiscal Quarters
multiplied by 5.2. Each Aggregate Funding Limitation Amount
as determined hereinabove shall be effective on the first day
of the second (2nd) Fiscal Quarter following the last day of
the Fiscal Quarters under review (the "Effective Limitation
Date") and shall continue in effect at all times during such
Fiscal Quarter. Any reduction to outstanding amounts required
to be made hereunder shall be made as a reduction to the
Maximum Principal Balance of the RLC Facility on the Effective
Limitation Date.
ARTICLE III
CONDITIONS PRECEDENT TO THE CLOSING DATE
----------------------------------------
AND FUNDING THE NOTES
---------------------
A. CLOSING CONDITIONS. This Credit Agreement shall
terminate if the Closing Date has not occurred on or before
December 30, 1993. 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
Lenders, each of the following:
Section 3.01. THE NOTES. Each of the Notes duly
executed by Borrower.
Section 3.02. THE A/R LOAN DOCUMENTS. Each of the
A/R Loan Documents (other than the Additional Funding
Addendum, the Syndication Adjustment Addendum, the REI Pledge
Documents, the Riverboat Loan Documents and the other
documents relating to the NRL Facility, but including the NRL
Note) duly executed, completed and delivered by the respective
parties to each A/R Loan Document and, where applicable, dated
as of the Closing Date.
Section 3.03. ENVIRONMENTAL CERTIFICATE. The
Environmental Certificate duly executed by Borrower and
Guarantor.
Section 3.04. ARTICLES OF INCORPORATION, BYLAWS,
CORPORATE RESOLUTION AND CERTIFICATE OF GOOD STANDING. Agent
Bank shall have received from each of the Borrower and
Guarantor: (a) a Certificate of Good Standing issued by the
Secretary of State for the State of Nevada with respect to the
Borrower and by the Secretary of State for the State of
Delaware with respect to Guarantor, each dated within thirty
(30) Banking Business Days of the Closing Date, (b) copy of
the respective articles of incorporation and by-laws certified
to be true and correct by a duly authorized officer of
Borrower and Guarantor, respectively, (c) original Certificate
of Corporate Resolution and Certificate of Incumbency executed
by the Secretary of each of the Borrower and Guarantor and
attested to by its respective President, Vice President, or
Treasurer authorizing Borrower and Guarantor, respectively, to
enter into all documents and 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 corporation; and (d) designation by corporate
resolution and certificate of incumbency, of the officers,
Borrower, and officers of Guarantor, as the case may be, who
are authorized to give Notices of Borrowing, NRL Disbursement
Requests, Continuation/Conversion Notices, and all other
notices, requests, consents and certifications on behalf of
the Borrower or Guarantor, as applicable (each individually an
"Authorized Officer" and collectively the "Authorized
Officers").
Section 3.05. OPINION OF COUNSEL. An opinion from
counsel(s) of Borrower and Guarantor dated as of the Closing
Date and addressed to Agent Bank on behalf of each of the
Lenders, to the effect that (a) each of the Borrower and
Guarantor have the full power and requisite corporate or other
authority necessary for the execution, delivery and
performance of its obligations under the A/R Loan Documents
(to the extent executed and delivered as of the Closing Date)
and any other document, agreement, certificate or instrument
executed by them in connection with the Credit Facilities,
(b) each A/R Loan Document (to the extent executed and
delivered as of the Closing Date) and the Environmental
Certificate is valid and binding upon each of the Borrower and
Guarantor and enforceable in accordance with its terms except
as such enforcement 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) but such enforcement limitations do not affect the
validity of the A/R Loan Documents and the A/R Loan Documents
contain adequate provisions for enforcing the payment of all
monetary obligations for the practical realization of the
rights and benefits afforded thereby, (c) each of Borrower and
Guarantor have duly authorized the taking of any and all
action necessary to carry out and give effect to the
transactions contemplated to be performed on their part by
this Credit Agreement, the Notes, the Deed of Trust, the
Financing Statements, the other A/R Loan Documents (to the
extent executed and delivered as of the Closing Date), the
Environmental Certificate and any other document, agreement,
certificate and instrument executed by them in connection with
the Credit Facilities, (d) the representations and warranties
of Borrower in Section 4.01 are, to the best knowledge of such
counsel, after due inquiry and investigation, true and
correct, (e) the representations and warranties set forth in
Sections 4.02 (other than with respect to the Americans with
Disabilities Act), 4.03 and 4.06 (with respect to licensing by
the Nevada Gaming Authorities) are, to the best knowledge of
such counsel true and correct, (f) the Deed of Trust, as
amended and restated, has been fully executed and delivered
and will, when recorded in the office of the County Recorder
of Clark County, Nevada, create a valid and legally binding
encumbrance lien on the Collateral therein described securing
repayment of the Notes, (g) the Financing Statements listing
the FF&E and other Collateral constitute a valid perfected
security interest in the Collateral therein described in
accordance with the Uniform Commercial Code as in force and
effect in the State of Nevada securing repayment of the Notes,
and no refiling or re-recording of such Financing Statements
is required in order to maintain the security interest of
Lenders in said FF&E, except continuation statements which are
required to be filed within six (6) months prior to the
expiration of five (5) years from the date of the filing of
the original Financing Statements, and (h) the Credit
Facilities will not violate the usury laws of the State of
Nevada.
Section 3.06. TITLE INSURANCE INDORSEMENTS. The
Title Insurance Indorsements to the Title Insurance Policy,
issued by the Title Insurance Company in accordance with the
Depository Closing Instructions.
Section 3.07. AS-BUILT SURVEY. A current as-built
survey for the Premises, which must (a) be certified to Agent
Bank and the Title Insurance Company, (b) show the Premises to
be free of encroachments, overlaps, and other survey defects,
(c) show the courses and distances of the lot lines for the
Premises, (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.
Section 3.08. PAYMENT OF TAXES. Evidence from the
Title Insurance Company that all past and current real and
personal property taxes and assessments which are presently
due and payable applicable to the Premises have been paid in
full.
Section 3.09. INSURANCE. Original certificates of
Insurance, loss-payable and mortgagee endorsements in favor of
Agent Bank, of insurance required by Section 5.09 hereof,
accompanied by affidavits, certificates, paid bills or other
documents evidencing that all premium payments are current.
Section 3.10. PAYMENT OF LOAN FEE AND AGENCY FEE.
Payment by Borrower of the Replacement Fee and Agency Fee as
provided in Sections 2.20a and 2.20c.
Section 3.11. REIMBURSEMENT FOR EXPENSES AND FEES.
Reimbursement by Borrower for all reasonable fees and out-of-
pocket expenses incurred by Agent Bank in connection with the
Credit Facilities, including, but not limited to, escrow
charges, title insurance premiums, recording fees, appraisal
fees, environmental audit fees, reasonable attorney's fees of
Henderson & Nelson, and all other like expenses remaining
unpaid as of the Closing Date.
Section 3.12. SUBLEASES AND EQUIPMENT LEASES AND
CONTRACTS. Copies of the Subleases and Equipment Leases and
Contracts duly executed by the parties thereto.
Section 3.13. REGULATORY APPROVAL FOR OCCUPANCY.
Copies of the final Certificate of Occupancy for the Premises
permitting the use and operation of the Hotel/Casino
Operation, together with all supporting documents and
materials reasonably requested by Agent Bank.
Section 3.14. FINANCIAL STATEMENTS. Audited
financial statements of Borrower and Guarantor for the last
Fiscal year, together with a certificate statement from an
Authorized Officer of the Borrower and Guarantor to the effect
that the financial condition of Borrower and Guarantor has not
materially adversely changed since the date of the financial
statements most recently given to Agent Bank.
Section 3.15. NO INJUNCTION OR OTHER LITIGATION.
No law or regulation shall prohibit, and no order, judgment or
decree of any Governmental Authority shall be outstanding, and
no litigation shall be pending or threatened which in the
reasonable judgment of the Agent Bank would or might, enjoin,
prohibit, limit or restrain the execution and delivery of this
Credit Agreement or the making of the Credit Facilities.
Section 3.16. ADDITIONAL DOCUMENTS AND STATEMENTS.
Such additional documents, affidavits, certificates and
opinions as Lenders may reasonably require to insure
compliance with this Credit Agreement.
B. CONDITIONS PRECEDENT TO INITIAL NRL
DISBURSEMENT. The obligation of NRL Lenders and Agent Bank to
advance the Initial NRL Disbursement is subject to Agent Bank
having received, in each case in form and substance reasonably
satisfactory to NRL Lenders or the occurrence of, as
applicable, each of the following:
Section 3.17. NRL SYNDICATION TERMINATION DATE.
The NRL Syndication Termination Date shall have occurred and
in the event any Post Closing Lenders have committed
Syndication Interests in the Credit Facilities, Borrower,
Guarantor, Agent Bank, Closing Lenders and Post Closing
Lenders have executed the Additional Funding Addendum as
provided in Section 2.09.
Section 3.18. RIVERBOAT LOAN DOCUMENTS. Each of
the Riverboat Loan Documents shall have been duly executed and
completed by the respective parties thereto and delivered to
REI in connection with the Riverboat Loan, each in a form and
content acceptable to Lenders (which will not be withheld so
long as such documentation is commercially reasonable and
customary) and the originals of each Riverboat Security
Document and a duplicate original of each of the other
Riverboat Loan Documents delivered to Agent Bank in connection
with the REI Pledge Documents. Each of the Riverboat Security
Documents shall have been recorded and filed in the
appropriate locations and offices of the State of Missouri
with the exception of the Ship Mortgage, which shall have been
filed and recorded with the Documents Officer for the
appropriate United States Coast Guard District.
Section 3.19. REI PLEDGE DOCUMENTS. Each of the
REI Pledge Documents shall be duly executed, completed and
delivered by REI and AMGC, where applicable each in a form and
content acceptable to Lenders (which will not be withheld so
long as such documentation is commercially reasonable and
customary). Each of the REI Pledge Documents shall have been
recorded and filed in the appropriate locations and offices of
the State of Missouri with the exception of the Assignment of
Ship Mortgage, which shall have been filed and recorded with
the Documents Officer for the appropriate United States Coast
Guard District.
Section 3.20. CORPORATE RESOLUTIONS AND
CERTIFICATES OF GOOD STANDING. Agent Bank and REI shall have
received from AMGC: (a) a Certificate of Good Standing
regarding AMGC issued by the Secretary of State for the State
of Missouri, dated within thirty (30) Banking Business Days of
the NRL Syndication Termination Date, (b) copy of the articles
of incorporation and by-laws of the AMGC, certified to be true
and correct by a duly authorized officer of AMGC, and
(c) original Certificate of Corporate Resolution and
Certificate of Incumbency executed by the Secretary of AMGC
and attested to by its President, Vice President, or Treasurer
authorizing AMGC to enter into all documents and agreements to
be executed by it pursuant to Riverboat Loan 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
the corporation.
Section 3.21. OPINION OF COUNSEL. An opinion from
counsel(s) of AMGC dated as of the NRL Syndication Termination
Date and addressed to Agent Bank on behalf of the Lenders, in
a form reasonably acceptable to Agent Bank and its counsel, to
the effect that (a) the AMGC has the full power and requisite
corporate or other authority necessary for the execution,
delivery and performance of its obligations under the
Riverboat Loan Documents and any other document, agreement,
certificate or instrument executed by it in connection with
the Riverboat Loan, (b) each of the Riverboat Loan Documents
is valid and binding upon AMGC and enforceable in accordance
with its terms except as such enforcement 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) but such enforcement
limitations do not affect the validity of the Riverboat Loan
Documents and the Riverboat Loan Documents contain adequate
provisions for enforcing payment of all monetary obligations
for the practical realization of the rights and benefits
afforded thereby, (c) each of the REI Pledge Documents is
valid and binding upon REI and AMGC and enforceable in
accordance with its terms except as such enforcement 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) but such enforcement
limitations do not affect the validity of the REI Pledge
Documents and the REI Pledge Documents contain adequate
provisions for enforcing payment of all monetary obligations
for the practical realization of the rights and benefits
afforded thereby, (d) upon the filing of the REI Pledge
Documents in the appropriate locations and offices of the
State of Missouri (which shall be specified), the pledges,
assignments and security interests granted by REI in favor of
Agent Bank on behalf of Lenders in the Riverboat Loan
Documents will be a valid perfected security interest in the
Riverboat Loan Documents, (e) upon the proper filing of the
Ship Mortgage with the Documents Officer of the appropriate
United States Coast Guard District (which shall be specified),
same will constitute a valid and binding Ship Mortgage lien
(subject only to a lien securing repayment of funds used in
the acquisition and construction of the Riverboat Facilities
and the Vessel, and that the Ship Mortgage is superior to all
other claims against the Vessel, except the following: any
lien for damages arising out of maritime tort, for wages of a
stevedore when employed directly by the owner, master, a
person entrusted with the management of the Vessel at the port
of supply, or an officer or agent appointed by the owner, a
charterer, an owner pro hac vice, or an agreed buyer in
possession of the Vessel; for wages of the crew of the Vessel;
and for general average, or for salvage, including contract
salvage and other liens that take priority by operation of
law, (f) the transactions contemplated by the Credit
Facilities and the Riverboat Loan will not violate the usury
laws of the State of Missouri, and (g) such other matters as
the Lenders may reasonably request.
Section 3.22. ENDORSEMENTS TO TITLE INSURANCE
POLICY. Title Insurance Company shall have issued its 108.8
endorsement, together with any other endorsements reasonably
requested by Agent Bank to the Title Insurance Policy as of
the Initial NRL Disbursement Date, insuring the priority of
the NRL Note and the NRL Disbursements subject only to the
Permitted Encumbrances and such other matters as may be
reasonably approved by Lenders.
C. CONDITIONS PRECEDENT TO ALL BORROWINGS AND NRL
DISBURSEMENTS. The obligation of each RLC Lender and Agent
Bank to make any Borrowing or each NRL Lender and Agent Bank
to advance any NRL Disbursement requested to be made by
Borrower, except Borrowings made upon the demand of Agent Bank
as provided in Section 2.06, is subject to the occurrence of
each of the following conditions precedent as of the
applicable Funding Date:
Section 3.23. REQUEST FOR ADVANCES.
a. With respect to any Borrowing, the Agent
Bank shall have received in accordance with Section 2.03, on
or before each Funding Date an original and duly executed
Notice of Borrowing or facsimile copy thereof, to be promptly
followed by an original.
b. With respect to any NRL Disbursement, the
Agent Bank shall have received in accordance with Section
2.12, on or before each Funding Date, an original and duly
executed NRL Disbursement Request or facsimile copy thereof,
to be promptly followed by an original.
Section 3.24. CERTAIN STATEMENTS. As of the
Closing Date the following statements shall be true and
correct:
(i) the representations and warranties
contained in Article IV of this Credit Agreement (except for
(a) the representations and warranties contained in Section
4.05 which shall be deemed superseded by the Financial
Covenants set forth in Article VI; (b) litigation disclosed
pursuant to Section 5.17; and (c) defaults under other
Indebtedness that do not violate Section 6.09) are true and
correct in all material respects; and
(ii) The representations and certifications
contained in the Environmental Certificate are true and
correct (other than representations and warranties which
expressly speak only as of a difference date);
(iii) Since the date of the financial
statements referred in Section 3.14, no Material Adverse
Effect or change to the financial condition of Borrower and/or
Guarantor or to the Collateral shall have occurred; and
(iv) No Default or Event of Default shall
have occurred and be continuing.
Section 3.25. GAMING PERMITS. Borrower shall have
all Gaming Permits material to or required for the conduct of
its gaming business and the conduct of games of chance at the
Hotel/Casino Operation and such Gaming Permits shall not then
be suspended, enjoined or prohibited (for any length of time)
by any Nevada Gaming Authority or any other Governmental
Authority.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
A. To induce Lenders to enter into this Credit
Agreement and to make advances under the Credit Facilities
hereunder, Borrower and Guarantor make the following
representations and warranties which shall be deemed to be
restated on each Funding Date (except as otherwise provided in
Section 3.24(i)):
Section 4.01. ORGANIZATION; POWER AND AUTHOR-
IZATION. Borrower is a corporation duly organized and validly
existing under the laws of the State of Nevada. Guarantor is
a corporation duly organized and validly existing under the
laws of the State of Delaware. Each of Borrower and Guarantor
(a) is authorized to do business in the State of Nevada, (b)
has all requisite power, authority and legal right to execute
and deliver any document, agreement or certificate to which it
is a party or by which it is bound in connection with the
Credit Facilities 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
(c) has taken all necessary action to authorize the execution,
delivery and performance of this Credit Agreement and the
other A/R 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 Notes, or any other
A/R Loan Document, or any other agreement, certificate or
instrument to which any Borrower and/or Guarantor is a party
or by which it is bound in connection with the Credit
Facilities, nor the consummation of the transactions
contemplated hereunder or thereunder, or 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 indenture, evidence of
indebtedness, loan or financing agreement, or other agreement
or instrument of whatever nature to which they, or any of
them, are a party or by which they, or any of them, are bound,
or (b) any provision of any existing law, rule, regulation,
order, writ, injunction or decree of any court or Governmental
Authority to which they, or any of them, are subject; provided
that the foregoing representation and warranty shall be deemed
to relate only to the A/R Loan Documents that have been
delivered, and to the other portions of the contemplated
transactions as have been consummated at the time of the
making or restatements of such representation and warranty.
Borrower represents that to the best of its knowledge the
Hotel/Casino Operation is in compliance with the Americans
With Disabilities Act.
Section 4.03. LITIGATION. Except as disclosed on
the Litigation Certificate, Exhibit R attached hereto, there
is no action, suit, proceeding, inquiry, hearing or
investigation pending or threatened, to the best knowledge of
Borrower, after due inquiry and investigation, in any court of
law or in equity, or before any Governmental Authority,
wherein an unfavorable determination, decision, decree, ruling
or finding would (a) result in any Material Adverse Effect to
the Hotel/Casino Operation or in Borrower or Guarantor's
respective business, financial condition, properties or
operations, (b) have a Material Adverse Effect on the
transactions contemplated by this Credit Agreement and the
other A/R Loan Documents and their respective ability to
perform their obligations hereunder and thereunder, or
(c) have a Material Adverse Effect on the validity or
enforceability of this Credit Agreement and the other A/R Loan
Documents. To the best knowledge of Borrower and Guarantor,
after due inquiry and investigation, Borrower and Guarantor
are not in violation of or default with respect to any order,
writ, injunction, decree or demand of any such court or
Governmental Authority. For the purpose of this Section 4.03,
only matters involving sums in excess of Seventy-Five Thousand
Dollars ($75,000.00) which are either uninsured or, if
insured, subject to a reservation of rights which Borrowers
have been notified in writing by the applicable insurance
carrier shall be deemed to be "material".
Section 4.04. AGREEMENTS LEGAL, BINDING, VALID AND
ENFORCEABLE. As and when executed and delivered, this Credit
Agreement, the Notes, the Deed of Trust, and all other A/R
Loan Documents when executed and delivered by Borrower and
Guarantor, in connection with the Credit Facilities will
constitute legal, valid and binding obligations of Borrower
and Guarantor, as the case may be, enforceable against
Borrower and Guarantor in accordance with their respective
terms, except as such enforcement 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).
Section 4.05. INFORMATION AND FINANCIAL DATA
ACCURATE; FINANCIAL STATEMENTS; NO ADVERSE CHANGE. All
information and financial and other data previously furnished
by Borrower and Guarantor is true, correct and complete as of
the date thereof, 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 Lenders misleading or
incorrect in any material respect to the date of this Credit
Agreement. Any and all financial statements heretofore
furnished to Lenders by Borrower and/or Guarantor: (a) present
fairly the financial position of the entity to which they
relate as at 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 Borrower and/or Guarantor.
Section 4.06. GOVERNMENTAL APPROVALS. All timely
consents, approvals, orders or authorizations of, or
registrations, declarations, notices or filings with any
Governmental Authority which may be required in connection
with the valid execution and delivery of this Credit Agreement
and the other A/R Loan Documents (other than such consents,
approvals and other matters in connection with the NRL
Facility and the Riverboat Project, which shall be obtained in
connection therewith) by Borrower and Guarantor and the carry-
out or performance of any of the transactions required or
contemplated hereunder, or thereunder, by Borrower and/or
Guarantor, have been obtained or accomplished and are in full
force and effect, or can be obtained by Borrower and
Guarantor. All timely consents, approvals, orders or
authorizations of, or registrations, declarations, notices or
filings with any Governmental Authority which may be required
by Borrower and Guarantor in connection with the use and
operation of the Hotel/Casino Operation have been obtained or
accomplished and are in full force and effect.
Section 4.07. PAYMENT OF TAXES. To the best of
Borrower's and Guarantor's knowledge, Borrower and Guarantor
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 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 Borrower and
Guarantor except such taxes, if any, as are being contested in
good faith by Borrower and/or Guarantor by appropriate
proceedings and for which Borrower and/or Guarantor, as the
case may be, have maintained adequate reserves for the payment
thereof.
Section 4.08. TITLE TO PROPERTIES. To the best of
Borrower's knowledge, Borrower has good and marketable title
to the Collateral as of the Closing Date. To the best of
Borrower's knowledge, Borrower has or as of the Closing Date
will have good and marketable title to: (a) all of its
properties and assets reflected in the financial statements
referred to in Section 4.05 hereof as owned by it (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 their business), and (b) all properties and
assets acquired by it subsequent to the date of the financial
statements referred to in Section 4.05 hereof. All such
properties and assets which constitute Collateral hereunder
are owned by Borrower and are not subject to any liens,
encumbrances or restrictions except Permitted Encumbrances.
Section 4.09. NO UNTRUE STATEMENTS. All state-
ments, representations and warranties made by Borrower and
Guarantor in this Credit Agreement, any other A/R Loan
Document and any other agreement, document, certificate or
instrument previously furnished or to be furnished by Borrower
and Guarantor to Lenders under this Credit Agreement, (a) are
and shall be true, correct and complete in all material
respects, at the time they were made and on and as of the
Closing Date, (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 necessary in order to make the
information contained herein or therein not misleading or
incomplete. Borrower and Guarantor understand that all such
statements, representations and warranties shall be deemed to
have been relied upon by Lenders as a material inducement to
make the Credit Facilities.
Section 4.10. BROKERAGE COMMISSIONS. Except as
previously disclosed in writing to Lenders, no person is
entitled to receive any brokerage commission, finder's fee or
similar fee or payment in connection with the consummation of
the transactions contemplated by this Credit Agreement. No
brokerage or other fee, commission or compensation is to be
paid by Lenders with respect to the transactions contemplated
hereby, and Borrower and Guarantor agree to indemnify Lenders
against any such claims for brokerage fees or commissions and
to pay all expenses including, without limitation, reasonable
attorney's fees incurred by Lenders in connection with the
defense of any action or proceeding brought to collect any
such brokerage fees or commissions. The foregoing
representation and indemnity shall not cover brokers or
finders claiming through any Lender.
Section 4.11. NO DEFAULTS. Borrower and Guarantor
are not in violation of or in default with respect to any
applicable laws and/or regulations which materially affect the
Premises or the business, financial condition, property of
Borrower and Guarantor or operations of the Hotel/Casino
Operation. Borrower and Guarantor 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 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 Lenders' attention in writing, for which Borrower
and Guarantor have received a written waiver from Lenders), a
default under which might have consequences that would
materially adversely affect the Premises or the business,
financial condition, properties or operations of Borrower
and/or Guarantor or of the Hotel/Casino Operation.
Section 4.12. EMPLOYMENT RETIREMENT INCOME SECURITY
ACT OF 1974. No Reportable Event has occurred and is
continuing with respect to any Plans under ERISA, that gives
rise to liabilities that materially adversely affect the
financial condition or operations of Borrower.
Section 4.13. AVAILABILITY OF UTILITY SERVICES AND
FACILITIES. All utility services and facilities necessary for
the Hotel/Casino Operation including, without limitation,
electrical, water, gas and sewage services and facilities are
available at the boundaries of the Premises and all utility
services necessary for the operation of the Premises as the
Hotel/Casino Operation are available at or within the
boundaries of the Premises.
Section 4.14. POLICIES OF INSURANCE. Each of the
Certificates of Insurance relating to the Hotel/Casino
Facilities and the Premises delivered to Lenders by Borrower
(a) 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
(b) has not been terminated and is in full force and effect.
Borrower is not in default in the observance or performance of
its respective obligations under said documents and
instruments, and Borrower has done all things required to be
done as of the date of this Credit Agreement to keep
unimpaired its rights thereunder.
Section 4.15. SUBLEASES. A list of all executed
Subleases pertaining to the Premises, or any portion thereof,
now in existence with payments in the aggregate amount of more
than Fifteen Thousand Dollars ($15,000.00), is set forth in
Exhibit N attached hereto.
Section 4.16. EQUIPMENT LEASES AND CONTRACTS. A
list of all executed Equipment Leases and Contracts pertaining
to the Premises, or any portion thereof, now in existence, is
set forth in Exhibit M attached hereto.
Section 4.17. GAMING PERMITS. All Gaming Permits
required to be held by Borrower are current and in good
standing and Borrower presently holds all Gaming Permits
necessary for the continued operation of the Hotel/Casino
Operation.
Section 4.18. ENVIRONMENTAL CERTIFICATE. The
representations and certifications contained in the
Environmental Certificate are true and correct.
Section 4.19. Intentionally omitted.
B. To induce NRL Lenders to enter into the NRL
Facility and to make NRL Disbursements thereunder, Borrower
and Guarantor make the following representations and
warranties which shall be deemed to be renewed as provided in
Section 3.24(i) (provided, however, that the following
representations and warranties shall only be effective upon
the satisfaction of the conditions precedent to the Initial
NRL Disbursement as described in Article III B):
Section 4.20. RIVERBOAT LOAN DOCUMENTS. Each of
the Riverboat Loan Documents to be delivered to Agent Bank
prior to the Initial NRL Disbursement shall be either
originals or true and correct copies of the originals thereof
and no amendments, modifications or other documentation or
agreements relating to the Riverboat Project and/or the
Riverboat Loan Documents shall have been executed between REI
and AMGC other than as set forth in such Riverboat Loan
Documents.
Section 4.21. RIVERBOAT AGREEMENTS LEGAL, BINDING,
VALID AND ENFORCEABLE. The Riverboat Loan Documents and the
REI Pledge Documents executed and delivered by Borrower and
AMGC, in connection with the Riverboat Loan will constitute
legal, valid and binding obligations of Borrower and AMGC, as
the case may be, enforceable against Borrower and AMGC in
accordance with their respective terms, except as such
enforcement 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).
Section 4.22. THE RIVERBOAT PROJECT. Borrower will
take all reasonable actions to enforce the Riverboat Loan
Documents to the consequence that the Riverboat Project will
be carried out and undertaken by AMGC in substantial
compliance with the Riverboat Plans and Specifications and all
applicable zoning, environmental protection, use and building
codes, laws, rules, regulations and ordinances of all
Governmental Authorities having jurisdiction over the
Riverboat Project.
Section 4.23. CONSTRUCTION AGREEMENT AND POLICIES
OF INSURANCE. Each of the copies of the Construction
Agreement and the Certificates of Insurance relating to the
Riverboat Project to be delivered by AMGC to REI (i) shall be
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 shall have been made, and (ii) will
not have been terminated and shall be in full force and
effect. AMGC shall not be in default in the observance or
performance of its obligations under said documents and
instruments, and AMGC and REI shall have done all things
required to be done by the Riverboat Loan Documents as of the
date of the Initial NRL Disbursement to keep unimpaired their
respective rights thereunder.
Section 4.24. SURVEY; CONSTRUCTION SCHEDULE;
RIVERBOAT PLANS AND SPECIFICATIONS; CONSTRUCTION COST
BREAKDOWN AND PROJECT DEVELOPMENT BUDGET. Each of the copies
of the survey of the Missouri Properties, the material permits
relating to the development and construction of the Riverboat
Project, the Riverboat Plans and Specifications, Construction
Schedule, Construction Cost Breakdown and the Project
Development Budget to be delivered by AMGC to REI shall be a
true, correct and complete copy of the respective original
thereof as in effect on the date thereof, and no amendments or
modifications of any of said documents not included in such
copies shall have been made.
ARTICLE V
GENERAL COVENANTS OF BORROWER AND GUARANTOR
-------------------------------------------
To induce Lenders to enter into this Credit
Agreement and to make advances under the Credit Facilities
hereunder, Borrower and Guarantor covenant to Lenders as
follows:
A. GENERAL COVENANTS.
Section 5.01. FF&E. Borrower shall furnish,
fixture and equip the Hotel/Casino Operation with the FF&E.
All FF&E that is purchased and installed in the Premises shall
be purchased free and clear of any liens, encumbrances or
claims, other than Permitted Encumbrances. If Borrower 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 herein, Borrower
shall be required to immediately, permanently reduce the
Maximum Principal Balance of the Credit Facility by the amount
of the Capital Proceeds of the FF&E so disposed of, subject,
however, to the right of Lenders to verify to their reasonable
satisfaction the amount of said Capital Proceeds; in the event
Lenders and Borrower do not agree as to the value of the FF&E
disposed of and the amount of the Capital Proceeds, then
Borrower, at its sole cost and expense, shall obtain a written
appraisal from an appraiser reasonably satisfactory to
Lenders, setting forth said values and amounts, and Lenders
agree to accept the results of said appraisal. The Maximum
Principal Balance shall immediately be reduced without
duplication by the amount of such appraisal.
Section 5.02. PERMITS; LICENSES AND LEGAL
REQUIREMENTS. Borrower shall comply in all material respects
with and keep in full force and effect, as and when required,
all permits, licenses and approvals obtained from any
Governmental Authorities which are required for the operation
and use of the Premises as the Hotel/Casino Operation.
Borrower shall comply in all material respects with all
applicable material existing and future laws, rules,
regulations, orders, ordinances and requirements of all
Governmental Authorities, and with all recorded restrictions
affecting the Premises.
