SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 1994
------------------
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
- ---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 86-0636534
- ----------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2390 East Camelback Road, Suite 400, Phoenix, Arizona 85016
- --------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 381-4100
----------------
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
----- -----
At October 27, 1994, the registrant had outstanding 37,380,299 shares
of its common stock, $.01 par value.
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Page
----
Consolidated Balance Sheets at September 29, 1994 and
December 30, 1993 3
Consolidated Statements of Operations for the quarters
and nine months ended September 29, 1994 and
September 30, 1993 5
Consolidated Statements of Cash Flows for the nine months
ended September 29, 1994 and September 30, 1993 7
Consolidated Statements of Shareholders' Equity for the
nine months ended September 29, 1994 and September 30, 1993 9
Notes to Consolidated Financial Statements 10
2
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AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)
---------------------------------------
(in thousands, except share data)
September 29, December 30,
1994 1993
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 29,799 $ 39,551
Investments 8,250 --
Accounts receivable, net 19,415 19,170
Refundable income taxes -- 2,062
Inventories 5,426 5,564
Prepaid expenses 8,598 9,206
Deferred income taxes 6,845 6,566
---------- ----------
Total current assets 78,333 82,119
Investments in and advances to
unconsolidated partnership 12,843 13,776
Other investments 24,138 22,131
Property and equipment:
Buildings and equipment, net 639,821 648,139
Land 81,795 81,795
Construction in progress 24,777 6,701
Leased under capital leases, net 922 1,043
---------- ----------
747,315 737,678
Other assets 20,716 21,467
---------- ----------
$ 883,345 $ 877,171
========== ==========
The accompanying notes are an integral part of these financial statements.
3
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AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited) (continued)
---------------------------------------
(in thousands, except share data)
September 29, December 30,
1994 1993
------------- ------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $ 37,403 $ 39,515
Accrued payroll and employee benefits 16,768 15,823
Accrued interest payable 13,602 13,714
Income taxes payable 3,758 2,633
Current portion of long-term debt 2,532 2,499
---------- ----------
Total current liabilities 74,063 74,184
Long-term debt 391,964 404,086
Other long-term liabilities 23,363 21,882
Deferred income taxes 23,669 26,126
Contingencies and commitments
Series B ESOP convertible preferred stock
(redemption value $4,504 and $4,295) 4,504 3,905
Shareholders' equity:
Common stock, $.01 par value (37,377,530
and 37,359,011 shares outstanding) 414 414
Paid-in capital 346,965 346,965
Retained earnings 35,300 16,559
Less: Treasury stock (16,885) (16,885)
Unearned compensation (12) (65)
---------- ----------
Total shareholders' equity 365,782 346,988
---------- ----------
$ 883,345 $ 877,171
========== ==========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
For the periods ended September 29, 1994 and September 30, 1993
---------------------------------------------------------------
(in thousands, except per share data)
Third Quarter Nine Months
------------------- -------------------
1994 1993 1994 1993
--------- --------- --------- ---------
Revenues
Casino $121,410 $122,477 $338,490 $338,790
Rooms 10,932 8,717 31,898 23,447
Food and beverage 10,604 9,509 32,490 26,987
Other 3,901 3,335 10,282 7,917
-------- -------- -------- --------
146,847 144,038 413,160 397,141
Costs and expenses
Casino 54,109 59,744 153,633 167,045
Rooms 6,899 5,241 19,529 13,808
Food and beverage 9,888 8,825 29,647 25,201
Other 2,351 1,881 5,890 4,921
Marketing 12,734 11,947 35,633 34,627
General and administrative 12,173 12,447 35,475 34,767
Utilities 4,119 3,768 10,609 9,334
Repairs and maintenance 5,394 4,558 14,825 15,329
Provision for doubtful accounts 324 931 1,963 1,390
Property taxes and insurance 4,619 4,025 12,979 12,399
Net rent 2,475 2,137 7,190 25,477
Depreciation and amortization 9,419 8,958 27,800 22,881
-------- -------- -------- --------
124,504 124,462 355,173 367,179
-------- -------- -------- --------
Operating income 22,343 19,576 57,987 29,962
Interest income 645 658 1,771 23,643
Interest expense (11,816) (10,428) (35,398) (33,250)
-------- -------- -------- --------
Income before other items and
income taxes 11,172 9,806 24,360 20,355
Equity in unconsolidated
partnership's loss (1,051) (947) (2,979) (2,876)
-------- -------- -------- --------
Income before income taxes 10,121 8,859 21,381 17,479
Income taxes (2,554) (3,526) (2,680) (6,656)
-------- -------- -------- --------
Net income $ 7,567 $ 5,333 $ 18,701 $ 10,823
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
5
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AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)(continued)
For the periods ended September 29, 1994 and September 30, 1993
---------------------------------------------------------------
(in thousands, except per share data)
Third Quarter Nine Months
------------------- -------------------
1994 1993 1994 1993
--------- --------- --------- ---------
Net income per common and common
equivalent share $ .19 $ .13 $ .48 $ .27
Net income per common share assuming
full dilution $ .19 $ .13 $ .46 $ .26
Weighted average common shares
applicable to:
Net income per common and common
equivalent share 38,225 38,434 38,224 38,400
Net income per common share
assuming full dilution 39,283 39,472 39,284 39,471
The accompanying notes are an integral part of these financial statements.
6
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AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
For the periods ended September 29, 1994 and September 30, 1993
---------------------------------------------------------------
(in thousands)
Nine Months
---------------------
1994 1993
Cash Flows from Operating Activities --------- ---------
Net income $ 18,701 $ 10,823
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 29,688 24,302
Provision for losses on accounts receivable 1,963 1,390
Loss on reinvestment obligation 824 741
Interest income -- 1,889
Rent expense 741 (1,393)
Distribution in excess of equity in income
of partnership 933 1,071
Deferred income taxes (3,186) 4,519
Change in assets and liabilities:
(Increase) decrease in accounts receivable (2,462) (906)
(Increase) decrease in refundable income taxes 2,062 (509)
(Increase) decrease in inventories and
prepaid expenses 493 455
Increase (decrease) in accounts payable,
accrued expenses and income taxes payable 1,328 2,519
Other items, net 1,354 1,267
--------- ---------
Net cash provided by (used in) operating activities 52,439 46,168
--------- ---------
Cash Flows from Investing Activities
Payments received on TropWorld second mortgage -- 24,400
Payments received on other notes receivable 965 2,166
Increase in invested funds (8,250) (1,493)
Increase in TropWorld second mortgage -- (24,400)
Increase in other notes receivable -- (419)
Purchases of property and equipment (36,268) (67,548)
Acquisition of AREI/AGP partnership interests, net of
cash acquired -- (61,859)
Additions to other long-term assets (5,313) (4,962)
--------- ---------
Net cash provided by (used in) investing activities (48,866) (134,115)
--------- ---------
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt 16,000 10,000
Proceeds from issuance of common stock -- 2,149
Principal payments on long-term debt (28,371) (2,030)
Preferred stock dividend (773) (787)
Redemption of preferred stock (181) (97)
--------- ---------
Net cash provided by (used in) financing activities (13,325) 9,235
--------- ---------
Net increase (decrease) in cash and cash equivalents (9,752) (78,712)
Cash and cash equivalents at beginning of period 39,551 100,403
--------- ---------
Cash and cash equivalents at end of period $ 29,799 $ 21,691
========= =========
The accompanying notes are an integral part of these financial statements.
7
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AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)(continued)
For the periods ended September 29, 1994 and September 30, 1993
---------------------------------------------------------------
(in thousands)
Nine Months
-------------------
1994 1993
-------- --------
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 $ 70 $ 385
Tax benefit from stock options and preferred stock
dividend 627 383
Cash paid during the period for the following:
Interest, net of amount capitalized $ 33,675 $ 31,683
Income taxes 2,052 2,083
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)
For the periods ended September 29, 1994 and September 30, 1993
---------------------------------------------------------------
(in thousands, except number of shares)
Nine Months
---------------------
1994 1993
---------- ---------
Common stock:
Beginning balance $ 414 $ 410
Stock options exercised for 338,830 shares
in 1993 -- 4
-------- --------
Ending balance 414 414
-------- --------
Paid-in capital:
Beginning balance 346,965 344,574
Stock options exercised -- 2,145
Tax benefit from stock options exercised -- 246
-------- --------
Ending balance 346,965 346,965
-------- --------
Retained earnings:
Beginning balance 16,559 5,787
Reduction in income tax valuation allowance 520 --
Preferred stock dividend, net of income tax
benefit of $107 and $137 (480) (459)
Net income 18,701 10,823
-------- --------
Ending balance 35,300 16,151
-------- --------
Treasury stock:
Beginning and ending balance (16,885) (16,885)
--------- ---------
Unearned compensation:
Beginning balance (65) (137)
Amortization 53 55
-------- --------
Ending balance (12) (82)
-------- --------
$365,782 $346,563
======== ========
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1: General
- ----------------
The consolidated financial statements reflect all adjustments, such adjust-
ments being normal recurring accruals, which are necessary, in the opinion of
management, for the fair presentation of the results of the interim periods;
interim results, however, may not be indicative of the results for the full
year.
The notes to the interim consolidated financial statements are presented to
enhance the understanding of the financial statements and do not necessarily
represent complete disclosures required by generally accepted accounting
principles. Capitalized interest was $523,000 and $1,790,000 for the quarter
and nine months ended 1994, respectively; and $1,379,000 and $3,379,000 for
the quarter and nine months ended 1993, respectively. For additional
information regarding significant accounting policies, long-term debt, lease
obligations, and other matters applicable to the Company, reference should be
made to the Company's Annual Report to Shareholders for the year ended
December 30, 1993.
Note 2: Investments in and Advances to Unconsolidated Partnership
- -----------------------------------------------------------------
Following are summarized operating results for the Company's unconsolidated
partnership, accounted for using the equity method for the periods ended
September 29, 1994 and September 30, 1993 (in thousands):
Third Quarter Nine Months
------------------ -------------------
1994 1993 1994 1993
-------- -------- -------- --------
Revenues $ 3,824 $ 3,113 $ 11,081 $ 9,395
Operating expenses (684) (393) (2,065) (2,071)
-------- -------- -------- --------
Operating income 3,140 2,720 9,016 7,324
Interest expense (1,145) (1,227) (3,073) (2,858)
-------- -------- -------- --------
Net income $ 1,995 $ 1,493 $ 5,943 $ 4,466
======== ======== ======== ========
Note 3: Other Long-term Liabilities
- -------------------------------------
At September 29, 1994 and December 30, 1993, other long-term liabilities
consisted of (in thousands):
1994 1993
-------- --------
Accrued rent expense $ 14,425 $ 13,684
Deferred compensation and retirement plans 8,784 8,044
Deferred income 154 154
-------- --------
$ 23,363 $ 21,882
======== ========
10
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 4: Income Taxes
- ----------------------
The Company is responsible, with certain exceptions, for the taxes of Ramada
through December 20, 1989. The Internal Revenue Service has completed its
examination of the years 1986 and 1987. Ramada has signed a partial
agreement for those two years and has filed a petition with the U.S. Tax
Court for two remaining issues. The Internal Revenue Service is examining
the income tax returns for the years 1988 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.
The December 30, 1993 valuation allowance was reduced during the 1994 nine-
month period 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 income tax expense for the 1994 third
quarter and nine-month periods by $1,884,000 and $5,858,000, respectively.
In addition, $520,000 that was included in the December 30, 1993 valuation
allowance was allocated to shareholders' equity during the 1994 third
quarter.
Note 5: Net Income Per Share
- -----------------------------
Net income per common and common equivalent share is computed based on the
weighted average number of common shares outstanding after consideration of
the dilutive effect of stock options. Net income per common share, assuming
full dilution, is 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.
Net income for both computations is adjusted for dividends on the preferred
stock.
Note 6: 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 of Ramada (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 million of judgments, fees or expenses related exclusively to the hotel
business. Aztar is entitled to the benefit of any crossclaims or
counterclaims 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
$3,972,000 and $3,980,000 at September 29, 1994 and December 30, 1993,
respectively.
11
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AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 6: Contingencies and Commitments (continued)
- --------------------------------------------------
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
$15,000,000 at September 29, 1994.
Note 7: Subsequent Event
- -------------------------
On October 4, 1994, the Company issued $180,000,000 principal amount of
13 3/4% Senior Subordinated Notes due on October 1, 2004 (the "Notes").
Interest on the Notes is payable semi-annually on April 1 and October 1,
beginning April 1, 1995. The net proceeds from the sale of the Notes were
approximately $172,000,000. These funds were used to redeem the $170 million
principal amount of outstanding 13 1/2% First Mortgage Notes Due 1996 (the
"First Mortgage Notes") of Aztar Mortgage Funding, Inc., a wholly owned,
special purpose subsidiary of the Company. The redemption of the First
Mortgage Notes was completed on November 2, 1994.
On October 5, 1994, the Company entered into a $207 million reducing
revolving credit facility maturing on December 31, 1999 (the "Credit
Facility") with a group of banks. The funds under the Credit Facility will
be available as needed for general corporate purposes, including to fund the
expansion of the Company's existing businesses and to fund the Company's
development of businesses in new gaming jurisdictions. Concurrently with
entering into the Credit Facility, the same group of banks entered into an
approximate $73 million term loan with Tropicana Enterprises maturing on
December 31, 1999, which was used to refinance the existing Tropicana loan in
the same amount. The Tropicana loan is serviced through rent payments made
by the Tropicana operation. The Company is a noncontrolling 50% partner in
Tropicana Enterprises.
On October 5, 1994, the Company repaid $35,000,000 borrowed under the $50
million revolving credit note that was collateralized by Ramada Express and
then terminated that credit facility.
In connection with the above debt extinguishments, the company will expense
the remaining unamortized deferred financing costs and unamortized discount
in the 1994 fourth quarter. This expense will be presented as an
extraordinary charge and shown net of an income tax benefit. The net expense
is currently estimated to be approximately $3,000,000.
12
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AZTAR CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis
Financial Condition
The Company's application, filed with the Missouri Gaming Commission, for a
gaming license to operate a casino riverboat in Caruthersville, Missouri is
pending. The Missouri Gaming Commission has commenced its formal
investigation of the Company's application. In addition, certain other
approvals are required, including those of the U.S. Army Corps of Engineers
and the U.S. Coast Guard. "Games of skill" are permitted in Missouri;
however, as a result of a Missouri Supreme Court decision in early 1994, the
use of slot machines and other "games of chance" is currently not permitted
in Missouri. On April 5, 1994, voters in a Missouri statewide election
defeated a proposed constitutional amendment that would have allowed games of
chance, such as slot machines, on riverboats. An initiative petition was
filed with the Secretary of State of Missouri and a proposed constitutional
amendment which would allow the legislature to permit "games of chance" to be
conducted on excursion gambling boats and floating facilities will appear on
the ballot for the November 8, 1994 election. The Company currently intends
to proceed with this project utilizing electronic machines and gaming tables
as approved by the Missouri Gaming Commission. The Company hopes to begin
operations in Caruthersville in 1995.
On June 30, 1994, the Company was named by the City of Evansville as its
choice to develop and operate the only riverboat gaming facility planned to
be licensed in the Evansville market. The Company and the City of Evansville
have signed a development agreement, and the City of Evansville will endorse
the Company's license request to the Indiana Gaming Commission, which prior
to the state trial court ruling discussed below had indicated that it
anticipated granting a license for the Evansville market area this fall. If
the Company is granted a riverboat gaming license, the development agreement
will bind the Company to make a series of payments in the nature of civic
inducements to the City of Evansville and community organizations that are
necessary to the success of the Company's efforts in Indiana. Evansville,
located on the Ohio River in southwestern Indiana, is a market of 2.5 million
people living within 100 miles, which includes a portion of metropolitan
Louisville, Kentucky. Aztar's proposed project, at an estimated cost of $110
million, would include a replica of the historic "Robert E. Lee" racing
sidewheel steamboat. The boat will have a 37,000-square-foot casino with
1,250 slot machines and 70 table games and will have a capacity of 2,500
passenger guests and a crew of 300. The project would also include, among
other things, a 250-room hotel and a 44,000-square-foot entertainment complex
for pre-boarding facilities, restaurants, lounge and retail shops. With the
boat due for delivery by April 1995, operations could commence in the summer
of 1995 utilizing permanent docking facilities and interim boarding
facilities, with all permanent facilities in place by December 1995.
However, a number of legal and regulatory matters could delay or prevent the
opening of the Evansville facility. A state trial court has ruled that
portions of the Indiana riverboat gaming law conflict with the state
constitution. Under this ruling, the Indiana Gaming Commission is precluded
from awarding licenses. The trial court decision has been appealed directly
to the Indiana Supreme Court. Oral arguments in the case were held on
13
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AZTAR CORPORATION AND SUBSIDIARIES
August 30, 1994. Furthermore, a number of approvals are required, including
those of the U.S. Army Corps of Engineers and the U.S. Coast Guard.
The Company is continuing its efforts to explore opportunities in new
jurisdictions in which the likelihood of legalization of gaming in the near
term is high and where the potential markets meet our standards for sound,
meaningful long-term opportunities.
During the first quarter of 1994, the Company, by drawing on the revolving
line of credit that is collateralized by Ramada Express (the "Ramada Express
Credit Facility"), repaid in full the $10 million that was borrowed under the
revolving credit facility (the "AREI/AGP Facility") obtained in connection
with the purchase in July 1993 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. On June 30, 1994, the Company terminated the AREI/AGP Facility.
During June 1994, the Company repaid $10 million of the Ramada Express Credit
Facility and during the third quarter had an additional repayment and
borrowing, leaving a balance of $25 million at September 29, 1994. On
October 3, 1994, the Company borrowed $10 million under this facility.
On October 4, 1994, the Company issued $180 million principal amount of
13 3/4% Senior Subordinated Notes due on October 1, 2004 (the "Notes").
Interest on the Notes is payable semi-annually on April 1 and October 1,
beginning April 1, 1995. The net proceeds from the sale of the Notes were
approximately $172 million. These funds were used to redeem the $170 million
principal amount of outstanding 13 1/2% First Mortgage Notes Due 1996 (the
"First Mortgage Notes") of Aztar Mortgage Funding, Inc., a wholly owned,
special purpose subsidiary of the Company. The redemption of the First
Mortgage Notes was completed on November 2, 1994.
On October 5, 1994, the Company entered into a $207 million reducing
revolving credit facility maturing on December 31, 1999 (the "Credit
Facility") with a group of banks. The availability of funds under this
facility will reduce from $207 million quarterly beginning on March 31, 1996
in the annual amounts of $25 million in 1996 and $35 million in each year
thereafter until maturity. The funds under the Credit Facility will be
available as needed for general corporate purposes, including to fund the
expansion of the Company's existing businesses and to fund the Company's
development of businesses in new gaming jurisdictions. Concurrently with
entering into the Credit Facility, the same group of banks entered into an
approximate $73 million term loan with Tropicana Enterprises maturing on
December 31, 1999, which was used to refinance the existing Tropicana loan in
the same amount. The term loan calls for principal payments of between $1.2
million and $3.3 million each year with a final payment of approximately $57
million due at maturity. The Tropicana loan is serviced through rent
payments made by the Tropicana operation. The Company is a noncontrolling
50% partner in Tropicana Enterprises.
On October 5, 1994, the Company repaid the $35 million borrowed under the
Ramada Express Credit Facility and then terminated that facility.
14
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AZTAR CORPORATION AND SUBSIDIARIES
At September 29, 1994, the Company had commitments of $15 million for the
purchase of fixed assets.
Result of Operations
Nine Months Ended September 29, 1994 Compared to Nine Months Ended
September 30, 1993.
The Company's consolidated revenues for the nine months of 1994 were $413.2
million, a 4% increase over $397.1 million for the nine months of 1993 as
increases in total revenues at Ramada Express and Tropicana more than offset
a decrease in total revenues at TropWorld. The primary reason for the
increase in consolidated revenues was due to the major expansion of the
Ramada Express facility completed in September 1993. Consolidated casino
revenue was down $0.3 million in the 1994 versus the 1993 nine-month period
primarily because a decrease in casino revenue at TropWorld more than offset
increases in casino revenue at Ramada Express and Tropicana. Consolidated
operating income was $58.0 million in the 1994 nine-month period compared
with $30.0 million in the 1993 nine-month period. The primary reason for the
increase in consolidated operating income was a reduction in net rent at
TropWorld, which was principally a result of the AREI/AGP acquisition in July
1993. The reduction in consolidated net rent was partially offset by an
increase in consolidated depreciation and amortization that was caused in
large part by this purchase, combined with higher depreciation and
amortization at Ramada Express due to the expansion of that facility. The
increase in the consolidated utilities expense in the 1994 nine-month period
was largely attributable to the expansion of the Ramada Express facility.
Consolidated casino costs were lower in the nine months of 1994 compared to
last year's nine-month period largely as a result of a reduction in coin
redemptions and complimentaries at TropWorld.
Consolidated interest income was $21.9 million lower in the 1994 nine-month
period compared to the 1993 nine-month period principally as a result of the
replacement on Aztar's balance sheet of the AGP notes receivable with the
assets acquired in the AREI/AGP acquisition.
For a discussion of income taxes, refer to "Note 4: Income Taxes".
RAMADA EXPRESS At Ramada Express, revenues and operating income for the 1994
nine-month period increased substantially over last year's nine-month period
due to the major expansion of that facility completed in September 1993.
Total revenues were $61.6 million for the nine months of 1994, a 60% increase
over $38.5 million for the nine months of 1993, reflecting increases in all
revenue components. Hotel occupancy was 88% on a 1,500-room base for the
1994 nine-month period compared to 92% for the 1993 nine-month period, during
which there was a 400-room base until the expansion opened in September 1993.
Operating income was $13.1 million in the 1994 nine-month period compared to
$4.4 million in last year's nine-month period, a 198% increase. Operating
income is after net rent and depreciation and amortization expenses. Net
rent was insignificant in both nine-month periods. As a result of the
expanded facility, depreciation and amortization increased to $5.7 million in
the 1994 nine-month period from $3.4 million in the 1993 nine-month period.
15
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AZTAR CORPORATION AND SUBSIDIARIES
TROPICANA Total revenues at Tropicana were $108.4 million in the nine months
of 1994, up 6% from $101.8 million in the nine months of 1993. The increase
in revenues reflects pedestrian walk-in business being generated by the new
properties recently opened at the intersection of Las Vegas Boulevard and
Tropicana Avenue, commonly referred to as "The New Four Corners" of Las
Vegas.
Rooms revenue was 20% higher in the 1994 nine-month period compared to the
1993 nine-month period principally because of higher room rates, combined
with a reduction in the use of complimentary rooms as a means of promoting
casino activity. The occupancy rate was unchanged.
Tropicana's operating income improved 53% to $9.3 million for the nine months
of 1994 from $6.1 million for the 1993 nine-month period. Operating income
is after net rent and depreciation and amortization expenses. Net rent was
$5.8 million in the 1994 nine-month period versus $5.1 million in the 1993
nine-month period. Depreciation and amortization was $4.8 million in the
1994 nine-month period compared to $4.7 million in the 1993 nine-month
period. Rooms cost was 16% higher in the 1994 nine-month period compared to
last year's nine-month period primarily as a result of a decrease in the
interdepartmental allocation to the casino department caused by the reduction
in the use of complimentary rooms as a means of promoting casino activity.
TROPWORLD Total revenues at TropWorld were $243.2 million in the 1994 nine-
month period compared to $256.8 million in the 1993 nine-month period, a 5%
decrease primarily as a result of lower casino revenue. The decline in
casino revenue was caused by a decrease in coin redemptions in the nine
months of 1994 compared to the nine months of 1993. In addition, there was a
reduction in the use of complimentary rooms and food and beverage service as
a means of promoting casino activity. Severe weather conditions in the East
were, in large part, the cause of declines in the market's growth rate for
casino revenue during January and February 1994.
TropWorld had operating income of $42.9 million in the nine months of 1994
compared to $26.2 million in the nine months of 1993. The increase in
TropWorld's operating income was largely due to the effects of the AREI/AGP
acquisition which resulted in a reduction in net rent expense, partially
offset by higher depreciation and amortization expense. Net rent declined
from $20.1 million in the 1993 nine-month period to $1.1 million in the 1994
nine-month period. Depreciation and amortization increased from $14.5
million in the 1993 nine-month period to $17.0 million in the 1994 nine-month
period. In addition to the effects of the AREI/AGP acquisition, operating
costs decreased at TropWorld, due in large part to a $15.9 million or 14%
reduction in casino costs attributable to the decrease in coin redemptions
and complimentaries.
Quarter Ended September 29, 1994 Compared to Quarter Ended September 30, 1993
Consolidated revenues for the 1994 third quarter were $146.8 million, a 2%
increase over $144.0 million for the 1993 third quarter as increases in total
revenues at Ramada Express and Tropicana more than offset a decrease in total
revenues at TropWorld. The primary reason for the increase in consolidated
revenues was due to the major expansion of the Ramada Express facility
completed in September 1993. Consolidated casino revenue was down $1.1
million in the 1994 third quarter compared to the 1993 third quarter
16
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
primarily because decreases in casino revenue at TropWorld and Tropicana more
than offset an increase in casino revenue at Ramada Express. Consolidated
operating income increased to $22.3 million in the 1994 third quarter from
$19.6 million in last year's third quarter, a 14% improvement primarily
coming from Ramada Express due to the major expansion of that facility
completed in September 1993.
Consolidated interest expense was $1.4 million higher in the 1994 third
quarter compared to the 1993 third quarter principally as a result of lower
capitalized interest in connection with the completion of the Ramada Express
expansion in September 1993.
For a discussion of income taxes, refer to "Note 4: Income Taxes".
RAMADA EXPRESS Revenues and operating income at Ramada Express were
substantially higher in the 1994 third quarter than the 1993 third quarter
due to the major expansion of that facility completed in September 1993.
Total revenues were $19.3 million for the 1994 third quarter, up 42% from
$13.6 million for the 1993 third quarter, reflecting increases in all revenue
components. Hotel occupancy was 84% on a 1,500-room base for the 1994 third
quarter compared to 88% for the 1993 third quarter, during which there was a
400-room base until the expansion opened in September 1993.
Operating income was $2.8 million in the 1994 third quarter compared to an
operating loss of $0.3 million in the 1993 third quarter. Ramada Express
experienced disruption of its operations during the 1993 third quarter as a
result of the construction of the expansion. The 1993 third quarter results
included $1.4 million in expenses associated with the opening of the
expansion. Operating income is after net rent and depreciation and
amortization expenses. Net rent was insignificant in both quarters. As a
result of the expanded facility, depreciation and amortization increased to
$1.9 million in the 1994 third quarter from $1.4 million in the 1993 third
quarter.
TROPICANA Total revenues at Tropicana were $36.1 million in the 1994 third
quarter, up slightly from $35.9 million in the 1993 third quarter. Rooms
revenue increased 17% in the 1994 third quarter over the 1993 third quarter
in spite of a slight reduction in occupancy rate primarily because of higher
room rates (a 10% increase), combined with a reduction in the use of
complimentary rooms as a means of promoting casino activity. A 4% decline in
casino revenue offset most of the increase in rooms revenue.
Tropicana's operating income declined by 18% to $2.4 million for the 1994
third quarter from $3.0 million for the 1993 third quarter. Operating income
is after net rent and depreciation and amortization expenses. Net rent was
$2.0 million in the 1994 third quarter compared to $1.7 million in last
year's third quarter. Depreciation and amortization was $1.8 million in the
1994 third quarter compared to $1.5 million in the 1993 third quarter. Rooms
cost was 19% higher in the 1994 third quarter compared to the same quarter
last year primarily as a result of a decrease in the interdepartmental
allocation to the casino department caused by the reduction in the use of
complimentary rooms as a means of promoting casino activity.
17
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
TROPWORLD TropWorld had total revenues of $91.4 million in the 1994 third
quarter compared to $94.5 million in the 1993 third quarter, down 3%
primarily as a result of lower casino revenue. The decline in casino revenue
was caused by a decrease in coin redemptions in this year's third quarter
compared to last year's third quarter. In addition, there was a reduction in
the use of complimentary rooms as a means of promoting casino activity.
TropWorld had operating income of $19.7 million in the 1994 third quarter
compared to $19.2 million in the 1993 third quarter. Operating income is
after net rent and depreciation and amortization expenses. Net rent was $0.3
million in both the 1994 and 1993 third quarters. Depreciation and
amortization decreased to $5.6 million in the 1994 third quarter from $6.0
million in the 1993 third quarter. Operating costs decreased at TropWorld
due in large part to a $5.3 million or 13% reduction in casino costs as a
result of the decrease in coin redemptions and complimentaries. These
decreases in operating costs and expenses were partially offset by an
increase in marketing costs primarily attributable to the introduction of
new marketing programs and increased advertising.
18
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As reported in the Company's registration statement No. 33-54151, filed on
June 16, 1994, the Company and more than 30 other major casino operators, as
well as various suppliers and distributors of video poker and electronic slot
machines, have been named as defendants in actions entitled William H. Poulos
v. Caesars World, Inc., et al., 94 Civ. 478-ORL-22 (filed on April 26, 1994)
and William Ahern v. Caesars World, Inc., et al., 94 Civ. 532-ORL-19 (filed
on May 10, 1994) (the "Actions") in the United States District Court for the
Middle District of Florida, Orlando Division.
On June 24, 1994, as reported under Part II, Item 1 of the Company's Form
10-Q for the quarter ended June 30, 1994, the Company, together with certain
other defendants, filed motions seeking orders: (i) dismissing the Actions
for lack of personal jurisdiction and improper venue, for failure to state a
claim and for failure to plead fraud with particularity, (ii) abstaining from
exercising jurisdiction over the Actions on the grounds of primary
jurisdiction; (iii) alternatively, transferring the Actions to the United
States District Court for the District of Nevada; and (iv) staying discovery
pending a ruling on defendants' motions to dismiss.
During July 1994, the Court issued orders setting time frames for the conduct
of certain pre-trial proceedings, staying discovery as to the merits until
October 31, 1994 and directing that discovery on jurisdictional and class
issues proceed.
The Company believes that plaintiffs' allegations are without merit, and it
intends to defend the Actions vigorously.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Page No.
----------
4. Indenture, dated as of October 1, 1994, between Aztar
Corporation, as Issuer, and American Bank National
Association, as Trustee, relating to the 13 3/4% Senior
Subordinated Notes Due 2004 of Aztar Corporation. *
10. Reducing Revolving Loan Agreement, dated as of October 4,
1994, among Aztar Corporation, Adamar of New Jersey, Inc.,
Ramada Express, Inc. and the banks therein named; Societe
Generale and Midlantic Bank, N.A., as lead managers; Bank
One, Arizona, N A and Credit Lyonnais, as co-agents;
Bankers Trust Company, as co-managing agent; and, Bank of
America National Trust and Savings Association, as
managing agent. *
11. Statement Regarding Computation of Per Share Earnings. *
19
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K (continued)
(a) Exhibits (continued)
Page No.
----------
27. Financial Data Schedule. *
* See exhibit index at page E-1 of this report for
a listing of exhibits filed with this report.
All other exhibits have been omitted because the
information is either not required or not
applicable.
(b) On September 28, 1994, the Company filed a report on
Form 8-K under Item 5. Other Events to file, as
Exhibit 4.1, the final form of Indenture between Aztar
Corporation, as Issuer, and American Bank National
Association, as Trustee, relating to the offering of
13 3/4% Senior Subordinated Notes Due 2004 of Aztar
Corporation.
20
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AZTAR CORPORATION
------------------------------
(Registrant)
Date November 2, 1994 By /s/ Robert M. Haddock
-------------------------- ---------------------------
Robert M. Haddock
Executive Vice President and
Chief Financial Officer
21
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
Exhibit Index
- -------------
4. Indenture, dated as of October 1, 1994, between Aztar
Corporation, as Issuer, and American Bank National
Association, as Trustee, relating to the 13 3/4% Senior
Subordinated Notes Due 2004 of Aztar Corporation.
10. Reducing Revolving Loan Agreement, dated as of October 4,
1994, among Aztar Corporation, Adamar of New Jersey, Inc.,
Ramada Express, Inc. and the banks therein named; Societe
Generale and Midlantic Bank, N.A., as lead managers; Bank
One, Arizona, N A and Credit Lyonnais, as co-agents; Bankers
Trust Company, as co-managing agent; and, Bank of America
National Trust and Savings Association, as managing agent.
11. Statement Regarding Computation of Per Share Earnings.
27. Financial Data Schedule.
E-1
<PAGE>
Exhibit 11
AZTAR CORPORATION AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
For the periods ended September 29, 1994 and September 30, 1993
---------------------------------------------------------------
(in thousands, except per share data)
Third Quarter Nine Months
------------------- -------------------
1994 1993 1994 1993
-------- --------- --------- ---------
Net income $ 7,567 $ 5,333 $ 18,701 $ 10,823
Deduct: preferred stock dividend
(net of income taxes credited to
retained earnings) (169) (150) (480) (459)
-------- -------- --------- ---------
Net income applicable to computation $ 7,398 $ 5,183 $ 18,221 $ 10,364
======== ======== ======== ========
Weighted average common shares
assuming no dilution 37,375 37,346 37,370 37,287
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 850 1,088 854 1,113
-------- -------- -------- --------
Weighted average common shares
applicable to net income per
common and common equivalent share 38,225 38,434 38,224 38,400
Additional shares using the market
close price at the end of the period
for the assumed purchase of shares
described above 38 -- 34 29
Conversion of preferred stock at
the stated rate assumed to have
been converted at the beginning
of the earliest period reported
1,020 1,038 1,026 1,042
-------- -------- -------- --------
Weighted average common shares
assuming full dilution 39,283 39,472 39,284 39,471
======== ======== ======== ========
Net income per common and common
equivalent share $ .19 $ .13 $ .48 $ .27
Net income per common share assuming
full dilution $ .19 $ .13 $ .46 $ .26
EXECUTION COPY
AZTAR CORPORATION,
as Issuer,
and
AMERICAN BANK NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of October 1, 1994
13 3/4% Senior Subordinated Notes Due 2004
<PAGE>
CROSS-REFERENCE TABLE
Trust Indenture Act Section Indenture Section
310(a)(1) . . . . . . . . . . . . . . . . . . 508
(a)(2) . . . . . . . . . . . . . . . . . . 508
(a)(3) . . . . . . . . . . . . . . . . . . Not applicable
(a)(4) . . . . . . . . . . . . . . . . . . Not applicable
(b) . . . . . . . . . . . . . . . . . . 508, 509
311(a) . . . . . . . . . . . . . . . . . . 512
(b) . . . . . . . . . . . . . . . . . . 512
(c) . . . . . . . . . . . . . . . . . . Not applicable
312(a) . . . . . . . . . . . . . . . . . . 207
(b) . . . . . . . . . . . . . . . . . . 108
(c) . . . . . . . . . . . . . . . . . . 108
313(a) . . . . . . . . . . . . . . . . . . 513(a)
(b) . . . . . . . . . . . . . . . . . . 513(b)
(c) . . . . . . . . . . . . . . . . . . 513(b)
(d) . . . . . . . . . . . . . . . . . . 513(c)
314(a) . . . . . . . . . . . . . . . . . . 713
(a)(2) . . . . . . . . . . . . . . . . . . 714
(b)(1) . . . . . . . . . . . . . . . . . . Not applicable
(b)(2) . . . . . . . . . . . . . . . . . . Not applicable
(c)(1) . . . . . . . . . . . . . . . . . . 103
(c)(2) . . . . . . . . . . . . . . . . . . 103
(c)(3) . . . . . . . . . . . . . . . . . . 103
Note: This Cross-Reference Table shall not for any purpose be
deemed to be a part of the Indenture.<PAGE>
Trust Indenture Act Section Indenture Section
(d) . . . . . . . . . . . . . . . . . . Not applicable
(e) . . . . . . . . . . . . . . . . . . 103
315(a) . . . . . . . . . . . . . . . . . . 501(a), (d)
(b) . . . . . . . . . . . . . . . . . . 502
(c) . . . . . . . . . . . . . . . . . . 501(b)
(d) . . . . . . . . . . . . . . . . . . 501(c)
(d)(1) . . . . . . . . . . . . . . . . . . 501(a)
(d)(2) . . . . . . . . . . . . . . . . . . 501(c)(2)
(d)(3) . . . . . . . . . . . . . . . . . . 501(c)(3)
(e) . . . . . . . . . . . . . . . . . . 414
316(a) . . . . . . . . . . . . . . . . . . 402, 412, 413
(a)(1)(A). . . . . . . . . . . . . . . . . 402, 412
(a)(1)(B). . . . . . . . . . . . . . . . . 413
(a)(2) . . . . . . . . . . . . . . . . . . Not applicable
(b) . . . . . . . . . . . . . . . . . . 408, 602
317(a)(1) . . . . . . . . . . . . . . . . . . 403
(a)(2) . . . . . . . . . . . . . . . . . . 404
(b) . . . . . . . . . . . . . . . . . . 703
318(a) . . . . . . . . . . . . . . . . . . 109
Note: This Cross-Reference Table shall not for any purpose be
deemed to be a part of the Indenture.<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION. . . . . . . . . . . . . . . . . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . . 1
SECTION 102. Incorporation by Reference of TIA . . . . . 22
SECTION 103. Compliance Certificates and Opinions. . . . 22
SECTION 104. Form of Documents Delivered to Trustee. . . 23
SECTION 105. Acts of Holders . . . . . . . . . . . . . . 24
SECTION 106. Notices, etc. to Trustee and the Company. . 25
SECTION 107. Notice to Holders; Waiver . . . . . . . . . 25
SECTION 108. Communication by Holders with Other
Holders . . . . . . . . . . . . . . . . . . 26
SECTION 109. Conflict with TIA . . . . . . . . . . . . . 26
SECTION 110. Rules by Trustee and Agents . . . . . . . . 26
SECTION 111. No Recourse Against Others. . . . . . . . . 26
SECTION 112. Execution in Counterparts . . . . . . . . . 26
SECTION 113. Effect of Headings and Table of Contents. . 26
SECTION 114. No Adverse Interpretation of Other
Agreements. . . . . . . . . . . . . . . . . 26
SECTION 115. Successors and Assigns. . . . . . . . . . . 27
SECTION 116. Separability Clause . . . . . . . . . . . . 27
SECTION 117. Benefits of Indenture . . . . . . . . . . . 27
SECTION 118. Governing Law and Choice of Forum . . . . . 27
SECTION 119. Legal Holidays. . . . . . . . . . . . . . . 27
SECTION 120. Incorporation of Exhibit. . . . . . . . . . 28
ARTICLE TWO - THE NOTES. . . . . . . . . . . . . . . . . . . . 28
SECTION 201. Form. . . . . . . . . . . . . . . . . . . . 28
SECTION 202. Title and Terms . . . . . . . . . . . . . . 28
SECTION 203. Denominations . . . . . . . . . . . . . . . 29
SECTION 204. Execution, Authentication, Delivery, and
Dating. . . . . . . . . . . . . . . . . . . 29
SECTION 205. Temporary Notes . . . . . . . . . . . . . . 30
SECTION 206. Registration, Registration of Transfer
and Exchange. . . . . . . . . . . . . . . . 30
SECTION 207. Holder Lists. . . . . . . . . . . . . . . . 31
SECTION 208. Mutilated, Destroyed, Lost or Stolen
Notes . . . . . . . . . . . . . . . . . . . 32
SECTION 209. Payment of Principal and Interest;
Principal and Interest Rights Preserved . . 32
SECTION 210. Persons Deemed Owners . . . . . . . . . . . 33
SECTION 211. Cancellation. . . . . . . . . . . . . . . . 34
SECTION 212. Computation of Interest . . . . . . . . . . 34
SECTION 213. CUSIP Number. . . . . . . . . . . . . . . . 34
ARTICLE THREE - SATISFACTION AND DISCHARGE; DEFEASANCE . . . . 34
SECTION 301. Satisfaction and Discharge of Indenture;
Defeasance. . . . . . . . . . . . . . . . . 34
SECTION 302. Application of Trust Money. . . . . . . . . 38
SECTION 303. Repayment to the Company. . . . . . . . . . 38
SECTION 304. Reinstatement . . . . . . . . . . . . . . . 39
SECTION 305. Indemnity . . . . . . . . . . . . . . . . . 39
ARTICLE FOUR - DEFAULTS AND REMEDIES . . . . . . . . . . . . . 39
SECTION 401. Events of Default . . . . . . . . . . . . . 39
SECTION 402. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . 42
SECTION 403. Collection Suits by Trustee . . . . . . . . 43
SECTION 404. Trustee May File Proofs of Claim. . . . . . 44
SECTION 405. Trustee May Enforce Claims Without
Possession of Notes . . . . . . . . . . . . 44
SECTION 406. Application of Money Collected. . . . . . . 45
SECTION 407. Limitation on Suits . . . . . . . . . . . . 45
SECTION 408. Unconditional Right of Holders to Receive
Principal and Interest. . . . . . . . . . . 46
SECTION 409. Restoration of Rights and Remedies. . . . . 46
SECTION 410. Rights and Remedies Cumulative. . . . . . . 46
SECTION 411. Delay or Omission Not Waiver. . . . . . . . 46
SECTION 412. Control by Holders. . . . . . . . . . . . . 47
SECTION 413. Waiver of Past Defaults . . . . . . . . . . 47
SECTION 414. Undertaking for Costs . . . . . . . . . . . 48
ARTICLE FIVE - THE TRUSTEE . . . . . . . . . . . . . . . . . . 48
SECTION 501. Certain Duties and Responsibilities . . . . 48
SECTION 502. Notice of Defaults. . . . . . . . . . . . . 49
SECTION 503. Certain Rights of Trustee . . . . . . . . . 49
SECTION 504. Not Responsible for Recitals or
Issuance of Notes . . . . . . . . . . . . . 51
SECTION 505. May Hold Notes. . . . . . . . . . . . . . . 51
SECTION 506. Money Held in Trust . . . . . . . . . . . . 51
SECTION 507. Compensation and Reimbursement. . . . . . . 51
SECTION 508. Eligibility; Disqualification . . . . . . . 52
SECTION 509. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . 52
SECTION 510. Acceptance of Appointment by Successor. . . 54
SECTION 511. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . 54
SECTION 512. Preferential Collection of Claims Against
the Company . . . . . . . . . . . . . . . . 55
SECTION 513. Reports by Trustee. . . . . . . . . . . . . 55
ARTICLE SIX - AMENDMENTS, SUPPLEMENTS AND WAIVERS. . . . . . . 56
SECTION 601. Without Consent of Holders. . . . . . . . . 56
SECTION 602. With Consent. . . . . . . . . . . . . . . . 57
SECTION 603. Compliance with Trust Indenture Act . . . . 58
SECTION 604. Revocation and Effect of Consents . . . . . 58
SECTION 605. Notation on or Exchange of Notes;
Effect of Supplemental Indenture. . . . . . 58
SECTION 606. Trustee Protected . . . . . . . . . . . . . 59
ARTICLE SEVEN - COVENANTS. . . . . . . . . . . . . . . . . . . 59
SECTION 701. Payment of Notes. . . . . . . . . . . . . . 59
SECTION 702. Maintenance of Office or Agency . . . . . . 59
SECTION 703. Money for Note Payments to be Held in
Trust . . . . . . . . . . . . . . . . . . . 60
SECTION 704. Limitation on Restricted Payments . . . . . 61
SECTION 705. Limitation on Indebtedness. . . . . . . . . 64
SECTION 706. Limitation on Liens . . . . . . . . . . . . 66
SECTION 707. Limitation on Payment Restrictions
Affecting Restricted Subsidiaries . . . . . 66
SECTION 708. Limitation on Capital Stock of Restricted
Subsidiaries. . . . . . . . . . . . . . . . 67
SECTION 709. Transactions with Affiliates. . . . . . . . 68
SECTION 710. Restriction on Incurrence of Certain
Indebtedness. . . . . . . . . . . . . . . . 68
SECTION 711. Change of Control . . . . . . . . . . . . . 68
SECTION 712. SEC Reports . . . . . . . . . . . . . . . . 70
SECTION 713. Compliance Certificates . . . . . . . . . . 70
SECTION 714. Continued Existence and Rights. . . . . . . 71
SECTION 715. Maintenance of Properties and Other
Matters . . . . . . . . . . . . . . . . . . 71
SECTION 716. Taxes and Claims. . . . . . . . . . . . . . 72
SECTION 717. Waiver of Stay, Extension and Usury Laws. . 72
SECTION 718. Investment Company Act. . . . . . . . . . . 73
ARTICLE EIGHT - MERGER, CONSOLIDATION AND SALE OF ASSETS . . . 73
SECTION 801. When the Company May Merge, etc.. . . . . . 73
SECTION 802. Successor Corporation Substituted . . . . . 74
ARTICLE NINE - REDEMPTION. . . . . . . . . . . . . . . . . . . 74
SECTION 901. Notices to Trustee. . . . . . . . . . . . . 74
SECTION 902. Selection of Notes to Be Redeemed . . . . . 75
SECTION 903. Notice of Redemption. . . . . . . . . . . . 75
SECTION 904. Effect of Notice of Redemption. . . . . . . 76
SECTION 905. Deposit of Redemption Price . . . . . . . . 76
SECTION 906. Notes Redeemed in Part. . . . . . . . . . . 76
SECTION 907. Redemption Pursuant to Gaming
Jurisdiction Law. . . . . . . . . . . . . . 76
ARTICLE TEN - SUBORDINATION. . . . . . . . . . . . . . . . . . 78
SECTION 1001. Agreement to Subordinate . . . . . . . . . 78
SECTION 1002. Liquidation; Dissolution; Bankruptcy . . . 78
SECTION 1003. Default on Senior Indebtedness . . . . . . 79
SECTION 1004. When Distribution Must Be Paid Over. . . . 80
SECTION 1005. Notice by the Company. . . . . . . . . . . 80
SECTION 1006. Subrogation. . . . . . . . . . . . . . . . 81
SECTION 1007. Relative Rights. . . . . . . . . . . . . . 81
SECTION 1008. Subordination May Not Be Impaired by the
Company. . . . . . . . . . . . . . . . . . 81
SECTION 1009. Distribution or Notice to
Representatives. . . . . . . . . . . . . . 81
SECTION 1010. Rights of Trustee and Paying Agent . . . . 82
SECTION 1011. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. . . . . . 82
SECTION 1012. Application by Trustee of Monies
Deposited With It. . . . . . . . . . . . . 82
SECTION 1013. Trustee's Compensation Not Prejudiced. . . 82
SECTION 1014. Officers' Certificate. . . . . . . . . . . 83
SECTION 1015. Certain Payments . . . . . . . . . . . . . 83
SECTION 1016. Names of Representatives . . . . . . . . . 83
SECTION 1017. No Fiduciary Duty Created to Holders of
Senior Indebtedness. . . . . . . . . . . . 83
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 84
EXHIBIT A - Form of Note . . . . . . . . . . . . . . . . . . .A-1
______________
Note: This Table of Contents shall not for any purpose be deemed
to be a part of the Indenture.<PAGE>
INDENTURE, dated as of October 1, 1994, among AZTAR
CORPORATION, a Delaware corporation (the "Company"), and AMERICAN
BANK NATIONAL ASSOCIATION, a national banking association, as
trustee (the "Trustee").
RECITALS
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of its
13 3/4% Senior Subordinated Notes Due 2004 (the "Notes").
All covenants and agreements made by the Company herein
are for the benefit of the Holders of the Notes. All things
necessary to make this Indenture a valid agreement of the Company
in accordance with its terms have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Notes by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions. (a) For all purposes of
this Indenture, except as otherwise expressly provided or unless
the context otherwise requires:
(1) the terms defined in this Article have the
meanings assigned to them in this Article, and include the
plural as well as the singular;
(2) all accounting terms not otherwise defined herein
have the meanings assigned to them from time to time in
accordance with generally accepted accounting principles;
(3) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision and all references to Sections refer to Sections
hereof; and
(4) "or" is not exclusive.
(b) As used herein, the following terms shall have the
following meanings:
"Accountants' Certificate" means a written opinion or
verification from a nationally recognized firm of independent
certified public accountants.
"Act" shall have the meaning provided in Section 105.
"Adamar of Nevada" means Adamar of Nevada, a Nevada
corporation.
"Affiliate" means, with respect to any Person, a Person
(i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, such Person, (ii) which beneficially owns or holds
10% or more of any class of the Voting Stock of such Person (or a
10% or greater equity interest in a Person which is not a
corporation) or (iii) of which 10% or more of any class of the
Voting Stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest) is beneficially
owned or held by such Person or any Subsidiary of such Person.
The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" means any Registrar or Paying Agent.
"Asset Sale" means the sale or other disposition
(including, without limitation, dispositions pursuant to Sale and
Leaseback Transactions) by the Company or one of its Subsidiaries
to any Person other than the Company or one of its Subsidiaries
of (i) any of the Capital Stock of any of the Subsidiaries of the
Company or (ii) any other assets of the Company or any assets of
its Subsidiaries outside the ordinary course of business of the
Company or such Subsidiary.
"Authorized Officer" means, with respect to any Person,
the chief executive officer, president, chief financial officer
or treasurer of such Person.
"Average Life" means, as of the date of determination,
with respect to any debt security, the quotient obtained by
dividing (i) the sum of the products of (x) the numbers of years
from the date of determination to the dates of each successive
scheduled principal payment of such debt security multiplied by
(y) the amount of such principal payment by (ii) the sum of all
such principal payments.
"Bankruptcy Law" shall have the meaning provided in
Section 401(5).
"Board of Directors" means, with respect to any Person,
the board of directors of such Person or any authorized committee
of such board.
"Business Day" means a day, other than a Saturday or a
Sunday, on which banks in New York City and the City of Los
Angeles are open for business and not required or authorized to
close and, with respect to any place of payment other than New
York City, a day, other than a Saturday or a Sunday, on which
banks in New York City and in the place of such payment are open
for business and not required or authorized to close.
"Capital Stock" means, with respect to any Person, any
and all shares, interests, participations or other equivalents
(however designated) of capital stock of such Person and any
rights (other than debt securities convertible into capital
stock), warrants or options to acquire such capital stock.
"Capitalized Lease Obligation" means, with respect to
any Person, the obligation of such Person to pay rent or other
amounts under a lease of (or other agreement conveying the right
to use) real or personal Property, which obligation is required
to be classified and accounted for as a capital lease obligation
on a balance sheet of such Person under generally accepted
accounting principles. For purposes of this Indenture, the
amount of such obligation at any date shall be the outstanding
amount thereof at such date, determined in accordance with
generally accepted accounting principles.
"Change of Control" means any one or more of the
following:
(A) the Company shall consolidate with or merge into
any other corporation or any other corporation shall
consolidate with or merge into the Company (in either case,
other than a consolidation or merger with a Wholly Owned
Subsidiary in which all of the Voting Stock of the Company
outstanding immediately prior to the effectiveness thereof
is changed into or exchanged for substantially the same
consideration), in either case pursuant to a transaction in
which substantially all of the Voting Stock of the Company
outstanding immediately prior to the effectiveness thereof
is changed into or exchanged for cash, securities (other
than Voting Stock of the Company) or other property;
provided, however, that the term "Change of Control" shall
not include any such consolidation or merger if, with
respect to such consolidation or merger, (x) substantially
all of the Voting Stock of the Company outstanding
immediately prior to the effectiveness thereof is changed
into or exchanged for Voting Stock of the surviving
corporation or the ultimate parent of the surviving
corporation (the "Merger Common Stock"), (y) the Merger
Common Stock, immediately following the effectiveness
thereof, is listed for trading on the New York Stock
Exchange or the American Stock Exchange or is quoted on the
National Association of Securities Dealers Automated
Quotation System and is designated as a "national market
system security" and (z) immediately after the effectiveness
thereof, the Persons who were holders of Voting Stock of the
Company immediately prior to the effectiveness thereof
(excluding Persons who immediately prior to the
effectiveness thereof were Affiliates of the corporation
consolidated or merged with the Company in such
consolidation or merger (other than Persons who were such
Affiliates solely as a result of the ownership by the
Company of Capital Stock in such consolidated or merged
corporation)) hold in the aggregate more than 50% of the
then outstanding Voting Stock of the surviving corporation
(or the ultimate parent of the surviving corporation);
(B) the Company shall convey, transfer or lease all or
substantially all its assets to any Person or Persons (other
than to a Wholly Owned Subsidiary); provided, however, that
the term "Change of Control" shall not include any such
conveyance, transfer or lease of assets (1) pursuant to a
Sale and Leaseback Transaction or (2) if immediately after
the effectiveness thereof, the Persons who were holders of
Voting Stock of the Company immediately prior to the
effectiveness thereof (excluding Persons who immediately
prior to the effectiveness thereof were Affiliates of the
transferee of such assets (other than Persons who were such
Affiliates solely as a result of the ownership by the
Company of Capital Stock in such transferee)) hold in the
aggregate more than 50% of the then outstanding common stock
of such transferee; or
(C) any Person (other than the Company) or group shall
acquire, directly or indirectly, beneficial ownership, in
the aggregate, of 50% or more of the outstanding shares of
Voting Stock of the Company or securities representing 50%
or more of the combined Voting Power of the Company's Voting
Stock (the "Controlling Securities"), in either case,
outstanding on the date immediately prior to the date of the
last such acquisition by such Person or group; provided,
however, that the term "Change of Control" shall not include
any such acquisition that results in the Company ESOP and
members of management of the Company who have been employed
in a management capacity with the Company for at least
eighteen months owning 50% or more of the Voting Stock of
the Company or 50% or more of the Controlling Securities.
"Change of Control Offer" shall have the meaning
provided in Section 711(a).
"Change of Control Payment Date" shall have the meaning
provided in Section 711(b)(2).
"Company" means Aztar Corporation unless and until a
successor replaces it in accordance with the terms of this
Indenture and thereafter means such successor.
"Company ESOP" means the employee stock ownership plan
adopted by the Company.
"Company Request" or "Company Order" means a written
request or order, respectively, signed in the name of the Company
by an Authorized Officer and delivered to the Trustee.
"Consolidated Amortization Expense" means, for any
period, amortization expense of the Company and its Restricted
Subsidiaries, on a consolidated basis, for such period
(including, without limitation, any amortization or write-offs of
deferred financing costs by the Company and its Restricted
Subsidiaries during such period).
"Consolidated Depreciation Expense" means, for any
period, depreciation expense of the Company and its Restricted
Subsidiaries, on a consolidated basis, for such period.
"Consolidated Fixed Charge Coverage Ratio" means, as of
any Transaction Date, the ratio of (i) Consolidated Operating
Cash Flow for the four consecutive fiscal quarters for which
financial information in respect thereof is available immediately
prior to such Transaction Date to (ii) Consolidated Fixed Charges
which will accrue during the then current fiscal quarter in which
such Transaction Date occurs (beginning on the first day of such
quarter) and the three fiscal quarters immediately subsequent to
the end of such current fiscal quarter, provided that, for the
purpose of calculating Consolidated Fixed Charges for the period
described in this clause (ii), (A) the interest rate on any
Indebtedness bearing interest at a rate that is adjustable based
on market rate levels shall be calculated based on the assumption
that the applicable market rate level in effect on the
Transaction Date shall remain constant throughout such period at
the market rate level in effect on the Transaction Date, (B)
adjustments that are reasonably anticipated to occur during such
period to Consolidated Fixed Charges shall be included in such
calculation (including such adjustments that result from the
scheduled maturity of Indebtedness of the Company and its
Restricted Subsidiaries) and (C) Indebtedness shall be included
in such calculation that is reasonably anticipated to be created,
incurred, assumed or guaranteed by, or to otherwise become the
obligation of, the Company or any Restricted Subsidiary;
provided, however, that, for purposes of calculating the
Consolidated Fixed Charge Coverage Ratio, Consolidated Operating
Cash Flow and Consolidated Fixed Charges shall (x) include the
consolidated operating cash flow and consolidated fixed charges
of any Person to be acquired by the Company or any of its
Restricted Subsidiaries as a Restricted Subsidiary in connection
with the transaction giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio, (y) include the
consolidated operating cash flow and consolidated fixed charges
of any other Person acquired during the period described in
clause (i) above by the Company or by any of its Restricted
Subsidiaries as a Restricted Subsidiary and (z) exclude the
consolidated operating cash flow of any Person directly
attributable to the Property of such Person that was the subject
of an Asset Sale, on a pro forma basis for the four consecutive
fiscal quarters for which financial information in respect
thereof is available immediately prior to such Transaction Date,
in the case of calculating Consolidated Operating Cash Flow, and
for the then current fiscal quarter in which such Transaction
Date occurs and the three fiscal quarters immediately subsequent
to the end of such fiscal quarter (on the same basis as described
in clause (ii) above), in the case of calculating Consolidated
Fixed Charges. For purposes of the foregoing proviso, the
consolidated operating cash flow and consolidated fixed charges
of any such Person shall be determined on the same basis as such
items are determined for the Company. For purposes of each pro
forma determination of the Consolidated Fixed Charge Coverage
Ratio in connection with Section 705(a), the proposed new
Indebtedness shall be deemed to be incurred on the first day of
the fiscal quarter in which the relevant Transaction Date occurs.
"Consolidated Fixed Charges" means, for any period, the
sum of Consolidated Interest Expense plus the Tropicana Payments.
"Consolidated Income Tax Expense" means, for any
period, the income tax expense of the Company and its Restricted
Subsidiaries, on a consolidated basis, for such period (other
than income tax expense attributable to Asset Sales).
"Consolidated Interest Expense" means, for any period,
without duplication, (A) the sum of (i) the aggregate amount of
interest recognized by the Company and its Restricted
Subsidiaries during such period in respect of Indebtedness of the
Company and its Restricted Subsidiaries (including, without
limitation, all interest capitalized by the Company and its
Restricted Subsidiaries during such period and all commissions,
discounts and other fees and charges owed by the Company and its
Restricted Subsidiaries with respect to letters of credit and
bankers' acceptance financing and the net costs associated with
Interest Swap Obligations of the Company and its Restricted
Subsidiaries), (ii) the aggregate amount of the interest
component of rentals in respect of Capitalized Lease Obligations
recognized by the Company and its Restricted Subsidiaries during
such period, (iii) to the extent any Indebtedness of any Person
is guaranteed by the Company or any of its Restricted
Subsidiaries, the aggregate amount of interest paid or accrued by
such Person during such period attributable to any such
Indebtedness, (iv) one-third of the rent expense incurred under
noncancelable operating leases (excluding the Tropicana Lease)
during such period and (v) the aggregate amount of Redeemable
Dividends recognized by the Company and its Restricted
Subsidiaries, whether or not declared during such period, less
(B) any amortization or write-off of deferred financing costs by
the Company and its Restricted Subsidiaries during such period;
in each case after elimination of intercompany accounts among the
Company and its Restricted Subsidiaries and as determined in
accordance with generally accepted accounting principles.
"Consolidated Interest Income" means, for any period,
interest income from all sources of the Company and its
Restricted Subsidiaries, on a consolidated basis, for such
period.
"Consolidated Net Income" means, for any period, the
aggregate net income of the Company and its Subsidiaries for such
period on a consolidated basis, determined in accordance with
generally accepted accounting principles, provided that there
shall be excluded therefrom (i) gains and losses from Asset Sales
or reserves relating thereto, (ii) items classified as
extraordinary or nonrecurring, (iii) the income (or loss) of any
Unrestricted Subsidiary or Joint Venture, except to the extent
that the aggregate amount of cash dividends or other
distributions actually paid during such period to the Company or
any Restricted Subsidiary by such Unrestricted Subsidiary or
Joint Venture in respect of its Capital Stock out of funds
legally available therefor exceeds the aggregate amount of new
Investments in such Unrestricted Subsidiary or Joint Venture by
the Company or any Restricted Subsidiary during such period, (iv)
except to the extent includable pursuant to clause (iii), the
income (or loss) of any Person accrued or attributable to any
period prior to the date it becomes a Restricted Subsidiary or is
merged into or consolidated with the Company or any of its
Restricted Subsidiaries or that Person's assets (or a portion
thereof) are acquired by the Company or any of its Restricted
Subsidiaries and (v) the income of any Restricted Subsidiary to
the extent that such Restricted Subsidiary is prevented by any
Legal Requirement from paying such income to the Company or
another Restricted Subsidiary. Notwithstanding the foregoing,
Consolidated Net Income as used in Section 704 shall include
gains (or losses) on the sale by the Company or a Restricted
Subsidiary of an Unrestricted Subsidiary.
"Consolidated Net Rent" means, for any period, without
duplication, an amount equal to the total of: (A) the rent
expense, net of intercompany rent, incurred by HRN pursuant to
the Tropicana Lease plus (B) two-thirds of the rent expense
incurred under other noncancelable operating leases.
"Consolidated Net Worth" means, as of any date, with
respect to any Person, the sum of the Capital Stock and
additional paid-in capital plus retained earnings (or minus
accumulated deficit) of such Person and its Subsidiaries on a
consolidated basis at such date, each item determined in
accordance with generally accepted accounting principles, less
amounts attributable to Redeemable Stock of such Person and its
Subsidiaries.
"Consolidated Operating Cash Flow" means, for any
period, without duplication, Consolidated Net Income plus (i)
Consolidated Interest Expense plus (ii) Consolidated Income Tax
Expense plus (iii) Consolidated Depreciation Expense plus (iv)
Consolidated Amortization Expense plus (v) Consolidated Net Rent
plus (vi) equity in unconsolidated partnerships' losses minus
(vii) Consolidated Interest Income plus (viii) other non-cash
items reducing such Consolidated Net Income, minus (ix) other
non-cash items increasing such Consolidated Net Income, for such
period, all as determined in accordance with generally accepted
accounting principles.
"Corporate Trust Office" means the office of the
Trustee at which at any particular time its corporate trust
business shall be administered, which office as of the date
hereof is located at Corporate Trust Division, 101 E. Fifth
Street, St. Paul, Minnesota 55101.
"corporation" means any corporation and any voluntary
association, joint stock company, business trust or similar
organization.
"Credit Facility" means any agreement between the
Company and/or any of its Restricted Subsidiaries and one or more
banks or other financial institutions providing for the making of
term loans or loans on a revolving basis (including, in either
case, construction loans and lines of credit), the issuance of
letters of credit and the creation of bankers' acceptances, as
any such agreement may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified,
including any agreement extending the maturity, refinancing or
restructuring of all or any portion of the Indebtedness and other
obligations under such agreement or any successor agreement.
"Currency Agreement" means, with respect to any Person,
any foreign exchange contract, currency swap agreement, option or
futures contract or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries
against fluctuations in currency values.
"Custodian" shall have the meaning provided in Section
401(5)(iii).
"Default" means any event or condition which is, or
after giving of notice or passage of time or both would be, an
Event of Default.
"Defaulted Interest" shall have the meaning provided in
Section 209.
"Designated Senior Indebtedness" means each issue of
Senior Indebtedness that (i) has an outstanding principal amount
of not less than $25,000,000 and (ii) has been designated as
Designated Senior Indebtedness pursuant to an Officers'
Certificate of the Company received by the Trustee.
"Discharged" means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by,
and obligations under, the Notes and to have satisfied all the
obligations under this Indenture relating to the Notes (and the
Trustee, at the request and the expense of the Company, shall
execute proper instruments acknowledging the same) except (a) the
rights of the Holders to receive, from the trust fund described
in Section 301(c), payment of the principal of and the interest
on such Notes when such payments are due, (b) the Company's
obligations with respect to the Notes under Sections 206, 207,
208, 302, 509, 510 and 703 so long as any of the Notes are
Outstanding and (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder; provided, however, that
notwithstanding the foregoing, the obligations of the Company
under Sections 303, 304, 305 and 507, together with the
definitions in Article One necessary for the interpretation of
such Sections, shall survive.
"DTC" shall have the meaning provided in Section 711.
"Effective Date" means September 27, 1994.
"Event of Default" shall have the meaning provided in
Section 401.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Gaming Authority" means the United States federal
government or any state, county, municipality or other political
subdivision or any agency or other governmental authority thereof
that now or hereafter has jurisdiction over all or any portion of
the gaming activities of the Company or any of its Subsidiaries.
"Gaming Jurisdiction Law" means any law, statute,
ordinance, code, regulation, constitutional provision, rule,
order, directive or other enforcement requirement now or
hereafter in existence of any Gaming Authority.
"Gaming License" means any license, franchise or other
authorization on the date of this Indenture or thereafter
required to own, lease, operate or otherwise conduct the gaming
business of the Company, including, without limitation, all
licenses granted under the New Jersey Act, the Nevada Act, the
regulations of the New Jersey Commission, the New Jersey
Division, the Nevada Commission and the Nevada Control Board and
other Legal Requirements.
"Governmental Authority" means any agency, authority,
board, bureau, commission, department, office or instrumentality
of any nature whatsoever of any governmental or quasi-government
unit, whether federal, state, county, district, city or other
political subdivision or otherwise and whether now or hereafter
in existence, or any officer or official of any thereof,
including, without limitation, the New Jersey Commission, the New
Jersey Division, the Nevada Commission, the Nevada Control Board
and the Clark County (Nevada) Liquor and Gaming License Board.
"guarantee" means any direct or indirect obligation,
contingent or otherwise, of a Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other
Person in any manner.
"Holder" means the Person in whose name a Note is
registered in the Register.
"Holdings" means Ramada New Jersey Holdings, a Delaware
corporation.
"HRN" means Hotel Ramada of Nevada, a Nevada
corporation.
"Indebtedness" means, with respect to any Person,
without duplication, (a) any obligation, contingent or otherwise,
for borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion
thereof), (b) any obligation evidenced by bonds, debentures,
notes or other similar instruments, (c) any obligation owed for
all or any part of the purchase price of Property, other assets
or services or for the cost of Property or other assets
constructed or of improvements thereto (including any obligation
under or in connection with any letter of credit related
thereto), other than accounts payable included in current
liabilities and incurred in respect of Property or services
purchased in the ordinary course of business, (d) any obligation
of such Person under or in connection with any letter of credit
issued for the account of such Person and all drafts drawn or
demands for payment honored thereunder, (e) any obligation under
conditional sale or other title retention agreements relating to
purchased Property, (f) any obligation issued or assumed as the
deferred purchase price of Property (other than accounts payable
incurred in the ordinary course of business), (g) any obligation,
contingent or otherwise, as set forth in subclauses (a), (b) and
(c) of this definition, of any other Person secured by any Lien
in respect of Property of such Person even though such Person has
not assumed or become liable for payment of such obligation, (h)
any Capitalized Lease Obligation or any other obligation pursuant
to any Sale and Leaseback Transaction, (i) any note payable or
draft accepted representing an extension of credit (other than
extensions of credit for Property and services purchased in the
ordinary course of business), whether or not representing an
obligation for borrowed money, (j) the maximum fixed repurchase
price of any Redeemable Stock, (k) obligations in respect of
Interest Swap Obligations and Currency Agreements and (1) any
obligation which is a guarantee with respect to Indebtedness (of
a kind otherwise described in this definition) of another Person.
For purposes of the preceding sentence, the maximum fixed
repurchase price of any Redeemable Stock which does not have a
fixed repurchase price shall be calculated in accordance with the
terms of such Redeemable Stock as if such Redeemable Stock were
repurchased on any date on which Indebtedness shall be required
to be determined pursuant to this Indenture; provided, however,
that if such Redeemable Stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such
Redeemable Stock. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all
unconditional obligations as described above, the maximum
liability of such contingent obligations at such date and, in the
case of clause (g), the lesser of the fair market value at such
date of any asset subject to a Lien securing the Indebtedness of
others and the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended or
supplemented from time to time.
"Independent" means a Person who (1) is in fact
independent, (2) does not have any direct financial interest or
any material indirect financial interest in the Company or in any
other obligor upon the Notes or in any Affiliate of the Company
or of such other obligor and (3) is not connected with the
Company or such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing
similar functions.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Notes.
"Interest Swap Obligations" means the obligations of
any Person pursuant to any interest rate swap agreement, interest
rate collar agreement or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries
against fluctuations in interest rates.
"Investment" means, with respect to any Person (such
Person being referred to in this definition as the "Investor'),
any amount paid by the Investor, directly or indirectly, or any
transfer of Property, directly or indirectly (such amount to be
the fair market value of such Property at the time of transfer as
determined in good faith by the Board of Directors of the
Investor, whose determination shall be conclusive) by the
Investor to any other Person (i) for Capital Stock of, or other
equity interest in, or as a capital contribution to, such other
Person or (ii) as a direct or indirect loan or advance to such
other Person (other than accounts receivable of the Investor
arising in the ordinary course of business).
"Investment Company Act" means the Investment Company
Act of 1940, as amended.
"Jaffe Partnership Interest" means the general
partnership interest in Tropicana Enterprises held by members of
the Jaffe family pursuant to the Amended and Restated Partnership
Agreement dated as of November 19, 1984 between the Jaffe family
and Adamar of Nevada, as amended.
"Joint Venture" means any Person (other than a
Subsidiary of the Company) in which any Person other than the
Company or any of its Subsidiaries has a joint or shared equity
interest with the Company or any of its Subsidiaries.
"Legal Holiday" means any day that is not a Business
Day.
"Legal Requirements" means all laws, statutes and
ordinances (including building codes and zoning and environmental
laws, regulations and ordinances) and all rules, orders, rulings,
regulations, directives, decrees, injunctions and requirements of
all Governmental Authorities, that are now or may hereafter be in
existence, and that may be applicable to the Company or any
Subsidiary or Affiliate thereof, or the Trustee (including,
without limitation, the New Jersey Act, the Nevada Act and the
regulations and supervisory procedures of the New Jersey
Division, the New Jersey Commission, the Nevada Commission, the
Nevada Control Board and the Clark County (Nevada) Liquor and
Gaming License Board, as modified by any variances, special use
permits, waivers, exceptions or other exemptions which may from
time to time be applicable).
"Lien" means any mortgage, pledge, lien, charge, deed
of trust, security interest, conditional sale or other title
retention agreement or any other similar encumbrance (including
any agreement to give any security interest).
"Nevada Act" means the Nevada Gaming Control Act, Nev.
Rev. Stat. Ann. 463.010, et seq., as amended from time to
time, or any successor provision of law.
"Nevada Commission" means the Nevada Gaming Commission
or any successor agency appointed pursuant to the Nevada Act.
"Nevada Control Board" means the Nevada State Gaming
Control Board or any successor agency appointed pursuant to the
Nevada Act.
"New Jersey Act" means the New Jersey Casino Control
Act, N.J. Stat. Ann. 5:12-1 et seq., (New Jersey Public Law 1977,
L. 110) as amended from time to time, or any successor provision
of law.
"New Jersey Commission" means the New Jersey Casino
Control Commission or any successor agency appointed pursuant to
the New Jersey Act.
"New Jersey Division" means the Division of Gaming
Enforcement of the New Jersey Department of Law and Public Safety
or any successor division or agency.
"Notes" means the notes, as amended or supplemented
from time to time, that are issued under this Indenture.
"Officers' Certificate" means, with respect to any
Person, a certificate signed by an Authorized Officer (other than
the treasurer) and by the treasurer, an assistant treasurer, the
secretary or an assistant secretary of such Person.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel
may be an employee of or counsel to the Company or the Trustee.
"Outstanding" means, with respect to the Notes, as of
the date of determination, all Notes theretofore authenticated
and delivered under this Indenture, except:
(i) the Notes theretofore cancelled by the Trustee or
delivered to the Corporate Trust Office of the Trustee for
cancellation;
(ii) the Notes for whose payment or redemption money
in the necessary amount has been theretofore deposited
(other than pursuant to Article III) with the Trustee or any
Paying Agent (other than the Company or an Affiliate
thereof), provided that, if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the
Trustee has been made; and
(iii) the Notes in exchange for or in lieu of which
other Notes have been authenticated and delivered pursuant
to this Indenture except for the Notes replaced pursuant to
Section 208 if the Trustee has received proof satisfactory
to it that the replaced Note is held by a bona fide
purchaser;
provided, however, that solely for the purpose of determining
whether the Holders of the requisite principal amount of
Outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Notes held of
record or beneficially owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes
which the Trustee knows to be so held or owned shall be so
disregarded. Notes so held or owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee
is not the Company or any other obligor upon the Notes or any
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the
Company pursuant to Section 702 to pay the principal of or
interest on any Notes on behalf of the Company. The Trustee
shall be the Paying Agent until a successor replaces it.
"Payment Blockage Period" shall have the meaning
provided in Section 1003.
"Permitted Liens" means, with respect to any Person,
(i) Liens for taxes, assessments, governmental charges or claims
which are not yet due and payable or are being contested in good
faith by such Person by appropriate proceedings promptly
instituted and diligently conducted and for which a reserve or
other appropriate provision, if any, as shall be required in
accordance with generally accepted accounting principles shall
have been made by such Person; (ii) statutory Liens of landlords
and carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen, or other like Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and for which a reserve or
other appropriate provision, if any, as shall be required in
accordance with generally accepted accounting principles shall
have been made by such Person; (iii) Liens incurred or deposits
made by such Person in the ordinary course of business in
connection with worker's compensation, unemployment insurance,
medical insurance and other types of social security and deposits
made by such Person in the ordinary course of business in
connection with other kinds of insurance; (iv) Liens incurred or
deposits made by such Person to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal
bonds, government contracts, performance and return-of-money
bonds and other obligations of a like nature incurred in the
ordinary course of business (exclusive of obligations for the
payment of borrowed money); (v) easements, rights-of-way,
restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material
respect with the business of such Person or any of its
Subsidiaries incurred in the ordinary course of business; (vi)
Liens (including extensions and renewals thereof) upon real or
tangible personal property acquired by such Person after the date
of this Indenture; provided that (a) any such Lien is created
solely for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, all costs (including
the cost of construction) of the item of Property subject
thereto, (b) the principal amount of the Indebtedness secured by
such Lien does not exceed 100% of such cost, (c) such Lien does
not extend to or cover any other Property other than such item of
Property and any improvements on such item and (d) the incurrence
of such Indebtedness is permitted by Section 705; (vii) Liens
upon specific items of inventory or other goods and proceeds of
such Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such
Person in the ordinary course of business to facilitate the
purchase, shipment or storage of such inventory or other goods;
(viii) Liens securing reimbursement obligations with respect to
commercial letters of credit issued for the account of such
Person which encumber documents and other Property relating to
such commercial letters of credit and the products and proceeds
thereof; (ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods by such Person; (x)
licenses, leases or subleases granted to others not interfering
in any material adverse respect with the business of such Person
or any of its Subsidiaries; (xi) Liens encumbering Property or
assets of such Person under construction arising from progress or
partial payments by a customer of such Person or one of its
Subsidiaries relating to such Property or assets; (xii) Liens
encumbering customary initial deposits and margin accounts, and
other Liens incurred in the ordinary course of business and which
are within the general parameters customary in the gaming
industry, in each case securing Interest Swap Obligations or
Currency Agreements; (xiii) Liens encumbering deposits made to
secure obligations arising from statutory or regulatory
requirements of such Person or its Subsidiaries; (xiv) any
interest or title of a lessor in the Property subject to any
Capitalized Lease obligation or operating lease which, in each
case, is permitted under this Indenture; (xv) Liens securing
obligations to the Trustee pursuant to the compensation and
indemnity provisions of this Indenture; (xvi) purchase money
liens securing payables arising from the purchase by such Person
or any of its Subsidiaries of any equipment or goods in the
ordinary course of business, provided that such payables do not
constitute Indebtedness; (xvii) Liens arising out of consignment
or similar arrangements for the sale of goods entered into by
such Person or any of its Subsidiaries in the ordinary course of
business; (xviii) Liens for judgments or orders not giving rise
to a Default or Event of Default; and (xix) Liens not specified
in the foregoing and not otherwise permitted by Section 706,
provided that the aggregate Indebtedness secured by the Liens
under this clause (xix) shall not exceed $5,000,000 at any time.
"Person" means any individual, partnership,
corporation, venture, joint venture, unincorporated organization,
association, joint-stock company, trust or Governmental
Authority.
"Predecessor Note" means, with respect to any
particular Note, every previous Note evidencing all or a portion
of the same debt as that evidenced by such particular Note. For
the purposes of this definition, any Note authenticated and
delivered under Section 208 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or
stolen Note.
"Preferred Share Purchase Rights" shall have the
meaning given to the term "Rights" in the Rights Agreement dated
as of December 20, 1989 between the Company and First Interstate
Bank of Arizona, N.A.
"principal" means, with respect to any debt security
(including any Note), the principal of such debt security plus
the premium, if any, on such debt security.
"Property" means any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or
intangible.
"Qualified Capital Stock" means Capital Stock not
constituting Redeemable Stock.
"Ramada" means Ramada Inc., a Delaware corporation.
"Redeemable Dividend" means, for any dividend payable
with respect to Redeemable Stock, (i) to the extent such dividend
is fully deductible for federal income tax purposes, the amount
of such dividend and (ii) to the extent such dividend may not be
deductible, the quotient of the amount of such dividend divided
by the difference between one and the maximum statutory federal
income tax rate (expressed as a decimal number between 1 and 0)
then applicable to the issuer of such Redeemable Stock.
"Redeemable Stock" means, with respect to any Person,
any equity security issued by such Person that by its terms or
otherwise is required to be redeemed (other than a security that
is required to be redeemed only in the event that a holder of
such security fails to qualify or to be found suitable or
otherwise eligible under a Gaming Jurisdiction Law to remain as a
holder of such security) or is redeemable at the option of the
holder of such security at any time prior to the maturity of the
Notes.
"Redemption Date" means, with respect to any Note to be
redeemed, the date fixed for such redemption pursuant to the
terms of this Indenture and the Notes.
"Redemption Price" means, with respect to any Note to
be redeemed, the price fixed for such redemption pursuant to the
terms of this Indenture and the Notes.
"Register" shall have the meaning provided in Section
206.
"Registrar" shall have the meaning provided in Section
206.
"Regular Record Date" means, for the interest payable
on any Interest Payment Date in respect of a Note, the date so
specified in Paragraph 2 of such Note.
"Replacement Indebtedness" shall have the meaning
provided in Section 705.
"Representative" means the indenture trustee or other
trustee, agent or representative for an issue of Senior
Indebtedness.
"Restricted Payments" shall have the meaning provided
in Section 704.
"Restricted Subsidiary" means any Subsidiary of the
Company that (i) has not been designated by the Board of
Directors of the Company as an Unrestricted Subsidiary or (ii)
was an Unrestricted Subsidiary but has been redesignated by the
Board of Directors of the Company as a Restricted Subsidiary, in
each case as provided under the definition of Unrestricted
Subsidiary in this Section 101.
"Sale and Leaseback Transaction" means any direct or
indirect arrangement with any Person or to which any such Person
is a party, providing for the leasing to the Company or a
Subsidiary of the Company of any Property, whether owned at the
date of this Indenture or thereafter acquired, which has been or
is to be sold or transferred by the Company or such Subsidiary to
such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such Property
if, after giving effect to such arrangement, the Company or a
Subsidiary of the Company operates the business, if any, located
on such Property.
"SEC" means the Securities and Exchange Commission.
"Senior Indebtedness" means the principal of, interest
(including without limitation, interest at the contract rate
subsequent to the commencement of any bankruptcy, insolvency or
similar proceeding with respect to the Company) on and other
amounts due on or in connection with any Indebtedness of the
Company for money borrowed from others, whether outstanding on
the date of the Indenture or thereafter created, incurred,
assumed or guaranteed, which, at the date of the Indenture or at
the time of any such creation, incurrence, assumption or
guarantee, (i) is by its terms expressly senior to and not
subordinate or subject in right of payment to any other
Indebtedness of the Company, or (ii) is secured by a lien on any
Property of the Company or any of its Subsidiaries; provided,
however, that Senior Indebtedness shall not include any such
Indebtedness if (A) the value of the collateral securing such
Indebtedness at time of incurrence is less than the amount of
such Indebtedness or (B) the value of any Property substituted
for the collateral securing such Indebtedness is less than the
value of the collateral so released in either case as determined
by the Company and set forth in an Officer's Certificate of the
Company received by the Trustee, which certificate shall be
conclusive evidence of the correctness of the matters set forth
herein, or (iii) has been designated Senior Indebtedness pursuant
to an Officers' Certificate of the Company received by the
Trustee. Notwithstanding anything herein to the contrary, Senior
Indebtedness shall not mean (a) Indebtedness of the Company to a
Subsidiary of the Company for money borrowed or advances from
such Subsidiary, (b) Indebtedness representing the maximum fixed
repurchase price of any Capital Stock of the Company which by its
terms or otherwise is or may be required to be redeemed or
repurchased prior to the Stated Maturity of the Notes or at the
option of the holder thereof, (c) Indebtedness of the Company to
any officer or director thereof, (d) obligations owing under
judgments arising out of obligations that are not Indebtedness
for borrowed money, (e) accounts payable or any other
Indebtedness to trade creditors created or assumed by the Company
in the ordinary course of business in connection with the
obtaining of materials or services and (f) any liability for
federal, state, local or other taxes owed or owing by the
Company.
"Series B Preferred Stock" means shares of the
Company's preferred stock, Series B held by the trustee for the
Company ESOP.
"Significant Subsidiary" means any Subsidiary of the
Company (i) the revenues attributable to which for the then most
recently completed four fiscal quarters constituted 5% or more of
the consolidated revenues of the Company and its Subsidiaries for
such period, (ii) the assets of which as of the end of such
period constituted 5% or more of the consolidated assets of the
Company and its Subsidiaries as of the end of such period or
(iii) that operates, owns or leases any Property that is material
to the business operations of the Company or any Restricted
Subsidiary.
"Special Record Date" means a date fixed by the Trustee
pursuant to Section 209.
"Stated Maturity" means, with respect to any Note or
any installment of interest thereon, the date specified in such
Note as the fixed day on which the principal on such Note or such
installment of interest is due.
"Stock Pledge" means the Stock Pledge Security and
Intercreditor Agreement dated as of December 12, 1989 among the
Company, Tropicana Enterprises, the members of the Jaffe Group
(as defined in the Tropicana Enterprises partnership agreement)
and Trop C.C., a Nevada general partnership, pursuant to which
the Company pledged all of the stock of Adamar of Nevada to
secure the Company's obligations under various agreements
relating to the Tropicana, as in effect on the Effective Date.
"Subsidiary" means, with respect to any Person, (i) a
corporation a majority of whose Capital Stock with voting power,
under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries
thereof, or such Person and one or more Subsidiaries thereof,
directly or indirectly, at the date of determination thereof has
at least majority ownership interest and the power to direct the
policies, management and affairs thereof. For purposes of this
definition, any directors' qualifying shares mandated by
applicable law shall be disregarded in determining the ownership
of a Subsidiary.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. 77aaa-bbbb)
as in effect on the date of execution of this Indenture, except as provided
in Section 603.
"Transaction Date" means the date of the transaction
giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio or to make any other determination for
purposes of complying with the provisions of this Indenture,
provided that if such transaction is related to or in connection
with any acquisition of any Person, the Transaction Date shall be
the date on which the Company or any of its Subsidiaries enters
into an agreement with such Person to effect such acquisition;
provided, however, that if subsequent to the entering of such
agreement the Company or any of its Subsidiaries shall amend the
terms of such acquisition with respect to the consideration
payable by the Company or any of its Subsidiaries in connection
with such acquisition, the Transaction Date shall be the date on
which the Company or any of its Subsidiaries enters into an
agreement with such Person to effect such amendment. The second
proviso above shall not be applicable if, as of the Transaction
Date with respect to any acquisition, the Company could incur at
least $1.00 of additional Indebtedness under Section 705(a) when
the Consolidated Fixed Charge Coverage Ratio is calculated on the
basis of the amended terms of such acquisition and the
Indebtedness to be incurred by the Company and its Restricted
Subsidiaries in connection therewith.
"Tropicana" means the Las Vegas Tropicana casino hotel
operated by HRN on the date of this Indenture.
"Tropicana Enterprises" means Tropicana Enterprises, a
Nevada general partnership.
"Tropicana Lease" means the Amended and Restated Lease
(Tropicana Hotel/Casino) dated November 1, 1984 between Tropicana
Enterprises and HRN, as amended.
"Tropicana Loan" means the Loan Agreement by and
between Tropicana Enterprises, HRN, Ramada and the Lenders named
therein, made and entered into on November 19, 1984, as in effect
at the Effective Date.
"Tropicana Loan Refinancings" means any refinancings or
financings of, or related to, the Tropicana Loan or any
refinancings thereof (including, but not limited to, any
Indebtedness owed to the Company or any Restricted Subsidiary in
connection with such Tropicana Loan or any refinancings thereof),
to the extent that the aggregate amount of such Indebtedness
incurred pursuant to such refinancings or financings does not
exceed the outstanding principal amount under the Tropicana Loan
at the Effective Date.
"Tropicana Payments" means, for any period, that
portion of the lease payments made by HRN to Tropicana
Enterprises pursuant to the Tropicana Lease that represents the
sum of interest expense on Indebtedness of Tropicana Enterprises
payable to Persons other than the Company plus amounts
distributed in respect of the Jaffe Partnership Interest.
"Tropicana Security Deposit" means the additional
security deposit that HRN may be required to provide from time to
time pursuant to the Tropicana Lease (as in effect on the
Effective Date).
"Trust Officer" means, with respect to the Trustee, the
chairman or vice chairman of the board of directors, the chairman
or vice chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president,
any vice president, any assistant vice president, the secretary,
any assistant secretary, the cashier, any assistant cashier, any
trust officer or assistant trust officer or any other officer of
the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means,
with respect to a particular corporate trust matter, any other
officer to whom such matter is specifically referred because of
his or her knowledge of and familiarity with the particular
subject.
"Trustee" means American Bank National Association, 101
East Fifth Street, St. Paul, Minnesota 55101, unless and until a
successor replaces it in accordance with the provisions of this
Indenture and thereafter means the successor.
"Unrestricted Subsidiary" means (1) any Subsidiary of
the Company which at the time of determination shall be an
Unrestricted Subsidiary (as designated by the Board of Directors
of the Company, as provided below) and (2) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors of the Company
may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary (unless such Subsidiary owns any Capital Stock of or
owns or holds any Lien on any Property of the Company or any
other Subsidiary of the Company which is not a Subsidiary of the
Subsidiary to be so designated), provided that either (x) the
Subsidiary to be so designated has total assets of $1,000 or less
or (y) immediately after giving pro forma effect to such
designation the Company could incur $1.00 of additional
Indebtedness under Section 705(a); and provided, further, that a
Subsidiary shall not be designated as an Unrestricted Subsidiary
if the Company or a Restricted Subsidiary creates, incurs,
issues, assumes, guarantees or in any other manner becomes liable
with respect to any obligation of such Subsidiary. The Board of
Directors of the Company may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary, provided that
immediately after giving pro forma effect to such redesignation,
the Company could incur $1.00 of additional Indebtedness under
Section 705(a). Any such designation or elimination thereof by
the Board of Directors of the Company shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect
to such designation and an Officers' Certificate certifying that
such designation complies with the foregoing conditions.
"U.S. Government Obligations" are direct noncallable
obligations of the United States of America or guaranteed by the
United States of America for the payment of which the full faith
and credit of the United States is pledged.
"Voting Power" means the aggregate number of votes that
may be cast for the election of a corporation's directors (or
Persons performing equivalent functions) by the beneficial owners
of all shares of Voting Stock issued by the Company.
"Voting Stock" means securities of any class or classes
of a corporation the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for corporate
directors (or Persons performing equivalent functions).
"Wholly Owned Subsidiary" means any Restricted
Subsidiary of which 100% of the Capital Stock of, or other
ownership interest in, such Restricted Subsidiary is at the time
owned by the Company or a Wholly Owned Subsidiary.
SECTION 102. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee;
"obligor" on the Notes means the Company.
All other terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or
defined by SEC rules under the TIA have the meanings assigned to
them thereby.
SECTION 103. Compliance Certificates and Opinions.
(a) Upon any request or application by the Company to the
Trustee to take any action under any provision of this Indenture,
the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed
action have been complied with;
(2) an Opinion of Counsel stating that in the opinion
of such counsel, all such conditions precedent, if any, have
been complied with; and
(3) other than for the initial request by the Company
to the Trustee to authenticate and issue the Notes, an
Accountants' Certificate stating that, in the opinion of
such accountant, such action may be taken under the
Indenture without the occurrence of a Default pursuant to
Sections 704, 705, 801(a)(4) and 801(a)(5).
In the case of any such application or request as to which the
furnishing of any such documents is specifically required by any
provision of this Indenture relating to such particular
application or request, no additional certificates or opinion
need be furnished.
(b) Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been
complied with.
SECTION 104. Form of Documents Delivered to Trustee.
(a) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
(b) Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under
this Indenture, they may, but need not, be consolidated to form
one instrument.
SECTION 105. Acts of Holders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or
other action provided for by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing. Except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to
the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to
as the Act of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 501) conclusive in favor
of the Trustee and the Company if made in the manner provided in
this Section 105.
(b) The fact and date of the execution by any Person
of any instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of notary public or
other officer authorized by law to take acknowledgements of
deeds, certifying that the individual signing such instrument or
writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authorization. The fact and
date of the execution of any such instrument or writing, or the
authorization of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) Ownership of Notes shall be proved by the
appearance of a Person's name in the Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Note
shall bind every future Holder of the same Note and the Holder of
every Note issued upon the registration of transfer or in
exchange therefor or in lieu thereof, to the same extent as the
original Holder, in respect of anything done, omitted or suffered
to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Note.
(e) The Trustee may require such additional proof of
any matter referred to in this Section as it shall deem
necessary.
SECTION 106. Notices, etc. to Trustee and the Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted
by this Indenture to be made upon, given or furnished to, or
filed with:
(1) the Trustee shall be sufficient for every purpose
hereunder if in writing and mailed postage prepaid by first-
class, registered or certified mail, in each case return
receipt requested, or delivered personally, to the Trustee
at its Corporate Trust Division, 101 E. Fifth Street, St.
Paul, Minnesota 55101, Attention: Corporate Trust
Department, or at any other address previously furnished in
writing to the Company; and
(2) the Company shall be sufficient for every purpose
hereunder if in writing and mailed postage prepaid by first-
class, registered or certified mail, in each case return
receipt requested, or delivered personally, to the Company,
addressed to it at Aztar Corporation, 2390 E. Camelback
Road, Suite 400, Phoenix, Arizona 85016, Attention: Chief
Financial Officer or at any other address previously
furnished in writing to the Trustee by the Company with
copies given in one of the foregoing manners to Snell &
Wilmer, One Arizona Center, Phoenix, Arizona 85004-0001,
Attention: David Sprentall, Esq. and to Latham & Watkins,
633 West Fifth Street, Suite 4000, Los Angeles, California
90071, Attention: Brian G. Cartwright, Esq. (provided that
any failure to furnish such copies shall not affect the
sufficiency of any such request, demand, authorization,
direction, notice, consent, waiver or Act of Holders or
other document with respect to the Company).
SECTION 107. Notice to Holders; Waiver. Where this
Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given if in writing and mailed
postage prepaid by first-class, registered or certified mail, in
each case return receipt requested, to each Holder affected by
such event, at his address as it appears in the Register, not
later than the latest date and not earlier than the earliest date
prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for
notice in any matter, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case, by reason of suspension of regular mail
service, or by reason of any other cause, it shall be
impracticable to give such notice by mail, then such notification
may be given by any other reasonable method of giving such notice
and shall be deemed to be sufficient giving of such notice for
every purpose hereunder.
If a notice or communication is delivered or mailed in
the manner provided above within the time prescribed, it is duly
given, whether or not the addressee receives it.
If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at
the same time.
SECTION 108. Communication by Holders with Other
Holders. Holders may communicate pursuant to TIA 312(b) with
other Holders with respect to their rights under this Indenture
or the Notes. The Trustee shall comply with the provisions of
TIA 312(b). The Company, the Trustee, the Registrar and any
agent of any of them shall have the protection of TIA 312(c).
SECTION 109. Conflict with TIA. If any provision
hereof limits, qualifies or conflicts or fails to comply with
another provision which is required to be included in this
Indenture by any of the provisions of the TIA, such required
provision shall control.
SECTION 110. Rules by Trustee and Agents. The Trustee
may make reasonable rules for action by or a meeting of Holders.
Each of the Registrar and Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 111. No Recourse Against Others. The Notes
and the obligations of the Company under this Indenture are
solely obligations of the Company and no officer, director,
employee or stockholder, as such, shall be liable for any failure
by the Company to pay amounts on the Notes when due or perform
any such obligation.
SECTION 112. Execution in Counterparts. This
Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
SECTION 113. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction
hereof.
SECTION 114. No Adverse Interpretation of Other
Agreements. This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary
of the Company. No such indenture, loan or debt agreement may be
used to interpret this Indenture.
SECTION 115. Successors and Assigns. All covenants
and agreements in this Indenture by the Company and the Trustee
shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 116. Separability Clause. In case any
provision in this Indenture or the Notes shall be invalid,
illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 117. Benefits of Indenture. Nothing in this
Indenture or the Notes, express or implied, shall give to any
Person, other than the parties hereto and their successors and
assigns hereunder, any Paying Agent and the Holders of Notes, any
benefits or any legal or equitable right, remedy or claim under
this Indenture, except to the extent provided in Article Ten with
respect to the holders of Senior Indebtedness.
SECTION 118. Governing Law and Choice of Forum. This
Indenture and each Note shall be deemed to be a contract under
the laws of the State of New York and shall be construed in
accordance with and governed by the laws of the State of New York
without regard to principles of conflicts of law. If any action
or proceeding shall be brought by the Trustee or a Holder in
order to enforce any right or remedy under this Indenture or the
Notes, the Company hereby consents and will submit to the
jurisdiction of the courts of the State of New York or any
federal court sitting in the Borough of Manhattan in The City of
New York, New York. Any action or proceeding brought by the
Company to enforce any right, assert any claim or obtain any
relief whatsoever in connection with this Indenture or the Notes
shall be brought by the Company exclusively in the courts of the
State of New York or in any federal court sitting in the Borough
of Manhattan in The City of New York, New York. The Trustee
hereby consents and agrees to submit to the jurisdiction of the
courts of the State of New York or any federal court sitting in
the Borough of Manhattan in The City of New York, New York in
respect of any action or proceeding under this Indenture or the
Notes.
SECTION 119. Legal Holidays. In any case where any
Interest Payment Date, Redemption Date or Stated Maturity of any
Notes shall not be a Business Day, then (notwithstanding any
other provision of this Indenture) payment of interest or
principal need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date or Redemption Date or at the
Stated Maturity and, if so made, no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be, until such Business Day.
SECTION 120. Incorporation of Exhibit. Exhibit A
annexed hereto shall constitute an integral part of this
indenture for all purposes.
ARTICLE TWO
THE NOTES
SECTION 201. Form. The Notes and the Trustee's
certificate of authentication shall be substantially in the form
annexed hereto as Exhibit A, with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements
placed thereon, as may be required to comply with the rules of
any securities exchange on which the Notes may be listed, or as
may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of the
Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the
face of the Note.
The terms and provisions contained in the Notes shall
constitute, and are expressly made, a part of this Indenture. To
the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.
The definitive Notes shall be printed, lithographed or
engraved or produced by any combination of these methods or in
any other manner permitted by the rules of any securities
exchange on which the Notes may be listed, all as determined by
the officers executing such Notes, as evidenced by their
execution of such Notes.
The principal of and interest on the Notes shall be
payable at the office or agency of the Company in the Borough of
Manhattan, The City of New York, New York maintained for such
purpose and at any other office or agency maintained by the
Company for such purpose; provided, however, that at the option
of the Company, interest may be paid by check mailed to the
address of the Person entitled thereto as such address shall
appear in the Register.
SECTION 202. Title and Terms. The aggregate principal
amount of Notes that may be authenticated and delivered under
this Indenture is limited to $180,000,000, except for Notes
authenticated and delivered upon registration of, transfer of, or
in exchange for, or in lieu of other Notes pursuant to Sections
205, 206, 208, 605 and 906.
The Notes shall be known and designated as the "13 3/4%
Senior Subordinated Notes Due 2004" of Aztar Corporation. Their
Stated Maturity for payment of principal shall be October 1,
2004.
SECTION 203. Denominations. The Notes shall be
issuable only as registered Notes without coupons in minimum
denominations of $1,000 and integral multiples thereof.
SECTION 204. Execution, Authentication, Delivery, and
Dating. The Notes shall be executed on behalf of the Company by
the chairman of its board of directors, its president or one of
its vice presidents and attested by its secretary or one of its
assistant secretaries, under its corporate seal, if any, which
may be in facsimile form and be imprinted or otherwise reproduced
thereon. The signature of any of these officers on the Notes may
be manual or facsimile.
Notes bearing the manual or facsimile signature of
individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to be such prior to the
authentication or delivery of such Notes or was not such at the
date of authentication or delivery of such Notes.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Notes
executed by the Company together with a Company Order authorizing
authentication thereof to the Trustee for authentication. The
order shall specify the amount of Notes to be authenticated and
the date on which the original issue of Notes is to be
authenticated. The Trustee shall authenticate and deliver such
Notes as provided for in this Indenture and not otherwise.
Each Note shall be dated as of the date of its
authentication.
No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there
appears on such Note a certificate of authentication in the form
provided for herein executed by the Trustee by the manual
signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive evidence, and the
only evidence, that such Note has been duly authenticated and
delivered hereunder.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with
the Company or an Affiliate of the Company.
SECTION 205. Temporary Notes. Pending the preparation
of definitive Notes, the Company may prepare and execute, and
upon a Company Order, the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Notes in lieu of
which they are issued and with such variations as the officers
executing such Notes may determine, as evidenced by their
execution of such Notes.
If temporary Notes are issued, the Company will cause
definitive Notes to be prepared without unreasonable delay.
After the preparation of definitive Notes, the temporary Notes
shall be exchangeable for definitive Notes upon surrender of the
temporary Notes at the office or agency of the Company to be
maintained as provided in Section 702, without charge to the
Holder. Upon surrender for cancellation of any one or more
temporary Notes, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more
definitive Notes of any authorized denominations of a like
initial aggregate principal amount and Stated Maturity. Until so
exchanged the temporary Notes shall in all respects be entitled
to the same benefits under this Indenture as definitive Notes.
SECTION 206. Registration, Registration of Transfer
and Exchange. The Company shall cause to be kept at the office
or agency maintained pursuant to Section 702 a register (the
"Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration
of Notes and the registration of transfers of Notes. In no case
shall there be more than one Register. The Trustee is hereby
appointed "Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided.
If a Person other than the Trustee is appointed by the
Company as Registrar, the Company will give the Trustee prompt
written notice of the appointment of a Registrar and of the
location, and any change in the location, of the Register, and
the Trustee shall have the right to inspect the Register at all
reasonable times, to obtain copies of the Register and to rely
upon a certificate executed on behalf of the Registrar by an
officer thereof as to the names and addresses of the Holders of
the Notes and the initial principal amounts and numbers of such
Notes.
Upon surrender for registration of transfer of any Note
at the office or agency of the Company to be maintained as
provided in Section 702, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of
any authorized denominations of a like initial aggregate
principal amount and Stated Maturity.
At the option of the Holder, Notes may be exchanged for
other Notes of any authorized denominations of a like initial
aggregate principal amount and Stated Maturity upon surrender of
the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes which
the Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company
evidencing the same debt and entitled to the same benefits under
this Indenture as the Notes surrendered upon such registration of
transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly
executed, by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 205, 605, 711 or 906 not involving
any transfer.
The Company shall not be required (i) to issue,
register the transfer of or exchange any Note during a period
beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Notes selected for
redemption and ending at the close of business on the day of such
mailing or (ii) to register the transfer of or exchange any Note
so selected for redemption except, in the case of any Note to be
redeemed in part, the portion thereof not to be redeemed.
SECTION 207. Holder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders. If
the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least five Business Days prior to each semi-annual
Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the
Trustee may require of the names and addresses of Holders. The
Trustee and the Registrar may rely on the accuracy of such list
as the same may be amended from time to time.
SECTION 208. Mutilated, Destroyed, Lost or Stolen
Notes. If (i) any mutilated Note is surrendered to the Trustee
or (ii) the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note and there is delivered to
the Trustee such security or indemnity as may be required by the
Trustee to hold the Company and the Trustee harmless, then the
Company shall execute and upon a Company Request the Trustee
shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Note, a new Note of the
same tenor, initial principal amount and Stated Maturity, bearing
a number not contemporaneously outstanding; provided, however,
that if any such mutilated, destroyed, lost or stolen Note shall
have become or shall be about to become due and payable, instead
of issuing a new Note, the Company may pay such Note without
surrender thereof, except that any mutilated Note shall be
surrendered.
Upon the issuance of any new Note under this Section
208, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 208 in
lieu of any mutilated, destroyed, lost or stolen Note shall
constitute an original, additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen
Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued
hereunder.
The provisions of this Section 208 are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes.
SECTION 209. Payment of Principal and Interest;
Principal and Interest Rights Preserved. Interest on any Note
which is payable, and is paid or for which payment is duly
provided for pursuant to Paragraph 2 of the Notes, on any
Interest Payment Date shall be paid to the Person in whose name
that Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Note which is payable, but is not
paid or for which payment is not duly provided for on any
Interest Payment Date, is herein called "Defaulted Interest."
Defaulted Interest on any Note shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by
virtue then of having been such Holder, and such Defaulted
Interest may be paid by the Company, as follows:
The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their
respective Predecessor Notes) are registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee of the amount
of Defaulted Interest proposed to be paid on each Note and
the date of the proposed payment (which payment date shall
not be less than 25 or more than 30 days following the date
of delivery of such notice to the Trustee), and at the same
time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest, such money when
deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as provided in this
clause. Thereupon, the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest in respect
of Notes which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be given to all
Holders in the manner and to the extent provided in Section
107. Notice of the proposed payment of such Defaulted
Interest on the Notes and the Special Record Date therefor
having been so given, such Defaulted Interest on the Notes
shall be paid by the Trustee from the funds deposited
therefor to the Persons in whose names such Notes (or their
respective Predecessor Notes) are registered in the Register
at the close of business on such Special Record Date, on the
date for payment of such Defaulted Interest specified in the
Notice.
Subject to the foregoing provisions of this Section,
each Note delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Note shall
carry the rights to interest accrued and unpaid, and to accrue,
which were carried by such other Note.
SECTION 210. Persons Deemed Owners. Prior to due
presentment for registration of transfer of any Note, the
Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Note is registered as the
owner of such Note for the purpose of receiving payments of
principal of and interest on such Note (subject to Section 209)
and for all other purposes whatsoever, whether or not such Note
be overdue, and none of the Company, the Trustee or any agent of
the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 211. Cancellation. All Notes surrendered to
the Trustee for payment, registration of transfer or exchange
(including Notes surrendered to any Person other than the Trustee
which shall be delivered to the Trustee) shall be promptly
cancelled by the Trustee. The Company may at any time deliver to
the Trustee for cancellation any Notes previously authenticated
and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled
as provided in this Section 211, except as expressly permitted by
this Indenture. Subject to the record retention requirements
under the Exchange Act, the Trustee may destroy cancelled Notes
pursuant to a Company Request and furnish a certificate of such
destruction to the Company, unless the Company shall direct by a
Company Order that cancelled Notes be returned to the Company.
SECTION 212. Computation of Interest. Interest on the
Notes shall be computed on the basis of a 360-day year of twelve
30-day months.
SECTION 213. CUSIP Number. The Company in issuing the
Notes may use a "CUSIP" number and if so the Trustee shall use
the CUSIP number in notices of redemption or exchange as a
convenience to Holders, provided that any such notice may state
that no representation is made as to the correctness or accuracy
of the CUSIP number printed in the notice or on the Notes and
that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify
the Trustee of any change in the CUSIP number.
ARTICLE THREE
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 301. Satisfaction and Discharge of Indenture;
Defeasance. (a) The Company, at any time, may terminate its
obligations under this Indenture by delivering all Outstanding
Notes to the Trustee for cancellation and paying all other sums
payable hereunder by the Company; provided, however, that the
obligations of the Company under Sections 303, 304, 305 and 507,
together with the definitions in Article One necessary for the
interpretation of such Sections, shall survive.
(b) At the Company's option, (i) the Company will be
Discharged on the 123rd day after the satisfaction of the
conditions set forth in paragraphs (c) and (d) below or (ii) the
Company need not comply with those covenants set forth in
Sections 704, 705, 706, 707, 708, 709, 710, 711 and 716 and the
provisions of Sections 401(3) (but only to the extent that
Section 401(3) relates to such enumerated provisions), 801(a)(4)
and 801(a)(5) at any time after the applicable conditions set
forth in paragraphs (c) and (d) below have been satisfied.
(c) In order to exercise either option in paragraph
(b) above,
(1) the Company must irrevocably deposit with the
Trustee or a trustee satisfactory to the Company and the
Trustee, in trust, specifically pledged as security for and
dedicated solely to the benefit of the Holders (A) money,
(B) U.S. Government Obligations which, through the payment
of interest thereon and principal thereof in accordance with
their terms, will provide money or (C) a combination of
money and U.S. Government Obligations, in an amount
sufficient (without consideration of any reinvestment of
interest on such funds) in the opinion (with respect to (B)
and (C)) of a nationally recognized firm of independent
public accountants expressed in an Accountants' Certificate
delivered to the Trustee to pay and discharge all the
principal of and interest on the Notes not later than one
day before the dates such payments are due in accordance
with the terms of the Notes;
(2) the Company must deliver to the Trustee:
(i) irrevocable instructions to apply such money
or the proceeds of such U.S. Government Obligations to
the payment of principal of and interest on the Notes
at maturity or redemption, as the case may be;
(ii) an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent
provided in Sections 301(c) and 301(d) have been
complied with;
(iii) an Officers' Certificate certifying as to
whether the Notes are then listed on the New York Stock
Exchange;
(iv) if the Notes are then listed on the New York
Stock Exchange, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the
Company's exercise of its option under this Section
would not cause the Notes to be delisted;
(v) an Opinion of Counsel to the effect that the
deposit and related defeasance would not cause the
Holders of the Notes to recognize income, gain, or loss
for federal income tax purposes and that the Holders
will be subject to federal income tax on the same
amount and in the same manner and at the same times as
would have been the case if the deposit and related
defeasance had not occurred and, in the case of a
Discharge pursuant to paragraph (b)(i) above,
accompanied by a revenue or private letter ruling to
such effect received from or published by the Internal
Revenue Service; and
(vi) an Opinion of Counsel to the effect that (A)
the trust funds will not be subject to any rights of
holders of Senior Indebtedness, including, without
limitation, those rights arising under Article Ten of
this Indenture; (B) in the case of a Discharge pursuant
to paragraph (b)(1) above and subject to customary
exclusions and exceptions reasonably acceptable to the
Trustee, (1) the Company has authorization to establish
an irrevocable trust in favor of the Trustee for the
benefit of the Holders under applicable law and the
action in establishing the irrevocable trust has been
duly and properly authorized by the Company and such
authorization has not been revoked, (2) the Trustee is
an Independent trustee with respect to the irrevocable
trust, (3) a valid trust is created at the time of such
irrevocable deposit and (4) the Holders will have the
sole beneficial ownership interest under applicable law
in the money so deposited in such trust; and (C) if a
court of competent jurisdiction were to rule under any
Bankruptcy Laws that the trust funds remained property
of the Company, (1) the Trustee will hold, for the
benefit of the Holders, a valid and first priority
perfected security interest in such trust funds that,
after the expiration of any applicable preference
period (as specified in such opinion), is not avoidable
under the Bankruptcy Laws of any jurisdiction, (2) the
Holders will be entitled to receive adequate protection
of their interests in such trust funds under 11 U.S.C.
361, 362, 363 and 364 and (3) no property, rights in
property or other interests granted to the Trustee for
the benefit of the Holders or to the Holders in
exchange for or with respect to any of such trust funds
will be subject to any prior rights of holders of
Senior Indebtedness, including, without limitation,
those rights arising under Article Ten of this
Indenture;
For the limited purpose of the Opinion of Counsel
referred to in this paragraph (c)(2)(vi), such opinion
may contain (1) either (A) an assumption that the
conclusions contained in a letter by a nationally
recognized appraisal firm that (i) the value of the
trust assets is reasonably equivalent to the amount of
Notes then Outstanding, plus accrued and unpaid
interest thereon, as of the date of the deposit and
(ii) the Discharge or defeasance pursuant to paragraph
(b) above of the principal amount of the Notes then
Outstanding, plus accrued and unpaid interest thereon,
as of the date of the transfer, is fair consideration
for the transfer of the trust assets to the trust, are
accurate, provided that such letter is also addressed
and delivered to the Trustee, or (B) an assumption that
the conclusions contained in a customary valuation
letter by a nationally recognized appraisal firm, dated
as of the date of the deposit and taking into account
such deposit, or, at counsel's option, a customary
alternative certificate reasonably acceptable to the
Trustee, to the effect that the Company, as a result of
the transfer, will not (i) be insolvent (either because
its financial condition is such that the sum of its
debts is greater than all of its assets, at a fair
valuation, or because the present fair saleable value
of its assets will be less than the amount required to
pay its probable liability on its debts as they become
absolute and matured), (ii) have unreasonably small
capital for the business in which it is or will be
engaged or (iii) have incurred or planned to incur
debts beyond its ability to pay as such debts mature,
are accurate, provided that (x) such valuation letter
is also addressed and delivered to the Trustee and (y)
the Company delivers to the Trustee a letter by a
nationally recognized appraisal firm to the effect that
the value of the trust assets is reasonably equivalent
to the amount of the Notes then Outstanding, plus
accrued and unpaid interest thereon, as of the date of
the deposit; or (2) a representation that (A) the Notes
are the legal, valid, binding and enforceable
obligations of the Company, and the Company's payment
obligations are not avoidable under any Bankruptcy
Laws, and (B) the trust funds are not subject to
recapture by or on behalf of the Company under any
Bankruptcy Laws;
(3) no Default or Event of Default (including as a
result of such deposit) shall have occurred and be
continuing on the date of such deposit and such deposit will
not result in a breach or violation of, or constitute a
default under, any other instrument to which the Company is
a party or by which it is bound, as evidenced to the Trustee
in an Officers' Certificate delivered to the Trustee
concurrently with such deposit;
(4) the Company shall have paid or duly provided for
payment of all sums payable by the Company under this
Indenture and the Notes; and
(5) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Company's exercise
of its option under this provision will not result in the
Company, the Trustee or the trust to be required to register
as an "investment company" under the Investment Company Act.
(d) It is the intention of the parties hereto that a
valid trust for the benefit of the Holders be created at the time
that the Company makes the deposit pursuant to this Section 301.
Solely as protection for the Holders in the event that a court of
competent jurisdiction were to determine in the future either
that (i) such trust had not been validly created or (ii) such
trust is not enforceable, the Company, at the time the Company
makes such deposit, will take any and all acts necessary to
create and perfect, in favor of the Holders, a first-priority
security interest in the money so deposited and shall take any
other action and execute and deliver any other documents that may
reasonably be requested by the Trustee to effectuate such
security interest, and shall do all of the above at such
appropriate time so that such security interest shall attach to
the deposit at the time such deposit is made.
SECTION 302. Application of Trust Money. All money
and U.S. Government Obligations deposited with the Trustee or
such other trustee pursuant to Section 301 shall be held in trust
and applied by the Trustee or such other trustee, in accordance
with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including
the Company acting as its own Paying Agent),as the Trustee or
such other trustee may determine, to the Persons entitled
thereto, of the principal and interest for whose payments such
money and U.S. Government Obligations have been deposited with
the Trustee or such other trustee. All such money and U.S.
Government Obligations shall be segregated and held in a separate
trust. Money, U.S. Government Obligations and proceeds thereof
so held in trust, to the extent allocated for the payment of the
Notes, shall not be subject to the provisions of Article Ten
(other than, in the case of a defeasance pursuant to Section
301(b)(ii), Section 1001).
SECTION 303. Repayment to the Company. Subject to
Section 302, the Trustee and the Paying Agent shall promptly pay
to the Company upon request any excess money or U.S. Government
Obligations held by them at any time and thereupon shall be
relieved from all liability with respect to such money. The
Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or
interest that remains unclaimed for two years; provided, however,
that the Company shall, if requested by the Trustee or such
Paying Agent, give the Trustee or such Paying Agent satisfactory
indemnification against any and all liability which may be
incurred by it by reason of such payment; and provided, further,
that the Trustee or such Paying Agent before being required to
make any payment shall at the expense of the Company cause to be
published once in a newspaper of general circulation in The City
of New York and mail to each Holder entitled to such money notice
that such money remains unclaimed and that, after a date
specified therein, which shall be at least 30 days from the date
of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After
payment to the Company, Holders entitled to such money must look
to the Company for payment as general creditors unless an
applicable law designates another Person.
SECTION 304. Reinstatement. If the Trustee or Paying
Agent is unable to apply any money or U.S. Government Obligations
in accordance with Section 302 by reason of any legal proceeding
or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under
this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 301 until such
time as the Trustee or Paying Agent is permitted to apply all
such money or U.S. Government Obligations in accordance with
Section 302; provided, however, that if the Company has made any
payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such
payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
SECTION 305. Indemnity. The Company shall indemnify
the Trustee and hold it harmless against any tax, fee or other
charge imposed on or assessed against the money or U.S.
Government Obligations deposited with the Trustee under this
Article Three or any interest or other income derived therefrom.
ARTICLE FOUR
DEFAULTS AND REMEDIES
SECTION 401. Events of Default. "Events of Default,"
wherever used herein, means any one of the following events:
(1) The Company defaults in the payment of interest on
any Note when the same becomes due and payable and the
default continues for a period of 30 days, whether or not
such payment is prohibited by Article Ten;
(2) The Company defaults in the payment of the
principal of any Note when the same becomes due and payable
at maturity, upon redemption, repayment pursuant to Section
711 or otherwise, whether or not such payment is prohibited
by Article Ten;
(3) The Company fails to observe, perform or comply
with any of its other agreements or covenants in or
provisions of the Notes or this Indenture and the failure to
observe, perform or comply continues for the period and
after the notice specified below;
(4) A default or defaults occur under any mortgage,
indenture, bond, note, debenture or other instrument under
which there may be issued or by which there may be secured
or evidenced any Indebtedness of the Company or any of its
Restricted Subsidiaries, whether such Indebtedness now
exists or shall be created hereafter, and such Indebtedness
shall have been accelerated (or shall have matured);
provided that the principal amount of Indebtedness with
respect to which any such default or defaults and
acceleration (or maturity) has occurred and is continuing,
together with the principal amount of all other Indebtedness
with respect to which such a default or defaults and
acceleration (or maturity) has occurred and is continuing,
aggregates $5,000,000 or more;
(5) The Company or any of its Significant Subsidiaries
pursuant to or within the meaning of Title 11 of the United
States Code or any similar federal or state law for the
relief of debtors or affecting creditors' rights
(collectively, "Bankruptcy Law"):
(i) commences a voluntary case or any other
action or proceeding,
(ii) consents by answer or otherwise to the
commencement against it of an involuntary case or any
other action or proceeding,
(iii) seeks or consents to the appointment of a
receiver, trustee, assignee, liquidator, custodian or
similar official (collectively, a "Custodian") of it or
for all or substantially all of its Property,
(iv) makes a general assignment for the benefit
of its creditors, or
(v) generally is unable to pay its debts as the
same become due;
(6) A court of competent jurisdiction enters an order
or decree under any Bankruptcy Law or under any law
affecting creditors' rights that is similar to a Bankruptcy
Law that:
(i) is for relief against the Company or any of
its Significant Subsidiaries in an involuntary case in
bankruptcy or any other action or proceeding for any
other relief,
(ii) appoints a Custodian of the Company or any
of its Significant Subsidiaries or for all or
substantially all of the Property of the Company or any
of its Significant Subsidiaries, or
(iii) orders the liquidation of the Company or
any of its Significant Subsidiaries, and in each case
the order or decree remains unstayed and in effect for
60 days, or any dismissal, stay, rescission or
termination ceases to remain in effect;
(7) one or more judgments or orders shall have been
rendered against the Company or any of its Restricted
Subsidiaries in an aggregate amount in excess of $5,000,000
and shall not have been discharged and either (x) an
enforcement proceeding shall have been commenced by any
creditor upon any such judgment or (y) there shall be any
period of 90 consecutive days during which a stay of
enforcement of such judgments, by reason of a pending appeal
or otherwise, shall not be in effect; or
(8) Any Gaming License of the Company or any of its
Subsidiaries is revoked, terminated or suspended or
otherwise ceases to be effective, resulting in the cessation
or suspension of operation for a period of more than 90 days
of the casino business of any casino hotel owned, leased, or
operated directly or indirectly by the Company or any of its
Subsidiaries (other than any voluntary relinquishment of a
Gaming License if such relinquishment is, in the judgment of
the Company, both desirable in the conduct of the business
of the Company and its Subsidiaries, taken as a whole, and
not disadvantageous in any material respect to the holders).
A Default under clause (3) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Notes provide written notification to
the Company (and the Trustee, in the case of Holders giving
notice) of the Default and the Company does not cure the Default
within 60 days after receipt of the notice. Any notice of
Default must specify the Default, demand that it be remedied and
state that the notice is a 'Notice of Default." Such notice
shall be given by the Trustee if so requested by Holders of at
least 25% in principal amount of the then Outstanding Notes.
SECTION 402. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default occurs and is continuing
(other than an Event of Default as defined in clauses (5) and (6)
of Section 401), then and in every such case the Trustee or the
Holders of not less than 25% in principal amount of the
Outstanding Notes may declare the principal of, and all accrued
but unpaid interest on, all the Notes to be due and payable by a
notice, in writing, to the Company (and the Trustee in the case
of a notice given by Holders) and upon any such declaration such
principal and accrued interest shall become due and payable
immediately. In case an Event of Default as defined in clauses
(5) and (6) of Section 401 occurs, the principal of and interest
on the Notes shall become immediately due and payable without any
declaration or act on the part of the Holders or the Trustee.
In the event of a declaration of acceleration because
an Event of Default as defined in clause (4) of Section 401 has
occurred, and is continuing, such declaration and its
consequences shall be automatically rescinded and annulled if (x)
in the case of Indebtedness that has been accelerated, the
holders of such Indebtedness shall have rescinded the declaration
of acceleration and the consequences thereof within 10 days of
such declaration or, in the case of Indebtedness that has
matured, such Indebtedness has been discharged in full within 10
days following maturity, (y) the Company shall have delivered an
Officers' Certificate certifying such rescission or discharge to
the Trustee and (z) no other Event of Default shall have occurred
and be continuing.
At any time after the Notes have been accelerated and
before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article Four
provided, the Holders of not less than a majority in principal
amount of the Notes Outstanding, by notice to the Company and the
Trustee, may rescind and annul such acceleration and its
consequences if:
(1) there has been paid or deposited with the Trustee
a sum sufficient to pay
(A) all overdue installments of interest on all
Notes,
(B) the principal of any Notes which have become
due otherwise than by such declaration of acceleration
and interest thereon at the rate borne by the Notes,
(C) to the extent the payment of such interest is
lawful, interest upon overdue installments of interest at
the rate borne by the Notes, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents
and counsel;
(2) all Defaults and Events of Default, other than the
non-payment of the principal of and interest on the Notes
that have become due solely by such acceleration, have been
cured or waived as provided in Section 413;
(3) the rescission would not conflict with any
judgment or order of a court of competent jurisdiction; and
(4) in the event of a cure or waiver of a Default or
Event of Default under clause (4) of Section 401, the
Trustee shall have received an Officers' Certificate of the
Company and an Opinion of Counsel that the default giving
rise to such Default or Event of Default has been cured or
waived.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
SECTION 403. Collection Suits by Trustee. If an Event
of Default specified in clause (1) or (2) of Section 401 occurs
and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company or
any other obligor on the Notes for the whole amount of principal
and accrued interest remaining unpaid, together with, to the
extent that payment of such interest is lawful, interest on
overdue principal and interest on overdue installments of
interest, in each case at the rate per annum borne by the Notes
and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial
and non-judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture, the Notes or in any other agreement or instrument or
in aid of the exercise of any power granted herein or therein, or
to enforce any other proper remedy.
SECTION 404. Trustee May File Proofs of Claim. (a) In
the case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company
or any other obligor upon the Notes or to the Property of the
Company or of such other obligor, the Trustee (irrespective of
whether the principal of the Notes shall then be due and payable
as therein expressed or by declaration of acceleration or
otherwise and irrespective of whether the Trustee shall have made
any demand on the Company or such other obligor for the payment
of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the
Notes (including post-petition interest) and to file such
other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial
proceeding, and
(2) to collect and receive any monies or other
Property payable or deliverable on any such claims and to
distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 507.
(b) Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the
rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceeding,
except that the Trustee may vote on behalf of the Holders for the
appointment of a trustee in bankruptcy without soliciting or
canvassing any Holder for consent or approval.
SECTION 405. Trustee May Enforce Claims Without
Possession of Notes. All rights of action and claims under this
Indenture or the Notes may be prosecuted and enforced by the
Trustee without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has
been recovered.
SECTION 406. Application of Money Collected. Any
money collected by the Trustee pursuant to this Article Four
shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such
money on account of principal or interest, upon presentation of
the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee
under Section 507;
Second: To holders of Senior Indebtedness to the
extent required by Article Ten;
Third: To the payment of the amounts then due and
unpaid upon the Notes for principal and interest, in respect
of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Notes
for principal and interest, respectively; and
Fourth: To the Company or any other obligor on the
Notes, as their interests may appear or as a court of
competent jurisdiction may direct.
The Trustee may set a record date and payment date for
any payment to Holders pursuant to this Section.
SECTION 407. Limitation on Suits. No Holder shall
have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default,
(2) the Holders of not less than 25% in principal
amount of the Outstanding Notes have made written request to
the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder,
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the losses, expenses and
liabilities to be incurred in compliance with such request,
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to
institute any such proceeding, and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of not less than a majority in
principal amount of the Outstanding Notes,
it being understood and intended that no one or more Holders
shall have any right in any manner by virtue of, or by availing
itself of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to
seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner
herein provided and for the ratable benefit of all the Holders.
SECTION 408. Unconditional Right of Holders to Receive
Principal and Interest. Notwithstanding any other provision in
this Indenture, the Holder of any Note shall have the absolute
and unconditional right to receive payment of the principal of
and interest on such Note on or after the respective dates
expressed in such Note and to institute suit for the enforcement
of any such payment, and such right shall not be impaired without
the consent of such Holder.
SECTION 409. Restoration of Rights and Remedies. If
the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or
has been determined adversely to the Trustee or the Holder after
exhaustion of all rights to appeal, then and in every such case
the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 410. Rights and Remedies Cumulative. No right
or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 411. Delay or Omission Not Waiver. No delay
or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 412. Control by Holders. The Holders of not
less than a majority in principal amount of the Outstanding Notes
shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee,
provided that
(1) such direction shall not be in conflict with any
rule of law or with this Indenture;
(2) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by
counsel, determines that the action so directed may not
lawfully be taken or if the Trustee in good faith shall, by
a Trust Officer or Trust Officers, determine that the
proceedings so directed would involve it in personal
liability or be unduly prejudicial to the Holders not taking
part in such direction; and
(3) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
SECTION 413. Waiver of Past Defaults. The Holders of
not less than a majority in principal amount of the Outstanding
Notes may on behalf of the Holders of all the Notes waive any
past Default hereunder and its consequences, except a Default
(1) in the payment of the principal of or interest on
any Note; or
(2) in respect of a covenant or provision hereof which
under Article Six cannot be modified or amended without the
consent of the Holder of each Outstanding Note affected;
provided, however, that no default in the payment of any amount
due to the Trustee under Section 507 or any other provision
hereof may be waived by the Holders without the Trustee's written
consent.
Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture, but no
such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 414. Undertaking for Costs. All parties to
this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted
by the Trustee, to any suit instituted by one or more Holders
holding in the aggregate more than 10% in principal amount of the
Outstanding Notes, or to any suit instituted by any Holder
pursuant to Section 408.
ARTICLE FIVE
THE TRUSTEE
SECTION 501. Certain Duties and Responsibilities. (a)
Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall
examine the same to determine whether or not they appear to
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such
Person's own affairs.
(c) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this subsection shall not be construed to limit
the effect of subsection (a) of this Section;
(2) The Trustee shall not be liable for any error of
judgment made in good faith, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent
facts;
(3) The Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of a
majority in principal amount of the Outstanding Notes
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) The Trustee shall examine any certificates or
other documents furnished to it pursuant to the provisions of
this Indenture to determine whether or not such certificates or
other documents conform to the requirements of such provisions.
(e) Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section 501.
SECTION 502. Notice of Defaults. Within 90 days after
the occurrence of any Default hereunder, the Trustee shall
transmit to all Holders notice of such Default hereunder known to
the Trustee in the manner provided in Section 107, unless such
Default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal
of or interest on any Note, the Trustee shall be protected in
withholding such notice if and so long as the Board of Directors
and/or Trust Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders.
SECTION 503. Certain Rights of Trustee. Except as
otherwise provided in Section 501:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other
paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company shall be
sufficiently evidenced by a Company Request;
(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in good faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally
or by agent or attorney;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(h) nothing in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties or the exercise of any of its rights or powers
hereunder; and
(i) The Trustee shall have no duty to inquire as to
the performance of the Company's covenants in Article Seven
hereof. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default, except
(i) any Default or Event of Default occurring pursuant to
Section 401(1), 401(2) or 701, or (ii) any Default or
Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
SECTION 504. Not Responsible for Recitals or Issuance
of Notes. The recitals contained herein and in the Notes (except
the Trustee's certificate of authentication) shall be taken as
the statements of the Company and the Trustee assumes no re-
sponsibility for their correctness. The Trustee makes no
representations as to validity or sufficiency of this Indenture
or the Notes. The Trustee shall not be accountable for the use
or application by the Company of the proceeds from the issuance
of the Notes.
SECTION 505. May Hold Notes. The Trustee, any Paying
Agent, any Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee
of Notes and, subject to Sections 508 and 512, may otherwise deal
with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Registrar or such other agent.
SECTION 506. Money Held in Trust. Money held by the
Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Company. The
Trustee shall apply funds deposited with or transferred to it by
or on behalf of the Company for the purposes so deposited or
transferred and in accordance with the terms of this Indenture.
SECTION 507. Compensation and Reimbursement. The
Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder
(which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties
hereunder.
The Trustee shall promptly notify the Company of any
claim asserted against the Trustee for which it may seek
indemnity.
As security for the performance of the obligations of
the Company under this Section 507, the Trustee shall have a Lien
senior and prior to the Notes upon all Property and funds held or
collected by the Trustee as such, except funds held in trust for
the payment of principal of or interest on Notes.
Notwithstanding the satisfaction and discharge of the
Indenture, the obligations of the Company to the Trustee under
this Section 507 shall survive.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in clause (5) or
(6) of Section 401, the expenses and the compensation for such
services are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 508. Eligibility; Disqualification. This
Indenture shall always have a Trustee who satisfies the
requirements of TIA 310(a)(1) and shall always have a combined
capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. If the Trustee
has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the TIA, the Trustee and the Company
shall in all respects comply with the provisions of Section
310(b) of the TIA.
SECTION 509. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article Five
shall become effective until the acceptance of appointment by the
successor Trustee under Section 510.
(b) The Trustee may resign at any time by giving
written notice thereof to the Company, the New Jersey Commission,
the New Jersey Division, the Nevada Commission and the Nevada
Control Board and any other Gaming Authority at least 30 days
prior to the proposed resignation.
(c) The Trustee may be removed at any time by an Act
of the Holders of a majority in principal amount of the
Outstanding Notes, delivered to the Trustee and to the Company.
(d) The Company, by action of an Authorized Officer,
may remove the Trustee at any time if:
(1) the Trustee fails to comply with Section 508;
(2) the Trustee is adjudged a bankrupt or an insolvent
or an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the
Trustee or its Property;
(4) the Trustee becomes incapable of acting; or
(5) the Trustee becomes disqualified under any
applicable provision of the New Jersey Act or is found
unsuitable under any applicable provision of the Nevada Act,
or the Trustee's relationship with the Company may, in the
Company's discretion, jeopardize any material Gaming License
or franchise or right or approval granted thereto.
(e) If the Trustee fails to comply with Section 508,
any Holder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor
Trustee.
(f) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Company, by action of an Authorized
Officer, shall promptly appoint a successor Trustee. Within one
year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee to replace the
successor Trustee appointed by the Company may be appointed by an
Act of the Holders of a majority in principal amount of the
Outstanding Notes delivered to the Company and the retiring
Trustee. If, within 30 days after the retiring Trustee resigns
or is removed, no successor Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in the
manner provided in Section 510, the retiring Trustee, the Company
or the Holders of at least 10% in aggregate principal amount of
the then Outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(g) The Company shall give notice to all Holders in
accordance with Section 107 of each resignation and each removal
of the Trustee and each appointment of a successor Trustee. Each
notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
SECTION 510. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and the
successor Trustee and the Company shall enter into a supplemental
indenture, pursuant to Section 601 hereof, evidencing the
appointment of the successor Trustee. Thereupon, the resignation
or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee. On request of the
Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee. The retiring Trustee shall
promptly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder,
subject to the Lien, if any, provided for in Section 507. Upon
request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers
and trusts.
No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article Five and under
the TIA.
Notwithstanding the replacement of the Trustee pursuant
to this Section 510, the Company's obligations under Section 507
hereof shall continue for the benefit of the retiring Trustee in
connection with its rights and duties hereunder prior to such
replacement.
SECTION 511. Merger, Conversion, Consolidation or
Succession to Business. Any corporation into which the Trustee
may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article Five, without
the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have
been authenticated, but not delivered, by the Trustee then in
office, any successor Trustee by merger, conversion or
consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the
same effect as if such successor Trustee had itself authenticated
such Notes.
SECTION 512. Preferential Collection of Claims Against
the Company. (a) The Trustee is subject to TIA 311(a),
excluding any creditor relationship listed in TIA 311(b). A
Trustee who has resigned or been removed shall be subject to TIA
311(a) to the extent indicated therein.
(b) For the purposes of interpreting TIA 311 under
this Section 512 only:
(1) The term "cash transaction" means any transaction
in which full payment for goods or securities sold is made
within seven days after delivery of the goods or securities
in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(2) The term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the purpose
of financing the purchase, processing, manufacturing,
shipment, storage or sales of goods, wares or merchandise
and which is secured by documents evidencing title to,
possession of, or a Lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the
sale of the goods, wares or merchandise previously
constituting the security, provided the security is received
by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the
making, drawing, negotiation or incurring of the draft, bill
of exchange, acceptance or obligation.
SECTION 513. Reports by Trustee. (a) Within 60 days
after May 15 of each year, the Trustee shall transmit by mail to
all Holders of Notes, as provided in Subsection (c) of this
Section, a brief report dated as of such May 15 if and to the
extent required under TIA 313(a).
(b) The Trustee shall also comply with TIA 313(b)
and (c).
(c) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each
stock exchange upon which the Notes are listed, and with the SEC
and the Company. The Company will notify the Trustee when the
Notes are listed on any stock exchange.
(d) The Trustee shall report the names of all Holders
to the New Jersey Division, the New Jersey Commission, the Nevada
Control Board, the Nevada Commission and, if requested in writing
by the Company, each other Gaming Authority so requested by the
Company promptly after the initial issuance of the Notes. The
Trustee shall provide to the New Jersey Division, the New Jersey
Commission, the Nevada Control Board, the Nevada Commission and,
if requested in writing by the Company, each other Gaming
Authority so requested by the Company copies of all written
communications from the Trustee to all Holders, notice of any
Default, notice of any transfer or assignment of the Trustee's
rights under this Indenture within five Business Days thereof, a
copy of any amendment to this Indenture or the Notes and notice
of any rescission, annulment or waiver in respect of an Event of
Default under this Indenture.
(e) The Trustee shall cooperate with the Company in
providing information relating to the Notes or the Holders to any
Governmental Authority pursuant to any Legal Requirement.
ARTICLE SIX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 601. Without Consent of Holders. The Company,
when duly authorized by resolutions of its Board of Directors,
and the Trustee, may amend or supplement this Indenture or the
Notes for the benefit of the Holders without notice to or consent
of any Holder:
(1) to evidence the succession of another Person to
the Company, and the assumption by any such successor of the
covenants of the Company contained herein and in the Notes;
(2) to evidence the succession of another Trustee, and
the assumption by any such successor Trustee of the
obligations of the Trustee hereunder;
(3) to add to the covenants of the Company, for the
benefit of the Holders, or to surrender any right or power
herein conferred upon the Company;
(4) to cure any ambiguity, to correct or supplement
any provision herein or in the Notes which may be
inconsistent with any other provision herein or to make any
other provisions with respect to matters or questions
arising under this Indenture or the Notes which shall not be
inconsistent with the provisions of this Indenture or the
Notes;
(5) to provide for uncertificated Notes in addition to
or in place of certificated Notes; or
(6) to comply with any requirement of the SEC in order
to effect or maintain the qualification of this Indenture
under the TIA, as contemplated by Section 109.
Notwithstanding the above, the Trustee and the Company may
not make any change that adversely affects the legal rights
of any Holder hereunder or under the Notes.
SECTION 602. With Consent. Subject to Section 408,
the Company, when duly authorized by resolution of its Board of
Directors, and the Trustee may amend this Indenture or the Notes
with the written consent of the Holders of at least a majority in
principal amount of the then Outstanding Notes.
Notwithstanding the provisions of this Section 602,
without the consent of each Holder affected, an amendment or
waiver, including a waiver pursuant to Section 413, may not:
(1) reduce the amount of Notes whose Holders must
consent to an amendment;
(2) reduce the rate of or change the time for or the
manner of, payment of interest, including Defaulted
Interest, on any Note;
(3) reduce the principal, or change the Stated
Maturity for the payment of principal, of any Note, or
reduce the Redemption Price of or change the date on which
any Note may be subject to redemption or alter any other
provision with respect to redemption pursuant to the terms
of the Notes;
(4) waive a Default in the payment of the principal of
or interest on or redemption of any Note;
(5) make any Note payable in money other than that
stated in the Note; or
(6) make any change in Section 408, 413 or this
Section 602.
It shall not be necessary under this Section 602 for
the consent of the Holders to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof.
An amendment under Section 601 or 602 may not make any
change that adversely affects the rights under Article Ten of any
holder of an issue of Senior Indebtedness unless the holders of
such issue pursuant to its terms consent to the change or the
change is otherwise permissible.
After an amendment under this Section 602 becomes
effective, the Company shall mail to Holders a notice briefly
describing the amendment.
SECTION 603. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Notes shall be set forth
in a supplemental indenture that complies with the TIA as then in
effect.
SECTION 604. Revocation and Effect of Consents. (a)
Until an amendment or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder and
every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note, even if
notation of the consent is not made on any Note. However, any
such Holder or subsequent Holder may revoke the consent as to his
Note or portion of a Note if the Trustee receives written notice
of revocation before the date on which the Trustee receives an
Officers' Certificate from the Company certifying that the
Holders of the requisite principal amount of Notes have consented
to such amendment or waiver. An amendment or waiver becomes
effective upon receipt by the Trustee of such Officers'
Certificate and the written consents from the Holders of the
requisite percentage in principal amount of Notes.
(b) The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the Holders
entitled to consent to any amendment or waiver. If a record date
is fixed, then notwithstanding the second and third sentence of
paragraph (a) of this Section 604, those Persons who were Holders
at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment or
waiver or to revoke any consent previously given, whether or not
such Persons continue to be Holders after such record date. No
such consent shall be valid or effective for more than 120 days
after such record date.
(c) After an amendment or waiver becomes effective, it
shall bind every Holder.
SECTION 605. Notation on or Exchange of Notes; Effect
of Supplemental Indenture. If an amendment, supplement or waiver
changes the terms of the Notes, the Trustee may require the
Holders to deliver the Notes to the Trustee. The Trustee may
place an appropriate notation on the Notes concerning such
changed terms and return them to the Holders and the Trustee may
place an appropriate notation on any Note thereafter
authenticated. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Notes shall issue and
the Trustee shall authenticate new Notes that reflect such
changed terms.
Upon the execution of any supplemental indenture under
this Article Six, this Indenture and, to the extent applicable,
the Notes, shall be modified thereby, and every Holder of any
Note authenticated and delivered hereunder, whether before or
after the execution of such supplemental indenture, shall be
bound by this Indenture, as so amended, modified or supplemented.
SECTION 606. Trustee Protected. The Trustee shall
sign all supplemental indentures, except that the Trustee need
not sign any supplemental indenture that adversely affects its
rights. In signing or refusing to sign such amendment or
supplemental indenture, the Trustee shall be entitled to receive
and, subject to Section 501, shall be fully protected in relying
upon, an Officers' Certificate of the Company and an Opinion of
Counsel as conclusive evidence that such amendment or
supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, that all
conditions precedent to the execution thereof have been met, that
it will be valid and binding upon the Company in accordance with
its terms and that, after the execution thereof, the Company will
not be in Default and no Event of Default will have occurred and
be continuing.
ARTICLE SEVEN
COVENANTS
SECTION 701. Payment of Notes. The Company shall pay
the principal of and interest on the Notes on the dates and in
the manner provided in the Notes. An installment of principal or
interest shall be considered paid on the date due if the Trustee
or Paying Agent holds on that date money designated for and
sufficient to pay such installment and is not prohibited from
paying such money to the Holders pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal at
the rate borne by the Notes; it shall pay interest on overdue
installments of interest at the same rate, to the extent lawful.
SECTION 702. Maintenance of Office or Agency. The
Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency where Notes may be surrendered for
presentation for payment, registration of transfer or exchange
and where notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Trustee with the address
thereof, such presentations or surrenders may be made or served
at the Corporate Trust Office in the City of St. Paul as the
office of the Company for purposes of this paragraph. The
Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough
of Manhattan, The City of New York where Notes may be surrendered
for presentation for payment, for registration of transfer or
exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location
of any such other office or agency.
SECTION 703. Money for Note Payments to be Held in
Trust. If the Company (or any other obligor on the Notes) or any
Affiliate of the Company (or any such other obligor) shall at any
time act as the Company's Paying Agent, it will, on or before
each due date of the principal of or interest on any of the
Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal or
interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying
Agents, it will, prior to each due date of the principal of or
interest on any Notes, appoint a lead Paying Agent and deposit
with such lead Paying Agent a sum sufficient to pay the principal
or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal or interest,
and (unless such lead Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 703, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of or interest on the Notes in trust for the
benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Notes including the
Company) in the making of any payment in respect of
principal or interest; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying
Agent.
For the purpose of obtaining the satisfaction and
discharge of this Indenture pursuant to Article Three or for any
other purpose, the Company may at any time pay, or by a Company
Request direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, respectively.
Such sums are to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such
Paying Agent. Upon any such payment, the Company and any such
Paying Agent shall be released from all further liability with
respect to such money.
SECTION 704. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any
dividend on or make any distribution or payment on its Capital
Stock or to its stockholders (in their capacity as stockholders)
(other than dividends or distributions payable solely in its
Qualified Capital Stock and, in the case of a Restricted
Subsidiary, dividends or distributions payable to the Company or
a Wholly Owned Subsidiary), (ii) purchase, redeem or otherwise
acquire or retire for value, any shares of Capital Stock of the
Company (except, in the case of a Restricted Subsidiary, from the
Company) or any Subsidiary of the Company (other than a Wholly
Owned Subsidiary), (iii) acquire, retire or redeem any
Indebtedness of or otherwise make any Investment in any Affiliate
of the Company (other than a Wholly Owned Subsidiary) or (iv)
purchase, redeem or otherwise acquire or retire for value, prior
to any scheduled maturity, scheduled repayment or scheduled
sinking fund or mandatory redemption payment, Indebtedness of the
Company or of any Affiliate of the Company that is pari passu or
subordinated (whether pursuant to its terms or by operation of
law) in right of payment to the Notes and which is scheduled to
mature (after giving effect to any and all unconditional (other
than as to the giving of notice) options to extend the maturity
thereof) on or after the maturity date of the Notes, if at the
time of any such declaration, distribution, payment, purchase,
redemption, acquisition or retirement (collectively, the
"Restricted Payments") and after giving effect thereto
(including, without limitation, in calculating on a pro forma
basis, as if such proposed Restricted Payment had been made, the
Consolidated Fixed Charge Coverage Ratio of the Company for
purposes of clause (y) below):
(x) any Event of Default shall have occurred and be
continuing; or
(y) the Company could not incur at least $1.00 of
additional Indebtedness pursuant to Section 705(a); or
(z) the aggregate amount of Restricted Payments for
all such purposes made subsequent to the Effective Date
would exceed an amount equal to the sum of (i) 50% of
aggregate Consolidated Net Income (or if such aggregate
Consolidated Net Income shall be a deficit, minus 100% of
such deficit) accrued on a cumulative basis in the period
commencing on the Effective Date and ending on the last day
of the fiscal quarter immediately preceding the relevant
Transaction Date, (ii) the aggregate net proceeds, including
cash and the fair market value of Property other than cash
(as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive, and
evidenced by a resolution of such Board of Directors filed
with the Trustee) received by the Company from the issuance
or sale to any Person (other than a Subsidiary of the
Company) during the period commencing on the Effective Date
and ending on such Transaction Date of Qualified Capital
Stock of the Company (other than Capital Stock of the
Company issued upon conversion of or in exchange for
securities of the Company, except to the extent of any
payment to the Company in addition to the securities of the
Company surrendered) and (iii) to the extent not included in
(ii) above, the aggregate net proceeds, including cash and
the fair market value of Property other than cash (as
determined in good faith by the Board of Directors of the
Company, whose determination shall be conclusive, and
evidenced by a resolution of such Board of Directors filed
with the Trustee) received by the Company from the issuance
or sale to any Person (other than a Subsidiary of the
Company) during the period commencing on the Effective Date
and ending on such Transaction Date, of any debt securities
evidencing Indebtedness of the Company or of any Redeemable
Stock of the Company, if, and to the extent that, as of such
Transaction Date such debt securities or Redeemable Stock,
as the case may be, have been converted into, exchanged for
or satisfied by the issuance of Qualified Capital Stock of
the Company; provided, however, that, if the Company and its
Restricted Subsidiaries have made any Investments during the
period commencing on the Effective Date and ending on such
Transaction Date, the proceeds of which Investments were
used, directly or indirectly, by the recipients thereof to
purchase Qualified Capital Stock of the Company or other
securities that have been converted into, exchanged for or
satisfied by the issuance of Qualified Capital Stock of the
Company, the aggregate amount determined under clauses (ii)
and (iii) shall be net of the aggregate amount of such
Investments.
(b) The provisions of this Section 704 shall not
prohibit:
(i) the Company or any Restricted Subsidiary from
paying a dividend on its own Capital Stock within 60 days
after the declaration thereof if, on the date when the
dividend was declared, the Company or such Restricted
Subsidiary, as the case may be, could have paid such
dividend in compliance with the other provisions of this
Section 704;
(ii) the Company or any Restricted Subsidiary from
redeeming or repurchasing its securities in the event that
the holder of such securities has failed to qualify or to be
found suitable or otherwise eligible under a Gaming
Jurisdiction Law to remain as a holder of such securities;
(iii) Holdings from redeeming, or the Company or any
Restricted Subsidiary from purchasing, for an amount not
exceeding $750,000 in the aggregate, all or a portion of the
shares of preferred stock, Series A, of Holdings outstanding
on the Effective Date; or
(iv) the Company and its Restricted Subsidiaries from
acquiring shares of Capital Stock of the Company solely in
exchange for other shares of Capital Stock of the Company
that is not Redeemable Stock and that is not exchangeable
for Redeemable Stock whether upon conversion or otherwise;
provided, however, that the aggregate amount of any payment,
dividend, acquisition, redemption or distribution made by the
Company or any Restricted Subsidiary pursuant to subsection
(b)(i) or (ii) shall be included in any computation under Section
704(a) of the aggregate amount of Restricted Payments made by the
Company and its Restricted Subsidiaries, and the aggregate amount
of any payment, dividend, acquisition, redemption or distribution
made by the Company or any Restricted Subsidiary pursuant to
subsection (b)(iii) or (iv) shall not be included in any such
computation.
(c) So long as no Event of Default shall have occurred
and be continuing, the provisions of this Section 704 shall not
prohibit the Company and its Restricted Subsidiaries from:
(i) acquiring shares of Capital Stock of the Company
(A) to eliminate fractional shares, (B) from an employee who
has purchased or otherwise acquired shares of Capital Stock
of the Company under an employee stock option or employee
stock purchase agreement or other plan or agreement
reserving to the Company the option to repurchase the shares
but in no event for a price greater than the higher of fair
market value or the price at which such securities were sold
by the Company and (C) pursuant to a court order, provided
that the aggregate consideration paid by the Company and its
Restricted Subsidiaries pursuant to subclauses (A) and (B)
above shall not exceed $250,000 in any fiscal year of the
Company;
(ii) declaring or paying any dividend on, or redeeming
or repurchasing, shares of the Series B Preferred Stock,
provided that the aggregate amount paid by the Company and
its Restricted Subsidiaries in all such redemptions and
repurchases from and after the Effective Date shall not
exceed $10,000,000;
(iii) redeeming or purchasing the Preferred Share
Purchase Rights at a price not exceeding $0.01 per right and
$2,000,000 in the aggregate;
(iv) acquiring, retiring or redeeming any Indebtedness
of, or otherwise making any Investment in, Tropicana
Enterprises in connection with the Tropicana Security
Deposit or the Tropicana Loan, except to the extent that the
aggregate amount of any such Investment in Tropicana
Enterprises in connection with the Tropicana Loan exceeds
the outstanding principal amount owed to third parties under
the Tropicana Loan at the Effective Date;
(v) purchasing the Tropicana or the Jaffe Partnership
Interest; or
(vi) making any Restricted Payment not otherwise
permitted by this Section 704, provided that the aggregate
amount of Restricted Payments made pursuant to this clause
(vi) from and after the Effective Date shall not exceed
$30,000,000;
provided, however, that the aggregate amount of any payment,
dividend, acquisition, redemption or distribution made by the
Company or any Restricted Subsidiary pursuant to subsection
(C)(i), (ii), (iii) or (vi) shall be included in any computation
under Section 704(a) of the aggregate amount of Restricted
Payments made by the Company and its Restricted Subsidiaries, and
the aggregate amount of any payment, dividend, acquisition,
redemption or distribution made by the Company or any Restricted
Subsidiary pursuant to subsection (c)(iv) or (v) shall not be
included in any such computation.
SECTION 705. Limitation on Indebtedness. (a) The
Company will not, and will not permit any Restricted Subsidiary
to, create, incur, assume, guarantee or otherwise become liable
with respect to, or become responsible for the payment of, any
Indebtedness unless, after giving effect thereto, the
Consolidated Fixed Charge Coverage Ratio of the Company is
greater than 1.9 to 1.
(b) Notwithstanding the foregoing, the Company and its
Restricted Subsidiaries may incur, create, assume, guarantee or
otherwise become liable with respect to any or all of the
following: (i) Indebtedness not otherwise permitted pursuant to
clauses (ii) through (xi) below in an aggregate amount at any
time outstanding of up to $20,000,000; (ii) Indebtedness
evidenced by the Notes or the 11% Senior Subordinated Notes Due
2002 of the Company; (iii) Indebtedness of the Company and its
Restricted Subsidiaries remaining outstanding immediately after
the issuance of the Notes and application of the proceeds
thereof; (iv) Indebtedness to the Company or to a Restricted
Subsidiary; (v) Indebtedness incurred by the Company or any
Restricted Subsidiary in connection with (a) the construction of
any new facility or facilities related to the gaming business or
any related business of the Company or any Restricted Subsidiary
or in connection with the expansion by the Company or any
Restricted Subsidiary of any of its existing facilities;
provided, however, that the aggregate principal amount of all
such Indebtedness incurred on and subsequent to the Effective
Date shall not exceed $100,000,000, (b) the maintenance,
refurbishment or replacement by the Company or any Restricted
Subsidiary in the ordinary course of business of assets related
to the gaming business or any related business of the Company or
any Restricted Subsidiary or (c) the acquisition of slot
machines, gaming tables or other similar gaming equipment; (vi)
Indebtedness under any Credit Facilities in an aggregate amount
of up to $112,300,000; (vii) Indebtedness incurred to purchase
the Tropicana or the Jaffe Partnership Interest or in connection
with any Tropicana Loan Refinancings; (viii) Indebtedness
incurred in respect of the Tropicana Security Deposit; (ix)
Indebtedness under Currency Agreements or Interest Swap
Obligations (including any Interest Swap Obligation, the purpose
of which is to alter or replace, or lengthen or shorten the
maturity of, any Interest Swap Obligation previously incurred
pursuant to this clause (ix)), provided that such Currency
Agreements or Interest Swap Obligations are related to payment
obligations on Indebtedness otherwise permitted by this Section
705; (x) Indebtedness incurred in respect of performance bonds,
bankers' acceptances, letters of credit and surety bonds provided
by the Company or any Restricted Subsidiary in the ordinary
course of business; and (xi) Indebtedness ("Replacement
Indebtedness") the proceeds of which are used to refinance (a)
all or a portion of the Notes, (b) any other permitted
Indebtedness of the Company and its Restricted Subsidiaries or
(c) permitted successor or replacement Indebtedness, in each case
in a principal amount (or, if such Replacement Indebtedness does
not require cash payments prior to maturity, with an original
issue price) not to exceed an amount equal to the aggregate of
the principal amount plus any prepayment penalties, premiums and
accrued and unpaid interest on the Indebtedness so refinanced and
customary fees, expenses and costs related to the incurrence of
such Replacement Indebtedness, provided that, in the case of this
clause (xi), (1) if the Notes are refinanced in part, such
Replacement Indebtedness is expressly made pari passu or
subordinate in right of payment to the remaining Notes, (2) if
the Indebtedness to be refinanced is subordinate in right of
payment to the Notes, such Replacement Indebtedness is
subordinate in right of payment to the Notes at least to the
extent that the Indebtedness to be refinanced is subordinate to
the Notes, (3) if the Indebtedness to be refinanced is pari passu
in right of payment to the Notes, such Replacement Indebtedness
is pari passu or subordinate in right of payment to the Notes at
least to the extent that the Indebtedness to be refinanced is
pari passu to the Notes and (4) if the Notes are refinanced in
part or if the Indebtedness to be refinanced is subordinate in
right of payment to the Notes and scheduled to mature after the
maturity date of the Notes, such Replacement Indebtedness
determined as of the date of incurrence does not mature prior to
the final scheduled maturity date of the Notes and the Average
Life of such Replacement Indebtedness is equal to or greater than
the Average Life of the remaining Notes.
SECTION 706. Limitation on Liens. The Company will
not, directly or indirectly, create, incur, assume or suffer to
exist, or permit any Restricted Subsidiary to create, incur,
assume or suffer to exist, any Lien on or with respect to any of
its Property or Capital Stock, whether now owned or hereafter
acquired, or assign, or permit any Restricted Subsidiary to
assign, any right to receive income, other than: (i) Liens
existing as of the date of this Indenture or arising hereafter
pursuant to the Credit Facility; (ii) Liens securing Senior
Indebtedness; (iii) Liens in favor of the Company; (iv) Liens
securing Indebtedness (including, without limitation, any
obligation, contingent or otherwise, for borrowed money of any
Person secured by any Lien in respect of Property of the Company
or any Restricted Subsidiary, even though neither the Company nor
any Restricted Subsidiary has assumed or become liable for
payment of such obligation) of the Company (other than Senior
Indebtedness) or any Restricted Subsidiary, provided that, with
respect to any Indebtedness that is pari passu with the Notes,
the Notes are secured by Liens equal and ratable to such Liens
and, with respect to Indebtedness that is subordinated to the
Notes, the Notes are secured by Liens that are senior to such
Liens; and (v) Permitted Liens. Notwithstanding the foregoing,
this provision shall not be applicable to any Lien on Capital
Stock issued by any Restricted Subsidiary that holds, directly or
indirectly, a license, or is a holding company, under the Nevada
Act.
SECTION 707. Limitation on Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and
will not permit any Restricted Subsidiary to, create or otherwise
cause or suffer to exist or become effective any consensual
encumbrance or restriction which by its terms expressly restricts
the ability of any Restricted Subsidiary to (i) pay dividends or
make any other distributions on such Restricted Subsidiary's
Capital Stock or pay any Indebtedness owed to the Company or any
Restricted Subsidiary (except that payment of dividends by Adamar
of Nevada may be suspended if required by Section 6.A. of the
Stock Pledge), (ii) make any loans or advances to the Company or
any Restricted Subsidiary or (iii) transfer any of its Property
to the Company or any Restricted Subsidiary, except that (A)
clauses (ii) and (iii) shall be deemed not to apply to any such
encumbrances or restrictions contained in any agreement or
instrument (a) relating to any Indebtedness of the Company or any
Restricted Subsidiary existing on the Effective Date or to the
Credit Facility; (b) relating to any Property acquired by the
Company or any Restricted Subsidiary after the Effective Date,
provided that such encumbrance or restriction relates only to the
Property which is acquired; (c) relating to (x) any industrial
revenue or development bonds, (y) any obligation of the Company
or any Restricted Subsidiary incurred in the ordinary course of
business to pay the purchase price of Property acquired by the
Company or such Restricted Subsidiary and (z) any lease of
Property by the Company or any Restricted Subsidiary in the
ordinary course of business, provided that such encumbrance or
restriction relates only to the Property which is the subject of
such industrial revenue or development bond, such Property
purchased or such Property leased and any such lease, as the case
may be; (d) relating to any Indebtedness of any Restricted
Subsidiary at the date of acquisition of such Restricted
Subsidiary by the Company or any Restricted Subsidiary, provided
that such Indebtedness was not incurred in connection with or in
anticipation of such acquisition; and (e) replacing or
refinancing agreements or instruments referred to in clauses (a),
(b) and (c), provided that the provisions relating to such
encumbrance or restriction contained in such replacing or
refinancing agreement or instrument are no more restrictive than
the provisions relating to such encumbrance or restriction
contained in the original agreement or instrument, (B) clauses
(i), (ii) and (iii) shall be deemed not to apply to any such
encumbrances or restrictions imposed by the New Jersey
Commission, the New Jersey Division, the Nevada Commission, the
Nevada Control Board or any other Gaming Authority and (C) clause
(iii) shall be deemed not to apply to the transfer of Property
that is used to secure Indebtedness, provided that such
Indebtedness is permitted to be incurred under the Indenture.
SECTION 708. Limitation on Capital Stock of Restricted
Subsidiaries. The Company will not (i) permit any of its
Restricted Subsidiaries to issue any Capital Stock to any Person
(other than the Company or any Wholly Owned Subsidiary) that
shall entitle the holder of such Capital Stock to a preference in
right of payment in the event of liquidation, dissolution or
winding-up of such Restricted Subsidiary or with respect to
dividends of such Restricted Subsidiary or (ii) permit any Person
(other than the Company or any Wholly Owned Subsidiary) to hold
any such Capital Stock.
SECTION 709. Transactions with Affiliates. The
Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any transaction (including, without
limitation, the purchase, sale or exchange of Property, the
making of any Investment, the giving of any guarantee or the
rendering of any service) with any Affiliate of the Company or
any Subsidiary of the Company (other than a Restricted
Subsidiary) unless (i) the Board of Directors of the Company
believes, in its reasonable good faith judgment, based on full
disclosure of all relevant facts and circumstances, that such
transaction is in the best interests of the Company or such
Restricted Subsidiary and (ii) such transaction is on terms no
less favorable to the Company or such Restricted Subsidiary than
those that could be obtained in a comparable arm's length
transaction with an entity that is not an Affiliate of the
Company or such Restricted Subsidiary, provided that this Section
709 shall not be applicable for so long as the Company's common
stock is listed for trading on the New York Stock Exchange or the
American Stock Exchange or is quoted on the National Association
of Securities Dealers Automated Quotation System and designated
as a "national market system security."
SECTION 710. Restriction on Incurrence of Certain
Indebtedness. The Company will not incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is
subordinate or junior in right of payment to Senior Indebtedness
and senior in any respect in right of payment to the Notes. The
Company agrees that the Notes will not be subordinate in right of
payment to any other Indebtedness of the Company, other than
Senior Indebtedness.
SECTION 711. Change of Control. (a) Upon the
occurrence of a Change of Control, each Holder shall have the
right to require that the Company repurchase each such Holder's
Notes pursuant to the offer described in paragraphs (b) and (c)
below (the "Change of Control Offer") at a purchase price in cash
equal to the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of repurchase.
(b) Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder and to the Trustee
stating:
(1) that the Change of Control Offer is being made
pursuant to this Section 711, that such Holder has the right
to require the Company to repurchase such Holder's Notes at
a purchase price in cash equal to the principal amount
thereof plus accrued and unpaid interest, if any, to the
date of repurchase and that all Notes tendered will be
accepted for payment;
(2) the purchase price and the purchase date (which
shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed) (the "Change of Control
Payment Date");
(3) that any Note not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in making
repurchase payments, any Note accepted for payment pursuant
to the Change of Control Offer shall cease to accrue
interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note purchased
pursuant to the Change of Control Offer will be required to
surrender the Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Note completed to
the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day prior to
the Change of Control Payment Date; provided, however that
in the case of Notes registered in the name of the
Depository Trust Company ("DTC") or its nominee, a Note will
be deemed surrendered at the time that it is transferred by
DTC to the account of the Paying Agent by book-entry credit
if such Note is physically transferred to the Paying Agent
within five Business Days after such transfer by book-entry
credit in accordance with DTC's normal procedures;
(6) that Holders whose Notes are purchased only in
part will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered; and
(7) the CUSIP number, if any, relating to the Notes to
be repurchased.
The notice to Holders shall contain all instructions
and materials necessary to enable such Holders to tender Notes.
(c) On the Change of Control Payment Date, the Company
shall (i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent money sufficient to pay the purchase price of all
Notes or portions thereof so tendered and (iii) deliver or cause
to be delivered to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof
tendered to the Company. The Paying Agent shall promptly mail to
the Holder of Notes so accepted payment in an amount equal to the
purchase price, and the Trustee shall promptly authenticate and
mail to such Holders a new Note equal in principal amount to any
unpurchased portion of the Note surrendered. The Company will
publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment
Date. For purposes of this Section 711, only the Trustee or its
agent shall act as the Paying Agent.
SECTION 712. SEC Reports. The Company shall file with
the Trustee copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe)
that the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act or otherwise within five
days after such annual reports, information, documents and other
reports are required to be filed with the SEC and, upon request
of any Holder, shall promptly mail such annual reports,
information, documents and other reports to such Holder;
provided, however, that if the Company is not subject to Section
13 or 15(d) of the Exchange Act, the Company shall nonetheless
file with the SEC and the Trustee on a timely basis, and, upon
request of any Holder, promptly mail to such Holder, the annual
reports, information, documents and other reports that the
Company would be required to file if the Company were subject to
the requirements of Section 13 or 15(d) of the Exchange Act. The
Company shall comply with the provisions of TIA 314(a).
SECTION 713. Compliance Certificates. The Company
will deliver to the Trustee, within 90 days after the end of each
fiscal quarter and within 120 days after the end of each fiscal
year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the
signing officers with a view to determining whether the Company
has kept, observed, performed and fulfilled its obligations under
this Indenture and further stating, as to each such officer
signing such certificate, that to the best of his knowledge the
Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture applicable to it and
is not in default in the performance or observance of any of the
terms, provisions and conditions hereof applicable to it (or, if
a Default or Event of Default shall have occurred, describing all
such Defaults or Events of Default of which he may have
knowledge) and that to the best of his knowledge no event has
occurred and remains in existence by reason of which payments on
account of the principal of or interest on the Notes are
prohibited.
The Company will deliver to the Trustee forthwith upon
becoming aware of any Default, Event of Default or default in the
performance of any covenant, agreement or condition contained in
this Indenture, an Officers' Certificate specifying such Default,
Event of Default or default.
SECTION 714. Continued Existence and Rights. Subject
to Article Eight, the Company will, and the Company will cause
each of its Restricted Subsidiaries and Significant Subsidiaries
to, do or cause to be done all things necessary to preserve and
keep in full force and effect its existence as a corporation and
its rights and franchises; provided, however, that nothing in
this Section 714 shall prevent the loss of the corporate
existence of any such Subsidiary or any such right or franchise
if such loss is, in the judgment of the Company both desirable in
the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and not disadvantageous in any material respect
to the Holders.
SECTION 715. Maintenance of Properties and Other
Matters. The Company will, and will cause each of its
Subsidiaries to, maintain its Properties in good working order
and condition and make all necessary repairs, renewals and
replacements; provided, however, that, subject to Article Eight,
nothing in this Section 715 shall prevent the Company or any of
its Subsidiaries from discontinuing the operation and maintenance
of any of its Properties, if such discontinuance is, in the
judgment of the Company or the Subsidiary, as the case may be,
both desirable in the conduct of its respective business and not
disadvantageous in any material respect to the Holders.
The Company will insure and keep insured, and will
cause each Subsidiary to insure and keep insured, with
financially sound and reputable insurers, so much of their
respective Properties and in such amounts as is usually and
customarily insured by companies engaged in a similar business
with respect to Properties of a similar character against loss by
fire and the extended coverage perils. None of the Company or
any of its Subsidiaries will maintain a system of self insurance
in lieu of or in combination with the foregoing, provided that
deductibles under the insurance policy or policies of the Company
and its Subsidiaries shall not be considered to be self insurance
as long as such deductibles accord with financially sound and
approved practices of companies owning or operating Properties of
a similar character and maintaining similar insurance coverage.
The Trustee shall not be required to see that such insurance is
effected or maintained.
The Company will keep, and will cause each of its
Subsidiaries to keep, proper books and records of accounts in
which full and correct entries will be made of all its business
transactions in accordance with generally accepted accounting
principles. The Company shall cause the books and records of
accounts of the Company and its Subsidiaries to be examined,
either on a consolidated or on an individual basis, by one or
more firms of independent public accountants not less frequently
than annually. The Company shall, and shall cause each of its
Subsidiaries to, prepare its financial statements in accordance
with generally accepted accounting principles.
The Company will, and will cause each of its
Subsidiaries to, comply with all Legal Requirements and to obtain
any licenses, permits, franchises or other governmental
authorizations necessary to the ownership or operation of its
Properties or to the conduct of its business including, without
limitation, all Gaming Licenses.
Notwithstanding the foregoing provisions in this
Section 715, failure by the Company or any of its Subsidiaries to
comply with such provisions shall not be deemed to be a breach of
such provisions to the extent that such failure would not have a
material adverse effect on the Company and its Subsidiaries,
taken as a whole.
SECTION 716. Taxes and Claims. The Company will, and
will cause each of its Subsidiaries to, pay (or, if appropriate,
withhold and pay over) prior to delinquency:
(1) all taxes, assessments and governmental charges or
levies imposed upon it or its Property (or that it is
required to withhold and pay over) and
(2) all claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons
which if unpaid might result in the creation of a Lien upon
its Properties;
provided, however, that the foregoing need not be paid while
being contested in good faith (and by appropriate proceedings in
the opinion of the Company's independent counsel in any case
involving more than $500,000) if (1) adequate provision for the
foregoing has been made and (2) the failure to make such payments
is not adverse in any material respect to the Holders.
SECTION 717. Waiver of Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, and will
actively resist any attempts to claim the benefit of, any stay or
extension law or any usury or other law that would prohibit or
forgive the Company from paying all or any portion of the
principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that
may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Company hereby
expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law
had been enacted.
SECTION 718. Investment Company Act. The Company
shall not, and the Company shall not permit any Subsidiary of the
Company to, become an investment company within the meaning of
the Investment Company Act as such statute and the regulations
thereunder and any successor statute or regulations thereto may
from time to time be in effect, unless the Company or such
Subsidiary is exempted under the Investment Company Act from any
requirement to register as an "investment company."
ARTICLE EIGHT
MERGER, CONSOLIDATION AND SALE OF ASSETS
SECTION 801. When the Company May Merge, etc. (a) The
Company shall not consolidate or merge with or into any Person,
or transfer, sell, lease or otherwise dispose of all or
substantially all of its assets as an entirety to any Person
unless:
(1) the entity formed by or surviving any such
consolidation or merger (if other than the Company), or to
which such sale or transfer shall have been made, is a
corporation organized and existing under the laws of the
United States, any state thereof or the District of
Columbia;
(2) (x) the corporation formed by or surviving any
such consolidation or merger (if other than the Company), or
to which such sale or transfer shall have been made,
unconditionally assumes by supplemental indenture all the
obligations of the Company under the Notes and this
Indenture and (y) such corporation has all Gaming Licenses
required to operate the casino hotels to be owned by the
surviving entity;
(3) immediately before and immediately after giving
effect to such transaction, no Default or Event of Default
exists;
(4) immediately after giving effect to such
transaction on a pro forma basis, as if such transaction had
occurred, the Consolidated Net Worth of the surviving entity
(including the Company) would be at least equal to the
Consolidated Net Worth of the Company immediately prior to
such transaction; and
(5) immediately after giving effect to such trans-
action involving the incurrence by the Company or any
Subsidiary, directly or indirectly, of additional
Indebtedness (and treating any Indebtedness not previously
an obligation of the Company or any of its Subsidiaries
incurred in connection with or as a result of such
transaction as having been incurred at the time of such
transaction), the Company (if it is the continuing
corporation) or such other entity could incur at least $1.00
of additional Indebtedness pursuant to Section 705(a).
(b) In connection with any consolidation, merger,
transfer or lease contemplated by this provision, the Company
shall deliver, or cause to be delivered, to the Trustee, in form
and substance reasonably satisfactory to the Trustee, an
Officers' Certificate of the Company and Opinion of Counsel
stating that such consolidation, merger, transfer or lease and
the supplemental indenture in respect thereto comply with this
section and that all conditions precedent herein provided for
relating to such transaction have been complied with and an
Accountants' Certificate with respect to compliance with clauses
(4) and (5) of Section 801(a).
SECTION 802. Successor Corporation Substituted. Upon
any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with
Section 801, the successor corporation formed by such
consolidation or into which the Company is merged or to which
such transfer is made, shall succeed to, and be substituted for,
and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor corporation
had been named as the Company herein. When a successor
corporation assumes all of the obligations of the Company under
the Notes and this Indenture pursuant to this Article Eight, the
applicable predecessor corporation shall be released from the
obligations so assumed.
ARTICLE NINE
REDEMPTION
SECTION 901. Notices to Trustee. If the Company
desires to redeem Notes in whole or in part in accordance with
the terms hereof or thereof, it shall notify the Trustee in
writing of the Redemption Date and the principal amount of Notes
to be so redeemed.
If the Company desires to credit Notes it has not
previously delivered to the Trustee for cancellation against the
principal amount of Notes to be redeemed, it shall so notify the
Trustee and it shall deliver the Notes with the notice.
Except as provided below, the Company shall give each
notice provided for in this Section 901 by a Company Order at
least 45 days before the Redemption Date (except for the notice
provided in the event of a Change of Control pursuant to Section
711 or unless a shorter notice period shall be satisfactory to
the Trustee).
SECTION 902. Selection of Notes to Be Redeemed. If
less than all of the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed pro rata or by lot or by any
other means that the Trustee determines to be fair and
appropriate. The Trustee shall make the selection from the Notes
Outstanding and not previously called for redemption. Notes in
denominations of $1,000 may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or
any integral multiple thereof) of the principal amount of Notes
that have denominations larger than $1,000. Provisions of this
Indenture that apply to Notes called for redemption in whole also
apply to Notes called for redemption in part.
SECTION 903. Notice of Redemption. At least 30 days
but not more than 60 days before a Redemption Date, the Company
shall give notice of redemption, mailed by first-class mail, to
each Holder whose Notes are to be redeemed at such Holders' last
address as it appears upon the Register.
The notice shall identify the Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price;
(5) that, unless the Company defaults in making the
redemption payment, interest on Notes called for redemption
ceases to accrue on and after the Redemption Date and the
only remaining right of the Holders is to receive payment of
the Redemption Price, together with accrued interest to the
Redemption Date, upon surrender to the Trustee of the Notes;
(6) if any Note is being redeemed in part, the portion
of the principal amount (in integral multiples of $1,000) of
such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed Portion
thereof will be issued in the name of the Holder thereof;
(7) the provision of the Notes or this Indenture
pursuant to which Notes are being redeemed; and
(8) the CUSIP number, if any, relating to the Notes to
be redeemed.
Pursuant to a Company Request, the Trustee shall give
the notice of redemption in the Company's name and at the
Company's expense.
SECTION 904. Effect of Notice of Redemption. Once
notice of redemption is given, Notes called for redemption become
due and payable on the Redemption Date and at the Redemption
Price. Upon surrender to the Paying Agent, such Notes shall be
paid at the Redemption Price plus accrued interest to the
Redemption Date.
SECTION 905. Deposit of Redemption Price. Prior to
the Redemption Date, the Company shall deposit with the Paying
Agent money sufficient to pay the Redemption Price of and accrued
interest on all Notes to be redeemed on the Redemption Date other
than Notes or portions thereof called for redemption on the
Redemption Date that have been delivered by the Company to the
Trustee for cancellation.
SECTION 906. Notes Redeemed in Part. Upon surrender
of a Note that is redeemed in part, the Trustee shall
authenticate for the Holder a new Note equal in principal amount
to the unredeemed portion of the Note surrendered.
SECTION 907. Redemption Pursuant to Gaming
Jurisdiction Law. (a) Notwithstanding the other provisions of
this Article Nine, if the New Jersey Commission does not waive
the requirement that a Holder or beneficial owner of Notes must
be licensed or found qualified or suitable to hold or own the
Notes under the New Jersey Act, and if such Holder or such
beneficial owner does not become so licensed or is not found
qualified or suitable within any time period specified by the New
Jersey Commission or the New Jersey Act, or if the Nevada
Commission finds a Holder or beneficial owner to be unsuitable
under the Nevada Act or regulations of the Nevada Commission, or
if any other Gaming Authority requires that Holders or beneficial
owners of Notes be licensed or found qualified or suitable and
such Gaming Authority fails to waive such requirement or any
beneficial owner or Holder of Notes does not become so licensed
or is not found qualified or suitable within the applicable time
period, the Company shall have the right, at its option, (i) to
require such Holder or beneficial owner to dispose of all or a
portion of such Holder's or beneficial owner's Notes within 120
days after receipt of notice by such Holder or beneficial owner
of such finding by the New Jersey Commission, the Nevada
Commission or such other Gaming Authority, as the case may be (or
such different period as may be prescribed by the New Jersey
Commission or the Nevada Commission or such other Gaming
Authority), or (ii) to call for redemption the Notes of such
Holder or beneficial owner, on not less than 30 nor more than 60
days' notice (or such different period as may be prescribed by
the applicable Gaming Authority).
(b) If such Holder or beneficial owner, having been
given the opportunity by the Company to dispose of such Holder's
or beneficial owner's Notes, shall have failed to do so within
the prescribed time period, the Company shall have the right to
redeem such Holder's or beneficial owner's Notes on five days'
notice.
(c) On any redemption of Notes pursuant to this
Section 907, the Redemption Price shall be without premium and
the lower of (i) the price at which such Holder or beneficial
owner acquired the Notes, together with (if permitted by the New
Jersey Act or the Nevada Act or other applicable Gaming
Jurisdiction Law, or by the orders of the New Jersey Commission
or the Nevada Commission or other relevant Gaming Authority, as
the case may be) accrued interest to the Redemption Date, and
(ii) the lowest closing sale price of the Notes between the date
of the notice given by the New Jersey Commission or the Nevada
Commission or such other Gaming Authority and the date 10 days
after such date, unless a Redemption Price or other payment,
remuneration or related terms or restrictions are required by the
New Jersey Commission or the Nevada Commission or such other
Gaming Authority, as the case may be, in which event such price,
terms and restrictions shall be the Redemption Price and terms of
redemption. Each Holder and beneficial owner by accepting a Note
agrees to the provisions of this Section 907 and of Paragraph 7
of the Notes and agrees to inform the Company upon request made
pursuant to this Section 907 of the price at which such Holder or
beneficial owner acquired such Holder's or beneficial owner's
Notes.
(d) Any redemption notice given by the Company under
this Section 907 shall also be provided to the Trustee at the
same time and shall state (i) that the Notes are being called for
redemption as a result of the Holder's or beneficial owner's
status under the New Jersey Act or with the New Jersey
Commission, or under the Nevada Act or with the Nevada
Commission, or under another Gaming Jurisdiction Law or with the
relevant Gaming Authority, as the case may be, (ii) whether
accrued interest is payable to the Holder under the New Jersey
Act or the Nevada Act or such other Gaming Jurisdiction Law and,
if so, the information required by paragraph (5) of Section 903
hereof and (iii) the information required by paragraphs (1), (2),
(3), (4), (7) and (8) of Section 903.
(e) The Trustee shall have no duty to verify a
Holder's or beneficial owner's status under the New Jersey Act or
Nevada Act or any other applicable Gaming Jurisdiction Law or to
verify the price at which a Holder or beneficial owner acquired
Notes.
ARTICLE TEN
SUBORDINATION
SECTION 1001. Agreement to Subordinate. The Company
agrees, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article
Ten, to the prior payment in full of all Senior Indebtedness and
that the subordination is for the benefit of the holders of
Senior Indebtedness, and authorizes and directs the Trustee to
take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination as provided in this
Article Ten and appoints the Trustee as attorney-in-fact for any
and all such purposes.
This Article Ten shall remain in full force and effect
as long as any Senior Indebtedness is outstanding.
SECTION 1002. Liquidation; Dissolution; Bankruptcy.
Upon any payment or distribution, whether of cash, securities or
other Property, to creditors of the Company in a liquidation
(total or partial), reorganization or dissolution of the Company,
whether voluntary or involuntary, or in a bankruptcy,
reorganization, insolvency, receivership, assignment for the
benefit of creditors, marshalling of assets or similar proceeding
relating to the Company or its Property:
(1) holders of Senior Indebtedness shall be entitled
to receive payment in full, in cash or cash equivalents, of
such Senior Indebtedness before Holders shall be entitled to
receive any payment of principal of, or interest on, or any
other distribution with respect to, the Notes; and
(2) until all Senior Indebtedness is paid in full in
cash or cash equivalents as provided in Section 1002(1), any
distribution to which Holders would be entitled but for this
Article Ten shall be made to the holders of Senior
Indebtedness as their interests may appear;
in each case except that Holders may receive securities that are
subordinated to Senior Indebtedness to at least the same extent
and pursuant to the same or more stringent terms as are the
Notes.