Section 5.03. PAYMENT OF FEES. Borrower shall pay
all Nonusage Fees, Agency Fees and each Extension Fee, if any
become due, on or before five (5) days from the date due.
Section 5.04. PROTECTION AGAINST LIEN CLAIMS.
Borrower 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 Operation in accordance with this
Section 5.04. If any mechanic's lien or materialman's lien
shall be recorded, filed or suffered to exist against the
Premises 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 Operation, said lien or claim shall be paid,
released and discharged of record within sixty (60) days after
the filing or recording thereof, or Borrower shall have caused
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 ninety (90) days
of the date of the recordation of the mechanic's lien or
materialman's lien in the office of the County Recorder of
Clark County, Nevada.
Section 5.05. NO CHANGE IN CHARACTER OF BUSINESS.
At all times throughout the term of the Credit Facilities (i)
Borrower shall be the owner of the Real Property and
Collateral, except as otherwise permitted in Section 6.16,
(ii) the Premises shall be operated by Borrower except for
Subleases, and (iii) Borrower shall not effect a material
change in the nature and character of the Hotel/Casino
Operation as presently conducted. Notwithstanding the
foregoing, Borrower shall be free to change the nature and
character of its business as presently conducted and as
presently contemplated so as to be competitive to other resort
hotel/casinos in the Laughlin area; provided, however, except
as permitted Section 6.16 herein, in no event shall the hotel
and/or gaming activities to be conducted in the Hotel/Casino
Operation be sold or leased or otherwise disposed of to any
Person without the prior written consent of Lenders.
Section 5.06. PRESERVATION AND MAINTENANCE OF
PROPERTIES AND ASSETS. At all times throughout the term of
the Credit Facilities, (a) Borrower shall operate, maintain
and preserve all rights, privileges, franchises, licenses,
gaming licenses and other properties and assets necessary to
conduct the Hotel/Casino Operation on the Premises, 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 (b) Borrower 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 the Hotel/Casino
Operation on the Premises (other than sales of FF&E to the
extent permitted hereby), as presently conducted and as
presently contemplated, other than in the normal course of
Borrower's business and as otherwise permitted herein.
Furthermore, in the event Borrower, any Affiliate or
Subsidiary or any Related Entities shall acquire any other
real property or rights to the use of real property, the use
of which is material to the Hotel/Casino Operation, then
within sixty (60) days of the acquisition of such real
property or the rights to the use of such real property,
Borrower shall notify Lenders of such acquisition and shall
further upon the demand of Agent Bank execute or cause to be
executed such documents as may be necessary to add such real
property or rights to the use of real property as Collateral
under the Credit Facilities. Furthermore, subject to the
limitations set forth in Section 6.15, Borrower agrees that
commencing on the first annual anniversary of the Closing
Date, that no less than a cumulative average of two percent
(2%) per annum of all Total Revenues from the Hotel/Casino
Operation shall be spent during each calendar year for Capital
Expenditures relating to the Premises.
Section 5.07. REPAIR OF PROPERTIES AND ASSETS. To
the extent permitted by Section 6.15, at all times throughout
the term of the Credit Facilities, Borrower shall, at its own
cost and expense, (a) maintain, preserve and keep in a manner
consistent with hotel and gaming casino operating practices
applicable to a hotel/casino operation operating in the
Laughlin area, its assets and properties, including, but not
limited to, the Collateral and all FF&E owned or leased by
Borrower 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 5.02 and subject to the lien of the
Deed of Trust.
Section 5.08. FINANCIAL STATEMENTS; REPORTS AND
BOOKS AND RECORDS.
a. At all times throughout the term of the
Credit Facilities, Borrower and Guarantor shall keep and
maintain complete and accurate books and records in accordance
with GAAP, consistently applied. Borrower and Guarantor shall
permit Lenders and any authorized representatives of Lenders
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 Borrower and/or Guarantor at all
reasonable times upon the giving of reasonable notice of such
intent. In addition, in the event any Default, or any event
which may have a Material Adverse Effect on the financial
condition of Borrower or Guarantor, then in either or both of
such events, Borrower or Guarantor, as the case may be, shall
promptly notify Lenders of such occurrence.
b. Company prepared unaudited financial
statements of the Aztar Consolidation, HRN, Adamar - NJ and
Borrower shall be submitted to each Lender within sixty (60)
days after the end of each Fiscal Quarter, except the last
quarter of each Fiscal Year. Annual audited financial
statements of the Aztar Consolidation and Borrower (the
"Annual Audited Statements") and company prepared financial
statements of HRN and Adamar - NJ, shall be submitted to each
Lender by May 1st of each calendar year. The statements
submitted by HRN and Adamar-NJ shall be signed by a duly
authorized officer of each respective company. The Annual
Audited Statements of the Aztar Consolidation and Borrower
shall be audited by Coopers and Lybrand or such other firm of
independent certified public accountants as is satisfactory to
Lenders. Further, the President, Vice President, Controller
or Treasurer of Aztar shall furnish Agent Bank with a
Compliance Certificate as of the end of each Fiscal Quarter at
the time of submission of Aztar Consolidation financial
statements declaring whether or not Aztar and Borrower are in
full compliance with all terms, provisions and covenants
required of Aztar and Borrower in this Credit Agreement. A
copy of such Compliance Certificate is marked "Exhibit P",
affixed hereto and by this reference incorporated herein and
made a part hereof. If requested by any Lender, a copy of the
annual audited financial statements in form and content as
required by the State Gaming Control Board (NGC-GCB Reg. 6)
shall be forwarded to each Lender within fifteen (15) days of
the date such reports are submitted to the Gaming Control
Board, together with a copy of the auditor's letter to
management accompanying such reports, if any. Aztar and
Borrower shall supply such additional information and detail
as to any item or items contained on any such statement that
Lenders may require. All such information will be prepared in
accordance with GAAP.
c. As soon as reasonably practical after each
Fiscal Year End, but in no event later than forty-five (45)
days following each Fiscal Year End, projected income
statements and balance sheets for Borrower and the Aztar
Consolidation shall be delivered to Agent Bank.
d. Guarantor shall submit its annual report
to shareholders to Agent Bank, with sufficient copies for
distribution to each of the Lenders, at such time as such
report is mailed to shareholders of record or otherwise made
available.
e. Throughout the term of the Credit
Facilities, Guarantor shall furnish to each of the Lenders all
reports of Guarantor to or required to be filed with the
Securities Exchange Commission (ie. 10Q, 10K, Proxy
Statements, etc.) promptly and in any event within ten (10)
Banking Business Days of submission of such reports to the
Securities Exchange Commission.
f. Throughout the term of the Credit
Facilities, Borrower and Guarantor shall furnish to Lenders
any financial information or other information bearing on the
financial status of the Credit Facilities which is reasonably
requested by Agent Bank or any Lender.
Section 5.09. INSURANCE. Borrower shall obtain, or
cause to be obtained, and shall maintain or cause to be
maintained, at all times throughout the term of the Credit
Facilities, at its own cost and expense, and shall deposit
with Agent Bank on or before the Closing Date:
a. Comprehensive general public liability
insurance in an amount reasonable and customary in the
hotel/casino industry and acceptable to Agent Bank;
b. Worker's compensation insurance and
employer's liability insurance in such amounts as may be
required by statute;
c. Flood insurance if the property is located
in an area designated by the Secretary of Housing and Urban
Development as a special flood hazard area, and then in the
maximum insurable amount;
d. Business interruption insurance in amounts
sufficient to pay operating expenses, lost rental income and
debt service for a period of up to one (1) year;
e. Casualty insurance against loss by fire
and other risks of physical loss or damage to the property in
amounts not less than the full replacement cost of all
improvements, plus the cost of debris removal;
f. Earthquake insurance to the extent
reasonable limits are available at commercially reasonable
rates. (For the purpose of this provision, commercially
reasonable rates shall be deemed to exist if a substantial
portion of hotel-casinos operating in Clark County, Nevada,
are carrying such insurance.) Such policies may provide for
a five percent (5%) deductible on losses due to earthquakes;
g. Any other insurance reasonably requested
by Agent Bank in such amounts and covering such risks as may
be reasonably required; and
h. All policies of insurance required to be
maintained by Borrower shall be issued by companies
satisfactory to Agent Bank and shall have coverages and
endorsements and be written for such amount as Agent Bank may
reasonably require. All policies of insurance for casualty
loss or general public liability shall name Agent Bank on
behalf of the Lenders as an additional loss payee and all
policies of insurance on the Collateral required to be
maintained by Borrower must name Agent Bank as mortgagee, must
insure the interest of Agent Bank in the property as mortgagee
and all of such policies must provide that no cancellation or
modification of the policies will be made without thirty (30)
days' prior written notice to Agent Bank. Policies may
include up to a Two Hundred Fifty Thousand Dollar
($250,000.00) deductible on all losses (other than earthquake
as provided hereinabove) with respect to any property
insurance policies or such higher amount as Agent Bank may
approve in its reasonable discretion, and a Five Hundred
Thousand Dollar ($500,000.00) deductible on all liability
insurance policies or such other amounts as Agent Bank may
approve in its reasonable discretion, but shall otherwise in
no manner make Borrower or Lenders a co-insurer prior to a
loss in excess of policy limits.
Section 5.10. TAXES. Throughout the term of the
Credit Facilities, Borrower and Guarantor 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 Borrower and Guarantor shall promptly pay and
discharge all taxes, assessments and other governmental
charges or levies imposed upon them, or in respect of any of
their respective properties and assets except such taxes, if
any, as are being contested in good faith as provided in
Section 4.07 herein.
Section 5.11. PERMITTED ENCUMBRANCES ONLY. At all
times throughout the term of the Credit Facilities, Borrower
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 Section 5.04
and 5.10, such items as are being contested in the manner
described therein, written notice of all tax lien contests and
all other items involving amounts in excess of $100,000 in the
aggregate having been given to Agent Bank, (b) with respect to
any other items involving amounts in excess of $100,000 in the
aggregate, if any, as are being contested in good faith by
appropriate proceedings and for which Borrower has maintained
adequate reserves with Agent Bank for the payment thereof, and
(c) with respect to any other item involving amounts less than
One Hundred Thousand Dollars ($100,000.00), if any, as are
being contested in good faith by appropriate proceedings. The
foregoing shall not be deemed to limit liens and encumbrances
with respect to the Riverboat Project, which shall be subject
to the terms and conditions of Article III B and the Riverboat
Loan Documents.
Section 5.12. ADVANCES. At any time during the
term of the Credit Facilities, if Borrower or Guarantor should
fail (a) to perform or observe, or (b) to cause to be
performed or observed, any covenant or obligation of Borrower
or Guarantor under this Credit Agreement or any of the other
A/R Loan Documents, then Agent Bank, upon the giving of thirty
(30) days written notice, may (but shall be under no obli-
gation 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 Lenders pursuant to this
Section 5.12 shall become an additional obligation of Borrower
and Guarantor to Lenders secured by the Deed of Trust and
other A/R Loan Documents, including, without limitation, funds
advanced by Lenders pursuant to any of the A/R Loan Documents
to comply with Hazardous Materials Laws prior to completion of
a judicial or non-judicial foreclosure under the Deed of
Trust, and reduce the amount of Available Borrowings and shall
become due and payable by Borrower and Guarantor on the next
interest payment date, together with interest thereon at a
rate per annum equal to the Default Rate as set forth in the
Note (such interest to be calculated from the date of such
advancement to the date of payment thereof by Borrower or
Guarantor). In no event shall the taking of any action or
actions contemplated by this Section 5.12 preclude Lenders or
Agent Bank from exercising any rights or remedies available to
them under Article VII of this Credit Agreement.
Section 5.13. FURTHER ASSURANCES. Borrower and
Guarantor 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 A/R Loan
Documents and such further documents, instruments and
transfers as the Lenders or Agent Bank may reasonably require
for the curing of any defect in the execution or
acknowledgement hereof or in any of the A/R Loan Documents or
in any of the REI Pledge Documents, or in the description of
the Real Property or other Collateral or for the proper
evidencing of giving notice of each lien or security interest
securing repayment of the Credit Facilities. Further, upon
the execution and delivery of the Deed of Trust and each of
the A/R Loan Documents or in any of the REI Pledge Documents
and thereafter, from time to time, Borrower shall cause the
Deed of Trust and each of the A/R Loan Documents and each of
the REI Pledge 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 required by the Lenders or Agent Bank,
in order to publish notice of and fully protect the liens of
the Deed of Trust and the A/R Loan Documents and each of the
REI Pledge Documents and to protect or continue to perfect the
security interests created by the Deed of Trust and A/R Loan
Documents in the Real Property and each of the REI Pledge
Documents 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. Borrower and
Guarantor agree to and do hereby jointly and severally
indemnify, protect, defend and save harmless each of the Banks
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 and the transactions
contemplated herein; provided, however, Borrower and Guarantor
shall not be obligated to indemnify, protect, defend and save
harmless an Indemnified Party if the loss, damage, expense or
liability was caused by (a) the negligence or wilful
misconduct of such Indemnified Party, or (b) the material
breach of this Credit Agreement by such Indemnified Party. 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 Borrower and Guarantor, Agent Bank shall
promptly notify Borrower and Guarantor in writing, and
Borrower and Guarantor shall assume the defense thereof,
including the employment of counsel selected by Borrower 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 a
conflict of interest would otherwise exist, the applicable
Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense
thereof. Borrower and Guarantor shall not be liable for any
settlement of any such action effected without its consent,
but if settled with Borrower's or Guarantor's consent, or if
there be a final judgment for the claimant in any such action,
Borrower and Guarantor 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
Facilities with respect to matters occurring prior to such
repayment.
Section 5.15. INSPECTION OF THE PREMISES. At all
times during the term of the Credit Facilities, Borrower shall
provide or cause to be provided to Lenders and any authorized
representatives of Lenders, accompanied by representatives of
Borrower, the reasonable right of entry and free access to the
Premises to inspect same on reasonable prior notice to
Borrower.
Section 5.16. COMPLIANCE WITH OTHER LOAN DOCUMENTS.
Borrower and/or Guarantor, as the case may be, shall comply
with each and every term, condition and agreement contained in
the A/R Loan Documents to which it is a party.
Section 5.17. SUITS OR ACTIONS AFFECTING BORROWER
AND/OR GUARANTOR. Throughout the term of the Credit
Facilities, Borrower and/or Guarantor, as applicable, shall
promptly advise Agent Bank in writing within ten (10) days of
Borrower's or Guarantor's, as the case may be, knowledge
thereof of (a) any claims, litigation, proceedings or disputes
(whether or not purportedly on behalf of Borrower and/or
Guarantor) against, or to the actual knowledge of Borrower
and/or Guarantor, threatened or affecting Borrower and/or
Guarantor which, if adversely determined, would have a
Material Adverse Effect on the Premises or the business,
operations, properties or financial conditions of Borrower
and/or Guarantor, (b) any material labor controversy resulting
in or threatening to result in a strike against the Premises,
or (c) any proposal by any Governmental Authority to acquire
any of the material assets or business of Borrower and/or
Guarantor.
Section 5.18. NOTICE TO STATE GAMING CONTROL BOARD.
Borrower and Guarantor shall make all required reports and
disclosures to the Nevada State Gaming Control Board,
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.
Section 5.19. TRADENAMES, TRADEMARKS AND
SERVICEMARKS. Borrower shall not assign or in any other
manner alienate its interest in any tradenames, trademarks or
servicemarks relating or pertaining to the Premises or the
Hotel/Casino Operation during the term of the Credit
Facilities. Provided, however, that Borrower may change or
modify any tradenames, trademarks or servicemarks upon thirty
(30) days prior written notice to Agent Bank and upon the
written consent of Lenders, which consent shall not be
unreasonably withheld.
Section 5.20. NOTICE OF HAZARDOUS MATERIALS.
Within ten (10) days after an executive officer of the
Borrower obtaining actual knowledge thereof, Borrower shall
immediately advise Agent Bank in writing of (a) any and all
enforcement, clean-up, removal or other governmental or
regulatory actions instituted, completed or threatened
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
Premises ("Hazardous Materials Laws"); (b) all claims made or
threatened by any third party against Borrower or the Premises
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 Premises that could cause
the Borrower or any part thereof to be classified as a
"border-zone property" under the provisions of, or to be
otherwise subject to any restrictions on the ownership,
occupancy, transferability or use of the Premises under, any
Hazardous Materials Laws.
B. RIVERBOAT CONSTRUCTION COVENANTS. The
following covenants shall be effective from and after the
Initial NRL Disbursement:
Section 5.21. MODIFICATION OF RIVERBOAT LOAN
DOCUMENTS. The Riverboat Loan Documents shall not be amended
or modified without the prior written consent of Agent Bank
which consent shall not be unreasonably withheld. No
additional agreements or understandings, either written or
oral, shall be entered into between REI and AMGC without the
prior written consent of Agent Bank which consent shall not be
unreasonably withheld.
Section 5.22. COMMENCEMENT AND COMPLETION OF THE
RIVERBOAT PROJECT. Borrower and Guarantor will use their best
efforts to cause AMGC to commence the Riverboat Project and to
complete the Riverboat Project with due diligence (a) in
substantial accordance and compliance with the Riverboat Plans
and Specifications, (b) in accordance and compliance with the
terms and conditions of the Riverboat Loan Documents and all
requirements of all Governmental Authorities acting in or for
the locality in which the Missouri Properties are situated, if
the failure to comply with such requirements would materially
jeopardize AMGC's right to or ability to continue and complete
the Riverboat Project, and (c) so that all requirements for
the occurrence of the Riverboat Completion Date with respect
to the Riverboat Project shall be completed in accordance with
the Riverboat Plans and Specifications.
Section 5.23. RIVERBOAT PLANS AND SPECIFICATIONS.
A final set of Riverboat Plans and Specifications for the
Riverboat Project has been furnished to Agent Bank or will be
furnished prior to the initial Riverboat Disbursement Date and
shall be held by Agent Bank throughout the Riverboat
Construction Period, as the same may be amended.
Section 5.24. CONSTRUCTION OF THE RIVERBOAT PROJECT
ENTIRELY ON MISSOURI PROPERTIES. REI shall use its best
efforts to cause AMGC to construct the Riverboat Project
entirely on the Missouri Properties and to not encroach upon
or overhang any real property, easement or restriction rights
owned by any other Person or entity other than as permitted
under the Riverboat Loan Documents.
Section 5.25. LIST OF MAJOR SUBCONTRACTORS.
Borrower shall use its best efforts to cause REI to furnish to
Agent Bank from time to time during the Riverboat Construction
Period, within a reasonable time after the written request by
Agent Bank to Borrower, in a form reasonably acceptable to
Agent Bank, a then current correct list of all Major
Subcontractors to the Riverboat Project. Upon request, true
and correct copies of all executed contracts and subcontracts
with Major Subcontractors as of such date shall be delivered
to Agent Bank.
Section 5.26. INSPECTION OF CONSTRUCTION PROGRESS.
The Riverboat Loan Documents shall provide that designated
representatives of Banks, shall, at all times have the right
of reasonable entry and free access to the Missouri Properties
and the right to inspect all work done, labor performed and
materials furnished in connection with the Riverboat Project
and the right to inspect all books, contracts and records of
Borrower and AMGC relating to the Riverboat Project and the
Riverboat Loan. In performing such inspection, Banks shall
cooperate with Borrower and AMGC in making suitable
arrangements to minimize disruption of the construction work,
and shall comply with Borrower's insurance policies and safety
and security requirements.
Section 5.27. PROTECTION AGAINST LIEN CLAIMS.
Borrower shall cause AMGC to 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 Riverboat Project in accordance with this
Section 5.28. If any mechanic's lien or materialman's lien
shall be recorded, filed or suffered to exist against the
Missouri Properties 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
Riverboat Project, said lien or claim shall be paid, released,
discharged of record or bonded within ninety (90) days after
the filing or recording of the mechanic's lien or
materialman's lien in accordance with applicable law and
procedures.
Section 5.28. APPRAISAL. Prior to the first annual
anniversary of the Initial NRL Disbursement Date, Agent Bank
shall receive an appraisal of the Premises in the Hotel/Casino
Operation engaged by Agent Bank on behalf of Lenders, at the
expense of Borrower, reviewed and acceptable to Agent Bank and
Lenders providing at least a One Hundred Million Dollar
($100,000,000.00) going concern value of the Premises and
Hotel/Casino Operation.
ARTICLE VI
----------
FINANCIAL COVENANTS
-------------------
Until payment in full of all sums owing hereunder
and under the Notes and the obligation to advance Borrowings
and NRL Disbursements hereunder has terminated, Borrower and
Guarantor agree, as set forth below, to comply or cause
compliance with the following Financial Covenants.
A. AZTAR CONSOLIDATION AFFIRMATIVE FINANCIAL
COVENANTS. Commencing on the Closing Date and continuing
until payment in full of all sums owing hereunder or under the
Notes and termination of the Credit Facilities, Guarantor
agrees that the Aztar Consolidation will comply with the
following financial covenants and deliver all reports, data
and statements required hereunder to Agent Bank at the times
and manner set forth below, as follows:
Section 6.01. AZTAR CONSOLIDATION TANGIBLE NET
WORTH. Aztar Consolidation shall maintain a Tangible Net
Worth of at least Three Hundred Five Million Dollars
($305,000,000.00), which shall be determined as of the end of
each Fiscal Year.
Section 6.02. AZTAR OPERATING TIMES FIXED CHARGE
COVERAGE RATIO. Aztar Consolidation shall maintain a minimum
Aztar Operating Times Fixed Charge Coverage Ratio of 1.5 to
1.0, which shall be determined at the end of each Fiscal
Quarter on a cumulative basis with that Fiscal Quarter and the
previous three (3) consecutive Fiscal Quarters. For the
purpose of this covenant, the "Aztar Operating Times Fixed
Charge Coverage Ratio" shall mean Pre-tax Net Profit plus
depreciation and amortization expense, plus interest expense,
plus net rent expense, minus interest income, divided by the
sum of the principal payments required to be made on long term
debt during the Fiscal Quarter under review and the previous
three (3) Fiscal Quarters (excluding the balloon payment by
Aztar Mortgage Funding due September 15, 1996), plus interest
expense and net rent expense, minus interest income.
Section 6.03. AZTAR DISTRIBUTION TIMES FIXED CHARGE
COVERAGE RATIO. Aztar Consolidation shall maintain a minimum
Aztar Distribution Times Fixed Charge Coverage Ratio of 1.0 to
1.0 to be determined at the end of each Fiscal Quarter in a
cumulative basis with that Fiscal Quarter and the previous
three consecutive Fiscal Quarters. For the purposes of this
covenant, "Aztar Distribution Times Fixed Charge Coverage
Ratio" shall be defined as Pre-tax Net Profit, plus
depreciation and amortization expense, plus interest expense,
plus net rent expense, minus interest income, divided by the
sum of the principal payments required to be made on long term
debt during the Fiscal Quarter under review and the previous
three (3) Fiscal Quarters (excluding the balloon payment by
Aztar Mortgage Funding due September 15, 1996), plus interest
expense, plus net rent expense, minus interest income, plus
dividends and Capital Expenditures (excluding: (i) the
financed portion of Capital Expenditures, (ii) purchase of the
general or limited partnership interests in AGP or AGP's
right, title and interest in the Trop World Hotel and Casino
in Atlantic City, New Jersey and related land and
improvements, and (iii) the "Expansion and Remodeling
Project", as defined in the C/T Loan Agreement).
B. BORROWER'S AFFIRMATIVE FINANCIAL COVENANTS.
Until the payment in full of all sums owing hereunder or under
the Notes, Borrower agrees it will comply with the following
financial covenants and deliver all reports, data and
statements required hereunder to Agent Bank at the times and
in the manner set forth below as follows:
Section 6.04. MATERIAL REPORTS. As soon as
available any written report pertaining to material items in
respect of Borrower's internal control matters submitted to
Borrower by independent certified public accountants in
connection with each annual audit or quarterly review of the
financial condition of Borrower, including, but not limited
to, a copy of the auditor's letter to management accompanying
such audits and reports, if any.
Section 6.05. CASH FLOW BUDGETS. Borrower shall
submit annual cash flow budgets within sixty (60) days after
each Fiscal Year end and shall deliver or cause to be
delivered to Agent Bank within fifty (50) days of the end of
each Fiscal Quarter reports on the actual Fiscal Quarter's and
year to date results compared to the comparative portions of
the annual cash flow budget and any adjustments to the annual
cash flow budget.
Section 6.06. CAPITAL EXPENDITURE BUDGET. Borrower
shall submit or cause to be submitted within ten (10) days
following completion thereof, but in no event later than sixty
(60) days after each Fiscal Year end, an annual budget of
Capital Expenditures listing each anticipated Capital
Expenditure for the Premises. On or before fifty (50) days
from the end of each Fiscal Quarter, Borrower shall submit or
cause to be submitted a report of actual Capital Expenditures
for Borrower comparing such actual Capital Expenditures with
the anticipated Capital Expenditures as set forth in the
comparative portions of the budget of Capital Expenditures for
such Fiscal Year and any adjustments to such budget of Capital
Expenditures.
Section 6.07. REI OPERATING TIMES FIXED CHARGE
COVERAGE RATIO. Borrower shall maintain a minimum REI
Operating Times Fixed Charge Coverage Ratio of at least 1.30
to 1.0 which shall be determined at the end of each Fiscal
Quarter on a cumulative basis with that Fiscal Quarter and the
previous three (3) consecutive Fiscal Quarters. "REI
Operating Times Fixed Charge Coverage Ratio" as used in this
covenant shall be defined as Pre-tax Net Profit plus
depreciation and amortization expense, plus interest expense,
plus net rent expense, minus interest income, divided by the
sum of the principal payments required to be made on long term
debt during the Fiscal Quarter under review and the previous
three (3) Fiscal Quarters, plus interest expense and net rent
expense, minus interest income.
Section 6.08. OPERATING ACCOUNTS. All operating
and payroll accounts used or maintained by Borrower with Agent
Bank in connection with the operation of the Hotel/Casino
Operation shall be maintained on, at least, a break-even basis
(as provided by Agent Bank's Statement of Account Analysis).
Any losses on such account or accounts shall be settled
monthly by Borrower.
C. AZTAR CONSOLIDATION/GUARANTOR NEGATIVE
FINANCIAL COVENANTS.
Section 6.09. AZTAR CONSOLIDATION'S NON-PAYMENT OF
OTHER INDEBTEDNESS FOR BORROWED MONEY. Aztar Consolidation
shall not (a) default in the payment when due (subject to any
applicable grace period), whether by acceleration or
otherwise, of (i) any other Indebtedness for borrowed money
of, or guaranteed by, Aztar or any Subsidiary (except any such
Indebtedness of any Subsidiary to Aztar or to any other
Subsidiary), or (ii) Indebtedness loaned pursuant to a loan
agreement to which Aztar, any Affiliate or any Subsidiary is
a party, or (b) default in the performance or observance of
any obligation or condition with respect to any such other
Indebtedness (subject to any applicable grace period) (x) if
as a consequence of such default the maturity of any such
Indebtedness is accelerated, or (y) if the acceleration of
such Indebtedness would have a Material Adverse Effect upon
the financial condition of Aztar and its Subsidiaries, taken
as a whole, and such default would permit the holder or
holders thereof, or any trustee or agent for such holders, to
cause such Indebtedness to become due and payable prior to its
expressed maturity. The provisions of this Section 6.09 shall
not be applicable to any such Indebtedness if the aggregate
principal amount thereof does not exceed Five Million Dollars
($5,000,000.00) at the time outstanding.
Section 6.10. ERISA. Aztar Consolidation shall
not:
a. At any time, permit any Pension Plan which
is maintained by the Aztar Consolidation or to which the Aztar
Consolidation is obligated to contribute on behalf of its
employees, in such case if to do so would constitute a
Material Adverse Effect, 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 Borrower to the Pension Plan or to the
Pension Benefit Guaranty Corporation or the
imposition of a lien on the Collateral pursuant to
Section 4068 of ERISA.
b. Fail, upon the Aztar Consolidation
becoming aware thereof, promptly to notify the Agent Bank of
the occurrence of any "reportable event" (as defined in
Section 4043 of ERISA) 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 the Aztar
Consolidation or to which the Aztar Consolidation is obligated
to contribute on behalf of its employees or any trust created
thereunder.
c. At any time, permit any Pension Plan which
is maintained by the Aztar Consolidation or to which the Aztar
Consolidation 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
Effect.
Section 6.11. PROHIBITION AGAINST TRANSFER OF STOCK
OF BORROWER. Guarantor shall not during the term of the
Credit Facilities sell, transfer, assign, hypothecate or
otherwise alienate its interest in all or any portion of the
common voting stock of Borrower.
D. BORROWER NEGATIVE FINANCIAL COVENANTS.
Section 6.12. LIMITATION ON CONSOLIDATED TAX
LIABILITY. Borrower shall not be liable to any Affiliate for
federal income taxes in excess of the amount of federal income
taxes it would pay if reporting as a separate entity.
Section 6.13. MARGIN REGULATIONS. No part of the
proceeds of the Credit Facilities will be used by Borrower 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 6.14. EQUIPMENT LEASE OBLIGATIONS. (Other
than with respect to the Expansion and Remodeling Project, as
defined in the C/T Loan Agreement, the Riverboat Project or
other project approved by Lenders under Section 2.10) Borrower
shall not incur in the aggregate any purchase money or
Equipment Lease obligations in excess of Five Million Five
Hundred Thousand Dollars ($5,500,000.00) at any time
outstanding without the prior written consent of Agent Bank.
The aggregate value of Equipment Lease obligations shall be
deemed to be the present value of future Equipment Lease
payments required thereunder.
Section 6.15. CAPITAL EXPENDITURE LIMITATION.
(Other than with respect to the Expansion and Remodeling
Project, as defined in the C/T Loan Agreement, the Riverboat
Project or other project approved by Lenders under
Section 2.10) Borrower shall not make Capital Expenditures or
acquire additional fixed assets in any Fiscal Year in an
annual aggregate amount in excess of Five Million Dollars
($5,000,000.00) without the prior written consent of Agent
Bank. Any sums not expended during any Fiscal Year may be
expended in the following Fiscal Year, cumulative from year to
year so long as the maximum aggregate amount expended during
any Fiscal Year does not exceed Fifteen Million Dollars
($15,000,000.00).
Section 6.16. NO MERGER. Borrower shall not
consolidate with or merge into any Person, or sell (whether in
one transaction or in a series of transactions) all or any
portion of the Collateral without the prior written consent of
Agent Bank other than: (a) as specifically provided and
permitted in this Credit Agreement, or (b) to Aztar so long as
Aztar acknowledges and agrees that the provisions herein
contained and contained in the A/R Loan Documents and/or REI
Pledge Documents as applicable to Borrower shall be binding
upon Aztar as its successor.
Section 6.17. NO SECONDARY LIENS. Subject to the
Capital Expenditure limitation set forth hereinabove in
Sections 6.14 and 6.15, Borrower shall not permit any
secondary liens or financing on the Collateral without prior
written consent of Agent Bank except for purchase money
security interest granted by Borrower for replacement of
furnishings, fixtures, and equipment in the ordinary course of
Borrower's business and except for other Permitted
Encumbrances.
Section 6.18. UNSECURED INDEBTEDNESS LIMITATION.
Other than with respect to Equipment Lease obligations set
forth in Section 6.14 above, Borrower shall not incur in the
aggregate unsecured interest bearing Indebtedness in excess of
Two Million Dollars ($2,000,000.00) at any time outstanding.
The unsecured Indebtedness permitted under this Section 6.18
shall not have or be subject to covenants and conditions more
onerous than the covenants applicable to Borrower as set forth
in this Credit Agreement.
Section 6.19. NO GUARANTIES. Borrower shall not
directly or indirectly guaranty or become secondarily liable
for the Indebtedness of any other Person; provided, however,
that the foregoing shall not limit or prohibit the endorsement
in the ordinary course of collection, of instruments payable
to it or to its order.
ARTICLE VII
EVENTS OF DEFAULT
-----------------
Section 7.01. EVENTS OF DEFAULT. The occurrence of
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
Borrower or Guarantor pursuant to or in connection with this
Credit Agreement, the Notes, or any other A/R Loan Document
(as in effect from time to time) or in any report,
certificate, financial statement or other writing furnished by
Borrower or Guarantor in connection herewith, shall prove to
be false, incorrect or misleading in any substantial and
material aspect as of the date when made;
(b) Borrower or Guarantor shall have defaulted
in the payment of any instalment of interest on the Notes when
due, and such default shall have remained uncured for a period
of five (5) days after the date due;
(c) Borrower or Guarantor shall have defaulted
in the payment of any instalment or required reduction of
principal on the Notes or on any other payment due under the
terms of the A/R Loan Documents when due, and such default
shall have remained uncured for a period of five (5) days
after the date due;
(d) Borrower or Guarantor shall have defaulted
in the payment of any late charge for a period of five (5)
days after the date due;
(e) Borrower or Guarantor shall fail to
observe or perform any term, covenant, condition or promise
contained in this Credit Agreement, the Notes, the Deed of
Trust or any other A/R Loan Document other than for the
payment of money, and such failure continues for a period of
more than thirty (30) days after notice by Agent Bank of such
failure; provided, however, that if the nature of the default
is such that it cannot be cured within such thirty (30) day
period, Borrower shall be afforded a reasonable period of time
to cure such a default, provided that Borrower commences such
cure within such thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
(f) Borrower or Guarantor shall commence a
voluntary case or other proceeding (or consents to an
involuntary case or proceeding) seeking liquidation, re-
organization or other relief with respect to it or its
respective 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 any substantial part
of its property, or shall consent to any such relief or to the
appointment or taking possession by any such official in any
involuntary case or other proceeding commenced against it;
(g) An involuntary case or other proceeding
shall be commenced against Borrower or Guarantor 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 any
substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a
period of sixty (60) days;
(h) Borrower or Guarantor makes an assignment
for the benefit of its creditors, or admits in writing its
inability to pay its debts generally as they become due;
(i) Borrower or Guarantor shall fail to pay
when due in accordance with its terms and provisions any other
Indebtedness which failure materially impairs the security
interests of Lenders and continues beyond the period of grace,
if any, therefor;
(j) The occurrence of any Reportable Event as
defined under the Employment Retirement Income Security Act of
1974, as amended, which Lenders determine in good faith
constitutes proper grounds for the termination of any employee
pension benefit plan or Pension Plan of Aztar Consolidation,
if any, covered by ERISA 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, should occur and should continue for thirty (30) days
after written notice of such determination shall have been
given by Lenders;
(k) Commencement, any time after the execution
of this Credit Agreement, of any litigation which is not
stayed, bonded, dismissed, terminated or disposed of to Agent
Bank's satisfaction within ninety (90) days after its
commencement, and which (i) materially affects the title to
the Premises, or (ii) materially affects Borrower's right to
use the Premises as a Hotel/Casino Operation;
(l) Aztar shall fail to own at least 100% of
the issued and outstanding voting common stock of REI;
(m) The loss or suspension, other than on
account of forces majeure, of Borrower's unrestricted Gaming
Permits or the failure of Borrower to maintain gaming
activities in the Hotel/Casino Operation 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;
(n) Any order, judgment or decree shall be
entered against Borrower or Guarantor 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 Borrower or Guarantor shall otherwise
dissolve or cease to exist;
(o) Failure of the REI Pledge Documents to be
valid, binding and in full force and effect after the Initial
NRL Disbursement Date; or
(p) The occurrence of an event of default
under the REI Pledge Documents unless the NRL Facility is paid
in full and Borrower's rights to borrow thereunder terminated
within thirty (30) days following written notice from Agent
Bank.
Section 7.02. DEFAULT REMEDIES. Upon the
occurrence of any Event of Default, Lenders may, at their
option, declare the unpaid balance of the Notes, together with
the interest thereon, to be fully due and payable, and may, at
their option, exercise any or all of the following remedies:
(a) The Lenders may terminate their obligation
to issue Letters of Credit and to make any advances for
Borrowings and NRL Disbursements and may declare all
outstanding unpaid Indebtedness hereunder and under the Notes
and other A/R Loan Documents and REI Pledge Documents (as in
effect from time to time) 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(f), (g) or (h).
(b) Any and all remedies available to Lenders
under the A/R Loan Documents and REI Pledge Documents.
(c) For the purpose of carrying out this
section and exercising these rights, powers and privileges,
Borrower and Guarantor hereby irrevocably constitute and
appoint Agent Bank as their true and lawful attorneys-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 Borrower and Guarantor.
(d) Any other remedies available to Lenders at
law or in equity, including requesting the appointment of a
receiver to perform any acts required of Borrower or Guarantor
under this Credit Agreement or the other A/R Loan Documents
and Borrower and Guarantor hereby specifically consent to any
such request by Lenders.
(e) Lenders may exercise one or more of their
remedies simultaneously and all their remedies are non-
exclusive and cumulative. Lenders shall not be required to
pursue or exhaust any Collateral or remedy before pursuing any
other Collateral or remedy.
(f) Lenders' failure to exercise any remedy for
a particular default shall not be deemed a waiver of (i) such
remedy or the default, 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
shall be applied in the following order of priority:
(a) First, to the payment of all fees, costs
and expenses (including reasonable attorney's fees and
expenses) incurred by Lenders, their agents or representatives
in connection with the realization upon any of said
Collateral; and
(b) Next, to the balance of accrued interest
remaining unpaid under the terms of the Notes; and
(c) Next, to the payment in full of the Notes
and other amounts due under this Credit Agreement, the Deed of
Trust, or any other A/R Loan Documents or REI Pledge
Documents; and
(d) Next, the balance, if any, of such
payments, proceeds, or amounts to Borrower or, if otherwise
determined by a court of competent jurisdiction, to whomever
may be entitled thereto. In the event the proceeds of the
disposition of the Collateral are insufficient to fully pay
the items set forth in subparagraphs (a), (b) and (c) above
Borrower and Guarantor shall remain liable for any deficiency
in accordance with the laws of the State of Nevada.
Section 7.04. NOTICES. In order to entitle Lenders
to exercise any remedy available hereunder, it shall not be
necessary for Lenders to give any notice, other than such
notice as may be required expressly herein.
Section 7.05. AGREEMENT TO PAY ATTORNEYS' FEES AND
EXPENSES. Upon the occurrence of an Event of Default, as a
result of which Lenders 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 Borrower contained
herein, Borrower shall, on demand, pay to Lenders the
reasonable fee of such attorneys and such other expenses so
incurred by Lenders.
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.
Section 7.07. LICENSING OF AGENT BANK AND LENDERS.
If Borrower shall be in default hereunder or under any of the
A/R Loan Documents or REI Pledge Documents and it shall become
necessary, or in the opinion of Agent Bank and Lenders
advisable, for an agent, receiver or other representative of
Agent Bank and Lenders to become licensed under the provisions
of the laws of the State of Nevada, or rules and regulations
adopted pursuant thereto, as a condition to receiving the
benefit of any Collateral encumbered by the Deed of Trust or
other A/R Loan Documents or REI Pledge Documents for the
benefit of Lenders or otherwise to enforce their rights
hereunder, Borrower does hereby give its consent to the
granting of such license or licenses and agrees to execute
such further documents as may be required in connection with
the evidencing of such consent.
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 the State of Nevada 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 Lenders shall have proceeded to enforce
any right, power or remedy under this Credit Agreement, the
Notes, the Deed of Trust or any other A/R Loan Document or REI
Pledge 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 Lenders,
then and in every such case Borrower and Guarantor, as
applicable, Agent Bank and Lenders 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 Lenders shall continue as if such proceedings had not been
taken, subject to any 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 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 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
Borrower hereunder or under the Notes, and Borrower shall
continue to be obligated to make such payments.
Section 8.02. DISTRIBUTION OF CAPITAL PROCEEDS UPON
OCCURRENCE OF FIRE, CASUALTY, OR CONDEMNATION. All monies
received from fire, earthquake, flood and hazard extended
insurance policies covering any of the Collateral or from
condemnation or similar actions in regard to said Collateral
(other than Business Interruption Insurance) shall be paid
directly to the Agent Bank, provided that 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
Borrower, unless a Default or Event of Default shall have
occurred and is continuing. In the event the amount paid to
Agent Bank exceeds the then unpaid balance of principal and
interest owing under the Notes, together with all other sums
owing Lenders thereunder and hereunder, including the Stated
Amount of any outstanding Letters of Credit (the "Balance of
the Loan"), then such amount may be applied by Agent Bank to
reduce the Balance of the Loan in such order as Lenders may
determine and fund the Cash Collateral Account with the Stated
Amount of all outstanding Letters of Credit, or at the option
of Lenders in their sole and absolute discretion, the entire
amount so collected, or any part thereof, may be released to
Borrower for repair or replacement of the property destroyed
or condemned or to reimburse Borrower for the costs of such
repair or replacement incurred prior to the date of such
release. In the event the amount paid to Agent Bank is
greater than One Million Dollars ($1,000,000.00) but less than
the Balance of the Loan, then such amount may be applied by
Agent Bank to reduce the outstanding balance of the Credit
Facilities in such order as Lenders may determine and fund the
Cash Collateral Account with the Stated Amount of all
outstanding Letters of Credit, or at the option of Borrower,
unless an Event of Default has occurred hereunder and is
continuing, in which case at the option of Lenders, the entire
amount so collected, or any part thereof, may be released to
Borrower for repair or replacement of the property destroyed
or condemned or to reimburse Borrower for the costs of such
repair or replacement incurred prior to the date of such
release. In the event Lenders elect to, or are required to,
release all or a portion of the collected funds to Borrower
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 to
be approved by Lenders and in accordance with all applicable
laws, ordinances, rules, regulations and requirements of
Governmental Authorities;
b. Borrower shall provide Lenders with a
detailed estimate of the costs of such repairs or
restorations;
c. Borrower satisfies Lenders that after the
reconstruction is completed, the value of the Hotel/Casino
Operation as determined by the Lenders in their reasonable
discretion, will not be less than the One Hundred Million
Dollars ($100,000,000.00);
d. In Lenders' sole reasonable opinion, any
undisbursed portion of the RLC Facility contemplated
hereunder, after deposit of such proceeds, is sufficient to
pay all costs of reconstruction of the Premises or other
Collateral; or if the undisbursed portion of such RLC Facility
is not sufficient, Borrower deposits additional funds with
Agent Bank, sufficient to pay such additional costs of
reconstructing the Collateral;
e. Borrower has delivered to the Lenders a
construction contract for the work of reconstruction in form
and content acceptable to the Lenders with a contractor
acceptable to the Lenders;
f. The Lenders in their reasonable discretion
have determined that after the work of reconstruction is
completed, the Hotel/Casino Operation will produce income
sufficient to pay all costs of operations and maintenance of
the Premises with a reasonable reserve for repairs, and
service all debts secured by the Premises;
g. No Default or Event of Default (other than
non-monetary Events of Default directly resulting from the
event or events causing such insurance or casualty loss) has
occurred and is continuing hereunder (other than non-monetary
Events of Default directly resulting from the event or events
causing such insurance or casualty loss);
h. Borrower has deposited with Agent Bank
that amount reasonably determined by Lenders (taking into
consideration the amount of RLC Facility funds available for
such purpose, and the amount of proceeds, if any, of insurance
policies covering loss or rental income in connection with the
Hotel/Casino Operation accruing and immediately forthcoming to
the Lenders) to be sufficient to service the Indebtedness
secured hereby during the period of reconstruction, as
reasonably estimated by the Lenders;
i. Before commencing any such work, Borrower
shall, at their own cost and expense, furnish Lenders with
appropriate endorsements, if needed, to the fire insurance
policy which Borrowers are then presently maintaining, to
cover all of the risks during the course of such work; and
j. Such work shall be commenced by Borrower
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 Deed of Trust.
ARTICLE IX
GENERAL CONDITIONS
------------------
The following conditions shall be applicable
throughout the terms of this Credit Agreement:
Section 9.01. FAILURE TO EXERCISE RIGHTS. Nothing
herein contained shall impose upon Lenders any obligation to
enforce any terms, covenants or conditions contained herein.
Failure of Lenders, in any one or more instances, to insist
upon strict performance by Borrower or Guarantor of any terms,
covenants or conditions of this Credit Agreement or the other
A/R Loan Documents or the REI Pledge Documents, shall not be
considered or taken as a waiver or relinquishment by Lenders
of their right to insist upon and to enforce in the future, by
injunction or other appropriate legal or equitable remedy,
strict compliance by Borrower or Guarantor with all the terms,
covenants and conditions of this Credit Agreement and the
other A/R Loan Documents or the REI Pledge Documents. The
consent of Lenders to any act or omission by Borrower or
Guarantor shall not be construed to be a consent to any other
or subsequent act or omission or to waive the requirement for
Lenders' consent to be obtained in any future or other
instance.
Section 9.02. SUCCESSORS AND ASSIGNS. Subject to
the provisions of Section 9.09, 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 9.03. NOTICES. All notices received by
Agent Bank with respect to Sections 2.03 and 2.12 and
Conversions under the Notes shall only be effective upon
actual receipt by Agent Bank. Unless otherwise indicated
differently, all notices, payments, requests, reports,
information or demand which any party hereto may desire or may
be required to give to any other party hereunder, shall be in
writing and shall be personally delivered or sent by telegram,
telex, telecopies, Federal Express or other recognized form of
overnight delivery, or first-class certified or registered
United States mail, postage prepaid, return receipt requested,
and sent to the party at its address appearing below or such
other address as any party shall hereafter inform the other
party hereto by written notice given as aforesaid; provided,
however, notices to Lenders requesting disbursements of the
Loan proceeds need not be sent by certified United States
mail:
If to Borrower
or Guarantor: c/o Aztar Corporation
2390 E. Camelback Rd., Ste. 400
Phoenix, Arizona 85016-3452
Attention: Treasury Department
With a copy to: Snell & Wilmer
One Arizona Center
Phoenix, Arizona 85004-0001
Attention: David Sprentall, Esq.
If to Lenders: First Interstate Bank of
Nevada, N.A.
Gaming Industry Department
Post Office Box 11007
Reno, Nevada 89520
With a copy to: Timothy J. Henderson, Esq.
Henderson & Nelson
164 Hubbard Way, Suite B
Reno, Nevada 89502
All notices, payments, requests, reports, information or
demands so given shall be deemed effective upon receipt or, if
mailed, upon receipt or the expiration of the third (3rd) day
following the date of mailing, whichever occurs first, except
that any notice of change of address or request for
disbursement shall be effective only upon actual receipt by
the party to whom said notice is addressed.
Section 9.04. INCORPORATION OF TERMS. Borrower and
Guarantor agree that the Notes shall be made subject to all
the terms, covenants, conditions, obligations, stipulations
and agreements contained in this Credit Agreement to the same
extent and effect as if fully set forth in and made a part of
the Notes, and Borrower and Guarantor and Lenders agree that
this Credit Agreement is made subject to all the terms,
covenants, conditions, obligations, stipulations and
agreements contained in the Notes to the same extent and
effect as if fully set forth herein and made a part of this
Credit Agreement, until this Credit Agreement is terminated by
the repayment to Lenders of all principal, interest and other
sums and expenses due and owing on the Notes and the cessation
of the obligation to make advances on the Credit Facilities.
If any provisions in this Credit Agreement are inconsistent
with the provisions of other A/R Loan Documents or REI Pledge
Documents, this Credit Agreement shall control.
Section 9.05. 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 A/R Loan Documents or REI Pledge Documents,
such document, certificate or agreement shall be amended to
the satisfaction of Lenders to remove such inconsistency.
Section 9.06. COUNTERPARTS. This Credit Agreement
may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall constitute
one and the same agreement with the same effect as if all
parties had signed the same signature page. Any signature
page of this Credit Agreement may be detached from any
counterpart of this Credit Agreement and reattached to any
other counterpart of this Credit Agreement identical in form
hereto but having attached to it one or more additional
signature pages.
Section 9.07. RIGHTS, POWER AND REMEDIES ARE
COUMLATIVE. None of the rights, powers and remedies conferred
upon or reserved to Agent Bank or Lenders 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 or Lenders 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, power and remedies given to Agent Bank or Lenders
herein. The exercise of any right or partial exercise thereof
by Agent Bank or Lenders 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 Lenders.
Section 9.08. SURVIVAL OF REPRESENTATIONS. All
agreements, representations and warranties made herein shall
survive the execution and delivery of this Credit Agreement,
the making of the Credit Facilities hereunder and the
execution and delivery of the Notes.
Section 9.09. ASSIGNMENT OF A/R LOAN DOCUMENTS OR
REI PLEDGE DOCUMENTS BY BORROWER. Borrower may not assign any
of its right, title or interests in the A/R Loan Documents or
REI Pledge Documents and the Credit Facilities, nor may
Borrower delegate any of its obligations and duties under the
A/R Loan Documents and the Credit Facilities, except as
expressly provided herein. Any attempted assignment or
delegation in contravention of the foregoing shall be null and
void AB INITIO.
Section 9.10. AGENT BANK AND ACTION BY LENDERS.
Each of the Closing Lenders does hereby and each Post Closing
Lender, upon execution and delivery of the Additional Funding
Addendum, shall be deemed to appoint FINV as Agent Bank for
the Lenders and FINV does hereby accept such appointment and
each of the rights, duties and obligations set forth herein
which are applicable to it as Agent Bank. Whenever Lenders
and/or Agent Bank 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 A/R Loan
Documents or REI Pledge Documents, then such election,
exercise or consent shall be given or made for all Lenders by
Agent Bank in accordance with Article X hereof.
Section 9.11. ASSIGNMENTS/PARTICIPATIONS BY
LENDERS. Lenders shall not have the right to assign their
respective interests in the Credit Facilities to any other
institutional lenders without the consent of Borrower which
consent shall not be unreasonably withheld. In no event shall
a Lender assign less than a Three Million Dollar
($3,000,000.00) Syndication Interest in the Credit Facilities
unless such Lender assigns all of its Syndication Interest
then held hereunder. Each assignee Lender shall assume the
duties and obligations of the assigning Lender to the extent
of the Syndication Interest assigned and effective as of the
date of assignment and upon such assumption the assigning
Lender shall be fully discharged of all duties and obligations
arising hereunder after the date of such assignment to the
extent of the Syndication Interest Assigned. Lenders may
disclose to any such assignees or participants or prospective
participants approved by Borrower any information or other
data or material in Lenders' possession relating to Borrower,
Guarantor or the Credit Facilities, the A/R Loan Documents,
the REI Pledge Documents and the Premises without the further
consent of or notice to Borrower. Borrower and Guarantor
hereby expressly consent to the disclosure by Agent Bank to
each of the Lenders of information, data and material relating
to Borrowers, the Credit Facilities, the A/R Loan Documents,
the REI Pledge Documents and the Premises. Provided, however,
that nothing contained herein shall prohibit Lenders from
participating their respective interests in the Credit
Facilities so long as such participants have no direct rights
hereunder or any voting rights under Article X hereinafter
contained.
Section 9.12. TIME OF ESSENCE. Time shall be of
the essence of this Credit Agreement.
Section 9.13. CHOICE OF LAW AND FORUM. This Credit
Agreement shall be governed by and construed in accordance
with the law of the State of Nevada. Borrower and Guarantor
further agree that the full and exclusive forum (other than in
connection with any arbitration pursuant to Section 9.14
below) for the determination of any action relating to this
Credit Agreement, the A/R Loan Documents, or any other
document or instruments delivered in favor of Lenders 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 9.14. 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, A/R 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 Nevada Uniform
Arbitration Act, Nevada Revised Statutes Chapter 38, or, if
not then in effect, 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 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 9.15. WAIVER OF JURY TRIAL. To the maximum
extnet permitted by law, borrower, guarantor 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 notes or any of the A/R loan documents or any
of the REI pledge documents, or in any way connected with,
related to, or incidental to the dealings of borrower,
guarantor and lenders with respect to this credit agreement,
the notes or any of the A/R loan documents or any of the REI
pledge documents, or the trnasactions 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, borrower,
guarantor and each of the lenders 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
of the consent of the complaining party to the waiver of its
right to trial by jury.
Section 9.16. SCOPE OF APPROVAL AND REVIEW. Any
inspection of the Premises or Hotel/Casino Operation or other
documents shall be deemed to be made solely for Lenders'
internal purposes and shall not be relied upon by the
Borrower, Guarantor or any third party. In no event shall
Lenders be deemed or construed to be joint venturers or
partners of Borrower and/or Guarantor.
Section 9.17. A/R LOAN DOCUMENTS. The A/R Loan
Documents and the Security Documents may be held in the name
of FINV as the administrative and collateral agent of all
Lenders hereunder pursuant to the terms of Article X of this
Credit Agreement and copies shall be furnished to each Lender.
Section 9.18. ENTIRE AGREEMENT. This Credit
Agreement with exhibits and related A/R Loan Documents
embodies the entire agreement and understanding between the
parties hereto and supersedes all prior agreements,
negotiations and understandings, whether written or oral,
relating to the subject matter hereof. Neither this Credit
Agreement nor any provision herein may be changed, waived,
discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the
charge, waiver, discharge or termination is sought.
Section 9.19. SEPARABILITY OF PROVISIONS. In the
event any one or more of the provisions contained in this
Credit Agreement should 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 9.20. 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 9.21. COSTS TO PREVAILING PARTY. If any
action or proceeding is brought by any party against any other
party under this Credit Agreement, the prevailing party shall
be entitled to recover such costs and attorneys fees as the
court in such action or proceeding may adjudge reasonable.
Section 9.22. CANCELLATION. Notwithstanding any
other provision hereof to the contrary, if Borrower, in its
sole discretion, elects, prior to the Initial NRL Disbursement
under the NRL Facility, not to request NRL Disbursements
thereunder and to cancel the obligations of NRL Lenders to
make NRL Disbursements thereunder, upon execution by Borrower
of such documentation as may be reasonably requested by Agent
Bank and its attorneys evidencing the cancellation of the NRL
Facility and NRL Lenders' obligation to make NRL Disbursements
thereunder, NRL Lenders shall reduce the amount secured by
security interests, encumbrances, liens and other interests
arising pursuant to the A/R Loan Documents with the amount of
the NRL Facility (including, without limitation, executing
amendments to the Deed of Trust reducing the amount secured
thereby) and shall fully release the REI Pledge Documents
within five (5) Banking Business Days after execution by
Borrower of such cancellation documentation.
Section 9.23. RIGHT OF SETOFF. In addition to all
rights of setoff or lien against any monies, securities or
other property of Borrower and Guarantor given to Lenders by
law, from and after the occurrence of an Event of Default,
Agent Bank and Lenders will have a right of setoff, in respect
of all Indebtedness of the Borrower and Guarantor arising
hereunder whether actual or contingent, mature or otherwise,
against all monies, securities and other property of Borrower
and Guarantor now or hereafter in the possession of or on
deposit with Lenders, or any of them, whether held in a
general or special account or deposit, or for safekeeping or
otherwise; and every such right of setoff may be exercised
without demand upon or notice to Borrower or Guarantor. No
right of setoff shall be deemed to have been waived by any act
or conduct on the part of Agent Bank or Lenders, or by any
neglect to exercise such right of setoff, or by any delay in
doing so; and every right of setoff shall continue in full
force and effect until specifically waived or released by an
instrument in writing executed by Agent Bank and Lenders.
Section 9.24. EXHIBITS ATTACHED. Exhibits are
attached hereto and incorporated herein and made a part hereof
as follows:
Exhibit A - Schedule of Lender Proportions in
Credit Facilities
Exhibit B - Additional Funding Addendum
Exhibit C - Syndication Adjustment Addendum
Exhibit D - RLC Note
Exhibit E - Notice of Borrowing
Exhibit F - RLC Extension Request
Exhibit G - RLC Reducing Revolving Option Exercise
Notice
Exhibit H - NRL Note
Exhibit I - NRL Disbursement Request
Exhibit J - Continuation/Conversion Notice
Exhibit K - Continuing Guaranty
Exhibit L - Depository Closing Instructions
Exhibit M - Equipment Leases
Exhibit N - Subleases
Exhibit O - Real Property
Exhibit P - Compliance Certificate
Exhibit Q - Termination Certificate
Exhibit R - Litigation Certificate
ARTICLE X
INTERCREDITOR PROVISIONS
------------------------
The following provisions are hereby agreed to by and
among Banks for the purpose of setting forth the terms,
covenants and agreements amongst themselves governing their
respective interests and responsibilities in the Credit
Facilities, the A/R Loan Documents and the REI Pledge
Documents. Nothing contained in this Article X shall be
deemed to be for the benefit of or enforceable by any party
other than Banks.
Section 10.01. COMMITMENT TO FUND THE RLC FACILITY
AND NRL FACILITY.
a. RLC FACILITY. Subject to the provisions
of Article II A of the Credit Agreement, RLC Lenders shall
fund Borrowings under the RLC Facility in the proportions set
forth with reference to the RLC Facility on the Schedule of
Lenders Proportions in Credit Facilities as described on
"Exhibit A", affixed hereto and by this reference incorporated
herein and made a part hereof, as may be amended from time to
time. To the extent funds are advanced pursuant to the Credit
Agreement for the RLC Facility, the RLC Lenders will have a
vested undivided interest in the RLC Facility, RLC Note and
the Collateral (after giving effect to the undivided interest
of NRL Lenders as to the NRL Facility and NRL Note and
together with the NRL Lenders in the Collateral as provided
hereinbelow) equal to the respective proportions that the
total amount of principal then owing each RLC Lender on the
RLC Facility has to the total aggregate principal amount owing
on the RLC Facility. Subject to the procedures set forth in
Section 2.03 and 2.06 herein, Agent Bank and the RLC Lenders
each agree to fund their proportions in each Borrowing being
made through Agent Bank on account of the RLC Facility on the
Funding Date specified in wire advice from Agent Bank to each
such RLC Lender in the manner provided in Sections 2.03 and
2.06 of the Credit Agreement.
b. NRL FACILITY. Subject to the provisions
of Article II C of the Credit Agreement, NRL Lenders shall
fund the NRL Disbursements under the NRL Facility in the
proportions set forth with reference to the NRL Facility on
the Schedule of Lenders Proportions in Credit Facilities, as
described on "Exhibit A", affixed to the Additional Funding
Addendum, as may be amended from time to time. To the extent
funds are advanced pursuant to the Credit Agreement for the
NRL Facility, NRL Lenders will have a vested undivided
interest in the NRL Facility, NRL Note and the Collateral
(after giving effect to the undivided interest of RLC Lenders
as to the RLC Facility and RLC Note together with the RLC
Lenders in the Collateral as provided hereinabove) equal to
the respective proportions that the total amount of principal
then owing each NRL Lender on the NRL Facility has to the
total aggregate principal amount owing on the NRL Facility.
Subject to the procedures set forth in Section 2.12 herein,
each of the NRL Lenders agree to fund their proportions in
each NRL Disbursement being made through Agent Bank on account
of the NRL Facility on the Funding Date specified in wire
advice from Agent Bank to each such NRL Lender in the manner
provided in Section 2.12 of the Credit Agreement.