Upon any distribution of assets of the Company referred
to in this Section 1002, the Trustee and the Holders shall be
entitled to rely upon any order or decree of a court of competent
jurisdiction in which such bankruptcy, reorganization,
insolvency, receivership, assignment for the benefit of
creditors, marshalling of assets or similar proceeding is pending
for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of Senior
Indebtedness, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 1002, and the Trustee and
the Holders shall be entitled to rely upon a certificate of the
liquidating trustee or agent or other such Person making any
distribution to the Trustee or to the Holders for the purpose of
ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Section 1002. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing
himself to be a Representative or a holder of Senior
Indebtedness, as the case may be, to establish that such notice
has been given by a Representative or a holder of Senior
Indebtedness, as the case may be. In the event that the Trustee
determines, in good faith, that further evidence is required with
respect to the right of any Person, as a holder of Senior
Indebtedness, to participate in any payment or distribution
pursuant to this Section 1002, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such
Person, as to the extent to which such Person is entitled to
participate in such payment or distribution and as to other facts
pertinent to the rights of such Person under this Section 1002,
and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 1003. Default on Senior Indebtedness. No
direct or indirect payment by or on behalf of the Company of
principal of or interest on the Notes, whether pursuant to the
terms of the Notes or upon acceleration or otherwise, shall be
made if at the time of such payment there exists a default in the
payment of all or any portion of principal of or interest on
Designated Senior Indebtedness pursuant to which the maturity of
such Designated Senior Indebtedness may be accelerated (and the
Trustee has received written notice thereof) and such default
shall not have been cured or waived or the benefits of this
sentence waived by or on behalf of the holders of such Designated
Senior Indebtedness (and the Trustee has received written notice
thereof). In addition, during the continuance of any other event
of default with respect to Designated Senior Indebtedness
pursuant to which the maturity of such Designated Senior
Indebtedness may be accelerated, upon the occurrence of (a)
receipt by the Trustee of written notice from the Representative
with respect to, or from the holders of at least a majority in
aggregate principal amount of, such Designated Senior
Indebtedness then outstanding or (b) if such event of default
results from the acceleration of the Notes, such acceleration, no
such payment may be made by the Company upon or in respect of the
Notes for a period (a "Payment Blockage Period") commencing on
the earlier of the date of receipt of such notice by the Trustee
or the date of such acceleration and ending 179 days thereafter
(unless such Payment Blockage Period shall be terminated by
written notice to the Trustee from such Representative or such
holders). Not more than one Payment Blockage Period may be
commenced with respect to the Notes during any period of 360
consecutive days; in no event will a Payment Blockage Period
extend beyond 179 days from the date the payment on the Notes was
due; and there must be 180 days in any 360 day period in which no
Payment Blockage Period is in effect. For all purposes of this
Section 1003, no default or event of default which existed or was
continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior
Indebtedness initiating such Payment Blockage Period shall be, or
be made, the basis for the commencement of a subsequent Payment
Blockage Period by the Representative or requisite holders of
such Designated Senior Indebtedness whether or not within a
period of 360 consecutive days unless such default or event of
default shall have been cured or waived for a period of not less
than 90 consecutive days.
SECTION 1004. When Distribution Must Be Paid Over. In
the event that the Company shall make any payment to the Trustee
on account of the principal of or interest on the Notes at a time
when such payment is prohibited by Section 1002 or 1003, such
payment shall be held by the Trustee, in trust for the benefit
of, and shall be paid forthwith over and delivered to, the
holders of Senior Indebtedness (pro rata as to each of such
holders on the basis of the respective amounts of Senior
Indebtedness held by them) or their Representatives, as their
respective interests may appear, for application to the payment
of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in accordance
with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
If a distribution is made to Holders that because of
this Article Ten should not have been made to them, the Holders
who receive the distribution shall hold it in trust for holders
of Senior Indebtedness and pay it over to them as their interests
may appear.
SECTION 1005. Notice by the Company. The Company
shall promptly notify the Trustee and any Paying Agent by an
appropriate Officers' Certificate of the Company delivered to a
Trust Officer and the Paying Agent of any facts known to the
Company that would cause a payment of principal of or interest on
the Notes to violate this Article Ten, but failure to give such
notice shall not affect the subordination of the Notes to the
Senior Indebtedness provided in this Article Ten.
SECTION 1006. Subrogation. After all Senior
Indebtedness is paid in cash or cash equivalents in full and
until the Notes are paid in full, Holders shall be subrogated to
the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent
that distributions otherwise payable to Holders have been applied
to payment of Senior Indebtedness. A distribution made under
this Article Ten to holders of Senior Indebtedness which
otherwise would have been made to Holders is not, as between the
Company and the Holders, a payment by the Company on Senior
Indebtedness.
SECTION 1007. Relative Rights. This Article Ten
defines the relative rights of Holders and holders of Senior
Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and the Holders,
the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Notes
in accordance with their terms;
(2) affect the relative rights of Holders and
creditors of the Company other than such creditors as are
holders of Senior Indebtedness;
(3) prevent the Trustee or any Holder from exercising
its available remedies upon a Default or Event of Default,
subject to the rights of holders of Senior Indebtedness to
receive distributions otherwise payable to Holders; or
(4) create or imply the existence of any commitment on
the part of the holders of Senior Indebtedness to extend
credit to the Company, other than as set forth in the terms
governing such Senior Indebtedness.
SECTION 1008. Subordination May Not Be Impaired by the
Company. No right of any present or future holder of Senior
Indebtedness to enforce the subordination of the Indebtedness
evidenced by the Notes shall be impaired by any act or failure to
act by the Company or anyone in custody of its assets or property
or by its failure to comply with this Indenture.
SECTION 1009. Distribution or Notice to
Representatives. Whenever a distribution is to be made or a
notice given to holders of Senior Indebtedness, the distribution
may be made and the notice given to their Representatives, if
any.
SECTION 1010. Rights of Trustee and Paying Agent. The
Trustee or any Paying Agent may continue to make payments on the
Notes unless, in the case of the Trustee, a Trust Officer or, in
the case of a Paying Agent other than the Trustee, an officer of
such Paying Agent, shall have received, at least three Business
Days prior to the date such payments are due and payable, written
notice of facts that would cause a payment of principal of or
interest on the Notes to violate this Article Ten. Only the
Company or a Representative with respect to or holders of at
least a majority in principal amount of an issue of Designated
Senior Indebtedness may give such notice. Nothing contained in
this Section 1010 shall limit the right of any holder of Senior
Indebtedness to recover payments as contemplated by Section 1004.
The Trustee in its individual or any other capacity may
hold Senior Indebtedness with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights.
SECTION 1011. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. Notwithstanding any of the
provisions of this Article Ten or any other provision of this
Indenture, unless a Trust Officer has received a written notice
pursuant to Section 1010, the Trustee shall not at any time be
charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee.
SECTION 1012. Application by Trustee of Monies
Deposited With It. Nothing contained in this Article Ten or
elsewhere in this Indenture, or in the Notes, shall (i) affect
the obligation of the Company to make, or prevent the Company
from making, at any time except as specified in Section 1002 or
1003 to the extent provided therein, payments at any time with
respect to the Notes, (ii) prevent the application by the Trustee
or any Paying Agent of any monies held by the Trustee or such
Paying Agent in trust for the benefit of the Holders of Notes as
to which notice of redemption shall have been mailed or
published, to the payment of or on account of the principal of or
interest on the Notes if, at the time of such mailing or
publishing, such payment would not have been prohibited by the
foregoing provisions of this Article Ten or (iii) prevent the
application by the Trustee or any Paying Agent of any monies
deposited with it hereunder to the payment of or on account of
the Notes if, at the time of such deposit, such payment would not
have been prohibited by the foregoing provisions of this Article
Ten and, if such monies have been deposited by the Company, the
Trustee shall not have received with respect to such monies the
written notice provided for in Section 1010.
SECTION 1013. Trustee's Compensation Not Prejudiced.
Nothing in this Article Ten shall apply to claims of, or payments
to, the Trustee pursuant to Section 507.
SECTION 1014. Officers' Certificate. If there occurs
an event referred to in Section 1002, the Company shall promptly
give to the Trustee an Officers' Certificate (on which the
Trustee may conclusively rely) identifying all holders of Senior
Indebtedness and the principal amount of Senior Indebtedness then
outstanding held by each such holder and stating the reasons why
such Officers' Certificate is being delivered to the Trustee.
SECTION 1015. Certain Payments. Nothing in this
Article Ten shall prevent or delay (i) the Company or any of its
Subsidiaries from or in purchasing or redeeming any of the Notes
pursuant to any Legal Requirement relating to the Company's
gaming business or (ii) the receipt by the Holders of payments of
principal of and interest on the Notes as provided in Section
302.
SECTION 1016. Names of Representatives. The Company
shall, upon request of the Trustee, provide to the Trustee an
Officers' Certificate setting forth the name and address of each
Representative of all outstanding Senior Indebtedness.
SECTION 1017. No Fiduciary Duty Created to Holders of
Senior Indebtedness. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically
set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and, subject to the provisions of
Article Five, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall mistakenly pay over or deliver to
Holders, the Company or any other Person, monies or assets to
which any holder of Senior Indebtedness shall be entitled by
virtue of this Article Ten or otherwise.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and have caused their respective
corporate seals to be hereunto affixed and attested, all as of
the date first written above.
AZTAR CORPORATION
By: ROBERT M. HADDOCK
Name: Robert M. Haddock
Title: Executive Vice
President and Chief Financial
Officer
SEAL
Attest: NELSON W. ARMSTRONG JR.
AMERICAN BANK NATIONAL
ASSOCIATION
By: THOMAS M. KORSMAN
Name: Thomas M. Korsman
Title: Vice President
SEAL
Attest:
<PAGE>
EXHIBIT A
[Face of Note]
No. $
AZTAR CORPORATION
Incorporated under the laws of the State
of Delaware
13 3/4% Senior Subordinated Note Due 2004
AZTAR CORPORATION promises to pay to _________________
or registered assigns, the principal sum of _____________ Dollars
on October 1, 2004 and to pay interest thereon semiannually in
arrears at the rate of 13 3/4% per annum on April 1 and October 1 of
each year until the principal hereof is paid or made available
for payment. Payment of principal and interest shall be made in
the manner and subject to the terms set forth in provisions
appearing on the reverse hereof, which provisions, in their
entirety, shall for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, AZTAR CORPORATION has caused this
instrument to be duly executed in its corporate name under its
corporate seal.
AZTAR CORPORATION
By:
Attest:
[SEAL]
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 13 3/4% Senior Subordinated Notes Due
2004 issued under the within-mentioned Indenture.
Dated:
AMERICAN BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Signature
<PAGE>
(Back of Note)
AZTAR CORPORATION
13 3/4% Senior Subordinated Note Due 2004
1. Interest. AZTAR CORPORATION (the "Company"), a
Delaware corporation, promises to pay interest on the principal
amount of this Note at the rate per annum shown above. The
Company will pay interest semiannually in arrears on April 1 and
October 1 of each year. Interest on this Note will accrue from
the most recent date on which interest has been paid or, if no
interest has been paid, from October 4, 1994. The Company will
pay interest on overdue principal and premium, if any, and, to
the extent lawful, on overdue installments of interest at the
rate per annum borne by this Note shown above. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest
on this Note (except Defaulted Interest) to the Person who is the
registered Holder of this Note at the close of business on the
Regular Record Date, which shall be the March 15 and September
15, as the case may be, next preceding the Interest Payment Date
even though this Note is cancelled after the Regular Record Date
and on or before the Interest Payment Date. Any such interest
not so punctually paid or duly provided for, and any interest
payable on such Defaulted Interest (to the extent lawful), will
forthwith cease to be payable to the Holder of this Note on such
Regular Record Date and shall be payable to the Person in whose
name this Note is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice of which shall be given to
Holders not less than 15 days prior to such Special Record Date.
The Holder must surrender this Note to a Paying Agent to collect
principal payments. The Company will pay principal, premium, if
any, and interest in money of the United States that at the time
of payment is legal tender for payment of public and private
debts. However, the Company may pay principal, premium, if any,
and interest by check payable in such money. The Company may
mail an interest check to a Holder's registered address. If a
payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not
a Legal Holiday, and no interest shall accrue for the intervening
period.
3. Paying Agent and Registrar. American Bank
National Association (the "Trustee") will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company may act in any such
capacity.
4. Indenture. The Company has issued the Notes under
an indenture dated as of October 1, 1994 (the "Indenture") among
the Company and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. 77aaa-bbbb) as in effect on the date of the Indenture.
The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The
Notes are unsecured senior subordinated obligations of the
Company limited to $180,000,000 in aggregate principal amount.
Unless otherwise defined herein, all capitalized terms shall have
the meanings assigned to them in the Indenture.
5. Denominations, Transfer, Exchange. The Notes are
in registered form without coupons in denominations of $1,000 and
integral multiples thereof. The transfer of Notes may be
registered and Notes may be exchanged as provided in the
Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not exchange or
register the transfer of any Note or portion of a Note selected
for redemption. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed.
6. Optional Redemption. The Notes may not be
redeemed prior to October 1, 1999. On or after such date, the
Notes may be redeemed at the election of the Company in whole at
any time or in part from time to time at the Redemption Prices
(expressed in percentages of principal amount) set forth below
plus accrued and unpaid interest, if any, to the Redemption Date,
if redeemed during the 12-month period beginning October 1 of the
years indicated below:
Year Percentage
1999 106.875%
2000 105.156
2001 103.437
2002 101.719
2003 and thereafter 100.000
Notice of redemption will be mailed at least 30 days
but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed, at such Holder's last address, as
it appears on the Register. Notes in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of
$1,000. On and after the Redemption Date interest ceases to
accrue on Notes or portions of them called for redemption.
If less than all the Notes are to be redeemed,
selection of the Notes will be made by the Trustee, pro rata or
by lot or by any other means that the Trustee determines to be
fair and appropriate.
7. Redemption Pursuant to Gaming Jurisdiction Law.
The Company is subject to the New Jersey Casino Control Act (the
"New Jersey Act") and the Nevada Gaming Control Act (the "Nevada
Act") and may become subject to applicable gaming laws, statutes,
ordinances, codes, regulations, constitutional provisions, rule,
orders, directives or other enforcement requirements in other
jurisdictions in which it from time to time operates (any such
jurisdiction, including New Jersey and Nevada, a "Gaming
Jurisdiction" and any such provision, including the New Jersey
Act and the Nevada Act, a "Gaming Jurisdiction Law"). If the New
Jersey Casino Control Commission (the "New Jersey Commission")
does not waive the requirement that a Holder or beneficial owner
of the Notes must be licensed or found qualified or suitable to
hold or own the Notes under the New Jersey Act, and if such
Holder or such beneficial owner does not become so licensed or is
not found qualified or suitable within any time period specified
by the New Jersey Commission or the New Jersey Act, or if the
Nevada Gaming Commission (the "Nevada Commission") finds a Holder
or beneficial owner to be unsuitable under the Nevada Act or
regulations of the Nevada Commission, or if any other gaming
authority of any other Gaming Jurisdiction (a "Gaming Authority")
requires that Holders or beneficial owners of the Notes be
licensed or found qualified or suitable and such Gaming Authority
fails to waive such requirement or such Holder or beneficial
owner does not become so licensed or is not found qualified or
suitable within the applicable time period, the Company shall
have the right, at its option, (i) to require such Holder or
beneficial owner to dispose of all or a portion of such Holder's
or beneficial owner's Notes within 120 days after receipt of
notice by such Holder or beneficial owner of such finding by the
New Jersey Commission or the Nevada Commission or such other
Gaming Authority, as the case may be (or such different period as
may be prescribed by the New Jersey Commission or the Nevada
Commission or such other Gaming Authority), or (ii) to call for
redemption the Notes of such Holder or beneficial owner, on not
less than 30 nor more than 60 days' notice (or such different
period as may be prescribed by the applicable Gaming Authority).
If such Holder or beneficial owner, having been given the
opportunity by the Company to dispose of such Holder's or
beneficial owner's Notes, shall have failed to do so within the
prescribed time period, the Company shall have the right to
redeem such Holder's or beneficial owner's Notes on five days'
notice. On any redemption of Notes pursuant to this provision,
the Redemption Price shall be without premium and the lower of
(i) the price at which such Holder or beneficial owner acquired
the Notes, together with (if permitted by the New Jersey Act or
the Nevada Act or other applicable Gaming Jurisdiction Law, or by
the orders of the New Jersey Commission or the Nevada Commission
or the relevant Gaming Authority, as the case may be) accrued
interest to the Redemption Date, and (ii) the lowest closing sale
price of the Notes between the date of the notice given by the
New Jersey Commission or the Nevada Commission or such other
Gaming Authority and the date 10 days after such date, unless a
Redemption Price or other payment, remuneration or related terms
or restrictions are required by the New Jersey Commission or the
Nevada Commission or such other Gaming Authority, as the case may
be, in which event such price, terms and restrictions shall be
the Redemption Price and terms of redemption. Each Holder and
beneficial owner by accepting this Note agrees to the provisions
set forth in this Paragraph and in the Indenture and agrees to
inform the Company upon request of the price at which such Holder
or beneficial owner acquired this Note.
8. Persons Deemed Owners. The registered Holder of
this Note may be treated as its owner for all purposes.
9. Amendments and Waivers. Subject to certain
exceptions, the Indenture or the Notes may be amended with the
consent of the Holders of at least a majority in principal amount
of the then Outstanding Notes. Without the consent of any
Holder, the Indenture or the Notes may be amended to cure any
ambiguity, defect or inconsistency, to provide for assumption of
the Company's obligations to Holders, to provide for
uncertificated Notes or to make any change that does not
adversely affect the rights of any Holder.
10. Defaults and Remedies. An Event of Default, as
defined in the Indenture, is: (i) default for 30 days in payment
of interest on the Notes; (ii) default in payment of principal
of, or premium on, the Notes; (iii) failure by the Company for 60
days after notice to comply with any of its other agreements or
covenants in the Indenture or the Notes; (iv) default under any
mortgage, indenture or other instrument under which there may be
secured or evidenced any other Indebtedness of the Company or any
of its Restricted Subsidiaries and such Indebtedness shall have
been accelerated (or shall have matured), provided that the
principal amount of all such Indebtedness with respect to which
such events of default have occurred and are continuing
aggregates $5,000,000 or more; (v) judgments in an aggregate
amount in excess of $5,000,000 have been rendered against the
Company or a Restricted Subsidiary and either an enforcement
proceeding shall have been commenced by any creditor upon any
judgment or there shall be a period of 90 consecutive days during
which a stay of enforcement of any such judgment shall not be in
effect; (vi) certain events of bankruptcy, insolvency or
reorganization; and (vii) any revocation, suspension or loss
(with certain exceptions) of any Gaming License which results in
the cessation or suspension of operation for a period of more
than 90 days of the casino business of any casino hotel owned,
leased or operated directly or indirectly by the Company or any
of its Subsidiaries. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in
principal amount of the then Outstanding Notes may declare all
the Notes to be due and payable immediately, except that in the
case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization, all Outstanding Notes
shall become due and payable immediately without further action
or notice. In the event of a declaration of acceleration because
an Event of Default as defined in clause (iv) above has occurred,
and is continuing, such declaration and its consequences shall be
automatically rescinded and annulled if (a) in the case of
Indebtedness that has been accelerated, the holders of such
Indebtedness shall have rescinded the declaration of acceleration
and the consequences thereof within 10 days of such declaration
or, in the case of Indebtedness that has matured, such
Indebtedness has been discharged in full within 10 days following
maturity, (b) the Company shall have delivered a notice of such
rescission or discharge to the Trustee and (c) no other Event of
Default shall have occurred and be continuing. Holders may not
enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount of
the then Outstanding Notes may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders
notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice
is in their interest. The Company must furnish annual compliance
certificates to the Trustee.
11. Discharge or Defeasance Prior to Redemption or
Maturity. Subject to certain conditions, including delivery of
an Opinion of Counsel regarding certain tax matters, if the
Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay principal of, premium, if
applicable, and accrued interest on the Notes to redemption or
maturity, the Company will be Discharged (to the extent provided
in the Indenture) from the Notes and the Indenture or the Company
need not comply with certain terms of the Indenture.
12. Restrictive Covenants. The Indenture imposes
certain limitations on the ability of the Company and its
Subsidiaries to, among other things, pay dividends, create or
incur Indebtedness, create Liens, merge or consolidate with any
other Person or sell, lease or otherwise transfer any of their
properties or assets.
13. Successor Corporation. When a successor Person or
other entity assumes all the obligations of its predecessor under
the Notes and the Indenture, the predecessor Person will be
released from those obligations.
14. Trustee Dealings with Company. The Trustee, in
its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or any of its
Subsidiaries or Affiliates, and may otherwise deal with the
Company or its Subsidiaries or Affiliates, as if it were not the
Trustee.
15. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have
any liability for any obligations of the Company under the Notes
or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of
the Notes.
16. Unclaimed Money. If money for the payment of
principal of or interest on any Note remains unclaimed for two
years after the date on which such payment shall have come due,
the Trustee or Paying Agent will pay the money back to the
Company at the Company's written request. After that, Holders
entitled to this money must look to the Company for payment,
unless applicable law designates another Person.
17. Discharge Upon Redemption or Maturity. Subject to
the terms of the Indenture, the Indenture will be discharged and
cancelled upon the payment of all Notes.
18. Authentication. This Note shall not be valid
until authenticated by the manual signature of the Trustee or an
authenticating agent.
19. Governing Law. This Note shall be construed in
accordance with and governed by the laws of the State of New York
without regard to principles of conflict of law.
20. Abbreviations. Customary abbreviations may be
used in the name of a Holder or an assignee, such as TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT
TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and UNIF GIFT MIN ACT
(= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture, which has in
it the text of this Note, in larger type. Requests may be made
to Aztar Corporation, 2390 E. Camelback Road, Suite 400, Phoenix,
Arizona 85016, Attn: Corporate Secretary.
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: I or we
assign and transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to
transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: Your signature:
(Sign exactly as your name appears
on the other side of this security)
Signature Guaranteed
By:
<PAGE>
OPTION OF HOLDER TO ELECT REPURCHASE
The undersigned hereby irrevocably requests and
instructs the Company to repay this Note pursuant to its terms at
a price equal to the principal amount hereof, together with
accrued and unpaid interest to the Change of Control Payment
Date, to the undersigned at
(Please print or type name and address of the undersigned)
For this Note to be repaid, the Company must receive
this Note with this "Option of Holder to Elect Repurchase" form
duly completed at an office or agency of the Company maintained
for that purpose in the Borough of Manhattan in The City of New
York within the time periods for such repurchase set forth in the
Indenture.
If less than the entire principal of the within Note is
to be repaid, specify the portion thereof (which shall be $1,000
or an integral multiple of $1,000) which the Holder elects to
have repaid:
Dated:
Note: The signature must correspond
with the name as written upon the
face of the Note in every particular
without alteration or enlargement.
REDUCING REVOLVING LOAN AGREEMENT
Dated as of October 4, 1994
among
AZTAR CORPORATION
ADAMAR OF NEW JERSEY, INC.
RAMADA EXPRESS, INC.
THE BANKS HEREIN NAMED
SOCIETE GENERALE
MIDLANTIC BANK, N.A.
as Lead Managers
BANK ONE, ARIZONA, N A
CREDIT LYONNAIS,
as Co-Agents
BANKERS TRUST COMPANY, as Co-Managing Agent
and
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Managing Agent
<PAGE>
TABLE OF CONTENTS
Page
Article 1 DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . 1
1.2 Use of Defined Terms . . . . . . . . . . . . . . 38
1.3 Accounting Terms . . . . . . . . . . . . . . . . 38
1.4 Rounding . . . . . . . . . . . . . . . . . . . . 38
1.5 Exhibits and Schedules . . . . . . . . . . . . . 39
1.6 References to "Borrowers and their
Subsidiaries". . . . . . . . . . . . . . . . . . 39
1.7 Miscellaneous Terms. . . . . . . . . . . . . . . 39
1.8 Relationship to TEGP Loan Agreement. . . . . . . 39
Article 2 LOANS AND LETTERS OF CREDIT. . . . . . . . . . . 40
2.1 Loans-General. . . . . . . . . . . . . . . . . . 40
2.2 Alternate Base Rate Loans. . . . . . . . . . . . 41
2.3 Eurodollar Rate Loans. . . . . . . . . . . . . . 42
2.4 Letters of Credit. . . . . . . . . . . . . . . . 42
2.5 Voluntary Reduction of Commitment. . . . . . . . 46
2.6 Automatic Reduction of Commitment. . . . . . . . 47
2.7 Optional Termination of Commitment . . . . . . . 47
2.8 Increase of Commitment . . . . . . . . . . . . . 47
2.9 Managing Agent's Right to Assume Funds
Available for Advances . . . . . . . . . . . . . 48
2.10 Swing Line . . . . . . . . . . . . . . . . . . . 48
2.11 Extension of Initial Reduction Date and
Maturity Date. . . . . . . . . . . . . . . . . . 50
2.12 Collateral and Guaranty. . . . . . . . . . . . . 52
2.13 Senior Indebtedness. . . . . . . . . . . . . . . 52
Article 3 PAYMENTS AND FEES. . . . . . . . . . . . . . . . 53
3.1 Principal and Interest . . . . . . . . . . . . . 53
3.2 Arrangement Fee. . . . . . . . . . . . . . . . . 54
3.3 Upfront Fees . . . . . . . . . . . . . . . . . . 54
3.4 Supplemental Upfront Fees. . . . . . . . . . . . 55
3.5 Commitment Fees. . . . . . . . . . . . . . . . . 55
3.6 Letter of Credit Fees. . . . . . . . . . . . . . 55
3.7 Agency Fees. . . . . . . . . . . . . . . . . . . 55
3.8 Increased Commitment Costs . . . . . . . . . . . 56
3.9 Eurodollar Costs and Related Matters . . . . . . 57
3.10 Late Payments. . . . . . . . . . . . . . . . . . 61
3.11 Computation of Interest and Fees . . . . . . . . 62
3.12 Non-Banking Days . . . . . . . . . . . . . . . . 62
3.13 Manner and Treatment of Payments . . . . . . . . 62
3.14 Funding Sources. . . . . . . . . . . . . . . . . 64
3.15 Failure to Charge Not Subsequent Waiver. . . . . 64
3.16 Managing Agent's Right to Assume Payments Will
be Made by Borrowers . . . . . . . . . . . . . . 64
3.17 Fee Determination Detail . . . . . . . . . . . . 65
3.18 Survivability. . . . . . . . . . . . . . . . . . 65
Article 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . 66
4.1 Existence and Qualification; Power; Compliance
With Laws. . . . . . . . . . . . . . . . . . . . 66
4.2 Authority; Compliance With Other Agreements
and Instruments and Government Regulations . . . 66
4.3 No Governmental Approvals Required . . . . . . . 67
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . 67
4.5 Financial Statements . . . . . . . . . . . . . . 68
4.6 No Other Liabilities; No Material Adverse
Changes. . . . . . . . . . . . . . . . . . . . . 69
4.7 Title to Property. . . . . . . . . . . . . . . . 69
4.8 Intangible Assets. . . . . . . . . . . . . . . . 69
4.9 Public Utility Holding Company Act . . . . . . . 69
4.10 Litigation . . . . . . . . . . . . . . . . . . . 69
4.11 Binding Obligations. . . . . . . . . . . . . . . 70
4.12 No Default . . . . . . . . . . . . . . . . . . . 70
4.13 ERISA. . . . . . . . . . . . . . . . . . . . . . 70
4.14 Regulations G, T, U and X; Investment Company
Act. . . . . . . . . . . . . . . . . . . . . . . 71
4.15 Disclosure . . . . . . . . . . . . . . . . . . . 71
4.16 Tax Liability. . . . . . . . . . . . . . . . . . 71
4.17 Projections. . . . . . . . . . . . . . . . . . . 71
4.18 Hazardous Materials. . . . . . . . . . . . . . . 71
4.19 Developed Properties . . . . . . . . . . . . . . 72
4.20 Gaming Laws. . . . . . . . . . . . . . . . . . . 72
4.21 Security Interests . . . . . . . . . . . . . . . 72
Article 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION
AND REPORTING REQUIREMENTS). . . . . . . . . . . 74
5.1 Payment of Taxes and Other Potential Liens . . . 74
5.2 Preservation of Existence. . . . . . . . . . . . 74
5.3 Maintenance of Properties. . . . . . . . . . . . 74
5.4 Maintenance of Insurance . . . . . . . . . . . . 75
5.5 Compliance With Laws . . . . . . . . . . . . . . 75
5.6 Inspection Rights. . . . . . . . . . . . . . . . 75
5.7 Keeping of Records and Books of Account. . . . . 75
5.8 Compliance With Agreements . . . . . . . . . . . 75
5.9 Use of Proceeds. . . . . . . . . . . . . . . . . 76
5.10 TropWorld Consolidation. . . . . . . . . . . . . 76
5.11 The TropWorld Property . . . . . . . . . . . . . 76
5.12 Other Future Collateral. . . . . . . . . . . . . 76
5.13 New Significant Subsidiaries . . . . . . . . . . 77
5.14 Hazardous Materials Laws . . . . . . . . . . . . 77
5.15 Intercompany Notes . . . . . . . . . . . . . . . 77
Article 6 NEGATIVE COVENANTS . . . . . . . . . . . . . . . 78
6.1 Payment of Subordinated Obligations. . . . . . . 78
6.2 Disposition of Property. . . . . . . . . . . . . 78
6.3 Mergers. . . . . . . . . . . . . . . . . . . . . 78
6.4 Hostile Acquisitions . . . . . . . . . . . . . . 79
6.5 Distributions. . . . . . . . . . . . . . . . . . 79
6.6 ERISA. . . . . . . . . . . . . . . . . . . . . . 79
6.7 Change in Nature of Business . . . . . . . . . . 80
6.8 Liens, Rights of Others and Negative Pledges . . 80
6.9 Indebtedness and Guaranty Obligations. . . . . . 81
6.10 Transactions with Affiliates . . . . . . . . . . 83
6.11 Tangible Net Worth . . . . . . . . . . . . . . . 83
6.12 Debt Service . . . . . . . . . . . . . . . . . . 83
6.13 Leverage Ratio . . . . . . . . . . . . . . . . . 83
6.14 Capital Expenditures . . . . . . . . . . . . . . 85
6.15 New Venture Capital Expenditures . . . . . . . . 85
6.16 New Venture Investments. . . . . . . . . . . . . 86
6.17 Investments. . . . . . . . . . . . . . . . . . . 87
6.18 Subsidiary Indebtedness. . . . . . . . . . . . . 88
6.19 Significant Subsidiaries . . . . . . . . . . . . 89
6.20 Amendments to Subordinated Obligations . . . . . 89
Article 7 INFORMATION AND REPORTING REQUIREMENTS . . . . . 90
7.1 Financial and Business Information . . . . . . . 90
7.2 Compliance Certificates. . . . . . . . . . . . . 94
Article 8 CONDITIONS . . . . . . . . . . . . . . . . . . . 95
8.1 Initial Advances, Etc. . . . . . . . . . . . . . 95
8.2 Availability of Reserve Amount . . . . . . . . . 99
8.3 Acquisition of Future Collateral . . . . . . . . 99
8.4 Any Increasing Advance, Etc. . . . . . . . . . . 99
8.5 Any Advance. . . . . . . . . . . . . . . . . . .100
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF
DEFAULT. . . . . . . . . . . . . . . . . . . . .101
9.1 Events of Default. . . . . . . . . . . . . . . .101
9.2 Remedies Upon Event of Default . . . . . . . . .103
Article 10 THE MANAGING AGENT . . . . . . . . . . . . . . .107
10.1 Appointment and Authorization. . . . . . . . . .107
10.2 Managing Agent and Affiliates. . . . . . . . . .107
10.3 Proportionate Interest in any Collateral . . . .107
10.4 Banks' Credit Decisions. . . . . . . . . . . . .108
10.5 Action by Managing Agent . . . . . . . . . . . .108
10.6 Liability of Managing Agent. . . . . . . . . . .109
10.7 Indemnification. . . . . . . . . . . . . . . . .110
10.8 Successor Managing Agent . . . . . . . . . . . .111
10.9 Foreclosure on Collateral. . . . . . . . . . . .112
10.10 No Obligations of Borrowers. . . . . . . . . . .112
Article 11 MISCELLANEOUS. . . . . . . . . . . . . . . . . .113
11.1 Cumulative Remedies; No Waiver . . . . . . . . .113
11.2 Amendments; Consents . . . . . . . . . . . . . .113
11.3 Costs, Expenses and Taxes. . . . . . . . . . . .114
11.4 Nature of Banks' Obligations . . . . . . . . . .115
11.5 Survival of Representations and Warranties . . .116
11.6 Notices. . . . . . . . . . . . . . . . . . . . .116
11.7 Execution of Loan Documents. . . . . . . . . . .116
11.8 Binding Effect; Assignment . . . . . . . . . . .117
11.9 Right of Setoff. . . . . . . . . . . . . . . . .120
11.10 Sharing of Setoffs . . . . . . . . . . . . . . .120
11.11 Indemnity by Borrowers . . . . . . . . . . . . .121
11.12 Nonliability of the Banks. . . . . . . . . . . .122
11.13 No Third Parties Benefited . . . . . . . . . . .123
11.14 Confidentiality. . . . . . . . . . . . . . . . .124
11.15 Further Assurances . . . . . . . . . . . . . . .124
11.16 Integration. . . . . . . . . . . . . . . . . . .124
11.17 Governing Law. . . . . . . . . . . . . . . . . .125
11.18 Severability of Provisions . . . . . . . . . . .125
11.19 Headings . . . . . . . . . . . . . . . . . . . .125
11.20 Time of the Essence. . . . . . . . . . . . . . .125
11.21 Foreign Banks and Participants . . . . . . . . .125
11.22 Hazardous Material Indemnity . . . . . . . . . .126
11.23 Gaming Boards. . . . . . . . . . . . . . . . . .127
11.24 Joint and Several. . . . . . . . . . . . . . . .127
11.25 Removal of a Bank. . . . . . . . . . . . . . . .128
11.26 Termination; Release of Liens. . . . . . . . . .129
11.27 Other Lien Releases. . . . . . . . . . . . . . .129
11.28 Waiver of Right to Trial by Jury . . . . . . . .129
11.29 Purported Oral Amendments. . . . . . . . . . . .130
Exhibits
A - Commitment Assignment and Acceptance
B - Compliance Certificate
C - Note
D-1 - Opinion of Counsel
D-2 - Opinion of Counsel
D-3 - Opinion of Counsel
D-4 - Opinion of Counsel
E - Pledge Agreement (Nevada Gaming)
F - Pledge Agreement (General)
G - Pricing Certificate
H - Ramada Express Deed of Trust
I - Request for Letter of Credit
J - Request for Loan
K - Security Agreement
L - Subsidiary Guaranty
M - Trademark Collateral Assignment
N - TropWorld Deeds of Trust
O - Unsecured Environmental Indemnity (New Jersey)
P - Joint Borrower Provisions
Schedules
1.1 Bank Commitments
4.3 Governmental Approvals
4.4 Subsidiaries
4.7 Existing Liens, Negative Pledges and Rights of Others
4.8 Trademarks and Trade Names
4.10 Material Litigation
4.18 Environmental Matters
4.19 Developed Properties
5.11 TropWorld Property Title Matters
6.9 Existing Indebtedness
6.17 Existing Investments<PAGE>
REDUCING REVOLVING LOAN AGREEMENT
Dated as of October 4, 1994
This REDUCING REVOLVING LOAN AGREEMENT ("Agreement")
is entered into by and among Aztar Corporation, a Delaware
corporation ("Parent"), Adamar of New Jersey, Inc., a New
Jersey corporation ("ANJI"), Ramada Express, Inc., a Nevada
corporation ("REI"), each bank whose name is set forth on the
signature pages of this Agreement and each lender which may
hereafter become a party to this Agreement pursuant to
Section 11.8 (collectively, the "Banks" and individually, a
"Bank"), Societe Generale and Midlantic Bank, N.A., as Lead
Managers, Bank One, Arizona, N A and Credit Lyonnais, as
Co-Agents, Bankers Trust Company, as Co-Managing Agent and Bank
of America National Trust and Savings Association, as Managing
Agent.
In consideration of the mutual covenants and agree-
ments herein contained, the parties hereto covenant and agree
as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Adjusted EBITDA" means, with respect to any fiscal
period, the sum of (a) Net Income for that period, plus
(b) any extraordinary loss reflected in such Net Income,
minus (c) any extraordinary gain reflected in such Net
Income, plus (d) Interest Expense for that period, plus
(e) the aggregate amount of federal and state taxes on or
measured by income for that period (whether or not payable
during that period), plus (f) depreciation, amortization
and all other non-cash expenses for that period, plus
(g) Parent's equity in any net loss of TEGP for that
period, minus (h) Parent's equity in any net income of
TEGP for that period, plus (i) that portion of the rentals
paid to TEGP by HRN during that period which is designated
and used to service principal and interest payable under
the TEGP Loan Agreement, plus (j) dividends or other
income received in Cash in that period by any of Borrowers
or the Restricted Subsidiaries from an Unrestricted New
Venture Entity (but only to the extent of earnings before
interest, taxes, depreciation and amortization of such
Unrestricted New Venture Entity), in each case as
determined in accordance with Generally Accepted
Accounting Principles and, in the case of items (d), (e),
(f), (g), (h) and (i), only to the extent reflected in the
determination of Net Income for that period.
"Adjusted Funded Debt" means, as of any date of
determination, Funded Debt as of that date plus (without
duplication) (a) all outstanding Letters of Credit on that
date, plus (b) all Guaranty Obligations of Borrowers and
the Restricted Subsidiaries on that date with respect to
Indebtedness of any Person that is not a Restricted
Subsidiary, plus (c) all other Guaranty Obligations of
Borrowers and the Restricted Subsidiaries if and to the
extent the amount thereof has been (or in accordance with
Financial Accounting Standards Board Statement No. 5
should be) quantified as of that date and reflected or
disclosed in the most recent consolidated financial
statements (or notes thereto) of Borrowers and the
Restricted Subsidiaries.
"Advance" means any advance made or to be made by any
Bank to Borrowers as provided in Article 2, and includes
each Alternate Base Rate Advance and Eurodollar Rate
Advance.
"Affiliate" means, as to any Person, any other Person
which directly or indirectly controls, or is under common
control with, or is controlled by, such Person. As used
in this definition, "control" (and the correlative terms,
"controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies
(whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise);
provided that, in any event, any Person that owns,
directly or indirectly, 10% or more of the securities
having ordinary voting power for the election of directors
or other governing body of a corporation that has more
than 100 record holders of such securities, or 10% or more
of the partnership or other ownership interests of any
other Person that has more than 100 record holders of such
interests, will be deemed to control such corporation,
partnership or other Person.
"Aggregate Effective Amount" means, as of any date of
determination and with respect to all Letters of Credit
then outstanding, the sum of (a) the aggregate effective
face amounts of all such Letters of Credit not then paid
by the Issuing Bank plus (b) the aggregate amounts paid by
the Issuing Bank under such Letters of Credit not then
reimbursed to the Issuing Bank by Borrowers pursuant to
Section 2.4(d) and not the subject of Advances made
pursuant to Section 2.4(e).
"Agreement" means this Reducing Revolving Loan
Agreement, either as originally executed or as it may from
time to time be supplemented, modified, amended, restated
or extended.
"Alternate Base Rate" means, as of any date of
determination, the rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the higher of
(a) the Reference Rate in effect on such date and (b) the
Federal Funds Rate in effect on such date plus 1/2 of 1%
(50 basis points).
"Alternate Base Rate Advance" means an Advance made
hereunder and specified to be an Alternate Base Rate
Advance in accordance with Article 2.
"Alternate Base Rate Loan" means a Loan made
hereunder and specified to be an Alternate Base Rate Loan
in accordance with Article 2.
"ANI" means Adamar of Nevada, Inc., a Nevada
corporation.
"ANJI" means Adamar of New Jersey, Inc., a New Jersey
corporation, and its successors and permitted assigns.
"Annualized Adjusted EBITDA" means, as of the last
day of each Fiscal Quarter, (a) Adjusted EBITDA for the
fiscal period consisting of that Fiscal Quarter and the
three immediately preceding Fiscal Quarters, plus (b) with
respect to any such fiscal period in which the Evansville
Project or the Caruthersville Project (whichever or both
is applicable, herein the "Project") is open for business
for at least one (1) full Fiscal Quarter but less than
four (4) full Fiscal Quarters, such amount as is necessary
to reflect the annualization of Adjusted EBITDA attributa-
ble to the Project using the following conventions:
(i) if the Project has been open for business for less
than one (1) full Fiscal Quarter, no annualization
adjustment shall be made, (ii) if the Project has been
open for business for one (1) full Fiscal Quarter, the
Project's Adjusted EBITDA for that Fiscal Quarter shall be
multiplied by four and then by 90%, (iii) if the Project
has been open for business two (2) full Fiscal Quarters,
the Project's Adjusted EBITDA for those Fiscal Quarters
shall be multiplied by two and then by 95% and (iv) if the
Project has been open for business for three (3) full
Fiscal Quarters, the Project's Adjusted EBITDA for those
Fiscal Quarters shall be multiplied by four thirds (4/3).
"Annualized Funded Debt Ratio" means, as of the last
day of each Fiscal Quarter, the ratio of (a) Average
Quarterly Funded Debt to (b) Annualized Adjusted EBITDA,
as such ratio is set forth in the most recent Pricing
Certificate delivered by Borrowers pursuant to
Section 7.1(c); provided that if such Pricing Certificate
is subsequently determined to be in error, then any
resulting change in the Applicable Pricing Level shall be
made retroactively.
"Applicable Alternate Base Rate Margin" means, for
each Pricing Period, the interest rate margin set forth
below (expressed in basis points per annum) opposite the
Applicable Pricing Level for that Pricing Period:
Applicable
Pricing Level Margin
I 0
II 37.50
III 75.00
IV 125.00
"Applicable Commitment Fee Rate" means, for each
Pricing Period, the rate set forth below (expressed in
basis points per annum) opposite the Applicable Pricing
Level for that Pricing Period:
Applicable
Pricing Level Commitment Fee
I 37.50
II 37.50
III 50.00
IV 50.00
"Applicable Eurodollar Rate Margin" means, for each
Pricing Period, the interest rate margin set forth below
(expressed in basis points per annum) opposite the
Applicable Pricing Level for that Pricing Period:
Applicable
Pricing Level Margin
I 125.00
II 162.50
III 200.00
IV 250.00
"Applicable Letter of Credit Fee" means, for each
Pricing Period, the per annum rate set forth as the
interest rate margin in the definition of "Applicable
Eurodollar Rate Margin" opposite the Applicable Pricing
Level for that Pricing Period.
"Applicable Pricing Level" means (a) for the Pricing
Period from the Closing Date through November 15, 1994,
Pricing Level IV and (b) for each Pricing Period
thereafter, the pricing level set forth below opposite the
Annualized Funded Debt Ratio as of the last day of the
Fiscal Quarter most recently ended prior to the
commencement of that Pricing Period:
Annualized Funded
Pricing Level Debt Ratio
I Less than 2.00 to 1.00
II Equal to or greater than
2.00 to 1.00
but less than 3.00 to 1.00
III Equal to or greater than
3.00 to 1.00
but less than 4.00 to 1.00
IV Equal to or greater than
4.00 to 1.00;
provided that in the event that Borrowers do not deliver a
Pricing Certificate with respect to any Pricing Period
prior to the commencement of such Pricing Period, then
until (but only until) such Pricing Certificate is
delivered the Applicable Pricing Level for that Pricing
Period shall be Pricing Level IV.
"Arranger" means BA Securities, Inc.
"Atlantic City Project" means the construction of a
third hotel tower containing approximately 600 rooms on
the TropWorld Property.
"Average Quarterly Adjusted Funded Debt" means, as of
the last day of each Fiscal Quarter, the greater of
(a) the principal amount of all Adjusted Funded Debt
outstanding on such day and (b) the Average Quarterly
Funded Debt as of such day.
"Average Quarterly Funded Debt" means, as of the last
day of each Fiscal Quarter, the average principal amount
of all Funded Debt outstanding on the last day of each of
the three 4 and 5 week fiscal periods comprising such
Fiscal Quarter.
"Bank" means each bank whose name is set forth in the
signature pages of this Agreement and each lender which
may hereafter become a party to this Agreement pursuant to
Section 11.8.
"Banking Day" means any Monday, Tuesday, Wednesday,
Thursday or Friday, other than a day on which banks are
authorized or required to be closed in California, Arizona
or New York.
"Bank Disqualification" means, with respect to any
Bank,:
(a) the failure of that Bank timely to file
pursuant to applicable Gaming Laws (i) any
application requested of the Bank by any Gaming Board
in connection with licensing required of that Bank as
a lender to Borrowers or (ii) any required
application or other papers in connection with
determination of the suitability of the Bank as a
lender to Borrowers;
(b) the withdrawal by that Bank (except where
requested or permitted by the Gaming Board) of any
such application or other required papers; or
(c) any final determination by a Gaming Board
pursuant to applicable Gaming Laws (i) that the Bank
is "unsuitable" as a lender to Borrowers, (ii) that
the Bank shall be "disqualified" as a lender to
Borrowers or (iii) denying the issuance to the Bank
of any license required under applicable Gaming Laws
to be held by all lenders to Borrowers.
"Basket Expenditures" means the aggregate New Venture
Capital Expenditures and New Venture Investments (without
duplication) (a) made with respect to the Evansville
Project, (b) in excess of $55,000,000 made with respect to
the Caruthersville Project, (c) made with respect to the
Atlantic City Project, but net of the amount financed by
the New Jersey Casino Reinvestment Development Authority
and (d) made with respect to all other New Ventures.
"Borrowers" means, collectively, Parent, ANJI and
REI.
"Capital Expenditure" means any expenditure by any of
the Borrowers or the Restricted Subsidiaries for or
related to fixed assets or purchased intangibles that is
treated as a capital expenditure under Generally Accepted
Accounting Principles, including any amount which is
required to be treated as an asset subject to a Capital
Lease Obligation; provided, however, that Capital
Expenditures to replace or restore Property theretofore
owned by Borrowers or any Restricted Subsidiary that is
damaged, destroyed or taken by a Governmental Agency under
eminent domain shall not be deemed to be Capital
Expenditures to the extent funded by the proceeds of
insurance or eminent domain awards received by Borrowers
or the Restricted Subsidiary.
"Capital Lease Obligations" means all monetary
obligations of a Person under any leasing or similar
arrangement which, in accordance with Generally Accepted
Accounting Principles, is classified as a capital lease.
"Caruthersville Project" means the riverboat casino
to be operated from, and related dockside facilities
located in, Caruthersville, Missouri.
"Cash" means, when used in connection with any
Person, all monetary and non-monetary items owned by that
Person that are treated as cash in accordance with Gener-
ally Accepted Accounting Principles, consistently applied.
"Cash Equivalents" means, when used in connection
with any Person, that Person's Investments in:
(a) Government Securities due within one year
after the date of the making of the Investment;
(b) readily marketable direct obligations of
any State of the United States of America or any
political subdivision of any such State or any public
agency or instrumentality thereof given on the date
of such Investment a credit rating of at least Aa by
Moody's Investors Service, Inc. or AA by Standard &
Poor's Corporation, in each case due within one year
from the making of the Investment;
(c) certificates of deposit issued by, bank
deposits in, eurodollar deposits through, bankers'
acceptances of, and repurchase agreements covering
Government Securities executed by any Bank or any
bank incorporated under the Laws of the United States
of America, any State thereof or the District of
Columbia and having on the date of such Investment
combined capital, surplus and undivided profits of at
least $250,000,000, or total assets of at least
$5,000,000,000, in each case due within one year
after the date of the making of the Investment;
(d) certificates of deposit issued by, bank
deposits in, eurodollar deposits through, bankers'
acceptances of, and repurchase agreements covering
Government Securities executed by any Bank or any
branch or office located in the United States of
America of a bank incorporated under the Laws of any
jurisdiction outside the United States of America
having on the date of such Investment combined
capital, surplus and undivided profits of at least
$500,000,000, or total assets of at least
$15,000,000,000, in each case due within one year
after the date of the making of the Investment;
(e) repurchase agreements covering Government
Securities executed by a broker or dealer registered
under Section 15(b) of the Securities Exchange Act of
1934, as amended, having on the date of the
Investment capital of at least $50,000,000, due
within 90 days after the date of the making of the
Investment; provided that the maker of the Investment
receives written confirmation of the transfer to it
of record ownership of the Government Securities on
the books of a "primary dealer" in such Government
Securities or on the books of such registered broker
or dealer, as soon as practicable after the making of
the Investment;
(f) readily marketable commercial paper or
other debt securities issued by corporations doing
business in and incorporated under the Laws of the
United States of America or any State thereof or of
any corporation that is the holding company for a
bank described in clause (c) or (d) above given on
the date of such Investment a credit rating of at
least P-1 by Moody's Investors Service, Inc. or A-1
by Standard & Poor's Corporation, in each case due
within one year after the date of the making of the
Investment;
(g) "money market preferred stock" issued by a
corporation incorporated under the Laws of the United
States of America or any State thereof (i) given on
the date of such Investment a credit rating of at
least Aa by Moody's Investors Service, Inc. and AA by
Standard & Poor's Corporation, in each case having an
investment period not exceeding 50 days or (ii) to
the extent that investors therein have the benefit of
a standby letter of credit issued by a Bank or a bank
described in clauses (c) or (d) above; provided that
(y) the amount of all such Investments issued by the
same issuer does not exceed $5,000,000 and (z) the
aggregate amount of all such Investments does not
exceed $15,000,000;
(h) a readily redeemable "money market mutual
fund" sponsored by a bank described in clause (c) or
(d) hereof, or a registered broker or dealer
described in clause (e) hereof, that has and
maintains an investment policy limiting its
investments primarily to instruments of the types
described in clauses (a) through (g) hereof and given
on the date of such Investment a credit rating of at
least Aa by Moody's Investors Service, Inc. and AA by
Standard & Poor's Corporation; and
(i) corporate notes or bonds having an original
term to maturity of not more than one year issued by
a corporation incorporated under the Laws of the
United States of America, or a participation interest
therein; provided that (i) commercial paper issued by
such corporation is given on the date of such
Investment a credit rating of at least Aa by Moody's
Investors Service, Inc. and AA by Standard & Poor's
Corporation, (ii) the amount of all such Investments
issued by the same issuer does not exceed $5,000,000
and (iii) the aggregate amount of all such
Investments does not exceed $15,000,000.
"Cash Income Taxes" means, with respect to any fiscal
period, taxes on or measured by income that are paid or
currently payable in Cash in respect of that fiscal
period.
"Cash Interest Expense" means Interest Expense that
is paid or currently payable in Cash.
"Certificate of a Responsible Official" means a
certificate signed by a Responsible Official of the Person
providing the certificate.
"Change in Control" means (a) any transaction or
series of related transactions in which any Unrelated
Person or two or more Unrelated Persons acting in concert
acquire beneficial ownership (within the meaning of
Rule 13d-3(a)(1) under the Securities Exchange Act of
1934, as amended), directly or indirectly, of 25% or more
of the outstanding Common Stock, or (b) any event or
circumstance constituting a "change in control" or other
similar occurrence under documentation evidencing or
governing any Indebtedness of Borrowers of $25,000,000 or
more which results in an obligation of Borrowers to
prepay, purchase, offer to purchase, redeem or defease all
or a portion of such Indebtedness. For purposes of the
foregoing, the term "Unrelated Person" means any Person
other than (i) a Subsidiary of Parent or (ii) an employee
stock ownership plan or other employee benefit plan
covering the employees of Parent and its Subsidiaries.
"Closing Date" means the time and Banking Day on
which the conditions set forth in Section 8.1 are
satisfied or waived. The Managing Agent shall notify
Borrowers and the Banks of the date that is the Closing
Date.
"Co-Agents" means Bank One, Arizona, N A and Credit
Lyonnais. The Co-Agents shall have no rights, duties or
responsibilities under the Loan Documents beyond those of
a Bank.
"Co-Managing Agent" means Bankers Trust Company. The
Co-Managing Agent shall have no rights, duties or
responsibilities under the Loan Documents beyond those of
a Bank.
"Code" means the Internal Revenue Code of 1986, as
amended or replaced and as in effect from time to time.
"Collateral" means all of the collateral covered by
the Collateral Documents.
"Collateral Documents" means, collectively, the
Security Agreement, the Trademark Collateral Assignment,
the Pledge Agreement (Nevada Gaming), the Pledge Agreement
(General), the Deeds of Trust and any other security
agreement, pledge agreement, deed of trust, mortgage or
other collateral security agreement hereafter executed and
delivered by Borrowers or the Significant Subsidiaries to
secure the Obligations.
"Commitment" means, subject to Sections 2.5, 2.6 and
2.8, $207,477,346.14. As of the Closing Date, the
respective Pro Rata Shares of the Banks with respect to
the Commitment are set forth in Schedule 1.1. From and
after the Closing Date, the Pro Rata Shares set forth in
Schedule 1.1 may be subject to assignment pursuant to
Section 11.8, with the portion of any Pro Rata Share so
assigned being reflected in the applicable Commitment
Assignment and Acceptance.
"Commitment Assignment and Acceptance" means a
commitment assignment and acceptance substantially in the
form of Exhibit A.
"Common Stock" means the common stock of Parent or
its successor by merger.
"Completion Guaranty" means a Guaranty Obligation
given by any of Borrowers or a Restricted Subsidiary to a
holder of Indebtedness of, or an obligee of, a New Venture
Entity which obligates any of Borrowers or the Restricted
Subsidiary (a) to cause the completion of construction of
a New Venture, (b) to provide funding for all or a portion
of any construction cost overruns with respect thereto,
and/or (c) to cause the New Venture Entity to perform any
of its Contractual Obligations (other than in respect of
the repayment of any Indebtedness or other monetary
obligation of the New Venture Entity) to an obligee of the
New Venture Entity.
"Compliance Certificate" means a certificate in the
form of Exhibit B, properly completed and signed by a
Senior Officer of Borrowers.
"Contractual Obligation" means, as to any Person, any
provision of any outstanding security issued by that
Person or of any material agreement, instrument or under-
taking to which that Person is a party or by which it or
any of its Property is bound.
"Debt Service Coverage" means, as of the last day of
each Fiscal Quarter, the ratio of (a) the sum of
(i) Annualized Adjusted EBITDA for the fiscal period
consisting of that Fiscal Quarter and the three
immediately preceding Fiscal Quarters, minus (ii) the
greater of (A) Maintenance Capital Expenditures for such
fiscal period or (B) $15,000,000, minus (iii) Cash Income
Taxes for such fiscal period to (b) the sum of
(i) Interest Charges for such fiscal period plus (ii) the
aggregate amount of required principal payments on Funded
Debt during such fiscal period.
"Debtor Relief Laws" means the Bankruptcy Code of the
United States of America, as amended from time to time,
and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of
creditors generally.
"Deeds of Trust" means the Ramada Express Deed of
Trust and the TropWorld Deeds of Trust.
"Default" means any event that, with the giving of
any applicable notice or passage of time specified in
Section 9.1, or both, would be an Event of Default.
"Default Rate" means the interest rate prescribed in
Section 3.10.
"Designated Deposit Account" means a deposit account
to be maintained by Borrowers with Bank of America
National Trust and Savings Association, as from time to
time designated by Borrowers by written notification to
the Managing Agent.
"Designated Eurodollar Market" means, with respect to
any Eurodollar Rate Loan, (a) the London Eurodollar
Market, (b) if prime banks in the London Eurodollar Market
are at the relevant time not accepting deposits of Dollars
or if the Managing Agent determines in good faith that the
London Eurodollar Market does not represent at the
relevant time the effective pricing to the Banks for
deposits of Dollars in the London Eurodollar Market, the
Cayman Islands Eurodollar Market or (c) if prime banks in
the Cayman Islands Eurodollar Market are at the relevant
time not accepting deposits of Dollars or if the Managing
Agent determines in good faith that the Cayman Islands
Eurodollar Market does not represent at the relevant time
the effective pricing to the Banks for deposits of Dollars
in the Cayman Islands Eurodollar Market, such other Euro-
dollar Market as may from time to time be selected by the
Managing Agent with the approval of Borrowers and the
Requisite Banks.
"Developed Property" means, as of any date of
determination, a casino, hotel, casino/hotel, resort,
casino/resort, riverboat casino, dockside casino, golf
course, entertainment center or similar facility owned by
Borrowers or any of the Restricted Subsidiaries (or owned
by a Person in which Borrowers or any of the Restricted
Subsidiaries holds an Investment other than an Investment
of the type contemplated by Section 6.17(m)) and which is
at such date substantially complete and open for business.
"Disposition" means the voluntary sale, transfer or
other disposition of any asset of Borrowers or any of the
Restricted Subsidiaries other than (a) Cash, Cash
Equivalents, inventory or other assets sold, leased or
otherwise disposed of in the ordinary course of business
of Borrowers or a Restricted Subsidiary, (b) equipment
sold or otherwise disposed of where substantially similar
equipment in replacement thereof has theretofore been
acquired, or thereafter within 90 days is acquired, by
Borrowers or a Restricted Subsidiary, or where Borrowers
or the Restricted Subsidiary determine in good faith that
the failure to replace such equipment will not be
detrimental to the business of Borrowers or the Restricted
Subsidiary and (c) a disposition to Borrowers or a
Restricted Subsidiary.
"Disqualified Stock" means any capital stock,
warrants, options or other rights to acquire capital stock
(but excluding any debt security which is convertible, or
exchangeable, for capital stock), which, by its terms (or
by the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeem-
able at the option of the holder thereof, in whole or in
part, on or prior to the Maturity Date; provided that the
aforementioned interests shall not be Disqualified Stock
if they are redeemable prior to the Maturity Date only if
the board of directors of Parent determines in its
judgment that as a result of a holder or beneficial owner
owning such interests (i) Borrowers or a Subsidiary of
Borrowers has lost or may lose any license or franchise
from any Gaming Board held by Borrowers or any Subsidiary
of Borrowers necessary to conduct any portion of the
business of Borrowers or such Subsidiary of Borrowers or
(ii) any Gaming Board has taken or may take action to
materially restrict or impair the operations of Borrowers
or its Subsidiaries, which license, franchise or action is
conditioned upon some or all of the holders or beneficial
owners of such interests being licensed or found qualified
or suitable to own such interests.
"Distribution" means, with respect to any shares of
capital stock or any warrant or option to purchase an
equity security or other equity security issued by a
Person, (i) the retirement, redemption, purchase or other
acquisition for Cash or for Property by such Person of any
such security, (ii) the declaration or (without duplica-
tion) payment by such Person of any dividend in Cash or in
Property on or with respect to any such security,
(iii) any Investment by such Person in the holder of 5% or
more of any such security if a purpose of such Investment
is to avoid characterization of the transaction as a
Distribution and (iv) any other payment in Cash or
Property by such Person constituting a distribution under
applicable Laws with respect to such security.
"Dollars" or "$" means United States dollars.
"Domestic Reference Bank" means Bank of America
National Trust and Savings Association.
"Eligible Assignee" means (a) another Bank, (b) with
respect to any Bank, any Affiliate of that Bank, (c) any
commercial bank having a combined capital and surplus of
$100,000,000 or more, (d) any (i) savings bank, savings
and loan association or similar financial institution or
(ii) insurance company engaged in the business of writing
insurance which, in either case (A) has a net worth of
$200,000,000 or more, (B) is engaged in the business of
lending money and extending credit under credit facilities
substantially similar to those extended under this
Agreement and (C) is operationally and procedurally able
to meet the obligations of a Bank hereunder to the same
degree as a commercial bank and (e) any other financial
institution (including a mutual fund or other fund) having
total assets of $250,000,000 or more which meets the
requirements set forth in subclauses (B) and (C) of clause
(d) above; provided that (I) each Eligible Assignee must
either (a) be organized under the Laws of the United
States of America, any State thereof or the District of
Columbia or (b) be organized under the Laws of the Cayman
Islands or any country which is a member of the
Organization for Economic Cooperation and Development, or
a political subdivision of such a country, and (i) act
hereunder through a branch, agency or funding office
located in the United States of America and (ii) be exempt
from withholding of tax on interest and deliver the
documents related thereto pursuant to Section 11.21 and
(II) to the extent required under applicable Gaming Laws,
each Eligible Assignee must be registered with, approved
by, or not disapproved by (whichever may be required under
applicable Gaming Laws), all applicable Gaming Boards
(including the New Jersey Casino Control Commission).
"ERISA" means the Employee Retirement Income Security
Act of 1974, and any regulations issued pursuant thereto,
as amended or replaced and as in effect from time to time.
"Eurodollar Banking Day" means any Banking Day on
which dealings in Dollar deposits are conducted by and
among banks in the Designated Eurodollar Market.
"Eurodollar Lending Office" means, as to each Bank,
its office or branch so designated by written notice to
Borrowers and the Managing Agent as its Eurodollar Lending
Office. If no Eurodollar Lending Office is designated by
a Bank, its Eurodollar Lending Office shall be its office
at its address for purposes of notices hereunder.
"Eurodollar Market" means a regular established
market located outside the United States of America by and
among banks for the solicitation, offer and acceptance of
Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency
liabilities, as defined in Regulation D or any comparable
regulation of any Governmental Agency having jurisdiction
over any Bank.
"Eurodollar Period" means, as to each Eurodollar Rate
Loan, the period commencing on the date specified by
Borrowers pursuant to Section 2.1(b) and ending 1, 2, 3 or
6 months (or, with the written consent of all of the
Banks, any other period) thereafter, as specified by
Borrowers in the applicable Request for Loan; provided
that:
(a) The first day of any Eurodollar Period
shall be a Eurodollar Banking Day;
(b) Any Eurodollar Period that would otherwise
end on a day that is not a Eurodollar Banking Day
shall be extended to the next succeeding Eurodollar
Banking Day unless such Eurodollar Banking Day falls
in another calendar month, in which case such
Eurodollar Period shall end on the next preceding
Eurodollar Banking Day;
(c) Borrowers may not specify a Eurodollar
Period that extends beyond the next Reduction Date
unless the sum of (i) the aggregate principal amount
of the Eurodollar Loans having a Eurodollar Period
ending after such Reduction Date plus (ii) the
aggregate maximum amount available for drawing under
Letters of Credit for which the expiry date is after
such Reduction Date, does not exceed the Commitment
(after giving effect to any reduction thereto
scheduled to be made on such Reduction Date pursuant
to Section 2.6); and
(d) No Eurodollar Period shall extend beyond
the Maturity Date.
"Eurodollar Rate" means, with respect to any Euro-
dollar Rate Loan, the interest rate per annum (rounded
upward, if necessary, to the next 1/100 of 1%) at which
deposits in Dollars are offered by the Eurodollar
Reference Bank to prime banks in the Designated Eurodollar
Market at or about 11:00 a.m. local time in the Designated
Eurodollar Market, two (2) Eurodollar Banking Days before
the first day of the applicable Eurodollar Period in an
aggregate amount approximately equal to the amount of the
Advance made by the Eurodollar Reference Bank with respect
to such Eurodollar Rate Loan and for a period of time
comparable to the number of days in the applicable
Eurodollar Period.
"Eurodollar Rate Advance" means an Advance made
hereunder and specified to be a Eurodollar Rate Advance in
accordance with Article 2.
"Eurodollar Rate Loan" means a Loan made hereunder
and specified to be a Eurodollar Rate Loan in accordance
with Article 2.
"Eurodollar Reference Bank" means Bank of America
National Trust and Savings Association.
"Evansville Commitment Date" means the date upon
which Parent notifies the Managing Agent that (a) it has
received a "certificate of suitability" from the Indiana
Gaming Commission with respect to its operation of the
Evansville Project as a riverboat casino, (b) it has
received all other necessary approvals and permits from
applicable Gaming Boards and other Governmental Agencies
for the commencement of the construction of the Evansville
Project and (c) it is committed to the construction of the
Evansville Project.
"Evansville Project" means the riverboat casino to be
operated from, and related dockside facilities located in,
Evansville, Indiana.
"Event of Default" shall have the meaning provided in
Section 9.1.
"Existing Subordinated Debt" means the 11% Senior
Subordinated Notes due 2002 issued by Parent.
"Existing Subordinated Debt Indenture" means the
Indenture governing the Existing Subordinated Debt, as in
effect on the date of this Agreement, and as the same may
from time to time be supplemented, modified, amended,
renewed, extended or supplanted with the written consent
of the Requisite Banks.
"Federal Funds Rate" means, as of any date of deter-
mination, the rate set forth in the weekly statistical
release designated as H.15(519), or any successor publica-
tion, published by the Federal Reserve Board (including
any such successor, "H.15(519)") for such date opposite
the caption "Federal Funds (Effective)". If for any rele-
vant date such rate is not yet published in H.15(519), the
rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any succes-
sor publication, published by the Federal Reserve Bank of
New York (including any such successor, the "Composite
3:30 p.m. Quotation") for such date under the caption
"Federal Funds Effective Rate". If on any relevant date
the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations,
the rate for such date will be the arithmetic mean of the
rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that
date by each of three leading brokers of Federal funds
transactions in New York City selected by the Managing
Agent. For purposes of this Agreement, any change in the
Alternate Base Rate due to a change in the Federal Funds
Rate shall be effective as of the opening of business on
the effective date of such change.
"FIRREA" means the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as it may be amended
from time to time.
"First Mortgage Notes" means the 13 1/2% First Mortgage
Notes due 1996 issued by Aztar Mortgage Funding, Inc.,
guaranteed by Parent and secured by a first priority Lien
on the TropWorld Property.
"Fiscal Quarter" means the fiscal quarter of
Borrowers consisting of a 13 week or 14 week fiscal period
ending on or about each March 31, June 30, September 30
and December 31.
"Fiscal Year" means the fiscal year of Borrowers
consisting of a 52 week or 53 week fiscal period ending on
the Thursday nearest December 31.
"Funded Debt" means, as of any date of determination
(without duplication and on a consolidated basis), the sum
of (a) all principal Indebtedness of Borrowers and the
Restricted Subsidiaries and of TEGP for borrowed money
(including debt securities issued by Borrowers, any of the
Restricted Subsidiaries or TEGP, but excluding in any
event any contingent obligations with respect to undrawn
letters of credit) on that date plus (b) the aggregate
amount of the principal portion of all Capital Lease
Obligations of Borrowers and the Restricted Subsidiaries
and of TEGP on that date.
"Gaming Board" means, collectively, (a) the Nevada
Gaming Commission, (b) the Nevada State Gaming Control
Board, (c) the New Jersey Casino Control Commission,
(d) the New Jersey Division of Gaming Enforcement, (e) the
Indiana Gaming Commission, (f) the Missouri Gaming
Commission and (g) any other Governmental Agency that
holds regulatory, licensing or permit authority over
gambling, gaming or casino activities conducted by
Borrowers and the Restricted Subsidiaries within its
jurisdiction.
"Gaming Laws" means all Laws pursuant to which any
Gaming Board possesses regulatory, licensing or permit
authority over gambling, gaming or casino activities
conducted by Borrowers and the Restricted Subsidiaries
within its jurisdiction.
"Generally Accepted Accounting Principles" means, as
of any date of determination, accounting principles
(a) set forth as generally accepted in then currently
effective Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants,
(b) set forth as generally accepted in then currently
effective Statements of the Financial Accounting Standards
Board or (c) that are then approved by such other entity
as may be approved by a significant segment of the
accounting profession in the United States of America.
The term "consistently applied," as used in connection
therewith, means that the accounting principles applied
are consistent in all material respects with those applied
at prior dates or for prior periods.
"Government Securities" means readily marketable
(a) direct full faith and credit obligations of the
United States of America or obligations guaranteed by the
full faith and credit of the United States of America and
(b) obligations of an agency or instrumentality of, or
corporation owned, controlled or sponsored by, the United
States of America that are generally considered in the
securities industry to be implicit obligations of the
United States of America.
"Governmental Agency" means (a) any international,
foreign, federal, state, county or municipal government,
or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, or
(c) any court or administrative tribunal of competent
jurisdiction.
"Guaranty Obligation" means, as to any Person, any
(a) guarantee by that Person of Indebtedness of, or other
obligation performable by, any other Person or (b) assur-
ance given by that Person to an obligee of any other
Person with respect to the performance of an obligation
by, or the financial condition of, such other Person,
whether direct, indirect or contingent, including any
purchase or repurchase agreement covering such obligation
or any collateral security therefor, any agreement to
provide funds (by means of loans, capital contributions or
otherwise) to such other Person, any agreement to support
the solvency or level of any balance sheet item of such
other Person or any "keep-well" or other arrangement of
whatever nature given for the purpose of assuring or
holding harmless such obligee against loss with respect to
any obligation of such other Person; provided, however,
that the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in
the ordinary course of business. The amount of any
Guaranty Obligation in respect of Indebtedness shall be
deemed to be an amount equal to the stated or determinable
amount of the related Indebtedness (unless the Guaranty
Obligation is limited by its terms to a lesser amount, in
which case to the extent of such amount) or, if not stated
or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the Person
in good faith. The amount of any other Guaranty
Obligation shall be deemed to be zero unless and until the
amount thereof has been (or in accordance with Financial
Accounting Standards Board Statement No. 5 should be)
quantified and reflected or disclosed in the consolidated
financial statements (or notes thereto) of Borrowers and
the Restricted Subsidiaries.
"Hazardous Materials" means substances defined as
"hazardous substances" pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. 9601 et seq., or as "hazardous", "toxic"
or "pollutant" substances or as "solid waste" pursuant to
the Hazardous Materials Transportation Act, 49 U.S.C.
1801, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. 6901, et seq., or as "friable asbestos"
pursuant to the Toxic Substances Control Act, 15 U.S.C.
2601 et seq. or any other applicable Hazardous Materials
Law, in each case as such Laws are amended from time to
time.
"Hazardous Materials Laws" means all Laws governing
the treatment, transportation or disposal of Hazardous
Materials applicable to any of the Real Property.
"HRN" means Hotel Ramada of Nevada, a Nevada
corporation.
"Indebtedness" means, as to any Person (without
duplication), (a) indebtedness of such Person for borrowed
money or for the deferred purchase price of Property
(excluding trade and other accounts payable in the
ordinary course of business in accordance with ordinary
trade terms), including any Guaranty Obligation for any
such indebtedness, (b) indebtedness of such Person of the
nature described in clause (a) that is non-recourse to the
credit of such Person but is secured by assets of such
Person, to the extent of the value of such assets,
(c) Capital Lease Obligations of such Person, (d) indebt-
edness of such Person arising under bankers' acceptance
facilities or under facilities for the discount of
accounts receivable of such Person, (e) any direct or
contingent obligations of such Person under letters of
credit issued for the account of such Person and (f) any
net obligations of such Person under Swap Agreements.
"Indenture" means, collectively (a) the Existing
Subordinated Debt Indenture, (b) the New Subordinated Debt
Indenture, and (c) any indenture or agreement governing
other Subordinated Obligations issued in accordance with
Section 6.9(g).
"Initial Reduction Date" means March 31, 1996 or such
later Initial Reduction Date as may then be in effect
pursuant to Section 2.10.
"Intangible Assets" means assets that are considered
intangible assets under Generally Accepted Accounting
Principles, including customer lists, goodwill, computer
software, copyrights, trade names, trademarks and patents.
"Intercompany Notes" means the intercompany promis-
sory notes required pursuant to Section 5.15.
"Interest Charges" means, as of the last day of any
fiscal period, the sum of (a) Cash Interest Expense for
that fiscal period, plus (b) all interest currently
payable in Cash incurred during that fiscal period which
is capitalized under Generally Accepted Accounting
Principles, plus (c) that portion of the rentals paid to
TEGP by HRN during that period which is designated and
used to service interest payable under the TEGP Loan
Agreement.
"Interest Differential" means, with respect to any
prepayment of a Eurodollar Rate Loan on a day other than
the last day of the applicable Interest Period and with
respect to any failure to borrow a Eurodollar Rate Loan on
the date or in the amount specified in any Request for
Loan, (a) the Eurodollar Rate payable (or, with respect to
a failure to borrow, the Eurodollar Rate which would have
been payable) with respect to the Eurodollar Rate Loan
minus (b) the Eurodollar Rate on, or as near as practica-
ble to the date of the prepayment or failure to borrow for
a Eurodollar Rate Loan with an Interest Period commencing
on such date and ending on the last day of the Interest
Period of the Eurodollar Rate Loan so prepaid or which
would have been borrowed on such date.
"Interest Expense" means, as of the last day of any
fiscal period, the sum of (a) all interest, fees, charges
and related expenses paid or payable (without duplication)
for that fiscal period by Borrowers and the Restricted
Subsidiaries to a lender in connection with borrowed money
(including any obligations for fees, charges and related
expenses payable to the issuer of any letter of credit) or
the deferred purchase price of assets that are considered
"interest expense" under Generally Accepted Accounting
Principles (other than underwriting discounts, closing
fees, legal fees and other transactional fees and expenses
incurred on or within six (6) months before or after the
Closing Date in connection with the Existing Subordinated
Debt, the issuance of the New Subordinated Debt or the
execution and delivery of the Loan Documents), plus
(b) the portion of rent paid or payable (without
duplication) for that fiscal period by Borrowers and the
Restricted Subsidiaries under Capital Lease Obligations
that should be treated as interest in accordance with
Financial Accounting Standards Board Statement No. 13.
"Interest Period" means, with respect to any
Eurodollar Rate Loan, the related Eurodollar Period.
"Investment" means, when used in connection with any
Person, any investment by or of that Person, whether by
means of purchase or other acquisition of stock or other
securities of any other Person or by means of a loan,
advance creating a debt, capital contribution, guaranty or
other debt or equity participation or interest in any
other Person, including any partnership and joint venture
interests of such Person. The amount of any Investment
shall be the amount actually invested (minus any return of
capital with respect to such Investment which has actually
been received in Cash or Cash Equivalents or has been
converted into Cash or Cash Equivalents), without
adjustment for subsequent increases or decreases in the
value of such Investment.
"Issuing Bank" means Bank of America National Trust
and Savings Association.
"Laws" means, collectively, all international,
foreign, federal, state and local statutes, treaties,
rules, regulations, ordinances, codes and administrative
or judicial precedents.
"Lead Managers" means each of Societe Generale and
Midlantic Bank, N.A. The Lead Managers shall have no
rights, duties or responsibilities under the Loan
Documents beyond those of a Bank.
"Letters of Credit" means any of the standby letters
of credit issued by the Issuing Bank under the Commitment
pursuant to Section 2.4, either as originally issued or as
the same may be supplemented, modified, amended, renewed,
extended or supplanted.
"Leverage Benchmark Date" means the first date as of
which Section 6.13 requires the Leverage Ratio to be 4.00
to 1.00 or lower.
"Leverage Ratio" means, as of the last day of each
Fiscal Quarter, the ratio of (a) Average Quarterly
Adjusted Funded Debt as of that date to (b) Annualized
Adjusted EBITDA for the fiscal period consisting of that
Fiscal Quarter and the three immediately preceding Fiscal
Quarters.
"License Revocation" means the revocation, failure to
renew or suspension of, or the appointment of a receiver,
supervisor or similar official with respect to, any
casino, gambling or gaming license issued by any Gaming
Board covering any casino or gaming facility of any
Borrower or Restricted Subsidiary.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment for security, security interest,
encumbrance, lien or charge of any kind, whether volun-
tarily incurred or arising by operation of Law or other-
wise, affecting any Property, including any agreement to
grant any of the foregoing, any conditional sale or other
title retention agreement, any lease in the nature of a
security interest, and/or the filing of or agreement to
give any financing statement (other than a precautionary
financing statement with respect to a lease that is not in
the nature of a security interest) under the Uniform
Commercial Code or comparable Law of any jurisdiction with
respect to any Property.
"Loan" means the aggregate of the Advances made at
any one time by the Banks pursuant to Article 2.
"Loan Documents" means, collectively, this Agreement,
the Notes, the Subsidiary Guaranty, the Swing Line
Documents, the Collateral Documents, the Unsecured
Environmental Indemnity (New Jersey), any Secured Swap
Agreement, any Request for Loan, any Request for Letter of
Credit, any Compliance Certificate, any Pricing
Certificate and any other agreements of any type or nature
hereafter executed and delivered by Borrowers or any of
the Restricted Subsidiaries to the Managing Agent or to
any Bank in any way relating to or in furtherance of this
Agreement, in each case either as originally executed or
as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.
"Maintenance Capital Expenditure" means a Capital
Expenditure for the maintenance, repair, restoration or
refurbishment of any Developed Property of Borrowers or
any of the Restricted Subsidiaries, but excluding any
Capital Expenditure which materially adds to or further
improves such Developed Property.
"Majority Banks" means, when used in Sections 6.15
and 6.16, Banks having in the aggregate more than 50% of
the Commitment then in effect.
"Managing Agent" means Bank of America National Trust
and Savings Association, when acting in its capacity as
the Managing Agent under any of the Loan Documents, or any
successor Managing Agent.
"Managing Agent's Office" means the Managing Agent's
address as set forth on the signature pages of this
Agreement, or such other address as the Managing Agent
hereafter may designate by written notice to Borrowers and
the Banks.
"Margin Stock" means "margin stock" as such term is
defined in Regulation G or U.
"Material Adverse Effect" means any set of circum-
stances or events which (a) has or could reasonably be
expected to have any material adverse effect whatsoever
upon the validity or enforceability of any Loan Document,
(b) is or could reasonably be expected to be material and
adverse to the business or condition (financial or
otherwise) of Borrowers and the Restricted Subsidiaries,
taken as a whole or (c) materially impairs or could
reasonably be expected to materially impair the ability of
Borrowers or Borrowers and the Significant Subsidiaries,
taken as a whole, to perform the Obligations, taken as a
whole.
"Maturity Date" means December 31, 1999 or such later
Maturity Date as may then be in effect pursuant to
Section 2.11.
"Multiemployer Plan" means any employee benefit plan
of the type described in Section 4001(a)(3) of ERISA to
which Borrowers or any of their ERISA Affiliates
contribute or are obligated to contribute.
"Negative Pledge" means a Contractual Obligation that
contains a covenant binding on Borrowers or any of the
Restricted Subsidiaries that prohibits Liens on any of its
or their Property, other than (a) any such covenant
contained in a Contractual Obligation granting a Lien
permitted under Section 6.8 which affects only the
Property that is the subject of such permitted Lien and
(b) any such covenant that does not apply to Liens
securing the Obligations.
"Net Income" means, with respect to any fiscal
period, the consolidated net income of Borrowers and the
Restricted Subsidiaries for that period, determined in
accordance with Generally Accepted Accounting Principles,
consistently applied.
"New Subordinated Debt" means Indebtedness of Parent
that (a) is in a principal amount not greater than
$180,000,000, (b) is unsecured, (c) has no principal due
or sinking fund requirement applicable prior to
December 31, 2002 and (d) is issued pursuant to the New
Subordinated Debt Indenture.
"New Subordinated Debt Indenture" means that certain
indenture made by Parent in favor of American Bank
National Association, as trustee, with respect to the New
Subordinated Debt, as in effect on the date of this
Agreement, as the same may from time to time be
supplemented, modified, amended, renewed, extended or
supplanted with the written consent of the Requisite
Banks.
"New Venture" means a casino, hotel, casino/hotel,
resort, casino/resort, riverboat casino, dockside casino,
golf course, entertainment center or similar facility (or
any site or proposed site for any of the foregoing) owned
or to be owned by Borrowers or any of the Restricted
Subsidiaries (or owned or to be owned by a Person in which
Borrowers, any of the Restricted Subsidiaries or a New
Venture Entity owned directly or indirectly by Borrowers
or any of the Restricted Subsidiaries holds an Investment
other than an Investment of the type contemplated by
Section 6.17(m)) and which is not at the Closing Date a
Developed Property.
"New Venture Basket" means, as of any date of
determination, (a) $175,000,000, plus (b) the aggregate
net Cash proceeds received by Parent from the issuance and
sale of capital stock of Parent (including upon any
conversion or exchange of debt securities of Parent issued
after July 1, 1994 into or for such capital stock) after
July 1, 1994 and through such date, plus (c) the net Cash
proceeds received by Parent from the issuance and sale of
the New Subordinated Debt if such date is on or after the
Leverage Benchmark Date, plus (d) the net Cash proceeds
received by Parent from the issuance and sale of other
Subordinated Obligations pursuant to Section 6.9(g) if,
giving effect thereto, the Leverage Ratio is 4.00 to 1.00
or lower.
"New Venture Capital Expenditure" means any Capital
Expenditure (a) with respect to a New Venture or (b) which
materially adds to or further improves any Developed
Property (including a New Venture that becomes a Developed
Property subsequent to the Closing Date).
"New Venture Entity" means (a) the Person that
directly owns a New Venture and (b) any holding company
for such a Person whose sole assets consist (directly or
indirectly through another New Venture Entity) of
Investments in that Person.
"New Venture Investment" means any Investment by
any of the Borrowers or Restricted Subsidiaries in an
Unrestricted New Venture Entity.
"Note" means the promissory note made by Borrowers to
a Bank evidencing the Advances under that Bank's Pro Rata
Share of the Commitment, substantially in the form of
Exhibit C, either as originally executed or as the same
may from time to time be supplemented, modified, amended,
renewed, extended or supplanted.
"Obligations" means all present and future obliga-
tions of every kind or nature of Borrowers or any
Significant Subsidiary at any time and from time to time
owed to the Managing Agent, the Issuing Bank, the Swing
Line Bank or the Banks or any one or more of them, under
any one or more of the Loan Documents, whether due or to
become due, matured or unmatured, liquidated or unliqui-
dated, or contingent or noncontingent, including obliga-
tions of performance as well as obligations of payment,
and including interest that accrues after the commencement
of any proceeding under any Debtor Relief Law by or
against Borrowers or any Subsidiary or Affiliate of
Borrowers.
"Opinions of Counsel" means the favorable written
legal opinions of (a) Latham & Watkins, special counsel to
Borrowers and the Restricted Subsidiaries, (b) Lionel,
Sawyer & Collins, special Nevada gaming counsel to
Borrowers and the Restricted Subsidiaries, (c) Henderson &
Nelson, special Nevada real estate counsel to Borrowers
and the Restricted Subsidiaries and (d) Hankin, Sandson &
Sandman, special New Jersey counsel to Borrowers and the
Restricted Subsidiaries, substantially in the form of
Exhibits D-1, D-2, D-3 and D-4, respectively, together
with copies of all factual certificates and legal opinions
upon which such counsel has relied.
"Parent" means Aztar Corporation, a Delaware
corporation, and its successors and permitted assigns.
"Party" means any Person other than the Managing
Agent, the Issuing Bank, the Swing Line Bank, the
Co-Agents and the Banks, which now or hereafter is a party
to any of the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation
or any successor thereof established under ERISA.
"Pension Plan" means any "employee pension benefit
plan" (as such term is defined in Section 3(2) of ERISA),
other than a Multiemployer Plan, which is subject to
Title IV of ERISA and is maintained by Borrowers or any of
its Subsidiaries or to which Borrowers or any of its
Subsidiaries contributes or has an obligation to
contribute.
"Permitted Encumbrances" means:
(a) Inchoate Liens incident to construction on
or maintenance of Property; or Liens incident to
construction on or maintenance of Property now or
hereafter filed of record for which adequate reserves
have been set aside (or deposits made pursuant to
applicable Law) and which are being contested in good
faith by appropriate proceedings and have not
proceeded to judgment, provided that, by reason of
nonpayment of the obligations secured by such Liens,
no such Property is subject to a material risk of
loss or forfeiture;
(b) Liens for taxes and assessments on Property
which are not yet past due; or Liens for taxes and
assessments on Property for which adequate reserves
have been set aside and are being contested in good
faith by appropriate proceedings and have not
proceeded to judgment, provided that, by reason of
nonpayment of the obligations secured by such Liens,
no such Property is subject to a material risk of
loss or forfeiture;
(c) minor defects and irregularities in title
to any Property which in the aggregate do not materi-
ally impair the fair market value or use of the Prop-
erty for the purposes for which it is or may
reasonably be expected to be held;
(d) easements, exceptions, reservations, or
other agreements for the purpose of pipelines,
conduits, cables, wire communication lines, power
lines and substations, streets, trails, walkways,
drainage, irrigation, water, and sewerage purposes,
dikes, canals, ditches, the removal of oil, gas,
coal, or other minerals, and other like purposes
affecting Property, facilities, or equipment which in
the aggregate do not materially burden or impair the
fair market value or use of such Property for the
purposes for which it is or may reasonably be
expected to be held;
(e) easements, exceptions, reservations, or
other agreements for the purpose of facilitating the
joint or common use of Property in or adjacent to a
shopping center or similar project affecting Property
which in the aggregate do not materially burden or
impair the fair market value or use of such Property
for the purposes for which it is or may reasonably be
expected to be held;
(f) rights reserved to or vested in any Govern-
mental Agency to control or regulate, or obligations
or duties to any Governmental Agency with respect to,
the use of any Property;
(g) rights reserved to or vested in any Govern-
mental Agency to control or regulate, or obligations
or duties to any Governmental Agency with respect to,
any right, power, franchise, grant, license, or
permit;
(h) present or future zoning laws and ordi-
nances or other laws and ordinances restricting the
occupancy, use, or enjoyment of Property;
(i) statutory Liens, other than those described
in clauses (a) or (b) above, arising in the ordinary
course of business with respect to obligations which
are not delinquent or are being contested in good
faith, provided that, if delinquent, adequate
reserves have been set aside with respect thereto
and, by reason of nonpayment, no Property is subject
to a material risk of loss or forfeiture;
(j) covenants, conditions, and restrictions
affecting the use of Property which in the aggregate
do not materially impair the fair market value or use
of the Property for the purposes for which it is or
may reasonably be expected to be held;
(k) rights of tenants under leases and rental
agreements covering Property entered into in the
ordinary course of business of the Person owning such
Property;
(l) Liens consisting of pledges or deposits to
secure obligations under workers' compensation laws
or similar legislation, including Liens of judgments
thereunder which are not currently dischargeable;
(m) Liens consisting of pledges or deposits of
Property to secure performance in connection with
operating leases made in the ordinary course of
business to which Borrowers or a Subsidiary of
Borrowers is a party as lessee, provided the
aggregate value of all such pledges and deposits in
connection with any such lease does not at any time
exceed 20% of the annual fixed rentals payable under
such lease;
(n) Liens consisting of deposits of Property to
secure bids made with respect to, or performance of,
contracts (other than contracts creating or evidenc-
ing an extension of credit to the depositor);
(o) Liens consisting of any right of offset, or
statutory bankers' lien, on bank deposit accounts
maintained in the ordinary course of business so long
as such bank deposit accounts are not established or
maintained for the purpose of providing such right of
offset or bankers' lien;
(p) Liens consisting of deposits of Property to
secure statutory obligations of Borrowers or a
Subsidiary of Borrowers;
(q) Liens consisting of deposits of Property to
secure (or in lieu of) surety, appeal or customs
bonds in proceedings to which Borrowers or a
Subsidiary of Borrowers is a party;
(r) Liens created by or resulting from any
litigation or legal proceeding involving Borrowers or
a Subsidiary of Borrowers in the ordinary course of
its business which is currently being contested in
good faith by appropriate proceedings, provided that
such Lien is junior to the Lien of the Collateral
Documents, adequate reserves have been set aside and
no material Property is subject to a material risk of
loss or forfeiture; and
(s) other non-consensual Liens incurred in the
ordinary course of business but not in connection
with an extension of credit, which do not in the
aggregate, when taken together with all other Liens,
materially impair the value or use of the Property of
the Borrowers and the Subsidiaries of Borrowers,
taken as a whole.
"Permitted Right of Others" means a Right of Others
consisting of (a) an interest (other than a legal or
equitable co-ownership interest, an option or right to
acquire a legal or equitable co-ownership interest and any
interest of a ground lessor under a ground lease), that
does not materially impair the value or use of Property
for the purposes for which it is or may reasonably be
expected to be held, (b) an option or right to acquire a
Lien that would be a Permitted Encumbrance, (c) the
subordination of a lease or sublease in favor of a
financing entity and (d) a license, or similar right, of
or to Intangible Assets granted in the ordinary course of
business.
"Person" means any individual or entity, including a
trustee, corporation, limited liability company, general
partnership, limited partnership, joint stock company,
trust, estate, unincorporated organization, business
association, firm, joint venture, Governmental Agency, or
other entity.
"Pledge Agreement (Nevada Gaming)" means the pledge
agreement to be executed and delivered by Parent in the
form of Exhibit E, either as originally executed or as it
may from time to time be supplemented, modified, amended,
extended or supplanted.
"Pledge Agreement (General)" means the pledge agree-
ment to be executed and delivered by Borrowers and the
Significant Subsidiaries, in the form of Exhibit F, either
as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Pledged Collateral (Nevada Gaming)" means the cer-
tificates evidencing (a) 100% of the shares of capital
stock of REI and (b) 49% of the shares of capital stock of
HRN.