Section 10.02. ACCOUNTING FOR PAYMENTS AND
COLLECTIONS.
a. RLC NOTE PAYMENTS AND COLLECTIONS. Agent
Bank agrees to receive on behalf of the RLC Lenders the
Scheduled Payments on the RLC Note and to remit such funds
received to the RLC Lenders, in the proportion that the total
amount of principal owing each RLC Lender has to the total
aggregate principal amount owing on the RLC Facility as a Pre-
Collateral Liquidation Distribution. Each such collection and
remittance shall be made in immediately available funds on the
date received by Agent Bank if received before 11:00 a.m.,
otherwise on the next Banking Business Day.
b. NRL NOTE PAYMENTS. Agent Bank agrees to
receive on behalf of the NRL Lenders, the Scheduled Payments
on the NRL Note and to remit such funds received to the NRL
Lenders, in the proportion that the total amount of principal
owing each NRL Lender has to the total aggregate principal
amount owing on the NRL Facility as a Pre-Collateral
Liquidation Distribution. Each such collection and remittance
shall be made in immediately available funds on the date
received by Agent Bank if received before 11:00 a.m.,
otherwise on the next Banking Business Day.
c. OTHER COLLECTIONS. All other payments,
proceeds and collections received, including any amounts
received from the Guarantor and all amounts held or realized
from the sale or other disposition of the Collateral prior to
the acquisition of such Collateral in the name of Agent Bank
shall be received by Agent Bank and applied to the Credit
Facilities in the following order of priority: (i) first to
the payment of all fees, costs and expenses, including
reasonable attorney's fees and expenses incurred by Agent
Bank, its agents or representatives in connection with the
realization upon any of said Collateral; (ii) next, to the
balance of interest remaining unpaid on the RLC Note and the
NRL Note as a Post-Collateral Liquidation Distribution; (iii)
next, to the balance of principal remaining unpaid under the
RLC Note and the NRL Note as a Post-Collateral Liquidation
Distribution; (iv) next, to any other amounts owing to Agent
Bank or any of the Lenders; and (v) next, the balance, if any,
of such payment, proceeds or amounts to Borrower, or if
otherwise determined by a court of competent jurisdiction, to
whomever may be legally entitled thereto.
d. POST-FORECLOSURE COLLECTIONS. All proceeds
received or realized from the sale or other disposition of all
or any portion of the Collateral which has theretofore been
acquired in the name of Agent Bank pursuant to a Foreclosure
Proceeding or the exercise of any right contained in the A/R
Loan Documents or REI Pledge Documents shall be applied as
follows: (i) first to the payment of all fees, costs and
expenses, including reasonable attorney's fees and expenses
incurred by Agent Bank, its agents or representatives in
connection with the realization upon any of said Collateral;
(ii) next, to the balance of interest remaining unpaid on the
RLC Note and the NRL Note as a Post-Collateral Liquidation
Distribution; (iii) next, to the balance of principal
remaining unpaid under the RLC Note and the NRL Note as a
Post-Collateral Liquidation Distribution; and (iv) next, the
balance, if any, shall be distributed to Lenders in the
proportions as if the Credit Facilities were fully funded as
a Post-Collateral Liquidation Distribution.
e. COLLATERAL AGENT. All Collateral acquired
pursuant to any Foreclosure Proceeding shall be acquired and
held in the name of Agent Bank for the benefit of all Lenders.
Section 10.03. DISCLAIMER OF WARRANTIES; RISK OF
LOSS. No Bank makes any express or implied warranty of any
kind with respect to all or any portion of either of the
Credit Facilities and no Bank shall be liable to any other for
any loss except as otherwise specifically provided herein; but
after the disposition of funds as provided in Section 10.02
above, all losses in the RLC Loan shall be borne by each RLC
Lender in accordance with its respective interest in the RLC
Facility and all losses in the NRL Facility shall be borne by
each NRL Lender in accordance with its respective interest in
the NRL Facility.
Section 10.04. DEFAULT AND DISCLOSURE. Agent Bank
shall act as the agent of RLC Lenders for the collection and
disbursement of the proceeds of the RLC Loan and as the agent
of NRL Lenders for the collection and disbursement of the
proceeds of the NRL Facility. Subject to the provisions
hereinafter contained in Section 10.08, Agent Bank in its
capacity as a RLC Lender and NRL Lender shall have all of the
rights of a holder of the RLC Note, NRL Note and Collateral
and shall immediately give written notice to each Lender of
the occurrence of any Default or Event of Default or any of
the A/R Loan Documents or REI Pledge Documents, or any other
matters which to its actual knowledge and in its best
judgement may materially and adversely affect the interests of
any of the parties hereto.
Section 10.05. ADMINISTRATION. Agent Bank agrees:
a. To monitor and deal with the Credit
Agreement, Collateral and Credit Facilities on behalf of
itself and the Lenders consistent with the terms of this
Article X;
b. To disburse the proceeds of the Credit
Facilities in accordance with the Credit Agreement;
c. To service and manage the Credit
Facilities and the Collateral in the ordinary course of
business and in accordance with its usual practices in
managing loans for its own account and shall bear the usual
servicing expenses;
d. To examine the Collateral and the books
and records of Borrower relating to said transactions as it
shall deem necessary, together with the filing of continuation
statements or amendments to any financing statements filed
with respect to the Collateral;
e. To remit each Notice of Borrowing, NRL
Disbursement Request, RLC Extension Request, RLC Reducing
Revolving Option Notice and all other notices, requests and
certifications to the applicable Lenders within the time
periods prescribed in the Credit Agreement;
f. To receive all payments on account of
principal and interest on said Credit Facilities, together
with proceeds from casualty or title insurance, proceeds from
condemnation, proceeds from setoffs, payment under guaranties
and all other monies due on or in connection with the Notes,
Credit Agreement, and other A/R Loan Documents and REI Pledge
Documents in escrow for the benefit of each of the Lenders and
shall promptly remit in immediately available funds (if
immediately available funds are received from Borrower and/or
Guarantor) by wire to each of the Lenders each Lender's pro
rata share of such amounts determined according to the
respective Syndication Interest of each of the Lenders in the
Credit Facilities;
g. Promptly give to each of the Lenders,
copies of any notice received or given by Agent Bank hereunder
in accordance with Section 9.03;
h. To request such additional financial or
other information and/or detail as to any item or items
contained in any financial information tendered by Borrower or
Guarantor upon the request of any one or more Lenders as long
as such request for additional information is reasonable.
i. To hold the A/R Loan Documents and the REI
Pledge Documents as security for the repayment of the Credit
Facilities, as administrative and collateral agent for the
Lenders.
j. To promptly remit to Lenders the
information received from Borrower and/or Guarantor in
accordance with the Credit Agreement and any other written
information received by Agent Bank which is material to the
Credit Facilities, the Borrower, Guarantor and/or the
condition of the Collateral within five (f) Banking Business
Days of Agent Bank's receipt of such written information.
Section 10.06. ACCESS TO BOOKS OF ACCOUNT AND
RECORDS. Agent Bank shall at all times keep proper books of
account and records reflecting the interest of each Lender and
reflecting the Borrowings and NRL Disbursements made and
payments received on the RLC Facility and NRL Facility and
shall make all of its records and files respecting the Credit
Facilities available for inspection by each Lender at all
reasonable hours and upon reasonable notice to Agent Bank.
Agent Bank shall cooperate in answering questions and using
diligent efforts to keep each Lender advised of material
aspects of the Credit Facilities.
Section 10.07. STANDARD OF CARE.
a. Agent Bank in its management and
administration of the Credit Facilities and in connection with
the exercise of any rights or remedies under the Credit
Agreement, the A/R Loan Documents, the REI Pledge Documents or
at law shall use the same diligence and care as customarily
used by Agent Bank with respect to loans held by it entirely
for its own account. In that regard, Agent Bank shall not be
liable for good faith errors in judgment or clerical errors
made in the ordinary course of administration. In no event
shall Agent Bank be liable for any action taken at the
direction of the requisite percentage of Lenders or set forth
in Section 10.08.
b. To the extent not reimbursable from
Borrower and/or Guarantor, RLC Lenders hereby agree to pay
their respective pro-rata share in the same proportion as the
Pre-Collateral Liquidation Distributions for the RLC Facility
of any and all losses, damages, expenses or liabilities of any
kind or nature (collectively "Liabilities") incurred by Agent
Bank from any suits, claims, or demands, including reasonable
attorney's fees relating solely to the RLC Facility. To the
extent not reimbursable from Borrower and/or Guarantor, NRL
Lenders hereby agree to pay their respective pro-rata share in
the same proportion as the Pre-Collateral Liquidation
Distributions for the NRL Facility of any and all Liabilities
incurred by Agent Bank from any suits, claims or demands,
including reasonable attorney's fees relating solely to the
NRL Facility. To the extent not reimbursable from Borrower
and/or Guarantor, Lenders hereby agree to pay their respective
pro-rata share in the same proportions as a Post-Collateral
Liquidation Distribution of any and all Liabilities incurred
by Agent Bank from any suits, claims or demands, including
reasonable counsel fees incurred in investigating or defending
the same suffered by Agent Bank and caused by, relating to,
arising out of, resulting from, or in any way connected with
the Collateral or any of the A/R Loan Documents, or any of the
REI Pledge Documents (other than those matters which solely
affect the RLC Facility or the NRL Facility as provided
hereinabove). The Liabilities described hereinabove shall
include, but not be limited to, good faith errors in judgement
and clerical errors made in the ordinary course of
administration, except to the extent that Liabilities are
incurred by Agent Bank's gross negligence or willful
misconduct in which event such Liabilities shall be paid by
Agent Bank. Without limiting the liability of Agent Bank as
set forth above, in the event of the gross negligence or
willful misconduct of Agent Bank hereunder, Lenders shall have
the right to replace Agent Bank with a substituted bank or
other entity to act as their agent hereunder and as "Agent
Bank" under the Credit Agreement, upon the vote of 80% or more
of the recalculated Combined Voting Interests, without regard
to the Syndication Interest or vote of FINV.
c. Agent Bank does not assume and shall have
no responsibility or liability, express or implied, for the
collectibility, enforceability, genuineness or validity of the
A/R Loan Documents, REI Pledge Documents or for the value or
physical condition of the Collateral or for the financial
condition of Borrower and/or Guarantor or other obligor on all
or any portion of the Credit Facilities. Each of the Lenders
assumes the obligation to determine independently the validity
and enforceability of the A/R Loan Documents and the REI
Pledge Documents and to make their own appraisal of the
Collateral and the creditworthiness of Borrower and Guarantor
or other obligor on all or any portion of the Credit
Facilities. The approval of the A/R Loan Documents and the
REI Pledge Documents by each of the Lenders shall be evidenced
by each Lender's execution of this Credit Agreement and each
Post Closing Lender's execution of the Additional Funding
Addendum. Without limiting the generality of the foregoing,
each Lender acknowledges that it has had the opportunity to
inspect the Real Property and Collateral and that Agent Bank
has made available to each Lender for its inspection all
material files and records of Agent Bank relating to the
Credit Facilities or relating to Borrower. Each Lender hereby
confirms that it, independently and without reliance upon
Agent Bank or any information provided by Agent Bank, has
determined to its satisfaction the suitability of its joining
in the making of the RLC Facility and the NRL Facility and all
other matters relating to the creditworthiness of Borrower,
the Guarantor and the value of the Collateral and that the
Lenders and each of them are not relying on any
representations or statements made by Agent Bank. Agent Bank
represents that it has provided and will continue to provide
Lenders with all material information received by it relating
to the Credit Agreement and the Credit Facilities, whether
financial or non-financial, or bearing on the quality of the
Credit Facilities.
Section 10.08. MANAGEMENT OF CREDIT FACILITIES.
Except as provided below, Agent Bank shall have the right to
make all decisions and take all actions respecting the RLC
Facility, the NRL Facility, the A/R Loan Documents and the REI
Pledge Documents and the Collateral without obtaining the
prior approval of Lenders. Notwithstanding the foregoing,
Agent Bank shall not:
a. without first obtaining the prior express
written consent of RLC Lenders representing 100% of the RLC
Voting Interests waive prompt payment of principal and/or
interest on the RLC Note or change the required principal
reductions or monthly interest payments under the RLC Note or
agree to any extension of time for such payments or the RLC
Maturity Date or change the interest rate provided for in the
RLC Note or increase the amount of the RLC Facility or
increase the commitments of any RLC Lender or impose any
additional obligations thereon.
b. without first obtaining the prior express
written consent of NRL Lenders representing 100% of the NRL
Voting Interests waive prompt payment of principal and/or
interest on the NRL Note or change the required payments of
principal and/or interest under the NRL Note or agree to any
extension of time for such payments or change the interest
rate provided for in the NRL Note or increase the amount of
the NRL Facility or increase the commitments of any NRL Lender
or impose any additional obligations thereon.
c. without first obtaining the prior express
written consent of NRL Lenders representing fifty-one percent
(51%) of the NRL Voting Interests approve use of the NRL
Facility for any purpose other than the Riverboat Loan under
Section 2.10.
d. without first obtaining the prior express
written consent of Lenders representing 100% of the Combined
Voting Interests:
(i) waive prompt payment or reduction of
principal and/or payment of interest or fees on the
Notes or change the required payments or reductions
on the Notes or agree to any extension of time for
such payments or reductions or change the interest
rate provided for in the Notes or increase the
amount of the Credit Facilities or increase the
commitment of any Lender or impose any additional
obligations thereon or reduce the principal of or
the interest on any amounts owed to any Lender
under the A/R Loan Documents or REI Pledge
Documents or modify Section 7.03 of the Credit
Agreement; or
(ii) make or consent to any release of
Borrower, any payment obligor or Guarantor from any
liability under the A/R Loan Documents or REI
Pledge Documents; or
(iii) make or consent to any release,
satisfaction or discharge of any of the Collateral,
except in accordance with the A/R Loan Documents or
REI Pledge Documents; or
(iv) make any amendment or modification to the
provisions contained in this Article X; or
(v) make any advance of the RLC Facility
and/or the NRL Facility with actual knowledge of an
existing Default or Event of Default under the
Credit Agreement, except as provided in
Section 2.06 with respect to Letters of Credit, or
waive any such Default or Event of Default under
the Credit Agreement; or
e. without first obtaining the prior express
written consent of Lenders representing at least 66-2/3% of
the Combined Voting Interests:
(i) make or consent to any modification of any
of the A/R Loan Documents or REI Pledge Documents
other than as set forth in subparagraph (c)
hereinabove; or
(ii) waive in writing any claim against
Borrower or Guarantor under the A/R Loan Documents
or REI Pledge Documents other than as set forth in
subparagraph (c) hereinabove; or
(iii) give any consent or approval to Borrower
or Guarantor under the A/R Loan Documents or REI
Pledge Documents other than as set forth in
subparagraph (c) hereinabove.
f. without first obtaining the prior express
written consent of RLC Lenders representing at least 66-2/3%
of the RLC Voting Interests, advance any Borrowing
notwithstanding the existence of less than full compliance
with the requirements of Article IIIC as provided in Section
2.04.
g. without first obtaining the prior express
written consent of NRL Lenders representing at least 66-2/3%
of the NRL Voting Interests, grant any waivers under Section
2.17, approve the Riverboat Loan Documents and REI Pledge
Documents or consent to any amendments of the Riverboat Loan
Documents or REI Pledge Documents under Section 5.21.
h. without first obtaining the prior express
written consent of Lenders representing in excess of Sixty-Six
and Two-Thirds percent (66-2/3%) of the Combined Voting
Interest exercise any remedies under the A/R Loan Documents or
REI Pledge Documents, including, without limitation,
accelerating maturity of the RLC Facility and/or the NRL
Facility giving Notice of Default or accepting a Deed in Lieu
of Foreclosure, commence a Foreclosure Proceeding concerning
the matters, management and disposition of the Collateral if
acquired in realization of the debt, including the price and
terms of any resale of such Collateral, or incur or agree to
incur any single expense or liability on behalf of Lenders in
excess of $25,000.00 in connection with the exercise of any
such remedies, enforcement of any of the A/R Loan Documents or
REI Pledge Documents or management and disposition of the
Collateral.
i. fail or refuse, upon request of Lenders
representing interests in excess of fifty percent (50%) of the
Combined Voting Interests:
(i) to accelerate the maturity of the RLC
Facility and the NRL Facility upon occurrence of an
Event of Default; or
(ii) to give notice of any default or breach
occurring under the terms of the A/R Loan Documents
or the REI Pledge Documents; or
(iii) consummate any Foreclosure Proceeding or
other action for the recovery of Collateral; or
(iv) sell any Collateral acquired by any
Foreclosure Proceeding or other action for the
recovery of Collateral on the price and terms
directed by such interests.
Should Lenders acquire title to all or any
portion of the Collateral, either through a Foreclosure
Proceeding or acceptance of an assignment or conveyance in
lieu of foreclosure, each of the Lenders hereto will
contribute, on the basis of the Post-Collateral Liquidation
Distributions, its pro rata share of the cost of such
acquisition, including, without limitation, fees of receivers,
trustees, title company charges, costs, disbursements and
counsel fees, and each of the Lenders hereto will also
contribute, on the basis of the Post-Collateral Liquidation
Distributions, its pro rata share of expenses for maintenance,
taxes, and building costs, and any and all other expenses
necessary in connection with the holding, operating and/or
sale of the Collateral.
Section 10.09. POST FORECLOSURE OBLIGATIONS. In
the event of the acquisition of title to all or any portion of
the Collateral, and upon the subsequent sale thereof, Agent
Bank shall at the time or as soon thereafter as is
practicable, account and pay over to each of the Lenders, each
of their respective proportionate share of the net proceeds of
such sale(s), on the basis of the Post-Collateral Liquidation
Distributions. If a purchase money encumbrance shall be taken
in part for the sale of all or any portion of the Collateral
upon written consent pursuant to Section 10.08h hereof, the
Lenders shall enter into an agreement with respect to said
encumbrance defining the rights of the Lenders, on the basis
of the Post-Collateral Liquidation Distributions, which
agreement shall be in all material respects similar to these
intercreditor provisions insofar as this Article X is
appropriate or applicable. In the absence of such agreement,
such encumbrance shall be held by Agent Bank for the benefit
of all Lenders and shall be subject to the terms of these
intercreditor provisions to the extent applicable. All such
proceeds of the Collateral shall be applied as Post-Collateral
Liquidation Distributions.
Section 10.10. COLLECTION AGENT. Lenders agree to
not accept any payments, proceeds and/or collections directly
from Borrower in respect of Indebtedness arising under the
Credit Agreement (or any third party except from Agent Bank)
unless such receiving Lender immediately forwards such
payment, proceeds or collection to Agent Bank in accordance
with the terms of this Article X or, if such payment,
proceeds, or collection cannot be forwarded to Agent Bank,
such sharing Lender shall distribute such payments or proceeds
received to the other Lenders in such proportions as may be
necessary to achieve a pro rata share with each of the Lenders
in the Credit Facilities so that each Lender's proportionate
interest shall remain the same as they were prior to the
receipt of such payments, proceeds or collections.
Section 10.11. FAILURE TO DISAPPROVE. If any
Lender fails to deliver Agent Bank written notice of its
approval or disapproval of any action proposed to be taken by
Agent Bank under Section 10.08, within the later of (x)
fifteen (15) Banking Business Days after day upon which said
Lender receives written notice from Agent Bank of the action
it proposes to take and(y) five (5) Banking Business Days
after the day upon which said Lender receives a second (2nd)
written notice covering such proposed action, which second
(2nd) written notice can be given no earlier than ten (10)
Banking Business Days after the giving of the first (1st)
notice covering such proposed action, then the proposed action
to be undertaken by Agent Bank shall be deemed to have been
approved by said party.
Section 10.12. NO ASSIGNMENT. Subject to the
provisions of Section 9.11, each of the Lenders agree that it
shall not sell, transfer, assign or otherwise dispose of,
whether voluntarily or by operation of law, all or any part of
its respective Syndication Interests in the Credit Facilities
without the prior express written consent of the Lenders
representing Combined Voting Interests in sixty percent (60%)
of the outstanding principal amount of the Credit Facilities,
which consent shall not be unreasonably withheld or delayed.
Provided, however, that until Agent Bank has procured Post
Closing Lenders for the additional aggregate amount of Fifteen
Million Dollars ($15,000,000.00) as provided in Section 2.08,
Lenders shall not sell, transfer, assign or otherwise dispose
of, whether voluntarily or by operation of law, all or any of
their respective Syndication Interests in the Credit
Facilities without the prior written consent of each of the
Lenders, which consent shall not be unreasonably withheld.
Provided further, however, that nothing contained herein shall
prohibit Lenders from subparticipating their respective
interests in the Credit Facilities so long as such
subparticipants have no direct rights hereunder or any voting
rights under Article X herein contained.
Section 10.13. SUCCESSORS AND ASSIGNS. All of the
terms, covenants, warranties and conditions contained in this
Article X shall be binding upon and inure to the sole and
exclusive benefit of, Banks and their respective successors
and assigns.
Section 10.14. MODIFICATION IN WRITING. This
Article X, together with the Credit Agreement is the entire
agreement between Banks and supersedes all prior agreements
whether written or oral, with respect to the subject matter
hereof. Neither this Article X nor any provision herein 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 terminate is
subject.
Section 10.15. INVALID PROVISIONS. If any clause,
provision or Section of this Article X 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.
Section 10.16. DISCLOSURE OF INFORMATION. Agent
Bank and each of the Lenders agree to disclose to all other
Lenders, promptly upon obtaining actual knowledge thereof, any
information concerning the occurrence of any Event of Default.
Each Lender acknowledges and agrees that the other Lenders may
have presently and in the future other loans and credit
accommodations with Guarantor and its Affiliates, provided,
however, that no Lender shall make any additional loans or
extend any additional credit accommodations to Borrower
without the prior written consent of each of the Lenders
hereto.
Section 10.17. NO JOINT ENTERPRISE. By the
execution or performance hereof, no relationship of co-
partnership or joint venturer or other joint enterprise shall
be deemed to be now or hereafter created as between Banks.
Section 10.18. INTERCREDITOR NOTICES. Unless
otherwise indicated differently, all notices, payments,
requests, reports, information or demand which any Bank may
desire or may be required to give to any other Bank hereunder
shall be in writing and personally delivered or sent by
telegram, telex, telecopier or first-class certified or
registered United States mail, postage prepaid, return receipt
requested and addressed to Agent Bank and each of the Lenders
at their respective addresses set forth below after their
respective signature below, or at such other address as any
Bank shall hereafter inform the other Banks hereto by written
notice given as aforesaid. All notices, payments, requests,
reports, information or demands so given shall be deemed
effective only upon receipt or, if mailed, upon receipt or the
expiration of the fifth (5th) day following the date of
mailing, whichever occurs first, except that any notice of
change of address shall be effective only upon receipt by the
party to whom said notice is addressed.
Section 10.19. TIME OF ESSENCE. Agent Bank and
each of the Lenders agree that time is of the essence in the
performance of each and every term of this Article X.
Section 10.20. CHOICE OF LAW AND FORUM. The
Intercredit Provisions set forth in this Article X shall be
governed by and construed in accordance with the law of the
State of Nevada. Each of the Banks further agree that the
full and exclusive forum for the determination of any action
relating to Article X shall be either an appropriate Court of
the State of Nevada or the United States District Court for
the District of Nevada.
Section 10.21. JURY TRIAL WAIVER. To the maximum
extent premitted by las, each of the banks 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 the intercreditor provisions set forth in this
Article X or in any way connected with, related to, or
incidental to the dealings of banks with respect to the
intercreditor provisions set forth in this Article X 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 las, each of the banks hereby 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 applicable
responding banks or banks may file an original counterpart of
this section with any court or other tribunal as written
evidence of the consent of the complaining banks or banks to
the waiver of its right to trial by jury.
Section 10.22. ARBITRATION.
a. Upon the request of any Lender, whether
made before or after the institution of any Dispute now
existing or hereafter arising between the Lenders in any way
arising out of, pertaining to or in connection with this
Article X or 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 Lenders shall be
resolved by binding arbitration governed by the Nevada Uniform
Arbitration Act, Nevada Revised Statutes Chapter 38, or, if
not then in effect, 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.
Section 10.23. RESIGNATION. The Agent Bank may
resign as such at any time upon at least thirty (30) days
prior written notice to the Borrower, Guarantor and each of
the Lenders. If the Agent Bank at any time shall resign, the
Lenders may appoint another Lender (without regard to the vote
of FINV) as a successor Agent Bank which shall thereupon
become the successor of such resigning Agent Bank hereunder.
If no successor Agent Bank shall have been so appointed by the
Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Agent Bank giving notice of
resignation, then the retiring Agent Bank may, on behalf of
the Lenders, appoint a successor Agent Bank, which shall be
one of the Lenders. Upon the acceptance of any appointment as
Agent Bank hereunder by successor Agent Bank, such successor
Agent Bank shall be entitled to receive from the retiring
Agent Bank such documents of transfer and assignment as such
successor Agent Bank may reasonably request, and shall
thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Agent Bank and
the retiring Agent Bank shall be discharged from its duties
and obligations as Agent Bank under this Article X and the A/R
Loan Documents and the REI Pledge Documents.
IN WITNESS WHEREOF, the parties hereto have caused
this Credit Agreement to be executed as of the day and year
first above written.
CLOSING LENDERS: BORROWER:
FIRST INTERSTATE BANK RAMADA EXPRESS, INC.,
OF NEVADA, N.A. a Nevada corporation
By /s/ J. Bydalek By /s/ Craig F. Sullivan
-------------------------- ----------------------------
Title Asst. Vice President Title /s/ Treasurer
----------------------- -----------------------
MIDLANTIC NATIONAL BANK, GUARANTOR:
a national banking
association AZTAR CORPORATION,
a Delaware corporation
By /s/ Denise Killen
-------------------------- By /s/ Craig F. Sullivan
Title Vice President --------------------------
----------------------- Title Treasurer
-----------------------
THE DAIWA BANK, LIMITED, AGENT BANK:
a Japanese corporation
FIRST INTERSTATE BANK
OF NEVADA, N.A.
By /s/ William A. Tyrer
--------------------------
Title Vice President & Manager By /s/ J. Bydalek
----------------------- -------------------------
Title Asst. Vice President
By -----------------------
--------------------------
Title
-----------------------
NBD BANK, N.A.
By /s/ J. J. Csernits
--------------------------
Title Vice President
-----------------------
FIRST SECURITY BANK OF
IDAHO, N.A.
By /s/ Victor w. Gillett
--------------------------
Title Vice President
-----------------------<PAGE>
EXHIBIT A
SCHEDULE OF LENDERS' PROPORTIONS IN CREDIT FACILITIES
|================================================================|
| RLC FACILITY |
|================================================================|
| | MAXIMUM | PERCENTAGE |
| | PRINCIPAL | SYNDICATION |
| NAME OF RLC LENDER | AMOUNT | INTEREST |
|==========================|==================|==================|
| First Interstate Bank | $ 8,000,000 | 16.0% |
| of Nevada | | |
|--------------------------|------------------|------------------|
| Midlantic National Bank | 15,000,000 | 30.0% |
|--------------------------|------------------|------------------|
| The Daiwa Bank, Limited | 10,000,000 | 20.0% |
|--------------------------|------------------|------------------|
| NBD Bank | 10,000,000 | 20.0% |
|--------------------------|------------------|------------------|
| First Security Bank of | 7,000,000 | 14.0% |
| Idaho | | |
|--------------------------|==================|==================|
| TOTAL | $50,000,000 | 100.0% |
|================================================================|
|================================================================|
| NRL FACILITY |
|================================================================|
| | MAXIMUM | PERCENTAGE |
| | PRINCIPAL | SYNDICATION |
| NAME OF NRL LENDER | AMOUNT | INTEREST |
|==========================|==================|==================|
| | | |
|--------------------------|------------------|------------------|
| | | |
|--------------------------|------------------|------------------|
| | | |
|--------------------------|------------------|------------------|
| | | |
|--------------------------|==================|==================|
| TOTAL | | 100.0% |
|================================================================|
|================================================================|
| COMBINED VOTING INTEREST |
|================================================================|
| NAME OF LENDER | COMBINED VOTING PERCENTAGE |
|=================================|==============================|
| | |
|---------------------------------|------------------------------|
| | |
|---------------------------------|------------------------------|
| | |
|---------------------------------|------------------------------|
| | |
|---------------------------------|==============================|
| TOTAL | 100.0% |
|================================================================|
<PAGE>
EXHIBIT B
ADDITIONAL FUNDING ADDENDUM
TO CREDIT AGREEMENT
THIS ADDITIONAL FUNDING ADDENDUM TO CREDIT AGREEMENT
("Addendum") is made and entered into this ___ day of
___________, 1994, by and among RAMADA EXPRESS, INC., a Nevada
corporation ("Borrower"), AZTAR CORPORATION, a Delaware
corporation ("Guarantor"), FIRST INTERSTATE BANK OF NEVADA,
N.A., MIDLANTIC NATIONAL BANK, a national banking association,
THE DAIWA BANK, LIMITED, a Japanese corporation, NBD BANK,
N.A. and FIRST SECURITY BANK OF IDAHO, N.A. (collectively the
"Closing Lenders") [Insert names of Post Closing Lenders]
(collectively the "Post Closing Lenders" and together with the
Closing Lenders collectively the "Lenders") and FIRST
INTERSTATE BANK OF NEVADA, N.A., as administrative and
collateral agent for the Lenders (herein, in such capacity,
called the "Agent Bank" and together with the Lenders
collectively the "Banks").
R_E_C_I_T_A_L_S:
WHEREAS:
A. Borrower, Guarantor, Closing Lenders and Agent
Bank entered into a First Amended and Restated Credit
Agreement, dated as of ___________, 1993 (the "Credit
Agreement"). In this Addendum, all capitalized words and
terms, not otherwise herein defined, shall have the respective
meanings and be construed herein as provided in Section 1.01
of the 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. Under the terms of the Credit Agreement,
Closing Banks committed to fund up to the Maximum Principal
Balance of Fifty Million Dollars ($50,000,000.00) of the RLC
Facility. [Insert name of Post Closing Lender - Repeat
sentence with name and amount of Post Closing Lenders and
amount if more than one] has committed and is hereby
evidencing its commitment to fund an additional amount under
the Credit Facilities up to the maximum aggregate amount of
$___________________ as a Lender in the Credit Facilities. As
of the date execution of this Addendum, the aggregate amount
committed for funding under the Credit Facilities by Post
Closing Lenders is ____________ Million Dollars
($___,000,000.00).
C. Borrower, Guarantor and Lenders desire to
execute this Addendum for the purpose of apportioning the
respective Syndication Interests of each of the Lenders
between the RLC Facility and the NRL Facility on a pro rata
basis and for the other purposes set forth in Section 2.09 of
the Credit Agreement and as more particularly herein provided.
NOW, THEREFORE, in consideration of the foregoing
and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto do agree as follows:
1. Subject to the conditions and upon the terms
set forth in the Credit Agreement [Insert name of Post Closing
Lender and commitment amount - repeat if more than one Post
Closing Lender] severally agrees to fund up to the aggregate
amount of $_____________ of the Credit Facilities. As of the
date of this Addendum, Lenders shall have undivided
Syndication Interests in the RLC Facility and NRL Facility as
more particularly set forth on the Schedule of Lender
Proportions in Credit Facilities, a copy of which is marked
"Exhibit A", affixed hereto and by this reference incorporated
herein and made a part hereof. As of the date hereof, the
Schedule of Lender Proportions in Credit Facilities, Exhibit
A hereto, shall fully restate and supersede the Schedule of
Lenders Proportions in Credit Facilities attached to the
Credit Agreement.
2. The aggregate amount of the RLC Facility
available to Borrower for Borrowings as of the date of this
Addendum is Fifty Million Dollars ($50,000,000.00). The
aggregate amount of the NRL Facility available to Borrower for
NRL Disbursements as of the date of this Addendum is
______________ Million Dollars ($___,000,000.00).
3. As of the date hereof, Borrowings in the
aggregate amount of $_______________ are outstanding under the
RLC Facility. On the date specified by Agent Bank by wire
advice to each of the Post Closing Lenders (the "Adjustment
Date"), which Adjustment Date shall not be prior to nor more
than two (2) Banking Business Days subsequent to the execution
of this Addendum, each Post Closing Lender agrees to disburse
to Agent Bank for receipt by Agent Bank prior to 11:00 o'clock
a.m., its pro rata share of the outstanding balance of the RLC
Facility in the proportions set forth on the Schedule of
Lenders Proportions in Credit Facilities. Agent Bank shall
disburse the funds received from Post Closing Lenders to
Closing Lenders on the day so received in such amounts and
proportions as may be necessary to conform the then
outstanding principal advanced by each RLC Lender under the
RLC Facility to the respective Syndication Interests of each
of the RLC Lenders as of the Adjustment Date. Interest
accrued on the unpaid balance of the principal sum owing under
the RLC Facility shall be prorated amongst Closing Lenders and
Post Closing Lenders as to the RLC Facility based on the
number of days elapsed during the applicable interest period
to the Adjustment Date.
4. On the Adjustment Date, Borrower shall pay to
Agent Bank for distribution to Post Closing Lenders the Post
Closing Loan Fee. Any Nonusage Fees then accruing shall be
prorated amongst Closing Lenders and Post Closing Lenders as
to the RLC Facility based on the number of days elapsed during
the applicable Fiscal Quarter to the Adjustment Date. L/C
Fees relating to Letters of Credit outstanding as of the
Adjustment Date shall not be prorated, but shall be deemed
fully earned by Closing Lenders upon receipt. Any L/C Fees
received by Agent Bank after the Adjustment Date shall be
distributed in the manner set forth in Section 2.20g of the
Credit Agreement.
5. As of the Adjustment Date each Post Closing
Lender shall be entitled to each and every benefit and right
afforded to the Lenders under the Credit Agreement and each of
the A/R Loan Documents and each of Post Closing Lenders shall
and do hereby agree to be bound by the Credit Agreement as a
Lender thereunder to the same extent as if it had originally
executed the Credit Agreement as a Closing Lender holding the
respective Syndication Interests in the Credit Facilities set
forth on the Schedule of Lenders Proportions in Credit
Facilities, Exhibit A hereto.
6. This Addendum shall be and is hereby
incorporated in and forms a part of the Credit Agreement.
7. Borrower and Guarantor each hereby certify and
represent that to their best knowledge, after due
investigation and inquiry, that as of the date of this
Addendum: (i) Agent Bank and each of the Lenders are in full
compliance with each and every term and provision contained in
the Credit Agreement, (ii) no Default or Event of Default has
occurred or is continuing, and (iii) the Representations and
Warranties contained in Article IV of the Credit Agreement are
true and correct in all respects (other than representations
and warranties which expressly speak only as of a different
date) and except as otherwise provided in Section 3.24(i) of
the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have executed
this Addendum as of the day and year first above written.
BORROWER: GUARANTOR:
RAMADA EXPRESS, INC., AZTAR CORPORATION,
a Nevada corporation a Delaware corporation
By__________________________ By__________________________
Title_______________________ Title_______________________
LENDERS
CLOSING LENDERS:
FIRST INTERSTATE BANK NBD BANK, N.A.,
OF NEVADA, N.A., Closing Closing Lender
Lender, Agent Bank
By_________________________
By__________________________
Title______________________
Title_______________________
FIRST SECURITY BANK OF
MIDLANTIC NATIONAL BANK, IDAHO, N.A., Closing Lender
a national banking
association, Closing Lender By_________________________
By__________________________ Title______________________
Title_______________________
THE DAIWA BANK, LIMITED,
a Japanese corporation,
Closing Lender
By__________________________
Title_______________________
By__________________________
Title_______________________
POST CLOSING LENDERS:
By__________________________
Title_______________________
<PAGE>
EXHIBIT C
SYNDICATION ADJUSTMENT ADDENDUM
TO CREDIT AGREEMENT
THIS SYNDICATION ADJUSTMENT ADDENDUM TO CREDIT
AGREEMENT ("Adjustment Addendum") is made and entered into
this ___ day of ___________, 1994, by and among RAMADA
EXPRESS, INC., a Nevada corporation ("Borrower"), AZTAR
CORPORATION, a Delaware corporation ("Guarantor"), FIRST
INTERSTATE BANK OF NEVADA, N.A., MIDLANTIC NATIONAL BANK, a
national banking association, THE DAIWA BANK, LIMITED, a
Japanese corporation, NBD BANK, N.A. and FIRST SECURITY BANK
OF IDAHO, N.A. (collectively the "Closing Lenders") [Insert
names of Post Closing Lenders] (collectively the "Post Closing
Lenders" and together with the Closing Lenders collectively
the "Lenders") and FIRST INTERSTATE BANK OF NEVADA, N.A., as
administrative and collateral agent for the Lenders (herein,
in such capacity, called the "Agent Bank" and together with
the Lenders collectively the "Banks").
R_E_C_I_T_A_L_S:
WHEREAS:
A. Borrower, Guarantor, Closing Lenders and Agent
Bank entered into a First Amended and Restated Credit
Agreement, dated as of ___________, 1993 as supplemented by
the Additional Funding Addendum to Credit Agreement dated as
of _____________, 1994, executed by and among Borrower,
Guarantor, Closing Lenders, Post Closing Lenders and Agent
Bank (collectively the "Credit Agreement"). In this Addendum,
all capitalized words and terms, not otherwise herein defined,
shall have the respective meanings and be construed herein as
provided in Section 1.01 of the 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. On or about ___________, 19___, Borrower
delivered an RLC Extension Request to Agent Bank pursuant to
Section 2.05a of the Credit Agreement requesting that the RLC
Maturity Date be extended from June 30, 19___ (the "Effective
Date"), to June 30, 19___. [Insert names of each Disapproving
RLC Lender], as Disapproving RLC Lenders have each refused to
extend the RLC Maturity Date pursuant to the RLC Extension
Request as provided hereinabove. Pursuant to the provisions
of 2.05(c)(ii) of the Credit Agreement Borrower has elected to
proceed with the extension of the RLC Maturity Date as set
forth above with the Approving RLC Lenders and has or shall as
of the Effective Date pay all outstanding principal and
accrued interest owing each Disapproving RLC Lender and
terminate the RLC Facility as to each Disapproving RLC Lender
pursuant to the Termination Certificate to be executed as of
the Effective Date.
C. Borrower, Guarantor, Agent Bank and the
Approving RLC Lenders desire to execute this Adjustment
Addendum for the purposes of: (i) evidencing that the Maximum
Principal Balance under the RLC Facility which may be
outstanding as of the Effective Date shall be reduced by the
amount of the respective Syndication Interests of the
Disapproving RLC Lenders, and (ii) as of the Effective Date
re-apportioning the respective Syndication Interests of each
of the Approving RLC Lenders in the Maximum Principal Balance
of RLC Facility, as so reduced, on a pro rata basis and for
the other purposes set forth in Section 2.05a through d of the
Credit Agreement and as more particularly herein provided.
NOW, THEREFORE, in consideration of the foregoing
and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto do agree as follows:
1. As of the Effective Date of this Adjustment
Addendum, Lenders (without regard to the Disapproving RLC
Lenders) shall have undivided Syndication Interests in the RLC
Facility and NRL Facility as more particularly set forth on
the Schedule of Lender Proportions in Credit Facilities, a
copy of which is marked "Exhibit A", affixed hereto and by
this reference incorporated herein and made a part hereof. As
of the Effective Date, the Schedule of Lender Proportions in
Credit Facilities, Exhibit A hereto, shall fully restate and
supersede the Schedule of Lenders Proportions in Credit
Facilities attached to the Credit Agreement and to any
previously executed Additional Funding Addendum and
Syndication Adjustment Addendum.
2. The Maximum Principal Balance of the RLC
Facility available to Borrower for Borrowings as of the
Effective Date of this Adjustment Addendum shall be _________
Million Dollars ($___,000,000.00) less the amount of
___________________ ($____________) constituting the
respective aggregate committed Syndication Interests of the
Disapproving RLC Lenders.
3. As of the Effective Date of this Adjustment
Addendum, Borrower shall fully repay all principal and accrued
interest owing to the Disapproving RLC Lenders under the RLC
Facility and shall execute a Termination Certificate as to
each of such RLC Disapproving Lenders. The Maximum Principal
Balance as reduced by the respective aggregate committed
Syndication Interests of each of the Disapproving Lenders as
set forth above shall be reapportioned between the Approving
RLC Lenders as set forth on the Schedule of Lenders
Proportions in Credit Facilities attached hereto as Exhibit A.
In the event the outstanding Borrowings plus the aggregate
Stated Amount of outstanding Letters of Credit exceed the
Maximum Principal Balance as of the Effective Date, on the
Effective Date Borrower shall reduce the outstanding
Borrowings by the amount of such excess.
4. This Addendum shall be and is hereby
incorporated in and forms a part of the Credit Agreement.
7. Borrower and Guarantor each hereby certify and
represent that to their best knowledge, after due
investigation and inquiry, that as of the date of this
Addendum: (i) Agent Bank and each of the Lenders are in full
compliance with each and every term and provision contained in
the Credit Agreement, (ii) no Default or Event of Default has
occurred or is continuing, and (iii) the Representations and
Warranties contained in Article IV of the Credit Agreement are
true and correct in all respects.
IN WITNESS WHEREOF, the parties hereto have executed
this Addendum as of the day and year first above written.
BORROWER: GUARANTOR:
RAMADA EXPRESS, INC., AZTAR CORPORATION
a Nevada corporation a Delaware corporation
By__________________________ By_________________________
Title_______________________ Title______________________
LENDERS
APPROVING RLC LENDERS:
FIRST INTERSTATE BANK ____________________________
OF NEVADA, N.A., RLC Lender,
Agent Bank By__________________________
By__________________________ Title_______________________
Title_______________________ ____________________________
____________________________
By__________________________
By__________________________ Title_______________________
Title_______________________
NRL LENDERS:
____________________________ ____________________________
By__________________________ By__________________________
Title_______________________ Title_______________________
<PAGE>
EXHIBIT D
REVOLVING CREDIT
PROMISSORY NOTE
(RLC Note)
$50,000,000.00 December 28, 1993
FOR VALUE RECEIVED, the undersigned, RAMADA EXPRESS,
INC., a Nevada corporation ("Borrower"), promises to pay to
the order of FIRST INTERSTATE BANK OF NEVADA, N.A., as Agent
Bank on behalf of itself and the other RLC Lenders as defined
and described in the First Amended and Restated Credit
Agreement described hereinbelow, such sums as RLC Lenders may
hereafter loan or advance or re-loan to or on behalf of the
Borrower from time to time pursuant to the Credit Facility as
described in the Credit Agreement, hereinafter defined, the
unpaid balance of which shall not exceed in the aggregate the
Maximum Principal Balance as defined and described in the
Credit Agreement, together with interest on the principal
balance outstanding from time to time at the rate or rates set
forth below commencing on the date of each Borrowing hereunder
and continuing until fully paid, as follows:
A. Interest Rate. Interest shall accrue on
the entire outstanding principal balance at the Prime
Rate as it changes from time to time plus one-half of one
percent (1/2 of 1%), unless Borrower elects pursuant to
Subparagraph C(4) to have interest accrue on a portion or
portions of the outstanding principal balance at a LIBO
Rate ("Interest Rate Option"), in which case interest on
such portion or portions shall accrue at a rate equal to
such LIBO Rate plus two and one-quarter percent (2.25%).
For that portion of the principal balance outstanding on
which interest is accruing with reference to the Prime
Rate, interest shall be due and payable in arrears on the
first (1st) day of the first (1st) month following the
initial Borrowing hereunder, then on the first (1st) day
of each successive month thereafter and on the RLC
Maturity Date. For each LIBO Loan, interest shall be due
and payable at the end of each Interest Period applicable
thereto.
B. Principal Repayment. Principal shall be
repaid as necessary to cause the outstanding balance of
principal to be equal to or less than the Maximum
Principal Balance as may be reduced from time to time
until the RLC Maturity Date, on which date the remaining
balance of the principal sum, together with all unpaid
interest accrued thereon shall be fully paid. In the
event the amount of such required reduction or any
portion thereof has been advanced as a Borrowing, the
amount so advanced shall be payable by Borrower as of the
applicable reduction date so that the outstanding
principal balance under the Credit Facility shall not, at
any time, exceed the Maximum Principal Balance as so
reduced.
Within the foregoing limits, Borrower may
borrow, repay and reborrow the Available Borrowings in
accordance with the terms and provisions of the Credit
Agreement.
C. General Conditions.
(1) Definitions. When used herein the
following terms shall have the following meaning:
Additional Funding Addendum shall have the
meaning as defined in Section 1.01 of the
Credit Agreement.
Agent Bank shall have the meaning as defined
in Section 1.01 of the Credit Agreement.
Authorized Officer shall have the meaning as
defined in Section 1.01 of the Credit
Agreement.
Available Borrowings shall have the meaning as
defined in Section 1.01 of the Credit
Agreement.
Banking Business Day shall mean a day upon
which the principal administrative offices (or
any successor offices) of each of one of the
Lenders and banking associations in New York
and London, England are open to conduct
regular banking business.
Borrower shall have the meaning set forth in
the preamble to this RLC Note.
Borrowing(s) shall have the meaning as defined
in Section 1.01 of the Credit Agreement.
Closing Date shall have the meaning as defined
in Section 1.01 of the Credit Agreement.
Continuation/Conversion Notice shall have the
meaning as defined in Section 1.01 of the
Credit Agreement.
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 Subparagraph C(4).
Credit Agreement shall mean that certain First
Amended and Restated Credit Agreement of even
date herewith executed by and between
Borrower, Guarantor, Agent Bank and Closing
Lenders and each Additional Funding Addendum
and Syndication Adjustment Addendum, together
with any and all rearrangements, extensions,
renewals, substitutions, replacements and
amendments thereof or thereto, which may be
executed in connection therewith by Borrower,
Guarantor, Agent Bank and Lenders relating to
the RLC Facility evidenced by this RLC Note.
Default Rate shall have the meaning as defined
in Section 1.01 of the Credit Agreement.
Dollar(s) and the sign ($) shall mean lawful
money 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 Real Property and the Hotel/Casino
Operation or (ii) the performance of any act
or obligation or the observance of any
agreement, provision or condition of whatever
nature herein contained.
Hotel/Casino Operation shall have the meaning
as defined in Section 1.01 of the Credit
Agreement.
Interest Period shall refer to the Interest
Periods set forth in Subparagraph C(6).
Interest Rate Option shall have the meaning
set forth in Paragraph A hereinabove.
LIBO Loan shall mean each portion of the total
unpaid principal hereunder which bears
interest at a rate determined by reference to
the LIBO Rate and "LIBO Loans" shall mean more
than one LIBO Loan.
LIBO Rate shall mean, with respect to any LIBO
Loan for any Interest Period the rate per
annum as published on the applicable Banking
Business Day in "Telerate Systems Reports" by
the British Bankers Association for interest
settlement rates relating to the London
interbank offerings as of 11:00 o'clock a.m.,
London, England time, on the date of each such
quote ("Fixed USD") for the applicable
Interest Period, for delivery on the first day
of such Interest Period, for the number of
months comprised therein and in a minimum
amount and multiples as set forth herein to
which rate shall be added 2.25% per annum.
Lenders shall have the meaning as defined in
Section 1.01 of the Credit Agreement.
Maximum Principal Balance shall have the
meaning as defined in Section 1.01 of the
Credit Agreement.
Prime Rate shall mean the rate of interest per
annum which Agent Bank from time to time
identifies and publicly announces as its prime
rate and is not necessarily, for example, the
lowest rate of interest which Agent Bank
collects from any borrower or group of
borrowers.
Prime Rate Loan shall mean reference to that
portion of the total unpaid principal
hereunder which bears interest at a rate
determined by reference to the Prime Rate,
plus one-half of one percent (1/2 of 1%) per
annum.
RLC Lender shall mean reference to individual
members of RLC Lenders, as applicable.
RLC Lenders shall have the meaning as defined
in Section 1.01 of the Credit Agreement.
RLC Maturity Date shall have the meaning as
defined in Section 1.01 of the Credit
Agreement.
RLC Note shall mean this Revolving Credit
Promissory Note.
Real Property shall have the meaning as
defined in Section 1.01 of the Credit
Agreement.
Syndication Adjustment Addendum shall have the
meaning as defined in Section 1.01 of the
Credit Agreement.
(2) Loan Components. Principal amounts
outstanding on any Banking Business Day shall bear
interest with reference to the Prime Rate, unless
Borrower elects to exercise an Interest Rate Option
in which event principal amounts outstanding may
bear interest with reference to one or more of the
LIBO Rates as long as: (i) each such LIBO Loan is
in a minimum amount of One Million Dollars
($1,000,000.00) and in minimum increments of One
Hundred Thousand Dollars ($100,000.00) and (ii) no
more than six (6) LIBO Loans may be outstanding at
any one time. Except as qualified above, the
outstanding principal balance hereunder may be a
Prime Rate Loan or one or more LIBO Loans, or any
combination thereof, as Borrower shall specify.
(3) Borrowing Procedures. Borrowings
hereunder shall be made in accordance with the
terms, provisions and procedures set forth in the
Credit Agreement.
(4) Conversion Procedures. Borrower shall
exercise its Interest Rate Option by giving
irrevocable notice to Agent Bank of such Conversion
by 11:00 A.M., Reno, Nevada Time, on a day which is
at least three (3) Banking Business Days prior to
the proposed date of such Conversion for each LIBO
Loan or two (2) Banking Business Days prior to the
proposed date of such Conversion for each Prime
Rate Loan. Each such notice shall be by telephone
or telex and thereafter immediately confirmed in
writing by delivery to Agent Bank of a
Continuation/Conversion Notice specifying the date
of such Conversion, the amounts to be so Converted
and the initial Interest Period if the Conversion
is to a LIBO Loan. Upon receipt of such
Continuation/Conversion Notice, Agent Bank shall
promptly set and confirm the applicable interest
rate and the applicable Interest Period if the
Conversion is to a LIBO Loan in writing to
Borrower. Each Conversion shall be on a Banking
Business Day. No LIBO Loan shall be converted to a
Prime Rate Loan or renewed on any day other than
the last day of the current Interest Period
relating to such amounts outstanding.
(5) Records. The Agent Bank shall record in
its records the date and amount of each Borrowing
made, each repayment, reborrowing or Conversion
thereof, and in the case of each LIBO Loan the
dates on which the Interest Period for such LIBO
Loan shall begin and end. The aggregate unpaid
principal amount, rate, and interest amount so
recorded shall be calculated by the Agent Bank and
shall be binding upon Borrower subject to
Borrower's right to require corrections of errors
in calculation. The failure to so record any such
amount or any error in so recording any such amount
shall not, however, limit or otherwise affect the
obligations of Borrower hereunder to repay the
principal amount outstanding together with all
interest accruing thereon.
(6) Interest Periods. Each Interest Period
for a LIBO Loan shall commence on the date of
Conversion of any amount or amounts of the
outstanding Borrowings hereunder to a LIBO Loan and
shall end on the date which is one (1), two (2), or
three (3) months thereafter. However, no Interest
Period may extend beyond the then applicable RLC
Maturity Date. Each Interest Period for a LIBO
Loan shall commence and end on a Banking Business
Day provided that any Interest Period which
commences on a date for which there is no numerical
correspondent in the month in which such Interest
Period is to end, shall end on the last Banking
Business Day of such month.
If Borrowers fail to give a Continuation/
Conversion Notice for the continuation of a LIBO
Loan as a LIBO Loan for a new Interest Period in
accordance with Subparagraph C(4), such LIBO Loan
shall automatically become a Prime Rate Loan at the
end of its then current Interest Period.
(7) Setting and Notice of Rates. The
applicable LIBO Rate and Prime Rate shall be
determined by the Agent Bank, and notice thereof
shall be given promptly to Borrower. Each
determination of the applicable Prime Rate and LIBO
Rate shall be conclusive and binding upon the
Borrower, in the absence of demonstrable error.
Agent Bank shall, upon written request of Borrower,
deliver to Borrower a statement showing the
computation used by the Agent Bank in determining
any rate hereunder.
(8) Computation of Interest. Interest shall
be computed for the actual number of days elapsed
on the basis of a three hundred sixty (360) day
year, in the case of LIBO Loans and Prime Rate
Loans. The applicable Prime Rate shall be
effective the same day as a change in the Prime
Rate. Any change in the Prime Rate shall be
effective on the date such change is publicly
announced by Agent Bank as being effective.
(9) Basis for Determining Interest Rate
Inadequate. If with respect to any Interest
Period, (a) the Agent Bank reasonably determines
(which determination shall be binding and
conclusive on Borrower) that by reason of circum-
stances affecting the inter-bank eurodollar market
adequate and reasonable means do not exist for
ascertaining the applicable LIBO Rate, or (b) any
RLC Lenders with outstanding Borrowings
representing at least fifty percent (50%) in the
aggregate of the unpaid principal amount of this
RLC Note advise Agent Bank that one or more of the
LIBO Rates as determined by Agent Bank will not
adequately and fairly reflect the cost to such RLC
Lender of maintaining or funding, for one or more
Interest Periods, a LIBO Loan or LIBO Loans (which
advice shall be promptly followed by a written
certificate setting forth in detail the reason or
reasons why such LIBO Rates do not adequately and
fairly reflect the cost to such RLC Lenders of
maintaining or funding such LIBO Loan or LIBO
Loans) then so long as such circumstances shall
continue: (i) Agent Bank shall promptly notify
Borrower thereof, (ii) RLC Lenders shall not be
under any obligation to make a LIBO Loan or Convert
a Prime Rate Loan into a LIBO Loan for which such
circumstances exist, and (iii) on the last day of
the then current Interest Period, the LIBO Loan for
which such circumstances exist shall, unless then
repaid in full, automatically Convert to a Prime
Rate Loan.
(10) Illegality. Notwithstanding any other
provisions of this RLC Note or the Credit
Agreement, if any law, rule, regulation, treaty or
directive or any change therein shall make it
unlawful for any RLC Lender to make or maintain
LIBO Loans, (i) the commitment and agreement to
maintain LIBO Loans shall immediately be suspended,
and (ii) unless required to be terminated earlier,
LIBO Loans, if any, shall be Converted on the last
day of the then current Interest Period applicable
thereto to Prime Rate Loans. If it shall become
lawful for any RLC Lender to again maintain LIBO
Loans, then Borrower may once again request
Conversions to the LIBO Rate.
(11) Increased Costs. If after the date
hereof the adoption, or any change in, of 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 RLC
Lender (or any eurodollar office of any RLC Lender)
with any request or directive (whether or not
having the force of law) of any such Governmental
Authority, central bank or comparable agency:
(a) Shall subject any RLC Lender to any
tax, duty or other charge with respect to LIBO
Loans, this RLC Note or such RLC Lender's
obligation to make LIBO Loans, or shall change
the basis of taxation of payments to such RLC
Lender of the principal of, or interest on,
LIBO Loans or any other amounts due under this
RLC Note in respect of LIBO Loans or such RLC
Lender's obligation to make LIBO Loans (except
for changes in the rate of tax on the overall
net income of such RLC Lender imposed by the
jurisdiction in which such RLC Lender's
principal executive office or funding office
is located); or
(b) Shall impose, modify or deem
applicable any reserve (including, without
limitation, any reserve imposed by the Board
of Governors of the Federal Reserve System),
special deposit, liquidity, capital
maintenance, capital adequacy, capital ratios
or similar requirement against assets of,
deposits with or for the account of, or credit
extended by, any RLC Lender; or
(c) Shall impose on any RLC Lender any
other condition affecting LIBO Loans, this RLC
Note or such RLC Lender's obligation to make
LIBO Loans;
and the result of any of the foregoing is to:
(i) Increase the actual cost incurred by
(or in the case of Regulation D referred to
above or a successor thereto, to impose a cost
on) such RLC Lender (or any eurodollar office
of such RLC Lender) of making or maintaining
LIBO Loans; or
(ii) Cause an increase in any capital
requirement arising out of the making or
maintenance of the LIBO Loan or any obligation
to makers hereunder; or
(iii) Reduce the amount of any sum
received or receivable by such RLC Lender
under this RLC Note,
then within ten (10) days after demand by such RLC
Lender (which demand shall be made prior to full
payment of the LIBO Loan and shall be accompanied
by a certificate setting forth the basis of such
demand), the Borrower shall pay directly to such
RLC Lender such additional amount or amounts as
will compensate such RLC Lender for such increased
cost or such reduction of any sum received or
receivable under this RLC Note. Each RLC Lender
agrees to use its reasonable efforts to minimize
such increased cost or such reduction.
In the event any increased costs are assessed by
any RLC Lender, as provided hereinabove, such RLC
Lender shall certify in writing that such RLC
Lender is generally assessing such increased costs
of such RLC Lender to borrowers that are also
covered by the event giving rise to such increased
costs, and the basis of such increase and set forth
in detail the calculations showing the components
and amount of such increased costs.
(12) Place and Time of Payments. All
payments of principal and interest of this RLC Note
are payable in immediately available funds without
set-off, counterclaim or deduction of any kind at
Agent Bank's principal place of business or at such
other place as Agent Bank may designate in writing
in accordance with the provisions of Section 2.19
of the Credit Agreement. If Borrower prepays or
repays any LIBO Loan on a day other than the last
day of the applicable Interest Period, Borrower
will reimburse each RLC Lender for any loss or
expense incurred or sustained by such RLC Lender as
reasonably determined by such RLC Lender as a
result of any such prepayment or repayment.
(13) Prepayments. This RLC Note,
together with unpaid interest accrued on the amount
prepaid to the date of prepayment, may be prepaid
at any time, subject to the provisions set forth in
Paragraph 12 hereinabove, in accordance with
Section 2.01 of the Credit Agreement.
D. Default. Upon failure to make any
payment as herein provided within five (5) days
from the date such payment is due or in the event
of any Event of Default as that term is defined in
the Credit Agreement, this RLC Note, at the option
of RLC Lenders, unless the Event of Default is the
occurrence of any event set forth in
Sections 7.01(f), (g) or (h) of the Credit
Agreement in which event the unpaid balance of this
RLC Note, together with the interest thereon shall
be automatically fully due and payable, shall at
once become due and payable and Borrower's right to
exercise an Interest Rate Option or to reborrow any
Available Borrowings under the Credit Agreement
shall immediately, without notice or demand,
terminate.
E. Default Rate. In the event of the
occurrence of an Event of Default as defined in the
Credit Agreement, commencing on the fifth (5th) day
following the mailing of written notice thereof by
Agent Bank, the Prime Rate Loan and each LIBO Loan
shall commence accruing interest at the Default
Rate with such accrued interest being due and
payable at the time herein specified for the
payment of interest on a Prime Rate Loan, and shall
continue accruing interest at the Default Rate
until such time as all payments and additional
interest are paid, together with the curing of any
other Event of Default which may have occurred, at
which time the interest rate shall revert to that
rate of interest otherwise accruing pursuant to
this RLC Note. During any period in which the out-
standing Borrowings hereunder bear interest at the
Default Rate, (i) Agent Bank shall not be under any
obligation to Convert into any LIBO Rate, (ii) RLC
Lenders shall have no obligation to fund Borrowings
hereunder, and (iii) on the last day of the then
current Interest Period, any LIBO Loan or LIBO
Loans shall automatically Convert to a Prime Rate
Loan.
F. Late Charge. In the event that any
payment required hereunder, including but not
limited to, interest or principal, shall not be
received by Agent Bank within five (5) Banking
Business Days of the date upon which such payment
is due, Borrower shall pay to Lenders a late charge
of one percent (1%) of the amount of such payment
for the purpose of defraying the expense incident
to the handling of such delinquent payment.
The late charge does not apply to amounts due
upon acceleration of the RLC Note.
G. Waiver. Borrower waives diligence,
demand, presentment for payment, protest and notice
of protest.