"Pledged Collateral (General)" means (a) the certifi-
cates evidencing all of the shares of capital stock held
by Borrowers or any of the Significant Subsidiaries in all
Subsidiaries of Parent other than (i) the shares of
capital stock comprising the Pledged Collateral (Nevada
Gaming), (ii) 100% of the shares of capital stock of ANI
(iii) 51% of the shares of capital stock of HRN, (iv) 100%
of the shares of Aztar Indiana Gaming Corporation, an
Indiana corporation, unless and until it is issued a
gaming license by any Gaming Board having jurisdiction
(and subject to any required approval of such Gaming
Board) and (v) 100% of the shares of Aztar Missouri Gaming
Corporation, a Missouri corporation, unless and until it
is issued a gaming license by any Gaming Board having
jurisdiction (and subject to any required approval of such
Gaming Board) and (b) the Intercompany Notes.
"Pricing Certificate" means a certificate in the form
of Exhibit G, properly completed and signed by a Senior
Officer of Parent.
"Pricing Period" means (a) the period commencing on
the Closing Date and ending on November 15, 1994, (b) the
period commencing on each November 16 and ending on the
next following February 15, (c) the period commencing on
each February 16 and ending on the next following May 15,
(d) the period commencing on each May 16 and ending on the
next following August 15 and (e) the period commencing on
each August 16 and ending on the next following
November 15.
"Prior ANJI Credit Facility" means that certain
Revolving Credit Loan Agreement dated as of July 29, 1993
among ANJI, Parent and Midlantic National Bank.
"Prior REI Credit Facility" means that certain First
Amended and Restated Credit Agreement dated as of
December 28, 1993 among REI, Parent, First Interstate Bank
of Nevada, as agent, and the banks party thereto.
"Projections" means the financial projections
contained in the Confidential Information Memorandum
distributed by or on behalf of Borrowers to the Banks on
or about June 23, 1994.
"Property" means any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or
intangible.
"Pro Rata Share" means, with respect to each Bank,
the percentage of the Commitment set forth opposite the
name of that Bank on Schedule 1.1, as such percentage may
be increased or decreased pursuant to a Commitment
Assignment and Acceptance executed in accordance with
Section 11.8.
"Quarterly Payment Date" means each June 30,
September 30, December 31 and March 31.
"Ramada Express Deed of Trust" means the deed of
trust to be executed and delivered by REI covering the
Ramada Express Property, in the form of Exhibit H, either
as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplemented.
"Ramada Express Property" means the real property and
improvements thereon known as the "Ramada Express Hotel
and Casino" located in Laughlin, Nevada, comprised of
approximately 27.7 acres and related easements and
appurtenances.
"Real Property" means, as of any date of determina-
tion, all real Property then or theretofore owned, leased
or occupied by Borrowers or any of the Restricted
Subsidiaries.
"Reduction Amount" means, with respect to each
Reduction Date, the amount set forth below opposite that
Reduction Date (subject to the last sentence of
Section 2.5 and to Section 11.25):
Reduction Date Amount
Initial Reduction Date $ 6,250,000
and the next following
June 30, September 30
and December 31
The date that is one (1) $ 8,750,000
year after the Initial
Reduction Date and
each Quarterly Payment
Date thereafter
"Reduction Date" means the Initial Reduction Date and
each Quarterly Payment Date thereafter.
"Reference Rate" means the rate of interest publicly
announced from time to time by the Domestic Reference Bank
in San Francisco, California (or other headquarters city
of the Domestic Reference Bank), as its "reference rate."
It is a rate set by the Domestic Reference Bank based upon
various factors including the Domestic Reference Bank's
costs and desired return, general economic conditions and
other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or
below such announced rate. Any change in the Reference
Rate announced by the Domestic Reference Bank shall take
effect at the opening of business on the day specified in
the public announcement of such change.
"Regulation D" means Regulation D, as at any time
amended, of the Board of Governors of the Federal Reserve
System, or any other regulation in substance substituted
therefor.
"Regulations G, T, U and X" means Regulations G, T, U
and X, as at any time amended, of the Board of Governors
of the Federal Reserve System, or any other regulations in
substance substituted therefor.
"REI" means Ramada Express, Inc., a Nevada
corporation, and its successors and permitted assigns.
"Request for Letter of Credit" means a written
request for a Letter of Credit substantially in the form
of Exhibit I, signed by a Responsible Official of any of
Borrowers, on behalf of Borrowers, and properly completed
to provide all information required to be included
therein.
"Request for Loan" means a written request for a Loan
substantially in the form of Exhibit J, signed by a
Responsible Official of any of Borrowers, on behalf of
Borrowers, and properly completed to provide all
information required to be included therein.
"Requirement of Law" means, as to any Person, the
articles or certificate of incorporation and by-laws or
other organizational or governing documents of such
Person, and any Law, or judgment, award, decree, writ or
determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its
Property or to which such Person or any of its Property is
subject.
"Requisite Banks" means (a) as of any date of deter-
mination if the Commitment is then in effect, Banks having
in the aggregate 65% or more of the Commitment then in
effect and (b) as of any date of determination if the
Commitment has then been terminated and there is then any
Indebtedness evidenced by the Notes, Banks holding Notes
evidencing in the aggregate 65% or more of the aggregate
Indebtedness then evidenced by the Notes.
"Reserve Amount" means, as of any date of determina-
tion, the greater of (a) $150,000,000 and (b) the aggre-
gate principal amount of all First Mortgage Notes then
outstanding less $20,000,000.
"Responsible Official" means (a) when used with
reference to a Person other than an individual, any
corporate officer of such Person, general partner of such
Person, corporate officer of a corporate general partner
of such Person, or corporate officer of a corporate
general partner of a partnership that is a general partner
of such Person, or any other responsible official thereof
duly acting on behalf thereof, and (b) when used with
reference to a Person who is an individual, such Person.
The Banks shall be entitled to conclusively rely upon any
document or certificate that is signed or executed by a
Responsible Official of Parent or any of its Subsidiaries
as having been authorized by all necessary corporate
partnership and/or other action on the part of Parent or
such Subsidiary.
"Restricted Subsidiary" means, as of any date of
determination, all Subsidiaries of Parent other than
(a) the Borrowers and (b) Unrestricted New Venture
Entities.
"Right of Others" means, as to any Property in which
a Person has an interest, any legal or equitable right,
title or other interest (other than a Lien) held by any
other Person in that Property, and any option or right
held by any other Person to acquire any such right, title
or other interest in that Property, including any option
or right to acquire a Lien; provided, however, that
(a) any covenant restricting the use or disposition of
Property of such Person contained in any Contractual
Obligation of such Person and (b) any provision contained
in a contract creating a right of payment or performance
in favor of a Person that conditions, limits, restricts,
diminishes, transfers or terminates such right, shall not
be deemed to constitute a Right of Others.
"Secured Swap Agreement" means a Swap Agreement
between Borrowers and a Bank.
"Security Agreement" means the security agreement to
be executed and delivered by Borrowers and the Significant
Subsidiaries, in the form of Exhibit K, either as
originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Senior Officer" means the (a) chief executive
officer, (b) president, (c) executive vice president,
(d) senior vice president, (e) chief financial officer,
(f) treasurer or (g) assistant treasurer of each of
Borrowers.
"Significant Subsidiary" means (a) each Restricted
Subsidiary that holds title to any portion of the Ramada
Express Property or the TropWorld Property, (b) each
Restricted Subsidiary that holds title to any Property
acquired after the Closing Date which is required to be
pledged as future Collateral pursuant to Section 5.12 and
(c) as of any date of determination, each other Restricted
Subsidiary that had on the last day of the Fiscal Quarter
then most recently ended total assets with a book value or
fair market value of $5,000,000 or more (except (i) any
Person to be dissolved or terminated pursuant to the
TropWorld Consolidation, (ii) Aztar Mortgage Funding,
Inc., a Delaware corporation, so long as the First
Mortgage Notes are outstanding and (iii) ANI, so long as
it is a general partner of TEGP).
"Special Eurodollar Circumstance" means the appli-
cation or adoption after the Closing Date of any Law or
interpretation, or any change therein or thereof, or any
change in the interpretation or administration thereof by
any Governmental Agency, central bank or comparable
authority charged with the interpretation or administra-
tion thereof, or compliance by any Bank or its Eurodollar
Lending Office with any request or directive (whether or
not having the force of Law) of any such Governmental
Agency, central bank or comparable authority, or the
existence or occurrence of circumstances affecting the
Designated Eurodollar Market generally that are beyond the
reasonable control of the Banks.
"Stockholders' Equity" means, as of any date of
determination and with respect to any Person, the consoli-
dated stockholders' equity of the Person as of that date
determined in accordance with Generally Accepted Account-
ing Principles; provided that there shall be excluded from
Stockholders' Equity any amount attributable to Disquali-
fied Stock.
"Subordinated Obligations" means (a) the Existing
Subordinated Debt, (b) the New Subordinated Debt and
(c) any other Indebtedness of Parent which is subordinated
in right of payment to the Obligations and issued pursuant
to Section 6.9(g).
"Subsidiary" means, as of any date of determination
and with respect to any Person, any corporation, limited
liability company or partnership (whether or not, in
either case, characterized as such or as a "joint
venture"), whether now existing or hereafter organized or
acquired: (a) in the case of a corporation or limited
liability company, of which a majority of the securities
having ordinary voting power for the election of directors
or other governing body (other than securities having such
power only by reason of the happening of a contingency)
are at the time beneficially owned by such Person and/or
one or more Subsidiaries of such Person, or (b) in the
case of a partnership, of which a majority of the part-
nership or other ownership interests are at the time
beneficially owned by such Person and/or one or more of
its Subsidiaries.
"Subsidiary Guaranty" means the continuing guaranty
of the Obligations to be executed and delivered by the
Significant Subsidiaries, in the form of Exhibit L, either
as originally executed or as it may from time to time be
supplemented, modified, amended, extended or supplanted.
"Swap Agreement" means a written agreement between
Borrowers and one or more financial institutions providing
for "swap", "cap", "collar" or other interest rate
protection with respect to any Indebtedness.
"Swing Line" means the revolving line of credit
established by the Swing Line Bank in favor of Borrowers
pursuant to Section 2.10.
"Swing Line Bank" means Bank of America National
Trust and Savings Association.
"Swing Line Documents" means the promissory note and
any other documents executed by Borrowers in favor of the
Swing Line Bank in connection with the Swing Line.
"Swing Line Loans" means loans made by the Swing Line
Bank to Borrowers pursuant to Section 2.10.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal Indebtedness of
Borrowers on all Swing Line Loans then outstanding.
"Tangible Net Worth" means, as of any date of deter-
mination, the Stockholders' Equity of Parent and its
Subsidiaries on that date minus the aggregate Intangible
Assets of Parent and its Subsidiaries on that date.
"TEGP" means Tropicana Enterprises, a Nevada general
partnership, in which ANI is a 50% general partner.
"TEGP Loan Agreement" means the Second Amended and
Restated Loan Agreement dated as of the date hereof among
TEGP, HRN, Bank of America National Trust and Savings
Association, as agent, and the banks party thereto, as
amended from time to time. The interests of Bank of
America National Trust and Savings Association, as agent,
and the banks party thereto under the TEGP Loan Agreement
are being acquired on the Closing Date pursuant to an
assignment of the interests of the banks party to that
certain Amended and Restated Loan Agreement dated as of
July 31, 1989 among TEGP, HRN, First Interstate Bank of
Nevada N.A., and Bank One, Arizona, N A (formerly known as
"Valley National Bank of Arizona"), and concurrent
amendment and restatement thereof.
"TEGP Loan Outstandings" means, as of any date of
determination, the principal amount then outstanding under
the TEGP Loan Agreement.
"Title Company" means Lawyers Title Insurance Company
or such other title insurance company as is reasonably
acceptable to the Managing Agent.
"to the best knowledge of" means, when modifying a
representation, warranty or other statement of any Person,
that the fact or situation described therein is known by
the Person (or, in the case of a Person other than a
natural Person, known by a Responsible Official of that
Person) making the representation, warranty or other
statement, or with the exercise of reasonable due dili-
gence under the circumstances (in accordance with the
standard of what a reasonable Person in similar circum-
stances would have done) would have been known by the
Person (or, in the case of a Person other than a natural
Person, would have been known by a Responsible Official of
that Person).
"Trademark Collateral Assignment" means the trademark
collateral assignment to be executed and delivered by
Borrowers and the Significant Subsidiaries in the form of
Exhibit M, either as originally executed or as it may from
time to time be supplemented, modified, amended, extended
or supplanted.
"TropWorld Consolidation" means (a) the dissolution
of AGP Holdings Corporation, a Delaware corporation, and
the distribution in liquidation thereof of all of its
assets to its sole shareholder, ANJI, (b) the dissolution
of AGP Sub., Inc., a Delaware corporation, and AREI Sub.,
Inc., a Delaware corporation, and the distribution in
liquidation thereof of all of their assets to their sole
shareholder, ANJI, (c) the termination of Ambassador
General Partnership, a general partnership whose sole
partners were (until the liquidating distributions
described in clause (b) above) AGP Sub., Inc. and AREI
Sub., Inc., and the distribution in liquidation thereof of
all of its assets to its sole partner, ANJI, (d) the
termination of all leases, debts, liens and contracts
between or among any of the foregoing Persons and (e) the
recordation or filing with the appropriate Governmental
Agencies of such confirmatory instruments of transfer as
may be necessary to reflect record ownership of that
portion of the TropWorld Property formerly owned by
Ambassador General Partnership to be vested in ANJI and
certain Significant Subsidiaries.
"TropWorld Deeds of Trust" means the deeds of trust
and assignment of rents and leases to be executed and
delivered by ANJI and certain Significant Subsidiaries
covering the TropWorld Property pursuant to Section 5.11,
in the form of Exhibit N, either as originally executed or
as it may from time to time be supplemented, modified,
amended, extended or supplanted.
"TropWorld Property" means the real property and
improvements thereon known as the "TropWorld Casino and
Entertainment Resort" and certain related property,
comprised of (a) a parcel of approximately 4 acres located
in Atlantic City, New Jersey on which the original casino-
hotel is located, (b) a parcel of approximately 3.1 acres
located in Atlantic City, New Jersey on which the
expansion portion of the casino-hotel is located, (c) a
parcel of approximately 1.1 acres located in Atlantic
City, New Jersey on which a transportation center is
located, (d) a parcel of approximately 1.1 acres located
in Atlantic City, New Jersey on which a parking garage is
located, (e) a parcel of approximately 1.6 acres located
in Atlantic City, New Jersey on which a parking lot is
located, (f) a parcel of approximately 6 acres located in
Egg Harbor, New Jersey on which a parking lot and minor
structures are located and (g) a parcel of approximately
3.5 acres located in Ventnor, New Jersey on which a
parking lot and minor structures are located.
"type", when used with respect to any Loan or
Advance, means the designation of whether such Loan or
Advance is an Alternate Base Rate Loan or Advance, or a
Eurodollar Rate Loan or Advance.
"Unrestricted New Venture Entity" means (a) any
New Venture Entity in which any single Person other than
Parent and its Subsidiaries owns an equity interest that
is larger than the equity interest owned by Parent and its
Subsidiaries and (b) any other New Venture Entity (except
a Restricted Subsidiary) designated by Borrowers to be an
Unrestricted New Venture Entity by written notice thereof
to the Managing Agent; provided, however, that (i) any New
Venture Entity that owns or operates the Atlantic City
Project or the Evansville Project may not be designated as
an Unrestricted New Venture Entity without the written
consent of all of the Banks, (ii) Borrowers may
redesignate any Unrestricted New Venture Entity as a
Restricted Subsidiary by written notice to the Managing
Agent, with such redesignation to become effective upon
the execution of the Subsidiary Guaranty, the Security
Agreement and any other instruments, documents and
agreements reasonably requested by the Managing Agent in
connection therewith by the former Unrestricted New
Venture Entity and (iii) if no Default or Event of Default
exists, Borrowers may, with the prior written consent of
the Requisite Banks and each Restricted Subsidiary,
redesignate any Restricted Subsidiary which is a New
Venture Entity and which has assets with a value not in
excess of $5,000,000 as an Unrestricted New Venture
Entity.
"Unsecured Environmental Indemnity (New Jersey)"
means the unsecured environmental indemnity to be executed
and delivered by ANJI and the Significant Subsidiaries
which execute the TropWorld Deeds of Trust substantially
in the form of Exhibit O, either as originally executed or
as it may from time to time be supplemented, modified,
amended, extended or supplanted.
1.2 Use of Defined Terms. Any defined term used in
the plural shall refer to all members of the relevant class,
and any defined term used in the singular shall refer to any
one or more of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not
specifically defined in this Agreement shall be construed in
conformity with, and all financial data required to be sub-
mitted by this Agreement shall be prepared in conformity with,
Generally Accepted Accounting Principles applied on a con-
sistent basis, except as otherwise specifically prescribed
herein. In the event that Generally Accepted Accounting
Principles change during the term of this Agreement such that
the covenants contained in Sections 6.11 through 6.16 would
then be calculated in a different manner or with different
components, (a) Borrowers and the Banks agree to amend this
Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating Borrowers' financial
condition to substantially the same criteria as were effective
prior to such change in Generally Accepted Accounting Princi-
ples and (b) Borrowers shall be deemed to be in compliance with
the covenants contained in the aforesaid Sections if and to the
extent that Borrowers would have been in compliance therewith
under Generally Accepted Accounting Principles as in effect
immediately prior to such change, but shall have the obligation
to deliver each of the materials described in Article 7 to the
Managing Agent and the Banks, on the dates therein specified,
with financial data presented in a manner which conforms with
Generally Accepted Accounting Principles as in effect
immediately prior to such change.
1.4 Rounding. Any financial ratios required to be
maintained by Borrowers pursuant to this Agreement shall be
calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the
number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest
number (with a round-up if there is no nearest number) to the
number of places by which such ratio is expressed in this
Agreement.
1.5 Exhibits and Schedules. All Exhibits and
Schedules to this Agreement, either as originally existing or
as the same may from time to time be supplemented, modified or
amended, are incorporated herein by this reference. A matter
disclosed on any Schedule shall be deemed disclosed on all
Schedules.
1.6 References to "Borrowers and their
Subsidiaries". Any reference herein to "Borrowers and their
Subsidiaries" or the like shall refer solely to Borrowers
during such times, if any, as Borrowers shall have no
Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is
disjunctive; the term "and" is conjunctive. The term "shall"
is mandatory; the term "may" is permissive. Masculine terms
also apply to females; feminine terms also apply to males. The
term "including" is by way of example and not limitation.
1.8 Relationship to TEGP Loan Agreement. This
Agreement is being entered concurrently with the TEGP Loan
Agreement, and each of the Banks holds a pro rata share of the
TEGP Loan Outstandings which is equivalent to its Pro Rata
Share of the Commitment. Pursuant to (a) Section 11.8(b)(iv)
and 11.8(e)(vi), assignments of and participations in this
Agreement and the TEGP Loan Agreement must be in the same
proportion, (b) Section 2.5, any termination of the Commitment
under this Agreement must be concurrent with a prepayment in
full of the TEGP Loan Outstandings, (c) Section 2.11, any
extension of the Initial Reduction Date and the Maturity Date
must be concurrent with a similar extension of the maturity
date of the TEGP Loan Agreement and (d) Section 9.1(m), an
Event of Default as defined under the TEGP Loan Agreement is an
Event of Default under this Agreement. This Agreement and the
TEGP Loan Agreement are, however, separate credit facilities
and the foregoing are the only interrelationships between them;
the Collateral hereunder does not secure the TEGP Loan
Agreement and the collateral securing the TEGP Loan Agreement
does not secure the Obligations under this Agreement.<PAGE>
Article 2
LOANS AND LETTERS OF CREDIT
2.1 Loans-General.
(a) Subject to the terms and conditions set
forth in this Agreement, at any time and from time to time
from the Closing Date through the Maturity Date, each Bank
shall, pro rata according to that Bank's Pro Rata Share of
the then applicable Commitment, make Advances to Borrowers
under the Commitment in such amounts as Borrowers may
request that do not result in the sum of (i) the aggregate
principal amount outstanding under the Notes, plus
(ii) the Aggregate Effective Amount of all outstanding
Letters of Credit plus (iii) the Swing Line Outstandings
exceeding (A) so long as the conditions precedent set
forth in Section 8.2 have not been satisfied, the then
applicable Commitment minus the Reserve Amount and
(B) upon and after satisfaction of the conditions prece-
dent set forth in Section 8.2, the then applicable Commit-
ment. Subject to the limitations set forth herein,
Borrowers may borrow, repay and reborrow under the
Commitment without premium or penalty.
(b) Subject to the next sentence, each Loan
shall be made pursuant to a Request for Loan which shall
specify the requested (i) date of such Loan, (ii) type of
Loan, (iii) amount of such Loan, and (iv) in the case of a
Eurodollar Rate Loan, the Interest Period for such Loan.
Unless the Managing Agent has notified, in its sole and
absolute discretion, Borrowers to the contrary, a Loan may
be requested by telephone by a Responsible Official of
Borrowers, in which case Borrowers shall confirm such
request by promptly delivering a Request for Loan in
person or by telecopier conforming to the preceding
sentence to the Managing Agent. Managing Agent shall
incur no liability whatsoever hereunder in acting upon any
telephonic request for Loan purportedly made by a
Responsible Official of Borrowers, and Borrowers hereby
agree to indemnify the Managing Agent from any loss, cost,
expense or liability as a result of so acting. In the
case of the initial Loan and Letters of Credit to be made
and issued on the Closing Date, the related Request for
Loan and Request for Letter of Credit to be delivered by
the Borrowers shall be delivered to the Managing Agent no
later than 12:00 noon (California time), one day before
the Closing Date, and such Loan shall be an Alternate Base
Rate Loan.
(c) Promptly following receipt of a Request for
Loan, the Managing Agent shall notify each Bank by
telephone or telecopier (and if by telephone, promptly
confirmed by telecopier) of the date and type of the Loan,
the applicable Interest Period, and that Bank's Pro Rata
Share of the Loan. Not later than 11:00 a.m., California
time, on the date specified for any Loan (which must be a
Banking Day), each Bank shall make its Pro Rata Share of
the Loan in immediately available funds available to the
Managing Agent at the Managing Agent's Office. Upon
satisfaction or waiver of the applicable conditions set
forth in Article 8, all Advances shall be credited on that
date in immediately available funds to the Designated
Deposit Account.
(d) Unless the Requisite Banks otherwise
consent, each Loan shall be not less than $5,000,000.
(e) The Advances made by each Bank shall be
evidenced by that Bank's Note.
(f) A Request for Loan shall be irrevocable
upon the Managing Agent's first notification thereof.
(g) If no Request for Loan (or telephonic
request for Loan referred to in the second sentence of
Section 2.1(b), if applicable) has been made within the
requisite notice periods set forth in Section 2.2 or 2.3
prior to the end of the Interest Period for any Eurodollar
Rate Loan, then on the last day of such Interest Period,
such Eurodollar Rate Loan shall be automatically converted
into an Alternate Base Rate Loan in the same amount.
(h) If a Loan is to be made on the same date
that another Loan is due and payable, Borrowers or the
Banks, as the case may be, shall make available to the
Managing Agent the net amount of funds giving effect to
both such Loans and the effect for purposes of this
Agreement shall be the same as if separate transfers of
funds had been made with respect to each such Loan.
2.2 Alternate Base Rate Loans. Each request by
Borrowers for an Alternate Base Rate Loan shall be made
pursuant to a Request for Loan (or telephonic or other request
for loan referred to in the second sentence of Section 2.1(b),
if applicable) received by the Managing Agent, at the Managing
Agent's Office, not later than 9:00 a.m. California time, on
the date (which must be a Banking Day) of the requested
Alternate Base Rate Loan. All Loans shall constitute Alternate
Base Rate Loans unless properly designated as a Eurodollar Rate
Loan pursuant to Section 2.3.
2.3 Eurodollar Rate Loans.
(a) Each request by Borrowers for a Eurodollar
Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for Loan referred to in the
second sentence of Section 2.1(b), if applicable) received
by the Managing Agent, at the Managing Agent's Office, not
later than 9:00 a.m., California time, at least three
(3) Eurodollar Banking Days before the first day of the
applicable Eurodollar Period.
(b) On the date which is two (2) Eurodollar
Banking Days before the first day of the applicable
Eurodollar Period, the Managing Agent shall confirm its
determination of the applicable Eurodollar Rate (which
determination shall be conclusive in the absence of
manifest error) and promptly shall give notice of the same
to Borrowers and the Banks by telephone or telecopier (and
if by telephone, promptly confirmed by telecopier).
(c) Unless the Managing Agent and the Requisite
Banks otherwise consent, no more than ten (10) Eurodollar
Rate Loans shall be outstanding at any one time.
(d) No Eurodollar Rate Loan may be requested
during the continuation of a Default or Event of Default.
(e) Nothing contained herein shall require any
Bank to fund any Eurodollar Rate Advance in the Designated
Eurodollar Market.
2.4 Letters of Credit.
(a) Subject to the terms and conditions hereof,
at any time and from time to time from the Closing Date
through the Maturity Date, the Issuing Bank shall issue
such Letters of Credit under the Commitment as Borrowers
may request by a Request for Letter of Credit; provided
that (i) giving effect to all such Letters of Credit, the
sum of (A) the aggregate principal amount outstanding
under the Notes, plus (B) the Aggregate Effective Amount
of all outstanding Letters of Credit, plus (C) the
Swing Line Outstandings do not exceed (I) so long as the
conditions precedent set forth in Section 8.2 have not
been satisfied, the then applicable Commitment minus the
Reserve Amount and (II) upon and after satisfaction of the
conditions precedent set forth in Section 8.2, the then
applicable Commitment and (ii) the Aggregate Effective
Amount under all outstanding Letters of Credit shall not
exceed $30,000,000. Each Letter of Credit shall be in a
form reasonably acceptable to the Issuing Bank. Unless
all the Banks otherwise consent in a writing delivered to
the Managing Agent, the term of any Letter of Credit shall
not exceed one (1) year or extend beyond the Maturity
Date.
(b) Each Request for Letter of Credit shall be
submitted to the Issuing Bank, with a copy to the Managing
Agent, at least five (5) Banking Days prior to the date
upon which the related Letter of Credit is proposed to be
issued. The Managing Agent shall promptly notify the
Issuing Bank whether such Request for Letter of Credit,
and the issuance of a Letter of Credit pursuant thereto,
conforms to the requirements of this Agreement. Upon
issuance of a Letter of Credit, the Issuing Bank shall
promptly notify the Managing Agent, and the Managing Agent
shall promptly notify the Banks, of the amount and terms
thereof.
(c) Upon the issuance of a Letter of Credit,
each Bank shall be deemed to have purchased a pro rata
participation in such Letter of Credit from the Issuing
Bank in an amount equal to that Bank's Pro Rata Share.
Without limiting the scope and nature of each Bank's
participation in any Letter of Credit, to the extent that
the Issuing Bank has not been reimbursed by Borrowers for
any payment required to be made by the Issuing Bank under
any Letter of Credit, each Bank shall, pro rata according
to its Pro Rata Share, reimburse the Issuing Bank through
the Managing Agent promptly upon demand for the amount of
such payment. The obligation of each Bank to so reimburse
the Issuing Bank shall be absolute and unconditional and
shall not be affected by the occurrence of an Event of
Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the
obligation of Borrowers to reimburse the Issuing Bank for
the amount of any payment made by the Issuing Bank under
any Letter of Credit together with interest as hereinafter
provided.
(d) Borrowers agree to pay to the Issuing Bank
through the Managing Agent an amount equal to any payment
made by the Issuing Bank with respect to each Letter of
Credit within one (1) Banking Day after demand made by the
Issuing Bank therefor, together with interest on such
amount from the date of any payment made by the Issuing
Bank at the rate applicable to Alternate Base Rate Loans
for three Business Days and thereafter at the Default
Rate. The principal amount of any such payment shall be
used to reimburse the Issuing Bank for the payment made by
it under the Letter of Credit and, to the extent that the
Banks have not reimbursed the Issuing Bank pursuant to
Section 2.4(c), the interest amount of any such payment
shall be for the account of the Issuing Bank. Each Bank
that has reimbursed the Issuing Bank pursuant to
Section 2.4(c) for its Pro Rata Share of any payment made
by the Issuing Bank under a Letter of Credit shall
thereupon acquire a pro rata participation, to the extent
of such reimbursement, in the claim of the Issuing Bank
against Borrowers for reimbursement of principal and
interest under this Section 2.4(d) and shall share, in
accordance with that pro rata participation, in any
principal payment made by Borrowers with respect to such
claim and in any interest payment made by Borrowers (but
only with respect to periods subsequent to the date such
Bank reimbursed the Issuing Bank) with respect to such
claim.
(e) Borrowers may, pursuant to a Request for
Loan, request that Advances be made pursuant to
Section 2.1(a) to provide funds for the payment required
by Section 2.4(d) and, for this purpose, the conditions
precedent set forth in Article 8 shall not apply. The
proceeds of such Advances shall be paid directly to the
Issuing Bank to reimburse it for the payment made by it
under the Letter of Credit.
(f) If Borrowers fail to make the payment
required by Section 2.4(d) within the time period therein
set forth, in lieu of the reimbursement to the Issuing
Bank under Section 2.4(c) the Issuing Bank may (but is not
required to), without notice to or the consent of
Borrowers, instruct the Managing Agent to cause Advances
to be made by the Banks under the Commitment in an
aggregate amount equal to the amount paid by the Issuing
Bank with respect to that Letter of Credit and, for this
purpose, the conditions precedent set forth in Article 8
shall not apply. The proceeds of such Advances shall be
paid directly to the Issuing Bank to reimburse it for the
payment made by it under the Letter of Credit.
(g) The issuance of any supplement, modifica-
tion, amendment, renewal, or extension to or of any Letter
of Credit shall be treated in all respects the same as the
issuance of a new Letter of Credit, except that the
Issuing Bank's issuance fees shall be payable as set forth
in the letter agreement referred to in Section 3.5.
(h) The obligation of Borrowers to pay to the
Issuing Bank the amount of any payment made by the Issuing
Bank under any Letter of Credit shall be absolute, uncon-
ditional, and irrevocable, subject only to performance by
the Issuing Bank of its obligations to Borrowers under
Uniform Commercial Code Section 5109. Without limiting
the foregoing, Borrowers' obligations shall not be
affected by any of the following circumstances:
(i) any lack of validity or
enforceability of the Letter of Credit, this
Agreement, or any other agreement or instrument
relating thereto;
(ii) any amendment or waiver of or any
consent to departure from the Letter of Credit, this
Agreement, or any other agreement or instrument
relating thereto, with the consent of Borrowers;
(iii) the existence of any claim,
setoff, defense, or other rights which Borrowers may
have at any time against the Issuing Bank, the
Managing Agent or any Bank, any beneficiary of the
Letter of Credit (or any persons or entities for whom
any such beneficiary may be acting) or any other
Person, whether in connection with the Letter of
Credit, this Agreement, or any other agreement or
instrument relating thereto, or any unrelated
transactions;
(iv) any demand, statement, or any
other document presented under the Letter of Credit
proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever
so long as any such document appeared to comply with
the terms of the Letter of Credit;
(v) payment by the Issuing Bank in
good faith under the Letter of Credit against
presentation of a draft or any accompanying document
which does not strictly comply with the terms of the
Letter of Credit;
(vi) the existence, character,
quality, quantity, condition, packing, value or
delivery of any Property purported to be represented
by documents presented in connection with any Letter
of Credit or any difference between any such Property
and the character, quality, quantity, condition, or
value of such Property as described in such
documents;
(vii) the time, place, manner, order or
contents of shipments or deliveries of Property as
described in documents presented in connection with
any Letter of Credit or the existence, nature and
extent of any insurance relative thereto;
(viii) the solvency or financial
responsibility of any party issuing any documents in
connection with a Letter of Credit;
(ix) any failure or delay in notice of
shipments or arrival of any Property;
(x) any error in the transmission of
any message relating to a Letter of Credit not caused
by the Issuing Bank, or any delay or interruption in
any such message;
(xi) any error, neglect or default of
any correspondent of the Issuing Bank in connection
with a Letter of Credit;
(xii) any consequence arising from acts
of God, war, insurrection, civil unrest,
disturbances, labor disputes, emergency conditions or
other causes beyond the control of the Issuing Bank;
(xiii) so long as the Issuing Bank in
good faith determines that the contract or document
appears to comply with the terms of the Letter of
Credit, the form, accuracy, genuineness or legal
effect of any contract or document referred to in any
document submitted to the Issuing Bank in connection
with a Letter of Credit; and
(xiv) where the Issuing Bank has acted
in good faith and observed general banking usage, any
other circumstances whatsoever.
(i) The Issuing Bank shall be entitled to the
protection accorded to the Managing Agent pursuant to
Section 10.6, mutatis mutandis.
(j) The Uniform Code of Practice for Documen-
tary Credits, as published in its most current version by
the International Chamber of Commerce, shall be deemed a
part of this Section and shall apply to all Letters of
Credit to the extent not inconsistent with applicable Law.
2.5 Voluntary Reduction of Commitment. Borrowers
shall have the right, at any time and from time to time, with-
out penalty or charge, upon at least three (3) Banking Days'
prior written notice by a Responsible Official of Borrowers to
the Managing Agent, voluntarily to reduce, permanently and
irrevocably, in aggregate principal amounts in an integral
multiple of $1,000,000 but not less than $5,000,000, or to
terminate, all or a portion of the then undisbursed portion of
the Commitment, provided that any termination of the Commitment
must be concurrent with the prepayment in full of the TEGP Loan
Outstandings. The Managing Agent shall promptly notify the
Banks of any reduction or termination of the Commitment under
this Section. Any voluntary reduction of the Commitment under
this Section shall be applied to reduce the Reduction Amount
for the next following Reduction Date (to the extent of such
reduction) and thereafter to subsequent Reduction Dates (to
the extent not previously applied) in the order of their
occurrence.
2.6 Automatic Reduction of Commitment. Subject to
the last sentence of Section 2.5, on each Reduction Date, the
Commitment shall automatically be reduced by the applicable
Reduction Amount.
2.7 Optional Termination of Commitment. Following
the occurrence of a Change in Control, the Requisite Banks may
in their sole and absolute discretion elect, during the
thirty (30) day period immediately subsequent to the later of
(a) such occurrence or (b) the earlier of (i) receipt of
Borrowers' written notice to the Managing Agent of such
occurrence or (ii) if no such notice has been received by the
Managing Agent, the date upon which the Managing Agent has
actual knowledge thereof, to terminate the Commitment, in which
case the Commitment shall be terminated effective on the date
which is thirty (30) days subsequent to written notice from the
Managing Agent to Borrowers thereof.
2.8 Increase of Commitment. Borrowers may, by
written notice to the Managing Agent and the Banks, increase
the Commitment to $212,477,346.14; provided that (a) the
Commitment has not theretofore been voluntarily reduced
pursuant to Section 2.5, (b) the Initial Reduction Date has not
then occurred, (c) the obligation to fund the increase in the
Commitment amount is assumed in writing by a Bank then party to
this Agreement or by a Person that is an Eligible Assignee, in
each case acceptable to Borrowers and, in the latter case,
reasonably acceptable to the Managing Agent, (d) such Person
concurrently purchases a pro rata share of the TEGP Loan
Outstandings from the banks party to the TEGP Loan Agreement
(and each Bank, in its capacity as such a bank, hereby agrees
to sell such a share at par value to such Person) that is
equivalent to the increased Pro Rata Share of such Person,
(e) the Eligible Assignee executes and delivers an agreement of
joinder to this Agreement and to the TEGP Loan Agreement in
form and substance satisfactory to Borrowers, TEGP and the
Managing Agent and (f) no such increase shall increase the
aggregate of the amount of the Commitment and the amount of the
TEGP Loan Outstandings held by any other Bank absent the
express written consent of that Bank. Giving effect to such
increase in the Commitment and purchase of TEGP Loan
Outstandings, adjustments shall be made to the Pro Rata Shares
of the Banks and the pro rata shares of TEGP Loan Outstandings
such that the Pro Rata Shares of each Bank shall be identical
to its pro rata share of the TEGP Loan Outstandings. The
Managing Agent shall promptly thereafter prepare and circulate
to Borrowers and the Banks a revised Schedule 1.1 reflecting
such increased Commitment, the revised Pro Rata Shares of the
Banks and the revised pro rata shares of the TEGP Loan
Outstandings.
2.9 Managing Agent's Right to Assume Funds Available
for Advances. Unless the Managing Agent shall have been
notified by any Bank no later than 10:00 a.m. on the Banking
Day of the proposed funding by the Managing Agent of any Loan
that such Bank does not intend to make available to the
Managing Agent such Bank's portion of the total amount of such
Loan, the Managing Agent may assume that such Bank has made
such amount available to the Managing Agent on the date of the
Loan and the Managing Agent may, in reliance upon such
assumption, make available to Borrowers a corresponding amount.
If the Managing Agent has made funds available to Borrowers
based on such assumption and such corresponding amount is not
in fact made available to the Managing Agent by such Bank, the
Managing Agent shall be entitled to recover such corresponding
amount on demand from such Bank. If such Bank does not pay
such corresponding amount forthwith upon the Managing Agent's
demand therefor, the Managing Agent promptly shall notify
Borrowers and Borrowers shall pay such corresponding amount to
the Managing Agent. The Managing Agent also shall be entitled
to recover from such Bank interest on such corresponding amount
in respect of each day from the date such corresponding amount
was made available by the Managing Agent to Borrowers to the
date such corresponding amount is recovered by the Managing
Agent, at a rate per annum equal to the daily Federal Funds
Rate. Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its share of the Commitment or to
prejudice any rights which the Managing Agent or Borrowers may
have against any Bank as a result of any default by such Bank
hereunder.
2.10 Swing Line. (a) The Swing Line Bank shall
from time to time from the Closing Date through the day prior
to the Maturity Date make Swing Line Loans to Borrowers in such
amounts as Borrowers may request, provided that (a) after
giving effect to such Swing Line Loan, the Swing Line
Outstandings do not exceed $10,000,000, (b) without the consent
of all of the Banks, no Swing Line Loan may be made during the
continuation of an Event of Default and (c) the Swing Line Bank
has not given at least twenty-four (24) hours prior notice to
Borrowers that availability under the Swing Line is suspended
or terminated. Borrowers may borrow, repay and reborrow under
this Section. Unless notified to the contrary by the Swing
Line Bank, borrowings under the Swing Line may be made in
amounts which are integral multiples of $100,000 upon
telephonic request by a Responsible Official of Borrowers made
to the Managing Agent not later than 1:00 p.m., California
time, on the Banking Day of the requested borrowing (which
telephonic request shall be promptly confirmed in writing by
telecopier). Promptly after receipt of such a request for
borrowing, the Managing Agent shall provide telephonic
verification to the Swing Line Bank that, after giving effect
to such request, availability for Loans will exist under
Section 2.1 (and such verification shall be promptly confirmed
in writing by telecopier). Unless notified to the contrary by
the Swing Line Bank, each repayment of a Swing Line Loan shall
be in an amount which is an integral multiple of $100,000. If
Borrowers instruct the Swing Line Bank to debit its demand
deposit account at the Swing Line Bank in the amount of any
payment with respect to a Swing Line Loan, or the Swing Line
Bank otherwise receives repayment, after 3:00 p.m., California
time, on a Banking Day, such payment shall be deemed received
on the next Banking Day. The Swing Line Bank shall promptly
notify the Managing Agent of the Swing Loan Outstandings each
time there is a change therein.
(b) Swing Line Loans shall bear interest at a
fluctuating rate per annum equal to the Alternate Base Rate
plus (if applicable) an interest rate equal to the excess of
the Applicable Alternate Base Rate Margin over the Applicable
Commitment Fee Rate or minus (if applicable) an interest rate
equal to the excess of the Applicable Commitment Fee Rate over
the Applicable Alternate Base Rate Margin. Interest shall be
payable on such dates, not more frequent than monthly, as may
be specified by the Swing Line Bank and in any event on the
Maturity Date. The Swing Line Bank shall be responsible for
invoicing Borrowers for such interest. The interest payable on
Swing Line Loans is solely for the account of the Swing Line
Bank (subject to clause (d) below).
(c) The Swing Line Loans shall be payable on demand
made by the Swing Line Bank and in any event on the Maturity
Date.
(d) Upon the making of a Swing Line Loan, each Bank
shall be deemed to have purchased from the Swing Line Bank a
participation therein in an amount equal to that Bank's Pro
Rata Share of the Commitment times the amount of the Swing Line
Loan. Upon demand made by the Swing Line Bank, each Bank
shall, according to its Pro Rata Share of the Commitment,
promptly provide to the Swing Line Bank its purchase price
therefor in an amount equal to its participation therein. The
obligation of each Bank to so provide its purchase price to the
Swing Line Bank shall be absolute and unconditional (except
only demand made by the Swing Line Bank) and shall not be
affected by the occurrence of a Default or Event of Default;
provided that no Bank shall be obligated to purchase its Pro
Rata Share of (i) Swing Line Loans to the extent that Swing
Line Outstandings are in excess of $10,000,000 and (ii) any
Swing Line Loan made (absent the consent of all of the Banks)
during the continuation of an Event of Default. Each Bank that
has provided to the Swing Line Bank the purchase price due for
its participation in Swing Line Loans shall thereupon acquire a
pro rata participation, to the extent of such payment, in the
claim of the Swing Line Bank against Borrowers for principal
and interest and shall share, in accordance with that pro rata
participation, in any principal payment made by Borrowers with
respect to such claim and in any interest payment made by
Borrowers (but only with respect to periods subsequent to the
date such Bank paid the Swing Line Bank its purchase price)
with respect to such claim.
(e) In the event that the Swing Line Outstandings
are in excess of $5,000,000 on three (3) consecutive Banking
Days, then on the next Banking Day (unless Borrowers have made
other arrangements acceptable to the Swing Line Bank to reduce
the Swing Line Outstandings below $5,000,000), Borrowers shall
request a Loan pursuant to Section 2.1 sufficient to reduce the
Swing Line Outstandings below $5,000,000. In addition, upon
any demand for payment of the Swing Line Outstandings by the
Swing Line Bank (unless Borrowers have made other arrangements
acceptable to the Swing Line Bank to reduce the Swing Line
Outstandings to $0), Borrowers shall request a Loan pursuant to
Section 2.1 sufficient to repay all Swing Line Outstandings
(and, for this purpose, Section 2.1(d) shall not apply). In
each case, the Managing Agent shall automatically provide the
responsive Advances made by each Bank to the Swing Line Bank
(which the Swing Line Bank shall then apply to the Swing Line
Outstandings). In the event that Borrowers fail to request a
Loan within the time specified by Section 2.2 on any such date,
the Managing Agent may, but is not required to, without notice
to or the consent of Borrowers, cause Advances to be made by
the Banks under the Commitment in amounts which are sufficient
to reduce the Swing Line Outstandings as required above. The
conditions precedent set forth in Article 8 shall not apply to
Advances to be made by the Banks pursuant to the three
preceding sentences. The proceeds of such Advances shall be
paid directly to the Swing Line Bank for application to the
Swing Line Outstandings.
2.11 Extension of Initial Reduction Date and
Maturity Date. During the period commencing on September 1,
1995 and ending on October 31, 1995, Borrowers may by written
request delivered to the Managing Agent (with sufficient copies
thereof for the Banks) request that the Initial Reduction Date
and the Maturity Date each be extended for one (1) year. Such
request shall be accompanied either by a written statement of a
Senior Officer of Parent confirming the reasonableness of the
budget and projections most recently provided to the Banks
pursuant to Section 7.1(e) or by a revised budget and
projection as required by such Section. A request for
extension under this Section 2.11 will not be considered by the
Banks unless there is a concurrent request by TEGP for a
similar extension of the maturity date under the TEGP Loan
Agreement.
The Managing Agent shall promptly forward the request
for extension, and any accompanying materials, to the Banks.
Each Bank, in its sole and absolute discretion, shall determine
whether to grant the request for extension. Borrowers at their
option may offer to pay an extension fee to each Bank which
consents to such extension, but if such a fee is offered, it
shall be a fee offered ratably to each consenting Bank in
accordance with that Bank's Pro Rata Share. The Banks agree to
use their best efforts to respond to the request for extension
within thirty (30) Banking Days after receipt of the request
for extension; failure to respond shall in no event be deemed
to be a consent to the extension.
If all of the Banks notify the Managing Agent in
writing that they consent to the requested extension, the
Initial Reduction Date and the Maturity Date shall (subject to
payment of any agreed-upon extension fee) automatically be
extended for one (1) year. The Managing Agent shall notify
Borrowers and the Banks in writing of such an extension.
If Banks holding at least 75% of the Commitment
consent to the request for extension, but one or more Banks
(each a "Non-Consenting Bank") notify the Managing Agent that
it will not consent to the request for extension (or fail to
notify the Managing Agent in writing of its consent to the
extension), Borrowers may cause such Non-Consenting Bank to be
removed as a Bank under this Agreement pursuant to
Section 11.25. If such removal is accomplished by assignment
to an Eligible Assignee and such Eligible Assignee notifies the
Managing Agent in writing that it consents to the request for
extension, then the request for extension shall be granted with
the effect as set forth above. If such removal is accomplished
by a voluntary reduction of the Commitment, then the Managing
Agent shall notify all of the Banks in writing thereof and each
Bank shall have the right to notify the Managing Agent within
ten (10) Banking Days after receipt of such notice that such
Bank elects to be treated as a Non-Consenting Bank, in which
case it shall be so treated as aforesaid.
If a request for extension is made during the
September 1, 1995 through October 31, 1995 period as aforesaid
and the requested extension is granted by the Banks, Borrowers
shall have the right to request a further one (1) year
extension of the Initial Reduction Date and Maturity Date
during the period from September 1, 1996 through October 31,
1996. All of the procedures and conditions applicable to the
earlier request for extension shall apply to any such request
for extension.
2.12 Collateral and Guaranty. The Obligations shall
be secured by the Collateral pursuant to the Collateral
Documents and be guaranteed by the Significant Subsidiaries
pursuant to the Subsidiary Guaranty.
2.13 Senior Indebtedness. The Obligations shall be
"Senior Indebtedness" with respect to all Subordinated
Obligations.<PAGE>
Article 3
PAYMENTS AND FEES
3.1 Principal and Interest.
(a) Interest shall be payable on the
outstanding daily unpaid principal amount of each Advance
from the date thereof until payment in full is made and
shall accrue and be payable at the rates set forth or
provided for herein before and after Default, before and
after maturity, before and after judgment, and before and
after the commencement of any proceeding under any Debtor
Relief Law, with interest on overdue interest at the
Default Rate to the fullest extent permitted by applicable
Laws.
(b) Interest accrued on each Alternate Base
Rate Loan on each Quarterly Payment Date, shall be due and
payable on that day. Except as otherwise provided in
Section 3.10, the unpaid principal amount of any Alternate
Base Rate Loan shall bear interest at a fluctuating rate
per annum equal to the Alternate Base Rate plus the
Applicable Alternate Base Rate Margin. Each change in the
interest rate under this Section 3.1(b) due to a change in
the Alternate Base Rate shall take effect simultaneously
with the corresponding change in the Alternate Base Rate.
(c) Interest accrued on each Eurodollar Rate
Loan which is for a term of three months or less shall be
due and payable on the last day of the related Eurodollar
Period. Interest accrued on each other Eurodollar Rate
Loan shall be due and payable on the date which is three
months after the date such Eurodollar Rate Loan was made
(and, in the event that all of the Banks have approved a
Eurodollar Period of longer than six months, every three
months thereafter through the last day of the Eurodollar
Period) and on the last day of the related Eurodollar
Period. Except as otherwise provided in Section 3.10, the
unpaid principal amount of any Eurodollar Rate Loan shall
bear interest at a rate per annum equal to the Eurodollar
Rate for that Eurodollar Rate Loan plus the Applicable
Eurodollar Rate Margin.
(d) If not sooner paid, the principal Indebted-
ness evidenced by the Notes shall be payable as follows:
(i) the principal amount of each Eurodollar Rate Loan shall be payable
on the last day of the Interest Period for such Loan,
which Loan may be paid by the conversion thereof into
an Alternate Base Rate Loan pursuant to
Section 2.1(g);
(ii) the amount, if any, by which the sum of (A) the principal
outstanding Indebtedness evidenced by the Notes, plus
(B) the Aggregate Effective Amount of all outstanding
Letters of Credit, plus (C) the Swing Line
Outstandings at any time exceeds (I) so long as the
conditions precedent set forth in Section 8.2 has not
been satisfied, the then applicable Commitment minus
the Reserve Amount and (II) upon and after
satisfaction of the conditions precedent set forth in
Section 8.2, the then applicable Commitment, shall be
payable immediately; and
(iii) the principal Indebtedness evidenced by the Notes shall in any
event be payable on the Maturity Date.
(e) The Notes may, at any time and from time to
time, voluntarily be paid or prepaid in whole or in part
without premium or penalty, except that with respect to
any voluntary prepayment under this Section (i) any
partial prepayment shall be not less than $5,000,000,
(ii) the Managing Agent shall have received written notice
of any prepayment by 9:00 a.m. California time on the date
of prepayment (which must be a Banking Day) in the case of
an Alternate Base Rate Loan, and, in the case of a Euro-
dollar Rate Loan, three (3) Banking Days before the date
of prepayment, which notice shall identify the date and
amount of the prepayment and the Loan(s) being prepaid,
(iii) each prepayment of principal on any Eurodollar Rate
Loan shall be accompanied by payment of interest accrued
to the date of payment on the amount of principal paid and
(iv) any payment or prepayment of all or any part of any
Eurodollar Rate Loan on a day other than the last day of
the applicable Interest Period shall be subject to
Section 3.9(e).
3.2 Arrangement Fee. On the Closing Date, Borrowers
shall pay to the Arranger an arrangement fee in the amount
heretofore agreed upon by letter agreement between Borrowers
and the Arranger. Such arrangement fee is for the services of
the Arranger in arranging the credit facilities under this
Agreement and is fully earned when paid. The arrangement fee
paid to the Arranger is solely for its own account and is
nonrefundable.
3.3 Upfront Fees. On the Closing Date, Borrowers
shall pay to the Managing Agent, for the account of the
Managing Agent, upfront fees in the amount heretofore agreed
upon by letter agreement among Parent, the Managing Agent and
the Arranger. On the Closing Date, Borrowers shall further pay
to the Managing Agent, for the respective accounts of the Banks
(other than the Managing Agent) pro rata according to their
Pro Rata Share of the Commitment, an upfront fee in an amount
set forth in a letter from the Arranger to each Bank and
acknowledged by that Bank and by Borrowers as the applicable
upfront fee for such Bank. Such upfront fees are for the
credit facilities committed by each Bank under this Agreement
and are fully earned when paid. The upfront fees paid to each
Bank are solely for its own account and are nonrefundable.
3.4 Supplemental Upfront Fees. On the Closing Date,
Borrowers shall pay to the Managing Agent, for the respective
accounts of the Banks, supplemental upfront fees equal to 1/2
of 1% (50 basis points) per annum times the sum of the
Commitment plus the average daily principal amount outstanding
under that certain Amended and Restated Loan Agreement dated as
of July 31, 1989 referred to in the definition of "TEGP Loan
Agreement" for the period from September 1, 1994 through the
Closing Date. Such supplemental upfront fees are for the
credit facilities committed by each Bank under this Agreement
and the TEGP Loan Agreement and are fully earned when paid.
The supplemental upfront fees paid to each Bank are solely for
its own account and are nonrefundable.
3.5 Commitment Fees. From the Closing Date,
Borrowers shall pay to the Managing Agent, for the ratable
accounts of the Banks pro rata according to their Pro Rata
Share of the Commitment, a commitment fee equal to the
Applicable Commitment Fee Rate per annum times the average
daily amount by which the Commitment exceeds the sum of (a) the
aggregate principal Indebtedness evidenced by the Notes (but
not the Swing Line Outstandings) plus (b) the aggregate amount
available for drawing under all outstanding Letters of Credit.
The commitment fee shall be payable quarterly in arrears on
each Quarterly Payment Date and on the Maturity Date.
3.6 Letter of Credit Fees. Concurrently with the
issuance of each Letter of Credit, Borrowers shall pay a letter
of credit issuance fee to the Issuing Bank, for the sole
account of the Issuing Bank, in an amount set forth in a letter
agreement between Borrowers and the Issuing Bank. The letter
of credit issuance fee is nonrefundable. On each Quarterly
Payment Date and on the Maturity Date, Borrowers shall also pay
to the Managing Agent in arrears, for the ratable account of
the Banks in accordance with their Pro Rata Share of the
Commitment, standby letter of credit fees in an amount equal to
the Applicable Letter of Credit Fee times the average daily
Aggregate Effective Amount since the later of the Closing Date
or the previous Quarterly Payment Date.
3.7 Agency Fees. Borrowers shall pay to the
Managing Agent an agency fee in such amounts and at such times
as heretofore agreed upon by letter agreement between Borrowers
and the Managing Agent. The agency fee is for the services to
be performed by the Managing Agent in acting as Managing Agent
and is fully earned on the date paid. The agency fee paid to
the Managing Agent is solely for its own account and is
nonrefundable.
3.8 Increased Commitment Costs. If any Bank shall
determine in good faith that the introduction after the Closing
Date of any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change therein or any change
in the interpretation or administration thereof by any central
bank or other Governmental Agency charged with the interpreta-
tion or administration thereof, or compliance by such Bank (or
its Eurodollar Lending Office) or any corporation controlling
the Bank, with any request, guideline or directive regarding
capital adequacy (whether or not having the force of Law) of
any such central bank or other authority, affects or would
affect the amount of capital required or expected to be main-
tained by such Bank or any corporation controlling such Bank
and (taking into consideration such Bank's or such corpora-
tion's policies with respect to capital adequacy and such
Bank's desired return on capital) determines in good faith that
the amount of such capital is increased, or the rate of return
on capital is reduced, as a consequence of its obligations
under this Agreement, then, within ten (10) Banking Days after
demand of such Bank, Borrowers shall pay to such Bank, from
time to time as specified in good faith by such Bank, addi-
tional amounts sufficient to compensate such Bank in light of
such circumstances, to the extent reasonably allocable to such
obligations under this Agreement, provided that Borrowers shall
not be obligated to pay any such amount which arose prior to
the date which is ninety (90) days preceding the date of such
demand or is attributable to periods prior to the date which is
ninety (90) days preceding the date of such demand. Any
request for compensation by a Bank under this Section shall set
forth the basis upon which it has been determined that such an
amount is due from Borrowers, a calculation of the amount due,
and a certification that the corresponding costs or diminished
rate of return on capital have been incurred or sustained by
the Bank. If Borrowers become obligated to pay a material
amount under this Section to any Bank, that Bank will be
subject to removal in accordance with Section 11.25; provided
that Borrowers shall have paid such amount to that Bank and
that Borrowers, within the thirty (30) day period following the
date of such payment, shall have notified that Bank in writing
of their intent to so remove the Bank. Each Bank's determina-
tion of such amounts shall be conclusive in the absence of
manifest error.
3.9 Eurodollar Costs and Related Matters.
(a) In the event that any Governmental Agency
imposes on any Bank any reserve or comparable requirement
(including any emergency, supplemental or other reserve)
with respect to the Eurodollar Obligations of that Bank,
Borrowers shall pay that Bank within five (5) Banking Days
after demand all amounts necessary to compensate such Bank
(determined as though such Bank's Eurodollar Lending
Office had funded 100% of its Eurodollar Rate Advance in
the Designated Eurodollar Market) in respect of the
imposition of such reserve requirements. The Bank's
determination of such amount shall be conclusive in the
absence of manifest error.
(b) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance:
(1) shall subject any Bank or its Eurodollar
Lending Office to any tax, duty or other charge or
cost with respect to any Eurodollar Rate Advance, any
of its Notes evidencing Eurodollar Rate Loans or its
obligation to make Eurodollar Rate Advances, or shall
change the basis of taxation of payments to any Bank
attributable to the principal of or interest on any
Eurodollar Rate Advance or any other amounts due
under this Agreement in respect of any Eurodollar
Rate Advance, any of its Notes evidencing Eurodollar
Rate Loans or its obligation to make Eurodollar Rate
Advances, excluding (i) taxes imposed on or measured
in whole or in part by its overall net income, gross
income or gross receipts and franchise taxes imposed
on it, by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or
maintains its principal office or Eurodollar Lending
Office or (B) any jurisdiction (or political
subdivision thereof) in which it is "doing business,"
(ii) any withholding taxes or other taxes based on
gross income imposed by the United States of America
(other than withholding taxes and taxes based on
gross income resulting from or attributable to any
change in any law, rule or regulation or any change
in the interpretation or administration of any law,
rule or regulation by any Governmental Agency) and
(iii) any withholding taxes or other taxes based on
gross income imposed by the United States of America
for any period with respect to which it has failed to
provide Borrowers with the appropriate form or forms
required by Section 11.21, to the extent such forms
are then required by applicable Laws;
(2) shall impose, modify or deem applicable any
reserve not applicable or deemed applicable on the
date hereof (including any reserve imposed by the
Board of Governors of the Federal Reserve System,
special deposit, capital or similar requirements
against assets of, deposits with or for the account
of, or credit extended by, any Bank or its Eurodollar
Lending Office); or
(3) shall impose on any Bank or its Eurodollar
Lending Office or the Designated Eurodollar Market
any other condition affecting any Eurodollar Rate
Advance, any of its Notes evidencing Eurodollar Rate
Loans, its obligation to make Eurodollar Rate
Advances or this Agreement, or shall otherwise affect
any of the same;
and the result of any of the foregoing, as determined in
good faith by such Bank, increases the cost to such Bank
or its Eurodollar Lending Office of making or maintaining
any Eurodollar Rate Advance or in respect of any
Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans or its obligation to make Eurodollar
Rate Advances or reduces the amount of any sum received or
receivable by such Bank or its Eurodollar Lending Office
with respect to any Eurodollar Rate Advance, any of its
Notes evidencing Eurodollar Rate Loans or its obligation
to make Eurodollar Rate Advances (assuming such Bank's
Eurodollar Lending Office had funded 100% of its
Eurodollar Rate Advance in the Designated Eurodollar
Market), then, within five (5) Banking Days after demand
by such Bank (with a copy to the Managing Agent),
Borrowers shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such increased
cost or reduction (determined as though such Bank's
Eurodollar Lending Office had funded 100% of its
Eurodollar Rate Advance in the Designated Eurodollar
Market). A statement of any Bank claiming compensation
under this subsection and setting forth in reasonable
detail the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest
error.
(c) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance shall,
in the good faith opinion of any Bank, make it unlawful or
impossible for such Bank or its Eurodollar Lending Office
to make, maintain or fund its portion of any Eurodollar
Rate Loan, or materially restrict the authority of such
Bank to purchase or sell, or to take deposits of, Dollars
in the Designated Eurodollar Market, or to determine or
charge interest rates based upon the Eurodollar Rate, and
such Bank shall so notify the Managing Agent, then such
Bank's obligation to make Eurodollar Rate Advances shall
be suspended for the duration of such illegality or
impossibility and the Managing Agent forthwith shall give
notice thereof to the other Banks and Borrowers. Upon
receipt of such notice, the outstanding principal amount
of such Bank's Eurodollar Rate Advances, together with
accrued interest thereon, automatically shall be converted
to Alternate Base Rate Advances on either (1) the last day
of the Eurodollar Period(s) applicable to such Eurodollar
Rate Advances if such Bank may lawfully continue to
maintain and fund such Eurodollar Rate Advances to such
day(s) or (2) immediately if such Bank may not lawfully
continue to fund and maintain such Eurodollar Rate
Advances to such day(s), provided that in such event the
conversion shall not be subject to payment of a prepayment
fee under Section 3.9(e). Each Bank agrees to endeavor
promptly to notify Borrowers of any event of which it has
actual knowledge, occurring after the Closing Date, which
will cause that Bank to notify the Managing Agent under
this Section, and agrees to designate a different
Eurodollar Lending Office if such designation will avoid
the need for such notice and will not, in the good faith
judgment of such Bank, otherwise be materially
disadvantageous to such Bank. In the event that any Bank
is unable, for the reasons set forth above, to make,
maintain or fund its portion of any Eurodollar Rate Loan,
such Bank shall fund such amount as an Alternate Base Rate
Advance for the same period of time, and such amount shall
be treated in all respects as an Alternate Base Rate
Advance. Any Bank whose obligation to make Eurodollar
Rate Advances has been suspended under this Section shall
promptly notify the Managing Agent and Borrowers of the
cessation of the Special Eurodollar Circumstance which
gave rise to such suspension.
(d) If, with respect to any proposed Eurodollar
Rate Loan:
(1) the Managing Agent reasonably determines
that, by reason of circumstances affecting the
Designated Eurodollar Market generally that are
beyond the reasonable control of the Banks, deposits
in Dollars (in the applicable amounts) are not being
offered to any Bank in the Designated Eurodollar
Market for the applicable Eurodollar Period; or
(2) the Requisite Banks advise the Managing
Agent that the Eurodollar Rate as determined by the
Managing Agent (i) does not represent the effective
pricing to such Banks for deposits in Dollars in the
Designated Eurodollar Market in the relevant amount
for the applicable Eurodollar Period, or (ii) will
not adequately and fairly reflect the cost to such
Banks of making the applicable Eurodollar Rate
Advances;
then the Managing Agent forthwith shall give notice
thereof to Borrowers and the Banks, whereupon until the
Managing Agent notifies Borrowers that the circumstances
giving rise to such suspension no longer exist, the
obligation of the Banks to make any future Eurodollar Rate
Advances shall be suspended unless (but only if clause (2)
above is the basis for such suspension) Borrowers notify
the Agent in writing that they elect to pay the Enhanced
Applicable Eurodollar Rate Margin with respect to all
Eurodollar Rate Loans made during such period. The
Enhanced Applicable Eurodollar Rate Margin shall be the
sum of (i) the Applicable Eurodollar Rate Margin plus
(ii) such interest rate margin as the Requisite Banks
specify is necessary to adjust the Eurodollar Rate to a
rate which represents the effective pricing to such Banks
for deposits of Dollars in the Designated Eurodollar
Market in the relevant amount for the applicable
Eurodollar Period and which adequately and fairly reflects
the cost to such Banks of making the applicable Eurodollar
Rate Advances.
(e) Upon payment or prepayment of any
Eurodollar Rate Advance (other than as the result of a
conversion required under Section 3.9(c), on a day other
than the last day in the applicable Eurodollar Period
(whether voluntarily, involuntarily, by reason of
acceleration, or otherwise), or upon the failure of
Borrowers (for a reason other than the failure of a Bank
to make an Advance) to borrow on the date or in the amount
specified for a Eurodollar Rate Loan in any Request for
Loan, Borrowers shall pay to the appropriate Bank within
ten (10) Banking Days after demand a prepayment fee or
failure to borrow fee, as the case may be (determined as
though 100% of the Eurodollar Rate Advance had been funded
in the Designated Eurodollar Market) equal to the sum of:
(1) the principal amount of the Eurodollar Rate
Advance prepaid or not borrowed, as the case may be,
times [the number of days from and including the date
of prepayment or failure to borrow, as applicable, to
but excluding the last day in the applicable Euro-
dollar Period], divided by 360, times the applicable
Interest Differential (provided that the product of
the foregoing formula must be a positive number);
plus
(2) all out-of-pocket expenses incurred by the
Bank reasonably attributable to such payment,
prepayment or failure to borrow.
Each Bank's determination of the amount of any prepayment
fee payable under this Section shall be conclusive in the
absence of manifest error.
(f) Each Bank agrees to endeavor promptly to
notify Borrowers of any event of which it has actual
knowledge, occurring after the Closing Date, which will
entitle such Bank to compensation pursuant to clause (a)
or clause (b) of this Section 3.9, and agrees to designate
a different Eurodollar Lending Office if such designation
will avoid the need for or reduce the amount of such
compensation and will not, in the good faith judgment of
such Bank, otherwise be materially disadvantageous to such
Bank. Any request for compensation by a Bank under this
Section 3.9 shall set forth the basis upon which it has
been determined that such an amount is due from Borrowers,
a calculation of the amount due, and a certification that
the corresponding costs have been incurred by the Bank.
(g) If any Bank claims compensation or is
excused from making or continuing Eurodollar Rate Loans
under this Section:
(i) Borrowers may at any time, upon
at least four (4) Eurodollar Banking Days' prior
notice to the Managing Agent and such Bank and upon
payment in full of the amounts provided for in this
Section through the date of such payment plus any
prepayment fee required by Section 3.9(e), pay in
full the affected Eurodollar Rate Advances of such
Bank or request that such Eurodollar Rate Advances be
converted to Alternate Base Rate Advances; and
(ii) In the case where Borrowers
become obligated to pay a material amount under this
Section 3.9 to any Bank, that Bank will be subject to
removal in accordance with Section 11.25; provided
that Borrowers shall have paid such amount to that
Bank and that Borrowers, within the thirty (30) day
period following the date of such payment, shall have
notified that Bank in writing of their intent to so
remove the Bank.
3.10 Late Payments. If any installment of principal
or interest or any fee or cost or other amount payable under
any Loan Document to the Managing Agent or any Bank is not paid
when due, it shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the sum of the
Alternate Base Rate plus the Applicable Alternate Base Rate
Margin plus 2%, to the fullest extent permitted by applicable
Laws. Accrued and unpaid interest on past due amounts
(including, without limitation, interest on past due interest)
shall be compounded monthly, on the last day of each calendar
month, to the fullest extent permitted by applicable Laws.
3.11 Computation of Interest and Fees. Computation
of interest on Alternate Base Rate Loans shall be calculated on
the basis of a year of 365 or 366 days, as the case may be, and
the actual number of days elapsed; computation of interest on
Eurodollar Rate Loans and all fees under this Agreement shall
be calculated on the basis of a year of 360 days and the actual
number of days elapsed. Borrowers acknowledge that such latter
calculation method will result in a higher yield to the Banks
than a method based on a year of 365 or 366 days. Interest
shall accrue on each Loan for the day on which the Loan is
made; interest shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid.
Any Loan that is repaid on the same day on which it is made
shall bear interest for one day. Notwithstanding anything in
this Agreement to the contrary, interest in excess of the
maximum amount permitted by applicable Laws shall not accrue or
be payable hereunder or under the Notes, and any amount paid as
interest hereunder or under the Notes which would otherwise be
in excess of such maximum permitted amount shall instead be
treated as a payment of principal.
3.12 Non-Banking Days. If any payment to be made by
Borrowers or any other Party under any Loan Document shall come
due on a day other than a Banking Day, payment shall instead be
considered due on the next succeeding Banking Day and the
extension of time shall be reflected in computing interest and
fees.
3.13 Manner and Treatment of Payments.
(a) Each payment hereunder (except payments
pursuant to Sections 2.9, 3.8, 3.9, 11.3, 11.11 and 11.22)
or on the Notes or under any other Loan Document shall be
made to the Managing Agent, at the Managing Agent's
Office, for the account of each of the Banks or the
Managing Agent, as the case may be, in immediately avail-
able funds not later than 11:00 a.m. (other than payments
with respect to Swing Line Loans, which must be received
by 3:00 p.m.), California time, on the day of payment
(which must be a Banking Day). All payments received
after such time, on any Banking Day, shall be deemed
received on the next succeeding Banking Day. The amount
of all payments received by the Managing Agent for the
account of each Bank shall be immediately paid by the
Managing Agent to the applicable Bank in immediately
available funds and, if such payment was received by the
Managing Agent by 11:00 a.m., California time, on a
Banking Day and not so made available to the account of a
Bank on that Banking Day, the Managing Agent shall
reimburse that Bank for the cost to such Bank of funding
the amount of such payment at the Federal Funds Rate. All
payments shall be made in lawful money of the United
States of America.
(b) Each payment or prepayment on account of
any Loan shall be applied pro rata according to the
outstanding Advances made by each Bank comprising such
Loan.
(c) Each Bank shall use its best efforts to
keep a record of Advances made by it and payments received
by it with respect to each of its Notes and, subject to
Section 10.6(g), such record shall, as against Borrowers,
be presumptive evidence of the amounts owing. Notwith-
standing the foregoing sentence, no Bank shall be liable
to any Party for any failure to keep such a record.
(d) Each payment of any amount payable by
Borrowers or any other Party under this Agreement or any
other Loan Document shall be made free and clear of, and
without reduction by reason of, any taxes, assessments or
other charges imposed by any Governmental Agency, central
bank or comparable authority, excluding (i) taxes imposed
on or measured in whole or in part by its overall net
income, gross income or gross receipts and franchise taxes
imposed on it, by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or maintains
its principal office or Eurodollar Lending Office or
(B) any jurisdiction (or political subdivision thereof) in
which it is "doing business," (ii) any withholding taxes
or other taxes based on gross income imposed by the United
States of America (other than withholding taxes and taxes
based on gross income resulting from or attributable to
any change in any law, rule or regulation or any change in
the interpretation or administration of any law, rule or
regulation by any Governmental Agency) and (iii) any
withholding taxes or other taxes based on gross income
imposed by the United States of America for any period
with respect to which it has failed to provide Borrowers
with the appropriate form or forms required by
Section 11.21, to the extent such forms are then required
by applicable Laws (all such non-excluded taxes,
assessments or other charges being hereinafter referred to
as "Taxes"). To the extent that Borrowers are obligated
by applicable Laws to make any deduction or withholding on
account of Taxes from any amount payable to any Bank under
this Agreement, Borrowers shall (i) make such deduction or
withholding and pay the same to the relevant Governmental
Agency and (ii) pay such additional amount to that Bank as
is necessary to result in that Bank's receiving a net
after-Tax amount equal to the amount to which that Bank
would have been entitled under this Agreement absent such
deduction or withholding. If and when receipt of such
payment results in an excess payment or credit to that
Bank on account of such Taxes, that Bank shall promptly
refund such excess to Borrowers. If Borrowers become
obligated to pay a material amount under this Section to
any Bank, that Bank will be subject to removal in
accordance with Section 11.25; provided that Borrowers
shall have paid such amount to that Bank and that
Borrowers, within the thirty (30) day period following the
date of such payment, shall have notified that Bank in
writing of their intent to so remove the Bank.
3.14 Funding Sources. Nothing in this Agreement
shall be deemed to obligate any Bank to obtain the funds for
any Loan or Advance in any particular place or manner or to
constitute a representation by any Bank that it has obtained or
will obtain the funds for any Loan or Advance in any particular
place or manner.
3.15 Failure to Charge Not Subsequent Waiver. Any
decision by the Managing Agent or any Bank not to require
payment of any interest (including interest arising under
Section 3.10), fee, cost or other amount payable under any Loan
Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a
waiver of the Managing Agent's or such Bank's right to require
full payment of any interest (including interest arising under
Section 3.10), fee, cost or other amount payable under any Loan
Document, or to calculate an amount payable by another method
that is not inconsistent with this Agreement, on any other or
subsequent occasion.
3.16 Managing Agent's Right to Assume Payments Will
be Made by Borrowers. Unless the Managing Agent shall have
been notified by Borrowers prior to the date on which any
payment to be made by Borrowers hereunder is due that Borrowers
do not intend to remit such payment, the Managing Agent may, in
its discretion, assume that Borrowers have remitted such pay-
ment when so due and the Managing Agent may, in its discretion
and in reliance upon such assumption, make available to each
Bank on such payment date an amount equal to such Bank's share
of such assumed payment. If Borrowers have not in fact
remitted such payment to the Managing Agent, each Bank shall
forthwith on demand repay to the Managing Agent the amount of
such assumed payment made available to such Bank, together with
interest thereon in respect of each day from and including the
date such amount was made available by the Managing Agent to
such Bank to the date such amount is repaid to the Managing
Agent at the Federal Funds Rate.
3.17 Fee Determination Detail. The Managing Agent,
and any Bank, shall provide reasonable detail to Borrowers
regarding the manner in which the amount of any payment to the
Managing Agent and the Banks, or that Bank, under Article 3 has
been determined, concurrently with demand for such payment.
3.18 Survivability. All of Borrowers' obligations
under Sections 3.8 and 3.9 shall survive for ninety (90) days
following the date on which the Commitment is terminated, all
Loans hereunder are fully paid and all Letters of Credit have
expired.<PAGE>
Article 4
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to the Banks, as of
the date hereof and as of the Closing Date, that:
4.1 Existence and Qualification; Power; Compliance
With Laws. Each of Parent, ANJI and REI is a corporation duly
formed, validly existing and in good standing under the Laws of
Delaware, New Jersey and Nevada, respectively. Each of
Borrowers is duly qualified or registered to transact business
and is in good standing in each other jurisdiction in which the
conduct of its business or the ownership or leasing of its
Properties makes such qualification or registration necessary,
except where the failure so to qualify or register and to be in
good standing would not constitute a Material Adverse Effect.
Each of Borrowers has all requisite corporate power and author-
ity to conduct its business, to own and lease its Properties
and to execute and deliver each Loan Document to which it is a
Party and to perform its Obligations. All outstanding shares
of capital stock of Parent are duly authorized, validly issued,
fully paid and non-assessable, and no holder thereof has any
enforceable right of rescission under any applicable state or
federal securities Laws. Each of Borrowers is in compliance
with all Laws and other legal requirements applicable to its
business, has obtained all authorizations, consents, approvals,
orders, licenses and permits from, and has accomplished all
filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental
Agency that are necessary for the transaction of its business,
except where the failure so to comply, file, register, qualify
or obtain exemptions does not constitute a Material Adverse
Effect.
4.2 Authority; Compliance With Other Agreements and
Instruments and Government Regulations. The execution, deliv-
ery and performance by each of Borrowers and each Significant
Subsidiary of the Loan Documents to which it is a Party have
been duly authorized by all necessary corporate action, and do
not and will not:
(a) Require any consent or approval not hereto-
fore obtained of any partner, director, stockholder,
security holder or creditor of such Party;
(b) Violate or conflict with any provision of
such Party's charter, articles of incorporation or bylaws,
as applicable;
(c) Result in or require the creation or
imposition of any Lien or Right of Others upon or with
respect to any Property now owned or leased or hereafter
acquired by such Party;
(d) Violate any Requirement of Law applicable
to such Party, subject to obtaining the authorizations
from, or filings with, the Governmental Agencies described
in Schedule 4.3;
(e) Result in a breach of or constitute a
default under, or cause or permit the acceleration of any
obligation owed under, any indenture or loan or credit
agreement or any other Contractual Obligation to which
such Party is a party or by which such Party or any of its
Property is bound or affected;
and none of Borrowers or any Significant Subsidiary is in
violation of, or default under, any Requirement of Law or
Contractual Obligation, or any indenture, loan or credit
agreement described in Section 4.2(e), in any respect that
constitutes a Material Adverse Effect.
4.3 No Governmental Approvals Required. Except as
set forth in Schedule 4.3 or previously obtained or made, no
authorization, consent, approval, order, license or permit
from, or filing, registration or qualification with, any
Governmental Agency is or will be required to authorize or
permit under applicable Laws the execution, delivery and
performance by Borrowers and the Significant Subsidiaries of
the Loan Documents to which it is a Party. All authorizations
from, or filings with, any Governmental Agency described in
Schedule 4.3 will be accomplished as of the Closing Date or
such other date as is specified in Schedule 4.3.
4.4 Subsidiaries.
(a) Schedule 4.4 hereto correctly sets forth
the names, form of legal entity, number of shares of capi-
tal stock issued and outstanding, number of shares owned
by Borrowers or a Subsidiary of Borrowers (specifying such
owner) and jurisdictions of organization of all
Subsidiaries of Parent (other than Borrowers) and
specifies which thereof, as of the Closing Date, are
Restricted Subsidiaries, Significant Subsidiaries and
Unrestricted New Venture Entities. Except as described in
Schedule 4.4 or Schedule 6.17, Borrowers do not own any
capital stock, equity interest or debt security which is
convertible, or exchangeable, for capital stock or equity
interests in any Person. Unless otherwise indicated in
Schedule 4.4, all of the outstanding shares of capital
stock, or all of the units of equity interest, as the case
may be, of each Restricted Subsidiary are owned of record
and beneficially by Parent, there are no outstanding
options, warrants or other rights to purchase capital
stock of any such Subsidiary, and all such shares or
equity interests so owned are duly authorized, validly
issued, fully paid and non-assessable, and were issued in
compliance with all applicable state and federal securi-
ties and other Laws, and are free and clear of all Liens
and Rights of Others, except for Permitted Encumbrances
and Permitted Rights of Others.
(b) Each Significant Subsidiary is a corpora-
tion duly formed, validly existing and in good standing
under the Laws of its jurisdiction of organization, is
duly qualified to do business as a foreign organization
and is in good standing as such in each jurisdiction in
which the conduct of its business or the ownership or
leasing of its Properties makes such qualification neces-
sary (except where the failure to be so duly qualified and
in good standing does not constitute a Material Adverse
Effect), and has all requisite power and authority to
conduct its business and to own and lease its Properties.
(c) Each Restricted Subsidiary is in compliance
with all Laws and other requirements applicable to its
business and has obtained all authorizations, consents,
approvals, orders, licenses, and permits from, and each
such Subsidiary has accomplished all filings, registra-
tions, and qualifications with, or obtained exemptions
from any of the foregoing from, any Governmental Agency
that are necessary for the transaction of its business,
except where the failure to be in such compliance, obtain
such authorizations, consents, approvals, orders,
licenses, and permits, accomplish such filings, registra-
tions, and qualifications, or obtain such exemptions, does
not constitute a Material Adverse Effect.
4.5 Financial Statements. Borrowers have furnished
to the Banks (a) the audited consolidated financial statements
of Parent and its Subsidiaries for the Fiscal Year ended
December 30, 1993, (b) the unaudited consolidating balance
sheet and statement of operations of Parent and its Subsid-
iaries for the Fiscal Year ended December 30, 1993 and (c) the
unaudited consolidated financial statements of Parent and its
Subsidiaries for the Fiscal Quarter ended June 30, 1994. The
financial statements described in clauses (a) and (c) fairly
present in all material respects the financial condition,
results of operations and changes in financial position, and
the balance sheet and statement of operations described in
clause (b), fairly present the financial condition and results
of operations, of Parent and its Subsidiaries as of such dates
and for such periods in conformity with Generally Accepted
Accounting Principles, consistently applied.
4.6 No Other Liabilities; No Material Adverse
Changes. Borrowers and the Restricted Subsidiaries do not have
any material liability or material contingent liability
required under Generally Accepted Accounting Principles to be
reflected or disclosed and not reflected or disclosed in the
balance sheet described in Section 4.5(c), other than
liabilities and contingent liabilities arising in the ordinary
course of business since the date of such financial statements.
As of the Closing Date, no circumstance or event has occurred
that constitutes a Material Adverse Effect since June 30, 1994.
As of any date subsequent to the Closing Date, no circumstance
or event has occurred that constitutes a Material Adverse
Effect since the Closing Date.
4.7 Title to Property. Borrowers and the Restricted
Subsidiaries have valid title to the Property (other than
assets which are the subject of a Capital Lease Obligation)
reflected in the balance sheet described in Section 4.5(c),
other than items of Property or exceptions to title which are
in each case immaterial to Borrowers and the Restricted
Subsidiaries, taken as a whole, and Property subsequently sold
or disposed of in the ordinary course of business, free and
clear of all Liens and Rights of Others, other than Liens or
Rights of Others described in Schedule 4.7 or permitted by
Section 6.8.
4.8 Intangible Assets. Borrowers and the Restricted
Subsidiaries own, or possess the right to use to the extent
necessary in their respective businesses, all material trade-
marks, trade names, copyrights, patents, patent rights, compu-
ter software, licenses and other Intangible Assets that are
used in the conduct of their businesses as now operated, and no
such Intangible Asset, to the best knowledge of Borrowers, con-
flicts with the valid trademark, trade name, copyright, patent,
patent right or Intangible Asset of any other Person to the
extent that such conflict constitutes a Material Adverse
Effect. Schedule 4.8 sets forth all trademarks, trade names
and trade styles used by Parent or any of its Subsidiaries at
any time within the five (5) year period ending on the Closing
Date.
4.9 Public Utility Holding Company Act. Neither any
of Borrowers nor any Restricted Subsidiary is a "holding
company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary com-
pany" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully
covered as to subject matter and amount (subject to applicable
deductibles and retentions) by insurance for which the insur-
ance carrier has not asserted lack of subject matter coverage
or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against Borrowers or any of
the Restricted Subsidiaries of less than $1,000,000,
(c) matters of an administrative nature not involving a claim
or charge against Borrowers or any of the Restricted Subsid-
iaries and (d) matters set forth in Schedule 4.10, there are no
actions, suits, proceedings or investigations pending as to
which Borrowers or any of the Restricted Subsidiaries have been
served or have received notice or, to the best knowledge of
Borrowers, threatened against or affecting Borrowers or any of
the Restricted Subsidiaries or any Property of any of them
before any Governmental Agency.
4.11 Binding Obligations. Each of the Loan
Documents to which any of Borrowers or the Significant
Subsidiaries is a Party will, when executed and delivered by
such Party, constitute the legal, valid and binding obligation
of such Party, enforceable against such Party in accordance
with its terms, except as enforcement may be limited by Debtor
Relief Laws, Gaming Laws or equitable principles relating to
the granting of specific performance and other equitable
remedies as a matter of judicial discretion.
4.12 No Default. No event has occurred and is
continuing that is a Default or Event of Default.
4.13 ERISA.
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all
material respects with ERISA and any other applicable
Laws to the extent that noncompliance could
reasonably be expected to have a Material Adverse
Effect;
(ii) such Pension Plan has not
incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA) that could
reasonably be expected to have a Material Adverse
Effect;
(iii) no "reportable event" (as defined
in Section 4043 of ERISA) has occurred that could
reasonably be expected to have a Material Adverse
Effect; and
(iv) none of Borrowers nor any of
their Subsidiaries has engaged in any non-exempt
"prohibited transaction" (as defined in Section 4975
of the Code) that could reasonably be expected to
have a Material Adverse Effect.
(b) None of Borrowers nor any of the Restricted
Subsidiaries has incurred or expects to incur any
withdrawal liability to any Multiemployer Plan that could
reasonably be expected to have a Material Adverse Effect.
4.14 Regulations G, T, U and X; Investment Company
Act. No part of the proceeds of any Loan hereunder will be
used to purchase or carry, or to extend credit to others for
the purpose of purchasing or carrying, any Margin Stock in
violation of Regulations G, T, U and X. Neither any of
Borrowers nor any of the Restricted Subsidiaries is or is
required to be registered as an "investment company" under the
Investment Company Act of 1940.
4.15 Disclosure. No written statement made by a
Senior Officer to the Managing Agent or any Bank in connection
with this Agreement, or in connection with any Loan, as of the
date thereof contained any untrue statement of a material fact
or omitted a material fact necessary to make the statement made
not misleading in light of all the circumstances existing at
the date the statement was made.
4.16 Tax Liability. Borrowers and the Restricted
Subsidiaries have filed all tax returns which are required to
be filed, and have paid, or made provision for the payment of,
all taxes with respect to the periods, Property or transactions
covered by said returns, or pursuant to any assessment received
by Borrowers or any of the Restricted Subsidiaries, except
(a) such taxes, if any, as are being contested in good faith by
appropriate proceedings and as to which adequate reserves have
been established and maintained and (b) immaterial taxes so
long as no material Property of Borrowers or any of the
Restricted Subsidiaries is in jeopardy of being seized, levied
upon or forfeited.
4.17 Projections. As of the Closing Date, to the
best knowledge of Borrowers, the assumptions set forth in the
Projections are reasonable and consistent with each other and
with all facts known to Borrowers, and the Projections are
reasonably based on such assumptions. Nothing in this Sec-
tion 4.17 shall be construed as a representation or covenant
that the Projections in fact will be achieved.
4.18 Hazardous Materials. Except as described in
Schedule 4.18, (a) none of Borrowers nor any of the Restricted
Subsidiaries at any time has disposed of, discharged, released
or threatened the release of any Hazardous Materials on, from
or under the Real Property in violation of any Hazardous
Materials Law that would individually or in the aggregate
constitute a Material Adverse Effect, (b) to the best knowledge
of Borrowers, no condition exists that violates any Hazardous
Material Law affecting any Real Property except for such
violations that would not individually or in the aggregate have
a Material Adverse Effect, (c) no Real Property or any portion
thereof is or has been utilized by Borrowers or any of the
Restricted Subsidiaries as a site for the manufacture of any
Hazardous Materials and (d) to the extent that any Hazardous
Materials are used, generated or stored by Borrowers or any of
the Restricted Subsidiaries on any Real Property, or trans-
ported to or from such Real Property by Borrowers or any of the
Restricted Subsidiaries, such use, generation, storage and
transportation are in compliance in all material respects with
all Hazardous Materials Laws.
4.19 Developed Properties. As of the Closing Date,
the facilities described on Schedule 4.19 comprise all of the
Developed Property owned by Borrowers and the Restricted
Subsidiaries.
4.20 Gaming Laws. Each of Borrowers and the
Restricted Subsidiaries is in compliance with all applicable
Gaming Laws in all respects which are material to the
operations, businesses and prospects of Borrowers and the
Restricted Subsidiaries, taken as a whole.
4.21 Security Interests. Upon the execution and
delivery of the Security Agreement, the Security Agreement will
create a valid first priority security interest in the Collat-
eral described therein securing the Obligations (subject only
to Permitted Encumbrances, Permitted Rights of Others, purchase
money liens permitted under Section 6.8(h) and matters
disclosed in Schedule 4.7 and to such qualifications and
exceptions as are contained in the Uniform Commercial Code with
respect to the priority of security interests perfected by
means other than the filing of a financing statement or with
respect to the creation of security interests in Property to
which Division 9 of the Uniform Commercial Code does not apply)
and all action necessary to perfect the security interests so
created, other than filing of the UCC-1 financing statements
delivered to the Managing Agent pursuant to Section 8.1 with
the appropriate Governmental Agency have been taken and
completed. Upon the execution and delivery of the Trademark
Collateral Assignment, the Trademark Collateral Assignment will
create a valid first priority collateral assignment of the
Collateral described therein securing the Obligations and all
action necessary to perfect the collateral assignment so
created, other than the filing thereof with the United States
Patent and Trademark Office, will have been taken and com-
pleted. Upon the execution and delivery of the Pledge Agree-
ment (Nevada Gaming), the Pledge Agreement (Nevada Gaming) will
create a valid first priority security interest in the Pledged
Collateral (Nevada Gaming) and upon delivery of the Pledged
Collateral (Nevada Gaming) to the Managing Agent (or its
designee) in the State of Nevada all action necessary to
perfect the security interest so created has been taken and
completed. Upon the execution and delivery of the Pledge
Agreement (General), the Pledge Agreement (General) will create
a valid first priority security interest in the Pledged Collat-
eral (General) and upon delivery of the Pledged Collateral
(General) to the Managing Agent (or its designee) all action
necessary to perfect the security interest so created has been
taken and completed. Upon the execution and delivery of each
of the Deeds of Trust, such Deed of Trust will create a valid
Lien in the Collateral described therein securing the
Obligations, other than those arising under Sections 4.18, 5.14
and 11.22, (subject only to Permitted Encumbrances, Permitted
Rights of Others and matters described in Schedule 4.7), and
all action necessary to perfect the Lien so created, other than
recordation or filing thereof with the appropriate Governmental
Agencies, will have been taken and completed.
<PAGE>
Article 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Advance remains unpaid, or any other
Obligation remains unpaid, or any portion of the Commitment
remains in force, Borrowers shall, and shall cause each of the
Restricted Subsidiaries to, unless the Managing Agent (with the
written approval of the Requisite Banks) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay
and discharge promptly all taxes, assessments and governmental
charges or levies imposed upon any of them, upon their respec-
tive Property or any part thereof and upon their respective
income or profits or any part thereof, except that Borrowers
and the Restricted Subsidiaries shall not be required to pay or
cause to be paid (a) any tax, assessment, charge or levy that
is not yet past due, or is being contested in good faith by
appropriate proceedings so long as the relevant entity has
established and maintains adequate reserves for the payment of
the same or (b) any immaterial tax so long as no material
Property of Borrowers or any of the Restricted Subsidiaries is
in jeopardy of being seized, levied upon or forfeited.