H. Collection Costs. In the event of the
occurrence of an Event of Default as defined in the
Credit Agreement, the Borrower agrees to pay all
costs of enforcement and collection, including a
reasonable attorney's fee, 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 default. In the event legal action is
commenced for the collection of any sums owing
hereunder the undersigned agrees that any judgment
issued as a consequence of such action against
Borrower shall bear interest at a rate equal to
three percent (3%) over the daily Prime Rate of
Agent Bank, until fully paid.
I. Interest Rate Limitation. Notwithstanding
any provision herein or in any document or
instrument now or hereafter securing this RLC Note,
the total liability for payments in the nature of
interest shall not exceed the limits now imposed by
the applicable laws of the State of Nevada or the
United States of America.
J. Security. This RLC Note is secured by
the Deed of Trust, Fixture Filing and Security
Agreement with Assignment of Rents recorded
August 28, 1992 in the Official Records of Clark
County, Nevada, in Book 920828, as Instrument No.
01119, as amended concurrently herewith, executed
by Borrower, as Trustor and Debtor, to Lawyers
Title of Nevada, Inc., as Trustee, for the benefit
of Agent Bank on behalf of Lenders as Beneficiary
and Secured Party, and is further secured by those
certain A/R Loan Documents (other than the
Environmental Certificate), REI Pledge Documents
and Collateral described and defined in the Credit
Agreement.
K. Due on Sale, etc. Except as otherwise
specifically permitted by the Credit Agreement, if
the Borrower, or its successors in interest, shall
sell, convey, further encumber or alienate the Real
Property encumbered by the Deed of Trust securing
payment hereof, or any part thereof, or any
interest therein, or shall be divested of its title
or any interest therein, in any manner or way,
whether voluntarily or involuntarily, or by merger,
without the written consent of RLC Lenders being
first had and obtained, except in accordance with
the Credit Agreement, the RLC Lenders shall have
the right, at their option, to declare any
indebtedness or obligation evidenced by this RLC
Note immediately due and payable irrespective of
the maturity dates specified herein.
L. Governing Law. This RLC Note has been
delivered in Las Vegas, Nevada, and shall be
governed by and construed in accordance with the
laws of the State of Nevada.
M. Partial Invalidity. If any provision of
this RLC Note shall be prohibited by or invalid
under any applicable law, such provision shall be
ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder
of such provision or any other provision of this
RLC Note.
IN WITNESS WHEREOF, this Revolving Credit Promissory
Note has been executed as of the date first hereinabove
written.
RAMADA EXPRESS, INC.,
a Nevada corporation
By /s/ Craig F. Sullivan
--------------------------
Title Treasurer
-----------------------
<PAGE>
EXHIBIT E
FORM OF
NOTICE OF BORROWING
TO: FIRST INTERSTATE BANK OF NEVADA, N.A. in its capacity as
Agent Bank under that certain Credit Agreement, dated as
of ________________ (together with any Additional Funding
Addendum, Syndication Adjustment Addendum and as amended,
supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among RAMADA EXPRESS, INC.,
a Nevada corporation ("Borrower"), AZTAR CORPORATION, a
Delaware corporation ("Guarantor"), the Lenders, as
defined and described in the Credit Agreement and FIRST
INTERSTATE BANK OF NEVADA, N.A., as administrative and
collateral agent for the Lenders (herein, in such
capacity, called the "Agent Bank"). Capitalized terms
used herein without definition shall have the meanings
attributed to them in Section 1.01 of the Credit
Agreement.
Pursuant to Section 2.03 of the Credit Agreement, this
Notice of Borrowing represents Borrower's request to borrow on
___________, 19___ (the "Funding Date") from the RLC Lenders
(each to advance in proportion to their respective Syndication
Interest in the RLC Facility) an aggregate principal amount of
____________________________ ($_____________), _______________
_________________ ($__________) in [Prime Rate] [LIBO Rate for
which the initial LIBO Loan Interest Period is requested to be
a ____________________ (____) month period]. Proceeds of such
Borrowing are to be disbursed on the Funding Date in
immediately available funds to Borrower's account at Agent
Bank's Main Branch at 3800 Howard Hughes Parkway, Las Vegas,
Nevada, Account No. _________________.
Borrower hereby certifies that (i) the representations
and warranties as set forth in Article IV of the Credit
Agreement and in any other A/R Loan Document (other than
representations and warranties which expressly speak only as
of a different date) and except as otherwise provided in
Section 3.24(i) of the Credit Agreement, shall be true and
correct in all material respects on and as of the Funding
Date; (ii) no Default or Event of Default has occurred and is
continuing under the Credit Agreement or any other A/R Loan
Document or will result from the making of the requested
Borrowing; (iii) the Closing Date shall occurred and Borrower
has and shall have satisfied all conditions precedent under
Article III C of the Credit Agreement; and (iv) Borrower has
all Gaming Permits which are material or required for the
conduct of its gaming business, and neither any Gaming
Authority or other Governmental Authority has suspended,
enjoined or prohibited, for any length of time, the conduct of
games of chance at the Hotel/Casino Operation.
This Notice of Borrowing is dated ___________, 19__.
RAMADA EXPRESS, INC.,
a Nevada corporation
By_________________________
Title_______________________
<PAGE>
EXHIBIT F
RLC EXTENSION REQUEST
TO: FIRST INTERSTATE BANK
OF NEVADA, N.A., Agent Bank
Gaming Division
One East First Street
Reno, NV 89501
THIS RLC EXTENSION REQUEST is made, executed and
delivered pursuant to Section 2.05a of the First Amended and
Restated Credit Agreement ("Credit Agreement") dated as of
______________, 1993, executed by and among Ramada Express,
Inc., a Nevada corporation ("Borrower"), Aztar Corporation, a
Delaware corporation ("Guarantor"), the Lenders, as defined
and described in the Credit Agreement and First Interstate
Bank of Nevada, N.A., as administrative and collateral agent
("Agent Bank") for the Lenders. In this RLC Extension Request
all capitalized words and terms, not otherwise herein defined,
shall have the respective meanings and be construed herein as
provided in Section 1.01 of the 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.
Borrower hereby certifies that the Annual Audited
Statements for the most recently ended Fiscal Year were
delivered to Agent Bank (concurrently herewith) (on
_____________, 19___).
The undersigned hereby requests that the RLC
Maturity Date be extended from June 30, 199___ to June 30,
19____.
Guarantor joins in the execution of this RLC
Extension Request to evidence its consent and agreement to the
extension of the RLC Maturity Date as set forth above.
DATED this ___ day of _____________, 199__.
RAMADA EXPRESS, INC.,
a Nevada corporation
By__________________________
Title_______________________
AZTAR CORPORATION,
a Delaware corporation
By__________________________
Title_______________________
<PAGE>
EXHIBIT G
RLC REDUCING REVOLVING OPTION
EXERCISE NOTICE
TO: FIRST INTERSTATE BANK
OF NEVADA, N.A., Agent Bank
Gaming Division
One East First Street
Reno, NV 89501
THIS RLC REDUCING REVOLVING OPTION EXERCISE NOTICE is made,
executed and delivered pursuant to Section 2.05e of the First Amended
and Restated Credit Agreement ("Credit Agreement") dated as of
______________, 1993, executed by and among Ramada Express, Inc., a
Nevada corporation ("Borrower"), Aztar Corporation, a Delaware
corporation ("Guarantor"), the Lenders as defined and described in
the Credit Agreement and First Interstate Bank of Nevada, N.A., as
administrative and collateral Agent ("Agent Bank") for the Lenders.
In this RLC Reducing Revolving Option Exercise Notice all capitalized
words and terms, not otherwise herein defined, shall have the
respective meanings and be construed herein as provided in Section
1.01 of the 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.
Borrower does hereby irrevocably exercise the RLC Reducing
Revolving Option to be effective as of June 30, 19___ (the "Reducing
Revolving Exercise Date"). In accordance with the terms of the
Credit Agreement and RLC Note, the Maximum Permitted Balance
permitted as of the Reducing Revolving Exercise Date shall be reduced
by one-twelfth (1/12th) of that amount (the "Reducing Revolving
Reduction Amount") on the first (1st) day of the second (2nd) Fiscal
Quarter following the Reducing Revolving Exercise Date and shall be
further reduced by the Reducing Revolving Reduction Amount on the
first (1st) day of each Fiscal Quarter until the RLC Maturity Date
(which shall be the third (3rd) annual anniversary of the Reducing
Revolving Exercise Date) on which date the entire unpaid balance of
the principal sum owing under the terms of the RLC Facility, together
with all interest accrued thereon shall be fully paid.
Guarantor joins in the execution of this RLC Reducing
Revolving Option Exercise Notice to evidence its consent and
agreement to the commencement of the Reducing Revolving Period on the
Reducing Revolving Exercise Date and the extension of the RLC
Maturity Date as set forth above.
DATED this ___ day of _____________, 19___.
RAMADA EXPRESS, INC.,
a Nevada corporation
By__________________________
Title_______________________
AZTAR CORPORATION,
a Delaware corporation
By__________________________
Title_______________________
<PAGE>
EXHIBIT H
PROMISSORY NOTE
(NRL NOTE)
$25,000,000.00 December 28, 1993
FOR VALUE RECEIVED, the undersigned, RAMADA EXPRESS,
INC., a Nevada corporation ("Borrower"), promises to pay to
the order of FIRST INTERSTATE BANK OF NEVADA, N.A., as Agent
Bank on behalf of itself and the other NRL Lenders as defined
and described in the Credit Agreement, described hereinbelow
(each individually being herein referred to as a "NRL Lender"
and collectively as the "NRL Lenders"), the principal sum of
Twenty-Five Million Dollars ($25,000,000.00), or so much as
may be disbursed under the provisions of the Credit Agreement,
with interest thereon at the rate or rates set forth below
from the date of each such NRL Disbursement and continuing
until fully paid, as follows:
A. NRL DISBURSEMENT PERIOD. During the NRL
Disbursement Period interest shall accrue on the
outstanding principal balance at a rate equal to
the Prime Rate as it changes from time to time plus
one-half of one percent (.50%) unless Borrower
elects pursuant to Subparagraph C(4) to have
interest accrue on a portion or portions of the
outstanding principal balance at a LIBO rate
("Interest Rate Option"), in which case interest
shall accrue at a rate equal to such LIBO rate plus
two and one-quarter percent (2.25%). For that
portion of the principal balance outstanding on
which interest is accruing with reference to the
Prime Rate, interest shall be due and payable in
arrears on the first day of the first month
following the Initial NRL Disbursement of loan
funds hereunder, and on the first day of each
successive month thereafter. For each LIBO Loan,
interest shall be due and payable at the end of
each Interest Period applicable thereto.
B. NRL TERM PERIOD. Commencing at the NRL
Term Period, and continuing until the outstanding
balance of principal is fully paid, subject to the
Default Rate provisions hereinafter set forth,
interest shall accrue on the outstanding principal
balance at a rate equal to the Prime Rate as it
changes from time to time plus one-half of one
percent (.50%), unless Borrower elects or has
elected pursuant to Subparagraph C(4) to have
interest accrue on a portion or portions of the
outstanding principal balance at a LIBO Rate, in
which case, effective as of the Conversion Date,
interest shall accrue at a rate equal to such LIBO
Rate plus two and one-quarter percent (2.25%). For
that portion of the principal balance outstanding
on which interest is accruing with reference to the
Prime Rate, interest shall be due and payable in
arrears on the first day of the first month
following the Conversion Date, on the first day of
each successive month thereafter, and on the NRL
Maturity Date. For each LIBO Loan, interest shall
be due and payable at the end of each Interest
Period and on the NRL Maturity Date. Principal
shall be due and payable in up to twelve (12) equal
successive quarterly installments each in the
amount of one-twelfth (1/12th) of the unpaid
principal balance outstanding at the commencement
of the Term Period. The first (1st) principal
reduction payment shall be made on the first (1st)
day of October 1995 and on the first day of each
consecutive Fiscal Quarter thereafter occurring
(ie: January 1, April 1, July 1 and October 1)
until the NRL Maturity Date, on which date the
remaining balance of the principal sum, together
with interest accrued thereon, shall be fully paid.
C. GENERAL CONDITIONS.
(1) CERTAIN DEFINITIONS. When used
herein the following terms shall have the following
meaning:
AGENT BANK shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
BANKING BUSINESS DAY shall have the
meaning ascribed to such term in Section
1.01 of the Credit Agreement.
CLOSING DATE shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
CONVERT, CONVERSION AND CONVERTED shall
refer to a conversion of interest rates
pursuant to Subparagraph C(4).
CREDIT AGREEMENT shall mean that certain
First Amended and Restated Credit
Agreement of even date herewith executed
by and between Borrower, Guarantor, Agent
Bank and Closing Lenders and each
Additional Funding Addendum and
Syndication Adjustment Addendum, together
with any and all rearrangements,
extensions, renewals, substitutions,
replacements and amendments thereof or
thereto, which may be executed in
connection therewith by Borrower,
Guarantor, Agent Bank and Lenders
relating to the NRL Facility evidenced by
this NRL Note.
DEFAULT RATE shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
DOLLAR(s) and the sign ($) shall mean
lawful money of the United States of
America.
FISCAL QUARTER shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
INITIAL NRL DISBURSEMENT shall have the
meaning ascribed to such term in Section
1.01 of the Credit Agreement.
INTEREST PERIOD shall have the meaning
set forth in Subparagraph C(6).
INTEREST RATE OPTION shall have the
meaning set forth in Paragraph A
hereinabove.
LIBO LOAN shall mean a portion of the
total Borrowings hereunder which bears
interest at a rate determined by
reference to a LIBO Rate and "LIBO Loans"
shall mean more than one LIBO Loan.
LIBO RATE shall mean, with respect to any
LIBO Loan for any Interest Period, the
rate per annum as published on the
applicable Banking Business Day in
"Telerate System Reports" by the British
Bankers Association for interest
settlement rates relating to London
Interbank Offerings as of 11:00 a.m.,
London, England time, on the date of each
such quote (Fixed USD) for the applicable
Interest Period for delivery on the first
day of such Interest Period, for the
number of months comprised therein and in
a minimum amount and multiples as set
forth herein to which rate shall be added
2.25% per annum.
NRL DISBURSEMENT shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
NRL DISBURSEMENT PERIOD shall have the
meaning ascribed to such term in Section
1.01 of the Credit Agreement.
NRL LENDERS shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
NRL MATURITY DATE shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
NRL TERM PERIOD shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
PRIME RATE shall have the meaning
ascribed to such term in Section 1.01 of
the Credit Agreement.
PRIME RATE LOAN shall mean any amount of
the total Borrowings hereunder which
bears interest at a rate determined by
reference to the Prime Rate.
(2) LOAN COMPONENTS. Portions of the
principal amount outstanding may bear interest with
reference to one or more of the LIBO Rates, so long
as: (i) each such LIBOR Loan is in a minimum amount
of One Million Dollars ($1,000,000.00) and in
minimum increments of One Hundred Thousand Dollars
($100,000.00), and (ii) no more than six (6) LIBO
Loans may be outstanding at any time. Except as
qualified above, the outstanding principal balance
on the borrowings hereunder may be a Prime Rate
Loan or one or more LIBO Loans, or any combination
thereof, as Maker shall specify.
(3) NRL DISBURSEMENT PROCEDURES. NRL
Disbursements hereunder shall be made in accordance
with the terms, provisions and procedures set forth
in the Credit Agreement.
(4) CONVERSION PROCEDURES. Borrower
shall exercise its Interest Rate Option by giving
irrevocable notice to Agent Bank of such Conversion
by 11:00 A.M., Reno, Nevada Time, on a day which is
at least three (3) Banking Business Days prior to
the proposed date of such Conversion for each LIBO
Loan or two (2) Banking Business Days prior to the
proposed date of such Conversion for each Prime
Rate Loan. Each such notice shall be by telephone
or telex and thereafter immediately confirmed in
writing by delivery to Agent Bank of a
Continuation/Conversion Notice specifying the date
of such Conversion, the amounts to be so Converted
and the initial Interest Period if the Conversion
is to a LIBO Loan. Upon receipt of such
Continuation/Conversion Notice, Agent Bank shall
promptly set and confirm the applicable interest
rate and the applicable Interest Period if the
Conversion is to a LIBO Loan in writing to
Borrower. Each Conversion shall be on a Banking
Business Day. No LIBO Loan shall be converted to a
Prime Rate Loan or renewed on any day other than
the last day of the current Interest Period
relating to such amounts outstanding.
(5) RECORDS. The Agent Bank shall
record in its records the date and amount of each
NRL Disbursement made, each repayment, reborrowing
or Conversion thereof, and in the case of each LIBO
Loan the dates on which the Interest Period for
such LIBO Loan shall begin and end. The aggregate
unpaid principal amount, rate, and interest amount
so recorded shall be calculated by the Agent Bank
and shall be binding upon Borrower subject to
Borrower's right to require corrections of errors
in calculation. The failure to so record any such
amount or any error in so recording any such amount
shall not, however, limit or otherwise affect the
obligations of Borrower hereunder to repay the
principal amount outstanding together with all
interest accruing thereon.
(6) INTEREST PERIODS. Each Interest
Period for a LIBO Loan shall commence on the date
of Conversion of any amount or amounts of the
outstanding NRL Disbursements hereunder to a LIBO
Loan and shall end on the date which is one (1),
two (2), or three (3) months thereafter. However,
no Interest Period may extend beyond the NRL
Maturity Date. Each Interest Period for a LIBO
Loan shall commence and end on a Banking Business
Day provided that any Interest Period which
commences on a date for which there is no numerical
correspondent in the month in which such Interest
Period is to end, shall end on the last Banking
Business Day of such month.
If Borrowers fail to give a Continuation/
Conversion Notice for the continuation of a LIBO
Loan as a LIBO Loan for a new Interest Period in
accordance with Subparagraph C(4), such LIBO Loan
shall automatically become a Prime Rate Loan at the
end of its then current Interest Period.
(7) SETTING AND NOTICE OF RATES. The
applicable LIBO Rate and Prime Rate shall be
determined by the Agent Bank, and notice thereof
shall be given promptly to Borrower. Each
determination of the applicable Prime Rate and LIBO
Rate shall be conclusive and binding upon the
Borrower, in the absence of demonstrable error.
Agent Bank shall, upon written request of Borrower,
deliver to Borrower a statement showing the
computation used by the Agent Bank in determining
any rate hereunder.
(8) COMPUTATION OF INTEREST. Interest
shall be computed for the actual number of days
elapsed on the basis of a three hundred sixty (360)
day year, in the case of LIBO Loans and Prime Rate
Loans. The applicable Prime Rate shall be
effective the same day as a change in the Prime
Rate. Any change in the Prime Rate shall be
effective on the date such change is announced by
Agent Bank as being effective.
(9) BASIS FOR DETERMINING INTEREST RATE
INADEQUATE. If with respect to any Interest
Period, (a) the Agent Bank reasonably determines
(which determination shall be binding and
conclusive on Borrower) that by reason of circum-
stances affecting the inter-bank eurodollar market
adequate and reasonable means do not exist for
ascertaining the applicable LIBO Rate, or (b) any
NRL Lenders with outstanding NRL Disbursements
representing at least fifty percent (50%) in the
aggregate of the unpaid principal amount of this
NRL Note advise Agent Bank that one or more of the
LIBO Rates as determined by Agent Bank will not
adequately and fairly reflect the cost to such NRL
Lender of maintaining or funding, for one or more
Interest Periods, a LIBO Loan or LIBO Loans (which
advice shall be promptly followed by a written
certificate setting forth in detail the reason or
reasons why such LIBO Rates do not adequately and
fairly reflect the cost to such NRL Lenders of
maintaining or funding such LIBO Loan or LIBO
Loans) then so long as such circumstances shall
continue: (i) Agent Bank shall promptly notify
Borrower thereof, (ii) NRL Lenders shall not be
under any obligation to make a LIBO Loan or Convert
a Prime Rate Loan into a LIBO Loan for which such
circumstances exist, and (iii) on the last day of
the then current Interest Period, the LIBO Loan for
which such circumstances exist shall, unless then
repaid in full, automatically Convert to a Prime
Rate Loan.
(10) ILLEGALITY. Notwithstanding any
other provisions of this NRL Note or the Credit
Agreement, if any law, rule, regulation, treaty or
directive or any change therein shall make it
unlawful for any NRL Lender to make or maintain
LIBO Loans, (i) the commitment and agreement to
maintain LIBO Loans shall immediately be suspended,
and (ii) unless required to be terminated earlier,
LIBO Loans, if any, shall be Converted on the last
day of the then current Interest Period applicable
thereto to Prime Rate Loans. If it shall become
lawful for any NRL Lender to again maintain LIBO
Loans, then Borrower may once again request
Conversions to the LIBO Rate.
(11) INCREASED COSTS. If after the date
hereof the adoption, or any change in, of 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 NRL
Lender (or any eurodollar office of any NRL Lender)
with any request or directive (whether or not
having the force of law) of any such Governmental
Authority, central bank or comparable agency:
(a) Shall subject any NRL Lender to any
tax, duty or other charge with respect to LIBO
Loans, this NRL Note or such NRL Lender's
obligation to make LIBO Loans, or shall change
the basis of taxation of payments to such NRL
Lender of the principal of, or interest on,
LIBO Loans or any other amounts due under this
NRL Note in respect of LIBO Loans or such NRL
Lender's obligation to make LIBO Loans (except
for changes in the rate of tax on the overall
net income of such NRL Lender imposed by the
jurisdiction in which such NRL Lender's
principal executive office or funding office
is located); or
(b) Shall impose, modify or deem
applicable any reserve (including, without
limitation, any reserve imposed by the Board
of Governors of the Federal Reserve System),
special deposit, liquidity, capital
maintenance, capital adequacy, capital ratios
or similar requirement against assets of,
deposits with or for the account of, or credit
extended by, any NRL Lender; or
(c) Shall impose on any NRL Lender any
other condition affecting LIBO Loans, this NRL
Note or such NRL Lender's obligation to make
LIBO Loans;
and the result of any of the foregoing is to:
(i) Increase the actual cost incurred by
(or in the case of Regulation D referred to
above or a successor thereto, to impose a cost
on) such NRL Lender (or any eurodollar office
of such NRL Lender) of making or maintaining
LIBO Loans; or
(ii) Cause an increase in any capital
requirement arising out of the making or
maintenance of the LIBO Loan or any obligation
to makers hereunder; or
(iii) Reduce the amount of any sum
received or receivable by such NRL Lender
under this NRL Note,
then within ten (10) days after demand by such NRL
Lender (which demand shall be made prior to full
payment of the LIBO Loan and shall be accompanied
by a certificate setting forth the basis of such
demand), the Borrower shall pay directly to such
NRL Lender such additional amount or amounts as
will compensate such NRL Lender for such increased
cost or such reduction of any sum received or
receivable under this NRL Note. Each NRL Lender
agrees to use its reasonable efforts to minimize
such increased cost or such reduction.
In the event any increased costs are assessed by
any NRL Lender, as provided hereinabove, such NRL
Lender shall certify in writing that such NRL
Lender is generally assessing such increased costs
of such NRL Lender to borrowers that are also
covered by the event giving rise to such increased
costs, and the basis of such increase and set forth
in detail the calculations showing the components
and amount of such increased costs.
(12) PLACE AND TIME OF PAYMENTS. All
payments of principal and interest of this NRL Note
are payable in immediately available funds without
set-off, counterclaim or deduction of any kind at
Agent Bank's principal place of business or at such
other place as Agent Bank may designate in writing
in accordance with the provisions of Section 2.19
of the Credit Agreement. If Borrower prepays or
repays any LIBO Loan on a day other than the last
day of the applicable Interest Period, Borrower
will reimburse each NRL Lender for any loss or
expense incurred or sustained by such NRL Lender as
reasonably determined by such NRL Lender as a
result of any such prepayment or repayment.
(13) PREPAYMENTS. This NRL Note,
together with unpaid interest accrued on the amount
prepaid to the date of prepayment, may be prepaid
at any time, subject to the provisions set forth in
Paragraph 12 hereinabove, provided that no amounts
prepaid or repaid may be reborrowed and each such
prepayment shall be applied to the quarterly
principal payments last falling due in the inverse
order of maturity.
(14) TOTAL BORROWINGS. The sum of the
NRL Disbursements under this Note shall not exceed
the lesser of: (i) the aggregate amount committed
by NRL Lenders for funding under the Credit
Agreement at the NRL Syndication Termination Date
or (ii) Twenty-Five Million Dollars
($25,000,000.00).
D. DEFAULT. Upon failure to make any
payment as herein provided within five (5) days
from the date such payment is due or in the event
of any Event of Default as that term is defined in
the Credit Agreement, this NRL Note, at the option
of NRL Lenders, unless the Event of Default is the
occurrence of any event set forth in
Sections 7.01(f), (g) or (h) of the Credit
Agreement in which event the unpaid balance of this
Note, together with the interest thereon shall be
automatically fully due and payable, shall at once
become due and payable and Borrower's right to
exercise an Interest Rate Option or to borrow any
further NRL Disbursements under the Credit
Agreement shall immediately, without notice or
demand, terminate.
E. DEFAULT RATE. In the event of the
occurrence of an Event of Default as defined in the
Credit Agreement, commencing on the fifth (5th) day
following the mailing of written notice thereof by
Agent Bank, the Prime Rate Loan and each LIBO Loan
shall commence accruing interest at the Default
Rate with such accrued interest being due and
payable at the time herein specified for the
payment of interest on a Prime Rate Loan, and shall
continue accruing interest at the Default Rate
until such time as all payments and additional
interest are paid, together with the curing of any
other Event of Default which may have occurred, at
which time the interest rate shall revert to that
rate of interest otherwise accruing pursuant to
this NRL Note. During any period in which the out-
standing NRL Disbursements hereunder bear interest
at the Default Rate, (i) Agent Bank shall not be
under any obligation to Convert into any LIBO Rate,
(ii) NRL Lenders shall have no obligation to fund
NRL Disbursements hereunder, and (iii) on the last
day of the then current Interest Period, any LIBO
Loan or LIBO Loans shall automatically Convert to a
Prime Rate Loan.
F. LATE CHARGE. In the event that any
payment required hereunder, including but not
limited to, interest or principal, shall not be
received by Agent Bank within five (5) Banking
Business Days of the date upon which such payment
is due, Borrower shall pay to Lenders a late charge
of one percent (1%) of the amount of such payment
for the purpose of defraying the expense incident
to the handling of such delinquent payment.
The late charge does not apply to amounts due
upon acceleration of the NRL Note.
G. WAIVER. Borrower waives diligence,
demand, presentment for payment, protest and notice
of protest.
H. COLLECTION COSTS. In the event of the
occurrence of an Event of Default as defined in the
Credit Agreement, the Borrower agrees to pay all
costs of enforcement and collection, including a
reasonable attorney's fee, 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 default. In the event legal action is
commenced for the collection of any sums owing
hereunder the undersigned agrees that any judgment
issued as a consequence of such action against
Borrower shall bear interest at a rate equal to
three percent (3%) over the daily Prime Rate of
Agent Bank, until fully paid.
I. INTEREST RATE LIMITATION. Notwithstanding
any provision herein or in any document or
instrument now or hereafter securing this NRL Note,
the total liability for payments in the nature of
interest shall not exceed the limits now imposed by
the applicable laws of the State of Nevada or the
United States of America.
J. SECURITY. This NRL Note is secured by
the Deed of Trust, Fixture Filing and Security
Agreement with Assignment of Rents recorded August
28, 1992 in the Official Records of Clark County,
Nevada, in Book 920828, as Instrument No. 01119, as
amended concurrently herewith, executed by
Borrower, as Trustor and Debtor, to Lawyers Title
of Nevada, Inc., as Trustee, for the benefit of
Agent Bank on behalf of Lenders as Beneficiary and
Secured Party, and is further secured by those
certain A/R Loan Documents (other than the
Environmental Certificate), REI Pledge Documents
and Collateral described and defined in the Credit
Agreement.
K. DUE ON SALE, ETC. Except as otherwise
specifically permitted by the Credit Agreement, if
the Borrower, or its successors in interest, shall
sell, convey, further encumber or alienate the Real
Property encumbered by the Deed of Trust securing
payment hereof, or any part thereof, or any
interest therein, or shall be divested of its title
or any interest therein, in any manner or way,
whether voluntarily or involuntarily, or by merger,
without the written consent of NRL Lenders being
first had and obtained, except in accordance with
the Credit Agreement, the NRL Lenders shall have
the right, at their option, to declare any
indebtedness or obligation evidenced by this NRL
Note immediately due and payable irrespective of
the maturity dates specified herein.
L. GOVERNING LAW. This NRL Note has been
delivered in Las Vegas, Nevada, and shall be
governed by and construed in accordance with the
laws of the State of Nevada.
M. PARTIAL INVALIDITY. If any provision of
this NRL Note shall be prohibited by or invalid
under any applicable law, such provision shall be
ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder
of such provision or any other provision of this
NRL Note.
IN WITNESS WHEREOF, this Promissory Note has been
executed as of the date first hereinabove written.
RAMADA EXPRESS, INC.,
a Nevada corporation
By /s/ Craig F. Sullivan
--------------------------
Title Treasurer
-----------------------<PAGE>
EXHIBIT I
NRL DISBURSEMENT REQUEST
[FORM]
DATE: ____________________________
TO: FIRST INTERSTATE BANK OF NEVADA, N.A.
("Agent Bank")
One East First Street
Reno, Nevada 89501
ATT'N: John Bydalek, V.P.
This NRL Disbursement Request is delivered to you
pursuant to Section 2.12 of the Credit Agreement dated as of
_______________, 1993 (together with any Additional Funding
Addendum, Syndication Adjustment Addendum and all amendments,
supplements and modifications, if any, from time to time made
thereto, the "Credit Agreement"), executed by and between
Ramada Express, Inc., a Nevada corporation (the "Borrower"),
Aztar Corporation, a Delaware corporation ("Guarantor"), the
Lenders, as defined and described in the Credit Agreement and
First Interstate Bank of Nevada, N.A., as administrative and
collateral agent for the Lenders (herein, in such capacity,
called the "Agent Bank"). Unless otherwise defined herein or
the context otherwise requires, the terms used herein shall
have the meanings provided in Section 1.01 of the Credit
Agreement.