5.2 Preservation of Existence. Preserve and main-
tain their respective existences in the jurisdiction of their
formation and all material authorizations, rights, franchises,
privileges, consents, approvals, orders, licenses, permits, or
registrations from any Governmental Agency that are necessary
for the transaction of their respective business except (a) as
necessary to accomplish the TropWorld Consolidation, (b) where
the failure to so preserve and maintain the existence of any
Restricted Subsidiary and such authorizations, rights,
franchises, privileges, consents, approvals, orders, licenses,
permits, or registrations would not constitute a Material
Adverse Effect and (c) that a merger permitted by Section 6.3
shall not constitute a violation of this covenant; and qualify
and remain qualified to transact business in each jurisdiction
in which such qualification is necessary in view of their
respective business or the ownership or leasing of their
respective Properties except where the failure to so qualify or
remain qualified would not constitute a Material Adverse
Effect.
5.3 Maintenance of Properties. Maintain, preserve
and protect all of their respective Properties in good order
and condition, subject to wear and tear in the ordinary course
of business, and not permit any waste of their respective
Properties, except that the failure to maintain, preserve and
protect a particular item of Property that is not of
significant value, either intrinsically or to the operations of
Borrowers and the Restricted Subsidiaries, taken as a whole,
shall not constitute a violation of this covenant.
5.4 Maintenance of Insurance. Maintain liability,
casualty and other insurance (subject to customary deductibles
and retentions) with responsible insurance companies in such
amounts and against such risks as is carried by responsible
companies engaged in similar businesses and owning similar
assets in the general areas in which Borrowers and the
Restricted Subsidiaries operate and, in any event, such
insurance as may be required under the Deeds of Trust.
5.5 Compliance With Laws. Comply, within the time
period, if any, given for such compliance by the relevant
Governmental Agency or Agencies with enforcement authority,
with all Requirements of Law noncompliance with which con-
stitutes a Material Adverse Effect, except that Borrowers and
the Restricted Subsidiaries need not comply with a Requirement
of Law then being contested by any of them in good faith by
appropriate proceedings.
5.6 Inspection Rights. Upon reasonable notice, at
any time during regular business hours and as often as
reasonably requested (but not so as to materially interfere
with the business of Parent or any of its Subsidiaries) permit
the Managing Agent or any Bank, or any authorized employee,
agent or representative thereof, to examine, audit and make
copies and abstracts from the records and books of account of,
and to visit and inspect the Properties of, Parent and its
Subsidiaries and to discuss the affairs, finances and accounts
of Parent and its Subsidiaries with any of their officers, key
employees or accountants and, upon request, furnish promptly to
the Managing Agent or any Bank true copies of all financial
information made available to the board of directors or audit
committee of the board of directors of Parent.
5.7 Keeping of Records and Books of Account. Keep
adequate records and books of account reflecting all financial
transactions in conformity with Generally Accepted Accounting
Principles, consistently applied, and in material conformity
with all applicable requirements of any Governmental Agency
having regulatory jurisdiction over Borrowers or any of the
Restricted Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully
comply with all Contractual Obligations under all material
agreements, indentures, leases and/or instruments to which any
one or more of them is a party, whether such material agree-
ments, indentures, leases or instruments are with a Bank or
another Person, except for any such Contractual Obligations
(a) the performance of which would cause a Default or (b) then
being contested by any of them in good faith by appropriate
proceedings or if the failure to comply with such agreements,
indentures, leases or instruments does not constitute a
Material Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of Loans for
(a) retirement of all outstanding obligations under the Prior
ANJI Credit Facility and the Prior REI Credit Facility, (b) the
funding of New Ventures and/or (c) working capital and general
corporate purposes of Borrowers and the Restricted
Subsidiaries.
5.10 TropWorld Consolidation. Cause the TropWorld
Consolidation to occur within ten (10) Banking Days after the
date upon which the First Mortgage Notes are redeemed and
retired.
5.11 The TropWorld Property. Within ten (10)
Banking Days after the completion of the TropWorld
Consolidation, (a) cause the TropWorld Deeds of Trust to be
executed and delivered to the Managing Agent for recordation
and filing with the appropriate Governmental Agencies, (b)
cause the Unsecured Environmental Indemnity (New Jersey) to be
executed and delivered to the Managing Agent and (c) provide
the Managing Agent with (i) an ALTA lenders title insurance
policy issued by the Title Company insuring the Liens of
the TropWorld Deeds of Trust in such form and with such
endorsements as the Managing Agent reasonably may require,
subject only to Permitted Encumbrances and the title exceptions
set forth in Schedule 5.11, in an amount equal to the fair
market value of the TropWorld Property as determined by the
appraisals referred to in Section 8.1(a)(12), (but not, when
added to the amount of the title insurance policy described in
Section 8.1(a)(13), in excess of the Commitment) and (ii) such
title re-insurance agreements from other title insurance
companies as the Managing Agent may reasonably require.
5.12 Other Future Collateral. Upon the acquisition
by Borrowers or any Significant Subsidiary of (a) any capital
stock of a new Subsidiary, deliver the certificates evidencing
such capital stock in pledge to the Managing Agent pursuant to
the Pledge Agreement (Nevada Gaming) or Pledge Agreement
(General), as the case may be and (b) any fee simple interest
in real Property or any vessel, vehicle or other Property which
is not subject to the Lien of the Collateral Documents, execute
and deliver to the Managing Agent such Collateral Documents as
are appropriate therefor as requested by the Managing Agent to
create a Lien thereon securing the Obligations subject in
priority only to Permitted Encumbrances, purchase money liens,
if any, permitted under Section 6.8(h) and Liens existing
thereon prior to such acquisition (and not done in
contemplation thereof); provided, however, that such Collateral
Documents shall not be required if Parent delivers to the
Managing Agent promptly following any such acquisition an
Officers' Certificate stating that the aggregate fair market
value of such Property plus the aggregate fair market value of
all other Property (except (a) the capital stock and the assets
of ANI and (b) 51% of the capital stock and the assets of HRN)
owned by Borrowers and the Restricted Subsidiaries that is not
subject to the Lien of the Collateral Documents is less than
$10,000,000 and provided further that no such Collateral
Documents shall in any event be required with respect to the
Caruthersville Project or Evansville Project prior to
November 15, 1994.
5.13 New Significant Subsidiaries. Cause each of
its Restricted Subsidiaries which hereafter becomes a
Significant Subsidiary to execute and deliver to the Managing
Agent an instrument of joinder of the Subsidiary Guaranty,
Security Agreement and the Trademark Collateral Assignment.
5.14 Hazardous Materials Laws. Keep and maintain
all Real Property and each portion thereof in compliance in all
material respects with all applicable Hazardous Materials Laws
and promptly notify the Managing Agent in writing (attaching a
copy of any pertinent written material) of (a) any and all
material enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened in
writing by a Governmental Agency pursuant to any applicable
Hazardous Materials Laws, (b) any and all material claims made
or threatened in writing by any Person against Borrowers
relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from any Hazardous Materials and
(c) discovery by any Senior Officer of any of Borrowers of any
material occurrence or condition on any real Property adjoining
or in the vicinity of such Real Property that could reasonably
be expected to cause such Real Property or any part thereof to
be subject to any restrictions on the ownership, occupancy,
transferability or use of such Real Property under any
applicable Hazardous Materials Laws.
5.15 Intercompany Notes. Execute a promissory note
(in a form reasonably acceptable to the Managing Agent)
evidencing any Indebtedness of any of Borrowers or a Restricted
Subsidiary to any other Borrower or any Restricted Subsidiary
which is in an amount of $5,000,000 or more (except for any
such Indebtedness of Ambassador General Partnership or its
partners to Parent or any of its Subsidiaries that will be
discharged pursuant to the TropWorld Consolidation), and cause
each payee of such promissory note (except for any promissory
note pledged to secure the First Mortgage Notes)to deliver the
same to the Managing Agent, with an endorsement in blank, as
Pledged Collateral (General).<PAGE>
Article 6
NEGATIVE COVENANTS
So long as any Advance remains unpaid, or any other
Obligation remains unpaid, or any portion of the Commitment
remains in force, Borrowers shall not, and shall not permit any
of the Restricted Subsidiaries to, unless the Managing Agent
(with the written approval of the Requisite Banks or, if
required by Section 11.2, of all of the Banks) otherwise
consents:
6.1 Payment of Subordinated Obligations. Pay any
(a) principal (including sinking fund payments) or any other
amount (other than scheduled interest payments) with respect to
any Subordinated Obligation, or purchase or redeem (or offer to
purchase or redeem) any Subordinated Obligation, or deposit any
monies, securities or other Property with any trustee or other
Person to provide assurance that the principal or any portion
thereof of any Subordinated Obligation will be paid when due or
otherwise to provide for the defeasance of any Subordinated
Obligation or (b) scheduled interest on any Subordinated
Obligation unless the payment thereof is then permitted
pursuant to the terms of the Indenture governing such
Subordinated Obligation;
provided, however, that this Section shall not apply to
prohibit any payment consisting of the repurchase or redemption
of Subordinated Obligations to the extent necessary to prevent
a License Revocation if (i) no Default or Event of Default then
exists which will not be cured by such payment, (ii) the
purchase or redemption price paid is not in excess of the
amount specified in Section 907 of the New Subordinated Debt
Indenture and (iii) Borrowers have notified the Managing Agent
in writing of the necessity to invoke this proviso at least
ten (10) Banking Days (or such shorter period as may be
necessary in order to comply with a regulation or order of the
relevant Gaming Board) in advance.
6.2 Disposition of Property. Make any Disposition
of its Property, whether now owned or hereafter acquired,
except a Disposition of an Investment in an Unrestricted New
Venture Entity.
6.3 Mergers. Merge or consolidate with or into any
Person, except:
(a) mergers and consolidations of a Subsidiary
of any of Borrowers into Borrowers or a Restricted Subsid-
iary (with any of Borrowers or the Restricted Subsidiary
as the surviving entity) or of Borrowers or Restricted
Subsidiaries of Borrowers with each other, provided that
Borrowers and each of such Subsidiaries have executed such
amendments to the Loan Documents as the Managing Agent may
reasonably determine are appropriate as a result of such
merger; and
(b) a merger or consolidation of Borrowers or
any Restricted Subsidiary with any other Person, provided
that (i) either (A) any of Borrowers or the Restricted
Subsidiary is the surviving entity, or (B) the surviving
entity is a corporation organized under the Laws of a
State of the United States of America or the District of
Columbia and, as of the date of such merger or consoli-
dation, expressly assumes, by an appropriate instrument,
the Obligations of Borrowers or the Restricted Subsidiary,
as the case may be, (ii) giving effect thereto on a pro-
forma basis, no Default or Event of Default exists or
would result therefrom, and (iii) as a result thereof, no
Change in Control has occurred.
6.4 Hostile Acquisitions. Directly or indirectly
use the proceeds of any Loan in connection with the acquisition
of part or all of a voting interest of five percent (5%) or
more in any corporation or other business entity if such
acquisition is opposed by the board of directors or management
of such corporation or business entity.
6.5 Distributions. Make any Distribution, whether
from capital, income or otherwise, and whether in Cash or other
Property, except (a) Distributions by Borrowers or any
Restricted Subsidiary to any of Borrowers or any Restricted
Subsidiary, (b) scheduled and required Distributions with
respect to the Series B ESOP Convertible Preferred Stock of
Parent if no Default or Event of Default exists or would result
therefrom, and (c) dividends payable solely in Common Stock or
rights to purchase Common Stock; provided, however, that this
Section shall not apply to prohibit a Distribution consisting
of the repurchase or redemption of capital stock of Parent to
the extent necessary to prevent a License Revocation if (i) no
Default or Event of Default then exists which will not be cured
by such Distribution, (ii) the purchase or redemption price
paid is not in excess of the amount specified in article 12 of
Parent's articles of incorporation and (iii) Borrowers have
notified the Managing Agent in writing of the necessity to
invoke this proviso at least ten (10) Banking Days (or such
shorter period as may be necessary in order to comply with a
regulation or order of the relevant Gaming Board) in advance.
6.6 ERISA. (a) At any time, permit any Pension Plan
to: (i) engage in any non-exempt "prohibited
transaction" (as defined in Section 4975 of the Code); (ii) fail to comply
with ERISA or any other applicable Laws; (iii) incur any material
"accumulated funding deficiency" (as defined in Section 302 of
ERISA); or (iv) terminate in any manner, which, with respect to
each event listed above, could reasonably be expected to result
in a Material Adverse Effect, or (b) withdraw, completely or
partially, from any Multiemployer Plan if to do so could
reasonably be expected to result in a Material Adverse Effect.
6.7 Change in Nature of Business. Make any material
change in the nature of the business of Borrowers and the
Restricted Subsidiaries, taken as a whole; provided that the
acquisition of an ownership interest in one or more New
Ventures shall not be construed to violate this covenant.
6.8 Liens, Rights of Others and Negative Pledges.
Create, incur, assume or suffer to exist any Lien, Negative
Pledge or Right of Others of any nature upon or with respect to
any of their respective Properties, or engage in any sale and
leaseback transaction with respect to any of their respective
Properties, whether now owned or hereafter acquired, except:
(a) Permitted Encumbrances and Permitted Rights
of Others;
(b) Liens and Negative Pledges under the Loan
Documents;
(c) Liens and Negative Pledges existing on the
Closing Date and disclosed in Schedule 4.7 and any
renewals/extensions or amendments thereof; provided that
the obligations secured or benefited thereby are not
increased;
(d) Rights of Others existing on the Closing
Date and disclosed in Schedule 4.7;
(e) Rights of Others consisting of joint hold-
ings of an ownership interest in a New Venture Entity or
consisting of obligations of Borrowers or the Restricted
Subsidiaries to sell, or rights of other Persons to
purchase, the ownership interests of Borrowers and the
Restricted Subsidiaries in a New Venture Entity, which
obligations or rights were created substantially concur-
rently with the acquisition of such ownership interest in
the New Venture Entity;
(f) any Lien, Negative Pledge or Right of
Others on shares of any equity security or any warrant or
option to purchase an equity security or any security
which is convertible into an equity security issued by any
of Borrowers or any Restricted Subsidiary that holds,
directly or indirectly through a holding company or
otherwise, a license under any Gaming Law of the State of
Nevada; provided that this clause (f) shall apply only so
long as the Gaming Laws of the State of Nevada provide
that the creation of any restriction on the disposition of
any of such securities shall not be effective and, if such
Gaming Laws at any time cease to so provide, then this
clause (f) shall be of no further effect; and provided
further that if at any time Borrowers create or suffer to
exist a Lien or Negative Pledge covering such securities
in favor of the holder of any other Indebtedness, it will
(subject to any approval required under the Gaming Laws of
the State of Nevada) concurrently grant a pari-passu Lien
or Negative Pledge likewise covering such securities in
favor of the Managing Agent for the benefit of the Banks;
any of the Restricted Subsidiaries that were in existence
at the time of the acquisition of such Property and were
not created in contemplation of such acquisition;
(h) Liens securing Indebtedness permitted by
Section 6.9(e) on and limited to the capital assets
acquired, constructed or financed with the proceeds of
such Indebtedness or with the proceeds of any Indebtedness
directly or indirectly refinanced by such Indebtedness;
and
(i) any Lien, Negative Pledge or Right of
Others created by an agreement or instrument entered into
by Borrowers or a Restricted Subsidiary in the ordinary
course of its business which consists of a restriction on
the assignability, transfer or hypothecation of such
agreement or instrument;
provided, that this Section shall not apply to prohibit the
creation of a Right of Others requested by a Gaming Board in
favor of the Gaming Board or a Person designated by the Gaming
Board to the extent necessary to prevent a License Revocation
if (i) no Default or Event of Default then exists which will
not be cured by creation of the Right of Others and
(ii) Borrowers have notified the Managing Agent in writing of
the necessity to invoke this proviso at least ten (10) Banking
Days (or such shorter period as may be necessary in order to
comply with a regulation or order of the relevant Gaming Board)
in advance.
6.9 Indebtedness and Guaranty Obligations. Create,
incur or assume any Indebtedness or Guaranty Obligation except:
(a) Indebtedness and Guaranty Obligations
existing on the Closing Date and disclosed in Sched-
ule 6.9, and refinancings, renewals, extensions or
amendments that do not increase the amount thereof;
(b) Indebtedness and Guaranty Obligations under
the Loan Documents;
(c) Indebtedness and Guaranty Obligations owed
to any of Borrowers or any Restricted Subsidiary;
(d) Indebtedness under the TEGP Loan Agreement
and Guaranty Obligations in support thereof;
(e) Indebtedness consisting of Capital Lease
Obligations, or otherwise incurred to finance the purchase
or construction of capital assets (which shall be deemed
to exist if the Indebtedness is incurred at or within
90 days before or after the purchase or construction of
the capital asset), or to refinance any such Indebtedness,
provided that the aggregate principal amount of such
Indebtedness outstanding at any time does not exceed
$15,000,000;
(f) Indebtedness consisting of one or more Swap
Agreements; provided, that the aggregate notional amount
of Indebtedness covered by all Secured Swap Agreements
shall not exceed $180,000,000;
(g) Indebtedness of Parent that (i) is not
secured by a Lien on any assets of Borrowers or the
Restricted Subsidiaries, (ii) is subordinated to the
Obligations pursuant to subordination provisions substan-
tially identical in all substantive respects to those
contained in the Existing Subordinated Debt Indenture or
are determined by the Requisite Banks, in their sole
discretion, prior to the issuance thereof to be accept-
able, (iii) has no principal payment due, and no sinking
fund payment requirement, prior to December 31, 2002 and
(iv) is subject to representations, warranties, covenants,
events of default and other provisions which are substan-
tially identical in all substantive respects to those
contained in the Existing Subordinated Debt Indenture or
are determined by the Requisite Banks prior to the
issuance thereof to be reasonably (from the standpoint of
a senior lender) acceptable, provided that, (y) giving
effect to the issuance thereof, Borrowers would have been
in compliance with Section 6.13 as of the most recently-
ended Fiscal Quarter, and (z) the Banks shall not
unreasonably delay the making of any necessary
determination with respect to the matters described in
clauses (ii) and (iv);
(h) Guaranty Obligations in support of the
obligations of a Restricted Subsidiary; and
(i) Guaranty Obligations (including Completion
Guaranties) in support of the obligations of Persons other
than a Restricted Subsidiary provided that the obligations
under such Guaranty Obligations are subordinated in right
of payment to the Obligations pursuant to subordination
provisions acceptable to the Managing Agent.
6.10 Transactions with Affiliates. Enter into any
transaction of any kind with any Affiliate of Borrowers other
than (a) salary, bonus, employee stock option and other
compensation arrangements with directors or officers in the
ordinary course of business, (b) transactions that are fully
disclosed to the board of directors of Parent and expressly
authorized by a resolution of the board of directors of Parent
which is approved by a majority of the directors not having an
interest in the transaction, (c) transactions between or among
Borrowers and the Restricted Subsidiaries, and (d) transactions
on overall terms at least as favorable to Borrowers or the
Restricted Subsidiaries as would be the case in an arm's-length
transaction between unrelated parties of equal bargaining
power.
6.11 Tangible Net Worth. Permit Tangible Net Worth,
as of the last day of any Fiscal Quarter ending after the
Closing Date, to be less than the sum of (a) $305,000,000, plus
(b) an amount equal to 50% of Net Income earned in each Fiscal
Quarter ending after June 30, 1994 (with no deduction for a net
loss in any such Fiscal Quarter), plus (c) an amount equal to
75% of the aggregate increases in Stockholders' Equity of
Parent and the Restricted Subsidiaries after the Closing Date
by reason of the issuance and sale of capital stock of Parent
(including upon any conversion of debt securities of Parent
into such capital stock).
6.12 Debt Service. Permit Debt Service Coverage, as
of the last day of any Fiscal Quarter ending after the Closing
Date, to be less than the ratio set forth below opposite such
Fiscal Quarter or the period during which such Fiscal Quarter
ends:
Period Ratio
Closing Date through
First Fiscal Quarter 1995 1.25 to 1.00
Second Fiscal Quarter 1995 1.40 to 1.00
and thereafter
6.13 Leverage Ratio. Permit the Leverage Ratio, as
of the last day of any Fiscal Quarter ending after the Closing
Date, to be greater than the ratio set forth below opposite
such Fiscal Quarter or the period during which such Fiscal
Quarter ends:
Fiscal Quarter or Period Ratio
Closing Date through 4.50 to 1.00
Third Fiscal Quarter 1995
Fourth Fiscal Quarter 1995
through Third Fiscal
Quarter 1996 4.00 to 1.00
Fourth Fiscal Quarter 1996 3.50 to 1.00
First Fiscal Quarter 1997
and thereafter 3.25 to 1.00;
provided, however, that if the Evansville Commitment Date
occurs on or before December 31, 1995, the maximum permitted
ratios shall be as follows:
Fiscal Quarter or Period Ratio
Evansville Commitment Date 4.50 to 1.00
through Fourth Fiscal
Quarter 1994
First Fiscal Quarter 1995 through 4.75 to 1.00
Fourth Fiscal Quarter 1995
First Fiscal Quarter 1996 through 4.25 to 1.00
Second Fiscal Quarter 1996
Third Fiscal Quarter 1996 4.00 to 1.00
Fourth Fiscal Quarter 1996
through Third Fiscal
Quarter 1997 3.75 to 1.00
Fourth Fiscal Quarter 1997 and 3.25 to 1.00;
thereafter
provided further that, for each Fiscal Quarter or period set
forth above for which the permitted Leverage Ratio is greater
than 4.00 to 1.00, Borrowers may unilaterally, but permanently
and irrevocably, amend this Section to reduce the maximum
permitted Leverage Ratio for each such period or Fiscal Quarter
to 4.00 to 1.00 (and may thereby accelerate the occurrence of
the Leverage Benchmark Date) by delivering a writing addressed
to the Banks to the Managing Agent containing a covenant to
that effect (which writing shall be a Loan Document and shall
be in form and substance reasonably acceptable to the Managing
Agent). The delivery of such a writing shall not defer or
otherwise affect any subsequent scheduled reductions of the
maximum Leverage Ratio set forth above.
6.14 Capital Expenditures. Make, or become legally
obligated to make, any Capital Expenditure except:
(a) Maintenance Capital Expenditures in any
Fiscal Year not in excess of the sum of (i) $30,000,000
plus (ii) the amount, if any, by which $30,000,000 exceeds
Maintenance Capital Expenditures made by Borrowers and the
Restricted Subsidiaries in the immediately preceding
Fiscal Year;
(b) Capital Expenditures to the extent financed
by Indebtedness permitted under Section 6.9(e); and
(c) New Venture Capital Expenditures permitted
by Section 6.15.
6.15 New Venture Capital Expenditures. With respect
to New Venture Capital Expenditures:
(a) Make, or enter into any legally binding
commitment to make, any New Venture Capital Expenditure
if, giving effect thereto, the aggregate Basket Expendi-
tures made by Borrowers and the Restricted Subsidiaries
subsequent to the Closing Date would exceed the
New Venture Basket;
(b) Make, or enter into any legally binding
commitment to make, any New Venture Capital Expenditure if
the aggregate New Venture Capital Expenditures and New
Venture Investments reasonably anticipated with respect to
the related New Venture (or, in the case of an addition to
or improvement of a Developed Property, with respect to
such addition or improvement) will exceed $50,000,000
without first obtaining the written consent of the
Majority Banks except:
(i) the Evansville Project, provided
that (A) the aggregate New Venture Capital
Expenditures and New Venture Investments with respect
thereto do not exceed $115,000,000 and (B) the
Evansville Commitment Date occurs on or before
December 31, 1995;
(ii) the Caruthersville Project,
provided that the aggregate New Venture Capital
Expenditures and New Venture Investments with respect
thereto do not exceed $65,000,000; and
(iii) the Atlantic City Project,
provided that (A) the New Jersey Casino Reinvestment
Development Authority (herein "CRDA") has made a
legally binding commitment to provide financing
therefor in an amount not less than $17,000,000 (of
which not less than $10,000,000 shall be available to
Borrowers during the construction phase of the
Atlantic City Project), (B) the aggregate New Venture
Capital Expenditures and New Venture Investments with
respect thereto do not exceed the sum of
(I) $60,000,000 plus (II) the principal amount so
financed by the CRDA and (C) the Atlantic City
Project is commenced within the six (6) month period
following the receipt of the CRDA financing
commitment and in any event not later than June 30,
1995; or
(c) Make, or enter into any legally binding
commitment to make, any New Venture Capital Expenditure if
a Default or Event of Default then exists or would result
therefrom.
6.16 New Venture Investments. With respect to New
Venture Investments:
(a) Make, or enter into any legally binding
commitment to make, any New Venture Investment if, giving
effect thereto, the aggregate Basket Expenditures made by
Borrowers and the Restricted Subsidiaries subsequent to
the Closing Date would exceed the New Venture Basket;
(b) Make, or enter into any legally binding
commitment to make, any New Venture Investment if the
aggregate New Venture Capital Expenditures and New Venture
Investments reasonably anticipated with respect to the
related New Venture (or, in the case of an addition to or
improvement of a Developed Property, with respect to such
addition or improvement) will exceed $50,000,000 without
first obtaining the written consent of the Majority Banks
except:
(i) the Evansville Project, provided
that (A) the aggregate New Venture Capital
Expenditures and New Venture Investments with respect
thereto do not exceed $115,000,000 and (B) the
Evansville Commitment Date occurs on or before
December 31, 1995;
(ii) the Caruthersville Project,
provided that the aggregate New Venture Capital
Expenditures and New Venture Investments with respect
thereto do not exceed $65,000,000; and
(iii) the Atlantic City Project,
provided that (A) the New Jersey Casino Reinvestment
Development Authority (herein "CRDA") has made a
legally binding commitment to provide financing
therefor in an amount not less than $17,000,000 (of
which not less than $10,000,000 shall be available to
Borrowers during the construction phase of the
Atlantic City Project), (B) the aggregate New Venture
Capital Expenditures and New Venture Investments with
respect thereto do not exceed the sum of
(I) $60,000,000 plus (II) the principal amount so
financed by the CRDA and (C) the Atlantic City
Project is commenced within the six (6) month period
following the receipt of the CRDA financing
commitment and in any event not later than June 30,
1995;
(c) Make, or enter into any legally binding
commitment to make, any New Venture Investment if a
Default or Event of Default then exists or would result
therefrom; or
(d) Make any New Venture Investment in an
Unrestricted New Venture Entity if, giving effect thereto,
the aggregate New Venture Investments in all Unrestricted
New Venture Entities made subsequent to the Closing Date
would exceed $50,000,000.
6.17 Investments. Make or suffer to exist any
Investment, other than:
(a) Investments in existence on the Closing
Date and disclosed on Schedule 6.17;
(b) Investments consisting of Cash and Cash
Equivalents;
(c) Investments consisting of advances to
officers, directors and employees of Borrowers and the
Restricted Subsidiaries for travel, entertainment,
relocation and analogous ordinary business purposes;
(d) Investments of Borrowers in any of
Borrowers or in any Restricted Subsidiary and Investments
of any Restricted Subsidiary in any of Borrowers or
another Restricted Subsidiary;
(e) Investments consisting of or evidencing the
extension of credit to customers or suppliers of Borrowers
and the Restricted Subsidiaries in the ordinary course of
business and any Investments received in satisfaction or
partial satisfaction thereof;
(f) Investments received in connection with the
settlement of a bona fide dispute with another Person;
(g) Investments representing all or a portion
of the sales price of Property sold or services provided
to another Person;
(h) New Venture Investments permitted by
Section 6.16;
(i) Investments resulting from the acquisition
by Borrowers or any of the Restricted Subsidiaries of all
or a portion of another Person's ownership interest in a
New Venture Entity pursuant to an obligation or right of
such Person to sell, or an obligation or right of
Borrowers or any of its Restricted Subsidiaries to
purchase, such ownership interest, which obligation or
right was created substantially concurrently with the
acquisition of such ownership interest in the New Venture
Entity;
(j) Investments consisting of Guaranty
Obligations permitted by Section 6.9.
(k) Investments required to be made pursuant to
the New Jersey Community Redevelopment Act;
(l) Investments by Parent in TEGP required by
TEGP's Partnership Agreement or by the lease between TEGP
and HRN covering the real property and related personal
property known as the Tropicana Resort and Casino, in
either case as in effect on the date hereof; and
(m) Investments consisting of 100 shares or
less of publicly traded equity securities of Persons
engaged in any business in which Borrowers are engaged,
which Investments do not exceed $100,000 at any time.
6.18 Subsidiary Indebtedness. Permit (whether or
not otherwise permitted under Section 6.9) any Significant
Subsidiary to create, incur, assume or suffer to exist any
Indebtedness or Guaranty Obligation, except (a) Indebtedness
and Guaranty Obligations in existence on the Closing Date,
(b) the Subsidiary Guaranty, (c) Indebtedness owed to any of
Borrowers or another Restricted Subsidiary, (d) Capital Lease
and purchase money obligations of a Restricted Subsidiary in
respect of Property used by that Subsidiary, (e) Indebtedness
permitted under Section 6.9(d) and (f) other Indebtedness
incurred in the ordinary course of business not in excess, with
respect to any Significant Subsidiary, of $500,000.
6.19 Significant Subsidiaries. Permit any
Restricted Subsidiary that is, as of the Closing Date, a
Significant Subsidiary to cease being a Restricted Subsidiary.
6.20 Amendments to Subordinated Obligations. Amend
or modify any term or provision of any indenture, agreement or
instrument evidencing or governing any Subordinated Obligation
in any respect that will or may adversely affect the interests
of the Banks.
<PAGE>
Article 7
INFORMATION AND REPORTING REQUIREMENTS
7.1 Financial and Business Information. So long as
any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitment remains in force,
Borrowers shall, unless the Managing Agent (with the written
approval of the Requisite Banks) otherwise consents, at
Borrowers' sole expense, deliver to the Managing Agent for
distribution by it to the Banks, a sufficient number of copies
for all of the Banks of the following:
(a) As soon as practicable, and in any event by
the fifteenth Banking Day in the next following month, an
operating revenue report for the preceding calendar month
for each of TropWorld Casino and Entertainment Resort, the
Tropicana Resort and Casino and Ramada Express Hotel and
Casino (and, after completion thereof, any New Venture),
in a form reasonably acceptable to the Managing Agent,
together with a written narrative statement discussing any
significant trends reflected therein signed by a Senior
Officer of Parent;
(b) As soon as practicable, and in any event
within 60 days after the end of each Fiscal Quarter (other
than the fourth Fiscal Quarter in any Fiscal Year),
(i) the consolidated balance sheet of Parent and its
Subsidiaries as at the end of such Fiscal Quarter and the
consolidated statement of operations for such Fiscal
Quarter, and its statement of cash flows for the portion
of the Fiscal Year ended with such Fiscal Quarter and
(ii) the consolidating (in accordance with past consoli-
dating practices of Parent) balance sheets and statements
of operations as at and for the portion of the Fiscal Year
ended with such Fiscal Quarter, all in reasonable detail.
Such financial statements shall be certified by a Senior
Officer of Parent as fairly presenting the financial
condition, results of operations and cash flows of Parent
and its Subsidiaries in accordance with Generally Accepted
Accounting Principles (other than footnote disclosures),
consistently applied, as at such date and for such
periods, subject only to normal year-end accruals and
audit adjustments;
(c) As soon as practicable, and in any event
within 45 days after the end of each Fiscal Quarter, a
Pricing Certificate setting forth a preliminary
calculation of the Annualized Funded Debt Ratio as of the
last day of such Fiscal Quarter, and providing reasonable
detail as to the calculation thereof, which calculations
shall be based on the preliminary unaudited financial
statements of Parent and its Subsidiaries for such Fiscal
Quarter, and as soon as practicable thereafter, in the
event of any material variance in the actual calculation
of the Annualized Funded Debt Ratio from such preliminary
calculation, a revised Pricing Certificate setting forth
the actual calculation thereof;
(d) As soon as practicable, and in any event
within 105 days after the end of each Fiscal Year, (i) the
consolidated balance sheet of Parent and its Subsidiaries
as at the end of such Fiscal Year and the consolidated
statements of operations, stockholders' equity and cash
flows, in each case of Parent and its Subsidiaries for
such Fiscal Year and (ii) consolidating (in accordance
with past consolidating practices of Parent) balance
sheets and statements of operations, in each case as at
the end of and for the Fiscal Year, all in reasonable
detail. Such financial statements shall be prepared in
accordance with Generally Accepted Accounting Principles,
consistently applied, and such consolidated balance sheet
and consolidated statements shall be accompanied by a
report of independent public accountants of recognized
standing selected by Parent and reasonably satisfactory to
the Requisite Banks, which report shall be prepared in
accordance with generally accepted auditing standards as
at such date, and shall not be subject to any qualifica-
tions or exceptions as to the scope of the audit nor to
any other qualification or exception determined by the
Requisite Banks in their good faith business judgment to
be adverse to the interests of the Banks. Such
accountants' report shall be accompanied by a certificate
stating that, in making the examination pursuant to gener-
ally accepted auditing standards necessary for the certi-
fication of such financial statements and such report,
such accountants have obtained no knowledge of any Default
or, if, in the opinion of such accountants, any such
Default shall exist, stating the nature and status of such
Default, and stating that such accountants have reviewed
Parent's financial calculations as at the end of such
Fiscal Year (which shall accompany such certificate) under
Sections 6.11 through 6.13, have read such Sections
(including the definitions of all defined terms used
therein) and that nothing has come to the attention of
such accountants in the course of such examination that
would cause them to believe that the same were not
calculated by Parent in the manner prescribed by this
Agreement;
(e) As soon as practicable, and in any event
within 45 days after the commencement of each Fiscal Year,
a budget and projection by Fiscal Quarter for that Fiscal
Year and by Fiscal Year for the next four succeeding
Fiscal Years, including for the first such Fiscal Year,
projected consolidated balance sheets, statements of
operations and statements of cash flow and, for the second
and third such Fiscal Years, projected consolidated
condensed balance sheets and statements of operations and
cash flows, of Parent and its Subsidiaries, all in
reasonable detail;
(f) Promptly after request by the Managing
Agent or any Bank, copies of any detailed audit reports,
management letters or recommendations submitted to the
board of directors (or the audit committee of the board of
directors) of Borrowers by independent accountants in
connection with the accounts or books of Parent or any of
its Subsidiaries, or any audit of any of them;
(g) As soon as practicable, and in any event
within 45 days (or, in the case of the fourth Fiscal
Quarter in each Fiscal Year, 90 days) after the end of
each Fiscal Quarter, a written report, in form and detail
reasonably acceptable to the Managing Agent, with respect
to the status of each New Venture, including the amounts
of New Venture Capital Expenditures and New Venture
Investments made, and reasonably anticipated to be made,
with respect thereto;
(h) Promptly after the same are available,
copies of each annual report, proxy or financial statement
or other report or communication sent to the stockholders
of Parent, and copies of all annual, regular, periodic and
special reports and registration statements which Parent
may file or be required to file with the Securities and
Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, and not
otherwise required to be delivered to the Banks pursuant
to other provisions of this Section 7.1;
(i) Promptly after the same are available,
copies of the Nevada "Regulation 6.090 Report" and
"6-A Report" and the New Jersey "Annual Report", and
copies of any written communication to Borrowers or any of
the Restricted Subsidiaries from any Gaming Board advising
it of a violation of or non-compliance with any Gaming Law
by Borrowers or any of the Restricted Subsidiaries;
(j) Promptly after request by the Managing
Agent or any Bank, copies of any other report or other
document that was filed by Borrowers or any of the
Restricted Subsidiaries with any Governmental Agency;
(k) Promptly upon a Senior Officer becoming
aware, and in any event within ten (10) Banking Days after
becoming aware, of the occurrence of any (i) "reportable
event" (as such term is defined in Section 4043 of ERISA)
or (ii) "prohibited transaction" (as such term is defined
in Section 406 of ERISA or Section 4975 of the Code) in
connection with any Pension Plan or any trust created
thereunder, telephonic notice specifying the nature
thereof, and, no more than five (5) Banking Days after
such telephonic notice, written notice again specifying
the nature thereof and specifying what action Borrowers or
any of the Restricted Subsidiaries is taking or proposes
to take with respect thereto, and, when known, any action
taken by the Internal Revenue Service with respect
thereto;
(l) As soon as practicable, and in any event
within two (2) Banking Days after a Senior Officer becomes
aware of the existence of any condition or event which
constitutes a Default or Event of Default, telephonic
notice specifying the nature and period of existence
thereof, and, no more than two (2) Banking Days after such
telephonic notice, written notice again specifying the
nature and period of existence thereof and specifying what
action Borrowers or any of its Restricted Subsidiaries are
taking or propose to take with respect thereto;
(m) Promptly upon a Senior Officer becoming
aware that (i) any Person has commenced a legal proceeding
with respect to a claim against Borrowers or any of the
Restricted Subsidiaries that is $5,000,000 or more in
excess of the amount thereof that is fully covered by
insurance, (ii) any creditor or lessor under a written
credit agreement or material lease has asserted a default
thereunder on the part of Borrowers or any of the
Restricted Subsidiaries, (iii) any Person has commenced a
legal proceeding with respect to a claim against Borrowers
or any of the Restricted Subsidiaries under a contract
that is not a credit agreement or material lease in
excess of $5,000,000 or which otherwise may reasonably be
expected to result in a Material Adverse Effect, (iv) any
labor union has notified Borrowers of its intent to strike
Borrowers or any of the Restricted Subsidiaries on a date
certain and such strike would involve more than
100 employees of Borrowers and the Restricted Subsidia-
ries, or (v) any Gaming Board has indicated its intent to
consider or act upon a License Revocation or a fine or
penalty of $1,000,000 or more with respect to Borrowers or
any of the Restricted Subsidiaries, a written notice
describing the pertinent facts relating thereto and what
action Borrowers or the Restricted Subsidiaries are taking
or propose to take with respect thereto; and
(n) Such other data and information as from
time to time may be reasonably requested by the Managing
Agent, any Bank (through the Managing Agent) or the
Requisite Banks.
7.2 Compliance Certificates. So long as any Advance
remains unpaid, or any other Obligation remains unpaid or
unperformed, or any portion of the Commitment remains outstand-
ing, Borrowers shall, at Borrowers' sole expense, deliver to
the Managing Agent for distribution by it to the Banks con-
currently with the financial statements required pursuant to
Sections 7.1(b) and 7.1(d), Compliance Certificates signed by a
Senior Officer.
<PAGE>
Article 8
CONDITIONS
8.1 Initial Advances, Etc.. The obligation of each
Bank to make the initial Advance to be made by it, or the
obligation of the Issuing Bank to issue the initial Letter of
Credit (as applicable), is subject to the following conditions
precedent, each of which shall be satisfied prior to the making
of the initial Advances (unless all of the Banks, in their sole
and absolute discretion, shall agree otherwise):
(a) The Managing Agent shall have received all
of the following, each of which shall be originals unless
otherwise specified, each properly executed by a
Responsible Official of each party thereto, each dated as
of the Closing Date and each in form and substance
satisfactory to the Managing Agent and its legal counsel
(unless otherwise specified or, in the case of the date of
any of the following, unless the Managing Agent otherwise
agrees or directs):
(1) at least one (1) executed counterpart of
this Agreement, together with arrangements satisfac-
tory to the Managing Agent for additional executed
counterparts, sufficient in number for distribution
to the Banks and Borrowers;
(2) Notes executed by Borrowers in favor of
each Bank, each in a principal amount equal to that
Bank's Pro Rata Share of the Commitment;
(3) the Swing Line Documents;
(4) the Subsidiary Guaranty executed by each
Significant Subsidiary;
(5) the Security Agreement executed by
Borrowers and each Significant Subsidiary;
(6) such financing statements on Form UCC-1
executed by Borrowers and each Significant Subsidiary
with respect to the Security Agreement as the
Managing Agent may request;
(7) the Trademark Collateral Assignment
executed by Borrowers and each Significant
Subsidiary;
(8) the Pledge Agreement (Nevada Gaming)
executed by Parent and the Company, together with the
Pledged Collateral (Nevada Gaming) accompanied by
appropriate stock powers endorsed in blank;
(9) the Pledge Agreement (General) executed by
Borrowers and the Restricted Subsidiaries, together
with the Pledged Collateral (General) and accompanied
by appropriate stock powers and note endorsements
endorsed in blank;
(10) the Ramada Express Deed of Trust executed
by REI;
(11) with respect to Borrowers and each
Significant Subsidiary, such documentation as the
Managing Agent may require to establish the due
organization, valid existence and good standing of
Borrowers and each such Subsidiary, its qualification
to engage in business in each material jurisdiction
in which it is engaged in business or required to be
so qualified, its authority to execute, deliver and
perform any Loan Documents to which it is a Party,
the identity, authority and capacity of each
Responsible Official thereof authorized to act on its
behalf, including certified copies of articles of
incorporation and amendments thereto, bylaws and
amendments thereto, certificates of good standing
and/or qualification to engage in business, tax
clearance certificates, certificates of corporate
resolutions, incumbency certificates, Certificates of
Responsible Officials, and the like;
(12) the Opinions of Counsel;
(13) written appraisals by a qualified indepen-
dent appraiser acceptable to the Managing Agent and
complying in all respects with FIRREA of the Ramada
Express Property and the TropWorld Property that
reflect an aggregate fair market value thereof of not
less than $350,000,000;
(14) assurances from the Title Company that it
is prepared to issue its ALTA lenders policy insuring
the Lien of the Ramada Express Deed of Trust in an
amount not less than the fair market value of the
Ramada Express Property as determined by the forego-
ing appraisal, and insuring (as of the execution and
delivery of the TropWorld Property Deeds of Trust
pursuant to Section 5.11) the Liens of the TropWorld
Deeds of Trust in an amount not less than the fair
market value of the TropWorld Property as determined
by the foregoing appraisal (provided, however, that
the aggregate title insurance amount shall not exceed
the Commitment), subject only to such exceptions as
are reasonably acceptable to the Managing Agent, with
such title policy endorsements as the Managing Agent
may reasonably require and with such assurances as
the Managing Agent may reasonably require from title
re-insurers acceptable to the Managing Agent;
(15) "Phase I" environmental reports with
respect to the Ramada Express Property and TropWorld
Property prepared by a qualified independent environ-
mental expert acceptable to the Managing Agent,
together with a Certificate of a Senior Officer of
Borrowers to the effect that no event or circumstance
has occurred since the dates thereof that would cause
such reports to be inaccurate in any respect that is
materially adverse to the interests of the Banks;
(16) a certificate of insurance issued by
Borrowers' insurance carrier or agent with respect to
the insurance required to be maintained pursuant to
the Ramada Express Deed of Trust, together with
lenders' loss payable endorsements thereof on
Form 438BFU or other form acceptable to the Managing
Agent;
(17) such assurances as the Managing Agent deems
appropriate that the relevant Gaming Boards have
approved the transactions contemplated by the Loan
Documents to the extent that such approval is
required by applicable Gaming Laws;
(18) written evidence that the Prior ANJI Credit
Facility and the Prior REI Credit Facility have been
or will be concurrently terminated and all Liens
securing such facilities have been or will be
concurrently released;
(19) a Pricing Certificate as of the last day of
the most recently ended Fiscal Quarter;
(20) a Certificate of a Senior Officer
certifying that the attached copies of the Existing
Subordinated Debt Indenture and the New Subordinated
Debt Indenture are true copies;
(21) a Certificate of a Senior Officer certify-
ing that incurrence by Borrowers of the Obligations
will not violate the Existing Subordinated Debt
Indenture or the New Subordinated Debt Indenture;
(22) a Certificate of a Responsible Official
signed by a Senior Officer of Parent certifying that
the conditions specified in Sections 8.1(l) and
8.1(m) have been satisfied; and
(23) such other assurances, certificates, docu-
ments, consents or opinions as the Managing Agent
reasonably may require.
(b) The arrangement fee payable pursuant to
Section 3.2 shall have been paid.
(c) The upfront fees payable pursuant to
Section 3.3 shall have been paid.
(d) The supplemental upfront fees payable
pursuant to Section 3.4 shall have been paid.
(e) Any agency fees payable on the Closing Date
pursuant to Section 3.7 shall have been paid.
(f) The reasonable costs and expenses of the
Managing Agent in connection with the preparation of the
Loan Documents payable pursuant to Section 11.3, and
invoiced to Borrowers prior to the Closing Date, shall
have been paid.
(g) The TEGP Loan Agreement shall be
concurrently assigned to the Banks (in their capacity as
Banks under the TEGP Loan Agreement).
(h) Parent shall have received, or shall
concurrently receive, net cash proceeds of not less than
$125,000,000 from the issuance and sale of the
New Subordinated Debt.
(i) The New Subordinated Debt Indenture shall
either conform in all material respects to the form
thereof filed by Parent with the Securities and Exchange
Commission on June 16, 1994 or be in a form acceptable to
the Banks.
(j) Parent shall have delivered to the trustees
under the Existing Subordinated Debt Indenture and the
New Subordinated Debt Indenture a written statement
designating the Obligations as "Designated Senior
Indebtedness" under such Indentures.
(k) The trustee under the indenture governing
the First Mortgage Notes shall have given irrevocable
written notice to the holders of the First Mortgage Notes
of the redemption thereof in their entirety as of a date
not later than November 30, 1994.
(l) The representations and warranties of
Borrowers contained in Article 4 shall be true and
correct.
(m) Borrowers and any other Parties shall be in
compliance with all the terms and provisions of the Loan
Documents, and giving effect to the initial Advance (or
initial Letter of Credit, as applicable) no Default or
Event of Default shall have occurred and be continuing.
(n) All legal matters relating to the Loan
Documents shall be satisfactory to Sheppard, Mullin,
Richter & Hampton, special counsel to the Managing Agent.
(o) The Closing Date shall have occurred on or
before October 31, 1994.
8.2 Availability of Reserve Amount. The obligation
of each Bank to make any Advance, the obligation of the Issuing
Bank to issue any Letter of Credit, and the obligation of the
Swing Line Bank to make any Swing Line Loan which would
increase the sum of (i) principal amount outstanding under the
Notes plus (ii) the Aggregate Effective Amount of all
outstanding Letters of Credit plus (iii) the Swing Line
Outstandings to an amount in excess of an amount equal to the
then applicable Commitment minus the Reserve Amount is subject
to the conditions precedent (and only the conditions precedent)
that (unless all of the Banks, in their sole and absolute
discretion, shall agree otherwise) (a) the conditions precedent
set forth in Section 8.1 shall have been satisfied on the
Closing Date, (b) the First Mortgage Notes shall have been, or
will concurrently be, redeemed, (c) ANJI and each Significant
Subsidiary owning of record any portion of the TropWorld
Property shall have executed and delivered the TropWorld Deeds
of Trust and the Unsecured Environmental Indemnity (New Jersey)
pursuant to Section 5.11 and (d) the Title Company shall have
confirmed its assurance referred to in Section 8.1(a)(13).
8.3 Acquisition of Future Collateral. The
obligation of each Bank to make any Advance to be used to
acquire any asset which is required pursuant to Section 5.12 to
be delivered as Collateral hereunder is subject to the condi-
tion precedent that (unless the Requisite Banks, in their sole
and absolute discretion, shall agree otherwise) Borrower and
the applicable Significant Subsidiaries concurrently execute
and deliver such Collateral Documents as are required by
Section 5.12 with respect to such asset.
8.4 Any Increasing Advance, Etc. The obligation of
each Bank to make any Advance which would increase the prin-
cipal amount outstanding under the Notes (other than the
initial Advance pursuant to Section 8.1), and the obligation of
the Issuing Bank to issue a Letter of Credit, is subject to the
following conditions precedent (unless the Requisite Banks, in
their sole and absolute discretion, shall agree otherwise):
(a) except (i) for representations and
warranties which expressly speak as of a particular date
or are no longer true and correct as a result of a change
which is permitted by this Agreement or (ii) as disclosed
by Borrowers and approved in writing by the Requisite
Banks, the representations and warranties contained in
Article 4 (other than Sections 4.4(a), 4.6 (first
sentence), 4.10, 4.17 and 4.19) shall be true and correct
on and as of the date of the Advance as though made on
that date;
(b) other than matters described in
Schedule 4.10 or not required as of the Closing Date to be
therein described, there shall not be then pending or
threatened any action, suit, proceeding or investigation
against or affecting Borrowers or any of the Restricted
Subsidiaries or any Property of any of them before any
Governmental Agency that constitutes a Material Adverse
Effect;
(c) the Managing Agent shall have timely
received a Request for Loan in compliance with Article 2
(or telephonic or other request for Loan referred to in
the second sentence of Section 2.1(b), if applicable) or
the Issuing Bank shall have received a Request for Letter
of Credit, as the case may be, in compliance with
Article 2; and
(d) the Managing Agent shall have received, in
form and substance satisfactory to the Managing Agent,
such other assurances, certificates, documents or consents
related to the foregoing as the Managing Agent or
Requisite Banks reasonably may require.
8.5 Any Advance. The obligation of each Bank to
make any Advance (other than an Alternate Base Rate Advance
with respect to an Alternate Base Rate Loan which, if made,
would not increase the outstanding principal Indebtedness
evidenced by the Notes) is subject to the condition precedent
that the Managing Agent shall have timely received a Request
for Loan in compliance with Article 2 (or telephonic or other
request for Loan referred to in the second sentence of
Section 2.1(b), if applicable).
<PAGE>
Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
9.1 Events of Default. The existence or occurrence
of any one or more of the following events, whatever the reason
therefor and under any circumstances whatsoever, shall consti-
tute an Event of Default:
(a) Borrowers fail to pay any principal on any
of the Notes, or any portion thereof, on the date when
due; or
(b) Borrowers fail to pay any interest on any
of the Notes, or any fees under Sections 3.5, 3.6 or 3.7,
or any portion thereof, within five (5) Banking Days after
the date when due; or fail to pay any other fee or amount
payable to the Banks under any Loan Document, or any por-
tion thereof, within five (5) Banking Days after demand
therefor; or
(c) Borrowers fail to comply with any of the
covenants contained in Article 6; or
(d) Borrowers fail to comply with
Section 7.1(l) in any respect that is materially adverse
to the interests of the Banks; or
(e) Borrowers, any of the Significant Subsid-
iaries or any other Party fails to perform or observe any
other covenant or agreement (not specified in clause (a),
(b), (c) or (d) above) contained in any Loan Document on
its part to be performed or observed within ten (10)
Banking Days after the giving of notice by the Managing
Agent on behalf of the Requisite Banks of such Default; or
(f) Any representation or warranty of Borrowers
or any of the Significant Subsidiaries made in any Loan
Document, or in any certificate or other writing delivered
by Borrowers or such Significant Subsidiary pursuant to
any Loan Document, proves to have been incorrect when made
or reaffirmed in any respect that is materially adverse to
the interests of the Banks; or
(g) Borrowers or any of the Restricted Subsid-
iaries (i) fails to pay the principal, or any principal
installment, of any present or future indebtedness for
borrowed money of $5,000,000 or more, or any guaranty of
present or future indebtedness for borrowed money of
$5,000,000 or more, on its part to be paid, when due (or
within any stated grace period), whether at the stated
maturity, upon acceleration, by reason of required pre-
payment or otherwise or (ii) fails to perform or observe
any other term, covenant or agreement on its part to be
performed or observed, or suffers any event of default to
occur, in connection with any present or future indebted-
ness for borrowed money of $5,000,000 or more, or of any
guaranty of present or future indebtedness for borrowed
money of $5,000,000 or more, if as a result of such
failure or sufferance any holder or holders thereof (or an
agent or trustee on its or their behalf) has the right to
declare such indebtedness due before the date on which it
otherwise would become due or the right to require
Borrowers or any Restricted Subsidiary to redeem or
purchase, or offer to redeem or purchase, all or any
portion of such indebtedness; or
(h) Any event occurs which gives the holder or
holders of any Subordinated Obligation (or an agent or
trustee on its or their behalf) the right to declare such
Subordinated Obligation due before the date on which it
otherwise would become due, or the right to require the
issuer thereof to redeem or purchase, or offer to redeem
or purchase, all or any portion of any Subordinated Obli-
gation; or the trustee for, or any holder of, a Subordi-
nated Obligation breaches any subordination provision
applicable to such Subordinated Obligation; or
(i) Any Loan Document, at any time after its
execution and delivery and for any reason other than the
agreement or action (or omission to act) of the Managing
Agent or the Banks or satisfaction in full of all the
Obligations ceases to be in full force and effect or is
declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any respect which,
in any such event in the reasonable opinion of the Requi-
site Banks, is materially adverse to the interests of the
Banks; or any Party thereto denies in writing that it has
any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind
same; or
(j) A final judgment against any of Borrowers
or any of the Restricted Subsidiaries is entered for the
payment of money in excess of $1,000,000 and, absent
procurement of a stay of execution, such judgment remains
unsatisfied for thirty (30) calendar days after the date
of entry of judgment, or in any event later than five (5)
days prior to the date of any proposed sale thereunder; or
any writ or warrant of attachment or execution or similar
process is issued or levied against all or any material
part of the Property of any such Person and is not
released, vacated or fully bonded within thirty (30)
calendar days after its issue or levy; or
(k) Any of Borrowers or any of the Significant
Subsidiaries institutes or consents to the institution of
any proceeding under a Debtor Relief Law relating to it or
to all or any material part of its Property, or is unable
or admits in writing its inability to pay its debts as
they mature, or makes an assignment for the benefit of
creditors; or applies for or consents to the appointment
of any receiver, trustee, custodian, conservator, liqui-
dator, rehabilitator or similar officer for it or for all
or any material part of its Property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator
or similar officer is appointed without the application or
consent of that Person and the appointment continues
undischarged or unstayed for sixty (60) calendar days; or
any proceeding under a Debtor Relief Law relating to any
such Person or to all or any part of its Property is
instituted without the consent of that Person and con-
tinues undismissed or unstayed for sixty (60) calendar
days; or
(l) The occurrence of an Event of Default (as
such term is or may hereafter be specifically defined in
any other Loan Document) under any other Loan Document; or
(m) The occurrence of an Event of Default (as
such term is defined in the TEGP Loan Agreement) under the
TEGP Loan Agreement; or
(n) A final judgment is entered by a court of
competent jurisdiction that any Subordinated Obligation is
not subordinated in accordance with its terms to the
Obligations; or
(o) Any Pension Plan maintained by Borrowers or
any of its Restricted Subsidiaries is determined to have a
material "accumulated funding deficiency" as that term is
defined in Section 302 of ERISA and the result is a
Material Adverse Effect; or
(p) The occurrence of a License Revocation that
continues for three (3) consecutive calendar days
affecting gaming operations accounting for five
percent (5%) or more of the consolidated gross revenues of
Parent and the Restricted Subsidiaries.
9.2 Remedies Upon Event of Default. Without limit-
ing any other rights or remedies of the Managing Agent or the
Banks provided for elsewhere in this Agreement, or the other
Loan Documents, or by applicable Law, or in equity, or
otherwise:
(a) Upon the occurrence, and during the continuance,
of any Event of Default other than an Event of Default
described in Section 9.1(k):
(1) the Commitment to make Advances, the obli-
gation of the Issuing Bank to issue Letters of Credit
and all other obligations of the Managing Agent or
the Banks and all rights of Borrowers and any other
Parties under the Loan Documents shall be suspended
without notice to or demand upon Borrowers, which are
expressly waived by Borrowers, except that all of the
Banks or the Requisite Banks (as the case may be, in
accordance with Section 11.2) may waive an Event of
Default or, without waiving, determine, upon terms
and conditions satisfactory to the Banks or Requisite
Banks, as the case may be, to reinstate the
Commitment and such other obligations and rights and
make further Advances, and cause the Issuing Bank to
issue further Letters of Credit which waiver or
determination shall apply equally to, and shall be
binding upon, all the Banks;
(2) the Issuing Bank may, with the approval of
the Managing Agent on behalf of the Requisite Banks,
demand immediate payment by Borrowers of an amount
equal to the aggregate amount of all outstanding
Letters of Credit to be held by the Issuing Bank in
an interest-bearing cash collateral account as
collateral hereunder; and
(3) the Requisite Banks may request the
Managing Agent to, and the Managing Agent thereupon
shall, terminate the Commitment and/or declare all or
any part of the unpaid principal of all Notes, all
interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents to be
forthwith due and payable, whereupon the same shall
become and be forthwith due and payable, without
protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are
expressly waived by Borrowers.
(b) Upon the occurrence of any Event of Default
described in Section 9.1(k):
(1) the Commitment to make Advances, the obli-
gation of the Issuing Bank to issue Letters of Credit
and all other obligations of the Managing Agent or
the Banks and all rights of Borrowers and any other
Parties under the Loan Documents shall terminate
without notice to or demand upon Borrowers, which are
expressly waived by Borrowers, except that all of the
Banks (or, in the case that such an Event of Default
affects one Significant Subsidiary, but not any of
the Borrowers or the other Significant Subsidiaries,
the Requisite Banks) may waive the Event of Default
or, without waiving, determine, upon terms and
conditions satisfactory to all the Banks, to
reinstate the Commitment and such other obligations
and rights and make further Advances and to cause the
Issuing Bank to issue further Letters of Credit,
which determination shall apply equally to, and shall
be binding upon, all the Banks;
(2) an amount equal to the aggregate amount of
all outstanding Letters of Credit shall be immedi-
ately due and payable to the Issuing Bank without
notice to or demand upon Borrowers, which are
expressly waived by Borrower, to be held by the
Issuing Bank in an interest-bearing cash collateral
account as collateral hereunder; and
(3) the unpaid principal of all Notes, all
interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents shall be
forthwith due and payable, without protest, present-
ment, notice of dishonor, demand or further notice of
any kind, all of which are expressly waived by
Borrowers.
(c) Upon the occurrence of any Event of
Default, the Banks and the Managing Agent, or any of them,
without notice to (except as expressly provided for in any
Loan Document) or demand upon Borrowers, which are
expressly waived by Borrowers (except as to notices
expressly provided for in any Loan Document), may proceed
(but only with the consent of the Requisite Banks) to
protect, exercise and enforce their rights and remedies
under the Loan Documents against Borrowers and any other
Party and such other rights and remedies as are provided
by Law or equity.
(d) The order and manner in which the Banks'
rights and remedies are to be exercised shall be deter-
mined by the Requisite Banks in their sole discretion, and
all payments received by the Managing Agent and the Banks,
or any of them, shall be applied first to the costs and
expenses (including reasonable attorneys' fees and
disbursements and the reasonably allocated costs of
attorneys employed by the Managing Agent or by any Bank)
of the Managing Agent and of the Banks, and thereafter
paid pro rata to the Banks in the same proportions that
the aggregate Obligations owed to each Bank under the Loan
Documents bear to the aggregate Obligations owed under the
Loan Documents to all the Banks, without priority or
preference among the Banks. Regardless of how each Bank
may treat payments for the purpose of its own accounting,
for the purpose of computing Borrowers' Obligations here-
under and under the Notes, payments shall be applied
first, to the costs and expenses of the Managing Agent and
the Banks, as set forth above, second, to the payment of
accrued and unpaid interest due under any Loan Documents
to and including the date of such application (ratably,
and without duplication, according to the accrued and
unpaid interest due under each of the Loan Documents), and
third, to the payment of all other amounts (including
principal and fees) then owing to the Managing Agent or
the Banks under the Loan Documents. Amounts due to a Bank
under a Secured Swap Agreement shall be considered a
principal amount for purposes of the preceding sentence.
No application of payments will cure any Event of Default,
or prevent acceleration, or continued acceleration, of
amounts payable under the Loan Documents, or prevent the
exercise, or continued exercise, of rights or remedies of
the Banks hereunder or thereunder or at Law or in equity.
<PAGE>
Article THE MANAGING AGENT
10.1 Appointment and Authorization. Subject to
Section 10.8, each Bank hereby irrevocably appoints and
authorizes the Managing Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Documents
as are delegated to the Managing Agent by the terms thereof or
are reasonably incidental, as determined by the Managing Agent,
thereto. This appointment and authorization is intended solely
for the purpose of facilitating the servicing of the Loans and
does not constitute appointment of the Managing Agent as
trustee for any Bank or as representative of any Bank for any
other purpose and, except as specifically set forth in the Loan
Documents to the contrary, the Managing Agent shall take such
action and exercise such powers only in an administrative and
ministerial capacity.
10.2 Managing Agent and Affiliates. Bank of America
National Trust and Savings Association (and each successor
Managing Agent) has the same rights and powers under the Loan
Documents as any other Bank and may exercise the same as though
it were not the Managing Agent, and the term "Bank" or "Banks"
includes Bank of America National Trust and Savings Association
in its individual capacity. Bank of America National Trust and
Savings Association (and each successor Managing Agent) and its
Affiliates may accept deposits from, lend money to and gener-
ally engage in any kind of banking, trust or other business
with Borrowers, any Subsidiary thereof, or any Affiliate of
Borrowers or any Subsidiary thereof, as if it were not the
Managing Agent and without any duty to account therefor to the
Banks. Bank of America National Trust and Savings Association
(and each successor Managing Agent) need not account to any
other Bank for any monies received by it for reimbursement of
its costs and expenses as Managing Agent hereunder, or for any
monies received by it in its capacity as a Bank hereunder. The
Managing Agent shall not be deemed to hold a fiduciary rela-
tionship with any Bank and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be
read into this Agreement or otherwise exist against the
Managing Agent.
10.3 Proportionate Interest in any Collateral. The
Managing Agent, on behalf of all the Banks, shall hold in
accordance with the Loan Documents all items of any collateral
or interests therein received or held by the Managing Agent.
Subject to the Managing Agent's and the Banks' rights to
reimbursement for their costs and expenses hereunder (including
reasonable attorneys' fees and disbursements and other
professional services and the reasonably allocated costs of
attorneys employed by the Managing Agent or a Bank) and subject
to the application of payments in accordance with Sec-
tion 9.2(d), each Bank shall have an interest in the Banks'
interest in the Collateral or interests therein in the same
proportions that the aggregate Obligations owed such Bank under
the Loan Documents bear to the aggregate Obligations owed under
the Loan Documents to all the Banks, without priority or
preference among the Banks.
10.4 Banks' Credit Decisions. Each Bank agrees that
it has, independently and without reliance upon the Managing A-
gent, any other Bank or the directors, officers, agents,
employees or attorneys of the Managing Agent or of any other
Bank, and instead in reliance upon information supplied to it
by or on behalf of Borrowers and upon such other information as
it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each Bank
also agrees that it shall, independently and without reliance
upon the Managing Agent, any other Bank or the directors,
officers, agents, employees or attorneys of the Managing Agent
or of any other Bank, continue to make its own independent
credit analyses and decisions in acting or not acting under the
Loan Documents.
10.5 Action by Managing Agent.
(a) Absent actual knowledge of the Managing A-
gent of the existence of a Default, the Managing Agent may
assume that no Default has occurred and is continuing,
unless the Managing Agent (or the Bank that is then the
Managing Agent) has received notice from Borrowers stating
the nature of the Default or has received notice from a
Bank stating the nature of the Default and that such Bank
considers the Default to have occurred and to be
continuing.
(b) The Managing Agent has only those
obligations under the Loan Documents as are expressly set
forth therein.
(c) Except for any obligation expressly set
forth in the Loan Documents and as long as the Managing
Agent may assume that no Event of Default has occurred and
is continuing, the Managing Agent may, but shall not be
required to, exercise its discretion to act or not act,
except that the Managing Agent shall be required to act or
not act upon the instructions of the Requisite Banks (or
of all the Banks, to the extent required by Section 11.2)
and those instructions shall be binding upon the Managing
Agent and all the Banks, provided that the Managing Agent
shall not be required to act or not act if to do so would
be contrary to any Loan Document or to applicable Law or
would result, in the reasonable judgment of the Managing
Agent, in substantial risk of liability to the Managing
Agent.
specified in clause (a), the Managing Agent shall
immediately give notice thereof to the Banks and shall act
or not act upon the instructions of the Requisite Banks
(or of all the Banks, to the extent required by
Section 11.2), provided that the Managing Agent shall not
be required to act or not act if to do so would be
contrary to any Loan Document or to applicable Law or
would result, in the reasonable judgment of the Managing
Agent, in substantial risk of liability to the Managing
Agent, and except that if the Requisite Banks (or all the
Banks, if required under Section 11.2) fail, for five (5)
Banking Days after the receipt of notice from the Managing
Agent, to instruct the Managing Agent, then the Managing
Agent, in its sole discretion, may act or not act as it
deems advisable for the protection of the interests of the
Banks.
(e) The Managing Agent shall have no liability
to any Bank for acting, or not acting, as instructed by
the Requisite Banks (or all the Banks, if required under
Section 11.2), notwithstanding any other provision hereof.
10.6 Liability of Managing Agent. Neither the
Managing Agent nor any of its directors, officers, agents,
employees or attorneys shall be liable for any action taken or
not taken by them under or in connection with the Loan
Documents, except for their own gross negligence or willful
misconduct. Without limitation on the foregoing, the Managing
Agent and its directors, officers, agents, employees and
attorneys:
(a) May treat the payee of any Note as the
holder thereof until the Managing Agent receives notice of
the assignment or transfer thereof, in form satisfactory
to the Managing Agent, signed by the payee, and may treat
each Bank as the owner of that Bank's interest in the
Obligations for all purposes of this Agreement until the
Managing Agent receives notice of the assignment or
transfer thereof, in form satisfactory to the Managing
Agent, signed by that Bank.
(b) May consult with legal counsel (including
in-house legal counsel), accountants (including in-house
accountants) and other professionals or experts selected
by it, or with legal counsel, accountants or other profes-
sionals or experts for Borrowers and/or their Subsidiaries
or the Banks, and shall not be liable for any action taken
or not taken by it in good faith in accordance with any
advice of such legal counsel, accountants or other pro-
fessionals or experts.
(c) Shall not be responsible to any Bank for
any statement, warranty or representation made in any of
the Loan Documents or in any notice, certificate, report,
request or other statement (written or oral) given or made
in connection with any of the Loan Documents.
(d) Except to the extent expressly set forth in
the Loan Documents, shall have no duty to ask or inquire
as to the performance or observance by Borrowers or its
Subsidiaries of any of the terms, conditions or covenants
of any of the Loan Documents or to inspect any Collateral
or the Property, books or records of Borrowers or their
Subsidiaries.
(e) Will not be responsible to any Bank for the
due execution, legality, validity, enforceability,
genuineness, effectiveness, sufficiency or value of any
Loan Document, any other instrument or writing furnished
pursuant thereto or in connection therewith, or any
Collateral.
(f) Will not incur any liability by acting or
not acting in reliance upon any Loan Document, notice,
consent, certificate, statement, request or other
instrument or writing believed in good faith by it to be
genuine and signed or sent by the proper party or parties.
(g) Will not incur any liability for any
arithmetical error in computing any amount paid or payable
by the Borrowers or any Subsidiary or Affiliate thereof or
paid or payable to or received or receivable from any Bank
under any Loan Document, including, without limitation,
principal, interest, commitment fees, Advances and other
amounts; provided that, promptly upon discovery of such an
error in computation, the Managing Agent, the Banks and
(to the extent applicable) Borrowers and/or their Subsid-
iaries or Affiliates shall make such adjustments as are
necessary to correct such error and to restore the parties
to the position that they would have occupied had the
error not occurred.
10.7 Indemnification. Each Bank shall, ratably in
accordance with its Pro Rata Share of the Commitment (if the
Commitment is then in effect) or in accordance with its
proportion of the aggregate Indebtedness then evidenced by the
Notes (if the Commitment has then been terminated), indemnify
and hold the Managing Agent and its directors, officers,
agents, employees and attorneys harmless against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever (including, without limitation, attorneys'
fees and disbursements and allocated costs of attorneys
employed by the Managing Agent) that may be imposed on,
incurred by or asserted against it or them in any way relating
to or arising out of the Loan Documents (other than losses
incurred by reason of the failure of Borrowers to pay the
Indebtedness represented by the Notes) or any action taken or
not taken by it as Managing Agent thereunder, except such as
result from its own gross negligence or willful misconduct.
Without limitation on the foregoing, each Bank shall reimburse
the Managing Agent upon demand for that Bank's Pro Rata Share
of any out-of-pocket cost or expense incurred by the Managing
Agent in connection with the negotiation, preparation, execu-
tion, delivery, amendment, waiver, restructuring, reorganiza-
tion (including a bankruptcy reorganization), enforcement or
attempted enforcement of the Loan Documents, to the extent that
Borrowers or any other Party is required by Section 11.3 to pay
that cost or expense but fails to do so upon demand. Nothing
in this Section 10.7 shall entitle the Managing Agent to
recover any amount from the Banks if and to the extent that
such amount has theretofore been recovered from Borrowers or
any of their Subsidiaries. To the extent that the Managing
Agent is later reimbursed such cost or expense by Borrowers or
any of its Subsidiaries, it shall return the amounts paid to it
by the Banks in respect of such cost or expense.
10.8 Successor Managing Agent. The Managing Agent
may, and at the request of the Requisite Banks shall, resign as
Managing Agent upon thirty (30) days' notice to the Banks and
Borrowers. If the Managing Agent shall resign as Managing
Agent under this Agreement, the Requisite Banks shall appoint
from among the Banks a successor Managing Agent for the Banks,
which successor Managing Agent shall be approved by Borrowers
(and such approval shall not be unreasonably withheld or
delayed). If no successor Managing Agent is appointed prior to
the effective date of the resignation of the Managing Agent,
the Managing Agent may appoint, after consulting with the Banks
and the Borrowers, a successor Managing Agent from among the
Banks. Upon the acceptance of its appointment as successor
Managing Agent hereunder, such successor Managing Agent shall
succeed to all the rights, powers and duties of the retiring
Managing Agent and the term "Managing Agent" shall mean such
successor Managing Agent and the retiring Managing Agent's
appointment, powers and duties as Managing Agent shall be
terminated. After any retiring Managing Agent's resignation
hereunder as Managing Agent, the provisions of this Article 10,
and Sections 11.3, 11.11 and 11.22, shall inure to its benefit
as to any actions taken or omitted to be taken by it while it
was Managing Agent under this Agreement. If (a) the Managing
Agent has not been paid its agency fees under Section 3.6 or
has not been reimbursed for any expense reimbursable to it
under Section 11.3, in either case for a period of at least
one (1) year and (b) no successor Managing Agent has accepted
appointment as Managing Agent by the date which is thirty
(30) days following a retiring Managing Agent's notice of
resignation, the retiring Managing Agent's resignation shall
nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Managing Agent hereunder until
such time, if any, as the Requisite Banks appoint a successor
Managing Agent as provided for above.
10.9 Foreclosure on Collateral. In the event of
foreclosure or enforcement of the Lien created by any of the
Collateral Documents, title to the Collateral covered thereby
shall be taken and held by the Managing Agent (or an Affiliate
or designee thereof) pro rata for the benefit of the Banks in
accordance with the Obligations outstanding to each of them and
shall be administered in accordance with the standard form of
collateral holding participation agreement used by the Managing
Agent in comparable syndicated credit facilities.
contained in this Article 10 shall be deemed to impose upon
Borrowers any obligation in respect of the due and punctual
performance by the Managing Agent of its obligations to the
Banks under any provision of this Agreement, and Borrowers
shall have no liability to the Managing Agent or any of the
Banks in respect of any failure by the Managing Agent or any
Bank to perform any of its obligations to the Managing Agent or
the Banks under this Agreement. Without limiting the
generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing
under the Loan Documents provides that such payments shall be
made by Borrowers to the Managing Agent for the account of the
Banks, Borrowers' obligations to the Banks in respect of such
payments shall be deemed to be satisfied upon the making of
such payments to the Managing Agent in the manner provided by
this Agreement.
<PAGE>
Article 11
MISCELLANEOUS
11.1 Cumulative Remedies; No Waiver. The rights,
powers, privileges and remedies of the Managing Agent and the
Banks provided herein or in any Note or other Loan Document are
cumulative and not exclusive of any right, power, privilege or
remedy provided by Law or equity. No failure or delay on the
part of the Managing Agent or any Bank in exercising any right,
power, privilege or remedy may be, or may be deemed to be, a
waiver thereof; nor may any single or partial exercise of any
right, power, privilege or remedy preclude any other or further
exercise of the same or any other right, power, privilege or
remedy. The terms and conditions of Article 8 hereof are
inserted for the sole benefit of the Managing Agent and the
Banks; the same may be waived in whole or in part, with or
without terms or conditions, in respect of any Loan or Letter
of Credit without prejudicing the Managing Agent's or the
Banks' rights to assert them in whole or in part in respect of
any other Loan.
11.2 Amendments; Consents. No amendment, modifi-
cation, supplement, extension, termination or waiver of any
provision of this Agreement or any other Loan Document, no
approval or consent thereunder, and no consent to any departure
by the Borrowers or any other Party therefrom, may in any event
be effective unless in writing signed by the Requisite Banks
(and, in the case of any amendment, modification or supplement
of or to any Loan Document to which any of the Borrowers or any
Significant Subsidiary is a Party, signed by each such Party,
and, in the case of any amendment, modification or supplement
to Article 10, signed by the Managing Agent), and then only in
the specific instance and for the specific purpose given; and,
without the approval in writing of all the Banks, no amendment,
modification, supplement, termination, waiver or consent may be
effective:
(a) To amend or modify the principal of, or the
amount of principal, principal prepayments or the rate of
interest payable on, any Note, or the amount of the
Commitment or the Pro Rata Share of any Bank or the amount
of any commitment fee payable to any Bank, or any other
fee or amount payable to any Bank under the Loan Documents
or to waive an Event of Default consisting of the failure
of Borrowers to pay when due principal, interest or any
commitment fee;
(b) To postpone any date fixed for any payment
of principal of, prepayment of principal of or any
installment of interest on, any Note or any installment of
any commitment fee, or to extend the term of the
Commitment, or to release the Subsidiary Guaranty (except
with respect to any Significant Subsidiary which is the
subject of a Disposition permitted hereunder or which is
redesignated as an Unrestricted New Venture Entity in
accordance with the terms of this Agreement);
(c) to release any material portion of the
Collateral except (i) as expressly provided for in
Sections 11.26 and 11.27, (ii) in connection with the
redesignation of a Restricted Subsidiary which is a New
Venture Entity (other than the New Venture Entity which
owns or operates the Atlantic City Project or the
Evansville Project) as an Unrestricted New Venture Entity
in accordance with the terms of this Agreement and
(iii) as otherwise expressly provided for in any Loan
Document;
(d) To amend the provisions of the definition
of "Requisite Banks", "Majority Banks", Articles 8 or 9 or
this Section 11.2 or to amend or waive Section 6.4; or
(e) To amend any provision of this Agreement
that expressly requires the consent or approval of all the
Banks.
Any amendment, modification, supplement, termination, waiver or
consent pursuant to this Section 11.2 shall apply equally to,
and shall be binding upon, all the Banks and the Managing
Agent.
11.3 Costs, Expenses and Taxes. Borrowers shall pay
within five (5) Banking Days after demand, accompanied by an
invoice therefor, the reasonable costs and expenses of the
Managing Agent in connection with the negotiation, preparation,
syndication, execution and delivery of the Loan Documents and
any amendment thereto or waiver thereof. Borrowers shall also
pay on demand, accompanied by an invoice therefor, the
reasonable costs and expenses of the Managing Agent and the
Banks in connection with the refinancing, restructuring,
reorganization (including a bankruptcy reorganization) and
enforcement or attempted enforcement of the Loan Documents, and
any matter related thereto. The foregoing costs and expenses
shall include filing fees, recording fees, title insurance
fees, appraisal fees, search fees, and other out-of-pocket
expenses and the reasonable fees and out-of-pocket expenses of
any legal counsel (including reasonably allocated costs of
legal counsel employed by the Managing Agent or any Bank),
independent public accountants and other outside experts
retained by the Managing Agent or any Bank, whether or not such
costs and expenses are incurred or suffered by the Managing
Agent or any Bank in connection with or during the course of
any bankruptcy or insolvency proceedings of any of Borrowers or
any Subsidiary thereof. Such costs and expenses shall also
include, in the case of any amendment or waiver of any Loan
Document requested by Borrowers, the administrative costs of
the Managing Agent reasonably attributable thereto. Borrowers
shall pay any and all documentary and other taxes, excluding
(i) taxes imposed on or measured in whole or in part by its
overall net income, gross income or gross receipts and
franchise taxes imposed on it by (A) any jurisdiction (or
political subdivision thereof) in which it is organized or
maintains its principal office or Eurodollar Lending Office or
(B) any jurisdiction (or political subdivision thereof) in
which it is "doing business", (ii) any withholding taxes or
other taxes based on gross income imposed by the United States
of America (other than withholding taxes and taxes based on
gross income resulting from or attributable to any change in
any law, rule or regulation or any change in the interpretation
or administration of any law, rule or regulation by any
Governmental Agency) or (iii) any withholding taxes or other
taxes based on gross income imposed by the United States of
America for any period with respect to which it has failed to
provide Borrowers with the appropriate form or forms required
by Section 11.21, to the extent such forms are then required by
applicable Laws, and all costs, expenses, fees and charges
payable or determined to be payable in connection with the
filing or recording of this Agreement, any other Loan Document
or any other instrument or writing to be delivered hereunder or
thereunder, or in connection with any transaction pursuant
hereto or thereto, and shall reimburse, hold harmless and
indemnify on the terms set forth in 11.11 the Managing Agent
and the Banks from and against any and all loss, liability or
legal or other expense with respect to or resulting from any
delay in paying or failure to pay any such tax, cost, expense,
fee or charge or that any of them may suffer or incur by reason
of the failure of any Party to perform any of its Obligations.
Any amount payable to the Managing Agent or any Bank under this
Section 11.3 shall bear interest from the second Banking Day
following the date of demand for payment at the Default Rate.
11.4 Nature of Banks' Obligations. The obligations
of the Banks hereunder are several and not joint or joint and
several. Nothing contained in this Agreement or any other Loan
Document and no action taken by the Managing Agent or the Banks
or any of them pursuant hereto or thereto may, or may be deemed
to, make the Banks a partnership, an association, a joint
venture or other entity, either among themselves or with the
Borrowers or any Affiliate of any of Borrowers. Each Bank's
obligation to make any Advance pursuant hereto is several and
not joint or joint and several, and in the case of the initial
Advance only is conditioned upon the performance by all other
Banks of their obligations to make initial Advances. A default
by any Bank will not increase the Pro Rata Share of the
Commitment attributable to any other Bank. Any Bank not in
default may, if it desires, assume in such proportion as the
nondefaulting Banks agree the obligations of any Bank in
default, but is not obligated to do so. The Managing Agent
agrees that it will use its best efforts either to induce the
other Banks to assume the obligations of a Bank in default or
to obtain another Bank, reasonably satisfactory to Borrowers,
to replace such a Bank in default.
11.5 Survival of Representations and Warranties.
All representations and warranties contained herein or in any
other Loan Document, or in any certificate or other writing
delivered by or on behalf of any one or more of the Parties to
any Loan Document, will survive the making of the Loans here-
under and the execution and delivery of the Notes, and have
been or will be relied upon by the Managing Agent and each
Bank, notwithstanding any investigation made by the Managing
Agent or any Bank or on their behalf.
11.6 Notices. Except as otherwise expressly
provided in the Loan Documents, all notices, requests, demands,
directions and other communications provided for hereunder or
under any other Loan Document must be in writing and must be
mailed, telegraphed, telecopied, dispatched by commercial
courier or delivered to the appropriate party at the address
set forth on the signature pages of this Agreement or other
applicable Loan Document or, as to any party to any Loan
Document, at any other address as may be designated by it in a
written notice sent to all other parties to such Loan Document
in accordance with this Section 11.6. Except as otherwise
expressly provided in any Loan Document, if any notice,
request, demand, direction or other communication required or
permitted by any Loan Document is given by mail it will be
effective on the earlier of receipt or the fourth Banking Day
after deposit in the United States mail with first class or
airmail postage prepaid; if given by telegraph or cable, when
delivered to the telegraph company with charges prepaid; if
given by telecopier, when sent; if dispatched by commercial
courier, on the scheduled delivery date; or if given by
personal delivery, when delivered.
11.7 Execution of Loan Documents. Unless the
Managing Agent otherwise specifies with respect to any Loan
Document, (a) this Agreement and any other Loan Document may be
executed in any number of counterparts and any party hereto or
thereto may execute any counterpart, each of which when
executed and delivered will be deemed to be an original and all
of which counterparts of this Agreement or any other Loan
Document, as the case may be, when taken together will be
deemed to be but one and the same instrument and (b) execution
of any such counterpart may be evidenced by a telecopier
transmission of the signature of such party. The execution of
this Agreement or any other Loan Document by any party hereto
or thereto will not become effective until counterparts hereof
or thereof, as the case may be, have been executed by all the
parties hereto or thereto.
11.8 Binding Effect; Assignment.
(a) This Agreement and the other Loan Documents
to which Borrowers are a Party will be binding upon and
inure to the benefit of Borrowers, the Managing Agent,
each of the Banks, and their respective successors and
assigns, except that, except as permitted in Section 6.3,
Borrowers may not assign their rights hereunder or
thereunder or any interest herein or therein without the
prior written consent of all the Banks. Each Bank
represents that it is not acquiring its Note with a view
to the distribution thereof within the meaning of the
Securities Act of 1933, as amended (subject to any
requirement that disposition of such Note must be within
the control of such Bank). Any Bank may at any time
pledge its Note or any other instrument evidencing its
rights as a Bank under this Agreement to a Federal Reserve
Bank, but no such pledge shall release that Bank from its
obligations hereunder or grant to such Federal Reserve
Bank the rights of a Bank hereunder absent foreclosure of
such pledge.
(b) From time to time following the Closing
Date, each Bank may assign to one or more Eligible
Assignees all or any portion of its Pro Rata Share of the
Commitment; provided that (i) such Eligible Assignee, if
not then a Bank or an Affiliate of the assigning Bank,
shall be approved by each of the Managing Agent and
Borrowers (neither of which approvals shall be
unreasonably withheld or delayed), (ii) such assignment
shall be evidenced by a Commitment Assignment and
Acceptance, a copy of which shall be furnished to the
Managing Agent as hereinbelow provided, (iii) except in
the case of an assignment to an Affiliate of the assigning
Bank, to another Bank or of the entire remaining Commit-
ment of the assigning Bank, the assignment shall not
assign a Pro Rata Share of the Commitment, that, when
added to the pro rata share of the TEGP Loan Outstandings
being concurrently assigned to the same Eligible Assignee,
is equivalent to less than $5,000,000, (iv) assignment of
a Pro Rata Share of the Commitment must be concurrent with
an assignment to the same Eligible Assignee of the same
pro rata share of the assigning Bank's pro rata share of
the TEGP Loan Outstandings and (v) the effective date of
any such assignment shall be as specified in the
Commitment Assignment and Acceptance, but not earlier than
the date which is five (5) Banking Days after the date the
Managing Agent has received the Commitment Assignment and
Acceptance. Upon the effective date of such Commitment
Assignment and Acceptance, the Eligible Assignee named
therein shall be a Bank for all purposes of this
Agreement, with the Pro Rata Share of the Commitment
therein set forth and, to the extent of such Pro Rata
Share, the assigning Bank shall be released from its
further obligations under this Agreement. Borrowers agree
that they shall execute and deliver (against delivery by
the assigning Bank to Borrowers of its Note) to such
assignee Bank, a Note evidencing that assignee Bank's Pro
Rata Share of the Commitment, and to the assigning Bank, a
Note evidencing the remaining balance Pro Rata Share
retained by the assigning Bank.
(c) By executing and delivering a Commitment
Assignment and Acceptance, the Eligible Assignee there-
under acknowledges and agrees that: (i) other than the
representation and warranty that it is the legal and
beneficial owner of the Pro Rata Share of the Commitment
being assigned thereby free and clear of any adverse
claim, the assigning Bank has made no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with this Agreement or the execution, legality,
validity, enforceability, genuineness or sufficiency of
this Agreement or any other Loan Document; (ii) the
assigning Bank has made no representation or warranty and
assumes no responsibility with respect to the financial
condition of Borrowers or the performance by Borrowers of
the Obligations; (iii) it has received a copy of this
Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.1 and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision
to enter into such Commitment Assignment and Acceptance;
(iv) it will, independently and without reliance upon the
Managing Agent or any Bank and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) it appoints and
authorizes the Managing Agent to take such action and to
exercise such powers under this Agreement as are delegated
to the Managing Agent by this Agreement; and (vi) it will
perform in accordance with their terms all of the obliga-
tions which by the terms of this Agreement are required to
be performed by it as a Bank.
(d) The Managing Agent shall maintain at the
Managing Agent's Office a copy of each Commitment Assign-
ment and Acceptance delivered to it and a register (the
"Register") of the names and address of each of the Banks
and the Pro Rata Share of the Commitment held by each
Bank, giving effect to each Commitment Assignment and
Acceptance. The Register shall be available during normal
business hours for inspection by Borrowers or any Bank
upon reasonable prior notice to the Managing Agent. After
receipt of a completed Commitment Assignment and Accept-
ance executed by any Bank and an Eligible Assignee, and
receipt of an assignment fee of $2,500 from such Bank or
Eligible Assignee, the Managing Agent shall, promptly
following the effective date thereof, provide to Borrowers
and the Banks a revised Schedule 1.1 giving effect there-
to. Borrowers, the Managing Agent and the Banks shall
deem and treat the Persons listed as Banks in the Register
as the holders and owners of the Pro Rata Share of the
Commitment listed therein for all purposes hereof, and no
assignment or transfer of any such Pro Rata Share of the
Commitment shall be effective, in each case unless and
until a Commitment Assignment and Acceptance effecting the
assignment or transfer thereof shall have been accepted by
the Managing Agent and recorded in the Register as
provided above. Prior to such recordation, all amounts
owed with respect to the applicable Pro Rata Share of the
Commitment shall be owed to the Bank listed in the
Register as the owner thereof, and any request, authority
or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in
the Register as a Bank shall be conclusive and binding on
any subsequent holder, assignee or transferee of the
corresponding Pro Rata Share of the Commitment.
(e) Each Bank may from time to time grant
participations to one or more banks or other financial
institutions (including another Bank) in a portion of its
Pro Rata Share of the Commitment; provided, however, that
(i) such Bank's obligations under this Agreement shall
remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the perfor-
mance of such obligations, (iii) the participating banks
or other financial institutions shall not be a Bank
hereunder for any purpose except, if the participation
agreement so provides, for the purposes of Sections 3.8,
3.9, 11.11 and 11.22 but only to the extent that the cost
of such benefits to Borrowers does not exceed the cost
which Borrowers would have incurred in respect of such
Bank absent the participation, (iv) Borrowers, the
Managing Agent and the other Banks shall continue to deal
solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement,
(v) the participation interest shall be expressed as a
percentage of the granting Bank's Pro Rata Share of the
Commitment as it then exists and shall not restrict an
increase in the Commitment, or in the granting Bank's Pro
Rata Share of the Commitment, so long as the amount of the
participation interest is not affected thereby, (vi) a
participation in a percentage of the granting Bank's Pro
Rata Share of the Commitment must be concurrent with a
participation granted to the same participant of the same
percentage of the granting Bank's pro rata share of the
TEGP Loan Outstandings and (vii) the consent of the holder
of such participation interest shall not be required for
amendments or waivers of provisions of the Loan Documents
other than those which (A) extend the Initial Reduction
Date, the Maturity Date or any other date upon which any
payment of money is due to the Banks, (B) reduce the rate
of interest on the Notes, any fee or any other monetary
amount payable to the Banks, (C) reduce the amount of any
installment of principal due under the Notes, or
(D) release any material portion of the Collateral (except
as otherwise expressly provided for in any Loan Document).
(f) Notwithstanding anything in this
Section 11.8 to the contrary, the rights of the Banks to
make assignments of, and grant participations in, their
Pro Rata Shares of the Commitment shall be subject to the
approval of any Gaming Board, to the extent required by
applicable Gaming Laws, and to compliance with applicable
securities laws.