The Borrower hereby requests that a NRL Disbursement
be made on __________________, 19____ (the "Funding Date")
from NRL Lenders (each to advance in proportion to their
respective Syndication Interest in the NRL Facility) in the
aggregate principal amount of ______________________
($___________) in [Prime Rate] [LIBO Rate for which the
initial LIBO Loan Interest Period is requested to be a
__________________ (_____) month period]. Proceeds of the NRL
Disbursement are to be disbursed on the Funding Date in
immediately available funds to Borrower's account at Agent
Bank's Main Branch, 3800 Howard Hughes Parkway, Las Vegas,
Nevada, Account No. ______________.
The Borrower hereby certifies and warrants that as
of the date of this NRL Borrowing Request:
A. The representations and warranties set forth in
Article IV of the Credit Agreement are and will be true and
correct as if then made, except to the extent such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties shall
have been true and correct on and as of such earlier date) and
except as otherwise provided in Section 3.24(i) of the Credit
Agreement;
B. As of the date of this NRL Disbursement Request
Borrower has made Riverboat Disbursements to AMGC in the
aggregate amount of ____________________ ($____________);
C. The Riverboat Project is being constructed in
accordance with the Riverboat Plans and Specification and no
event of default or event with which the passage of time or
giving of notice, or both, has occurred and is continuing
under the Riverboat Loan Documents or the Riverboat Security
Documents;
D. No Default or Event of Default has occurred and
is continuing under the Credit Agreement, any of the A/R Loan
Documents or REI Pledge Documents; and
E. The Closing Date shall have occurred and
Borrower has and shall have satisfied all conditions precedent
under Article III B and C of the Credit Agreement.
Borrower agrees that if prior to the time of the
funding of the NRL Disbursement hereby requested, any matters
certified hereto herein by it will not be true and correct at
such time as if then made, it will immediately so notify the
Agent Bank. Except to the extent, if any, that prior to the
time the NRL Disbursement requested hereby the Agent Bank
shall receive written notice to the contrary from the
Borrower, each matter certified to herein shall be deemed once
again to be certified as true and correct at the date of such
NRL Disbursement as if then made.
The Borrower has caused this NRL Disbursement
Request to be executed and delivered and the certification and
warranties contained herein to be made, by their duly
authorized officers as of the day and year first above
written.
RAMADA EXPRESS, INC.,
a Nevada corporation
By__________________________
Title_______________________
<PAGE>
EXHIBIT J
CONTINUATION/CONVERSION NOTICE
First Interstate Bank of
Nevada, N.A., Agent Bank
Gaming Division
One East First Street
Reno, Nevada 89501
Attn: John Bydalek, V.P.
Re: Credit Agreement dated as of _______________, 1993
This Continuation/Conversion Notice
("Continuation/Conversion Notice") is delivered to you
pursuant to Section C(4) of that certain (RLC Note)(NRL Note),
dated as of __________________, 1993, executed by Ramada
Express, Inc., a Nevada corporation (the "Borrower"), payable
to First Interstate Bank of Nevada, N.A., as Agent Bank.
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in
Section 1.01 of the Credit Agreement.
The Borrower hereby requests that:
1. ($____________) of the presently
outstanding principal amount of (RLC Facility) (NRL
Facility),
2. and presently being maintained as [Prime
Rate Loan] [LIBO Loan having a LIBO Loan Interest
Period ending on ___________________, 19___],
3. be [Converted into] [continued as],
4. a [LIBO Loan having a LIBO Loan Interest
Period of __________ months] [Prime Rate Loan] as
of ___________, 19___.
The Borrower hereby:
a. certifies and warrants that no Default or
Event of Default has occurred and is continuing;
and
b. certifies that the representations and
warranties contained in Article IV of the Credit
Agreement are true and correct in all material
respects;
c. certifies that Borrower is in full
compliance with each covenant contained in Article
V of the Credit Agreement;
d. agrees that if prior to the time of such
continuation or Conversion any matter certified to
herein by Borrower will not be true and correct at
such time as if then made, it will immediately so
notify the Agent Bank.
Except to the extent, if any, that prior to the time of the
continuation or Conversion requested hereby the Agent Bank
shall receive written notice to the contrary from the
Borrower, each matter certified to herein shall be deemed to
be certified at the date of such continuation or Conversion as
if then made.
The Borrower has caused this Continuation/Conversion
Notice to be executed and delivered, and the certification and
warranties contained herein to be made, by its Authorized
Officer this ___ day of ______________, 19__.
RAMADA EXPRESS, INC.,
a Nevada corporation
By__________________________
Title_______________________
<PAGE>
EXHIBIT K
GENERAL CONTINUING GUARANTY
---------------------------
THIS GENERAL CONTINUING GUARANTY ("Guaranty"), dated
as of December 28, 1993, is executed and delivered by AZTAR
CORPORATION, a Delaware corporation ("Guarantor"), in favor of
Beneficiary and in light of the following:
WHEREAS, Guarantor, Borrower and Beneficiary are,
contemporaneously herewith, entering into the Credit
Agreement; and
WHEREAS, in order to induce Lenders to advance
Borrowings, NRL Disbursements, loans, advances and extend
financial accommodations to Borrower pursuant to the Credit
Agreement, and in consideration thereof, and in consideration
of any Borrowings, NRL Disbursements, loans, advances, or
other financial accommodations heretofore or hereafter
extended by Lenders to Borrower, whether pursuant to the
Credit Agreement or otherwise, Guarantor has agreed to
guaranty the Guarantied Obligations.
NOW, THEREFORE, in consideration of the foregoing,
Guarantor hereby agrees, in favor of Beneficiary, as follows:
1. DEFINITIONS AND CONSTRUCTION.
(a) DEFINITIONS. The following terms, as used
in this Guaranty, shall have the following meanings:
"A/R LOAN DOCUMENTS" shall have the meaning
ascribed thereto in the Credit Agreement.
"AGENT BANK" shall have the meaning ascribed
thereto in the Credit Agreement.
"BANKRUPTCY CODE" shall mean The Bankruptcy
Reform Act of 1978 (11 U.S.C. Par. 101-1330), as amended or
supplemented from time to time, and any successor statute, and
any and all rules issued or promulgated in connection
therewith.
"BENEFICIARY" shall mean Agent Bank on behalf
of itself and each of the Lenders.
"BORROWER" shall mean Ramada Express, Inc., a
Nevada corporation.
"BORROWINGS" shall have the meaning ascribed
thereto in the Credit Agreement.
"CREDIT AGREEMENT" shall mean that certain
First Amended and Restated Credit Agreement, dated as of even
date herewith, between Borrower and Guarantor, on the one
hand, and Agent Bank and Closing Lenders, on the other hand,
together with any Additional Funding Addendum, Syndication
Adjustment Addendums and all amendments, modifications,
restatements and revisions thereto.
"EVENT OF DEFAULT" shall have the meaning
ascribed thereto in the Credit Agreement.
"GUARANTIED OBLIGATIONS" shall mean: (a) the
due and punctual payment of the principal of, and interest
(including post petition interest and including any and all
interest which, but for the application of the provisions of
the Bankruptcy Code, would have accrued on such amounts) on,
and premium, if any on the Notes; and (b) the due and punctual
payment of all present or future Indebtedness owing by
Borrower.
"GUARANTOR" shall have the meaning set forth in
the preamble to this Guaranty.
"GUARANTY" shall have the meaning set forth in
the preamble to this Guaranty.
"INDEBTEDNESS" shall mean any and all
obligations, indebtedness, or liabilities of any kind or
character owed to Lenders or the Agent Bank and arising
directly or indirectly out of or in connection with the Credit
Agreement, the Notes, the Environmental Certificate, or the
other A/R Loan Documents and the REI Pledge Documents,
including all such obligations, indebtedness, or liabilities,
whether for principal, interest (including post petition
interest and including any and all interest which, but for the
application of the provisions of the Bankruptcy Code, would
have accrued on such amounts), premium, reimbursement
obligations, fees, costs, expenses (including reasonable
attorneys' fees), or indemnity obligations, whether
heretofore, now, or hereafter made, incurred, or created,
whether voluntarily or involuntarily made, incurred, or
created, whether secured or unsecured (and if secured,
regardless of the nature or extent of the security), whether
absolute or contingent, liquidated or unliquidated, or
determined or indeterminate, whether Borrower is liable
individually or jointly with others, and whether recovery is
or hereafter becomes barred by any statute of limitations or
otherwise becomes unenforceable for any reason whatsoever,
including any act or failure to act by Beneficiary or any of
the Lenders.
"LENDERS" shall have the meaning ascribed
thereto in the Credit Agreement.
"NRL DISBURSEMENTS" shall have the meaning
ascribed thereto in the Credit Agreement.
"NOTES" shall have the meaning ascribed thereto
in the Credit Agreement.
"PERSON" shall have the meaning ascribed
thereto in the Credit Agreement.
"REI PLEDGE DOCUMENTS" shall have the meaning
ascribed thereto in the Credit Agreement.
"SECURITY DOCUMENTATION" shall have the meaning
ascribed thereto in the Credit Agreement.
"SUBSIDIARY" shall have the meaning ascribed
thereto in the Credit Agreement.
(b) CONSTRUCTION. Unless the context of this
Guaranty clearly requires otherwise, references to the plural
including the singular, references to the singular include the
plural, the part includes the whole, the term "including" is
not limiting, and the term "or" has the inclusive meaning
represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and other similar terms refer
to this Guaranty as a whole and not to any particular
provision of this Guaranty. Any reference in this Guaranty to
any of the following documents includes any and all
alterations, amendments, extensions, modifications, renewals,
or supplements thereto or thereof, as applicable: the A/R
Loan Documents; the Credit Agreement; this Guaranty; and the
Notes.
2. GUARANTIED OBLIGATIONS. Guarantor hereby
irrevocably and unconditionally guaranties to Beneficiary, as
and for its own debt, until final and indefeasible payment
thereof has been made, (a) the due and punctual payment of the
Guarantied Obligations, in each case when the same shall
become due and payable, whether at maturity, pursuant to a
mandatory prepayment requirement, by acceleration, or
otherwise; it being the intent of Guarantor that the guaranty
set forth herein shall be a guaranty of payment and not a
guaranty of collection; and (b) the punctual and faithful
performance, keeping, observance, and fulfillment by Borrower
of all of the agreements, conditions, covenants, and
obligations of Borrower contained in the Credit Agreement, the
Notes, and under each of the other A/R Loan Documents and the
REI Pledge Documents.
3. CONTINUING GUARANTY. This Guaranty includes
Guarantied Obligations arising under successive transactions
continuing, compromising, extending, increasing, modifying,
releasing, or renewing the Guarantied Obligations, changing
the interest rate, payment terms, or other terms and
conditions thereof, or creating new or additional Guarantied
Obligations after prior Guarantied Obligations have been
satisfied in whole or in part. To the maximum extent
permitted by law, Guarantor hereby waives any right to revoke
this Guaranty as to future Indebtedness. If such a revocation
is effective notwithstanding the foregoing waiver, Guarantor
acknowledges and agrees that (a) no such revocation shall be
effective until written notice thereof has been received by
Beneficiaries, (b) no such revocation shall apply to any
Guarantied Obligations in existence on such date (including
any subsequent continuation, extension, or renewal thereof, or
change in the interest rate, payment terms, or other terms and
conditions thereof to the extent permitted by law), (c) no
such revocation shall apply to any Guarantied Obligations made
or created after such date to the extent made or created
pursuant to a legally binding commitment of Beneficiaries in
existence on the date of such revocation, (d) no payment by
Guarantor, Borrower, or from any other source, prior to the
date of such revocation shall reduce the maximum obligation of
Guarantor hereunder, and (e) any payment by Borrower or from
any source other than Guarantor subsequent to the date of such
revocation shall first be applied to that portion of the
Guarantied Obligations as to which the revocation is effective
and which is not, therefore, guarantied hereunder, and to the
extent so applied shall reduce the maximum obligations of
Guarantor hereunder.
4. PERFORMANCE UNDER THIS GUARANTY. In the event
that Borrower fails to make any payment of any Guarantied
Obligations on or before the due date thereof, or if Borrower
shall fail to perform, keep, observe, or fulfill any other
obligations referred to in clause (b) of Section 2 hereof in
the manner provided in the Credit Agreement, the Notes, or the
other A/R Loan Documents and the REI Pledge Documents, as
applicable, Guarantor immediately shall cause such payment to
be made or each of such obligations to be performed, kept,
observed, or fulfilled.
5. PRIMARY OBLIGATIONS. This Guaranty is a
primary and original obligation of Guarantor, is not merely
the creation of a surety relationship, and is an absolute,
unconditional, and continuing guaranty of payment and
performance which shall remain in full force and effect
without respect to future changes in conditions, including any
change of law or any invalidity or irregularity with respect
to the issuance of the Notes. Guarantor agrees that it is
directly, jointly and severally with any other guarantor of
the Guarantied Obligations, liable to Beneficiary, that the
obligations of Guarantor hereunder are independent of the
obligations of Borrower or any other guarantor, and that a
separate action may be brought against Guarantor, whether such
action is brought against Borrower or any other guarantor
whether Borrower or any such other guarantor is joined in such
action. Guarantor agrees that its liability hereunder shall
be immediate and shall not be contingent upon the exercise or
enforcement by Beneficiary of whatever remedies it may have
against Borrower or any other guarantor, or the enforcement of
any lien or realization upon any security Beneficiary may at
any time possess. Guarantor agrees that any release which may
be given by Beneficiary to Borrower or any other guarantor
shall not release Guarantor. Guarantor consents and agrees
that Beneficiary shall be under no obligation to marshal any
property or assets of Borrower or any other guarantor in favor
of Guarantor, or against or in payment of any or all of the
Guarantied Obligations.
6. WAIVERS.
(a) Guarantor hereby waives: (i) notice of
acceptance hereof; (ii) notice of any Borrowings, requests for
NRL Disbursements, advances, loans or other financial
accommodations made or extended under the Credit Agreement, or
the creation or existence of any Guarantied Obligations; (iii)
notice of the amount of the Guarantied Obligations, subject,
however, to Guarantor's right to make inquiry of Agent Bank to
ascertain the amount of the Guarantied Obligations at any
reasonable time; (iv) notice of any adverse change in the
financial condition of Borrower or of any other fact that
might increase Guarantor's risk hereunder; (v) notice of
presentment for payment, demand, protest, and notice thereof
as to the Notes or any other instrument; (vi) notice of any
unmatured event of default or Event of Default under the
Credit Agreement, except for such notices as may be required
pursuant to the Credit Agreement; and (vii) all other notices
(except if such notice is specifically required to be given to
Guarantor under this Guaranty or any other A/R Loan Document
to which Guarantor is party) and demands to which Guarantor
might otherwise be entitled.
(b) To the fullest extent permitted by
applicable law, Guarantor waives the right by statute or
otherwise to require Beneficiary to institute suit against
Borrower or to exhaust any rights and remedies which
Beneficiary has or may have against Borrower. In this regard,
Guarantor agrees that it is bound to the payment of each and
all Guarantied Obligations, whether now existing or hereafter
accruing, as fully as if such Guarantied Obligations were
directly owing to Beneficiary by Guarantor. Guarantor further
waives any defense arising by reason of any disability or
other defense (other than the defense that the Guarantied
Obligations shall have been fully and finally performed and
indefeasibly paid) of Borrower or by reason of the cessation
from any cause whatsoever of the liability of Borrower in
respect thereof.
(c) To the maximum extent permitted by law,
Guarantor hereby waives: (i) any rights to assert against
Beneficiary any defense (legal or equitable), set-off,
counterclaim, or claim which Guarantor may now or at any time
hereafter have against Borrower or any other party liable to
Beneficiary; (ii) any defense, set-off, counterclaim, or
claim, of any kind or nature, arising directly or indirectly
from the present or future lack of perfection, sufficiency,
validity, or enforceability of the Guarantied Obligations or
any security therefor; (iii) any defense arising by reason of
any claim or defense based upon an election of remedies by
Beneficiary; and (iv) any defense or benefit that may be
derived from or afforded by law which limits the liability of
or exonerates guaranties or sureties including, without
limitation, the benefits of Nevada Revised Statutes Par.
40.430 - 40.459, 40.475 and 40.485 as permitted by Nevada
Revised Statutes Par. 40.495 (1989).
(d) Guarantor agrees that if all or a portion
of the Indebtedness or this Guaranty is at any time secured by
a deed of trust or mortgage covering interests in real
property, Beneficiary, in its sole discretion, without notice
or demand (other than such notices as may be required by
applicable law or pursuant to the Credit Agreement) and
without affecting the liability of Guarantor under this
Guaranty, may foreclose pursuant to the terms of the Credit
Agreement or otherwise the deed of trust or mortgage and the
interests in real property secured thereby by non-judicial
sale pursuant to applicable law. Guarantor understands that
the exercise by Beneficiary of certain rights and remedies
contained in the Credit Agreement and any such deed of trust
or mortgage may affect or eliminate Guarantor's right of
subrogation against Borrower and that Guarantor may therefore
incur a partially or totally non-reimbursable liability
hereunder. Nevertheless, Guarantor hereby authorizes and
empowers Beneficiaries to exercise, in their sole discretion,
any rights and remedies, or any combination thereof, which may
then be available, since it is the intent and purpose of
Guarantor that the obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances.
Notwithstanding any foreclosure of the lien of any deed of
trust or security agreement with respect to any or all of any
real or personal property secured thereby, whether by the
exercise of the power of sale contained therein, by an action
for judicial foreclosure or by an acceptance of a deed in lieu
of foreclosure, Guarantor shall remain bound under this
Guaranty including its obligation to pay any deficiency
following a non-judicial foreclosure.
(e) Guarantor also hereby subordinates to the
Guaranteed Obligations in favor of Beneficiary any claim,
right or remedy which Guarantor may now have or hereafter
acquire against the Borrower that arises hereunder and/or from
the performance by Guarantor hereunder including, without
limitation, any claim, remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification, or
participation in any claim, right or remedy of Beneficiary
against the Borrower or any security which Beneficiary now has
or hereafter acquire, whether or not such claim, right or
remedy arises in equity, under contract, by statute, under
common law or otherwise.
7. RELEASES. Guarantor consents and agrees that,
without notice to or by Guarantor and without affecting or
impairing the obligations of Guarantor hereunder, Beneficiary
may, by action or inaction, compromise or settle, extend the
period of duration or the time for the payment, or discharge
the performance of, or may refuse to, or otherwise not
enforce, or may, by action or inaction, release all of any one
or more parties to, any one or more of the Credit Agreement,
the Notes, or any of the other A/R Loan Documents or any of
the REI Pledge Documents or may grant other indulgences to
Borrower in respect thereof, or may amend or modify in any
manner and at any time (or from time to time) any one or more
of the Credit Agreement, the Notes, or any of the other A/R
Loan Documents or any of the REI Pledge Documents, or may, by
action or inaction, release or substitute any other guarantor,
if any, of the Guarantied Obligations, or may enforce,
exchange, release, or waive, by action or inaction, any
security for the Guarantied Obligations (including the
Collateral) or any other guaranty of the Guarantied
Obligations, or any portion thereof.
8. NO ELECTION. Beneficiary shall have the right
to seek recourse against Guarantor to the fullest extent
provided for herein and no election by Beneficiary to proceed
in one form of action or proceeding, or against any party, or
on any obligation, shall constitute a waiver of Beneficiary's
right to proceed in any other form of action or proceeding or
against other parties unless Beneficiary has expressly waived
such right in writing. Specifically, but without limiting the
generality of the foregoing, no action or proceeding by
Beneficiary under any document or instrument evidencing the
Guarantied Obligations shall serve to diminish the liability
of Guarantor under this Guaranty except to the extent that
Beneficiary finally and unconditionally shall have realized
indefeasible payment by such action or proceeding.
9. INDEFEASIBLE PAYMENT. The Guarantied
Obligations shall not be considered indefeasibly paid for
purposes of this Guaranty unless and until all payments to
Beneficiary and Lenders are no longer subject to any right on
the part of any person whomsoever, including Borrower,
Borrower as a debtor in possession, or any trustee (whether
appointed under the Bankruptcy Code or otherwise) of
Borrower's assets to invalidate or set aside such payments or
to seek to recoup the amount of such payments or any portion
thereof, or to declare same to be fraudulent or preferential.
In the event that, for any reason, all or any portion of such
payments to Beneficiary is set aside or restored, whether
voluntarily or involuntarily, after the making thereof, the
obligation or part thereof intended to be satisfied thereby
shall be revived and continued in full force and effect as if
said payment or payments had not been made and Guarantor shall
be liable for the full amount Beneficiary is required to repay
plus any and all costs and expenses (including attorneys'
fees) paid by Beneficiary in connection therewith.
10. FINANCIAL CONDITION OF BORROWER. Guarantor
represents and warrants to Beneficiary that it is currently
informed of the financial condition of Borrower and of all
other circumstances which a diligent inquiry would reveal and
which bear upon the risk of nonpayment of the Guarantied
Obligations. Guarantor further represents and warrants to
Beneficiary that it has read and understands the terms and
conditions of the Credit Agreement, the Notes, and the other
A/R Loan Documents. Guarantor hereby covenants that it will
continue to keep itself informed of Borrower's financial
condition, the financial condition of other guarantors, if
any, and of all other circumstances which bear upon the risk
of nonpayment or nonperformance of the Guarantied Obligations.
11. Intentionally omitted.
12. PAYMENTS; APPLICATION. All payments to be made
hereunder by Guarantor shall be made in lawful money of the
United States of America at the time of payment, shall be made
in immediately available funds, and shall be made without
deduction (whether for taxes or otherwise) or offset. All
payments made by Guarantor hereunder shall be applied as
follows: first, to all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by Beneficiary
in enforcing this Guaranty or in collecting the Guarantied
Obligations; second, to all accrued and unpaid interest,
premium, if any, and fees owing to Beneficiary constituting
Guarantied Obligations; and third, to the balance of the
Guarantied Obligations.
13. COSTS TO PREVAILING PARTY. If any action or
proceeding is brought by any party against any other party
under this Guaranty, 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.
14. NOTICES. Unless otherwise specifically
provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may
be personally served, sent by telefacsimile, telexed, 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 telefacsimile or telex or four (4)
Banking Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly
addressed). For the purposes hereof, the addresses of the
parties hereto (until notice of a change thereof is delivered
as provided in this Section 14) shall be as set forth below,
or, as to each party, at such other address as may be
designated by such party in a written notice to all of the
other parties:
If to Guarantor: Aztar Corporation
2390 E. Camelback Road, Ste. 400
Phoenix, Arizona 85016-3452
Attn: Treasury Department
With a copy to: Snell & Wilmer
One Arizona Center
Phoenix, Arizona 85004-0001
Attn: David Sprentall, Esq.
If to Beneficiary: First Interstate Bank of
Nevada, N.A., Agent Bank
Gaming Division
P.O. Box 11007
Reno, NV 89520
Attn: John Bydalek, V.P.
With a copy to: Timothy J. Henderson, Esq.
Henderson & Nelson
164 Hubbard Way, Suite B
Reno, NV 89502
15. CUMULATIVE REMEDIES. No remedy under this
Guaranty, the Credit Agreement, the Notes, or any A/R Loan
Document is intended to be exclusive of any other remedy, but
each and every remedy shall be cumulative and in addition to
any and every other remedy given under this Guaranty, under
the Credit Agreement, the Notes, or any other A/R Loan
Document or any REI Pledge Document, and those provided by
law. No delay or omission by Beneficiaries to exercise any
right under this Guaranty shall impair any such right nor be
construed to be a waiver thereof. No failure on the part of
Beneficiary to exercise, and no delay in exercising, any right
under this Guaranty shall operate as a waiver thereof; nor
shall any single or partial exercise of any right under this
Guaranty preclude any other or further exercise thereof or the
exercise of any other right.
16. RIGHT OF SETOFF. In addition to all rights of
setoff or lien against any monies, securities or other
property of Guarantor given to Beneficiary by law, from and
after the occurrence of an Event of Default, Beneficiary will
have a right of setoff, in respect of all Indebtedness of the
Guarantor arising hereunder whether actual or contingent,
mature or otherwise, against all monies, securities and other
property of Guarantor now or hereafter in the possession of or
on deposit with Beneficiary, whether held in a general or
special account or deposit, or for safekeeping or otherwise;
and every such right of setoff may be exercised without demand
upon or notice to Guarantor. No right of setoff shall be
deemed to have been waived by any act or conduct on the part
of Beneficiary, or by any neglect to exercise such right of
setoff, or by any delay in doing so; and every right of setoff
shall continue in full force and effect until specifically
waived or released by an instrument in writing executed by
Beneficiary.
17. SEVERABILITY OF PROVISIONS. Any provision of
this Guaranty which is prohibited or unenforceable under
applicable law shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof.
18. ENTIRE AGREEMENT; AMENDMENTS. This Guaranty,
together with the Credit Agreement and the other A/R Loan
Documents, constitute the entire agreement between Guarantor
and Beneficiary pertaining to the subject matter contained
herein. This Guaranty may not be altered, amended, or
modified, nor may any provisions hereof be waived or
noncompliance therewith consented to, except by means of a
writing executed by Guarantor and Beneficiary. Any such
alteration, amendment, modification, waiver, or consent shall
be effective only to the extent specified therein and for the
specific purpose for which given. No course of dealing and no
delay or waiver of any right or default under this Guaranty
shall be deemed a waiver of any other, similar or dissimilar,
right or default or otherwise prejudice the rights and
remedies hereunder.
19. SUCCESSORS AND ASSIGNS. This Guaranty shall be
binding upon Guarantor and its successors and assigns
permitted under the A/R Loan Documents and shall inure to the
benefit of the successors and assigns of Beneficiary;
PROVIDED, HOWEVER, Guarantor shall not assign this Guaranty or
delegate any of its duties hereunder without Beneficiary's
prior written consent and any unconsented to assignment shall
be absolutely void. In the event of any permitted assignment
or other transfer of rights by Beneficiary, the rights and
benefits herein conferred upon Beneficiary shall automatically
extend to and be vested in such assignee or other transferee.
20. COSTS AND EXPENSES. Notwithstanding the
liability limitation set forth hereinabove, Guarantor agrees
to pay the Beneficiary's reasonable out-of-pocket costs and
expenses, including, but not limited to, legal fees and
disbursements, incurred in any effort (which shall include
those incurred in investigations of and advising on matters
relating to the Beneficiary's rights and remedies) to collect
or enforce any of the sums owing under the Notes whether or
not any lawsuit is filed. Until paid to the Agent Bank such
sums will bear interest at the Default Rate set forth in the
Credit Agreement.
21. CHOICE OF LAW AND VENUE; SERVICE OF PROCESS.
The validity of this Guaranty, its construction,
interpretation, and enforcement, and the rights of Guarantor
and Beneficiary, shall be determined under, governed by , and
construed in accordance with the Internal Laws of the State of
Nevada, without regard to principles of conflicts of law. All
judicial proceedings brought against Guarantor with respect to
this Guaranty may be brought in any State or Federal Court of
Competent Jurisdiction in the State of Nevada, and by
execution and delivery of this Guaranty, Guarantor accepts,
for itself and in conneciton with its assets, generally and
unconditionally, the nonexclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any
final judement rendered thereby in connection with this
Guaranty from which no appeal has been taken or is available.
22. WAIVER OF JURY TRIAL. To the maximum extent
permitted by law, Guarantor and Beneficiary 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 Guaranty, or in any way
connected with, related to, or incidental to the dealings of
Guarantor and Beneficiary with respect to this Guaranty, 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 premitted by law, Guarantor and Beneficiary each
mutually heraby 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 of the consent of the complaining
party to the waiver of its right to trial by jury.
23. ARBITRATION.
a. Upon the request of Guarantor or
Beneficiary 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 this
Guaranty, the Credit Agreement, A/R 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 Guarantor and
Beneficiary shall be resolved by binding arbitration governed
by the Nevada Uniform Arbitration Act, Nevada Revised Statutes
Chapter 38, or, if not then in effect, 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
Guarantor or Beneficiary, and the Guarantor and Beneficiary,
shall have the right during 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 Guarantor and/or Borrower, including the plaintiff, to
submit the Dispute to arbitration nor render inapplicable the
compulsory arbitration provision hereof.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Guaranty as of the day and year first written
above.
AZTAR CORPORATION,
a Delaware corporation
By /s/ Craig Sullivan
--------------------------
Title Treasurer
-----------------------
<PAGE>
EXHIBIT L
DEPOSITORY CLOSING INSTRUCTIONS
-------------------------------
TO: Lawyers Title of Nevada, Inc.
333 South Third Street
Las Vegas, Nevada 89101
RE: 9311071 GW (Ramada Express)
ATTN: ____________________________
In connection with the above-referenced escrow, the
undersigned hands you herewith the following:
1. First Amendment to Deed of Trust, Fixture
Filing and Security Agreement with Assignment of Rents (the
"First Amendment to Deed of Trust") executed by Ramada
Express, Inc., a Nevada corporation ("Borrower") as Trustor
and Debtor, for the benefit of First Interstate Bank of
Nevada, N.A. (National Association), as Agent Bank ("Agent
Bank") on behalf of itself and Lenders therein described as
Beneficiary and Secured Party, relating to the Deed of Trust,
Fixture Filing and Security Agreement with Assignment of Rents
recorded August 28, 1992, in Book 920828, as Instrument No.
01119, Clark County Official Records (the "Deed of Trust").
2. First Amendment to Assignment of Equipment
Leases, Contracts and Subleases executed by Borrower as
Assignor and by Agent Bank as Assignee, relating to the
Assignment of Equipment Leases, Contracts and Subleases,
recorded August 28, 1992, in the Official Records of Clark
County, Nevada, in Book No. 920828, as Instrument No. 01121.