11.9 Right of Setoff. If an Event of Default has
occurred and is continuing, the Managing Agent or any Bank (but
in each case only with the consent of the Requisite Banks) may
exercise its rights under Article 9 of the Uniform Commercial
Code and other applicable Laws and, to the extent permitted by
applicable Laws, apply any funds in any deposit account main-
tained with it by Borrowers and/or any Property of Borrowers in
its possession against the Obligations.
11.10 Sharing of Setoffs. Each Bank severally
agrees that if it, through the exercise of any right of setoff,
banker's lien or counterclaim against Borrowers, or otherwise,
receives payment of the Obligations held by it that is ratably
more than any other Bank, through any means, receives in pay-
ment of the Obligations held by that Bank, then, subject to
applicable Laws: (a) the Bank exercising the right of setoff,
banker's lien or counterclaim or otherwise receiving such pay-
ment shall purchase, and shall be deemed to have simultaneously
purchased, from the other Bank a participation in the Obliga-
tions held by the other Bank and shall pay to the other Bank a
purchase price in an amount so that the share of the Obliga-
tions held by each Bank after the exercise of the right of
setoff, banker's lien or counterclaim or receipt of payment
shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien or counterclaim
or receipt of payment; and (b) such other adjustments and
purchases of participations shall be made from time to time as
shall be equitable to ensure that all of the Banks share any
payment obtained in respect of the Obligations ratably in
accordance with each Bank's share of the Obligations immedi-
ately prior to, and without taking into account, the payment;
provided that, if all or any portion of a disproportionate
payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter
recovered from the purchasing Bank by Borrowers or any Person
claiming through or succeeding to the rights of Borrowers, the
purchase of a participation shall be rescinded and the purchase
price thereof shall be restored to the extent of the recovery,
but without interest. Each Bank that purchases a participation
in the Obligations pursuant to this Section 11.10 shall from
and after the purchase have the right to give all notices,
requests, demands, directions and other communications under
this Agreement with respect to the portion of the Obligations
purchased to the same extent as though the purchasing Bank were
the original owner of the Obligations purchased. Borrowers
expressly consent to the foregoing arrangements and agree that
any Bank holding a participation in an Obligation so purchased
may exercise any and all rights of setoff, banker's lien or
counterclaim with respect to the participation as fully as if
the Bank were the original owner of the Obligation purchased.
11.11 Indemnity by Borrowers. Borrowers agree to
indemnify, save and hold harmless the Managing Agent and each
Bank and their directors, officers, agents, attorneys and
employees (collectively the "Indemnitees") from and against:
(a) any and all claims, demands, actions or causes of action
(except a claim, demand, action, or cause of action for any
amount excluded from the definition of "Taxes" in
Section 3.12(d)) if the claim, demand, action or cause of
action arises out of or relates to any act or omission (or
alleged act or omission) of Borrowers, their Affiliates or any
of their officers, directors or stockholders relating to the
Commitment, the use or contemplated use of proceeds of any
Loan, or the relationship of Borrowers and the Banks under this
Agreement; (b) any administrative or investigative proceeding
by any Governmental Agency arising out of or related to a
claim, demand, action or cause of action described in
clause (a) above; and (c) any and all liabilities, losses,
costs or expenses (including reasonable attorneys' fees and the
reasonably allocated costs of attorneys employed by any
Indemnitee and disbursements of such attorneys and other
professional services) that any Indemnitee suffers or incurs as
a result of the assertion of any foregoing claim, demand,
action or cause of action; provided that no Indemnitee shall be
entitled to indemnification for any loss caused by its own
gross negligence or willful misconduct or for any loss asserted
against it by another Indemnitee. If any claim, demand, action
or cause of action is asserted against any Indemnitee, such
Indemnitee shall promptly notify Borrowers, but the failure to
so promptly notify Borrowers shall not affect Borrowers'
obligations under this Section unless such failure materially
prejudices Borrowers' right to participate in the contest of
such claim, demand, action or cause of action, as hereinafter
provided. Such Indemnitee may (and shall, if requested by
Borrowers in writing) contest the validity, applicability and
amount of such claim, demand, action or cause of action and
shall permit Borrowers to participate in such contest. Any
Indemnitee that proposes to settle or compromise any claim or
proceeding for which Borrowers may be liable for payment of
indemnity hereunder shall give Borrowers written notice of the
terms of such proposed settlement or compromise reasonably in
advance of settling or compromising such claim or proceeding
and shall obtain Borrowers' prior consent (which shall not be
unreasonably withheld or delayed). In connection with any
claim, demand, action or cause of action covered by this
Section 11.11 against more than one Indemnitee, all such Indem-
nitees shall be represented by the same legal counsel (which
may be a law firm engaged by the Indemnitees or attorneys
employed by an Indemnitee or a combination of the foregoing)
selected by the Indemnitees and reasonably acceptable to
Borrowers; provided, that if such legal counsel determines in
good faith that representing all such Indemnitees would or
could result in a conflict of interest under Laws or ethical
principles applicable to such legal counsel or that a defense
or counterclaim is available to an Indemnitee that is not
available to all such Indemnitees, then to the extent reason-
ably necessary to avoid such a conflict of interest or to
permit unqualified assertion of such a defense or counterclaim,
each Indemnitee shall be entitled to separate representation by
legal counsel selected by that Indemnitee and reasonably
acceptable to Borrowers, with all such legal counsel using
reasonable efforts to avoid unnecessary duplication of effort
by counsel for all Indemnitees; and further provided that the
Managing Agent (as an Indemnitee) shall at all times be enti-
tled to representation by separate legal counsel (which may be
a law firm or attorneys employed by the Managing Agent or a
combination of the foregoing). Any obligation or liability of
Borrowers to any Indemnitee under this Section 11.11 shall
survive the expiration or termination of this Agreement and the
repayment of all Loans and the payment and performance of all
other Obligations owed to the Banks.
11.12 Nonliability of the Banks. Borrowers acknowl-
edge and agree that:
(a) Any inspections of any Property of
Borrowers made by or through the Managing Agent or the
Banks are for purposes of administration of the Loan only
and Borrowers are not entitled to rely upon the same
(whether or not such inspections are at the expense of
Borrowers);
(b) By accepting or approving anything required
to be observed, performed, fulfilled or given to the
Managing Agent or the Banks pursuant to the Loan Docu-
ments, neither the Managing Agent nor the Banks shall be
deemed to have warranted or represented the sufficiency,
legality, effectiveness or legal effect of the same, or of
any term, provision or condition thereof, and such
acceptance or approval thereof shall not constitute a
warranty or representation to anyone with respect thereto
by the Managing Agent or the Banks;
(c) The relationship between Borrowers and the
Managing Agent and the Banks is, and shall at all times
remain, solely that of borrowers and lenders; neither the
Managing Agent nor the Banks shall under any circumstance
be construed to be partners or joint venturers of
Borrowers or their Affiliates; neither the Managing Agent
nor the Banks shall under any circumstance be deemed to be
in a relationship of confidence or trust or a fiduciary
relationship with Borrowers or their Affiliates, or to owe
any fiduciary duty to Borrowers or their Affiliates;
neither the Managing Agent nor the Banks undertake or
assume any responsibility or duty to Borrowers or their
Affiliates to select, review, inspect, supervise, pass
judgment upon or inform Borrowers or their Affiliates of
any matter in connection with their Property or the
operations of Borrowers or their Affiliates; Borrowers and
their Affiliates shall rely entirely upon their own judg-
ment with respect to such matters; and any review, inspec-
tion, supervision, exercise of judgment or supply of
information undertaken or assumed by the Managing Agent or
the Banks in connection with such matters is solely for
the protection of the Managing Agent and the Banks and
neither Borrowers nor any other Person is entitled to rely
thereon; and
(d) The Managing Agent and the Banks shall not
be responsible or liable to any Person for any loss,
damage, liability or claim of any kind relating to injury
or death to Persons or damage to Property caused by the
actions, inaction or negligence of Borrowers and/or its
Affiliates and Borrowers hereby indemnify and hold the
Managing Agent and the Banks harmless on the terms set
forth in Section 11.11 from any such loss, damage,
liability or claim.
11.13 No Third Parties Benefited. This Agreement is
made for the purpose of defining and setting forth certain
obligations, rights and duties of Borrowers, the Managing Agent
and the Banks in connection with the Loans, and is made for the
sole benefit of Borrowers, the Managing Agent and the Banks,
and the Managing Agent's and the Banks' successors and assigns.
Except as provided in Sections 11.8 and 11.11, no other Person
shall have any rights of any nature hereunder or by reason
hereof.
11.14 Confidentiality. Each Bank agrees to hold any
confidential information that it may receive from Borrowers
pursuant to this Agreement in confidence, except for disclo-
sure: (a) to other Banks; (b) to legal counsel and accountants
for Borrowers or any Bank; (c) to other professional advisors
to Borrowers or any Bank, provided that the recipient has
accepted such information subject to a confidentiality
agreement substantially similar to this Section 11.14; (d) to
regulatory officials having jurisdiction over that Bank; (e) to
any Gaming Board having regulatory jurisdiction over Parent or
its Subsidiaries, provided that each Bank agrees to use its
best efforts to notify Borrowers of any such disclosure unless
prohibited by applicable Laws; (f) as required by Law or legal
process or in connection with any legal proceeding to which
that Bank and any of Borrowers are adverse parties; and (g) to
another financial institution in connection with a disposition
or proposed disposition to that financial institution of all or
part of that Bank's interests hereunder or a participation
interest in its Note, provided that the recipient has accepted
such information subject to a confidentiality agreement
substantially similar to this Section 11.14. For purposes of
the foregoing, "confidential information" shall mean any
information respecting Parent or its Subsidiaries reasonably
considered by Borrowers to be confidential, other than
(i) information previously filed with any Governmental Agency
and available to the public, (ii) information previously
published in any public medium from a source other than,
directly or indirectly, that Bank, and (iii) information
previously disclosed by Borrowers to any Person not associated
with Borrowers without a confidentiality agreement or
obligation substantially similar to this Section 11.14. Noth-
ing in this Section shall be construed to create or give rise
to any fiduciary duty on the part of the Managing Agent or the
Banks to Borrowers.
11.15 Further Assurances. Borrowers and the
Significant Subsidiaries shall, at their expense and without
expense to the Banks or the Managing Agent, do, execute and
deliver such further acts and documents as the Requisite Banks
or the Managing Agent from time to time reasonably require for
the assuring and confirming unto the Banks or the Managing
Agent of the rights hereby created or intended now or hereafter
so to be, or for carrying out the intention or facilitating the
performance of the terms of any Loan Document.
11.16 Integration. This Agreement, together with
the other Loan Documents and the letter agreements referred to
in Sections 3.2, 3.3 and 3.5, comprises the complete and
integrated agreement of the parties on the subject matter
hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict
between the provisions of this Agreement and those of any other
Loan Document, the provisions of this Agreement shall control
and govern; provided that the inclusion of supplemental rights
or remedies in favor of the Managing Agent or the Banks in any
other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather
in accordance with the fair meaning thereof.
11.17 Governing Law. Except to the extent otherwise
provided therein, each Loan Document shall be governed by, and
construed and enforced in accordance with, the local Laws of
California.
11.18 Severability of Provisions. Any provision in
any Loan Document that is held to be inoperative, unenforceable
or invalid as to any party or in any jurisdiction shall, as to
that party or jurisdiction, be inoperative, unenforceable or
invalid without affecting the remaining provisions or the
operation, enforceability or validity of that provision as to
any other party or in any other jurisdiction, and to this end
the provisions of all Loan Documents are declared to be
severable.
11.19 Headings. Article and Section headings in
this Agreement and the other Loan Documents are included for
convenience of reference only and are not part of this
Agreement or the other Loan Documents for any other purpose.
11.20 Time of the Essence. Time is of the essence
of the Loan Documents.
11.21 Foreign Banks and Participants. Each Bank
that is incorporated or otherwise organized under the Laws of a
jurisdiction other than the United States of America or any
State thereof or the District of Columbia shall deliver to
Borrowers (with a copy to the Managing Agent), within
twenty (20) days after the Closing Date (or after accepting an
assignment or receiving a participation interest herein
pursuant to Section 11.8, if applicable) two duly completed
copies, signed by a Responsible Official, of either Form 1001
(relating to such Bank and entitling it to a complete exemption
from withholding on all payments to be made to such Bank by
Borrowers pursuant to this Agreement) or Form 4224 (relating to
all payments to be made to such Bank by the Borrowers pursuant
to this Agreement) of the United States Internal Revenue
Service or such other evidence (including, if reasonably
necessary, Form W-9) satisfactory to Borrowers and the Managing
Agent that no withholding under the federal income tax laws is
required with respect to such Bank. Thereafter and from time
to time, each such Bank shall (a) promptly submit to Borrowers
(with a copy to the Managing Agent), such additional duly com-
pleted and signed copies of one of such forms (or such succes-
sor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available
under then current United States laws and regulations to avoid,
or such evidence as is satisfactory to Borrowers and the
Managing Agent of any available exemption from, United States
withholding taxes in respect of all payments to be made to such
Bank by Borrowers pursuant to this Agreement and (b) take such
steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Bank, and as may be reasonably
necessary (including the re-designation of its Eurodollar
Lending Office, if any) to avoid any requirement of applicable
Laws that Borrowers make any deduction or withholding for taxes
from amounts payable to such Bank. In the event that Borrowers
or the Managing Agent become aware that a participation has
been granted pursuant to Section 11.8(e) to a financial
institution that is incorporated or otherwise organized under
the Laws of a jurisdiction other than the United States of
America, any State thereof or the District of Columbia, then,
upon request made by Borrowers or the Managing Agent to the
Bank which granted such participation, such Bank shall cause
such participant financial institution to deliver the same
documents and information to Borrowers and the Managing Agent
as would be required under this Section if such financial
institution were a Bank.
11.22 Hazardous Material Indemnity. Each of
Borrowers hereby agrees to indemnify, hold harmless and defend
(by counsel reasonably satisfactory to the Managing Agent) the
Managing Agent and each of the Banks and their respective
directors, officers, employees, agents, successors and assigns
from and against any and all claims, losses, damages,
liabilities, fines, penalties, charges, administrative and
judicial proceedings and orders, judgments, remedial action
requirements, enforcement actions of any kind, and all costs
and expenses incurred in connection therewith (including but
not limited to reasonable attorneys' fees and the reasonably
allocated costs of attorneys employed by the Managing Agent or
any Bank, and expenses to the extent that the defense of any
such action has not been assumed by Borrowers), arising
directly or indirectly out of (i) the presence on, in, under or
about any Real Property of any Hazardous Materials, or any
releases or discharges of any Hazardous Materials on, under or
from any Real Property and (ii) any activity carried on or
undertaken on or off any Real Property by Borrowers or any of
its predecessors in title, whether prior to or during the term
of this Agreement, and whether by Borrowers or any predecessor
in title or any employees, agents, contractors or subcon-
tractors of Borrowers or any predecessor in title, or any third
persons at any time occupying or present on any Real Property,
in connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any
Hazardous Materials at any time located or present on, in,
under or about any Real Property. The foregoing indemnity
shall further apply to any residual contamination on, in, under
or about any Real Property, or affecting any natural resources,
and to any contamination of any Property or natural resources
arising in connection with the generation, use, handling,
storage, transport or disposal of any such Hazardous Materials,
and irrespective of whether any of such activities were or will
be undertaken in accordance with applicable Laws, but the
foregoing indemnity shall not apply to Hazardous Materials on
any Real Property, the presence of which is caused by the
Managing Agent or the Banks. Borrowers hereby acknowledge and
agree that, notwithstanding any other provision of this
Agreement or any of the other Loan Documents to the contrary,
the obligations of Borrowers under this Section (and under
Sections 4.18 and 5.14) shall be unlimited corporate
obligations of Borrowers and shall not be secured by any deed
of trust on any Real Property. Any obligation or liability of
Borrowers to any Indemnitee under this Section 11.22 shall
survive the expiration or termination of this Agreement and the
repayment of all Loans and the payment and performance of all
other Obligations owed to the Banks.
11.23 Gaming Boards. The Managing Agent and each of
the Banks agree to cooperate with all Gaming Boards in connec-
tion with the administration of their regulatory jurisdiction
over Borrowers and its Subsidiaries, including the provision of
such documents or other information as may be requested by any
such Gaming Board relating to Parent or any of its Subsidiaries
or to the Loan Documents.
11.24 Joint and Several. Each of Borrowers shall be
obligated for all of the Obligations on a joint and several
basis, notwithstanding which of Borrowers may have directly
received the proceeds of any particular Loan or the benefit of
a particular Letter of Credit. Each of Borrowers acknowledges
and agrees that, for purposes of the Loan Documents, Borrowers
constitute a single integrated financial enterprise and that
each receives a benefit from the availability of credit under
this Agreement to all of Borrowers. Each of Borrowers waive
all defenses arising under the Laws of suretyship, to the
extent such Laws are applicable, in connection with its joint
and several obligations under this Agreement. Without limiting
the foregoing, each of Borrowers agrees to the Joint Borrower
Provisions set forth in Exhibit P, incorporated by this
reference.
right to remove a Bank as a party to this Agreement in
accordance with this Section (a) under the circumstances set
forth in Sections 2.11, 3.8, 3.9 and 3.13(d), (b) if such Bank
is the subject of a Bank Disqualification and (c) upon the
occurrence of any event or circumstance which allows TEGP to
remove the same Bank as a party to the TEGP Loan Agreement;
provided that (i) no Default or Event of Default then exists
and (ii) such Bank is concurrently removed as a party to the
TEGP Loan Agreement pursuant to Section 8.20 thereof. If
Borrowers are so entitled to remove a Bank pursuant to this
Section either:
(x) Upon notice from Borrowers, the Bank being
removed shall execute and deliver a Commitment
Assignment and Acceptance covering that Bank's
Pro Rata Share of the Commitment and that Bank's
Pro Rata Share of the TEGP Loan Outstandings in
favor of one or more Eligible Assignees
designated by Borrowers (and acceptable to the
Managing Agent, which acceptance shall not be
unreasonably delayed or withheld) and which
Eligible Assignees shall have identical
percentage interests in the Commitment and the
TEGP Loan Outstandings, subject to (i) payment
of a purchase price by such Eligible Assignee
equal to all principal and accrued interest,
fees and other amounts payable to such Bank
under this Agreement and the TEGP Loan Agreement
through the date of assignment and (ii) the
written release of the Issuing Bank and the
Swing Line Bank of such Bank's obligations under
Sections 2.4(c) and 2.10(d) or delivery by such
Eligible Assignee of such appropriate assurances
and indemnities (which may include letters of
credit) as such Bank may reasonably require with
respect to its participation interest in any
Letters of Credit then outstanding or any Swing
Line Outstandings; or
(y) Borrowers may reduce the Commitment pursu-
ant to Section 2.5 (and, for this purpose, the
numerical requirements of such Section shall not
apply) by an amount equal to that Bank's
Pro Rata Share of the Commitment, pay and pro-
vide to such Bank the amounts, assurances and
indemnities described in subclauses (i) and (ii)
of clause (x) above and release such Bank from
its Pro Rata Share of the Commitment, provided
that concurrently therewith, the TEGP Loan
Outstandings are reallocated in the manner
described in Section 8.20(b) of the TEGP Loan
Agreement. In the event that the Commitment is
reduced pursuant to this clause (y), subsequent
Reduction Amounts shall be reduced by a
proportional amount.
11.26 Termination; Release of Liens. Upon (a) the
expiration or termination of the Commitment, (b) the full and
final payment in Cash of the Loans, all interest and fees with
respect thereto, (c) the reimbursement of all draws under
Letters of Credit and the payment of all fees with respect
thereto, (d) the expiration of all Letters of Credit or the
deposit of Cash collateral with the Issuing Bank in the
effective face amount thereof, (e) the payment of all amounts
then demanded by any Bank or indemnitee under Sections 3.8,
3.9, 11.11 and 11.22 and (f) the payment of all other amounts
then due under the Loan Documents, the Managing Agent is
hereby authorized by the Banks to, and the Managing Agent
shall, upon the request of Borrowers, execute and deliver to
Borrowers discharges from further compliance with the covenants
contained in Articles 5, 6 and 7 and releases of the Liens
created by the Collateral Documents, and shall return any
Property pledged to the Managing Agent as Collateral for the
Obligations, notwithstanding the survival of any provisions of
this Agreement herein provided for.
11.27 Other Lien Releases. In addition to the
provisions of Section 11.26, each of the Banks hereby
authorizes the Managing Agent to, and the Managing Agent shall,
release any Lien granted to or held by the Managing Agent upon
any Collateral (i) sold, transferred or otherwise disposed of
in connection with any transaction not prohibited by the Loan
Documents, (ii) constituting Property leased to Parent or its
Subsidiaries under a lease which has expired or been terminated
in a transaction not prohibited by the Loan Documents or which
will concurrently expire and which has not been, and is not
intended by Parent or the relevant Subsidiary to be, renewed or
extended, (iii) consisting of an instrument, if the
Indebtedness evidenced by such instrument has been finally
repaid in full and (iv) if approved or consented to by those of
the Banks required by Section 11.2. If the Collateral so
released consists of capital stock of a Significant Subsidiary,
then the Managing Agent shall concurrently also release such
Significant Subsidiary from its obligations under the
Subsidiary Guaranty. Upon the request of the Managing Agent,
each Bank shall promptly provide written confirmation of the
authority of the Managing Agent to release such Liens upon any
one or more items of Collateral under this Section.
11.28 Waiver of Right to Trial by Jury. EACH PARTY
TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF
THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE;
AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.29 Purported Oral Amendments. BORROWERS
EXPRESSLY ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS
HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN
WRITING THAT COMPLIES WITH SECTION 11.2. BORROWERS AGREE THAT
THEY WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PER-
FORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE
OF THE MANAGING AGENT OR ANY BANK THAT DOES NOT COMPLY WITH
SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR
SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first above
written.
AZTAR CORPORATION
By: CRAIG F. SULLIVAN
Craig F. Sullivan
Treasurer
ADAMAR OF NEW JERSEY, INC.
By: CRAIG F. SULLIVAN
Craig F. Sullivan
Treasurer
RAMADA EXPRESS, INC.
By: CRAIG F. SULLIVAN
Craig F. Sullivan
Treasurer
Address for all the foregoing:
Aztar Corporation
2390 East Camelback Road
Suite 400
Phoenix, Arizona 85016
Attn: Craig F. Sullivan
Treasurer
Telecopier: (602) 381-4108
Telephone: (602) 381-4113
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Managing Agent
By: PEGGY A. FUJIMOTO
Peggy A. Fujimoto
Vice President
Address:
Bank of America National Trust and
Savings Association
Global Agency #5596
1455 Market Street, 13th Floor
San Francisco, California 94103
Attn: Peggy A. Fujimoto
Telecopier: (415) 622-4894
Telephone: (415) 622-4835
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By: JON VARNELL
Jon Varnell, Vice President
Address:
Bank of America National Trust and
Savings Association
555 South Flower Street, #3283
Los Angeles, California 90071
Attn: Jon Varnell, Vice President
Telecopier: (213) 228-2641
Telephone: (213) 228-6181
With a copy to:
Bank of America National Trust and
Savings Association
555 South Flower Street (LA-5777)
Los Angeles, California 90071
Attn: William Newby
Vice President
Telecopier: (213) 228-3145
Telephone: (213) 228-2438
BANKERS TRUST COMPANY, as Co-Managing
Agent and a Bank
By ROBERT R. TELESCA
______________________________________
Robert R. Telesca
Assistant Vice President
Address:
Bankers Trust Company
1 Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Mary Jo Jolly
Assistant Vice President
Telecopier: (212) 250-6576
Telephone: (212) 250-5860
<PAGE>
with a copy to:
Bankers Trust Company
300 South Grand Avenue, 41st Floor
Los Angeles, California 90071
Attention: Robert I. Bernstein
Vice President
Telecopier: (213) 620-8484
Telephone: (213) 620-8173
BANK ONE, ARIZONA, N A, as a Co-Agent
and a Bank
By CLIFFORD PAYSON
Clifford Payson
Vice President
Address:
Bank One, Arizona, N.A.
201 North Central Avenue
Phoenix, Arizona 85004
Attention: Clifford Payson
Vice President
Telecopier: (602) 221-2632
Telephone: (602) 221-1773
<PAGE>
CREDIT LYONNAIS LOS ANGELES BRANCH, as
a Co-Agent and a Bank
By T. VINCENT
Thierry Vincent
Vice President
Address:
Domestic Lending Office
Credit Lyonnais Los Angeles Branch
515 South Flower Street, 22nd Floor
Los Angeles, California 90071
Attention: David L. Miller
Vice President
Telecopier: (213) 623-3437
Telephone: (213) 362-5956
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
as a Co-Agent and a Bank
By T. VINCENT
Thierry Vincent
Authorized Signatory
Address:
Eurodollar Lending Office
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais Los Angeles Branch
515 South Flower Street, 22nd Floor
Los Angeles, California 90071
Attention: David L. Miller
Vice President
Telecopier: (213) 623-3437
Telephone: (213) 362-5956
<PAGE>
SOCIETE GENERALE, as a Lead Manager
and a Bank
By DONALD L. SCHUBERT
Donald L. Schubert
Vice President
Address:
Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, California 90067
Attention: Donald L. Schubert
Vice President
Telecopier: (310) 551-1537
Telephone: (310) 788-7104
MIDLANTIC BANK, N.A.,
as a Lead Manager and a Bank
By DENISE D. KILLEN
Denise D. Killen
Vice President
Address:
Midlantic Bank, N.A.
6000 Midlantic Drive
Mt. Laurel, New Jersey 08054-6000
Attention: Denise D. Killen
Vice President
Telecopier: (609) 778-2673
Telephone: (609) 778-2683
THE DAIWA BANK, LIMITED, as a Bank
By DAVID M. LAWRENCE
David M. Lawrence
Vice President and Manager
By F. GLENN HARVEY
F. Glenn Harvey
Vice President
Address:
The Daiwa Bank, Limited
800 West 6th Street, Suite 950
Los Angeles, California 90017
Attention: F. Glenn Harvey
Vice President
Telecopier: (213) 623-4629
Telephone: (213) 623-7205
BANK OF SCOTLAND, as a Bank
By CATHERINE M. ONIFFREY
Catherine M. Oniffrey
Vice President
Address:
Bank of Scotland
565 Fifth Avenue
New York, New York 10017
Attention: Catherine M. Oniffrey
Vice President
Telecopier: (212) 557-9460
Telephone: (212) 450-0872
FIRST SECURITY BANK OF IDAHO, N.A., as
a Bank
By VICTOR W. GILLETT
Victor W. Gillett
Vice President.
Address:
First Security Bank of Idaho, N.A.
119 North 9th Street
Boise, Idaho 83702
Attention: Victor W. Gillett
Vice President
Telecopier: (208) 393-2472
Telephone: (208) 393-2166
BANK OF AMERICA NEVADA, as a Bank
By ALAN F. GORDON
Alan F. Gordon
Vice President
Address:
Bank of America Nevada
Commercial Banking Division
300 South Fourth Street, Suite 200
Las Vegas, Nevada 89101
Attention: Alan F. Gordon
Vice President
Telecopier: (702) 654-7158
Telephone: (702) 654-7144
<PAGE>
EXHIBIT A
COMMITMENT ASSIGNMENT AND ACCEPTANCE
This COMMITMENT ASSIGNMENT AND ACCEPTANCE
("Assignment") dated as of ____________, 19___ is made with
reference to the following loan agreements:
A. That certain Reducing Revolving Loan Agreement
dated as of October 4, 1994 (as amended, extended, renewed,
supplemented or otherwise modified from time to time, the
"Aztar Loan Agreement") by and among Aztar Corporation, a
Delaware corporation, Adamar of New Jersey, Inc., a New Jersey
corporation, and Ramada Express, Inc., a Nevada corporation
(collectively, "Borrowers," and individually, "Borrower"), the
lenders from time to time party thereto (the "Banks"), Societe
Generale and Midlantic Bank, N.A., as Lead Managers, Bank One,
Arizona, N A and Credit Lyonnais, as Co-Agents, Bankers Trust
Company, as Co-Managing Agent, and Bank of America National
Trust and Savings Association, as Managing Agent for itself and
for the Banks; and
B. That certain Second Amended and Restated Loan
Agreement dated as of October 4, 1994 (as amended, extended,
renewed, supplemented or otherwise modified from time to time,
the "TEGP Loan Agreement") by and among Tropicana Enterprises,
a Nevada general partnership ("TEGP"), Hotel Ramada of Nevada,
a Nevada corporation ("HRN"), the Banks, Societe Generale and
Midlantic Bank, N.A., as Lead Managers, Bank One, Arizona, N A
and Credit Lyonnais, as Co-Agents, Bankers Trust Company, as
Co-Managing Agent, and Bank of America National Trust and
Savings Association, as Managing Agent for itself and for the
Banks.
This Assignment is entered into between
_______________, the "Assignor" in its capacity as a Bank under
the Aztar Loan Agreement and as a Bank under the TEGP Loan
Agreement, and _________________, the "Assignee." The Assignor
and Assignee hereby represent, warrant and agree as follows:
1. Definitions. Capitalized terms used but
otherwise not defined herein shall have the respective meanings
assigned to them in the Loan Agreements. In addition, as used
in this Assignment, the following capitalized terms shall have
the meanings set forth below:
"Assigned Aztar Pro Rata Share" means that interest
in and to all the Assignor's rights and obligations under the
Aztar Loan Agreement as of the date hereof which represents the
percentage interest specified in Item 2 of Schedule A to this
Assignment.
"Assigned TEGP Pro Rata Share" means that interest in
and to all the Assignor's rights and obligations under the TEGP
Loan Agreement as of the date hereof which represents the
percentage interest specified in Item 2 of Schedule A to this
Assignment.
"Aztar Loan Documents" means the "Loan Documents" as
such term is defined in the Aztar Loan Agreement.
"Aztar Note" means a Note issued by Borrowers
pursuant to the Aztar Loan Agreement.
"Effective Date" means the effective date of this
Assignment as determined in accordance with Section 10 of this
Assignment.
"Loan Agreements" means, collectively, the Aztar Loan
Agreement and the TEGP Loan Agreement.
"TEGP Loan Documents" means "Loan Documents" as such
term is defined in the TEGP Loan Agreement.
"TEGP Note" means a Note issued by TEGP pursuant to
the TEGP Loan Agreement.
2. Representations and Warranties of the Assignor.
The Assignor represents and warrants as follows:
(a) The Assignor is the legal and beneficial
owner of the Assigned Aztar Pro Rata Share and the Assigned
TEGP Pro Rata Share. The Assigned Aztar Pro Rata Share and the
Assigned TEGP Pro Rata Share are each free and clear of any
adverse claim.
(b) The Assignor has full power and authority,
and has taken all action necessary, to execute and deliver this
Assignment and any and all other documents required to be
executed by it in connection with this Assignment and to
fulfill its obligations under, and to consummate the
transactions contemplated by this Assignment, and no
governmental authorizations or other authorizations are
required in connection herewith.
(c) The Assignor makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrowers or their Subsidiaries,
TEGP or HRN, the performance by Borrowers or their Subsidiaries
of the obligations or the performance by TEGP or HRN of their
respective obligations under the TEGP Loan Agreement and the
other TEGP loan documents, and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with the Loan Agreements or the execution,
legality, validity, enforceability, genuineness, or sufficiency
of either Loan Agreement or any loan document other than as
expressly set forth above.
(d) This Assignment constitutes the legal,
valid and binding obligation of the Assignor.
3. Representations and Warranties of the Assignee.
The Assignee represents and warrants as follows:
(a) The Assignee has full power and authority,
and has taken all action necessary, to execute and deliver this
Assignment and any and all other documents required to be
executed by it in connection with this Assignment and to
fulfill its obligations under, and to consummate the
transactions contemplated by this Assignment, and no
governmental authorizations or other authorizations are
required in connection herewith.
(b) The Assignee has independently and without
reliance upon the Managing Agent or the Assignor and based on
such documents and information as the Assignee has deemed
appropriate, made its own credit analysis and decision to enter
into this Assignment. The Assignee will, independently and
without reliance upon the Managing Agent or any Bank, and based
upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Aztar Loan
Agreement and/or the TEGP Loan Agreement.
(c) The Assignee has received copies of the
Loan Agreements together with copies of the financial
statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment.
(d) The Assignee is an Eligible Assignee.
(e) The Assignee will perform in accordance
with their respective terms all of the obligations which, by
the terms of the Loan Agreements, are required to be performed
by it as a Bank.
(f) This Assignment constitutes the legal,
valid and binding obligation of the Assignor.
4. Assignment. On the terms set forth herein, the
Assignor, as of the Effective Date, hereby irrevocably sells,
and assigns and transfers to the Assignee all of the rights and
obligations of the Assignor under (a) the Aztar Loan Agreement,
the other Aztar Loan Documents and Assignor's Aztar Note to the
extent of the Assigned Aztar Pro Rata Share, and (b) the TEGP
Loan Agreement, the TEGP Loan Documents and the Assignor's TEGP
Note, to the extent of the Assigned TEGP Pro Rata Share, and
the Assignee irrevocably accepts such assignment of the rights
and assumes such obligations from the Assignor on such terms as
of the Effective Date. As of the Effective Date, the Assignee
shall have the rights and obligations of a "Bank" under the
Aztar Loan Documents and the TEGP Loan Documents, respectively,
and the Assignor shall to the extent provided in this
Assignment relinquish such rights and interest and be released
from such liabilities, duties and obligations under the Aztar
Loan Documents and the TEGP Loan Documents, respectively. The
Assignee hereby appoints and authorizes the Managing Agent, the
Issuing Bank, and Swing Line Bank, as the case may be, to take
such action and to exercise such powers as delegated to the
Managing Agent, the Issuing Bank, and Swing Line Bank, as
applicable, as are delegated by the Loan Agreements.
5. Payments.
(a) As of the Effective Date, the Assignee
shall pay to the Assignor, in immediately available funds, an
amount equal to the outstanding indebtedness owed to it by the
Borrowers under the Loan Agreements with respect to the
Assigned Aztar Pro Rata Share and the Assigned TEGP Pro Rata
Share.
(b) From and after the Effective Date, the
Agent shall make all payments under the Loan Agreements in
respect of the Assigned Aztar Pro Rata Share and the Assigned
TEGP Pro Rata Share (including without limitation, all payments
of principal, interest and fees, if applicable, with respect to
thereto) to the Assignee. The Assignee and the Assignor shall
make all appropriate adjustments in payments under the Loan
Agreements for periods prior to the Effective Date between
themselves.
6. Notes. The Assignor and the Assignee shall make
appropriate arrangements with the Borrowers and TEGP
concurrently with the execution and delivery hereof so that a
replacement or a new Aztar Note and TEGP Note are issued to the
Assignor and the Assignee as applicable reflecting their
respective Aztar Pro Rata Share and TEGP Pro Rata Share.
7. Notices. All communications among the parties
or notices in connection herewith shall be in writing and may
be hand delivered, telexed, sent by telecopy, U.S. mail or
courier service, to the notice address as set forth on the
signature pages hereof.
8. Counterparts. The Assignment may be executed in
any number of counterparts as by different parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which
taken together shall constitute but one and the same
instrument.
9. Governing Law. THIS ASSIGNMENT SHALL BE DEEMED
TO BE A CONTRACTUAL OBLIGATION UNDER, AND SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA without reference to the provisions
thereof regarding conflicts of law.
10. Effective Date. This Assignment shall become
effective on the date (the "Effective Date") upon which all of
the following conditions are satisfied, provided that for all
purposes hereof, the term "Settlement Date" (as used in
Schedule "A" hereto) means the later of (i) the Settlement Date
referred to in Schedule A and (ii) the Effective Date: (i) the
execution of a counterpart hereof by each of the Assignor and
the Assignee; (ii) the execution of a counterpart hereof by the
Borrowers, TEGP, HRN and the Managing Agent as evidence of
their consent hereto to the extent required under Section
11.8(b) of the Aztar Loan Agreement and Section 10.3(b) of the
TEGP Loan Agreement; (iii) the receipt by Managing Agent of the
processing and recordation fee referred to in Section 11.8 of
the Aztar Loan Agreement; (iv) the Assignee shall have been (or
shall be deemed to have been) recorded in the Register as
provided in Section 11.8(d) of the Aztar Loan Agreement and
Section 10.3(d) of the TEGP Loan Agreement; (v) in the event
the Assignee is a not a United States person, the delivery by
the Assignee to the Managing Agent of such forms, certificates
or other evidence with respect to United States federal income
tax withholding matters as the Assignee may be required to
deliver to Managing Agent pursuant to Section 11.21 of the
Aztar Loan Agreement and Section 10.8 of the TEGP Loan
Agreement, and (vi) the receipt by the Managing Agent of
originals or telecopies of the counterparts described above and
authorization of delivery thereof.
IN WITNESS WHEREOF, the parties hereto have caused
this agreement to be executed and delivered by their respective
officials, officers or agents thereunto duly authorized, such
execution being made as of the Effective Date in the applicable
spaces provided on Schedule A.
<PAGE>
SCHEDULE A
TO THE COMMITMENT ASSIGNMENT AND ACCEPTANCE
1. Name and Date of Loan Agreement: Aztar Reducing Revolving
Loan Agreement dated as of October 4, 1994, as further
defined in Paragraph A of this Assignment and the TEGP
Second Amended and Restated Loan Agreement dated as of
October 4, 1994, as further defined in Paragraph B of this
Assignment.
2. Assigned Portions:
Aztar TEGP
Revolving Credit Term Loan
Commitment
(a) Aggregate Commitments/
Loans of All Banks $___________ $___________
(b) Assigned Pro Rata Share ___________% __________%
(c) Amount of Assigned
Pro Rata Share $___________ $___________
3. Settlement Date: _______________, 199
4. Payment Instructions:
ASSIGNOR: ASSIGNEE:
______________________ __________________________
______________________ __________________________
______________________ __________________________
Attn:_________________ Attn:_____________________
Ref: _________________ Ref: _____________________
5: Notice Address:
ASSIGNOR: ASSIGNEE:
______________________ __________________________
______________________ __________________________
______________________ __________________________
Attn:_________________ Attn:_____________________
Ref: _________________ Ref: _____________________
Tel: _________________ Tel: _____________________
Fax: _________________ Fax: _____________________
6: SIGNATURES:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
as ASSIGNOR as ASSIGNEE
By: _____________________ By: ______________________
_____________________ ______________________
Printed Name & Title Printed Name & Title
<PAGE>
Consented to in accordance Consented to in accordance
with Section 11.8 of the with Section 10.3(b) of the
Aztar Loan Agreement TEGP Loan Agreement
AZTAR CORPORATION, TROPICANA ENTERPRISES,
a Delaware corporation a Nevada general partnership
By: _____________________ By: Adamar of Nevada, Inc.,
_____________________ a Nevada corporation
Printed Name & Title
Its: General Partner
RAMADA EXPRESS, INC.,
a Nevada corporation By: ________________________
________________________
By: _____________________ Printed Name & Title
_____________________
Printed Name & Title
HOTEL RAMADA OF NEVADA,
a Nevada Corporation
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation By: ________________________
________________________
Printed Name & Title
By: _____________________
_____________________
Printed Name & Title
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Managing Agent
By: ________________________
________________________
Printed Name & Title
<PAGE>
EXHIBIT B
COMPLIANCE CERTIFICATE
To: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
This Compliance Certificate is delivered with
reference to that certain Reducing Revolving Loan Agreement
dated as of October 4, 1994, among Aztar Corporation, a
Delaware corporation ("Parent"), Adamar of New Jersey, Inc.,
a New Jersey corporation, and Ramada Express, Inc., a Nevada
corporation (collectively, "Borrowers" and individually,
"Borrower"), the Banks therein named, Societe Generale and
MidLantic Bank, N.A., as Lead Managers, Bank One, Arizona, NA
and Credit Lyonnais, as Co-Agents, Bankers Trust Company, as
Co-Managing Agent, and Bank of America National Trust and
Savings Association, as Managing Agent (as amended, extended,
renewed, supplemented or otherwise modified from time to time,
the "Loan Agreement"). Terms defined in the Loan Agreement
and not otherwise defined in this Compliance Certificate
("Certificate") shall have the meanings defined for them in the
Loan Agreement. Section references herein relate to the Loan
Agreement unless stated otherwise.
This Certificate is delivered in accordance with
Section 7.2 of the Loan Agreement by a Senior Officer of Parent
on behalf of Parent and the other Borrowers. This Certificate
is delivered with respect to the Fiscal Quarter ended
_________________, 199_ (the "Test Fiscal Quarter").
Computations indicating compliance with respect to the
covenants contained in Sections 6.9, 6.11, 6.12, 6.13, 6.14,
6.15, 6.16, 6.17 and 6.18 of the Loan Agreement are set forth
below:
of the last day of the Test Fiscal Quarter (the "Determination
Date"):
A. Aggregate Indebtedness consisting of Capital Leases,
or otherwise incurred to finance the purchase or construction
of capital assets or to refinance such Indebtedness was
$_________________.
Maximum Permitted: $15,000,000
B. Aggregate notional amount of Indebtedness covered by
one or more Secured Swap Agreements was $________________.
Maximum Permitted: $180,000,000
II. Section 6.11 - Tangible Net Worth. As of the
Determination Date, actual Tangible Net Worth was
$____________.
Minimum Requirement: $_________________
Component Calculations
Actual Tangible Net Worth and minimum required Tangible
Net Worth as set forth above were calculated as follows:
Actual Tangible Net Worth:
Stockholders' Equity of Parent and its
Subsidiaries $______
minus the aggregate Intangible
Assets of Parent and its
Subsidiaries ($_____)
Equals actual Tangible Net Worth $______
Minimum Required Tangible Net Worth: See Appendix I
attached hereto.
III. Section 6.12 - Debt Service Coverage. As of the
Determination Date, Debt Service Coverage was ____:1:00.
Minimum Requirement: ____:1.00
Debt Service Coverage is computed as follows:
(a) the sum of (i) Annualized Adjusted
EBITDA for the fiscal period consisting of
the Test Fiscal Period plus the three
immediately preceding Fiscal Quarters (the
"Test Period") (as calculated below) $______
plus (ii) the greater of (A) Maintenance
Capital Expenditures for the Test Period
$_________ or (B) $15,000,000 $______
minus (iii) Cash Income Taxes for the Test
Period ($______)
(a) equals [(i) + (ii) - (iii)] $______
divided by (b) the sum of (i) Interest
Charges for the Test Period (which is the
sum of (x), (y) and (z) set forth below):
(x) Cash Interest Expense for the Test
Period (as calculated below) $______
plus (y) all interest currently
payable in Cash incurred during the
Test Period which is capitalized under
Generally Accepted Accounting
Principles $______
plus (z) that portion of the
rentals paid to TEGP by HRN
during the Test Period which is
designated and used to service
interest payable under the TEGP
Loan Agreement $_______
equals Interest Charges [(x) +
(y) + (z)] $_______
plus (ii) the aggregate amount of required
principal payments on Funded Debt for the
Test Period $______
(b) equals [(i) + (ii)] $______
Debt Service Coverage equals [(a) / (b)] ____:1.00
Component Calculations: See Appendix I attached hereto.
IV. Section 6.13 - Leverage Ratio. As of the Determination
Date, the Leverage Ratio was ____:1.00.
Maximum Permitted: _____:1.00
Leverage Ratio is computed as follows:
(a) Average Quarterly Adjusted Funded Debt
as of the Determination Date $______
divided by (b) Annualized Adjusted EBITDA
for the Test Period (as calculated in
Paragraph III) $______
equals Leverage Ratio [(a)/(b)] ____:1.00
Component Calculations: See Appendix I attached hereto.
V. Section 6.14 - Capital Expenditures.
A. Maintenance Capital Expenditures for the Fiscal Year
(or portion thereof) ending on the Determination Date were
$___________________.
Maximum Permitted: The sum of (x) and
(y) set forth below:
(x) = $30,000,000
(y) = (i) $30,000,000 minus
(ii) Maintenance Capital Expenditures made
by Borrowers and the Restricted
Subsidiaries for the immediately preceding
Fiscal Year ($_______)
equals [(i) - (ii)] $______
Maximum Permitted: [(x) + (y)] $______
B. As of the Determination Date, Capital Expenditures
financed by Indebtedness permitted by Section 6.9(d) of the
Loan Agreement were $______________.
Maximum Permitted: $15,000,000
C. As of the Determination Date, New Venture Capital
Expenditures permitted by Section 6.15 of the Loan Agreement
were $________________.
VI. Sections 6.15 and 6.16 - New Venture Capital Expenditures
and New Venture Investments.
A. As of the Determination Date, the aggregate amount of
Basket Expenditures made by Borrowers and the Restricted
Subsidiaries since the Closing Date was $_________.
Maximum Permitted: $____________ insert amount
of New Venture Basket
Component Calculations: See Appendix I attached hereto.
B. As of the Determination Date, the aggregate New
Venture Capital Expenditures and New Venture Investments in the
Evansville Project were $_______________.
Maximum Permitted: $115,000,000, provided
the Evansville
Commitment Date occurs
on or before
December 31, 1995
C. As of the Determination Date, the aggregate New
Venture Capital Expenditures and New Value Investments in the
Caruthersville Project were $______________.
Maximum Permitted: $65,000,000
D. As of the Determination Date, the aggregate New
Venture Capital Expenditures and New Venture Investments in the
Atlantic City Project were $_______________.
Maximum Permitted: _______________.
E. As of the Determination Date, the aggregate New
Venture Investments in Unrestricted New Venture Entities made
since the Closing Date was $_______________.
Maximum Permitted: $50,000,000
VII. Section 6.17 - Investments. As of the Determination Date
the aggregate value of Investments permitted by Section 6.17(m)
of the Loan Agreement was $____________.
Maximum Permitted: $100,000
VIII. Section 6.18 - Subsidiary Indebtedness. As of the
Determination Date and with respect to each of the following
Significant Subsidiaries, if any, the aggregate amount of
Indebtedness and Guaranty Obligations incurred in the ordinary
course of such Significant Subsidiary's business and not
otherwise permitted by Sections 6.18(a) through (e)
("Non-Excluded Subsidiary Debt") was that amount set forth
opposite such Significant Subsidiary:
Amount of
Non-Excluded
Significant Subsidiary Subsidiary Debt
____________________________ $______________
____________________________ $______________
____________________________ $______________
____________________________ $______________
Maximum Permitted: $500,000 per Significant
Subsidiary
IX. A review of the activities of Borrowers and their
Subsidiaries during the fiscal period covered by this
Certificate has been made under the supervision of the
undersigned with a view to determining whether during such
fiscal period Borrowers and their Restricted Subsidiaries
performed and observed all of their respective Obligations. To
the best knowledge of the undersigned, during the fiscal period
covered by this Certificate, all covenants and conditions have
been so performed and observed and no Default or Event of
Default has occurred and is continuing, with the exceptions set
forth below in response to which Borrowers and the Restricted
Subsidiaries have taken or propose to take the following
actions (if none, so state).
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
X. The undersigned Senior Officer of Parent certifies that
the calculations made and the information contained herein are
derived from the books and records of Borrowers and their
Subsidiaries, as applicable, and that each and every matter
contained herein correctly reflects those books and records.
XI. To the best knowledge of the undersigned no event or
circumstance has occurred that constitutes a Material Adverse
Effect since the date the most recent Compliance Certificate
was executed and delivered, with the exceptions set forth below
(if none, so state).
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Dated: _______________, 199__
_________________________________
_________________________________
Printed Name and Title of Senior
Officer of Aztar Corporation
<PAGE>
Appendix I
to
Compliance Certificate
Paragraph II
Minimum Required Tangible Net Worth is calculated as
follows:
Minimum Required Tangible Net Worth:
(a) $305,000,000 $______
plus (b) an amount equal to Net Income
earned in each Fiscal Quarter ending after
June 30, 1994 (with no deduction for a net
loss in any such Fiscal Quarter) equals
$________ multiplied by 50%
$______
plus (c) an amount equal to the aggregate
increases in Stockholders' Equity of Parent
and the Restricted Subsidiaries after the
Closing Date by reason of the issuance of
capital stock of Parent (including upon any
conversion of debt securities of Parent
into such capital stock) $_____________
multiplied by 75% $______
equals minimum required Tangible Net Worth
[(a)+(b)+(c)] $______
Paragraph III
Annualized Adjusted EBITDA - Component Calculations
Annualized Adjusted EBITDA as of the Determination Date is
calculated as follows:
(a) Adjusted EBITDA for the Test Period $_______
plus (b) with respect to any Test Period
in which the Evansville Project or the
Caruthersville Project (whichever or both
is applicable, the "Project") is open
for business for at least one (1) full
Fiscal Quarter but less than four (4) full
Fiscal Quarters, such amount as is
necessary to reflect the annualization of
Adjusted EBITDA attributable to the
Project $_____
equals Annualized Adjusted EBITDA
[(a)+(b)] $_______
Adjusted EBITDA - Component Calculations
Adjusted EBITDA for the Test Period is calculated as
follows, in each case as determined in accordance with
Generally Accepted Accounting Principles, and in the case of
items (d), (e), (f), (g), (h) and (i) only to the extent
reflected in the determination of item (a) for such Test
Period:
(a) Consolidated net income of Borrowers
and the Restricted Subsidiaries ("Net
Income") for the Test Period $_______
plus (b) any extraordinary loss reflected
in Net Income for the Test Period $_______
minus (c) any extraordinary gain reflected
in Net Income for the Test Period ($______)
plus (d) Interest Expense for the Test
Period (which is the sum of (x) and (y)
set forth below)
(x) all interest, fees, charges and
related expenses paid or payable
(without duplication) for the Test
Period by Borrowers and the Restricted
Subsidiaries to a lender in connection
with borrowed money (including any
obligations for fees, charges and
related expenses payable to the issuer
of any letter of credit) or the
deferred purchase price of assets that
are considered "interest expense"
under Generally Accepted Accounting
Principles (other than underwriting
discounts, closing fees and other
transactional fees and expenses
incurred on or within six (6) months
before or after the Closing Date in
connection with the Existing
Subordinated Debt, the issuance of the
New Subordinated Debt or the execution
and delivery of the Loan Documents)
$_________________
plus (y) the portion of rent paid or
payable (without duplication) for the
Test Period by Borrowers and the
Restricted Subsidiaries under Capital
Lease Obligations that should be
treated as interest in accordance with
Financial Accounting Standards Board
Statement No. 13
$_________________
Interest Expense [(x)+(y)] equals $_______
plus (e) the aggregate amount of federal
and state taxes on or measured by income
for the Test Period (whether or not payable
during the Test Period) $_______
plus (f) depreciation, amortization and all
other non-cash expenses for the Test
Period $_______
plus (g) Parent's equity in any net loss of
TEGP for the Test Period $_______
minus (h) Parent's equity in any net income
of TEGP for the Test Period ($______)
plus (i) that portion of the rentals paid
to TEGP by HRN which is designated and used
to service principal and interest payable
under the TEGP Loan Agreement for the Test
Period $_______
plus (j) dividends or other income received
in Cash during the Test Period by any of
Borrowers or the Restricted Subsidiaries
from an Unrestricted New Venture Entity
(but only to the extent of earnings before
interest, taxes, depreciation and
amortization of such Unrestricted New
Venture Entity) $_______
equals Adjusted EBITDA [(a)+(b)-
(c)+(d)+(e)+(f)+(g)-(h)+(i)+(j)] $_______
Cash Interest Expense - Component Calculations
In the above computation, Cash Interest Expense is calculated
as follows:
(a) all interest, fees, charges and related
expenses paid or payable (without
duplication) in Cash for the Test Period to
a lender in connection with borrowed money
(including any obligations for fees,
charges and related expenses payable to the
issuer of any letter of credit) or the
deferred purchase price of assets that are
considered "interest expense" under
Generally Accepted Accounting Principles
(other than financed underwriting
discounts, closing fees and other
transactional fees and expenses incurred on
or within six months before or after the
Closing Date in connection with the
Existing Subordinated Debt, the issuance of
the New Subordinated Debt or the execution
and delivery of the Loan Documents) $______
plus (b) the portion of rent paid or
payable (without duplication) in Cash for
the Test Period under Capital Lease
Obligations that should be treated as
interest in accordance with Financial
Accounting Standards Board Statement
No. 13 $______
equals Cash Interest Expense
[(a) + (b)] $______
Paragraph IV
Average Quarterly Adjusted Funded Debt is calculated as the
greater of (f) or (g) below, as follows:
(a) the amount of all principal
Indebtedness of Borrowers and the
Restricted Subsidiaries for borrowed money
(including debt securities issued by
Borrowers or any of the Restricted
Subsidiaries) on the Determination Date $______
plus (b) the aggregate amount of the
principal portion of all Capital Lease
Obligations on the Determination Date $_____
plus (c) the amount of all Letters of
Credit outstanding on the Determination
Date $_____
plus (d) the amount of all Guaranty
Obligations of Borrowers and the Restricted
Subsidiaries on the Determination Date with
respect to Indebtedness of any Person that
is not a Restricted Subsidiary $_____
plus (e) the amount of all other Guaranty
Obligations of Borrowers and the Restricted
Subsidiaries on the Determination Date if
and to the extent the amount thereof has
been (or in accordance with Financial
Accounting Standards Board Statement No. 5
should be) quantified as of that date and
reflected or disclosed in the most recent
consolidated financial statements (or notes
thereto) of Borrowers and the Restricted
Subsidiaries.
equals (f) [(a)+(b)+(c)+(d)+(e)] $_____
(g) the average of the sum of (i) the
amounts of principal Indebtedness of
Borrowers and the Restricted Subsidiaries
for borrowed money (including debt
securities issued by Borrowers or any of
the Restricted Subsidiaries) and (ii) the
aggregate amount of the principal portion
of all Capital Lease Obligations on the
last day of each of the three 4 and 5 week
fiscal periods comprising the Test Fiscal
Quarter $_____
Paragraph VI
New Venture Basket - Component Calculations
(a) $175,000,000 $175,000,000
plus (b) the aggregate net Cash proceeds
received by Parent from the issuance and
sale of capital stock of Parent (including
upon any conversion or exchange of debt
securities of Parent issued after July 1,
1994 into or for such capital stock) after
July 1, 1994 and through the Determination
Date $______
plus (c) the net Cash proceeds received by
Parent from the issuance and sale of New
Subordinated Debt [If the Determination
Date is on or after the Leverage Benchmark
Date] $______
plus (d) the net Cash proceeds received by
Parent from the issuance and sale of other
Subordinated Obligations pursuant to
Section 6.9(g) of the Loan Agreement, but
only if after giving effect thereto, the
Leverage Ratio is 4.00 to 1.00 or lower $______
equals New Venture Basket [(a)+(b)+(c)+(d)] $______
Basket Expenditures - Component Calculations
In the above computation, Basket Expenditures is
calculated as follows:
(a) The aggregate New Venture Capital
Expenditures and New Venture Investments
made with respect to the Evansville
Project $______
plus (b) the aggregate New Venture
Expenditures and New Venture Investments
made with respect to the Caruthersville
Project in excess of $55,000,000 $______
plus (c) the aggregate New Venture Capital
Expenditures and New Venture Investments
made with respect to the Atlantic City
Project, net of the amount financed by the
New Jersey Casino Reinvestment Development
Authority $______
plus (d) the aggregate New Venture Capital
Expenditures and New Venture Investments
made with respect to all other New
Ventures $______
equals Basket Expenditures
[(a)+(b)+(c)+(d)] $______
<PAGE>
EXHIBIT C
PROMISSORY NOTE
$[Pro Rata share of $212,300,000] October 4, 1994
Los Angeles, California
FOR VALUE RECEIVED, the undersigned jointly and
severally promise to pay to the order of ____________________
__________________________________ (the "Bank"), the principal
amount of ___________________________________________________
AND NO/100 DOLLARS ($___________________) or such lesser
aggregate amount of Advances as may be made by the Bank with
respect to the Commitment under the Loan Agreement referred to
below, together with interest on the principal amount of each
Advance made hereunder and remaining unpaid from time to time
from the date of each such Advance until the date of payment in
full, payable as hereinafter set forth.
Reference is made to the Reducing Revolving Loan
Agreement dated as of October 4, 1994, by and among the
undersigned, as Borrowers, the Banks which are parties thereto,
Societe Generale and Midlantic Bank, N.A., as Lead Managers,
Bank One, Arizona, NA and Credit Lyonnais, as Co-Agents,
Bankers Trust Company, as Co-Managing Agent, and Bank of
America National Trust and Savings Association, as Managing
Agent for the Banks (the "Loan Agreement"). Terms defined in
the Loan Agreement and not otherwise defined herein are used
herein with the meanings given those terms in the Loan
Agreement. This is one of the Notes referred to in the Loan
Agreement, and any holder hereof is entitled to all of the
rights, remedies, benefits and privileges provided for in the
Loan Agreement as originally executed or as it may from time to
time be supplemented, modified or amended. The Loan Agreement,
among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events
upon the terms and conditions therein specified.
The principal indebtedness evidenced by this Note
shall be payable as provided in the Loan Agreement and in any
event on the Maturity Date.
Interest shall be payable on the outstanding daily
unpaid principal amount of Advances from the date of each such
Advance until payment in full and shall accrue and be payable
at the rates and on the dates set forth in the Loan Agreement
both before and after default and before and after maturity and
judgment, with interest on overdue principal and interest to
bear interest at the rate set forth in Section 3.10 of the Loan
Agreement, to the fullest extent permitted by applicable Law.
Each payment hereunder shall be made to the Managing
Agent at the Managing Agent's Office for the account of the
Bank in immediately available funds not later than 11:00 a.m.
(San Francisco time) on the day of payment (which must be a
Banking Day). All payments received after 11:00 a.m. (San
Francisco time) on any particular Banking Day shall be deemed
received on the next succeeding Banking Day. All payments
shall be made in lawful money of the United States of America.
The Bank shall use its best efforts to keep a record
of Advances made by it and payments received by it with respect
to this Note, and such record shall be presumptive evidence of
the amounts owing under this Note.
The undersigned hereby promise to pay all costs and
expenses of any rightful holder hereof incurred in collecting
the undersigneds' obligations hereunder or in enforcing or
attempting to enforce any of such holder's rights hereunder,
including reasonable attorneys' fees and disbursements, whether
or not an action is filed in connection therewith.
The undersigned hereby waive presentment, demand for
payment, dishonor, notice of dishonor, protest, notice of
protest and any other notice or formality, to the fullest
extent permitted by applicable Laws.
The undersigned agree that their liability hereunder
is joint and several, absolute and unconditional without regard
to the liability of any other party. All provisions of this
Note shall apply to each of the undersigned. Each of the
undersigned other than Aztar Corporation ("Parent") hereby
irrevocably appoints Parent as its agent for the purpose of
(i) requesting Advances hereunder and (ii) receiving notices
with respect hereto.
<PAGE>
THIS NOTE SHALL BE DELIVERED TO AND ACCEPTED BY THE
BANK, OR BY THE MANAGING AGENT ON ITS BEHALF, IN THE STATE OF
CALIFORNIA, AND SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LOCAL LAWS THEREOF.
AZTAR CORPORATION,
a Delaware corporation
By:__________________________
Craig F. Sullivan
Treasurer<PAGE>
RAMADA EXPRESS, INC.,
a Nevada corporation
By:__________________________
Craig F. Sullivan
Treasurer
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation
By:__________________________
Craig F. Sullivan
Treasurer<PAGE>
<PAGE>
SCHEDULE OF COMMITTED ADVANCES AND
PAYMENTS OF PRINCIPAL
Date
<PAGE>
Amount
of
Advance
<PAGE>
Interest
Period
<PAGE>
Amount of
Principal
Paid
<PAGE>
Unpaid
Principal
Balance
<PAGE>
Notation
Made by
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
<PAGE>
EXHIBIT E
NEVADA GAMING PLEDGE AGREEMENT
This NEVADA GAMING PLEDGE AGREEMENT ("Agreement"),
dated as of October 4, 1994, is made by AZTAR CORPORATION, a
Delaware corporation ("Aztar"), as Grantor, in favor of and for
the benefit of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as the Managing Agent under the Loan Agreement
hereafter referred to above for the ratable benefit of each of
the Banks which are parties to the Loan Agreement from time to
time, as Secured Party, with reference to the following facts:
RECITALS
A. Pursuant to the Loan Agreement of even date
herewith by and among Aztar, Adamar of New Jersey, Inc., a New
Jersey corporation and Ramada Express, Inc., a Nevada
corporation (collectively, "Borrowers" and individually,
"Borrower"), the lenders from time to time a party thereto
(collectively, the "Banks" and individually, a "Bank"), Societe
Generale and Midlantic Bank, N.A., as Lead Managers, Bank One,
Arizona, N A and Credit Lyonnais, as Co-Agents, Bankers Trust
Company, as Co-Managing Agent, and Bank of America National
Trust and Savings Association, as Managing Agent (as such
agreement may from time to time be extended, modified, renewed,
restated, supplemented or amended, the "Loan Agreement"), the
Banks have agreed to extend certain credit facilities to
Borrowers.
B. The Loan Agreement provides, as a condition
precedent to the Banks' obligation to extend credit facilities
to Borrowers, that Grantor shall enter into this Agreement, and
shall pledge certain Pledged Collateral to Secured Party, all
under the terms and conditions set forth in this Agreement.
C. Grantor expects to realize direct and indirect
benefits as a result of the availability of the aforementioned
credit facilities.
AGREEMENT
NOW, THEREFORE, in order to induce the Banks to
extend credit facilities to Borrowers under the Loan Agreement,
and for other good and valuable consideration, the receipt and
adequacy of which hereby are acknowledged, Grantor hereby
represents, warrants, covenants, agrees, and pledges as
follows:
1. Definitions. This Agreement is the Pledge
Agreement (Gaming) referred to in the Loan Agreement. Terms
defined in the Loan Agreement and not otherwise defined in this
Agreement shall have the meanings given those terms in the Loan
Agreement as though set forth herein in full. The following
terms shall have the meanings respectively set forth after
each:
"Agreement" means this Pledge Agreement, and any
extensions, modifications, renewals, restatements, supple-
ments or amendments hereof.
"Certificates" means all certificates, instruments or
other documents now or hereafter representing or evidenc-
ing any Pledged Securities.
"Gaming Board" means, collectively, (a) the Nevada
Gaming Commission, (b) the Nevada State Gaming Control
Board, and (c) any other Governmental Agency that holds
regulatory, licensing or permit authority over gambling,
gaming or casino activities conducted by Borrowers and the
Restricted Subsidiaries within its jurisdiction.
"Gaming Laws" means all Laws pursuant to which any
Gaming Board possesses regulatory, licensing or permit
authority over gambling, gaming or casino activities
conducted by Borrowers and the Restricted Subsidiaries
within its jurisdiction, including, without limitation,
the Nevada Gaming Control Act, as amended from time to
time, and the rules and regulations of the Gaming Board
promulgated thereunder.
"Gaming Subsidiary" means any Subsidiary of Grantor
with respect to which the inclusion of Grantor's equity
interest in such Subsidiary in the applicable Pledged
Collateral would require compliance with one or more
Nevada Gaming Laws in connection with the execution,
delivery or performance of this Agreement.
"Pledged Collateral" means any and all property of
Grantor now or hereafter pledged and delivered to Secured
Party, and includes without limitation the Pledged
Securities, any Certificates representing or evidencing
the same, any and all proceeds and products of any of the
foregoing, and any and all collections, dividends, distri-
butions, redemption payments, liquidation payments, inter-
est or premiums with respect to any of the foregoing.
"Pledged Securities" means (i) 100% of the shares of
capital stock of Ramada Express, Inc., a Nevada corpora-
tion ("REI"), and 49% of the shares of Hotel Ramada of
Nevada, a Nevada corporation ("HRN"), as more particularly
described on Schedule 1 hereto, (ii) any and all securi-
ties now or hereafter issued in substitution, exchange or
replacement therefor, or with respect thereto, (iii) any
and all warrants, options or other rights to subscribe to
or acquire any additional capital stock of REI and 49% of
any and all warrants, options or other rights to subscribe
to or acquire any additional capital stock of HRN,
(iv) any and all additional capital stock of REI and 49%
of any and all additional capital stock of HRN, and
(v) any and all equity interests and the Certificates or
other written evidences representing such equity interests
and any interest of Grantor in the entries on the books of
any financial intermediary pertaining thereto hereafter
acquired by Grantor in any future Gaming Subsidiary which
is subject to Nevada Gaming Laws.
"Secured Party" means the Managing Agent, who shall
hold the pledges and security interests granted hereunder
for the ratable benefit of each of the Banks which are
parties to the Loan Agreement from time to time. Subject
to the terms hereof and of the Loan Agreement, any right,
remedy, privilege or power of Secured Party shall be
exercised by the Managing Agent acting with the consent of
the Requisite Banks.
2. Incorporation of Representations, Warranties,
Covenants and Other Provisions of Loan Documents. This Agree-
ment is one of the Loan Documents referred to in the Loan
Agreement. All representations, warranties, affirmative and
negative covenants and other provisions contained in any Loan
Document that are applicable to Loan Documents generally are
fully applicable to this Agreement and are incorporated herein
by this reference as though set forth in full.
3. Creation of Security Interest.
3.1 Pledge of Pledged Collateral. Subject to
compliance with Gaming Laws, Grantor hereby pledges and grants
to Secured Party a security interest in and to all Pledged Col-
lateral for the benefit of Secured Party, together with all
products, proceeds, dividends, redemption payments, liquidation
payments, instruments and other Property, and any and all
rights, titles, interests, privileges, benefits and preferences
appertaining or incidental to the Pledged Collateral. The
security interest and pledge created by this Section 3.1 shall
continue in effect so long as any Obligation is owed to Secured
Party or any commitment to extend credit to the Borrowers
remains outstanding from Secured Party.
3.2 Delivery of Certain Pledged Collateral. On
or before the Closing Date (but in any event subject to compli-
ance with applicable Gaming Laws), Grantor shall cause to be
pledged and delivered to Secured Party the Certificates evi-
dencing the capital stock of the existing Gaming Subsidiaries
listed on Schedule 1 hereto. Following the Closing Date,
subject to compliance with Gaming Laws, additional Pledged
Collateral may from time to time be delivered to Secured Party
by agreement between Secured Party and Grantor. All Certifi-
cates at any time delivered to Secured Party shall be in
suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Secured Party.
Secured Party shall hold all Certificates pledged hereunder
pursuant to this Agreement unless and until released in accord-
ance with Section 3.3 of this Agreement. Secured Party shall
hold and maintain the Pledged Collateral at all times at a
location within the State of Nevada approved by the applicable
Gaming Board.
3.3 Release of Pledged Collateral. Pledged
Collateral that is required to be released from the pledge and
security interest created by this Agreement in order to permit
Grantor to consummate any disposition of stock or assets, mer-
ger, consolidation, amalgamation, acquisition, or dividend
payment or distribution that Grantor is entitled to consummate
pursuant to the Loan Documents, if any, shall be so released by
Secured Party at such times and to the extent necessary to
permit Grantor to consummate such permitted transactions
promptly following Secured Party's receipt of written request
therefor by Grantor specifying the purpose for which release is
requested and such further certificates or other documents as
Secured Party reasonably shall request in its discretion to
confirm that Grantor is permitted to consummate such permitted
transaction and to confirm Secured Party's replacement lien on
appropriate collateral (unless replacement collateral is not
required pursuant to the Loan Documents). Any request for any
permitted release shall be transmitted to Secured Party.
Subject to compliance with Gaming Laws, Secured Party, at the
expense of Grantor, promptly shall redeliver all Certificates
and shall execute and deliver to Grantor all documents
requested by Grantor that are reasonably necessary to release
Pledged Collateral of record whenever Grantor shall be entitled
to the release thereof in accordance with this Section 3.3.
4. Security for Obligations. This Agreement and
the pledge and security interests granted herein secure the
prompt payment, in full in cash, and full performance of, all
Obligations, whether for principal, interest, fees, expenses or
otherwise, including, without limitation, all Obligations of
Borrowers now or hereafter existing under the Loan Documents,
all Obligations of Grantor now or hereafter existing under this
Agreement, and all interest that accrues on all or any part of
any of the Obligations of Borrowers and/or Grantor after the
filing of any petition or pleading against any Borrower,
Grantor or any other Person for a proceeding under any Debtor
Relief Law.
5. Further Assurances.
5.1 Subject to compliance with applicable
Gaming Laws, Grantor agrees that at any time, and from time to
time, at its own expense Grantor will promptly execute, deliver
and file or record all further financing statements, instru-
ments and documents, and will take all further actions, includ-
ing, without limitation, causing the Gaming Subsidiaries to so
execute, deliver, file or take other actions, that may be
necessary or desirable, or that Secured Party reasonably may
request, in order to perfect and protect any pledge or security
interest granted hereby or to enable Secured Party to exercise
and enforce its rights and remedies hereunder with respect to
any Pledged Collateral and to preserve, protect and maintain
the Pledged Collateral and the value thereof, including, with-
out limitation, payment of all taxes, assessments and other
charges imposed on or relating to the Pledged Collateral.
Grantor hereby consents and agrees that the issuers of, or
obligors on, the Pledged Collateral, or any registrar or trans-
fer agent or trustee for any of the Pledged Collateral, shall
be entitled to accept the provisions of this Agreement as
conclusive evidence of the right of Secured Party to effect any
transfer or exercise any right hereunder, notwithstanding any
other notice or direction to the contrary heretofore or here-
after given by Grantor or any other Person to such issuers or
such obligors or to any such registrar or transfer agent or
trustee.
5.2 Grantor agrees to assist Secured Party in
obtaining all approvals of any Gaming Board or other Govern-
mental Authority that are required by law for or in connection
with any action or transaction contemplated by this Agreement
or by Division 8 or Division 9 of the California Uniform
Commercial Code and, at Secured Party's request after and
during the continuance of an Event of Default, to prepare, sign
and file with the appropriate Gaming Board the transferor's
portion of any application or applications for consent to the
transfer of control thereof necessary or appropriate under
applicable Gaming Laws for approval of any sale or transfer of
the Pledged Collateral pursuant to the exercise of Secured
Party's remedies hereunder and under the Loan Documents.
6. Voting Rights; Dividends; etc. So long as no
Event of Default under the Loan Agreement occurs and remains
continuing:
6.1 Voting Rights. Grantor shall be entitled
to exercise any and all voting and other consensual rights per-
taining to the Pledged Securities, or any part thereof, for any
purpose not inconsistent with the terms of this Agreement, the
Loan Agreement, or the other Loan Documents.
6.2 Interest, Dividend and Distribution Rights.
Grantor shall be entitled to receive and to retain and use any
and all interest, premiums, dividends or distributions paid in
respect of the Pledged Collateral; provided, however, that any
and all such dividends or distributions received in the form of
capital stock shall be, and the Certificates representing such
capital stock forthwith shall be delivered to Secured Party to
hold as, Pledged Collateral and shall, if received by Grantor,
be received in trust for the benefit of Secured Party, be
segregated from the other property of Grantor, and forthwith be
delivered to Secured Party as Pledged Collateral in the same
form as so received (with any necessary endorsements or stock
powers).
7. Rights During Event of Default. When an Event
of Default has occurred and is continuing, but subject to
compliance with Gaming Laws:
7.1 Voting and Distribution Rights. At the
option of Secured Party, all rights of Grantor to exercise the
voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 6.1 above, and to
receive the interest, premiums, dividends and distributions
which it would otherwise be authorized to receive and retain
pursuant to Section 6.2 above, shall cease, and all such rights
shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other
consensual rights and to receive and to hold as Pledged
Collateral such dividends and distributions. Secured Party
shall give notice to Grantor of Secured Party's election to
exercise voting rights with respect to the Pledged Collateral;
provided, however, that (i) neither the giving of such notice
nor the receipt thereof by Grantor shall be a condition to
exercise of any rights of Secured Party hereunder, and
(ii) Secured Party shall not incur any liability for failing to
give such notice.
7.2 Distributions Held in Trust. All dividends
and other distributions which are received by Grantor contrary
to the provisions of this Agreement shall be received in trust
for the benefit of Secured Party, shall be segregated from
other funds of Grantor, and forthwith shall be paid over to
Secured Party as Pledged Collateral in the same form as so
received (with any necessary endorsements or stock powers).
7.3 Irrevocable Proxy. Grantor hereby revokes
all previous proxies with regard to the Pledged Securities and,
to the extent allowable under applicable Law (including,
without limitation, applicable Gaming Laws), appoints Secured
Party as its proxyholder to attend and vote at any and all
meetings of the shareholders of the Gaming Subsidiaries, and
any adjournments thereof, held on or after the date of the
giving of this proxy and prior to the termination of this proxy
and to execute any and all written consents of shareholders of
such corporations executed on or after the date of the giving
of this proxy and prior to the termination of this proxy, with
the same effect as if Grantor had personally attended the meet-
ings or had personally voted its shares or had personally
signed the written consents; provided, however, that the proxy-
holder shall have rights hereunder only upon the occurrence and
during the continuance of an Event of Default under the Loan
Agreement. Grantor hereby authorizes Secured Party to sub-
stitute another person as the proxyholder and, upon the occur-
rence or during the continuance of any Event of Default, hereby
authorizes and directs the proxyholder to file this proxy and
the substitution instrument with the secretary of the
appropriate corporation. This proxy is coupled with an
interest and is irrevocable until such time as no commitment to
extend credit to Borrowers remains outstanding from Secured
Party and until such time as all Obligations have been paid and
performed in full.
8. Transfers and Other Liens. Subject to compli-
ance with Gaming Laws, Grantor agrees that, except as specific-
ally permitted under the Loan Documents, it will not (i) sell,
assign, exchange, transfer or otherwise dispose of, or contract
to sell, assign, exchange, transfer or otherwise dispose of, or
grant any option with respect to, any of the Pledged Colla-
teral, (ii) create or permit to exist any Lien upon or with
respect to any of the Pledged Collateral, except for Permitted
Encumbrances, or (iii) take any action with respect to the
Pledged Collateral which is inconsistent with the provisions or
purposes of this Agreement or any other Loan Document.
9. Secured Party Appointed Attorney-in-Fact.
Subject to compliance with Gaming Laws, Grantor hereby irrevoc-
ably appoints Secured Party as Grantor's attorney-in-fact, with
full authority in the place and stead of Grantor, and in the
name of Grantor, or otherwise, from time to time, in Secured
Party's sole and absolute discretion to do any of the following
acts or things: (a) to do all acts and things and to execute
all documents necessary or advisable to perfect and continue
perfected the security interests created by this Agreement and
to preserve, maintain and protect the Pledged Collateral;
(b) to do any and every act which Grantor is obligated to do
under this Agreement; (c) to prepare, sign, file and record, in
Grantor's name, any financing statement covering the Pledged
Collateral; and (d) to endorse and transfer the Pledged Col-
lateral upon foreclosure by Secured Party; provided, however,
that Secured Party shall be under no obligation whatsoever to
take any of the foregoing actions, and Secured Party shall have
no liability or responsibility for any act (other than its own
gross negligence or willful misconduct) or omission taken with
respect thereto. Grantor hereby agrees to repay immediately
upon demand all reasonable costs and expenses incurred or
expended by Secured Party in exercising any right or taking any
action under this Agreement, together with interest as provided
for in the Loan Agreement.
10. Secured Party May Perform Obligations. If
Grantor fails to perform any Obligation contained herein,
Secured Party may, subject to compliance with applicable Gaming
Laws, but without any obligation to do so and without notice to
or demand upon Grantor, perform the same and take such other
action as Secured Party may deem necessary or desirable to
protect the Pledged Collateral or Secured Party's security
interests therein, Secured Party being hereby authorized (with-
out limiting the general nature of the authority hereinabove
conferred) to pay, purchase, contest and compromise any lien
which in the reasonable judgment of Secured Party appears to be
prior or superior to Secured Party's security interests, and in
exercising any such powers and authority to pay necessary
expenses, employ counsel and pay reasonable attorneys' fees.
Grantor hereby agrees to repay immediately upon demand all sums
so expended by Secured Party, together with interest from the
date of expenditure at the rates provided for in the Loan
Agreement. Secured Party shall be under no duty or obligation
to (i) preserve, maintain or protect the Pledged Collateral or
any of Grantor's rights or interest therein, (ii) exercise any
voting rights with respect to the Pledged Collateral, or
(iii) make or give any notices of default, presentments,
demands for performance, notices of nonperformance or dishonor,
protests, notices of protest or notice of any other nature
whatsoever in connection with the Pledged Collateral on behalf
of Grantor or any other Person having any interest therein; and
Secured Party assumes no liability for and shall not be
obligated to perform the obligations of Grantor, if any, with
respect to the Pledged Collateral.
11. Reasonable Care. Secured Party shall be deemed
to have exercised reasonable care in the custody and preserva-
tion of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially similar to that
which Secured Party accords its own property and if the tang-
ible Pledged Collateral is maintained in a location within the
State of Nevada approved by the applicable Gaming Board, it
being understood that Secured Party shall not have any respons-
ibility for (i) ascertaining or taking action with respect to
maturities, calls, conversions, exchanges, tenders or other
matters relative to any Pledged Collateral, whether or not
Secured Party has or is deemed to have knowledge of such
matters, or (ii) taking any necessary steps to preserve rights
against any Person with respect to any Pledged Collateral.
Secured Party shall comply with the conditions, if any, imposed
by any Gaming Board in connection with the approvals of the
security interest granted hereunder by Grantor, including,
without limitation, any conditions requiring Secured Party to
permit representatives of the Gaming Board to inspect such
securities. Secured Party shall not surrender possession of
any Pledged Collateral to any party other than Grantor without
the prior approval of the applicable Gaming Board or as
otherwise permitted by applicable Gaming Laws.
12. Events of Default and Remedies.
12.1 Rights Upon Event of Default. Upon the
occurrence and during the continuance of an Event of Default
under the Loan Agreement, Grantor shall be in default hereunder
and, subject to compliance with applicable Gaming Laws, Secured
Party shall have in any jurisdiction where enforcement is
sought, in addition to all other rights and remedies that
Secured Party may have under this Agreement and under applic-
able law or in equity, all of its rights and remedies as a
secured party under the Uniform Commercial Code as enacted in
any such jurisdiction, and in addition, subject to compliance
with Gaming Laws, the following rights and remedies, all of
which may be exercised with or without further notice to
Grantor:
(a) to notify any issuer of any Pledged
Collateral that the same has been pledged to Secured Party
and that all dividends and other payments thereon are to
be made directly and exclusively to Secured Party; to
renew, extend, modify, amend, accelerate, accept partial
payments on, make allowances and adjustments and issue
credits with respect to, release, settle, compromise,
compound, collect or otherwise liquidate, on terms accept-
able to Secured Party, in whole or in part, the Pledged
Collateral and any amounts owing thereon; to enter into
any other agreement relating to or affecting the Pledged
Collateral; and to give all consents, waivers and ratifi-
cations with respect to the Pledged Collateral and exer-
cise all other rights (including voting rights), powers
and remedies and otherwise act with respect thereto as if
Secured Party were the owner thereof;
(b) to enforce payment and prosecute any
action or proceeding with respect to any and all of the
Pledged Collateral and take or bring, in Secured Party's
name(s) or in the name of Grantor, all steps, actions,
suits or proceedings deemed by Secured Party necessary or
desirable to effect collection of or to realize upon the
Pledged Collateral;
(c) in accordance with applicable Law
(including, without limitation, applicable Gaming Laws),
to take possession of the Pledged Collateral with or
without judicial process;
(d) to endorse, in the name of Grantor,
all checks, notes, drafts, money orders, instruments and
other evidences of payment relating to the Pledged
Collateral;
(e) to transfer any or all of the Pledged
Collateral into the name of Secured Party or its nominee
or nominees; and
(f) in accordance with applicable Law
(including, without limitation, applicable Gaming Laws),
to foreclose the liens and security interests created
under this Agreement or under any other agreement relating
to the Pledged Collateral by any available judicial proce-
dure or without judicial process, and to sell, assign or
otherwise dispose of the Pledged Collateral or any part
thereof, either at public or private sale or at any
broker's board or securities exchange, in lots or in bulk,
for cash, on credit or on future delivery, or otherwise,
with or without representations or warranties, and upon
such terms as shall be acceptable to Secured Party;
all at the sole option of and in the sole discretion of Secured
Party.
12.2 Notice of Sale. Secured Party shall give
Grantor at least five (5) days' written notice of sale of all
or any part of the Pledged Collateral. Subject to compliance
with Gaming Laws, any sale of the Pledged Collateral shall be
held at such time or times and at such place or places as
Secured Party may determine in the exercise of its sole and
absolute discretion. Secured Party may bid (which bid may be,
in whole or in part, in the form of cancellation of Obliga-
tions) for and purchase for the account of Secured Party or any
nominee of Secured Party the whole or any part of the Pledged
Collateral. Secured Party shall not be obligated to make any
sale of the Pledged Collateral if it shall determine not to do
so regardless of the fact that notice of sale of the Pledged
Collateral may have been given. Secured Party may, without
notice or publication, adjourn the sale from time to time by
announcement at the time and place fixed for sale, and such
sale may, without further notice, be made at the time and place
to which the same was so adjourned.
12.3 Private Sales. Subject to compliance with
Gaming Laws, upon the occurrence and during the continuance of
an Event of Default under the Loan Agreement, whether or not
any of the Pledged Collateral has been effectively registered
under the Securities Act of 1933, as amended, or other
applicable Laws, Secured Party may, in its sole and absolute
discretion, sell all or any part of the Pledged Collateral at
private sale in such manner and under such circumstances as
Secured Party may deem necessary or advisable in order that the
sale may be lawfully conducted. Without limiting the fore-
going, Secured Party may (i) approach and negotiate with a
limited number of potential purchasers, and (ii) restrict the
prospective bidders or purchasers to Persons who will represent
and agree that they are purchasing the Pledged Collateral for
their own account for investment and not with a view to the
distribution or resale thereof. In the event that any of the
Pledged Collateral is sold at private sale, Grantor agrees that
if the Pledged Collateral is sold in a sale which is otherwise
commercially reasonable, (A) Grantor shall not be entitled to a
credit against the Obligations in an amount in excess of the
purchase price, and (B) Secured Party shall not incur any
liability or responsibility to Grantor in connection therewith,
notwithstanding the possibility that a substantially higher
price might have been realized at a public sale. Grantor
recognizes that a ready market may not exist for Pledged
Securities which are not regularly traded on a recognized
securities exchange or in another recognized market, and that a
sale by Secured Party of any such Pledged Securities for an
amount substantially less than a pro rata share of the fair
market value of the issuer's assets minus liabilities may be
commercially reasonable in view of the difficulties that may be
encountered in attempting to sell a large amount of Pledged
Securities or Pledged Securities that are privately traded.
12.4 Title of Purchasers. Subject to appli-
cable requirements of Law (including, without limitation,
applicable Gaming Laws), upon consummation of any sale of
Pledged Collateral pursuant to this Section 12, Secured Party
shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Pledged Collateral so sold.
Each such purchaser at any such sale shall hold the Pledged
Collateral sold absolutely free from any claim or right on the
part of Grantor, and Grantor hereby waives (to the extent
permitted by applicable Law, including, without limitation,
applicable Gaming Laws) all rights of redemption, stay and
appraisal which it now has or may at any time in the future
have under any rule of Law or statute now existing or hereafter
enacted. If the sale of all or any part of the Pledged
Collateral is made on credit or for future delivery, Secured
Party shall not be required to apply any portion of the sale
price to the Obligations until such amount actually is received
by Secured Party, and any Pledged Collateral so sold may be
retained by Secured Party until the sale price is paid in full
by the purchaser or purchasers thereof. Secured Party shall
not incur any liability in case any such purchaser or
purchasers shall fail to pay for the Pledged Collateral so
sold, and, in case of any such failure, the Pledged Collateral
may be sold again upon like notice.
12.5 Disposition of Proceeds of Sale. The net
cash proceeds resulting from the collection, liquidation, sale
or other disposition of the Pledged Collateral shall be
applied, first, to the reasonable costs and expenses (including
reasonable attorneys' fees) of retaking, holding, storing,
processing and preparing for sale, selling, collecting and
liquidating the Pledged Collateral, and the like; second, to
the satisfaction of all Obligations, with application as to any
particular Obligations to be in the order set forth in the Loan
Agreement or other Loan Documents; and, third, to all other
indebtedness secured hereby in such order and manner as Secured
Party in its sole and absolute discretion may determine.
13. Regulatory Matters. Secured Party, acknowledges
and agrees that:
(a) In the event that Secured Party exercises
one or more of the remedies set forth in Section 12 of
this Agreement, including but not limited to re-
registration of the Pledged Collateral pursuant to
applicable Gaming Laws, such exercise of remedies would be
deemed a separate transfer of the Pledged Collateral and
would require the separate and prior approval of the
applicable Gaming Board pursuant to applicable Gaming Laws
as in effect on the date hereof.
(b) The approval by the applicable Gaming Board
of this Agreement shall not act or be construed as the
approval, either express or implied, for Secured Party to
take any actions or steps provided for in this Agreement
for which prior approval of the Gaming Board is required,
without first obtaining such prior and separate approval
of the Gaming Board to the extent then required by
applicable Law.
14. Continuing Effect. This Agreement shall remain
in full force and effect and continue to be effective should
any petition be filed by or against Grantor for liquidation or
reorganization, should Grantor become insolvent or make an
assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of
Grantor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is,
pursuant to applicable Law, rescinded or reduced in amount, or
must otherwise be restored or returned by Secured Party or any
Bank, whether as a "voidable preference," "fraudulent
conveyance," or otherwise, all as though such payment or
performance had not been made. In the event that any payment
or any part thereof is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
15. Covenant Not to Issue Uncertificated Securities.
Grantor represents and warrants to Secured Party that all of
the capital stock of each of the Gaming Subsidiaries is in
certificated form (as contemplated by Division 8 of the
California Uniform Commercial Code), and, subject to compliance
with applicable Gaming Laws, covenants to Secured Party that it
will not cause or permit such Gaming Subsidiaries to issue any
capital stock in uncertificated form or seek to convert all or
any part of its existing capital stock into uncertificated form
(as contemplated by Division 8 of the California Uniform
Commercial Code). The foregoing representations, warranties
and covenants shall survive the execution and delivery of this
Agreement.
16. Covenant Not to Dilute Interests of Secured
Party in Pledged Securities. Subject to compliance with
applicable Gaming Laws, Grantor represents, warrants and
covenants to Secured Party that it will not at any time cause
or permit the Gaming Subsidiaries to issue any additional
capital stock, or any warrants, options or other rights to
acquire any additional capital stock, if the effect thereof
would be to dilute in any way the interests of Secured Party in
any Pledged Securities or any corporation whose securities
constitute Pledged Securities unless such action is permitted
at such time under the Loan Agreement.
17. Indemnity. Grantor agrees to indemnify and hold
harmless Secured Party, and each of them, from and against any
and all claims, demands, losses, judgments and liabilities
(including without limitation liabilities for penalties) of
whatsoever kind or nature, and to reimburse Secured Party for
all costs and expenses, including without limitation reasonable
attorneys' fees and expenses and/or costs and expenses asso-
ciated with obtaining required approvals of any Gaming Board,
arising out of or in connection with this Agreement or the
exercise by Secured Party of any right or remedy granted to it
hereunder or under the Loan Documents, other than arising from
the gross negligence or willful misconduct of Secured Party.
In no event shall Secured Party be liable for any matter or
thing in connection with this Agreement other than to account
for monies actually received by it in accordance with the terms
hereof. If and to the extent that the agreements of the
Grantor under this Section 17 are unenforceable for any reason,
Grantor hereby agrees to make the maximum contribution to the
payment and satisfaction as such obligations which is permis-
sible under applicable Law.
18. Governing Law. This Agreement shall be con-
strued and enforced in accordance with and governed by the Laws
of the State of California, provided that (i) the perfection
and effect of perfection of the Pledged Collateral shall be
governed by the Laws of the State of Nevada and (ii) the
pledges and security interests granted hereunder shall in any
event be subject to, and granted in accordance with, applicable
Gaming Laws of the State of Nevada.
19. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original and all of which, taken together, shall constitute one
and the same agreement.
20. Additional Powers and Authorization. Secured
Party shall be entitled to the benefits accruing to it as
Managing Agent under the Loan Agreement and the other Loan
Documents. Notwithstanding anything contained herein to the
contrary, Secured Party may employ agents, trustees, or
attorneys-in-fact and, subject to compliance with applicable
Gaming Laws, may vest any of them with any property (including,
without limitation, the Pledged Collateral), title, right or
power deemed necessary for the purposes of such appointment.
21. Incorporation of Suretyship Provisions and
Waivers. The attached Exhibit A, "Suretyship Provisions and
Waivers," is hereby incorporated by this reference as though
set forth herein in full.
IN WITNESS WHEREOF, Grantor has caused this Agreement
to be duly executed as of the date first above written.
"Grantor"
AZTAR CORPORATION, a Delaware
corporation
By: ____________________________
Title:__________________________
ACCEPTED AND AGREED TO:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Managing Agent
By: ____________________________
Title: _____________________<PAGE>
SCHEDULE 1
Class Stock Number Percentage Percentage
Stock of Certificate of of of
Issuer Stock No(s). Shares Ownership Shares
Pledged
Ramada Express, Inc. 100% 100%
Hotel Ramada of Nevada 100% 49%
<PAGE>
EXHIBIT A
SURETYSHIP PROVISIONS AND WAIVERS
1. Waivers and Consents. Grantor acknowledges that
the liens and security interests created or granted herein will
or may secure obligations of Persons other than Grantor and, in
full recognition of that fact, consents and agrees that Secured
Party may, at any time and from time to time, without notice or
demand, and without affecting the enforceability or security
hereof:
(a) supplement, modify, amend, extend, renew,
or otherwise change the time for payment or the terms of
the Obligations or any part thereof, including any
increase or decrease of the rate(s) of interest thereon;
(b) supplement, modify, amend or waive, or
enter into or give any agreement, approval or consent with
respect to, the Obligations or any part thereof or any of
the Loan Documents or any additional security or
guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder;
(c) accept new or additional instruments,
documents or agreements in exchange for or relative to any
of the Loan Documents or the Obligations or any part
thereof;
(d) accept partial payments on the Obligations;
(e) receive and hold additional security or
guaranties for the Obligations or any part thereof;
(f) release, reconvey, terminate, waive,
abandon, subordinate, exchange, substitute, transfer and
enforce any security or guaranties, and apply any security
and direct the order or manner of sale thereof as Secured
Party in its sole and absolute discretion may determine;
(g) release any Person or any guarantor from
any personal liability with respect to the Obligations or
any part thereof;
(h) settle, release on terms satisfactory to
Secured Party or by operation of applicable laws or
otherwise liquidate or enforce any Obligations and any
security or guaranty therefor in any manner, consent to
the transfer of any security and bid and purchase at any
sale; and
(i) consent to the merger, change or any other
restructuring or termination of the corporate existence of
any Borrower or any other Person, and correspondingly
restructure the Obligations, and any such merger, change,
restructuring or termination shall not affect the
liability of Grantor or the continuing existence of any
Lien hereunder, under any other Loan Document to which
Grantor is a party or the enforceability hereof or thereof
with respect to all or any part of the Obligations.
Subject to compliance with Gaming Laws, upon the
occurrence of and during the continuance of any Event of
Default, Secured Party may enforce this Agreement independently
of any other remedy or security Secured Party at any time may
have or hold in connection with the Obligations, and it shall
not be necessary for Secured Party to marshal assets in favor
of Grantor, any Borrower or any other Person or to proceed upon
or against and/or exhaust any other security or remedy before
proceeding to enforce this Agreement. Grantor expressly waives
any right to require Secured Party to marshal assets in favor
of Grantor, any Borrower or any other Person or to proceed
against any other Person or any collateral provided by any
other Person, and agrees that Secured Party may proceed against
any Person and/or collateral in such order as it shall deter-
mine in its sole and absolute discretion. Secured Party may
file a separate action or actions against Grantor, whether
action is brought or prosecuted with respect to any other
security or against any other Grantor, any Borrower or any
other Person, or whether any other Person is joined in any such
action or actions. Grantor agrees that Secured Party and
Borrowers and any other Person may deal with each other in
connection with the Obligations or otherwise, or alter any
contracts or agreements now or hereafter existing between any
of them, in any manner whatsoever, all without in any way
altering or affecting the security of this Agreement. Secured
Party's rights hereunder shall be reinstated and revived, and
the enforceability of this Agreement shall continue, with
respect to any amount at any time paid on account of the
Obligations which thereafter shall be required to be restored
or returned by Secured Party upon the bankruptcy, insolvency or
reorganization of any Borrower, Grantor or any other Person, or
otherwise, all as though such amount had not been paid. The
Liens created or granted herein and the enforceability of this
Agreement at all times shall remain effective to secure the
full amount of all the Obligations including, without limita-
tion, the amount of all loans and interest thereon at the rates
provided for in the Loan Agreement and the note(s) thereunder,
even though the Obligations, including any part thereof or any
other security or guaranty therefor, may be or hereafter may
become invalid or otherwise unenforceable as against Borrowers
or any other Person and whether or not Borrowers or any other
Person shall have any personal liability with respect thereto.
Grantor expressly waives any and all defenses now or hereafter
arising or asserted by reason of (a) any disability or other
defense of any Borrower or any other Person with respect to the
Obligations, (b) the unenforceability or invalidity of any
security or guaranty for the Obligations or the lack of
perfection or continuing perfection or failure of priority of
any security for the Obligations, (c) the cessation for any
cause whatsoever of the liability of any Borrower or any other
Person (other than by reason of the full payment and perform-
ance of all Obligations), (d) any failure of Secured Party to
marshal assets in favor of Grantor or any other Person,
(e) except as otherwise required by Law of provided in this
Agreement, any failure of Secured Party to give notice of sale
or other disposition of collateral to Grantor or any other
Person or any defect in any notice that may be given in con-
nection with any sale or disposition of collateral, (f) except
as otherwise required by Law or as provided in this Agreement,
any failure of Secured Party to comply with applicable Laws
(other than Gaming Laws) in connection with the sale or other
disposition of any collateral or other security for any
Obligation, including without limitation any failure of Secured
Party to conduct a commercially reasonable sale or other
disposition of any collateral or other security for any
Obligation, (g) any act or omission of Secured Party or others
that directly or indirectly results in or aids the discharge or
release of any Borrower, Grantor or any other Person or the
Obligations or any other security or guaranty therefor by
operation of law or otherwise, (h) any Law which provides that
the obligation of a surety or guarantor must neither be larger
in amount nor in other respects more burdensome than that of
the principal or which reduces a surety's or guarantor's
obligation in proportion to the principal obligation, (i) any
failure of Secured Party to file or enforce a claim in any
bankruptcy or other proceeding with respect to any Person,
(j) the election by Secured Party, in any bankruptcy proceeding
of any Person, of the application or non-application of
Section 1111(b)(2) of the United States Bankruptcy Code,
(k) any extension of credit or the grant of any Lien under
Section 364 of the United States Bankruptcy Code, (l) any use
of cash collateral under Section 363 of the United States
Bankruptcy Code, (m) any agreement or stipulation with respect
to the provision of adequate protection in any bankruptcy
proceeding of any Person, (n) the avoidance of any Lien in
favor of Secured Party for any reason, (o) any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
liquidation or dissolution proceeding commenced by or against
any Person, including any discharge of, or bar or stay against
collecting, all or any of the Obligations (or any interest
thereon) in or as a result of any such proceeding, or (p) to
the extent permitted in paragraph 40.495(4) of the Nevada
Revised Statutes ("NRS"), the benefits of the one-action rule
under NRS Section 40.430. Until no part of any commitment to
lend remains outstanding and all of the Obligations have been
paid and performed in full, Grantor shall have no right of
subrogation, contribution, reimbursement or indemnity, and
Grantor expressly waives any right to enforce any remedy that
Secured Party now has or hereafter may have against any other
Person and waives the benefit of, or any right to participate
in, any other security now or hereafter held by Secured Party.
Grantor expressly waives all setoffs and counterclaims and all
presentments, demands for payment or performance, notices of
nonpayment or nonperformance, protests, notices of protest,
notices of dishonor and all other notices or demands of any
kind or nature whatsoever with respect to the Obligations, and
all notices of acceptance of this Agreement or of the exist-
ence, creation or incurring of new or additional Obligations.
2. Condition of Borrowers and their Subsidiaries.
Grantor represents and warrants to Secured Party that it has
established adequate means of obtaining from each Borrower and
its Subsidiaries, on a continuing basis, financial and other
information pertaining to the businesses, operations and condi-
tion (financial and otherwise) of each of Borrower and its
Subsidiaries and their properties, and Grantor now is and here-
after will be completely familiar with the businesses, opera-
tions and condition (financial and otherwise) of each Borrower
and its Subsidiaries and their properties. Grantor hereby
expressly waives and relinquishes any duty on the part of
Secured Party to disclose to Grantor any matter, fact or thing
related to the businesses, operations or condition (financial
or otherwise) of any Borrower or its Subsidiaries or their
properties, whether now known or hereafter known by Secured
Party during the life of this Agreement. With respect to any
of the Obligations, Secured Party need not inquire into the
powers of any Borrower or any Subsidiaries thereof or the
officers or employees acting or purporting to act on their
behalf, and all Obligations made or created in good faith
reliance upon the professed exercise of such powers shall be
secured hereby.
3. Liens on Real Property. In the event that all
or any part of the Obligations at any time are secured by any
one or more deeds of trust or mortgages creating or granting
Liens on any interests in real property, and subject to
compliance with all applicable Gaming Laws, Grantor authorizes
Secured Party, upon the occurrence of and during the continu-
ance of any Event of Default, at its sole option, without
notice or demand and without affecting any Obligations, the
enforceability of this Agreement, or the validity or enforce-
ability of any Liens of any Secured Party on any collateral, to
foreclose any or all of such deeds of trust or mortgages by
judicial or nonjudicial sale. Insofar as the Liens created
herein secure the obligations of other Persons (i) Grantor
expressly waives any defenses to the enforcement of this
Agreement or any Liens created or granted hereby or to the
recovery by Secured Party against Borrowers or any other Person
liable therefor of any deficiency after a judicial or nonjudi-
cial foreclosure or sale, even though such a foreclosure or
sale may impair the subrogation rights of Grantor and may
preclude Grantor from obtaining reimbursement or contribution
from any other Person and (ii) Grantor expressly waives any
defenses or benefits that may be derived from California Code
of Civil Procedure 580a, 580b, 580d or 726, or comparable
provisions of the Laws of any other jurisdiction, including,
without limitation, NRS Section 40.430 and judicial decisions
relating thereto, NRS Sections 40.451, 40.455, 40.457 and
40.459, and all other suretyship defenses it otherwise might or
would have under California Law or other applicable Law.
Grantor expressly waives any right to receive notice of any
judicial or nonjudicial foreclosure or sale of any real
property or interest therein subject to any such deeds of trust
or mortgages and Grantor's failure to receive any such notice
shall not impair or affect Grantor's obligations to Secured
Party or the enforceability of this Agreement or any Liens
created or granted hereby.
4. Waiver of Rights of Subrogation. Notwith-
standing anything to the contrary elsewhere contained herein or
in any other Loan Document to which Grantor is a Party, Grantor
hereby waives with respect to Borrowers and their successors
and assigns (including any surety) and any other Party any and
all rights at Law or in equity, to subrogation, to reimburse-
ment, to exoneration, to contribution, to setoff or to any
other rights that could accrue to a surety against a principal,
to a guarantor against a maker or obligor, to an accommodation
party against the party accommodated, or to a holder or trans-
feree against a maker and which Grantor may have or hereafter
acquire against any Borrower or any other Party in connection
with or as a result of Grantor's execution, delivery and/or
performance of this Agreement or any other Loan Document to
which Grantor is a party. Grantor agrees that it shall not have
or assert any such rights against any Borrower or its succes-
sors and assigns or any other Person (including any surety),
either directly or as an attempted setoff to any action
commenced against Grantor by any Borrower (as borrower or in
any other capacity) or any other Person. Grantor hereby
acknowledges and agrees that this waiver is intended to benefit
Secured Party and shall not limit or otherwise affect Grantor's
liability hereunder, under any other Loan Document to which
Grantor is a party, or the enforceability hereof or thereof.
5. Waiver of Discharge. Without limiting the
generality of the foregoing and to the extent otherwise
applicable, Grantor hereby waives discharge under NRS
Section 104.3605 by waiving all defenses based on suretyship or
impairment of collateral.
6. Understandings with Respect to Waivers and
Consents. Grantor warrants and agrees that each of the waivers
and consents set forth herein is made with full knowledge of
its significance and consequences, with the understanding that
events giving rise to any defense waived may diminish, destroy
or otherwise adversely affect rights which Grantor otherwise
may have against the other Borrowers, Secured Party or others,
or against collateral, and that, under the circumstances, the
waivers and consents herein given are reasonable and not
contrary to public policy or Law. If any of the waivers or
consents herein are determined to be contrary to any applicable
Law or public policy, such waivers and consents shall be
effective to the maximum extent permitted by Law.
<PAGE>
EXHIBIT F
PLEDGE AGREEMENT
(General)
This PLEDGE AGREEMENT ("Agreement") dated as of
October 4, 1994, is made by Aztar Corporation, a Delaware
corporation ("Parent"), Adamar of New Jersey, Inc., a New
Jersey corporation and those Significant Subsidiaries of
Borrowers (as defined below), if any, that are parties hereto,
as indicated on the signature pages hereof, and/or that become
parties hereto in the manner provided in Section 14 hereof, and
each of them, jointly and severally, as Grantors, in favor of
and for the benefit of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as the Managing Agent under the Loan
Agreement referred to below for the ratable benefit of each of
the Banks which are parties to the Loan Agreement from time to
time, as Secured Party, with reference to the following facts:
RECITALS
A. Pursuant to the Reducing Revolving Loan
Agreement of even date herewith by and among Parent, Adamar of
New Jersey, Inc., a New Jersey corporation, and Ramada Express,
Inc. (collectively, "Borrowers" and individually, "Borrower"),
the lenders from time to time a party thereto (collectively,
the "Banks" and individually, a "Bank"), Societe Generale and
Midlantic Bank, N.A., as Lead Managers, Bank One, Arizona, N A
and Credit Lyonnais, as Co-Agents, Bankers Trust Company, as
Co-Managing Agent, and the Managing Agent (as such agreement
may from time to time be extended, modified, renewed, restated,
supplemented or amended, the "Loan Agreement"), the Banks have
agreed to extend certain credit facilities to Borrowers.
B. The Loan Agreement provides, as a condition
precedent to the Banks' obligation to extend credit facilities
to Borrowers, that Grantors shall enter into this Agreement,
and shall pledge certain Pledged Collateral to Secured Party,
all under the terms and conditions set forth in this Agreement.
C. Each Grantor expects to realize direct and
indirect benefits as a result of the availability of the
aforementioned credit facilities.
AGREEMENT
NOW, THEREFORE, in order to induce the Banks to
extend credit facilities to Borrowers under the Loan Agreement,
and for other good and valuable consideration, the receipt and
adequacy of which hereby are acknowledged, Grantors hereby
jointly and severally represent, warrant, covenant, agree, and
pledge as follows:
1. Definitions. This Agreement is the Pledge
Agreement (General) referred to in the Loan Agreement. Terms
defined in the Loan Agreement and not otherwise defined in this
Agreement shall have the meanings given those terms in the Loan
Agreement as though set forth herein in full. The following
terms shall have the meanings respectively set forth after
each:
"Agreement" means this Pledge Agreement, and any
extensions, modifications, renewals, restatements, supple-
ments or amendments hereof.
"Certificates" means all certificates, instruments or
other documents now or hereafter representing or evidenc-
ing any Pledged Securities.
"Gaming Subsidiary" means any Subsidiary of any
Grantor with respect to which the inclusion of such
Grantor's equity interest in such Subsidiary in the
applicable Pledged Collateral would require compliance
with one or more Gaming Laws in connection with the
execution, delivery or performance of this Agreement.
"Pledged Collateral" means any and all property of
Grantors now or hereafter pledged and delivered to Secured
Party, and includes, without limitation, the Pledged
Securities, any Certificates representing or evidencing
the same, any and all existing and future Intercompany
Notes, any and all proceeds and products of any of the
foregoing, and any and all collections, dividends (whether
in Cash, stock or otherwise), distributions, redemption
payments, liquidation payments, interest or premiums with
respect to any of the foregoing.
"Pledged Securities" means (a) any and all shares of
capital stock of all existing Subsidiaries of Parent other
than the capital stock of REI, ANI and HRN, which existing
Subsidiaries are listed on Schedule 1 hereto, now or here-
after owned by Grantors, (b) any and all securities now or
hereafter issued in substitution, exchange or replacement
therefor, or with respect thereto, (c) any and all war-
rants, options or other rights to subscribe to or acquire
any additional capital stock of the existing Subsidiaries
listed on Schedule 1 hereto, and (d) any and all equity
interests and the Certificates or other written evidences
representing such equity interests and any interest of any
Grantor in the entries on the books of any financial
intermediary pertaining thereto now or hereafter acquired
by any Grantor in any existing or future Subsidiary of any
Grantor (other than a Gaming Subsidiary subject to Nevada
Gaming Laws).
"Secured Party" means the Managing Agent who shall
hold the pledges and security interests granted hereunder
for the ratable benefit of each of the Banks which are
parties to the Loan Agreement from time to time. Subject
to the terms and conditions of the Loan Agreement, any
right, remedy, privilege or power of Secured Party shall
be exercised by the Managing Agent.
2. Incorporation of Representations, Warranties,
Covenants and Other Provisions of Loan Documents. This Agree-
ment is one of the Loan Documents referred to in the Loan
Agreement. All representations, warranties, affirmative and
negative covenants and other provisions contained in any Loan
Document that are applicable to Loan Documents generally are
fully applicable to this Agreement and are incorporated herein
by this reference as though set forth in full.
3. Creation of Security Interest.
3.1 Pledge of Pledged Collateral. Grantors and
each of them hereby pledge and grant to Secured Party a
security interest in and to all Pledged Collateral for the
benefit of Secured Party, together with all products, proceeds,
dividends, redemption payments, liquidation payments, Cash,
instruments and other Property, and any and all rights, titles,
interests, privileges, benefits and preferences appertaining or
incidental to the Pledged Collateral; provided, however, that
the foregoing pledge and grant of security interest shall not
apply to any right, title or interest of any Grantor in (a) any
equity interests in any Gaming Subsidiary which is subject to
Nevada Gaming Laws or (b) any Pledged Collateral (Nevada
Gaming) (as such term is defined in the Loan Agreement). The
security interest and pledge created by this Section 3.1 shall
continue in effect so long as any Obligation is owed to Secured
Party or any commitment to extend credit to Borrowers remains
outstanding from Secured Party.
3.2 Delivery of Certain Pledged Collateral. On
or before the Closing Date, Grantors shall cause to be pledged
and delivered to Secured Party the Certificates evidencing the
capital stock of the existing Subsidiaries listed on Schedule 1
hereto and the Intercompany Notes listed on Schedule 2 hereto.
Following the Closing Date, additional Pledged Collateral may
from time to time be delivered to Secured Party by agreement
between Secured Party and Grantors. All Certificates and
Intercompany Notes at any time delivered to Secured Party shall
be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to
Secured Party. Secured Party shall hold all Certificates and
Intercompany Notes pledged hereunder pursuant to this Agreement
unless and until released in accordance with Section 3.3 of
this Agreement.
3.3 Release of Pledged Collateral. Pledged
Collateral that is required to be released from the pledge and
security interest created by this Agreement in order to permit
any Grantor to consummate any disposition of stock or assets,
merger, consolidation, amalgamation, acquisition, or dividend
payment or distribution that such Grantor is entitled to
consummate pursuant to the Loan Documents, if any, shall be so
released by Secured Party at such times and to the extent
necessary to permit such Grantor to consummate such permitted
transactions promptly following the Secured Party's receipt of
written request therefor by such Grantor specifying the purpose
for which release is requested and such further certificates or
other documents as Secured Party reasonably shall request in
its discretion to confirm that such Grantor is permitted to
consummate such permitted transaction and to confirm Secured
Party's replacement Liens on appropriate collateral (unless
replacement collateral is not required pursuant to the Loan
Documents). Any request for any permitted release shall be
transmitted to Secured Party. Secured Party, at the expense of
Grantors, promptly shall redeliver all Certificates and
Intercompany Notes shall execute and deliver to Grantors all
documents requested by Grantors that are reasonably necessary
to release Pledged Collateral of record whenever Grantors shall
be entitled to the release thereof in accordance with this
Section 3.3.
4. Security for Obligations. This Agreement and
the pledge and security interests granted herein secure the
prompt payment, in full in cash, and full performance of, all
Obligations, whether for principal, interest, fees, expenses or
otherwise, including, without limitation, all Obligations of
Borrowers now or hereafter existing under the Loan Documents,
all Obligations of Grantors now or hereafter existing under
this Agreement, and all interest that accrues on all or any
part of any of the Obligations of Borrowers and/or Grantors
after the filing of any petition or pleading against any
Borrower, Grantor or any other Person for a proceeding under
any Debtor Relief Law.
5. Further Assurances. Each Grantor agrees that at
any time, and from time to time, at its own expense such
Grantor will promptly execute, deliver and file or record all
further financing statements, instruments and documents, and
will take all further actions, including, without limitation,
causing the issuers of, or obligors on any of the Pledged
Collateral to so execute, deliver, file or take other actions,
that may be necessary or desirable, or that Secured Party
reasonably may request, in order to perfect and protect any
pledge or security interest granted hereby or to enable Secured
Party to exercise and enforce its rights and remedies hereunder
with respect to any Pledged Collateral and to preserve, protect
and maintain the Pledged Collateral and the value thereof,
including, without limitation, payment of all taxes, assess-
ments and other charges imposed on or relating to the Pledged
Collateral. Each Grantor hereby consents and agrees that the
issuers of, or obligors on, the Pledged Collateral, or any
registrar or transfer agent or trustee for any of the Pledged
Collateral, shall be entitled to accept the provisions of this
Agreement as conclusive evidence of the right of Secured Party
to effect any transfer or exercise any right hereunder, not-
withstanding any other notice or direction to the contrary
heretofore or hereafter given by such Grantor or any other
Person to such issuers or such obligors or to any such regis-
trar or transfer agent or trustee.
6. Voting Rights; Dividends; etc. So long as no
Event of Default under the Loan Agreement occurs and remains
continuing:
6.1 Voting Rights. Grantors shall be entitled
to exercise any and all voting and other consensual rights per-
taining to the Pledged Securities, or any part thereof, for any
purpose not inconsistent with the terms of this Agreement, the
Loan Agreement, or the other Loan Documents; provided, however,
that Grantor shall not exercise, or shall refrain from
exercising, any such right if it would result in an Event of
Default.
6.2 Interest, Dividend and Distribution Rights.
Grantors shall be entitled to receive and to retain and use any
and all interest, premiums, dividends or distributions paid in
respect of the Pledged Collateral; provided, however, that any
and all such dividends or distributions received in the form of
capital stock shall be, and the Certificates representing such
capital stock forthwith shall be delivered to Secured Party to
hold as, Pledged Collateral and shall, if received by any
Grantor, be received in trust for the benefit of Secured Party,
be segregated from the other property of such Grantor, and
forthwith be delivered to Secured Party as Pledged Collateral
in the same form as so received (with any necessary
endorsements or stock powers).
7. Rights During Event of Default. When an Event
of Default has occurred and is continuing:
7.1 Voting and Distribution Rights. At the
option of Secured Party, all rights of any Grantor to exercise
the voting and other consensual rights which it would otherwise
be entitled to exercise pursuant to Section 6.1 above, and to
receive the interest, premiums, dividends and distributions
which it would otherwise be authorized to receive and retain
pursuant to Section 6.2 above, shall cease, and all such rights
shall thereupon become vested solely in Secured Party who shall
thereupon have the sole right to exercise such voting and other
consensual rights and to receive and to hold as Pledged
Collateral such dividends and distributions. Secured Party
shall give notice to each applicable Grantor of Secured Party's
election to exercise voting rights with respect to the Pledged
Collateral; provided, however, that (i) neither the giving of
such notice nor the receipt thereof by any Grantor shall be a
condition to exercise of any rights of Secured Party hereunder,
and (ii) Secured Party shall not incur any liability for
failing to give such notice.
7.2 Distributions Held in Trust. All dividends
and other distributions which are received by any Grantor
contrary to the provisions of this Agreement shall be received
in trust for the benefit of Secured Party, shall be segregated
from other funds of such Grantor, and forthwith shall be paid
over to Secured Party as Pledged Collateral in the same form as
so received (with any necessary endorsements or stock powers).
7.3 Irrevocable Proxy. Each Grantor hereby
revokes all previous proxies with regard to the Pledged
Securities and, to the extent allowable under applicable Law,
appoints Secured Party as its proxyholder to attend and vote at
any and all meetings of the shareholders of the corporations
which issued the Pledged Securities, and any adjournments
thereof, held on or after the date of the giving of this proxy
and prior to the termination of this proxy and to execute any
and all written consents of shareholders of such corporations
executed on or after the date of the giving of this proxy and
prior to the termination of this proxy, with the same effect as
if such Grantor had personally attended the meetings or had
personally voted its shares or had personally signed the
written consents; provided, however, that the proxyholder shall
excercise rights hereunder only upon the occurrence and during
the continuance of an Event of Default under the Loan
Agreement. Each Grantor hereby authorizes Secured Party to
substitute another Person as the proxyholder and, upon the
occurrence or during the continuance of any Event of Default,
hereby authorizes and directs the proxyholder to file this
proxy and the substitution instrument with the secretary of the
appropriate corporation. This proxy is coupled with an
interest and is irrevocable until such time as no commitment to
extend credit to Borrowers remains outstanding from Secured
Party and until such time as all Obligations have been paid and
performed in full.
8. Transfers and Other Liens. Subject to compli-
ance with applicable Gaming Laws, each Grantor agrees that,
except as specifically permitted under the Loan Documents, it
will not (i) sell, assign, exchange, transfer or otherwise dis-
pose of, or contract to sell, assign, exchange, transfer or
otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral, (ii) create or permit to exist any
Liens upon or with respect to any of the Pledged Collateral,
except for Permitted Encumbrances, or (iii) take any action
with respect to the Pledged Collateral which is inconsistent
with the provisions or purposes of this Agreement or any other
Loan Document.
9. Secured Party Appointed Attorney-in-Fact.
Subject to compliance with applicable Gaming Laws, each Grantor
hereby irrevocably appoints Secured Party as such Grantor's
attorney-in-fact, with full authority in the place and stead of
such Grantor, and in the name of such Grantor, or otherwise,
from time to time, in Secured Party's sole and absolute
discretion to do any of the following acts or things: (a) to
do all acts and things and to execute all documents necessary
or advisable to perfect and continue perfected the security
interests created by this Agreement and to preserve, maintain
and protect the Pledged Collateral; (b) to do any and every act
which such Grantor is obligated to do under this Agreement;
(c) to prepare, sign, file and record, in such Grantor's name,
any financing statement covering the Pledged Collateral; and
(d) to endorse and transfer the Pledged Collateral upon
foreclosure by Secured Party; provided, however, that Secured
Party shall be under no obligation whatsoever to take any of
the foregoing actions, and Secured Party shall have no
liability or responsibility for any act (other than its own
gross negligence or willful misconduct) or omission taken with
respect thereto. Each Grantor hereby agrees to repay immedi-
ately upon demand all reasonable costs and expenses incurred or
expended by Secured Party in exercising any right or taking any
action under this Agreement, together with interest as provided
for in the Loan Agreement.
10. Secured Party May Perform Obligations. If any
Grantor fails to perform any Obligation contained herein,
Secured Party may, subject to compliance with applicable Gaming
Laws, but without any obligation to do so and without notice to
or demand upon Grantors, perform the same and take such other
action as Secured Party may deem necessary or desirable to
protect the Pledged Collateral or Secured Party's security
interests therein, Secured Party being hereby authorized (with-
out limiting the general nature of the authority hereinabove
conferred) to pay, purchase, contest and compromise any Liens
which in the reasonable judgment of Secured Party appears to be
prior or superior to Secured Party's security interests, and in
exercising any such powers and authority to pay necessary
expenses, employ counsel and pay reasonable attorneys' fees.
Each Grantor hereby agrees to repay immediately upon demand all
sums so expended by Secured Party, together with interest from
the date of expenditure at the rates provided for in the Loan
Agreement. Secured Party shall be under no duty or obligation
to (i) preserve, maintain or protect the Pledged Collateral or
any of any Grantor's rights or interest therein, (ii) exercise
any voting rights with respect to the Pledged Collateral, or
(iii) make or give any notices of default, presentments,
demands for performance, notices of nonperformance or dishonor,
protests, notices of protest or notice of any other nature
whatsoever in connection with the Pledged Collateral on behalf
of any Grantor or any other Person having any interest therein;
and Secured Party assumes no liability for and shall not be
obligated to perform the obligations of any Grantor, if any,
with respect to the Pledged Collateral.
11. Reasonable Care. Secured Party shall be deemed
to have exercised reasonable care in the custody and preserva-
tion of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially similar to that
which Secured Party accords its own property, it being under-
stood that Secured Party shall not have any responsibility for
(i) ascertaining or taking action with respect to maturities,
calls, conversions, exchanges, tenders or other matters rela-
tive to any Pledged Collateral, whether or not Secured Party
has or is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve rights against any
Person with respect to any Pledged Collateral. Secured Party
shall comply with the conditions, if any, imposed by any Gaming
Board in connection with the approvals of the security interest
granted hereunder by Grantors, including, without limitation,
any conditions requiring Secured Party to permit
representatives of such Gaming Board to inspect such
securities. Secured Party shall not surrender possession of
any Pledged Collateral which consists of Pledged Securities of
a Gaming Subsidiary to any party other than Grantor without the
prior approval of the applicable Gaming Board or as otherwise
permitted by applicable Gaming Laws.
12. Events of Default and Remedies.
12.1 Rights Upon Event of Default. Upon the
occurrence and during the continuance of an Event of Default
under the Loan Agreement, Grantors shall be in default here-
under and, subject to compliance with applicable Gaming Laws,
Secured Party shall have in any jurisdiction where enforcement
is sought, in addition to all other rights and remedies that
Secured Party may have under this Agreement and under applic-
able Law or in equity, all of its rights and remedies as a
secured party under the Uniform Commercial Code as enacted in
any such jurisdiction, and in addition the following rights and
remedies, all of which may be exercised with or without further
notice to any Grantor:
(a) to notify any issuer of any Pledged
Collateral that the same has been pledged to Secured Party and
that all dividends and other payments thereon are to be made
directly and exclusively to Secured Party; to renew, extend,
modify, amend, accelerate, accept partial payments on, make
allowances and adjustments and issue credits with respect to,
release, settle, compromise, compound, collect or otherwise
liquidate, on terms acceptable to Secured Party, in whole or in
part, the Pledged Collateral and any amounts owing thereon; to
enter into any other agreement relating to or affecting the
Pledged Collateral; and to give all consents, waivers and rati-
fications with respect to the Pledged Collateral and exercise
all other rights (including voting rights), powers and remedies
and otherwise act with respect thereto as if Secured Party were
the owner thereof;
(b) to enforce payment and prosecute any
action or proceeding with respect to any and all of the Pledged
Collateral and take or bring, in Secured Party's name(s) or in
the name of the applicable Grantor(s), all steps, actions,
suits or proceedings deemed by Secured Party necessary or
desirable to effect collection of or to realize upon the
Pledged Collateral;
(c) in accordance with applicable Law, to
take possession of the Pledged Collateral with or without judi-
cial process;
(d) to endorse, in the name of the applic-
able Grantor(s), all checks, notes, drafts, money orders,
instruments and other evidences of payment relating to the
Pledged Collateral;
(e) to transfer any or all of the Pledged
Collateral into the name of Secured Party or its nominee or
nominees; and
(f) in accordance with applicable Law, to
foreclose the Liens and security interests created under this
Agreement or under any other agreement relating to the Pledged
Collateral by any available judicial procedure or without judi-
cial process, and to sell, assign or otherwise dispose of the
Pledged Collateral or any part thereof, either at public or
private sale or at any broker's board or securities exchange,
in lots or in bulk, for cash, on credit or on future delivery,
or otherwise, with or without representations or warranties,
and upon such terms as shall be acceptable to Secured Party;
all at the sole option of and in the sole discretion of Secured
Party.
12.2 Notice of Sale. Secured Party shall give
Grantors at least five (5) days' written notice of sale of all
or any part of the Pledged Collateral. Subject to compliance
with applicable Gaming Laws, any sale of the Pledged Collateral
shall be held at such time or times and at such place or places
as Secured Party may determine in the exercise of its sole and
absolute discretion. Secured Party may bid (which bid may be,
in whole or in part, in the form of cancellation of Obliga-
tions) for and purchase for the account of Secured Party or any
nominee of Secured Party the whole or any part of the Pledged
Collateral. Secured Party shall not be obligated to make any
sale of the Pledged Collateral if it shall determine not to do
so regardless of the fact that notice of sale of the Pledged
Collateral may have been given. Secured Party may, without
notice or publication, adjourn the sale from time to time by
announcement at the time and place fixed for sale, and such
sale may, without further notice, be made at the time and place
to which the same was so adjourned.
12.3 Private Sales. Subject to compliance with
applicable Gaming Laws, upon the occurrence and during the
continuance of an Event of Default under the Loan Agreement,
whether or not any of the Pledged Collateral has been
effectively registered under the Securities Act of 1933, as
amended, or other applicable Laws, Secured Party may, in its
sole and absolute discretion, sell all or any part of the
Pledged Collateral at private sale in such manner and under
such circumstances as Secured Party may deem necessary or
advisable in order that the sale may be lawfully conducted.
Without limiting the foregoing, Secured Party may (i) approach
and negotiate with a limited number of potential purchasers,
and (ii) restrict the prospective bidders or purchasers to
Persons who will represent and agree that they are purchasing
the Pledged Collateral for their own account for investment and
not with a view to the distribution or resale thereof. In the
event that any of the Pledged Collateral is sold at private
sale, each Grantor agrees that if the Pledged Collateral is
sold in a sale which is otherwise commercially reasonably,
(A) such Grantor shall not be entitled to a credit against the
Obligations in an amount in excess of the purchase price, and
(B) Secured Party shall not incur any liability or responsibil-
ity to such Grantor in connection therewith, notwithstanding
the possibility that a substantially higher price might have
been realized at a public sale. Each Grantor recognizes that a
ready market may not exist for Pledged Securities which are not
regularly traded on a recognized securities exchange or in
another recognized market, and that a sale by Secured Party of
any such Pledged Securities for an amount substantially less
than a pro rata share of the fair market value of the issuer's
assets minus liabilities may be commercially reasonable in view
of the difficulties that may be encountered in attempting to
sell a large amount of Pledged Securities or Pledged Securities
that are privately traded.
12.4 Title of Purchasers. Subject to applic-
able requirements of Law, upon consummation of any sale of
Pledged Collateral pursuant to this Section 12, Secured Party
shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Pledged Collateral so sold.
Each such purchaser at any such sale shall hold the Pledged
Collateral sold absolutely free from any claim or right on the
part of Grantors, and each Grantor hereby waives (to the extent
permitted by applicable Law) all rights of redemption, stay and
appraisal which it now has or may at any time in the future
have under any rule of Law or statute now existing or hereafter
enacted. If the sale of all or any part of the Pledged Colla-
teral is made on credit or for future delivery, Secured Party
shall not be required to apply any portion of the sale price to
the Obligations until such amount actually is received by
Secured Party, and any Pledged Collateral so sold may be
retained by Secured Party until the sale price is paid in full
by the purchaser or purchasers thereof. Secured Party shall
not incur any liability in case any such purchaser or pur-
chasers shall fail to pay for the Pledged Collateral so sold,
and, in case of any such failure, the Pledged Collateral may be
sold again upon like notice.
12.5 Disposition of Proceeds of Sale. The net
cash proceeds resulting from the collection, liquidation, sale
or other disposition of the Pledged Collateral shall be
applied, first, to the reasonable costs and expenses (including
reasonable attorneys' fees) of retaking, holding, storing,
processing and preparing for sale, selling, collecting and
liquidating the Pledged Collateral, and the like; second, to
the satisfaction of all Obligations, with application as to any
particular Obligations to be in the order set forth in the Loan
Agreement or other Loan Documents; and, third, to all other
indebtedness secured hereby in such order and manner as Secured
Party in its sole and absolute discretion may determine.
13. Continuing Effect. This Agreement shall remain
in full force and effect and continue to be effective should
any petition be filed by or against any Grantor for liquidation
or reorganization, should any Grantor become insolvent or make
an assignment for the benefit of creditors or should a receiver
or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is,
pursuant to applicable Law, rescinded or reduced in amount, or
must otherwise be restored or returned by Secured Party or any
Bank, whether as a "voidable preference," "fraudulent convey-
ance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment or any part
thereof is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or
returned.
14. Additional Grantors. The initial Grantors here-
under shall be Borrowers and those Significant Subsidiaries, if
any, as are signatories hereto. From time to time following
the Closing Date, additional Significant Subsidiaries of
Borrowers may become parties hereto, as additional Grantors, by
executing and delivering to Secured Party an Instrument of
Joinder substantially in the form of Exhibit A, accompanied by
such documentation as Secured Party may require in connection
therewith, wherein such additional Grantors agree to become a
party hereto and to be bound hereby. Upon delivery of such
Instrument of Joinder to and acceptance thereof by Secured
Party, notice of which acceptance is hereby waived by Grantors,
each such additional Grantor shall be as fully a party hereto
as if such Grantor were an original signatory hereof. Each
Grantor expressly agrees that its Secured Obligations and the
Liens upon its property granted herein shall not be affected or
diminished by the addition or release of additional Grantors
hereunder, nor by any election of Secured Party not to cause
any Significant Subsidiary of Borrowers to become an additional
Grantor hereunder. This Agreement shall be fully effective as
to any Grantor who is or becomes a party hereto regardless of
whether any other Person becomes or fails to become or ceases
to be a Grantor hereunder.
15. Covenant Not to Issue Uncertificated Securities.
Each Grantor represents and warrants to Secured Party that all
of the capital stock of each of the corporations that issued
the Pledged Securities is in certificated form (as contemplated
by Division 8 of the California Uniform Commercial Code), and
covenants to Secured Party that it will not cause or permit
such corporations to issue any capital stock in uncertificated
form or seek to convert all or any part of its existing capital
stock into uncertificated form (as contemplated by Division 8
of the California Uniform Commercial Code). The foregoing
representations, warranties and covenants shall survive the
execution and delivery of this Agreement.
16. Covenant Not to Dilute Interests of Secured
Party in Pledged Securities. Each Grantor represents, warrants
and covenants to Secured Party that it will not at any time
cause or permit the corporations that issued the Pledged
Securities to issue any additional capital stock, or any
warrants, options or other rights to acquire any additional
capital stock, if the effect thereof would be to dilute in any
way the interests of Secured Party in any Pledged Securities or
any corporation whose securities constitute Pledged Securities
unless such action is permitted at such time under the Loan
Agreement.
17. Indemnity. Each Grantor agrees to indemnify and
hold harmless Secured Party, and each of them, from and against
any and all claims, demands, losses, judgments and liabilities
(including without limitation liabilities for penalties) of
whatsoever kind or nature, and to reimburse Secured Party for
all costs and expenses, including without limitation reasonable
attorneys' fees and expenses and/or costs and expenses asso-
ciated with, arising out of or in connection with this Agree-
ment or the exercise by Secured Party of any right or remedy
granted to it hereunder or under the Loan Documents other than
arising from the gross negligence or willful misconduct of
Secured Party. In no event shall Secured Party be liable for
any matter or thing in connection with this Agreement other
than to account for monies actually received by it in accord-
ance with the terms hereof. If and to the extent that the
agreements of the Grantors under this Section 17 are unenforce-
able for any reason, each Grantor hereby agrees to make the
maximum contribution to the payment and satisfaction as such
obligations which is permissible under applicable Law.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF CALIFORNIA.
19. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original and all of which, taken together, shall constitute one
and the same agreement.
20. Additional Powers and Authorization. Secured
Party shall be entitled to the benefits accruing to it as
Managing Agent under the Loan Agreement and the other Loan
Documents. Notwithstanding anything contained herein to the
contrary, Secured Party may employ agents, trustees, or
attorneys-in-fact and may vest any of them with any property
(including, without limitation, the Pledged Collateral), title,
right or power deemed necessary for the purposes of such
appointment.
21. WAIVER OF JURY TRIAL. EACH GRANTOR AND SECURED
PARTY EXPRESSLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE LOAN
AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR PARTIES, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. EACH GRANTOR AND SECURED PARTY
AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT, THE LOAN AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS. ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
22. Incorporation of Suretyship Provisions and
Waivers. The attached Exhibit B, "Suretyship Provisions and
Waivers," is hereby incorporated by this reference as though
set forth herein in full.
IN WITNESS WHEREOF, each Grantor has caused this
Agreement to be duly executed as of the date first above
written.
"Grantors"
AZTAR CORPORATION,
a Delaware corporation
By __________________________
Title _______________________
<PAGE>
RAMADA NEW JERSEY HOLDINGS
CORPORATION, a Delaware
corporation
By __________________________
Title _______________________
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation
By __________________________
Title _______________________<PAGE>
ATLANTIC-DEAUVILLE INC.,
a New Jersey corporation
By __________________________
Title _______________________
AZTAR DEVELOPMENT
CORPORATION, a Delaware
corporation
By _________________________
Title ______________________<PAGE>
ACCEPTED AND AGREED TO:
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION,
as Managing Agent
By: _________________________
Title: __________________
<PAGE>
SCHEDULE 1
PLEDGED SECURITIES
Grantor: AZTAR CORPORATION
Class Stock Number Percentage
Stock of Certificate of of
Issuer Stock No(s). Shares Ownership
Aztar Development Corporation 100%
Aztar Indiana Gaming Corporation 100%
Aztar Missouri Gaming Corporation 100%
Aztar Mortgage Funding, Inc. 100%
Ramada New Jersey Holdings, Inc. 100%
Ramada New Jersey, Inc. 100%
REI Acquisition, Inc. 100%
Atlantic Deauville, Inc. 100%
Eddie's Fabulous 50's, Inc. 100%
Ramada Energy Systems, Inc. 100%
Grantor: ADAMAR OF NEW JERSEY, INC.
Class Stock Number Percentage
Stock of Certificate of of
Issuer Stock No(s). Shares Ownership
AGP Holdings Corporation 100%
Manchester Mall, Inc. 100%
Grantor: RAMADA NEW JERSEY HOLDINGS, INC.
Class Stock Number Percentage
Stock of Certificate of of
Issuer Stock No(s). Shares Ownership
Adamar of New Jersey, Inc. 100%
Grantor: ATLANTIC DEAUVILLE, INC.
Class Stock Number Percentage
Stock of Certificate of of
Issuer Stock No(s). Shares Ownership
Adamar Garage, Inc. 100%
<PAGE>
SCHEDULE 2
INTERCOMPANY NOTES
[to be provided by Grantors]
<PAGE>
EXHIBIT A
INSTRUMENT OF JOINDER
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as
of _________________, 19___, by ______________________________,
a ___________________________ ("Joining Party"), and delivered
to Bank of America National Trust and Savings Association, as
Managing Agent, pursuant to the Pledge Agreement (General)
dated as of October 4, 1994 made by Ramada New Jersey Holdings
Corporation, a New Jersey corporation, Aztar Corporation, a
Delaware corporation, Adamar of New Jersey, Inc., a New Jersey
corporation, Atlantic-Deauville Inc., a New Jersey
Corporation, and Aztar Development Corporation, a Delaware
corporation in favor of the Managing Agent and the Banks (the
"Pledge Agreement (General)"). Terms used but not defined in
this Joinder shall have the meanings defined for those terms in
the Pledge Agreement (General).
RECITALS
(a) The Pledge Agreement (General) was made by the
Grantors in favor of the Managing Agent for the ratable benefit
of the Banks that are parties to that certain Reducing Revolv-
ing Loan Agreement dated as of October 4, 1994, by and among
Aztar Corporation, a Delaware corporation, Adamar of
New Jersey, Inc., a New Jersey corporation, and Ramada Express,
Inc., a Nevada corporation (collectively, "Borrowers" and
individually, "Borrower"), the Banks which are parties thereto,
Societe Generale and Midlantic Bank, N.A., as Lead Managers,
Bank One, Arizona, N A and Credit Lyonnais, as Co-Agents,
Bankers Trust Company, as Co-Managing Agent, and Bank of
America National Trust and Savings Association, as the Managing
Agent for the Banks.
Borrowers, and is required pursuant to the Reducing Revolving
Loan Agreement and the Pledge Agreement (General) to become a
Grantor.
(c) Joining Party expects to realize direct and
indirect benefits as a result of the availability to Borrowers
of the credit facilities under the Reducing Revolving Loan
Agreement.
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
(i) By this Joinder, Joining Party becomes a
"Grantor" under and pursuant to Section 14 of the Pledge
Agreement (General). Joining Party agrees that, upon its
execution hereof, it will become a Grantor under the Pledge
Agreement (General) with respect to all Obligations of
Borrowers heretofore or hereafter incurred under the Loan
Documents, and will be bound by all terms, conditions, and
duties applicable to a Grantor under the Pledge Agreement
(General);
(ii) Concurrently with the execution hereof,
Joining Party shall cause to be pledged and delivered to
Secured Party the Certificates evidencing the capital stock of
the Subsidiaries listed on Schedule 1 hereto and the
Intercompany Notes listed on Schedule 2 hereto. All Cer-
tificates and Intercompany Notes delivered to Secured Party
shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to
Secured Party. All Certificates and Intercompany Notes
delivered pursuant to this Joinder shall also be considered
"Certificates" and "Intercompany Notes" and shall constitute
"Pledged Collateral" as defined in the Pledge Agreement
(General); and
(iii) The effective date of this Joinder is
_________. 199___.
"Joining Party"
_________________________________
a _________________________
By:_____________________________
Title:___________________________
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Managing Agent
By:__________________________
Title:_______________________
<PAGE>
SCHEDULE 1 TO INSTRUMENT OF JOINDER
PLEDGED SECURITIES
Joining Party:______________________
Class Stock Number Percentage
Stock of Certificate of of
Issuer Stock No(s). Shares Ownership
<PAGE>
SCHEDULE 2 TO INSTRUMENT OF JOINDER
INTERCOMPANY NOTES<PAGE>
EXHIBIT B
SURETYSHIP PROVISIONS AND WAIVERS
1. Waivers and Consents. Each Grantor acknowledges
that the Liens and security interests created or granted herein
will or may secure obligations of Persons other than such
Grantor and, in full recognition of that fact, each Grantor
consents and agrees that Secured Party may, at any time and
from time to time, without notice or demand, and without
affecting the enforceability or security hereof:
(a) supplement, modify, amend, extend, renew,
or otherwise change the time for payment or the terms of
the Obligations or any part thereof, including any
increase or decrease of the rate(s) of interest thereon;
(b) supplement, modify, amend or waive, or
enter into or give any agreement, approval or consent with
respect to, the Obligations or any part thereof or any of
the Loan Documents or any additional security or
guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder;
(c) accept new or additional instruments,
documents or agreements in exchange for or relative to any
of the Loan Documents or the Obligations or any part
thereof;
(d) accept partial payments on the Obligations;
(e) receive and hold additional security or
guaranties for the Obligations or any part thereof;
(f) release, reconvey, terminate, waive,
abandon, subordinate, exchange, substitute, transfer and
enforce any security or guaranties, and apply any security
and direct the order or manner of sale thereof as Secured
Party in its sole and absolute discretion may determine;
(g) release any Person or any guarantor from
any personal liability with respect to the Obligations or
any part thereof;
(h) settle, release on terms satisfactory to
Secured Party or by operation of applicable laws or
otherwise liquidate or enforce any Obligations and any
security or guaranty therefor in any manner, consent to
the transfer of any security and bid and purchase at any
sale; and
(i) consent to the merger, change or any other
restructuring or termination of the corporate existence of
any Borrower or any other Person, and correspondingly
restructure the Obligations, and any such merger, change,
restructuring or termination shall not affect the liabil-
ity of any Grantor or the continuing existence of any
Liens hereunder, under any other Loan Document to which
any Grantor is a party or the enforceability hereof or
thereof with respect to all or any part of the
Obligations.
Upon the occurrence of and during the continuance of
any Event of Default, Secured Party may enforce this Agreement
independently as to each Grantor and independently of any other
remedy or security Secured Party at any time may have or hold
in connection with the Obligations, and it shall not be neces-
sary for Secured Party to marshal assets in favor of any
Grantor, any Borrower or any other Person or to proceed upon or
against and/or exhaust any other security or remedy before
proceeding to enforce this Agreement. Each Grantor expressly
waives any right to require Secured Party to marshal assets in
favor of such Grantor, any Borrower or any other Person or to
proceed against any other Person or any collateral provided by
any other Person, and agrees that Secured Party may proceed
against any Person and/or collateral in such order as it shall
determine in its sole and absolute discretion. Secured Party
may file a separate action or actions against any Grantor,
whether action is brought or prosecuted with respect to any
other security or against any other Grantor, any Borrower or
any other Person, or whether any other Person is joined in any
such action or actions. Each Grantor agrees that Secured Party
and Borrowers and any other Person may deal with each other in
connection with the Obligations or otherwise, or alter any
contracts or agreements now or hereafter existing between any
of them, in any manner whatsoever, all without in any way
altering or affecting the security of this Agreement. Secured
Party's rights hereunder shall be reinstated and revived, and
the enforceability of this Agreement shall continue, with
respect to any amount at any time paid on account of the
Obligations which thereafter shall be required to be restored
or returned by Secured Party upon the bankruptcy, insolvency or
reorganization of any Borrower, any Grantor or any other
Person, or otherwise, all as though such amount had not been
paid. The Liens created or granted herein and the enforce-
ability of this Agreement at all times shall remain effective
to secure the full amount of all the Obligations including,
without limitation, the amount of all loans and interest
thereon at the rates provided for in the Loan Agreement and the
note(s) thereunder, even though the Obligations, including any
part thereof or any other security or guaranty therefor, may be
or hereafter may become invalid or otherwise unenforceable as
against Borrowers or any other Person and whether or not
Borrowers or any other Person shall have any personal liability
with respect thereto. Each Grantor expressly waives any and
all defenses now or hereafter arising or asserted by reason of
(a) any disability or other defense of any Borrower or any
other Person with respect to the Obligations, (b) the unen-
forceability or invalidity of any security or guaranty for the
Obligations or the lack of perfection or continuing perfection
or failure of priority of any security for the Obligations,
(c) the cessation for any cause whatsoever of the liability of
any Borrower or any other Person (other than by reason of the
full payment and performance of all Obligations), (d) any
failure of Secured Party to marshal assets in favor of such
Grantor or any other Person, (e) except as otherwise required
by Law or as provided in this Agreement, any failure of Secured
Party to give notice of sale or other disposition of collateral
to such Grantor or any other Person or any defect in any notice
that may be given in connection with any sale or disposition of
collateral, (f) except as otherwise required by Law or as pro-
vided in this Agreement, any failure of Secured Party to comply
with applicable Laws in connection with the sale or other dis-
position of any collateral or other security for any Obliga-
tion, including without limitation any failure of Secured Party
to conduct a commercially reasonable sale or other disposition
of any collateral or other security for any Obligation, (g) any
act or omission of Secured Party or others that directly or
indirectly results in or aids the discharge or release of any
Borrower, any Grantor or any other Person or the Obligations or
any other security or guaranty therefor by operation of law or
otherwise, (h) any Law which provides that the obligation of a
surety or guarantor must neither be larger in amount nor in
other respects more burdensome than that of the principal or
which reduces a surety's or guarantor's obligation in propor-
tion to the principal obligation, (i) any failure of Secured
Party to file or enforce a claim in any bankruptcy or other
proceeding with respect to any Person, (j) the election by
Secured Party, in any bankruptcy proceeding of any Person, of
the application or non-application of Section 1111(b)(2) of the
United States Bankruptcy Code, (k) any extension of credit or
the grant of any Liens under Section 364 of the United States
Bankruptcy Code, (l) any use of cash collateral under
Section 363 of the United States Bankruptcy Code, (m) any
agreement or stipulation with respect to the provision of
adequate protection in any bankruptcy proceeding of any Person,
(n) the avoidance of any Liens in favor of Secured Party for
any reason, (o) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against any Person, including any
discharge of, or bar or stay against collecting, all or any of
the Obligations (or any interest thereon) in or as a result of
any such proceeding, or (p) to the extent permitted in
paragraph 40.495(4) of the Nevada Revised Statutes ("NRS"), the
benefits of the one-action rule under NRS Section 40.430.
Until no part of any commitment to lend remains outstanding and
all of the Obligations have been paid and performed in full,
Grantors shall have no right of subrogation, contribution,
reimbursement or indemnity, and each Grantor expressly waives
any right to enforce any remedy that Secured Party now has or
hereafter may have against any other Person and waives the
benefit of, or any right to participate in, any other security
now or hereafter held by Secured Party. Each Grantor expressly
waives all setoffs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or
nonperformance, protests, notices of protest, notices of
dishonor and all other notices or demands of any kind or nature
whatsoever with respect to the Obligations, and all notices of
acceptance of this Agreement or of the existence, creation or
incurring of new or additional Obligations.
2. Condition of Borrowers and their Subsidiaries.
Each Grantor represents and warrants to Secured Party that such
Grantor has established adequate means of obtaining from each
Borrower and its Subsidiaries, on a continuing basis, financial
and other information pertaining to the businesses, operations
and condition (financial and otherwise) of each of Borrower and
its Subsidiaries and their properties, and such Grantor now is
and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of each
Borrower and its Subsidiaries and their properties. Each
Grantor hereby expressly waives and relinquishes any duty on
the part of Secured Party to disclose to such Grantor any
matter, fact or thing related to the businesses, operations or
condition (financial or otherwise) of any Borrower or its
Subsidiaries or their properties, whether now known or
hereafter known by Secured Party during the life of this
Agreement. With respect to any of the Obligations, Secured
Party need not inquire into the powers of any Borrower or any
Subsidiaries thereof or the officers or employees acting or
purporting to act on their behalf, and all Obligations made or
created in good faith reliance upon the professed exercise of
such powers shall be secured hereby.
3. Liens on Real Property. In the event that all
or any part of the Obligations at any time are secured by any
one or more deeds of trust or mortgages creating or granting
Liens on any interests in real property, each Grantor auth-
orizes Secured Party, upon the occurrence of and during the
continuance of any Event of Default, at its sole option,
without notice or demand and without affecting any Obligations,
the enforceability of this Agreement, or the validity or
enforceability of any Liens of any Secured Party on any
collateral, to foreclose any or all of such deeds of trust or
mortgages by judicial or nonjudicial sale. Insofar as the
Liens created herein secure the obligations of other Persons,
(i) each Grantor expressly waives any defenses to the
enforcement of this Agreement or any Liens created or granted
hereby or to the recovery by Secured Party against Borrowers or
any other Person liable therefor of any deficiency after a
judicial or nonjudicial foreclosure or sale, even though such a
foreclosure or sale may impair the subrogation rights of such
Grantor and may preclude such Grantor from obtaining reimburse-
ment or contribution from any other Person and (ii) each
Grantor expressly waives any defenses or benefits that may be
derived from California Code of Civil Procedure 580a, 580b,
580d or 726, or comparable provisions of the Laws of any other
jurisdiction, including, without limitation, NRS Section 40.430
and judicial decisions relating thereto, NRS Sections 40.451,
40.455, 40.457 and 40.459, and all other suretyship defenses it
otherwise might or would have under California Law or other
applicable Law. Each Grantor expressly waives any right to
receive notice of any judicial or nonjudicial foreclosure or
sale of any real property or interest therein subject to any
such deeds of trust or mortgages and such Grantor's failure to
receive any such notice shall not impair or affect such
Grantor's obligations hereunder or the enforceability of this
Agreement or any Liens created or granted hereby.
4. Waiver of Rights of Subrogation. Notwith-
standing anything to the contrary elsewhere contained herein or
in any other Loan Document to which any Grantor is a Party,
each Grantor hereby waives with respect to Borrowers and their
successors and assigns (including any surety) and any other
Party any and all rights at Law or in equity, to subrogation,
to reimbursement, to exoneration, to contribution, to setoff or
to any other rights that could accrue to a surety against a
principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, or to a
holder or transferee against a maker and which such Grantor may
have or hereafter acquire against any Borrower or any other
Party in connection with or as a result of such Grantor's
execution, delivery and/or performance of this Agreement or any
other Loan Document to which such Grantor is a party. Each
Grantor agrees that it shall not have or assert any such rights
against any Borrower or its successors and assigns or any other
Person (including any surety), either directly or as an
attempted setoff to any action commenced against such Grantor
by any Borrower (as borrower or in any other capacity) or any
other Person. Each Grantor hereby acknowledges and agrees that
this waiver is intended to benefit Secured Party and shall not
limit or otherwise affect such Grantor's liability hereunder,
under any other Loan Document to which such Grantor is a party,
or the enforceability hereof or thereof.
5. Waiver of Discharge. Without limiting the
generality of the foregoing and to the extent otherwise
applicable, each Grantor hereby waives discharge under NRS
Section 104.3605 by waiving all defenses based on suretyship or
impairment of collateral.
6. Understandings with Respect to Waivers and
Consents. Each Grantor warrants and agrees that each of the
waivers and consents set forth herein is made with full
knowledge of its significance and consequences, with the under-
standing that events giving rise to any defense waived may
diminish, destroy or otherwise adversely affect rights which
such Grantor otherwise may have against Borrowers, Secured
Party or others, or against collateral, and that, under the
circumstances, the waivers and consents herein given are
reasonable and not contrary to public policy or Law. If any of
the waivers or consents herein are determined to be contrary to
any applicable Law or public policy, such waivers and consents
shall be effective to the maximum extent permitted by law.
<PAGE>
EXHIBIT G
CERTIFICATE
OF A SENIOR OFFICER OF
AZTAR CORPORATION
(Applicable Pricing Level)
TO: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, AS
MANAGING AGENT
Reference is made to that certain Reducing Revolving
Loan Agreement (the "Loan Agreement") dated as of October 4,
1994, among Aztar Corporation, a Delaware corporation
("Parent"), Adamar of New Jersey, Inc., a New Jersey
corporation, and Ramada Express, Inc., a Nevada corporation
(collectively, "Borrowers" and individually, "Borrower"), the
Banks therein named, Societe Generale and Midlantic Bank, N.A.,
as Lead Managers, Bank One, Arizona, N A and Credit Lyonnais,
as Co-Agents, Bankers Trust Company, as Co-Managing Agent, and
Bank of America National Trust and Savings Association, as
Managing Agent. Terms defined in the Loan Agreement and not
otherwise defined in this Certificate are used herein as so
defined.
This Certificate ("Pricing Certificate") is delivered
in accordance with Section 7.1(c) of the Loan Agreement by a
Senior Officer of Parent on behalf of Parent and the other
Borrowers. This Pricing Certificate is delivered with respect
to the Pricing Period commencing _________, 199_, and ending on
___________, 199_ (the "Subject Pricing Period"). Computations
used to determine the Applicable Pricing Level for the Subject
Pricing Period are set forth below:
I. Applicable Pricing Level. Subject to later adjustment as
provided in the Loan Agreement, the Applicable Pricing Level
for the Subject Pricing Period shall be Level ______.
The Applicable Pricing Level set forth above was
determined on the basis of the following:
Annualized Funded Debt Ratio. As of the last day of the
Fiscal Quarter ended _______________, 199__ (the "Determination
Date"), the ratio of Average Quarterly Funded Debt to
Annualized Adjusted EBITDA was____:1.00.
The foregoing ratio is computed as follows:
(a) Average Quarterly Funded Debt as of
the Determination Date (as calculated
below) $_______
divided by (b) Annualized Adjusted EBITDA
as of the Determination Date (as
calculated below) $_______
equals Annualized Funded Debt Ratio
[(a)/(b)] ___:1.00
Average Quarterly Funded Debt -- Component Calculations
In the above computation, Average Quarterly Funded Debt as
of the Determination Date is the sum of the following, without
duplication:
(a) the average of all principal Indebted-
ness of Borrowers and the Restricted
Subsidiaries and of TEGP for borrowed money
(including debt securities issued by
Borrowers, any of the Restricted
Subsidiaries or TEGP, but excluding in any
event any contingent obligations with
respect to undrawn letters of credit) on
the last day of each of the three 4 and
5 week fiscal periods comprising the Fiscal
Quarter ending on the Determination Date
(the "Test Fiscal Quarter") $_______
plus (b) the average of the aggregate
amount of the principal portion of all
Capital Lease Obligations of Borrowers and
the Restricted Subsidiaries and of TEGP on
the last day of each of the three 4 and
5 week fiscal periods comprising the Test
Fiscal Quarter $_______
equals Average Quarterly Funded Debt [(a)+(b)]$_______
Annualized Adjusted EBITDA - Component Calculations
In the above calculation, Annualized Adjusted EBITDA as of
the Determination Date is calculated as follows:
(a) Adjusted EBITDA for the fiscal period
consisting of the Test Fiscal Quarter plus
the three immediately preceding Fiscal
Quarters (the "Test Period") (as
calculated below) $_______
plus (b) with respect to any Test Period
in which the Evansville Project or the
Caruthersville Project (whichever or both
is applicable, the "Project") is open
for business for at least one (1) full
Fiscal Quarter but less than four (4) full
Fiscal Quarters, such amount as is
necessary to reflect the annualization of
Adjusted EBITDA attributable to the
Project $_____
equals Annualized Adjusted EBITDA
[(a)+(b)] $_______
Adjusted EBITDA - Component Calculations
In the above calculation, Adjusted EBITDA for the Test
Period is calculated as follows, in each case as determined in
accordance with Generally Accepted Accounting Principles, and
in the case of items (d), (e), (f), (g), (h) and (i) only to
the extent reflected in the determination of item (a) for such
Test Period:
(a) Consolidated net income of Borrowers
and the Restricted Subsidiaries ("Net
Income") for the Test Period $_______
plus (b) any extraordinary loss reflected
in Net Income for the Test Period $_______
minus (c) any extraordinary gain reflected
in Net Income for the Test Period ($______)
plus (d) Interest Expense for the Test
Period (which is the sum of (x) and (y) set
forth below)
(x) all interest, fees, charges and
related expenses paid or payable
(without duplication) for the Test
Period by Borrowers and the Restricted
Subsidiaries to a lender in connection
with borrowed money (including any
obligations for fees, charges and
related expenses payable to the issuer
of any letter of credit) or the
deferred purchase price of assets that
are considered "interest expense"
under Generally Accepted Accounting
Principles (other than underwriting
discounts, closing fees and other
transactional fees and expenses
incurred on or within six (6) months
before or after the Closing Date in
connection with the Existing
Subordinated Debt, the issuance of the
New Subordinated Debt or the execution
and delivery of the Loan Documents)
$_________________
plus (y) the portion of rent paid or
payable (without duplication) for the
Test Period by Borrowers and the
Restricted Subsidiaries under Capital
Lease Obligations that should be
treated as interest in accordance with
Financial Accounting Standards Board
Statement No. 13
$_________________
Interest Expense [(x)+(y)] equals $_______
plus (e) the aggregate amount of federal
and state taxes on or measured by income
for the Test Period (whether or not payable
during the Test Period) $_______
plus (f) depreciation, amortization and all
other non-cash expenses for the Test
Period $_______
plus (g) Parent's equity in any net loss of
TEGP for the Test Period $_______
minus (h) Parent's equity in any net income
of TEGP for the Test Period ($______)
plus (i) that portion of the rentals paid
to TEGP by HRN which are designated and
used to service principal and interest
payable under the TEGP Loan Agreement for
the Test Period $_______
plus (j) dividends or other income received
in Cash during the Test Period by any of
Borrowers or the Restricted Subsidiaries
from an Unrestricted New Venture Entity
(but only to the extent of earnings before
interest, taxes, depreciation and
amortization of such Unrestricted New
Venture Entity) $_______
equals Adjusted EBITDA
[(a)+(b)-(c)+(d)+(e)+(f)+(g)+(h)] $_______
II. I further certify that the calculations made and the
information contained herein are derived from the books and
records of Borrowers and their Restricted Subsidiaries, as
applicable, and that each and every matter correctly reflects
those books and records.
IN WITNESS WHEREOF, I have signed this Certificate on
this _______ day of __________, 199___.
____________________________________
____________________________________
Printed Name and Title of Senior
Officer of Aztar Corporation
<PAGE>
EXHIBIT H
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
Sheppard, Mullin, Richter & Hampton)
333 South Hope Street, 48th Floor)
Los Angeles, California 90071)
Attn: Kirk Wallace, Esq. )
____________________________________________________________
(Space above for Recorder's Use)
DEED OF TRUST
with Assignment of Rents, Security Agreement and
Fixture Filing
The parties to this Deed of Trust with Assignment of
Rents, Security Agreement and Fixture Filing ("Deed of Trust"),
dated as of October 4, 1994, are RAMADA EXPRESS, INC., a Nevada
corporation ("Trustor"), as trustor, EQUITABLE DEED COMPANY, a
California corporation, as trustee ("Trustee"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association, as "Managing Agent" for the "Banks," the
"Swing Line Bank" and the "Issuing Bank" (as each of those four
terms is defined in the Loan Agreement), as beneficiary and
secured party ("Beneficiary"). Capitalized terms used and not
otherwise defined herein shall have the meanings given to them
in that certain Reducing Revolving Loan Agreement of even date
herewith among Aztar Corporation, a Delaware corporation
("Parent"), Adamar of New Jersey, Inc., a New Jersey
corporation ("ANJI"), Trustor, Beneficiary, and each of the
Banks which executed such agreement (as amended, the "Loan
Agreement"). Trustee is a subsidiary of Beneficiary. Parent,
ANJI and Trustor are collectively referred to herein as
"Borrowers."
1. Grant in Trust and Secured Obligations.
1.1 Grant in Trust. For the purpose of securing payment
and performance of the Secured Obligations defined and
described in Section 1.2, Trustor hereby irrevocably and
unconditionally grants, bargains, conveys, sells, transfers and
assigns to Trustee, in trust for the benefit of Beneficiary,
with power of sale and right of entry and possession, all
estate, right, title and interest which Trustor now has or may
later acquire in and to the following property (all or any part
of such property, or any interest in all or any part of it, as
the context may require, the "Property"):
(a) The real property located in the County of Clark
(the "County"), State of Nevada, as described in Exhibit A,
together with all existing and future easements and rights
affording access to it (the "Land"); together with
(b) All buildings, structures and improvements now
located or later to be constructed on the Land, including,
without limitation, all parking areas, roads, driveways, walks,
fences, walls, docks, berms, landscaping, recreation
facilities, drainage facilities, lighting facilities and other
site improvements (the "Improvements"); together with
(c) All existing and future appurtenances,
privileges, easements, franchises, hereditaments and tenements
of the Land, including all minerals, oil, gas, other
hydrocarbons and associated substances, sulphur, nitrogen,
carbon dioxide, helium and other commercially valuable
substances which may be in, under or produced from any part of
the Land, all development rights and credits, air rights,
water, water courses, water rights (whether riparian,
appropriative or otherwise, and whether or not appurtenant) and
water stock (together with the statutory right to file
applications to change, and any and all applications to
change), easements, rights of way, rights of ingress and
egress, drainage rights, gores or strips of land, any land
lying in the streets, highways, ways, sidewalks, alleys,
passages, roads or avenues, open or proposed, in front of or
adjoining the Land and Improvements, any land in the bed of any
body of water adjacent to the Land, any land adjoining the Land
created by artificial means or by accretion, all air space and
rights to use such air space, and all development and similar
rights; together with
(d) Subject to Article 2, below, all existing and
future leases, subleases, subtenancies, licenses (except for
gaming licenses and liquor licenses that are not transferable),
occupancy agreements, concessions and any other agreement
devising any portion of the Property or relating to the use and
enjoyment of all or any part of the Land and Improvements, and
any and all guaranties and other agreements relating to or made
in connection with any of the foregoing, whether written or
oral and whether in existence at or upon the recordation of
this Deed of Trust or entered into after the recordation of
this Deed of Trust (some or all collectively, as the context
may require, "Leases"), and all rents, security deposits,
royalties, issues, profits, receipts, earnings, revenue,
income, products and proceeds and other benefits of the Land
and Improvements, whether now due, past due or to become due,
including, without limitation, all prepaid rents, security
deposits, fixed, additional and contingent rents, deficiency
rents and liquidated damages, occupancy charges, hotel room
charges, cabana charges, casino revenues, show ticket revenues,
food and beverage revenues, room service revenues, merchandise
sales revenues, parking, maintenance, common area, tax,
insurance, utility and service charges and contributions,
proceeds of sale of electricity, gas, heating, air-
conditioning, cable and other utilities and services, green
fees, cart rental fees, instruction fees, membership charges,
restaurant, snack bar and pro shop revenues, liquidated
damages, and all other rights to payments (some or all
collectively, as the context may require, "Rents"); together
with
(e) [INTENTIONALLY OMITTED]; together with
(f) All goods, materials, supplies, chattels,
furniture, fixtures, equipment, machinery and other property
now or later to be attached to, placed in or on, or used in
connection with the use, enjoyment, occupancy or operation of
all or any part of the Land and Improvements, whether stored on
the Land or elsewhere, including all pumping plants, engines,
pipes, ditches and flumes, and also all gas, electric, cooking,
heating, cooling, air conditioning, lighting, refrigeration and
plumbing fixtures and equipment, all water, sanitary and storm
sewer, drainage, electricity, steam, gas, telephone, cable and
other utility equipment and facilities, all plumbing, lighting,
heating, ventilating, air conditioning, refrigerating,
incinerating, compacting, fire protection and sprinkler,
surveillance and security, vacuum cleaning, public address and
communications equipment and systems, all kitchen and laundry
appliances, screens, awnings, floor coverings, partitions,
elevators, escalators, motors, machinery, pipes, fittings and
other items of equipment and property of every kind and
description, all of which shall be considered to the fullest
extent of the law to be real property for purposes of this Deed
of Trust; together with
(g) All building materials, equipment, work in
process or other personal property of any kind, whether stored
on the Land or elsewhere, which have been or later will be
acquired for the purpose of being delivered to, incorporated
into or installed in or about the Land or Improvements;
together with
(h) All rights to the payment of money, accounts,
accounts receivable, reserves, deferred payments, refunds, cost
savings, payments and deposits, whether now or later to be
received from third parties (including all earnest money sales
deposits) or deposited by Trustor with third parties (including
all utility deposits), contract rights, development and use
rights, governmental permits and licenses (except for gaming
licenses and liquor licenses that are not transferable),
authorizations, certificates, variances, consents and
approvals, applications, architectural and engineering plans,
specifications and drawings, as-built drawings, guaranties,
warranties, management agreements, operating and/or licensing
agreements, supply and service contracts for water, sanitary
and storm sewer, drainage, electricity, steam, gas, telephone,
cable, and other utilities, title insurance policies and
proceeds thereof, chattel paper, instruments, documents, notes,
certificates of deposit, securities, other investments, drafts
and letters of credit (other than letters of credit in favor of
Beneficiary), which arise from or relate to construction on the
Land or to any business now or later to be conducted on it, or
to the Land and Improvements generally; together with
(i) All proceeds, including all rights and claims
to, dividends of and demands for them, of the voluntary or
involuntary conversion of any of the Land, Improvements or the
other property described above into cash or liquidated claims,
including proceeds of all present and future fire, hazard or
casualty insurance policies and all condemnation awards or
payments now or later to be made by any public body or decree
by any court of competent jurisdiction for any taking or in
connection with any condemnation or eminent domain proceeding,
and all causes of action and their proceeds for any damage or
injury to the Land, Improvements or the other property
described above or any part of them, or breach of warranty in
connection with the construction of the Improvements, including
causes of action arising in tort, contract, fraud or
concealment of a material fact; together with
(j) All books and records pertaining to any and all
of the property described above, including computer readable
memory and any computer hardware or software necessary to
access and process such memory ("Books and Records"); together
with
(k) All proceeds of, additions and accretions to,
substitutions and replacements for, changes in, and greater
right, title and interest in, to and under or derived from, any
of the property described above and all extensions, improve-
ments, betterments, renewals, substitutions and replacements
thereof and additions and appurtenances thereto, including all
proceeds of any voluntary or involuntary disposition or claim,
right and remedy respecting any such property (arising out of
any judgment, condemnation or award, or otherwise arising) and
all goods, documents, general intangibles, chattel paper and
accounts, wherever located, acquired with cash proceeds of any
of the foregoing or its proceeds.
Trustor shall and will warrant and forever defend the
Property in the quiet and peaceable possession of the Trustee,
its successors and assigns against all and every person or
persons lawfully claiming or to claim the whole or any part
thereof. Trustor agrees that any greater title to the Property
hereafter acquired by Trustor during the term hereof shall be
subject hereto.
1.2 Secured Obligations.
1.2.1 Trustor makes the grant, bargain, conveyance,
sale, transfer and assignment set forth in Section 1.1 and
grants the security interest set forth in Article 3 for the
purpose of securing the following obligations (collectively,
the "Secured Obligations") in any order of priority that
Beneficiary may choose:
(a) Except as specified in Section 1.2.2 below,
the payment and performance of all Obligations of Trustor
and each other Borrower, including, without limitation,
(i) payment of all amounts owing by Trustor and each other
Borrower under the Notes, including, without limitation,
principal in the aggregate amount of up to the Commitment
(which is initially $207,477,346.14, subject to increase
to $212,477,346.14 under certain circumstances) and
interest thereon; (ii) payment of all amounts owing by
Trustor and each other Borrower under Section 2.4(d) of
the Loan Agreement for reimbursement of draws, and all
amounts owing by Trustor and each other Borrower under
Section 9.2(a)(2) of the Loan Agreement for payment of
cash collateral for the undrawn amounts, under the Letters
of Credit in the aggregate face amount of up to
$30,000,000, and interest thereon; (iii) payment of all
amounts owing by Trustor and each other Borrower under the
Swing Line Documents, including, without limitation,
principal in an amount of up to $10,000,000 and interest
thereon; (iv) payment of all amounts owing by Trustor and
each other Borrower under any and all Secured Swap
Agreements; (v) payment of all fees, charges, costs and
other amounts owing by Trustor and each other Borrower
under the Loan Documents, including, without limitation,
the agency fees described in Section 3.7 of the Loan
Agreement; (vi) payment and performance of all obligations
of Trustor under this Deed of Trust; (vii) payment and
performance of all obligations of ANJI under the TropWorld
Deed of Trust, and of all obligations of each Borrower
other than Trustor under any other Loan Document to which
Trustor is not a party; and
(b) The payment and performance of all future
advances and other obligations that Trustor or any other
person may owe to Beneficiary and/or any Banks (whether as
principal, surety or guarantor), when a writing evidences
Trustor's and Beneficiary's agreement that such advances
or obligations be secured by this Deed of Trust; and
(c) The payment and performance of all
modifications, amendments, extensions and renewals,
however evidenced, of any of the Secured Obligations
described in clause (a) or (b), above.
1.2.2 Notwithstanding any provision of this Deed of
Trust or any other Loan Document, the obligations and liability
of Trustor, any Borrower or any other person arising under
Sections 4.18, 5.14, and/or 11.22 of the Loan Agreement (and/or
under any separate agreement relating to Hazardous Materials
which states that it is not secured by real property) are not
and shall not be Secured Obligations under this Deed of Trust.
1.2.3 All persons who may have or acquire an
interest in all or any part of the Property will be considered
to have notice of, and will be bound by, the terms of the
Secured Obligations and each other agreement or instrument made
or entered into in connection with each of the Secured
Obligations. Such terms include any provisions in the Loan
Agreement or the other Loan Documents which permit borrowing,
repayment and reborrowing, or which provide that the interest
rate on one or more of the Secured Obligations may vary from
time to time.
1.3 Future Advances (NRS 106.300, et seq). It is the
intention of Trustor, Beneficiary and the Banks that this Deed
of Trust is an "instrument" (as defined in NRS 106.330, as
amended or recodified from time to time) which secures "future
advances" (as defined in NRS 106.320, as amended or recodified
from time to time) and which is governed pursuant to NRS
106.300 through 106.400, as amended or recodified from time to
time ("NRS" means Nevada Revised Statutes). It is the
intention of the parties that the Secured Obligations include
the obligation of Trustor to repay "future advances" of
"principal" (as defined in NRS 106.345, as amended or
recodified from time to time) in an amount up to the Commitment
(as further described above), and that the lien of this Deed of
Trust secures the obligation of Trustor to repay all such
"future advances" with the priority set forth in NRS
106.370(1), as amended or recodified from time to time.
2. Assignment of Rents and Leases.
2.1 Assignment. Trustor hereby irrevocably, absolutely,
presently and unconditionally assigns, transfers and sets over
to Beneficiary all of the right, title and interest which
Trustor now has or may later acquire in and to the Rents and
the Leases, and confers upon Beneficiary the right to collect
such Rents and enforce the provisions of the Leases with or
without taking possession of the Property. This is an absolute
assignment, not an assignment for security only.
2.2 Grant of License. Beneficiary hereby confers upon
Trustor a license ("License") to collect and retain the Rents
as they become due and payable, so long as no Event of Default,
as defined in Section 6.2, shall exist and be continuing. If
an Event of Default has occurred and is continuing, Beneficiary
shall have the right, which it may choose to exercise in its
absolute discretion, to terminate this License without notice
to or demand upon Trustor, and without regard to the adequacy
of Beneficiary's security under this Deed of Trust.
2.3 Collection and Application of Rents. Subject to the
License granted to Trustor under Section 2.2, Beneficiary has
the right, power and authority to collect any and all Rents and
exercise Trustor's right, title and interest under the Leases.
Trustor hereby appoints Beneficiary its attorney-in-fact to
perform any and all of the following acts, if and at the times
when Beneficiary in its absolute discretion may so choose:
(a) Demand, receive and enforce payment of any and
all Rents and any other right, title and interest of Trustor
under the Leases; or
(b) Give receipts, releases and satisfactions for
any and all Rents and any other obligations and duties under
the Leases; or
(c) Sue either in the name of Trustor or in the name
of Beneficiary for any and all Rents and to enforce any other
obligations and duties under the Leases.
Beneficiary's right to the Rents and the Leases does not depend
on whether or not Beneficiary takes possession of the Property
as permitted under Section 6.3.3. In Beneficiary's absolute
discretion, Beneficiary may choose to collect Rents and
exercise the right, title and interest of Trustor under the
Leases either with or without taking possession of the
Property. Beneficiary shall apply all Rents collected by it in
the manner provided under Section 6.6. If an Event of Default
occurs while Beneficiary is in possession of all or part of the
Property and is collecting and applying Rents and exercising
any right, title and interest of Trustor under the Leases as
permitted under this Deed of Trust, then Beneficiary, Trustee
and any receiver shall nevertheless be entitled to exercise and
invoke every right and remedy afforded any of them under this
Deed of Trust and at law and in equity, including the right to
exercise the power of sale granted under Section 1.1 and
Section 6.3.7.
2.4 Beneficiary Not Responsible. Under no circumstances
shall Beneficiary have any duty to produce Rents from the
Property or maintain the Leases. Regardless of whether or not
Beneficiary, in person or by agent, takes actual possession of
the Land and Improvements, Beneficiary is not and shall not be
deemed to be:
(a) a "mortgagee in possession" for any purpose; or
(b) responsible for performing any of the
obligations under any Lease; or
(c) responsible for any waste committed by lessees
or any other parties, any dangerous or defective condition of
the Property, or any negligence in the management, upkeep,
repair or control of the Property; or
(d) liable in any manner for the Property or the
use, occupancy, enjoyment or operation of all or any part of
it.
2.5 Leasing. Without Beneficiary's prior written
consent, Trustor shall not accept any deposit or prepayment of
Rents for any period exceeding one (1) month, and Trustor shall
not lease the Property or any part of it except strictly in
accordance with the Loan Documents. Trustor shall not apply
any Rents in any manner prohibited by the Loan Documents.
3. Grant of Security Interest.
3.1 Security Agreement. The parties intend for this Deed
of Trust to create a lien on and security interest in the
Property, and an absolute assignment of the Rents and the
Leases, all in favor of Beneficiary. The parties acknowledge
that some of the Property and some of the Rents and Leases may
be determined under applicable law to be personal property or
fixtures. To the extent such Property, Rents or Leases
constitute personal property, Trustor, as debtor, hereby grants
to Beneficiary, as secured party, a security interest in all
such Property, Rents and Leases, to secure payment and
performance of the Secured Obligations, and Trustor, as debtor,
also has granted a security interest in such Property, Rents
and Leases pursuant to that certain Security Agreement of even
date herewith, executed by each of Trustor and the other
Borrowers and certain other parties, as debtor, in favor of
Beneficiary, as secured party. This Deed of Trust constitutes
a security agreement under the Nevada Uniform Commercial Code,
as amended or recodified from time to time, covering all such
Property, Rents and Leases. To the extent such Property, Rents
or Leases are not real property encumbered by the lien created
by Section 1.1, above, and are not absolutely assigned by the
assignment set forth in Section 2.1, above, it is the intention
of the parties that such Property, Rents and/or Leases shall
constitute "proceeds, products, offspring, rents or profits"
(as defined in and for the purposes of Section 552(b) of the
United States Bankruptcy Code, as such section may be modified
or supplemented) of the Land and Improvements.
3.2 Financing Statements. Trustor shall execute one or
more financing statements and such other documents as
Beneficiary may from time to time require to perfect or
continue the perfection of Beneficiary's security interest in
any Property, Rents or Leases. As provided in Section 5.11,
Trustor shall pay all fees and costs that Beneficiary may incur
in filing such documents in public offices and in obtaining
such record searches as Beneficiary may reasonably require. If
Trustor fails to execute any financing statements or other
documents for the perfection or continuation of any security
interest, Trustor hereby appoints Beneficiary as its true and
lawful attorney-in-fact to execute any such documents on its
behalf. If any financing statement or other document is filed
in the records normally pertaining to personal property, that
filing shall never be construed as in any way derogating from
or impairing this Deed of Trust or the rights or obligations of
the parties under it.
4. Fixture Filing. This Deed of Trust constitutes a financing
statement filed as a fixture filing under NRS 104.9402(6) of
the Nevada Uniform Commercial Code, as amended or recodified
from time to time, covering any Property which now is or later
may become fixtures attached to the Land or Improvements. In
connection therewith, the addresses of Trustor, as debtor, and
Beneficiary, as secured party, are as set forth in Section
7.11, below. The foregoing address of Beneficiary, as secured
party, is also the address from which information concerning
the security interest may be obtained by any interested party.
The property subject to this fixture filing is described in
Section 1.1, above. Portions of the property subject to this
fixture filing as identified in this Section are or are to
become fixtures related to the real estate described in
Exhibit A attached hereto.
5. Rights and Duties of the Parties.
5.1 Representations and Warranties. Trustor represents
and warrants that, except as previously disclosed to
Beneficiary in a writing making reference to this Section 5.1:
(a) Trustor lawfully possesses and holds fee simple
title to all of the Land and Improvements thereon;
Property other than the Land and Improvements;
(c) Trustor has the full and unlimited power, right
and authority to encumber the Property and assign the Rents and
the Leases;
(d) This Deed of Trust creates a first and prior
lien on and security interest in the Property, subject only to
the Permitted Encumbrances;
(e) The Property includes all property and rights
which may be reasonably necessary or desirable to promote the
present and any reasonable future beneficial use and enjoyment
of the Land and Improvements;
(f) Trustor owns any Property which is personal
property free and clear of any security agreements, reserva-
tions of title or conditional sales contracts, and there is no
financing statement affecting such personal property on file in
any public office;
(g) Trustor's place of business, or its chief
executive office if it has more than one place of business, is
located at the address specified below; and
(h) None of the Property is located in an area
having or identified as having special flood hazards or any
similar designation under the National Flood Insurance Act of
1968, as amended or recodified from time to time, or the Flood
Disaster Protection Act of 1973, as amended or recodified from
time to time.
5.2 Taxes and Assessments. Trustor shall pay prior to
delinquency all taxes, levies, charges and assessments,
including assessments on appurtenant water stock, imposed by
any public or quasi-public authority or utility company which
are (or if not paid, may become) a lien on or security interest
in all or part of the Property or any interest in it, or which
may cause any decrease in the value of the Property or any part
of it. If any such taxes, levies, charges or assessments
become delinquent, Beneficiary may require Trustor to present
evidence that they have been paid in full, on ten (10) days'
written notice by Beneficiary to Trustor. This Section 5.2 is
subject to the right granted in Section 5.1 of the Loan
Agreement to contest in good faith certain taxes, assessments,
charges and levies.
5.3 Performance of Secured Obligations. Trustor shall
promptly pay and perform each Secured Obligation (exclusive of
Secured Obligations of other Borrowers under documents to which
Trustor is not a party and for which Trustor is not otherwise
liable) in accordance with its terms.
5.4 Liens, Charges and Encumbrances. Trustor shall
immediately discharge any lien on or security interest in the
Property to which Beneficiary has not consented in writing,
except any Permitted Encumbrances and Permitted Rights of
Others. Subject to any applicable rights to contest set forth
in the Loan Agreement, Trustor shall pay when due each
obligation secured by or reducible to a lien, security
interest, charge or encumbrance which now does or later may
encumber or appear to encumber all or part of the Property or
any interest in it, whether the lien, security interest, charge
or encumbrance is or would be senior or subordinate to this
Deed of Trust.
5.5 Damages and Insurance and Condemnation Proceeds.
5.5.1 Trustor hereby absolutely and irrevocably
assigns to Beneficiary, and authorizes the payor to pay to
Beneficiary, the following claims, causes of action, awards,
payments and rights to payment:
(a) All awards of damages and all other
compensation payable directly or indirectly because of a
condemnation, proposed condemnation or taking for public
or private use which affects all or part of the Property
or any interest in it; and
(b) All other awards, claims and causes of
action, arising out of any warranty affecting all or any
part of the Property, or for damage or injury to or
decrease in value of all or part of the Property or any
interest in it; and
(c) All proceeds of any insurance policies
payable because of loss sustained to all or part of the
Property; and
(d) All interest which may accrue on any of the
foregoing.
5.5.2 Trustor shall immediately notify Beneficiary
in writing if:
(a) Any damage occurs or any injury or loss is
sustained in the amount of $2,000,000 or more to all or
part of the Property, or any action or proceeding relating
to any such damage, injury or loss is commenced; or
(b) Any offer is made, or any action or
proceeding is commenced, which relates to any actual or
proposed condemnation or taking of all or part of the
Property.
5.5.3 If Beneficiary chooses to do so, Beneficiary
may in its own name appear in or prosecute any action or
proceeding to enforce any cause of action based on warranty, or
for damage, injury or loss to all or part of the Property, and
Beneficiary may make any compromise or settlement of the action
or proceeding. Beneficiary, if it so chooses, may participate
in any action or proceeding relating to condemnation or taking
of all or part of the Property, and may join Trustor in
adjusting any loss covered by insurance. Trustor hereby
irrevocably appoints Beneficiary its true and lawful
attorney-in-fact for all such purposes. Trustor shall not
settle, adjust or compromise any such action or proceeding
without the prior written approval of Beneficiary.