3. First Amendment to Assignment of Permits,
Licenses and Contracts executed by Borrower as Assignor and by
Agent Bank as Assignee, relating to the Assignment of Permits,
Licenses and Contracts recorded August 28, 1992, in the
Official Records of Clark County, Nevada, in Book No. 920828,
as Instrument No. 01122.
4. First Amendment to Assignment of Rents and
Revenues executed by Borrower as Assignor and by Agent Bank as
Assignee, relating to the Assignment of Rents and Revenues
recorded August 28, 1992, in the Official Records of Clark
County, Nevada, in Book No. 920828, as Instrument No. 01123.
5. UCC-1 Financing Statement relating to the First
Amendment to Deed of Trust handed you herewith as Item No. 1
executed by Borrower, as Debtor, and Agent Bank, as Secured
Party.
Reference is made to:
a. the Preliminary Title Report issued by
Lawyers Title of Nevada, Inc. under Order No. 9311071GW and
dated as of November 10, 1993, at 7:30 a.m. (the "Title
Report"); and
b. that certain ALTA Extended Coverage
Lender's Policy of Title Insurance dated August 28, 1992, at
11:47 a.m., Policy No. 82-02-929620, Order No. 9204042 RM/LP,
together with the Indorsements issued concurrently therewith,
providing coverage in the amount of Fifty Million Dollars
($50,000,000.00) (the "Title Policy").
YOU ARE AUTHORIZED AND INSTRUCTED THAT WHEN:
You are irrevocably committed to issue your:
a. Form 101.2 Indorsement to the Title Policy
relating to the lien free completion of the improvements
constructed on the real property described in the Deed of
Trust,
b. Form 110.5 Indorsement to the Title Policy
relating to the modifications to the Deed of Trust as
contained in the First Amendment to Deed of Trust, and
c. Form Revolving Credit Indorsement to the
Title Policy relating to the RLC Note described in the First
Amendment to Deed of Trust,
with liability in aggregate amount of not less than Fifty
Million Dollars ($50,000,000.00) insuring that the Deed of
Trust as amended by the First Amendment to Deed of Trust for
the benefit of Agent Bank on behalf of the Lenders, is a first
mortgage lien on the real property which is described by the
Title Report, subject only to exceptions numbered 1 through 5
(all taxes and assessments paid current), 6 through 17, 23 and
24, as shown on Schedule B of the Title Report.
THEN, AND ONLY THEN, YOU SHALL:
a. Record the First Amendment to Deed of
Trust handed you herewith as Item No. 1 in the Office of the
County Recorder of Clark County, Nevada.
b. Record the First Amendment to Assignment
of Equipment Leases, Contracts and Subleases handed you
herewith as Item No. 2, in the Office of the County Recorder
of Clark County, Nevada.
c. Record the First Amendment to Assignment
of Permits, Licenses and Contracts handed you herewith as Item
No. 3 in the Office of the County Recorder of Clark County,
Nevada.
d. Record the First Amendment to Assignment
of Rents and Revenues handed you herewith as Item No. 4 in the
Office of the County Recorder of Clark County, Nevada.
e. Record the UCC-1 Financing Statement,
handed you herewith as Item No. 5, in the Office of the County
Recorder of Clark County, Nevada, and cross-index such
recording as real property.
f. Collect all costs, fees, charges and
expenses of Lawyers Title of Nevada, Inc. incurred by reason
of the closing of this transaction, including escrow fees,
title policy charges, indorsement fees and recording fees from
Borrower. It is specifically understood and agreed that Agent
Bank and Lenders are not to be charged with any expenses in
connection with this transaction. In the event of
cancellation, all fees and charges shall be paid by Borrower
above-named.
WHEN YOU HAVE RECORDED AND FILED the documents and
instruments handed you herewith in accordance with the
aforestated instructions and have issued your Form 101.2
Indorsement, Form 110.5 Indorsement and Form Revolving Credit
Indorsement, in favor of Agent Bank in accordance with the
foregoing instructions, you shall deliver conformed copies of
all filed and recorded documents and your Form 101.2
Indorsement, Form 110.5 Indorsement and Form Revolving Credit
Indorsement to Timothy J. Henderson, Esq., 164 Hubbard Way,
Suite B, Reno, Nevada 89502 and shall advise John Bydalek,
Assistant Vice President, First Interstate Bank of Nevada,
N.A., (702) 334-5630, that such recordings have occurred.
It is understood by and between the parties hereto
that this escrow shall close no later than December 31, 1993,
at 5:00 p.m. If said escrow fails to close by said date or
unless said escrow is continued by mutual agreement of the
parties hereto or in the event said escrow is canceled by
either of the parties hereto as provided hereinabove, the
documents and instruments deposited herewith shall be returned
to the depositing party.
DATED this _____ day of December, 1993.
FIRST INTERSTATE BANK OF
NEVADA, N.A., as Agent Bank
of behalf of itself and each
of the Lenders
By__________________________
Title_______________________
Approved as to form and content:
RAMADA EXPRESS, INC.,
a Nevada corporation
By__________________________
Title_______________________
LAWYERS TITLE OF NEVADA, INC. hereby acknowledges
receipt of the foregoing Depository Closing Instructions and
items listed therein and agrees to hold and dispose of the
items in strict accordance with the terms and conditions set
forth above.
DATED this ______ day of December, 1993.
LAWYERS TITLE OF NEVADA, INC.
By__________________________
Title_______________________
<PAGE>
EXHIBIT M
RAMADA EXPRESS, INC.
LIST OF EQUIPMENT LEASES
AS OF DECEMBER 1, 1993
LESSOR: Harvey's Wagon Wheel, Inc.
DATED: October 26, 1991
TERM: month-to-month; Termination notices effective 1/1/94
DESCRIPTION: Fast Action Holdem table game lease & license (1)
PAYMENT: $800.00 per month
LESSOR: D P Stud, Inc.
DATED: September 1, 1993
TERM: one year
DESCRIPTION: Caribbean Stud table game lease & license (1)
PAYMENT: $1216.66 per month
LESSOR: Infolink Corporation
DATED: August 4, 1993
TERM: one year
DESCRIPTION: Electrowriter transmitter & receiver for Valet
PAYMENT: $228.00 per month
LESSOR: Hospitality Network, LTD.
DATED: October 12, 1993
TERM: five years
DESCRIPTION: In-room movie equipment and services for guests
PAYMENT: Hotel receives 15% commission on guest movie sales
LESSOR: International Games Technology
DATED: August 3, 1993
TERM: month-to-month
DESCRIPTION: Megabucks Progressive equipment and license (8)
PAYMENT: $ .01 per handle pull
LESSOR: International Games Technology
DATED: January 28, 1992
TERM: month-to-month
DESCRIPTION: Fabulous 50's Progressive equipment and license (6)
PAYMENT: $ .01 per handle pull
<PAGE>
EXHIBIT N
RAMADA EXPRESS, INC.
LIST OF SUBLEASES
AS OF DECEMBER 1, 1993
LESSEE: McCall Communications of Nevada, Inc.
DATED: August 23, 1990
TERM: five years
DESCRIPTION: Rooftop antennae site for cellular services
LESSEE: Don Trubble d.b.a. Frannie's Personal Touch
DATED: October 1, 1993
TERM: one year
DESCRIPTION: sales of personalized children's books
LESSEE: First Interstate Bank of Nevada
DATED: September 1, 1992
TERM: two years
DESCRIPTION: ATM cash dispersement services
LESSEE: Comdata Network, Inc.
DATED: April 1, 1993
TERM: two years
DESCRIPTION: Credit Card cash advance services
LESSEE: Linda Gebow d.b.a. Ask Me Information Services
DATED: negotiations in-process
TERM: one year or termination of Mayday Parking Lot Lease
DESCRIPTION: Information booth t/b located on north parking lot
<PAGE>
EXHIBIT O
REAL PROPERTY DESCRIPTION
-------------------------
PARCEL I:
That portion of the South Half (S 1/2) of Section 13, Township 32
South, Range 66 East, M.D.B.&M., described as follows:
Parcel Two (2) as shown by Parcel Map in File 53, Page 53, recorded
July 9, 1987 as Document No. 00890 in Book 870709 of Official
Records, Clark County, Nevada.
EXCEPTING THEREFROM that portion of said land for Casino Drive as
conveyed to the County of Clark by Quitclaim Deed recorded
August 20, 1992 as Document No. 00522 in Book 920820 of Official
Records, Clark County, Nevada.
PARCEL II:
An undivided 31.667% interest in and to that certain non-exclusive
30.00 foot access easement as described in that certain License
Agreement recorded February 15, 1985 as Document No. 1648776 in
Book 1689 of Official Records, Clark County, Nevada, affecting the
following described property:
That portion of Government Lot Four (4) in Section 13, Township 32
South, Range 66 East, M.D.B.M., situate within the County of Clark,
State of Nevada, described as follows:
A strip of land thirty (30) feet in width lying Northerly of and
contiguous to Line One (1) and Line Two (2) hereinafter described.
COMMENCING at the Northwest corner of said Government Lot Four (4);
THENCE South 89 degrees 59'51" East a distance of 377.85 feet to
a point;
THENCE South 10 degrees 49'28" West a distance of 132.17 feet to the
Southeast corner of Parcel Two (2) as shown on File 30 of Parcel Maps,
Page 48, Clark County, Nevada records, the TRUE POINT OF BEGINNING.
Said true point of beginning hereinafter referred to as Point "A".
LINE ONE (1):
COMMENCING at Point "A";
THENCE North 89 degrees 59'51" West along the Southerly line of said
Parcel Two (2) and the Westerly Prolongation thereof to a point on the
Easterly line of Rio Alta Vista Drive, as shown on File 39 of Surveys,
Page 73, Clark County, Nevada records, the point of terminus of Line
One (1).
LINE TWO (2):
COMMENCING at Point "A";
THENCE South 89 degrees 59'51" East a distance of 645.36 feet, more
or less, to a point in the Westerly line of Colorado River, the point
of terminus of Line Two (2).
EXCEPTING THEREFROM that portion of said land for Casino Drive as
conveyed to the County of Clark by Quitclaim Deed recorded August 20,
1992 as Document No. 00522 in Book 920820 of Official Records, Clark
County, Nevada.
Such easement being subject to the provisions contained in the above
License Agreement.
<PAGE>
EXHIBIT P
COMPLIANCE CERTIFICATE
----------------------
TO: FIRST INTERSTATE BANK OF NEVADA, N.A.,
as Agent Bank
Reference is made to the First Amended and Restated
Credit Agreement dated as of __________________, by and among
RAMADA EXPRESS, INC., a Nevada corporation ("Borrower"), AZTAR
CORPORATION, a Delaware corporation ("Guarantor"), the Lenders
that are parties thereto and FIRST INTERSTATE BANK OF NEVADA,
N.A., as the Agent Bank for the Lenders (the "Credit
Agreement"). Terms defined in the Credit Agreement and not
otherwise defined in this Compliance Certificate
("Certificate") shall have the meanings defined and described
in the Credit Agreement. This Certificate is delivered in
accordance with Section 5.08b of the Credit Agreement.
I.
NON-USAGE FEE
-------------
Amount of the average daily Available
Borrowings under the RLC Loan for
Fiscal Quarter under review. $___________
Amount of Non-Usage Fee for Fiscal
Quarter under review, to be computed on
the basis of a 360 day year at 1/2 of
1% per annum. $___________
II.
COMPLIANCE WITH GENERAL COVENANTS
---------------------------------
A. FF&E (Section 5.01): Amount of FF&E
sold or disposed not replaced by
FF&E of equivalent value and utility. $___________
B. LIENS FILED (Section 5.04): Report
any liens filed against the
Premises and the amounts claimed in
such liens. $___________
C. OTHER REAL PROPERTY (Section 5.06):
Other than the Real Property
presently encumbered by the Deed of
Trust, attach a legal description
of any other real property or
rights to the use of real property
which is used in connection with
the Hotel/Casino Operation and
describe such use.
D. Permitted Encumbrances (Section
5.11): Describe any mortgage, deed
of trust, pledge, lien, security
interest, encumbrance, attachment,
levy, distraint or other judicial
process or burden affecting the
Collateral other than the Permitted
Encumbrances. Describe any matters
being contested in the manner
described in Sections 5.04 and 5.10
of the Credit Agreement.
E. SUITS OF ACTIONS (Section 5.17):
Describe on a separate sheet any
matters requiring advice to Lenders
under Section 5.17.
F. NOTICE OF HAZARDOUS MATERIALS
(Section 5.20): State whether or
not to your knowledge there are any
matters to which Lenders should be
advised under Section 5.20. If so,
attach a detailed summary of such
matters.
III.
COMPLIANCE WITH RIVERBOAT CONSTRUCTION COVENANTS
------------------------------------------------
A. MODIFICATION OF RIVERBOAT LOAN
DOCUMENTS (Section 5.21): Describe
any modifications or amendments to
the Riverboat Loan Documents not
permitted by Section 5.21.
B. LIENS FILED (Section 5.27): Report
any liens filed against the
Missouri Properties and the amounts
claimed in such liens. $___________
IV.
AZTAR CONSOLIDATION AFFIRMATIVE FINANCIAL COVENANTS
---------------------------------------------------
A. AZTAR CONSOLIDATION TANGIBLE NET
WORTH (Section 6.01): Set forth the
amount of Tangible Net Worth (to be
calculated as of the end of each
Fiscal Year). $___________
B. AZTAR OPERATING TIMES FIXED CHARGE
COVERAGE RATIO (Section 6.02): To
be calculated on a cumulative basis
with respect to the Fiscal Quarter
under review and the previous three
(3) consecutive Fiscal Quarters:
Pre-tax Net Profit $___________
Plus depreciation and amortization
expense + $___________
Plus interest expense + $___________
Plus net rent expense + $___________
Minus interest income - $___________
Total $___________
Divided by
Sum of the principal payments
required to be made on long term
debt during the Fiscal Quarter
under review and the previous three
(3) Fiscal Quarters (excluding the
balloon payment by Aztar Mortgage
Funding due September 15, 1996) $___________
Plus interest expense + $___________
Plus net rent expense - $___________
Minus interest income - $___________
Total $___________
Aztar Operating Times Fixed Charge
Coverage Ratio :1
-----------
C. AZTAR DISTRIBUTION TIMES FIXED
CHARGE COVERAGE RATIO (Section
6.03): To be calculated on a
cumulative basis with respect to
the Fiscal Quarter under review and
the previous three (3) consecutive
Fiscal Quarters:
Pre-Tax Net Profit $___________
Plus depreciation and amortization
expense + $___________
Plus interest expense + $___________
Plus net rent expense + $___________
Minus interest income - $___________
Total $___________
Divided by $___________
Sum of the principal payments
required to be made on long term
debt during the Fiscal Quarter
under review and the previous three
(3) Fiscal Quarters (excluding the
balloon payment by Aztar Mortgage
Funding due September 15, 1996) $___________
Plus interest expense
Plus net rent expense + $___________
Minus interest income - $___________
Plus dividends + $___________
Plus Capital Expenditures
(excluding: (i) the financed
portion of Capital Expenditures,
(ii) purchase of the general or
limited partnership interests in
AGP or AGP's right, title and
interest in the Trop World Hotel
and Casino in Atlantic City, New
Jersey and related land and
improvements, and (iii) the
"Expansion and Remodeling Project",
as defined in the C/T Loan
Agreement). + $___________
Total $___________
Aztar Distribution Times Fixed
Charge Coverage Ratio :1
___________
V.
AZTAR CONSOLIDATION/GUARANTOR NEGATIVE FINANCIAL COVENANTS
----------------------------------------------------------
A. AZTAR CONSOLIDATION'S NON-PAYMENT
OF OTHER INDEBTEDNESS FOR BORROWED
MONEY (Section 6.09): State whether
or not to your knowledge there are
any matters to which Lenders should
be advised under Section 6.09. If
so, attach a detailed summary of
such matters.
B. ERISA (Section 6.10): State whether
or not to your knowledge there are
any matters to which Lenders should
be advised under Section 6.10. If
so, attach a detailed summary of
such matters.
C. STOCK TRANSFER PROHIBITION (Section
6.11): Describe any stock
transfer(s) made by Guarantor not
permitted under Section 6.11.
VI.
BORROWER'S AFFIRMATIVE FINANCIAL COVENANTS
------------------------------------------
A. REI OPERATING TIMES FIXED CHARGE
COVERAGE RATIO (Section 6.07): To
be calculated on a cumulative basis
with respect to the Fiscal Quarter
under review and the previous three
(3) consecutive Fiscal Quarters
Pre-tax Net Profit $___________
Plus depreciation and amortization
expense + $___________
Plus interest expense + $___________
Plus net rent expense + $___________
Minus interest income - $___________
Total $___________
Divided by
Sum of principal payments required
to be made on long term debt during
the Fiscal Quarter under review and
the previous three (3) Fiscal
Quarters $___________
Plus interest expense + $___________
Plus net rent expense + $___________
Minus interest income - $___________
Total $___________
REI Operating Times Fixed Charge
Coverage Ratio :1
-----------
B. CAPITAL EXPENDITURE REQUIREMENT
(Section 5.06): Set forth the
amounts expended on Capital
Expenditures for the period under
review $___________
VII.
BORROWER'S NEGATIVE FINANCIAL COVENANTS
---------------------------------------
A. LIMITATION ON CONSOLIDATED TAX
LIABILITY (Section 6.12): State
whether or not to your knowledge
there are any matters to which
Lenders should be advised under
Section 6.12. If so, attach a
detailed summary of such matters.
B. MARGIN REGULATIONS (Section 6.13):
Set forth the amount of proceeds of
the Credit Facilities used by the
Borrower to purchase or carry any
Margin Stock or to extend credit to
others for the purpose of
purchasing or carrying any Margin
Stock in violation of Section 6.13. $___________
C. RESTRICTIONS ON EQUIPMENT LEASE
Obligations (Section 6.14): Describe
and set forth the amounts of any
Equipment Lease or purchase money
obligations which are not permitted
under Section 6.14. $___________
D. CAPITAL EXPENDITURE LIMITATION
(Section 6.15): Describe and set
forth the amounts of any Capital
Expenditures not permitted by
Section 6.15. $___________
E. SECONDARY LIENS (Section 6.17):
Describe any secondary liens which
are not permitted by Section 6.17.
VIII.
PERFORMANCE OF OBLIGATIONS
--------------------------
A review of the activities of Borrower and Guarantor
during the fiscal period covered by the attached financial
statements has been made under my supervision with a view to
determining whether during such fiscal period Borrower and
Guarantor performed and observed all of their obligations
under the A/R Loan Documents. Except as described in an
attached document or in an earlier Certificate, to the best of
my knowledge, as of the date of this Certificate there is no
Default or Event of Default has occurred or is continuing.
DATED this ____ day of _____________, 199__.
____________________________
By__________________________
Title_______________________
<PAGE>
EXHIBIT Q
CERTIFICATE AND ACKNOWLEDGEMENT OF
----------------------------------
TERMINATION OF SYNDICATION INTEREST IN RLC FACILITY
---------------------------------------------------
THIS CERTIFICATE AND ACKNOWLEDGEMENT OF TERMINATION
OF SYNDICATION INTEREST IN RLC FACILITY ("Termination
Certificate") is made this _____ day of ____________, 19___,
by and among RAMADA EXPRESS, INC., a Nevada corporation
("Borrower"), AZTAR CORPORATION, a Delaware corporation
("Guarantor"), FIRST INTERSTATE BANK OF NEVADA, N.A. ("Agent
Bank"), [INSERT NAMES OF APPROVING RLC LENDERS] ("Approving
RLC Lenders") and [INSERT NAMES OF DISAPPROVING RLC LENDERS]
("Disapproving RLC Lenders").
R E C I T A L S:
WHEREAS:
A. Borrower, Guarantor and Lenders as described
and defined in the Credit Agreement and Agent Bank, as
administrative and collateral agent for the Lenders entered
into a First Amended and Restated Credit Agreement under date
of ___________, 1993, (together with any Additional Funding
Addendum, Syndication Adjustment Addendum and all amendments,
supplements and modifications, if any, from time to time made
thereto, the "Credit Agreement"). In this Termination
Certificate all capitalized words and terms not otherwise
herein defined shall have the respective meanings and be
construed herein as provided in Section 1.01 of the Credit
Agreement.
B. The Credit Facilities consist of the RLC
Facility and NRL Facility. The RLC Facility is evidenced by
the RLC Note in the maximum principal amount of Fifty Million
Dollars ($50,000,000.00). The NRL Facility is evidenced by
the NRL Note in the maximum principal amount of Twenty-Five
Million Dollars ($25,000,000.00).
C. The RLC Lenders presently consist of the
Approving RLC Lenders and the Disapproving RLC Lenders.
D. Pursuant to Section 2.05a of the Credit
Agreement, Borrower has requested that the RLC Facility be
extended for a one (1) year period pursuant to the RLC
Extension Request dated ___________. Disapproving RLC Lenders
have delivered their written disapproval of the RLC Extension
Request to Agent Bank under the terms of which each of the
Disapproving RLC Lenders have rejected the requested
extension. On ______________, 19__, Borrower delivered its
written election to proceed with the RLC Extension Request and
pursuant to Section 2.05d Borrower shall on or before June 30,
19___ (the "Termination Effective Date") fully pay all
principal and interest owing to the Disapproving RLC Lenders
under the terms of the RLC Facility.
E. The parties hereto desire to execute this
Termination Certificate for the purposes set forth in
Section 2.05d of the Credit Agreement, including without
limitation, evidencing that the RLC Facility shall be
terminated as to each Disapproving RLC Lender as of the
Termination Effective Date and that as of the Termination
Effective Date each of the Disapproving RLC Lenders shall owe
no further duty or obligation or be entitled to any further
rights or interest as an RLC Lender under the RLC Facility,
other than with respect to the indemnity provisions set forth
in the Credit Agreement and in the Environmental Certificate
which survive full payment of the Credit Facilities.
NOW, THEREFORE, in consideration of the foregoing
and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged and pursuant to
and in furtherance of the provisions contained in
Section 2.05d of the Credit Agreement, the parties hereto do
agree as follows:
1. On or before the Termination Effective Date,
the entire outstanding principal amount owing to each of the
Disapproving RLC Lenders under the RLC Note, together with all
accrued interest thereon and all charges accruing in
connection therewith shall be paid in full and all obligations
of Borrower and Guarantor to each of the Disapproving RLC
Lenders under the RLC Facility shall be fully satisfied, other
than with respect to the indemnity provisions set forth in the
Credit Agreement and in the Environmental Certificate which
survive full payment of the Credit Facilities.
2. Upon receipt of full payment as provided
hereinabove, the respective Syndication Interests of each of
the Disapproving RLC Lenders in and to the RLC Note and RLC
Facility shall be and are as of the Termination Effective Date
hereby terminated and canceled. As of the Termination
Effective Date, all obligations of Disapproving RLC Lenders
under the RLC Facility and the A/R Loan Documents shall be and
are hereby terminated and canceled, including, without
limitation, any and all obligations and commitments to advance
funds and make any further Borrowings under the RLC Facility
whether as disbursements of principal, or otherwise,
including, without limitation, all obligations to advance
Borrowings in connection with Letters of Credit pursuant to
Article II B of the Credit Agreement. As of the Termination
Effective Date, the Disapproving RLC Lenders and Borrower and
Guarantor shall and do hereby mutually release each other from
any further liability or obligation with respect to the RLC
Facility, other than with respect to the indemnity provisions
set forth in the Credit Agreement and in the Environmental
Certificate which survive full payment of the Credit
Facilities.
3. Nothing herein contained shall be deemed to
modify or amend the respective Syndication Interests of the
Disapproving RLC Lenders in the NRL Facility, which
Syndication Interests shall continue in full force and effect
without regard to this Termination Certificate.
4. The Maximum Principal Balance of the RLC
Facility shall, as of the Termination Effective Date, be
reduced by the commitment amounts of the respective
Syndication Interests of the Disapproving RLC Lenders and the
proportionate percentage of Syndication Interests of the
Approving RLC Lenders in the RLC Facility shall be adjusted
accordingly by the execution of a Syndication Adjustment
Addendum concurrently herewith among Borrower, Guarantor,
Agent Bank and Approving RLC Lenders.
5. This Termination Certificate 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.
WHEREFORE, the parties have executed this
Termination Certificate as of the day and year first above
written.
BORROWER: APPROVING RLC LENDERS:
RAMADA EXPRESS, INC., FIRST INTERSTATE BANK
a Nevada corporation OF NEVADA, N.A.,
Agent Bank and Approving
RLC Lender
By__________________________
Title_______________________ By__________________________
GUARANTOR: Title_______________________
AZTAR CORPORATION, [NAME OF BANK]
a Delaware corporation
By__________________________
By__________________________
Title_______________________
Title_______________________
[NAME OF BANK]
By__________________________
Title_______________________
DISAPPROVING RLC LENDERS:
[NAME OF BANK]
By__________________________
Title_______________________
[NAME OF BANK]
By__________________________
Title_______________________
<PAGE>
EXHIBIT R
LITIGATION CERTIFICATE
1. AMELIA ASSOCIATES V. ATLANTIC-DEAUVILLE, INC., PERINI
CORPORATION AND AZTAR CORPORATION - SUPERIOR COURT OF NEW
JERSEY, LAW DIVISION, ATLANTIC COUNTY - DOCKET NO.:
ATL-L-005499-90.
Plaintiff filed a Complaint on October 9, 1990, alleging the
right to recover liquidated damages due to an alleged
obstruction of an alley. Adamar has not been made a party to
this litigation and, as such, extensive disclosure of this
matter herein cannot be made. Aztar and Atlantic Deauville,
Inc.'s motion for summary judgment was granted on May 1, 1992.
The Appellate Division reversed and remanded the matter to the
trial court. Trial is scheduled for January 25, 1994.
[Note: alleged damages approximately $915,000].
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
-------------------------------------
(in thousands, except per share data)
1993 1992 1991
Income from continuing operations -------- -------- --------
before extraordinary items and
cumulative effect of accounting
change $ 11,382 $ 16,378 $ 2,708
Deduct: preferred stock dividend
(net of income taxes credited
to retained earnings) (610) (586) (800)
-------- -------- --------
Income from continuing operations
before extraordinary items and
cumulative effect of accounting
change applicable to computation 10,772 15,792 1,908
Discontinued operations -- 1,262 2,553
Extraordinary items -- (5,335) 1,237
Cumulative effect of accounting change -- 7,500 --
-------- -------- --------
Net income applicable to computation $ 10,772 $ 19,219 $ 5,698
======== ======== ========
Weighted average common shares
assuming no dilution 37,304 37,215 37,782
Stock options that had a dilutive
effect on net income (based on
relationship of market value to
exercise price), assumed to have
been exercised on the first day of
each period (or date of grant, if
later), less number of shares which
could have been purchased from the
proceeds of such assumed exercise:
Number of shares using the weighted
average market price for the assumed
purchase of shares described above 1,063 997 1,000
-------- -------- --------
Weighted average common shares
applicable to earnings per common
and common equivalent share 38,367 38,212 38,782
Additional shares using the market
close price at the end of the
period for the assumed purchase
of shares described above 22 47 100
Conversion of preferred stock at the
stated rate assumed to have been
converted at the beginning of the
earliest period reported (or at time
of issuance, if later) 1,040 1,052 1,057
-------- -------- --------
Weighted average common shares
assuming full dilution 39,429 39,311 39,939
======== ======== ========<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS (continued)
For the Years Ended December 30, 1993, December 31, 1992 and January 2, 1992
-------------------------------------
(in thousands, except per share data)
1993 1992 1991
-------- -------- --------
Earnings per common and common
equivalent share:
Income from continuing operations
before extraordinary items and
cumulative effect of accounting
change $ .28 $ .41 $ .05
Discontinued operations -- .03 .07
Extraordinary items -- (.14) .03
Cumulative effect of accounting
change -- .20 --
-------- -------- --------
Net income $ .28 $ .50 $ .15
======== ======== ========
Earnings per common share assuming
full dilution:
Income from continuing operations
before extraordinary items and
cumulative effect of accounting
change $ .27 $ .40 $ .05
Discontinued operations -- .03 .06
Extraordinary items -- (.13) .03
Cumulative effect of accounting
change -- .19 --
-------- -------- --------
Net income $ .27 $ .49 $ .14
======== ======== ========
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF AZTAR CORPORATION
The Company has no parent corporation. In addition to the subsidiaries listed
below, the Company has seven other wholly-owned subsidiaries. The unnamed
subsidiaries, considered in the aggregate, would not constitute a significant
subsidiary.
Jurisdiction of
Incorporation
Name or Organization
---- ---------------
Adamar Garage Corporation Delaware
Adamar of Nevada Nevada
Adamar of New Jersey, Inc. New Jersey
dba TropWorld Casino and Entertainment Resort
AGP Holdings Corporation Delaware
AGP Sub, Inc. Delaware
Ambassador General Partnership New Jersey
AREI Sub, Inc. Delaware
Atlantic-Deauville, Inc. New Jersey
Aztar Mortgage Funding, Inc. Delaware
Hotel Ramada of Nevada Nevada
dba Tropicana Resort and Casino
Ramada Express, Inc. Nevada
dba Ramada Express Hotel and Casino
Ramada New Jersey, Inc. New Jersey
Ramada New Jersey Holdings Corporation Delaware
</PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
---------------------
We consent to the incorporation by reference in the registration
statements of Aztar Corporation on Form S-8 (Registration No. 33-
32399 and No. 33-44794) of our reports, dated February 11, 1994 on
our audit of the consolidated financial statements and financial
statement schedules of Aztar Corporation as of December 30, 1993 and
December 31, 1992 and for each of the three years in the period
ended December 30, 1993, which reports are included in this Annual
Report on Form 10-K.
COOPERS & LYBRAND
Phoenix, Arizona
March 11, 1994