5.5.4 All proceeds of these assigned claims, other
property and rights which Trustor may receive or be entitled to
(collectively, "Proceeds") shall be paid to Beneficiary. In
each instance, Beneficiary shall apply such Proceeds first
toward reimbursement of all of Beneficiary's costs and expenses
of recovering the Proceeds, including attorneys' fees. If, in
any instance, each and all of the following conditions are
satisfied in Beneficiary's reasonable judgment, Beneficiary
shall permit Trustor to use the balance of such Proceeds ("Net
Claims Proceeds") to pay costs of repairing or reconstructing
the Property in the manner described below:
(a) The plans and specifications, cost
breakdown, construction contract, construction schedule,
contractor and payment and performance bond for the work
of repair or reconstruction must all be acceptable to
Beneficiary; and
(b) Beneficiary must receive evidence
satisfactory to it that, after repair or reconstruction,
the Property will be at least as valuable as it was
immediately before the damage or condemnation occurred;
and
(c) The Net Claims Proceeds must be sufficient
in Beneficiary's determination to pay for the total cost
of repair or reconstruction, including all associated
development costs and interest projected to be payable on
the Secured Obligations until the repair or reconstruction
is complete; or Trustor must provide its own funds in an
amount equal to the difference between the Net Claims
Proceeds and a reasonable estimate, made by Trustor and
found acceptable by Beneficiary, of the total cost of
repair or reconstruction; and
(d) Beneficiary must receive evidence
satisfactory to it that all Leases which Beneficiary may
find acceptable will continue after the repair or
reconstruction is complete; and
(e) No Event of Default shall have occurred and
be continuing.
If Beneficiary finds that such conditions have been met,
Beneficiary shall hold the Net Claims Proceeds and any funds
which Trustor is required to provide in a noninterest-bearing
account and shall disburse them to Trustor to pay costs of
repair or reconstruction upon presentation of evidence
reasonably satisfactory to Beneficiary that repair or
reconstruction has been completed satisfactorily and lien-free
and security interest-free. However, if Beneficiary finds that
one or more of such conditions have not been satisfied,
Beneficiary may apply the Net Claims Proceeds to pay or prepay
(without premium) some or all of the Secured Obligations in
such order and proportions as Beneficiary in its absolute
discretion may choose (subject to the provisions for priority
of application of payments set forth in the Loan Agreement).
Any and all Proceeds (including, without limitation, any Net
Claims Proceeds) held by Beneficiary from time to time shall be
collateral for the Secured Obligations, and Trustor hereby
grants to Beneficiary a security interest in and lien on such
Proceeds and all rights and remedies available under applicable
laws with respect to such Proceeds, including, without
limitation, all rights and remedies under the Nevada Uniform
Commercial Code. Trustor shall execute and deliver to
Beneficiary and the Banks any and all documents reasonably
requested by Beneficiary in order to confirm, create and
perfect such security interest in and lien on such Proceeds.
In the event that any Proceeds are applied to pay any Secured
Obligations, then Beneficiary shall have no obligation to
disburse or release such applied Proceeds to Trustor under this
Section 5.5.
5.5.5 Trustor hereby specifically, unconditionally
and irrevocably waives all rights of a property owner granted
under applicable law, including NRS 37.115, as amended or
recodified from time to time, which provide for allocation of
condemnation proceeds between a property owner and a
lienholder, and any other law or successor statute of similar
import. Trustor hereby specifically, unconditionally and
irrevocably waives all right to recover against Beneficiary or
any Bank (or any officer, employee, agent or representative of
Beneficiary or any Bank) for any loss incurred by Trustor from
any cause insured against or required by any Loan Document to
be insured against; provided, however, that this waiver of
subrogation shall not be effective with respect to any
insurance policy if the coverage thereunder would be materially
reduced or impaired as a result.
5.6 Maintenance and Preservation of Property.
5.6.1 Except as permitted in the Loan Agreement,
Trustor shall not remove or demolish the Property or any part
of it, or alter, restore or add to the Property, or initiate or
allow any change in any zoning or other land use classification
which affects the Property or any part of it, except as
permitted or required by the Loan Agreement or with
Beneficiary's express prior written consent in each instance.
5.6.2 If all or part of the Property becomes damaged
or destroyed, Trustor shall promptly and completely repair
and/or restore the Property in a good and workmanlike manner in
accordance with sound building practices, regardless of whether
or not Beneficiary agrees to disburse insurance proceeds or
other sums to pay costs of the work of repair or reconstruction
under Section 5.5.
5.6.3 Trustor shall not commit or allow any act upon
or use of the Property which would violate: (i) any applicable
law or order of any Governmental Agency, whether now existing
or later to be enacted and whether foreseen or unforeseen
(except to the extent that noncompliance would not cause a
Material Adverse Effect or a License Revocation); or (ii) any
public or private covenant, condition, restriction, equitable
servitude, Contractual Obligation or Right of Others affecting
the Property. Trustor shall not bring or keep any article on
the Property or cause or allow any condition to exist on it,
that could invalidate or would be prohibited by any insurance
coverage required to be maintained by Trustor on the Property
or any part of it under this Deed of Trust.
5.6.4 Trustor shall not commit or allow waste of the
Property.
5.6.5 Trustor shall perform all other acts which
from the character or use of the Property may be reasonably
necessary to maintain and preserve its value.
5.7 Insurance.
5.7.1 Trustor shall maintain the following insurance
with respect to the Property:
(a) Trustor shall provide, maintain and keep in
force at all times during any period of construction with
respect to the portion of the Property affected by such
construction a policy or policies of builder's "all risk"
insurance in nonreporting form in an amount not less than the
full insurable completed value of such portion of the Property
on a replacement cost basis. The policy or policies shall
insure against loss or damage by hazards customarily included
within such "all risk" policies and any other risks or hazards
which Beneficiary may reasonably specify (and shall include
boiler and machinery insurance), and each shall contain a
Lender's Loss Payable Endorsement (Form 438 BFU or equivalent)
in favor of Beneficiary.
(b) Trustor shall provide, maintain and keep in
force at all times for all portions of the Property not covered
by a policy or policies described in Section 5.7.1(a), above, a
policy or policies of fire and hazards "all risk" insurance
providing extended coverage, in an amount not less than the
full insurable value of such portions of the Property on a
replacement cost basis. The policy or policies shall insure
against loss or damage by hazards customarily included within
"all risk" and "extended coverage" policies and any other risks
or hazards which Beneficiary may reasonably specify (and shall
include boiler and machinery insurance), and each shall contain
a Lender's Loss Payable Endorsement (Form 438 BFU or
equivalent) in favor of Beneficiary.
(c) Trustor shall provide, maintain and keep in
force at all times for all portions of the Property any policy
or policies of business interruption insurance that Beneficiary
reasonably requires (including insurance against income loss
during a period of at least one (1) year), and each such policy
shall contain a Lender's Loss Payable Endorsement (Form 438 BFU
or equivalent) in favor of Beneficiary.
(d) Trustor shall provide, maintain and keep in
force at all times a policy or policies of comprehensive
liability insurance naming Beneficiary and the Banks as
additional insureds, on an "occurrence" basis, against claims
for "personal injury" liability, including bodily injury, death
or property damage liability, with a limit of not less than
Fifty Million Dollars ($50,000,000). Such insurance shall be
primary and noncontributory with any other insurance carried by
Beneficiary and/or any Bank(s).
(e) Trustor shall provide, maintain and keep in
force at all times such policies of worker's compensation
insurance as may be required by applicable laws (including
employer's liability insurance, if required by Beneficiary),
covering all employees of Trustor and each contractor and
subcontractor.
(f) Trustor shall provide, maintain and keep in
force at all times any and all additional insurance that
Beneficiary in its reasonable judgment may from time to time
require, so long as such insurance is available in the
commercial market at reasonable rates.
5.7.2 All such policies of insurance shall be issued
by companies approved by Beneficiary having a minimum A.M.
Best's rating of A-:X. The limits, coverage, forms,
deductibles, inception and expiration dates and cancellation
provisions of all such policies shall be acceptable to
Beneficiary. Each property insurance policy maintained in
connection with any of the Property shall contain a Lender's
Loss Payable Endorsement (Form 438 BFU or equivalent) in favor
of Beneficiary, and shall provide that all proceeds be payable
to Beneficiary to the extent of its interest. Each liability
insurance policy maintained in connection with any of the
Property shall name Beneficiary and the Banks as additional
insureds. An approval by Beneficiary is not, and shall not be
deemed to be, a representation of the solvency of any insurer
or the sufficiency of any amount of insurance. Each policy of
insurance required hereunder shall provide that it may not be
modified or cancelled without at least thirty (30) days' prior
written notice to Beneficiary, and shall permit a waiver of
subrogation by Trustor in favor of Beneficiary and the Banks.
5.7.3 Trustor shall supply Beneficiary with
certificates of each policy required hereunder and any other
policy of insurance maintained in connection with any of the
Property, together with an original or underlyer of each such
policy and all endorsements thereto. When any insurance policy
required hereunder expires, Trustor shall furnish Beneficiary
with proof acceptable to Beneficiary that the policy has been
reinstated or a new policy issued, continuing in force the
insurance covered by the policy which expired. If Trustor
fails to pay any such premium, Beneficiary shall have the
right, but not the obligation, to obtain current coverage and
advance funds to pay the premiums for it. Trustor shall repay
Beneficiary immediately on demand for any advance for such
premiums, which shall be considered to be an additional loan to
Trustor bearing interest at the Default Rate, and secured by
this Deed of Trust and any other collateral held by Beneficiary
in connection with the Secured Obligations.
5.8 Trustee's Acceptance of Trust. Trustee accepts this
trust when this Deed of Trust is recorded.
5.9 Releases, Extensions, Modifications and Additional
Security.
5.9.1 From time to time, Beneficiary may perform any
of the following acts without incurring any liability or giving
notice to any person, and without affecting the personal
liability of any person for the payment of the Secured
Obligations (except as provided below), and without affecting
the security hereof for the full amount of the Secured
Obligations on all Property remaining subject hereto, and
without the necessity that any sum representing the value of
any portion of the Property affected by Beneficiary's action(s)
be credited on the Secured Obligations:
(a) Release any person liable for payment of
any Secured Obligation;
(b) Extend the time for payment, or otherwise
alter the terms of payment, of any Secured Obligation;
(c) Accept additional real or personal property
of any kind as security for any Secured Obligation,
whether evidenced by deeds of trust, mortgages, security
agreements or any other instruments of security; or
(d) Alter, substitute or release any property
securing the Secured Obligations.
5.9.2 From time to time when requested to do so by
Beneficiary in writing, Trustee may perform any of the
following acts without incurring any liability or giving notice
to any person:
(a) Consent to the making of any plat or map of
the Property or any part of it;
(b) Join in granting any easement or creating
any restriction affecting the Property;
(c) Join in any subordination or other
agreement affecting this Deed of Trust or the lien or
security interest of it; or
(d) Reconvey the Property or any part of it
without any warranty.
5.10 Reconveyance. Upon the satisfaction of all of the
conditions to the reconveyance hereof set forth in
Section 11.26 of the Loan Agreement, Beneficiary shall request
Trustee in writing to reconvey the Property, and shall
surrender this Deed of Trust and all notes and instruments
evidencing the Secured Obligations to Trustee. When Trustee
receives Beneficiary's written request for reconveyance and all
fees and other sums owing to Trustee by Trustor under Section
5.11, Trustee shall reconvey the Property, or so much of it as
is then held under this Deed of Trust, without warranty, to the
person or persons legally entitled to it. Such person or
persons shall pay any costs of recordation. In the
reconveyance, the grantee may be described as "the person or
persons legally entitled thereto," and the recitals of any
matters or facts shall be conclusive proof of their
truthfulness. Neither Beneficiary nor Trustee shall have any
duty to determine the rights of persons claiming to be rightful
grantees of any reconveyance.
5.11 Compensation, Exculpation, Indemnification.
5.11.1 Trustor agrees to pay fees in the maximum
amounts legally permitted, or reasonable fees as may be charged
by Beneficiary and Trustee when the law provides no maximum
limit, for any services that Beneficiary or Trustee may render
in connection with this Deed of Trust, including Beneficiary's
providing a statement of the Secured Obligations or Trustee's
rendering of services in connection with a reconveyance.
Trustor shall also pay or reimburse all of Beneficiary's and
Trustee's costs and expenses which may be incurred in rendering
any such services. Trustor further agrees to pay or reimburse
Beneficiary for all costs, expenses and other advances which
may be incurred or made by Beneficiary or Trustee in any
efforts to enforce any terms of this Deed of Trust, including
any rights or remedies afforded to Beneficiary or Trustee or
both of them under Section 6.3, whether any lawsuit is filed or
not, or in defending any action or proceeding arising under or
relating to this Deed of Trust, including attorneys' fees and
other legal costs, costs of any Foreclosure Sale (as defined in
Section 6.3.8) and any cost of evidence of title. If
Beneficiary chooses to dispose of the Property through more
than one Foreclosure Sale, Trustor shall pay all costs,
expenses or other advances that may be incurred or made by
Trustee or Beneficiary in each of such Foreclosure Sales.
5.11.2 Beneficiary shall not be directly or
indirectly liable to Trustor or any other person as a
consequence of any of the following:
(a) Beneficiary's exercise of, or failure to
exercise, any rights, remedies or powers granted to
Beneficiary in this Deed of Trust;
(b) Beneficiary's failure or refusal to perform
or discharge any obligation or liability of Trustor under
any agreement related to the Property or under this Deed
of Trust; or
(c) Any loss sustained by Trustor or any third
party resulting from Beneficiary's failure to lease or
operate the Property, or from any other act or omission of
Beneficiary in managing the Property, after an Event of
Default, unless the loss is caused by the willful
misconduct and bad faith of Beneficiary.
Trustor hereby expressly waives and releases all liability of
the types described above, and agrees that no such liability
shall be asserted against or imposed upon Beneficiary.
5.11.3 Trustor agrees to indemnify Trustee,
Beneficiary and the Banks (collectively, the "Indemnitees")
against and hold them harmless from all losses, damages,
liabilities, claims, causes of action, judgments, court costs,
reasonable attorneys' fees and other reasonable legal expenses,
cost of evidence of title, cost of evidence of value, and other
costs and expenses which any of them may suffer or incur:
(a) In performing any act required or permitted
by this Deed of Trust or any of the other Loan Documents
or by law;
(b) Because of any failure of Trustor to
perform any of Trustor's obligations; or
(c) Because of any alleged obligation of or
undertaking by Beneficiary to perform or discharge any of
the representations, warranties, conditions, covenants or
other obligations in any document relating to the Property
other than the Loan Documents.
Notwithstanding the foregoing, no Indemnitee shall be entitled
to indemnification for any loss caused by its own gross
negligence or willful misconduct or for any loss asserted
against it by another Indemnitee. If any claim, demand, action
or cause of action is asserted against any Indemnitee, such
Indemnitee shall promptly notify Trustor, but the failure to so
promptly notify Trustor shall not affect Trustor's obligations
under this Section unless such failure materially prejudices
Trustor's right to participate in the contest of such claim,
demand, action or cause of action, as hereinafter provided.
Such Indemnitee may (and shall, if requested by Trustor in
writing) contest the validity, applicability and amount of such
claim, demand, action or cause of action and shall permit
Trustor to participate in such contest. Any Indemnitee that
proposes to settle or compromise any claim or proceeding for
which Trustor may be liable for payment of indemnity hereunder
shall give Trustor written notice of the terms of such proposed
settlement or compromise reasonably in advance of settling or
compromising such claim or proceeding and shall obtain
Trustor's prior consent (which shall not be unreasonably
withheld or delayed). In connection with any claim, demand,
action or cause of action covered by this Section 5.11.3
against more than one Indemnitee, all such Indemnitees shall be
represented by the same legal counsel (which may be a law firm
engaged by the Indemnitees or attorneys employed by an
Indemnitee or a combination of the foregoing) selected by the
Indemnitees and reasonably acceptable to Trustor; provided,
that if such legal counsel determines in good faith that
representing all such Indemnitees would or could result in a
conflict of interest under Laws or ethical principles
applicable to such legal counsel or that a defense or counter-
claim is available to an Indemnitee that is not available to
all such Indemnitees, then to the extent reasonably necessary
to avoid such a conflict of interest or to permit unqualified
assertion of such a defense or counterclaim, each Indemnitee
shall be entitled to separate representation by legal counsel
selected by that Indemnitee and reasonably acceptable to
Trustor, with all such legal counsel using reasonable efforts
to avoid unnecessary duplication of effort by counsel for all
Indemnitees; and further provided that Beneficiary (as an
Indemnitee) shall at all times be entitled to representation by
separate legal counsel (which may be a law firm or attorneys
employed by Beneficiary or a combination of the foregoing).
Any obligation or liability of Trustor to any Indemnitee under
this Section 5.11.3 shall survive the release and cancellation
of any or all of the Secured Obligations and the full or
partial release and/or reconveyance of this Deed of Trust.
5.11.4 Trustor shall pay all obligations to pay
money arising under this Section 5.11 immediately upon demand
by Trustee or Beneficiary. Each such obligation shall be added
to, and considered to be part of, the principal of the Notes in
favor of Beneficiary, and shall bear interest from the date the
obligation arises at the Default Rate.
5.12 Defense and Notice of Claims and Actions. At
Trustor's sole expense, Trustor shall protect, preserve and
defend the Property and title to and right of possession of the
Property, and the security of this Deed of Trust and the rights
and powers of Beneficiary and Trustee created under it, against
all adverse claims. Trustor shall give Beneficiary and Trustee
prompt notice in writing if any claim is asserted which does or
could affect any of such matters, or if any action or pro-
ceeding is commenced which alleges or relates to any such
claim.
5.13 Substitution of Trustee. From time to time,
Beneficiary may substitute a successor to any Trustee named in
or acting under this Deed of Trust in any manner now or later
to be provided at law, or by a written instrument executed and
acknowledged by Beneficiary and recorded in the office(s) of
the recorder(s) of the County. Any such instrument shall be
conclusive proof of the proper substitution of the successor
Trustee, who shall automatically upon recordation of the
instrument succeed to all estate, title, rights, powers and
duties of the predecessor Trustee, without conveyance from it.
5.14 Subrogation. Beneficiary shall be subrogated to the
liens and security interests of all encumbrances, whether
released of record or not, which are discharged in whole or in
part by Beneficiary in accordance with this Deed of Trust or
with the proceeds of any loan secured by this Deed of Trust.
5.15 Site Visits, Observation and Testing. Beneficiary
and its agents and representatives shall have the right at any
reasonable time to enter and visit the Property for the purpose
of performing appraisals. In addition, each person indemnified
by each of the Borrowers under Section 11.22 of the Loan
Agreement (collectively, "Indemnified Parties") and their
agents and representatives shall have the right at any
reasonable time to enter and visit the Property for the pur-
poses of observing the Property, taking and removing soil or
groundwater samples, and conducting tests on any part of the
Property. The Indemnified Parties have no duty, however, to
visit or observe the Property or to conduct tests, and no site
visit, observation or testing by any Indemnified Party shall
impose any liability on any Indemnified Party. In no event
shall any site visit, observation or testing by any Indemnified
Party be a representation that Hazardous Materials are or are
not present in, on, or under the Property, or that there has
been or shall be compliance with any Hazardous Materials Law,
or any other applicable governmental law. Neither Trustor nor
any other party is entitled to rely on any site visit,
observation or testing by any Indemnified Party. The
Indemnified Parties owe no duty of care to protect Trustor or
any other party against, or to inform Trustor or any other
party of, any Hazardous Material or any other adverse condition
affecting the Property. Any Indemnified Party shall give
Trustor reasonable notice before entering the Property. The
Indemnified Party shall make reasonable efforts to avoid
interfering with Trustor's use of the Property in exercising
any rights provided in this Section.
5.16 Notice of Change. Trustor shall give Beneficiary
prior written notice of (a) any change in the location of
Trustor's place of business or its chief executive office if it
has more than one place of business, (b) any change in the
location of any of the Property, including the Books and
Records, and (c) any change to Trustor's name or business
structure. Unless otherwise approved by Beneficiary in
writing, all Property that consists of personal property (other
than the Books and Records) will be located on the Land and all
Books and Records for the portion of the Property owned by
Trustor will be located at such Trustor's place of business or
chief executive office if such Trustor has more than one place
of business.
5.17 Title Insurance. At any time and from time to time
at the request of Beneficiary, Trustor, at its sole cost and
expense, shall deliver to Beneficiary such additional or
increased title insurance coverage and title insurance
indorsements and reinsurance issued by title insurance
companies, all in form and substance and reasonably
satisfactory to Beneficiary, with respect to this Deed of
Trust, including, without limitation, CLTA 122 endorsements
insuring that each advance is secured by this Deed of Trust
(without any exception not set forth in the policy of title
insurance insuring this Deed of Trust other than (i) liens for
taxes and assessments not yet due and payable and
(ii) Permitted Encumbrances insured to be subordinate to this
Deed of Trust), and CLTA 101.4 endorsements insuring the
priority of the Deed of Trust over any mechanic's lien;
provided that Trustor shall be obligated under this Section
5.17 to increase the stated amount of the policy of title
insurance insuring this Deed of Trust only if improvements have
been constructed on the Property after the date of recordation
of this Deed of Trust, and provided further that the amount of
any such increase in the amount of such policy of title
insurance shall equal the sum of the amounts of soft costs and
hard costs of constructing such improvements.
6. Accelerating Transfers, Defaults and Remedies.
6.1 Accelerating Transfers.
6.1.1 "Accelerating Transfer" means any sale,
contract to sell, conveyance, encumbrance, lease, alienation or
further encumbrance not expressly permitted under the Loan
Agreement, or other transfer of all or any material part of the
Property or any interest in it, whether voluntary, involuntary,
by operation of law or otherwise, unless Beneficiary has given
its prior written consent to such "Accelerating Transfer,"
which consent may be given or not given in the absolute
discretion of Beneficiary. If Trustor is a corporation or
limited liability company, "Accelerating Transfer" also means
any transfer or transfers of shares possessing, in the aggre-
gate, more than fifty percent (50%) of the voting power. If
Trustor is a partnership or limited liability company,
"Accelerating Transfer" also means withdrawal or removal of any
general partner or manager, as the case may be, dissolution of
the partnership or limited liability company under Nevada law,
or any transfer or transfers of, in the aggregate, more than
fifty percent (50%) of the partnership interests or ownership
interests in the limited liability company.
6.1.2 Trustor acknowledges that Beneficiary and the
Banks are making one or more advances under the Loan Agreement
in reliance on the expertise, skill and experience of Trustor;
thus, the Secured Obligations include material elements similar
in nature to a personal service contract. In consideration of
Beneficiary's reliance, Trustor agrees that Trustor shall not
make any Accelerating Transfer, unless the transfer is preceded
by Beneficiary's written consent to the particular transaction
and transferee. Beneficiary may withhold such consent in its
absolute discretion. If any Accelerating Transfer occurs,
Beneficiary may, in its absolute discretion (provided that it
has received any consents or approvals of any other Banks
required under the Loan Agreement), declare all of the Secured
Obligations to be immediately due and payable, and Beneficiary
and Trustee may invoke any rights and remedies provided by
Section 6.3 of this Deed of Trust.
6.2 Events of Default. Trustor will be in default under
this Deed of Trust upon the occurrence of any one or more of
the following events ("Events of Default"):
(a) Trustor fails to perform any obligation to pay
money which arises under this Deed of Trust within five (5)
Banking Days after written demand therefor; or
(b) Trustor fails to perform any other obligation
arising under this Deed of Trust within ten (10) Banking Days
after the giving of written notice by Beneficiary of such
failure; or
(c) Trustor, any other Borrower, any other Party, or
any other "borrower" (as that term is defined in NRS 106.310,
as amended or recodified from time to time) who may send a
notice pursuant to NRS 106.380(1), as amended or recodified
from time to time, with respect to this Deed of Trust,
(i) delivers, sends by mail or otherwise gives, or purports to
deliver, send by mail or otherwise give, to Beneficiary or any
Bank, (A) any notice of an election to terminate the operation
of this Deed of Trust as security for any Secured Obligation,
including, without limitation, any obligation to repay any
"future advance" (as defined in NRS 106.320, as amended or
recodified from time to time) of "principal" (as defined in NRS
106.345, as amended or recodified from time to time), or
(B) any other notice pursuant to NRS 106.380(1), as amended or
recodified from time to time, (ii) records a statement pursuant
to NRS 106.380(3), as amended or recodified from time to time,
or (iii) causes this Deed of Trust, any Secured Obligation,
Beneficiary or any Bank to be subject to NRS 106.380(2),
106.380(3) or 106.400, as amended or recodified from time to
time; or
(d) Any Event of Default (as defined in the Loan
Agreement or any other Loan Document) occurs; or any other
default occurs under any of the Secured Obligations.
6.3 Remedies. At any time after and during the
continuance of an Event of Default and provided that
Beneficiary has received any consents or approvals of any other
Banks required under the Loan Agreement, Beneficiary and
Trustee will be entitled to invoke any or all of the following
rights and remedies (subject to any restrictions on those
rights and remedies imposed by applicable Gaming Laws), all of
which will be cumulative, and the exercise of any one or more
of which shall not constitute an election of remedies:
6.3.1 Acceleration. Beneficiary may declare any or
all of the Secured Obligations to be due and payable
immediately.
6.3.2 Receiver. Beneficiary may apply to any court
of competent jurisdiction for, and obtain appointment of, a
receiver for the Property; and Beneficiary may request, in
connection with any foreclosure proceeding hereunder, that the
Nevada Gaming Commission petition a District Court of the State
of Nevada for the appointment of a supervisor to conduct the
normal gaming activities on the Property following such
foreclosure proceeding.
6.3.3 Entry. Beneficiary, in person, by agent or by
court-appointed receiver, may enter, take possession of, manage
and operate all or any part of the Property, and may also do
any and all other things in connection with those actions that
Beneficiary may in its absolute discretion consider necessary
and appropriate to protect the security of this Deed of Trust.
Such other things may include, without limitation: taking and
possessing all of Trustor's or the then owner's Books and
Records; entering into, enforcing, modifying, or cancelling
Leases on such terms and conditions as Beneficiary may consider
proper; obtaining and evicting tenants; collecting and
receiving any payment of money owing to Trustor; completing
construction; and/or contracting for and making repairs and
alterations. If Beneficiary so requests, Trustor shall
assemble all of the Property that has been removed from the
Land and make all of it available to Beneficiary at the site of
the Land. Trustor hereby irrevocably constitutes and appoints
Beneficiary as Trustor's attorney-in-fact to perform such acts
and execute such documents as Beneficiary in its absolute
discretion may consider to be appropriate in connection with
taking these measures, including endorsement of Trustor's name
on any instruments. Regardless of any provision of this Deed
of Trust or the Loan Agreement, Beneficiary shall not be
considered to have accepted any property other than cash or
immediately available funds in satisfaction of any obligation
of Trustor to Beneficiary unless Beneficiary has given express
written notice of Beneficiary's election of that remedy in
accordance with NRS 104.9505, as it may be amended or
recodified from time to time.
6.3.4 Cure; Protection of Security. Either
Beneficiary or Trustee may cure any breach or default of
Trustor and, if it chooses to do so in connection with any such
cure, Beneficiary or Trustee may also enter the Property and/or
do any and all other things which either may in its absolute
discretion consider necessary and appropriate to protect the
security of this Deed of Trust. Such other things may include,
without limitation: appearing in and/or defending any action
or proceeding which purports to affect the security of, or the
rights or powers of Beneficiary or Trustee under, this Deed of
Trust; paying, purchasing, contesting or compromising any
encumbrance, charge, lien, security interest or claim of lien
or security interest which (in Beneficiary's or Trustee's sole
judgment) is or may be senior in priority to this Deed of
Trust, such judgment of Beneficiary or Trustee to be conclusive
as among the parties to this Deed of Trust; obtaining insurance
and/or paying any premiums or charges for insurance required to
be carried under this Deed of Trust and the other Loan
Documents; otherwise caring for and protecting any and all of
the Property; and/or employing counsel, accountants, con-
tractors and other appropriate persons to assist Beneficiary or
Trustee. Beneficiary and Trustee may take any of the actions
permitted under this Section 6.3.4 either with or without
giving notice to any person.
6.3.5 Uniform Commercial Code Remedies. Beneficiary
may exercise any or all of the remedies granted to a secured
party under the Nevada Uniform Commercial Code, as amended or
recodified from time to time.
6.3.6 Judicial Action. Beneficiary may bring an
action in any court of competent jurisdiction to foreclose this
Deed of Trust or to obtain specific enforcement of any of the
covenants or other terms of this Deed of Trust.
6.3.7 Power of Sale. Under the power of sale hereby
granted, Beneficiary shall have the discretionary right to
cause some or all of the Property, including any Property which
constitutes personal property, to be sold or otherwise disposed
of in any combination and in any manner permitted by applicable
law.
(a) Sales of Personal Property.
(i) For purposes of this power of sale,
Beneficiary may elect to treat as personal property any
Property which is intangible or which can be severed from
the Land or Improvements without causing structural
damage. If it chooses to do so, Beneficiary may dispose
of any personal property separately from the sale of real
property, in any manner permitted by Article 9 of the
Nevada Uniform Commercial Code, as amended or recodified
from time to time, including any public or private sale,
or in any manner permitted by any other applicable law.
Any proceeds of any such disposition shall not cure any
Event of Default or reinstate any Secured Obligation.
(ii) In connection with any sale or other
disposition of such Property, Trustor agrees that the
following procedures constitute a commercially reasonable
sale: Beneficiary shall mail written notice of the sale
to Trustor not later than five (5) days prior to such
sale. Once per week during the three weeks immediately
preceding such sale, Beneficiary will publish notice of
the sale in a local daily newspaper of general
circulation. Upon receipt of any written request,
Beneficiary will make the Property available to any bona
fide prospective purchaser for inspection during
reasonable business hours. Notwithstanding any provision
to the contrary, Beneficiary shall be under no obligation
to consummate a sale if, in its judgment, none of the
offers received by it equals the fair value of the
Property offered for sale. The foregoing procedures do
not constitute the only procedures that may be
commercially reasonable.
(b) Trustee's Sales of Real Property or Mixed
Collateral.
(i) Beneficiary may choose to dispose of
some or all of the Property which consists solely of real
property in any manner then permitted by applicable law.
In its discretion, Beneficiary may also or alternatively
choose to dispose of some or all of the Property, in any
combination consisting of both real and personal property,
together in one sale to be held in accordance with the law
and procedures applicable to real property, as permitted
by Article 9 of the Nevada Uniform Commercial Code, as
amended or recodified from time to time. Trustor agrees
that such a sale of personal property together with real
property constitutes a commercially reasonable sale of the
personal property. For purposes of this power of sale,
either a sale of real property alone, or a sale of both
real and personal property together in accordance with
Article 9 of the Nevada Uniform Commercial Code, as
amended or recodified from time to time, will sometimes be
referred to as a "Trustee's Sale."
(ii) Before any Trustee's Sale,
Beneficiary or Trustee shall give such notice of default
and election to sell as may then be required by law. When
all time periods then legally mandated have expired, and
after such notice of sale as may then be legally required
has been given, Trustee shall sell the property being sold
at a public auction to be held at the time and place
specified in the notice of sale, provided, however, that
no sale or other disposition of slot machines or other
gaming devices shall occur without first receiving the
approval of the applicable Gaming Board. Neither Trustee
nor Beneficiary shall have any obligation to make demand
on Trustor before any Trustee's Sale. From time to time
in accordance with then applicable law, Trustee may, and
in any event at Beneficiary's request shall, postpone any
Trustee's Sale by public announcement at the time and
place noticed for that sale.
(iii) At any Trustee's Sale, Trustee shall
sell the property being sold at a public auction to the
highest bidder at public auction for cash in lawful money
of the United States. Trustee shall execute and deliver
to the purchaser(s) a deed or deeds conveying the property
being sold without any covenant or warranty whatsoever,
express or implied. The recitals in any such deed of any
matters or facts, including any facts bearing upon the
regularity or validity of any Trustee's Sale, shall be
conclusive proof of their truthfulness. Any such deed
shall be conclusive against all persons as to the facts
recited in it.
6.3.8 Single or Multiple Foreclosure Sales. If the
Property consists of more than one lot, parcel or item of
property, Beneficiary may:
(a) Designate the order in which the lots,
parcels and/or items shall be sold or disposed of or
offered for sale or disposition; and
(b) Elect to dispose of the lots, parcels
and/or items through a single consolidated sale or
disposition to be held or made under the power of sale
granted in Sections 1.1 and 6.3.7, or in connection with
judicial proceedings, or by virtue of a judgment and
decree of foreclosure and sale; or through two or more
such sales or dispositions; or in any other manner
Beneficiary may deem to be in its best interests (any such
sale or disposition being referred to herein as a
"Foreclosure Sale").
If Beneficiary chooses to have more than one Foreclosure Sale,
Beneficiary at its option may cause the Foreclosure Sales to be
held simultaneously or successively, on the same day, or on
such different days and at such different times and in such
order as Beneficiary may deem to be in its best interests. No
Foreclosure Sale shall terminate or affect the liens or
security interests of this Deed of Trust on any part of the
Property which has not been sold until all of the Secured
Obligations have been paid in full and the Commitment has been
fully and finally terminated.
6.3.9 Other Permitted Remedies. Beneficiary and the
Banks may refuse to make any advance to, or issue any Letter of
Credit for the account of, any Borrower. Beneficiary and the
Banks may exercise any and all other rights and remedies
available under the Loan Documents and applicable law,
including, without limitation, the right to file applications
to change, and to exercise all other rights and remedies
available under applicable law with respect to, the water
permits and rights described on Exhibit B attached hereto;
provided however that, notwithstanding the foregoing or any
other provision contained in this Deed of Trust, the remedies
provided by this Deed of Trust shall not include the right to
take any action that violates applicable Gaming Laws.
6.4 Credit Bids. At any Foreclosure Sale, any person,
including Trustor, Trustee or Beneficiary, may bid for and
acquire the Property or any part thereof to the extent
permitted by then applicable law. Instead of paying cash for
such property, Beneficiary may settle for the purchase price by
crediting the sales price of the property against the following
obligations:
(a) First, the portion of the Secured Obligations
attributable to the expenses of sale, costs of any action and
any other sums for which Trustor is obligated to pay or
reimburse Beneficiary, the Banks or Trustee under Section 5.11;
and
(b) Second, all other Secured Obligations in any
order and proportions as Beneficiary in its absolute discretion
may choose (subject to any applicable provisions for priority
of application of payments set forth in the Loan Agreement).
6.5 Application of Foreclosure Sale Proceeds.
Beneficiary and Trustee shall apply the proceeds of any
Foreclosure Sale in the manner required by applicable law.
6.6 Application of Rents and Other Sums. Beneficiary
shall apply any and all Rents collected by it, and any and all
sums other than proceeds of a Foreclosure Sale which
Beneficiary may receive or collect under Section 6.3, in the
following manner:
(a) First, to pay the portion of the Secured
Obligations attributable to the costs and expenses of operation
and collection that may be incurred by Trustee, Beneficiary or
any receiver;
(b) Second, to pay all other Secured Obligations in
any order and proportions as Beneficiary in its absolute
discretion may choose (subject to the provisions for priority
of application of payments set forth in the Loan Agreement);
and
(c) Third, to remit the remainder, if any, to the
person or persons entitled to it. Beneficiary shall have no
liability for any funds which it does not actually receive.
7. Miscellaneous Provisions.
7.1 Additional Provisions. The Loan Documents fully
state all of the terms and conditions of the parties' agreement
regarding the matters mentioned in or incidental to this Deed
of Trust. The Loan Documents also grant further rights to
Beneficiary and contain further agreements and affirmative and
negative covenants by Trustor which apply to this Deed of Trust
and to the Property.
7.2 No Waiver or Cure.
7.in writing, and no waiver shall be construed as a continuing
waiver. No waiver shall be implied from any delay or failure
by Beneficiary or Trustee to take action on account of any
default of Trustor. Consent by Beneficiary or Trustee to any
act or omission by Trustor shall not be construed as a consent
to any other or subsequent act or omission or to waive the
requirement for Beneficiary's or Trustee's consent to be
obtained in any future or other instance.
7.2.2 If any of the events described below occurs,
that event alone shall not: cure or waive any breach, Event of
Default or notice of default under this Deed of Trust or
invalidate any act performed pursuant to any such default or
notice; or nullify the effect of any notice of default or sale
(unless all Secured Obligations then due have been paid and
performed and all other defaults under the Loan Documents have
been cured); or impair the security of this Deed of Trust; or
prejudice Beneficiary, Trustee or any receiver in the exercise
of any right or remedy afforded any of them under this Deed of
Trust; or be construed as an affirmation by Beneficiary of any
tenancy, lease or option, or a subordination of the lien or
security interest of this Deed of Trust.
(a) Beneficiary, its agent or a receiver takes
possession of all or any part of the Property in the
manner provided in Section 6.3.3.
(b) Beneficiary collects and applies Rents as
permitted under Sections 2.3 and 6.6 or exercises
Trustor's right, title and interest under the Leases,
either with or without taking possession of all or any
part of the Property.
(c) Beneficiary receives and applies to any
Secured Obligation proceeds of any Property, including any
proceeds of insurance policies, condemnation awards, or
other claims, property or rights assigned to Beneficiary
under Section 5.5.
(d) Beneficiary makes a site visit, observes
the Property and/or conducts tests as permitted under
Section 5.15.
(e) Beneficiary receives any sums under this
Deed of Trust or any proceeds of any collateral held for
any of the Secured Obligations, and applies them to one or
more Secured Obligations.
(f) Beneficiary, Trustee or any receiver
invokes any right or remedy provided under this Deed of
Trust.
7.3 Powers of Beneficiary and Trustee.
7.3.1 Trustee shall have no obligation to perform
any act which it is empowered to perform under this Deed of
Trust unless it is requested to do so in writing and is
reasonably indemnified against loss, cost, liability and
expense.
7.3.2 If either Beneficiary or Trustee performs any
act which it is empowered or authorized to perform under this
Deed of Trust, including any act permitted by Section 5.9 or
Section 6.3.4, that act alone shall not release or change the
personal liability of any person for the payment and
performance of the Secured Obligations then outstanding, or the
lien or security interest of this Deed of Trust on all or the
remainder of the Property for full payment and performance of
all outstanding Secured Obligations. The liability of the
original Trustor shall not be released or changed if
Beneficiary grants any successor in interest to any Borrower or
Trustor any extension of time for payment, or modification of
the terms of payment, of any Secured Obligation. Beneficiary
shall not be required to comply with any demand by any original
Trustor that Beneficiary refuse to grant such an extension or
modification to, or commence proceedings against, any such
successor in interest.
7.3.3 Beneficiary may take any of the actions
permitted under Sections 6.3.2 and/or 6.3.3 regardless of the
adequacy of the security for the Secured Obligations, or
whether any or all of the Secured Obligations have been
declared to be immediately due and payable, or whether notice
of default and election to sell has been given under this Deed
of Trust.
7.3.4 From time to time, Beneficiary or Trustee may
apply to any court of competent jurisdiction for aid and
direction in executing the trust and enforcing the rights and
remedies created under this Deed of Trust. Beneficiary or
Trustee may from time to time obtain orders or decrees
directing, confirming or approving acts in executing this trust
and enforcing these rights and remedies.
7.4 Merger. No merger shall occur as a result of
Beneficiary's acquiring any other estate in or any other lien
on or security interest in the Property unless Beneficiary
consents to a merger in writing.
7.5 Applicable Law. This Deed of Trust shall be governed
by and construed in accordance with the laws of the State of
California, except that the laws of the State of Nevada shall
govern the creation, perfection and enforcement of the liens
and security interests created hereby.
7.6 Successors in Interest. The terms, covenants and
conditions of this Deed of Trust shall be binding upon and
inure to the benefit of the heirs, successors and assigns of
the parties. However, this Section 7.6 does not waive the
provisions of Section 6.1.
7.7 Interpretation.
7.7.1 Whenever the context requires, all words used
in the singular will be construed to have been used in the
plural, and vice versa, and each gender will include any other
gender. The captions of the sections of this Deed of Trust are
for convenience only and do not define or limit any terms or
provisions. The word "include(s)" means "include(s), without
limitation," and the word "including" means "including, but not
limited to."
7.7.2 The word "obligations" is used in its broadest
and most comprehensive sense, and includes all primary,
secondary, direct, indirect, fixed and contingent obligations.
It further includes all principal, interest, prepayment
charges, late charges, loan fees and any other fees and charges
accruing or assessed at any time, as well as all obligations to
perform acts or satisfy conditions.
7.7.3 No listing of specific instances, items or
matters in any way limits the scope or generality of any
language of this Deed of Trust. All Exhibits and/or Schedules
attached to this Deed of Trust are hereby incorporated in this
Deed of Trust.
7.8 In-House Counsel Fees. Whenever Trustor is obligated
to pay or reimburse Beneficiary or Trustee for any attorneys'
fees, those fees shall include the allocated costs for services
of in-house counsel.
7.9 Waiver of Marshalling. To the extent permitted by
applicable law, Trustor waives all rights, legal and equitable,
it may now or hereafter have to require marshalling of assets
or to require foreclosure sales of assets in a particular
order, including any rights provided by NRS 100.040 and
100.050, as such Sections may be amended or recodified from
time to time. Each successor and assign of Trustor, including
any holder of a lien or security interest subordinate to this
Deed of Trust, by acceptance of its interest or lien or
security interest, agrees that it shall be bound by the above
waiver, as if it had given the waiver itself.
7.10 Severability. Any provision in this Deed of Trust
that is held to be inoperative, unenforceable or invalid as to
any party or in any jurisdiction shall, as to that party or
jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions or the operation,
enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the
provisions of this Deed of Trust are declared to be severable.
7.11 Notices. Trustor hereby requests that a copy of
notice of default and notice of sale be mailed to it at the
address set forth below. That address is also the mailing
address of Trustor as debtor under the Nevada Uniform
Commercial Code, as amended or recodified from time to time.
Beneficiary's address given below is the address for
Beneficiary as secured party under the Nevada Uniform
Commercial Code, as amended or recodified from time to time.
Addresses Where
Notices to Trustor
Are to Be Sent:
c/o Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Attn: Craig F. Sullivan
Treasurer
Address Where Address Where
Notices to Beneficiary Notices to Trustee
Are to Be Sent: Are to Be Sent:
Bank of America NT&SA Equitable Deed Company
Global Agency #5596 555 Anton Boulevard
1455 Market Street 8th Floor (Unit 8699)
13th Floor Costa Mesa, CA 92626
San Francisco, CA 94103
Attn: Peggy A. Fujimoto
IN WITNESS WHEREOF, this Deed of Trust has been
executed as of the date first written above.
"Trustor":
RAMADA EXPRESS, INC.,
a Nevada corporation
By ____________________________
Craig F. Sullivan
Treasurer<PAGE>
ACKNOWLEDGEMENTS
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On October 4, 1994, before me, __________________________,
Notary Public in and for said County and State, personally
appeared
____________________________________________________________,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________
<PAGE>
EXHIBIT A
(Legal Description of Land)
EXHIBIT A to DEED OF TRUST executed as of October 4,
1994, by RAMADA EXPRESS, INC., a Nevada corporation, as
"Trustor", in favor of EQUITABLE DEED COMPANY, as "Trustee",
for the benefit of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association, as Managing Agent
for the Banks, as "Beneficiary."
DESCRIPTION OF PROPERTY
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 1/2 59'51" East a distance of 377.85 feet to a
point; THENCE South 10 1/2 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 1/2 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 1/2 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.
STREET ADDRESS OF PROPERTY
2121 South Casino Drive, Laughlin, Nevada 89029
<PAGE>
EXHIBIT I
REQUEST FOR LETTER OF CREDIT
1. This REQUEST FOR LETTER OF CREDIT is executed and
delivered by Aztar Corporation, a Delaware corporation
("Parent"), on behalf of itself, Adamar of New Jersey, Inc., a
New Jersey corporation, and Ramada Express, Inc., a Nevada
corporation (collectively, "Borrowers" and individually,
"Borrower") to Bank of America National Trust and Savings
Association, as the Issuing Bank, pursuant to Sections 2.4 and
8.4 of that certain Reducing Revolving Loan Agreement (as
amended, modified or extended, the "Agreement") dated as of
October 4, 1994, among Borrowers, the Banks that are parties
thereto, Societe Generale and Midlantic Bank, N.A., as Lead
Managers, Bank One, Arizona, N A and Credit Lyonnais, as
Co-Agents, Bankers Trust Company, as Co-Managing Agent, and
Bank of America National Trust and Savings Association, as
Managing Agent, and the Issuing Bank. Any terms used herein
and not defined herein shall have the meanings set forth for
such terms in the Agreement.
2. Borrowers hereby request that the Issuing Bank issue
a Letter of Credit as follows:
(a) Amount of Letter of Credit: $_______________.
(b) Date of Issuance: ________________, 19__.
(c) Beneficiary under Letter of Credit:
Name: _______________________________
Address: ____________________________
____________________________
____________________________
(d) Expiry Date: __________________, 19__.
(e) Purpose of Letter of Credit: _______________
____________________________________________.
(f) Additional Information/Terms: ______________
____________________________________________.
3. The requested Letter of Credit is (check one box
only):
a new Letter of Credit in addition to Letters of
Credit already outstanding.
a supplement, modification, amendment, renewal,
or extension to or of the following outstanding
Letter(s) of Credit: [identify]
4. In connection with the issuance of the Letter of
Credit requested herein, Borrowers represent, warrant and
certify to the Banks that:
(a) Now and as of the date of the issuance of the
requested Letter of Credit, except (i) for representations
and warranties which expressly speak as of a particular
date or which are no longer true and correct as a result
of a change permitted by the Agreement or (ii) as dis-
closed by Borrowers and approved in writing by the
Requisite Banks, each representation and warranty made by
Borrowers in Article 4 of the Agreement (other than
Sections 4.4(a), 4.6 (first sentence), 4.10, 4.17 and
4.19) will be true and correct, both immediately before
such Letter of Credit is issued and after giving effect to
such Letter of Credit, as though such representations and
warranties were made on and as of the date of such Letter
of Credit;
(b) Other than matters described in Schedule 4.10 to
the Agreement or not required as of the Closing Date to be
described therein, there is not any action, suit, pro-
ceeding or investigation pending as to which Borrowers or
the Restricted Subsidiaries have been served or received
notice or, to the best knowledge of Borrowers, threatened
against or affecting Borrowers or any of the Restricted
Subsidiaries or any Property of any of them before any
Governmental Agency that constitutes a Material Adverse
Effect;
(c) Now and as of the date of the requested Letter
of Credit, no Default or Event of Default presently exists
or will have occurred and be continuing as a result of the
issuance of the Letter of Credit; and
(d) Following the issuance of the Letter of Credit
requested herein, (i) the Aggregate Effective Amount under
all outstanding Letters of Credit will not exceed
$30,000,000, and (ii) the sum of (A) the aggregate
principal amount outstanding under the Notes, plus (B) the
Aggregate Effective Amount of all outstanding Letters of
Credit, plus (C) the Swing Line Outstandings will not
exceed (check one box only):
if the conditions precedent set forth in
Section 8.2 have not been satisfied, the
applicable Commitment minus the Reserve Amount.
if the conditions precedent set forth in
Section 8.2 have been satisfied, the applicable
Commitment.
5. Attached hereto is an Application for Letter of
Credit on the form provided to Borrowers by the Issuing Bank.
6. This Request for Letter of Credit is executed on
_____________, 19___, by a Responsible Official of Parent, on
behalf of all Borrowers. The undersigned, in such capacity,
hereby certifies each and every matter contained herein to be
true and correct.
AZTAR CORPORATION,
a Delaware corporation
By:___________________________
Title:________________________
<PAGE>
EXHIBIT J
REQUEST FOR LOAN
1. This REQUEST FOR LOAN is executed and delivered
by Aztar Corporation, a Delaware corporation ("Parent"), on
behalf of itself, Adamar of New Jersey, Inc., a New Jersey
corporation, and Ramada Express, Inc., a Nevada corporation
(collectively, "Borrowers" and individually, "Borrower") to
Bank of America National Trust and Savings Association, as
Managing Agent, pursuant to that certain Reducing Revolving
Loan Agreement (as amended, modified or extended, the
"Agreement") dated as of October 4, 1994, among Borrowers, the
Banks that are parties thereto, Societe Generale and Midlantic
Bank, N.A., as Lead Managers, Bank One, Arizona, N A and Credit
Lyonnais, as Co-Agents, Bankers Trust Company, as Co-Managing
Agent, and Managing Agent. Any terms used herein and not
defined herein shall have the meanings set forth for such terms
in the Agreement.
2. Borrowers hereby request that the Banks make a
Loan pursuant to the Agreement as follows:
(a) Amount of Requested Loan: $______________
(b) Date of Requested Loan: _________________
(c) Type of Requested Loan (Check one box only):
Alternate Base Rate
Eurodollar Rate for a Eurodollar Period of
________ Months
3. In connection with the request, Borrowers certify
that:
(a) If this Request for Loan is for a Loan which
will increase the principal amount outstanding under the
Notes, now and as of the date of the requested Loan,
except (i) for representations and warranties which
expressly speak as of a particular date or which are no
longer true and correct as a result of a change permitted
by the Agreement or (ii) as disclosed by Borrowers and
approved in writing by the Requisite Banks, each repre-
sentation and warranty made by Borrowers in Article 4 of
the Agreement (other than Sections 4.4(a), 4.6 (first
sentence), 4.10, 4.17 and 4.19) will be true and correct,
both immediately before and after giving effect to such
Loan, as though such representations and warranties were
made on and as of that date;
(b) If this Request for Loan is for a Loan
which will increase the principal amount outstanding under
the Notes, other than matters described in Schedule 4.10
to the Agreement or not required as of the Closing Date to
be described therein, there is not any action, suit,
proceeding or investigation pending as to which Borrowers
or the Restricted Subsidiaries have been served or
received notice or, to the best knowledge of Borrowers,
threatened against or affecting Borrowers or any of the
Restricted Subsidiaries or any Property of any of them
before any Governmental Agency that constitutes a Material
Adverse Effect; and
(c) If this Request for Loan is for a
Eurodollar Rate Loan or for any Loan which will result in
an increase in the principal amount outstanding under the
Notes, no Default or Event of Default presently exists or
will have occurred and be continuing as a result of the
Loan.
4. If this Request for Loan is for a Loan which,
after giving effect thereto, would cause the aggregate
principal amount of (a) the outstanding Loans plus the
Aggregate Effective Amount of all outstanding Letters of Credit
plus the Swing Line outstandings to exceed (b) the amount of
the then applicable Commitment minus the Reserve Amount, then
Borrowers certify that each of the conditions set forth in
Section 8.2 of the Agreement have been satisfied.
5. This Request for Loan is executed on __________,
19___, by a Responsible Official of Parent, on behalf of all
Borrowers. The undersigned, in such capacity, hereby certifies
each and every matter contained herein to be true and correct.
AZTAR CORPORATION,
a Delaware corporation
By:___________________________
Title:________________________
<PAGE>
EXHIBIT L
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY ("Subsidiary Guaranty")
dated as of October 4, 1994, is made by each of the
corporations and partnerships listed on the signature pages
hereto, together with each other Person who may become a party
hereto pursuant to Section 18 of this Subsidiary Guaranty (each
a "Guarantor" and collectively "Guarantors"), jointly and
severally in favor of Bank of America National Trust and
Savings Association, as Managing Agent, and the Banks that are
party to the Reducing Revolving Loan Agreement referred to
below (referred to herein collectively and individually as
"Lender"), with reference to the following facts:
RECITALS
A. Pursuant to that certain Reducing Revolving Loan
Agreement of even date herewith entered into among Aztar
Corporation, a Delaware corporation ("Parent"), Adamar of
New Jersey, Inc., a New Jersey corporation, and Ramada Express,
Inc., a Nevada corporation (collectively, "Borrowers" and
individually, "Borrower"), the Banks therein named, Societe
Generale and Midlantic Bank, N.A., as Lead Managers, Bank One,
Arizona, N A and Credit Lyonnais, as Co-Agents, Bankers Trust
Company, as Co-Managing Agent, and Bank of America National
Trust and Savings Association, as Managing Agent (said Reducing
Revolving Loan Agreement, as it may hereafter be amended,
extended, renewed, supplemented, or otherwise modified from
time to time, being the "Reducing Revolving Loan Agreement"),
the Banks are making certain credit facilities available to
Borrowers.
B. As a condition to the availability of such
credit facilities, Guarantors are required to enter into this
Subsidiary Guaranty and to guaranty the Guarantied Obligations
as hereinafter provided.
C. Guarantors expect to realize direct and indirect
benefits as the result of the availability of the aforemen-
tioned credit facilities to Borrowers, as the result of
financial or business support which will be provided to the
Guarantors by Borrowers.
AGREEMENT
NOW, THEREFORE, in order to induce Lender to extend
the aforementioned credit facilities, and for other good and
valuable consideration, the receipt and adequacy of which
hereby are acknowledged, Guarantors hereby represent, warrant,
covenant, agree and guaranty as follows:
1. Definitions. This Subsidiary Guaranty is the
Subsidiary Guaranty referred to in the Reducing Revolving Loan
Agreement and is one of the Loan Documents. Terms defined in
the Reducing Revolving Loan Agreement and not otherwise defined
in this Subsidiary Guaranty shall have the meanings given those
terms in the Reducing Revolving Loan Agreement when used herein
and such definitions are incorporated herein as though set
forth in full. In addition, as used herein, the following
terms shall have the meanings respectively set forth after
each:
"Guarantied Obligations" means all Obligations
of Borrowers or any Party at any time and from
time to time owed to Lender under one or more of
the Loan Documents (but not including
Obligations owed to Lender under this Subsidiary
Guaranty), whether due or to become due, matured
or unmatured, liquidated or unliquidated, or
contingent or noncontingent, including obliga-
tions of performance as well as obligations of
payment, and including interest that accrues
after the commencement of any bankruptcy or
insolvency proceeding by or against any
Borrower, any Guarantor or any other Person.
"Guarantors" means the Significant Subsidiaries
of Parent that are parties hereto as indicated
on the signature pages hereof, or that become
parties hereto as provided in Section 18 hereof,
and each of them, and any one or more of them,
jointly and severally.
"Lender" means the Managing Agent (acting as the
Managing Agent and/or on behalf of the Banks),
and the Banks, and each of them, and any one or
more of them. Subject to the terms of the
Reducing Revolving Loan Agreement, any right,
remedy, privilege or power of Lender may be
exercised by the Managing Agent, or by the
Requisite Banks, or by any Bank acting with the
consent of the Requisite Banks.
"Subsidiary Guaranty" means this Subsidiary
Guaranty, and any extensions, modifications,
renewals, restatements, reaffirmations, supple-
ments or amendments hereof, including, without
limitation, any documents or agreements by which
additional Guarantors become party hereto.
2. Guaranty of Guarantied Obligations. Guarantors
hereby, jointly and severally, irrevocably, unconditionally
guaranty and promise to pay and perform on demand the
Guarantied Obligations and each and every one of them, includ-
ing all amendments, modifications, supplements, renewals or
extensions of any of them, whether such amendments, modifica-
tions, supplements, renewals or extensions are evidenced by new
or additional instruments, documents or agreements or change
the rate of interest on any Guarantied Obligation or the
security therefor, or otherwise.
3. Nature of Guaranty. This Subsidiary Guaranty is
irrevocable and continuing in nature and relates to any
Guarantied Obligations now existing or hereafter arising. This
Subsidiary Guaranty is a guaranty of prompt and punctual pay-
ment and performance and is not merely a guaranty of
collection.
4. Relationship to Other Agreements. Nothing
herein shall in any way modify or limit the effect of terms or
conditions set forth in any other document, instrument or
agreement executed by any Guarantor or in connection with the
Guarantied Obligations, but each and every term and condition
hereof shall be in addition thereto. All provisions contained
in the Reducing Revolving Loan Agreement or any other Loan
Document that apply to Loan Documents generally are fully
applicable to this Subsidiary Guaranty and are incorporated
herein by this reference.
5. Subordination of Indebtedness of Borrowers to
Guarantors to the Guarantied Obligations. To the fullest
extent it is permitted to do so under the indentures governing
the First Mortgage Notes, the Existing Subordinated Debt and
the New Subordinated Debt, in each case as in effect on the
Closing Date, each Guarantor agrees that:
(a) Any indebtedness of any Borrower now or
hereafter owed to any Guarantor hereby is subordinated to
the Guarantied Obligations.
(b) If Lender so requests, upon the occurrence
and during the continuance of any Event of Default, any
such indebtedness of any Borrower now or hereafter owed to
any Guarantor shall be collected, enforced and received by
such Guarantor as trustee for Lender and shall be paid
over to Lender in kind on account of the Guarantied
Obligations, but without reducing or affecting in any
manner the obligations of such Guarantor under the other
provisions of this Subsidiary Guaranty.
(c) Should such Guarantor fail to collect or
enforce any such indebtedness of such Borrower now or
hereafter owed to such Guarantor and pay the proceeds
thereof to Lender in accordance with Section 5(b) hereof,
Lender as such Guarantor's attorney-in-fact may do such
acts and sign such documents in such Guarantor's name as
Lender considers necessary or desirable to effect such
collection, enforcement and/or payment.
6. Statutes of Limitations and Other Laws. Until
the Guarantied Obligations shall have been paid and performed
in full, all the rights, privileges, powers and remedies
granted to Lender hereunder shall continue to exist and may be
exercised by Lender at any time and from time to time irres-
pective of the fact that any of the Guarantied Obligations may
have become barred by any statute of limitations. Each
Guarantor expressly waives the benefit of any and all statutes
of limitation, and any and all Laws providing for exemption of
property from execution or for evaluation and appraisal upon
foreclosure, to the maximum extent permitted by applicable
Laws.
7. Waivers and Consents. Each Guarantor acknowl-
edges that the obligations undertaken herein involve the guar-
anty of obligations of Persons other than such Guarantor and,
in full recognition of that fact, consents and agrees that
Lender may, at any time and from time to time, without notice
or demand, and without affecting the enforceability or continu-
ing effectiveness hereof: (a) supplement, modify, amend,
extend, renew or otherwise change the time for payment or the
terms of the Guarantied Obligations or any part thereof,
including any increase or decrease of the rate(s) of interest
thereon; (b) supplement, modify, amend or waive, or enter into
or give any agreement, approval or consent with respect to, the
Guarantied Obligations or any part thereof, or any of the Loan
Documents to which such Guarantor is not a party or any
additional security or guaranties, or any condition, covenant,
default, remedy, right, representation or term thereof or
thereunder; (c) accept new or additional instruments, documents
or agreements in exchange for or relative to any of the Loan
Documents or the Guarantied Obligations or any part thereof;
(d) accept partial payments on the Guarantied Obligations;
(e) receive and hold additional security or guaranties for the
Guarantied Obligations or any part thereof; (f) release,
reconvey, terminate, waive, abandon, fail to perfect,
subordinate, exchange, substitute, transfer and/or enforce any
security or guaranties, and apply any security and direct the
order or manner of sale thereof as Lender in its sole and
absolute discretion may determine; (g) release any Person from
any personal liability with respect to the Guarantied
Obligations or any part thereof; (h) settle, release on terms
satisfactory to Lender or by operation of applicable Laws or
otherwise liquidate or enforce any Guarantied Obligations and
any security or guaranty therefor in any manner, consent to the
transfer of any security and bid and purchase at any sale;
and/or (i) consent to the merger, change or any other restruc-
turing or termination of the corporate existence of any
Borrower, any Guarantor or any other Person, and
correspondingly restructure the Guarantied Obligations, and any
such merger, change, restructuring or termination shall not
affect the liability of any Guarantor or the continuing effec-
tiveness hereof, or the enforceability hereof with respect to
all or any part of the Guarantied Obligations.
Upon the occurrence and during the continuance of any
Event of Default, Lender may enforce this Subsidiary Guaranty
independently as to each Guarantor and independently of any
other remedy or security Lender at any time may have or hold in
connection with the Guarantied Obligations. Each Guarantor
expressly waives any right to require Lender to marshal assets
in favor of any Borrower, and agrees that Lender may proceed
against any Borrower, or upon or against any security or
remedy, before proceeding to enforce this Subsidiary Guaranty,
in such order as it shall determine in its sole and absolute
discretion. Lender may file a separate action or actions
against any Borrower and/or any Guarantor without respect to
whether action is brought or prosecuted with respect to any
security or against any other Person, or whether any other
Person is joined in any such action or actions. Guarantors
agree that Lender and Borrowers and any Affiliates of Borrowers
may deal with each other in connection with the Guarantied
Obligations or otherwise, or alter any contracts or agreements
now or hereafter existing between any of them, in any manner
whatsoever, all without in any way altering or affecting the
security of this Subsidiary Guaranty. Lender's rights
hereunder shall be reinstated and revived, and the enforce-
ability of this Subsidiary Guaranty shall continue, with
respect to any amount at any time paid on account of the Guar-
antied Obligations which thereafter shall be required to be
restored or returned by Lender upon the bankruptcy, insolvency
or reorganization of Borrower or any other Person, or other-
wise, all as though such amount had not been paid. The rights
of Lender created or granted herein and the enforceability of
this Subsidiary Guaranty with respect to Guarantors at all
times shall remain effective to guaranty the full amount of all
the Guarantied Obligations even though the Guarantied Obliga-
tions, or any part thereof, or any security or guaranty
therefor, may be or hereafter may become invalid or otherwise
unenforceable as against Borrowers or any other guarantor or
surety and whether or not Borrowers shall have any personal
liability with respect thereto. Each Guarantor expressly
waives any and all defenses now or hereafter arising or
asserted by reason of (a) any disability or other defense of
Borrower with respect to the Guarantied Obligations, (b) the
unenforceability or invalidity of any security or guaranty for
the Guarantied Obligations or the lack of perfection or con-
tinuing perfection or failure of priority of any security for
the Guarantied Obligations, (c) the cessation for any cause
whatsoever of the liability of any Borrower (other than by
reason of the full payment and performance of all Guarantied
Obligations), (d) any failure of Lender to marshal assets in
favor of Borrowers or any other Person, (e) except as otherwise
required by Law or as provided in this Subsidiary Guaranty, any
failure of Lender to give notice of sale or other disposition
of Collateral to such Guarantor or any other Person or any
defect in any notice that may be given in connection with any
sale or disposition of Collateral, (f) except as otherwise
required by Law or as provided in this Subsidiary Guaranty, any
failure of Lender to comply with applicable Laws in connection
with the sale or other disposition of any Collateral or other
security for any Guarantied Obligation, including without
limitation, any failure of Lender to conduct a commercially
reasonable sale or other disposition of any Collateral or other
security for any Guarantied Obligation, (g) any act or omission
of Lender or others that directly or indirectly results in or
aids the discharge or release of any Borrower or the Guarantied
Obligations or any security or guaranty therefor by operation
of law or otherwise, (h) any Law which provides that the obli-
gation of a surety or guarantor must neither be larger in
amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or guarantor's obligation
in proportion to the principal obligation, (i) any failure of
Lender to file or enforce a claim in any bankruptcy or other
proceeding with respect to any Person, (j) the election by
Lender, in any bankruptcy proceeding of any Person, of the
application or non-application of Section 1111(b)(2) of the
United States Bankruptcy Code, (k) any extension of credit or
the grant of any Lien under Section 364 of the United States
Bankruptcy Code, (l) any use of cash collateral under
Section 363 of the United States Bankruptcy Code, (m) any
agreement or stipulation with respect to the provision of
adequate protection in any bankruptcy proceeding of any Person,
(n) the avoidance of any Lien in favor of Lender for any
reason, (o) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against any Person, including any
discharge of, or bar or stay against collecting, all or any of
the Guarantied Obligations (or any interest thereon) in or as a
result of any such proceeding, (p) to the extent permitted in
paragraph 40.495(4) of the Nevada Revised Statutes ("NRS"), the
benefits of the one-action rule under NRS Section 40.430, or
(q) any action taken by Lender that is authorized by this
Section or any other provision of any Loan Document. Each
Guarantor expressly waives all setoffs and counterclaims and
all presentments, demands for payment or performance, notices
of nonpayment or nonperformance, protests, notices of protest,
notices of dishonor and all other notices or demands of any
kind or nature whatsoever with respect to the Guarantied Obli-
gations, and all notices of acceptance of this Subsidiary
Guaranty or of the existence, creation or incurrence of new or
additional Guarantied Obligations.
8. Condition of Borrowers and their Subsidiaries.
Each Guarantor represents and warrants to Lender that each
Guarantor has established adequate means of obtaining from each
Borrower and its Subsidiaries, on a continuing basis, financial
and other information pertaining to the businesses, operations
and condition (financial and otherwise) of each Borrower and
its Subsidiaries and their Properties, and each Guarantor now
is and hereafter will be completely familiar with the busi-
nesses, operations and condition (financial and otherwise) of
each Borrower and its Subsidiaries and their Properties. Each
Guarantor hereby expressly waives and relinquishes any duty on
the part of Lender (should any such duty exist) to disclose to
any Guarantor any matter, fact or thing related to the busines-
ses, operations or condition (financial or otherwise) of any
Borrower or its Subsidiaries or their Properties, whether now
known or hereafter known by Lender during the life of this
Subsidiary Guaranty. With respect to any of the Guarantied
Obligations, Lender need not inquire into the powers of any
Borrower or any Subsidiaries thereof or the officers or employ-
ees acting or purporting to act on their behalf, and all
Guarantied Obligations made or created in good faith reliance
upon the professed exercise of such powers shall be secured
hereby.
9. Liens on Real Property. In the event that all
or any part of the Guarantied Obligations at any time are
secured by any one or more deeds of trust or mortgages or other
instruments creating or granting Liens on any interests in real
Property, each Guarantor authorizes Lender, upon the occurrence
of and during the continuance of any Event of Default, at its
sole option, without notice or demand and without affecting any
Guarantied Obligations of any Guarantor, the enforceability of
this Subsidiary Guaranty, or the validity or enforceability of
any Liens of Lender on any Collateral, to foreclose any or all
of such deeds of trust or mortgages or other instruments by
judicial or nonjudicial sale. Each Guarantor expressly waives
any defenses to the enforcement of this Subsidiary Guaranty or
any rights of Lender created or granted hereby or to the
recovery by Lender against any Borrower, any Guarantor or any
other Person liable therefor of any deficiency after a judicial
or nonjudicial foreclosure or sale, even though such a foreclo-
sure or sale may impair the subrogation rights of any Guarantor
or may preclude any Guarantor from obtaining reimbursement or
contribution from Borrower. Each Guarantor expressly waives
any defenses or benefits that may be derived from California
Code of Civil Procedure 580a, 580b, 580d or 726, or
comparable provisions of the Laws of any other jurisdiction,
including, without limitation, NRS Section 40.430 and judicial
decisions relating thereto, and NRS Sections 40.451, 40.455,
40.457 and 40.459, and all other suretyship defenses it
otherwise might or would have under California Law or other
applicable Law. Each Guarantor expressly waives any right to
receive notice of any judicial or nonjudicial foreclosure or
sale of any real Property or interest therein subject to any
such deeds of trust or mortgages or other instruments and any
Guarantor's or any other Person's failure to receive any such
notice shall not impair or affect Guarantors' Obligations or
the enforceability of this Subsidiary Guaranty or any rights of
Lender created or granted hereby.
10. Waiver of Rights of Subrogation. Notwith-
standing anything to the contrary elsewhere contained herein or
in any other Loan Document to which any Guarantor is a Party,
Guarantors hereby expressly waive with respect to Borrowers and
their successors and assigns (including any surety) and any
other Person which is directly or indirectly a creditor of
Borrowers or any surety for Borrowers, any and all rights at
Law or in equity to subrogation, to reimbursement, to
exoneration, to contribution (except as specifically provided
in Section 11 below), to setoff or to any other rights that
could accrue to a surety against a principal, to a guarantor
against a maker or obligor, to an accommodation party against
the party accommodated, or to a holder or transferee against a
maker, and which Guarantors may have or hereafter acquire
against Borrowers or any other such Person in connection with
or as a result of Guarantors' execution, delivery and/or
performance of this Guaranty or any other Loan Document to
which any Guarantor is a party. Guarantors agree that they
shall not have or assert any such rights against Borrowers or
their successors and assigns or any other Person (including any
surety) which is directly or indirectly a creditor of Borrowers
or any surety for Borrowers, either directly or as an attempted
setoff to any action commenced against Guarantors by any
Borrower (as borrower or in any other capacity), Lender or any
other such Person. Guarantors hereby acknowledge and agree
that this waiver is intended to benefit Borrowers and Lender
and shall not limit or otherwise affect Guarantors' liability
hereunder, under any other Loan Document to which any Guarantor
is a party, or the enforceability hereof or thereof.
11. Right of Contribution. Each Guarantor hereby
agrees that to the extent that a Guarantor shall have paid more
than its proportionate share of all payments made hereunder,
provided that the Guarantied Obligations are then satisfied,
such Guarantor shall be entitled to seek and receive contribu-
tion from and against any other Guarantor hereunder who has not
paid its proportionate share of all such payments. The provi-
sions of this Section 11 shall in no respect limit the obliga-
tions and liabilities of any Guarantor to Lender, and, subject
to the provisions of Section 17 below, each Guarantor shall
remain liable to Lender for the full amount guaranteed by such
Guarantor hereunder. The "proportionate share" of any
Guarantor shall be a fraction (which shall in no event exceed
1.00) the numerator of which is the excess, if any, of the fair
value of the assets of such Guarantor over a fair estimate of
the liabilities of Guarantor and the denominator of which is
the excess (but not less than $1.00) of the fair value of the
aggregate assets (without duplication) of all Guarantors over a
fair estimate of the aggregate liabilities (without duplica-
tion) of all Guarantors. All relevant calculations shall be
made as of the date such Guarantor became a Guarantor.
12. Waiver of Discharge. Without limiting the
generality of the foregoing and to the extent otherwise
applicable, each Guarantor hereby waives discharge under NRS
Section 104.3605 by waiving all defenses based on suretyship or
impairment of collateral.
13. Understandings With Respect to Waivers and
Consents. Each Guarantor warrants and agrees that each of the
waivers and consents set forth herein are made with full
knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right
waived may diminish, destroy or otherwise adversely affect
rights which Guarantor otherwise may have against Borrowers,
Lender or others, or against any Collateral, and that, under
the circumstances, the waivers and consents herein given are
reasonable and not contrary to public policy or Law. Each
Guarantor acknowledges that it has either consulted with legal
counsel regarding the effect of this Subsidiary Guaranty and
the waivers and consents set forth herein, or has made an
informed decision not to do so. If this Subsidiary Guaranty or
any of the waivers or consents herein are determined to be
unenforceable under or in violation of applicable Law, this
Subsidiary Guaranty and such waivers and consents shall be
effective to the maximum extent permitted by Law.
14. Representations and Warranties. Each Guarantor
hereby makes each and every representation and warranty
applicable to such Guarantor set forth in Article 4 of the
Reducing Revolving Loan Agreement as if set forth in full
herein.
15. Costs and Expenses. Each Guarantor agrees to
pay to Lender all costs and expenses (including, without limi-
tation, reasonable attorneys' fees and disbursements) incurred
by Lender in the enforcement or attempted enforcement of this
Subsidiary Guaranty, whether or not an action is filed in
connection therewith, and in connection with any waiver or
amendment of any term or provision hereof. All advances,
charges, costs and expenses, including reasonable attorneys'
fees and disbursements (including the reasonably allocated cost
of legal counsel employed by Lender), incurred or paid by
Lender in exercising any right, privilege, power or remedy
conferred by this Subsidiary Guaranty, or in the enforcement or
attempted enforcement thereof, shall be subject hereto and
shall become a part of the Guarantied Obligations and shall be
paid to Lender by each Guarantor, immediately upon demand,
together with interest thereon at the rate(s) provided for
under the Reducing Revolving Loan Agreement.
16. Construction of this Guaranty. This Subsidiary
Guaranty is intended to give rise to absolute and unconditional
obligations on the part of each Guarantor; hence, in any
construction hereof, notwithstanding any provision of any Loan
Document to the contrary, this Subsidiary Guaranty shall be
construed strictly in favor of Lender in order to accomplish
its stated purpose.
17. Liability. Notwithstanding anything to the
contrary elsewhere contained herein or in any Loan Document to
which any Guarantor is a Party, the aggregate liability of all
Guarantors hereunder for payment and performance of the
Guarantied Obligations shall not exceed an amount which, in the
aggregate, is $1.00 less than that amount which if so paid or
performed would constitute or result in a "fraudulent
transfer", "fraudulent conveyance", or terms of similar import,
under applicable state or federal Law, including without
limitation, Section 548 of the United States Bankruptcy Code.
The liability of each Guarantor hereunder is independent of any
other guaranties at any time in effect with respect to all or
any part of the Guarantied Obligations, and each Guarantor's
liability hereunder may be enforced regardless of the existence
of any such guaranties. Any termination by or release of any
guarantor in whole or in part (whether it be another Guarantor
under this instrument or not) shall not affect the continuing
liability of any Guarantor hereunder, and no notice of any such
termination or release shall be required. The execution hereof
by each Guarantor is not founded upon an expectation or
understanding that there will be any other guarantor of the
Guarantied Obligations.
18. Joinder. Any other Person may become a
Guarantor under and become bound by the terms and conditions of
this Subsidiary Guaranty by executing and delivering to Lender
an Instrument of Joinder substantially in the form attached
hereto as Exhibit A, accompanied by such documentation as
Lender may require to establish the due organization, valid
existence and good standing of such Person, its qualification
to engage in business in each material jurisdiction in which it
is required to be so qualified, its authority to execute,
deliver and perform this Subsidiary Guaranty, and the identity,
authority and capacity of each Responsible Official thereof
authorized to act on its behalf.
19. Release of Guarantors. This Subsidiary Guaranty
and all Obligations of Guarantors hereunder shall be released
when all Obligations of each Party to any Loan Document have
been paid in full in Cash or otherwise performed in full and
when no portion of the Commitment remains outstanding. In
addition, if (i) Managing Agent releases the Lien on the
capital stock of any Guarantor as provided by the terms of the
Reducing Revolving Loan Agreement or (ii) any Guarantor
becomes, and is permitted under the Reducing Revolving Loan
Agreement to become, an Unrestricted New Venture Entity, then
such Guarantor shall automatically be released from all of its
Obligations under this Subsidiary Guaranty. Upon such release
of any or all such Guarantors' Obligations hereunder, Managing
Agent shall endorse, execute, deliver, record and file all
instruments and documents, and do all other acts and things,
reasonably required to evidence or document the release of
Managing Agent's rights arising under this Subsidiary Guaranty,
all as reasonably requested by, and at the sole expense of,
Guarantors.
20. WAIVER OF JURY TRIAL. EACH GUARANTOR AND LENDER
EXPRESSLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS SUBSIDIARY GUARANTY, THE
REDUCING REVOLVING LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GUARANTOR AND
LENDER AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS SUBSIDIARY GUARANTY, THE REDUCING
REVOLVING LOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS SUBSIDIARY GUARANTY, THE REDUCING REVOLVING LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS. ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
21. THIS SUBSIDIARY GUARANTY SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF CALIFORNIA.
IN WITNESS WHEREOF, each Guarantor has executed this
Subsidiary Guaranty by its duly authorized officer as of the
date first written above.
"Guarantors"
HOTEL RAMADA OF NEVADA,
a Nevada corporation
By:__________________________
Title:____________________
AZTAR DEVELOPMENT CORPORATION,
a Delaware corporation
By:__________________________
Title:____________________
AZTAR INDIANA GAMING CORPORATION,
an Indiana corporation
By:__________________________
Title:____________________
AZTAR MISSOURI GAMING CORPORATION,
a Missouri corporation
By:__________________________
Title:____________________
ATLANTIC-DEAUVILLE INC.,
a New Jersey corporation
By:__________________________
Title:____________________
ADAMAR GARAGE CORPORATION,
a Delaware corporation
By:__________________________
Title:____________________
MANCHESTER MALL, INC.,
a New Jersey corporation
By:__________________________
Title:____________________
RAMADA NEW JERSEY HOLDINGS CORPORATION,
a Delaware corporation
By:__________________________
Title:____________________
RAMADA NEW JERSEY, INC.,
a New Jersey corporation
By:__________________________
Title:____________________
Address for Guarantors:
2390 East Camelback Road
Suite 400
Phoenix, Arizona
Telecopier: (602) 381-4107
Telephone: (602) 381-4100
<PAGE>
EXHIBIT A
TO
SUBSIDIARY GUARANTY
INSTRUMENT OF JOINDER
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as
of _________________, 19___, by ______________________________,
a ___________________________ ("Joining Party"), and delivered
to Bank of America National Trust and Savings Association, as
Managing Agent, pursuant to the Subsidiary Guaranty dated as of
October 4, 1994 made by Hotel Ramada of Nevada, a Nevada
corporation, Aztar Development Corporation, a Delaware
corporation, Aztar Indiana Gaming Corporation, an Indiana
corporation, Aztar Missouri Gaming Corporation, a Missouri
corporation, Atlantic-Deauville Inc., a New Jersey corporation,
Adamar Garage Corporation, a Delaware corporation, Manchester
Mall, Inc., a New Jersey corporation, Ramada New Jersey
Holdings Corporation, a Delaware corporation, Ramada New
Jersey, Inc., a New Jersey corporation (each a "Guarantor"
collectivley "Guarantors") in favor of the Managing Agent and
the Banks (the "Guaranty"). Terms used but not defined in this
Joinder shall have the meanings defined for those terms in the
Guaranty.
RECITALS
(a) The Guaranty was made by the Guarantors in favor
of the Managing Agent for the benefit of the Banks that are
parties to that certain Reducing Revolving Loan Agreement dated
as of October 4, 1994, by and among Aztar Corporation, a
Delaware corporation, Adamar of New Jersey, Inc., a New Jersey
corporation, and Ramada Express, Inc., a Nevada corporation
(collectively, "Borrowers" and individually, "Borrower"), the
Banks which are parties thereto, Societe Generale and Midlantic
Bank, N.A., as Lead Managers, Bank One, Arizona, N A and Credit
Lyonnais, as Co-Agents, Bankers Trust Company, as Co-Managing
Agent, and Bank of America National Trust and Savings
Association, as the Managing Agent for the Banks.
(b) Joining Party has become a Significant
Subsidiary of Parent, and as such is required pursuant to
Section 5.13 of the Reducing Revolving Loan Agreement to become
a Guarantor.
(c) Joining Party expects to realize direct and
indirect benefits as a result of the availability to Borrowers
of the credit facilities under the Reducing Revolving Loan
Agreement.
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
(1) By this Joinder, Joining Party becomes a
"Guarantor" under and pursuant to Section 18 of the Guaranty.
Joining Party agrees that, upon its execution hereof, it will
become a Guarantor under the Guaranty with respect to all
Obligations of Borrowers heretofore or hereafter incurred under
the Loan Documents, and will be bound by all terms, conditions,
and duties applicable to a Guarantor under the Guaranty.
(2) The effective date of this Joinder is _________.
199___.
"Joining Party"
_________________________________
a _________________________
By:_____________________________
Title:___________________________
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Managing Agent
By:__________________________
Title:_______________________
<PAGE>
EXHIBIT K
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement") dated as of
October 4, 1994, is made by Aztar Corporation, a Delaware
corporation ("Parent"), Adamar of New Jersey, Inc., a
New Jersey corporation, and Ramada Express, Inc., a Nevada
corporation (collectively, "Borrowers" and individually,
"Borrower"), and those Significant Subsidiaries of Borrowers,
if any, that are parties hereto, as indicated on the signature
pages hereof, and/or that become parties hereto in the manner
provided in Section 23 hereof, and each of them, jointly and
severally, as Grantors, in favor of Bank of America National
Trust and Savings Association, as the Managing Agent under the
Loan Agreement referred to below for the ratable benefit of
each of the Banks which are parties to the Loan Agreement from
time to time, as Secured Party, with reference to the following
facts:
RECITALS
A. Pursuant to the Reducing Revolving Loan
Agreement of even date herewith by and among Borrowers, the
lenders from time to time a party thereto (collectively, the
"Banks" and individually, a "Bank"), Society Generale and
Midlantic Bank, N.A., as Lead Managers, Bank One, Arizona, N A
and Credit Lyonnais, as Co-Agents, Bankers Trust Company, as
Co-Managing Agent, and the Managing Agent (as such agreement
may from time to time be amended, extended, renewed,
supplemented or otherwise modified, the "Loan Agreement"), the
Banks have agreed to extend certain credit facilities to
Borrowers.
B. The Loan Agreement provides, as a condition of
the availability of such credit facilities, that Grantors shall
enter into this Agreement and shall grant security interests to
Secured Party as herein provided.
C. Each Grantor expects to realize direct and
indirect benefits as a result of the availability of the
aforementioned credit facilities.
AGREEMENT
NOW, THEREFORE, in order to induce the Banks to
extend the aforementioned credit facilities, and for other good
and valuable consideration, the receipt and adequacy of which
hereby is acknowledged, Grantors hereby jointly and severally
represent, warrant, covenant, agree, assign and grant as
follows:
1. Definitions. This Agreement is the Security
Agreement referred to in the Loan Agreement. This Agreement is
one of the "Loan Documents" referred to in the Loan Agreement.
Terms defined in the Loan Agreement and not otherwise defined
in this Agreement shall have the meanings defined for those
terms in the Loan Agreement. Terms defined in the California
Uniform Commercial Code and not otherwise defined in this
Agreement or in the Loan Agreement shall have the meanings
defined for those terms in the California Uniform Commercial
Code. As used in this Agreement, the following terms shall
have the meanings respectively set forth after each:
"Agreement" means this Security Agreement, and any
extensions, modifications, renewals, restatements, supplements
or amendments hereof, including, without limitation, any
documents or agreements by which additional Grantors become
party hereto.
"Collateral" means and includes all present and
future right, title and interest of Grantors, or any one or
more of them, in or to any Property or assets whatsoever, and
all rights and powers of Grantors, or any one or more of them,
to transfer any interest in or to any Property or assets
whatsoever, including, without limitation, any and all of the
following Property:
(a) All present and future accounts, accounts
receivable, agreements, contracts, leases, contract
rights, rights to payment, instruments, documents, chattel
paper, security agreements, guaranties, letters of credit,
undertakings, surety bonds, insurance policies (whether or
not required by the terms of the Loan Documents), notes
and drafts, and all forms of obligations owing to any
Grantor or in which any Grantor may have any interest,
however created or arising and whether or not earned by
performance;
(b) All present and future general intangibles,
all tax refunds of every kind and nature to which any
Grantor now or hereafter may become entitled, however
arising, all other refunds, and all deposits, reserves,
loans, royalties, cost savings, deferred payments,
goodwill, choses in action, liquidated damages, rights to
indemnification, trade secrets, computer programs,
software, customer lists, trademarks, trade names,
patents, licenses (except for gaming licenses and liquor
licenses, which are not transferrable), copyrights,
technology, processes, proprietary information and
insurance proceeds of which any Grantor is a beneficiary;
(c) Whether characterized as accounts, general
intangibles or otherwise, all rents (including, without
limitation, prepaid rents, fixed, additional and
contingent rents), issues, profits, receipts, earnings,
revenue, income, security deposits, occupancy charges,
hotel room charges, cabana charges, casino revenues, show
ticket revenues, food and beverage revenues, room service
revenues, merchandise sales revenues, parking, mainten-
ance, common area, tax, insurance, utility and service
charges and contributions, instruction fees, membership
charges, restaurant and snack bar revenues;
(d) All present and future deposit accounts of
any Grantor, including, without limitation, any demand,
time, savings, passbook or like account maintained by any
Grantor with any bank, savings and loan association,
credit union or like organization, and all money, Cash and
Cash Equivalents of any Grantor, whether or not deposited
in any such deposit account;
(e) All present and future books and records,
including, without limitation, books of account and
ledgers of every kind and nature, all electronically
recorded data relating to any Grantor or the business
thereof, all receptacles and containers for such records,
and all files and correspondence;
(f) All present and future goods, including,
without limitation, all consumer goods, farm products,
inventory, equipment, gaming devices and associated
equipment (including, without limitation, gaming devices
and associated equipment as defined in Nevada Revised
Statutes Chapter 463), machinery, tools, molds, dies,
furniture, furnishings, fixtures, trade fixtures, motor
vehicles, aircraft, documented and undocumented vessels,
ships and other watercraft, and all other goods used in
connection with or in the conduct of any Grantor's
business;
(g) All present and future inventory and
merchandise, including, without limitation, all present
and future goods held for sale or lease or to be furnished
under a contract of service, all raw materials, work in
process and finished goods, all packing materials,
supplies and containers relating to or used in connection
with any of the foregoing, and all bills of lading,
warehouse receipts or documents of title relating to any
of the foregoing;
(h) All present and future stocks, bonds,
debentures, securities, subscription rights, options,
warrants, puts, calls, certificates, partnership
interests, joint venture interests, Investments and/or
brokerage accounts and all rights, preferences,
privileges, dividends, distributions, redemption payments,
or liquidation payments with respect thereto;
(i) All present and future accessions,
appurtenances, components, repairs, repair parts, spare
parts, replacements, substitutions, additions, issue
and/or improvements to or of or with respect to any of the
foregoing;
(j) All other tangible and intangible Property
of any Grantor;
(k) All rights, remedies, powers and/or
privileges of any Grantor with respect to any of the
foregoing; and
(l) Any and all proceeds and products of any of
the foregoing, including, without limitation, all money,
accounts, general intangibles, deposit accounts,
documents, instruments, chattel paper, goods, insurance
proceeds, and any other tangible or intangible property
received upon the sale or disposition of any of the
foregoing;
provided that the term "Collateral", as used in this Agreement,
shall not include the following: (i) interests pledged
pursuant to the Pledge Agreement (Nevada Gaming) or the Pledge
Agreement (General), or (ii) Real Property or any interest
therein.
"Grantors" means Borrowers and those Significant
Subsidiaries of Borrowers, if any, that are parties hereto as
indicated on the signature pages hereof, or that become parties
hereto as provided in Section 23 hereof, and each of them, and
any one or more of them, jointly and severally. At such times,
if any, as no Significant Subsidiaries of Borrowers are parties
hereto, the term "Grantors" shall refer solely to Borrowers.
"Secured Obligations" means any and all present and
future Obligations of any type or nature of Grantors or any one
or more of them to the Managing Agent, the Banks, and any one
or more of them, arising under or relating to the Loan
Documents or any one or more of them, whether due or to become
due, matured or unmatured, liquidated or unliquidated, or
contingent or noncontingent, including Obligations of
performance as well as Obligations of payment, and including
interest that accrues after the commencement of any bankruptcy
or insolvency proceeding by or against any Grantor.
"Secured Party" means the Managing Agent who shall
hold the Liens and security interests granted hereunder for the
ratable benefit of each of the Banks which are parties to the
Loan Agreement from time to time. Subject to the terms and
conditions of the Loan Agreement, any right, remedy, privilege
or power of Secured Party shall be exercised by the Managing
Agent.
2. Further Assurances. At any time and from time
to time at the request of Secured Party, each Grantor shall
execute and deliver to Secured Party all such financing
statements and other instruments and documents in form and
substance satisfactory to Secured Party as shall be necessary
or desirable to fully perfect, when filed and/or recorded,
Secured Party's security interests granted pursuant to
Section 3 of this Agreement. At any time and from time to
time, Secured Party shall be entitled to file and/or record any
or all such financing statements, instruments and documents
held by it, and any or all such further financing statements,
documents and instruments, and to take all such other actions,
as Secured Party may deem appropriate to perfect and to
maintain perfected the security interests granted in Section 3
of this Agreement. Before and after the occurrence of any
Event of Default, at Secured Party's request, each Grantor
shall execute all such further financing statements,
instruments and documents, and shall do all such further acts
and things, as may be deemed necessary or desirable by Secured
Party to create and perfect, and to continue and preserve, an
indefeasible security interest in the Collateral in favor of
Secured Party, or the priority thereof. With respect to any
Collateral consisting of certificated securities, instruments,
documents, certificates of title or the like, as to which
Secured Party's security interest need be perfected by, or the
priority thereof need be assured by, possession of such
Collateral, Grantors will upon demand of Secured Party deliver
possession of same in pledge to Secured Party. With respect to
any Collateral consisting of securities, instruments,
partnership or joint venture interests or the like, Grantors
hereby consent and agree that the issuers of, or obligors on,
any such Collateral, or any registrar or transfer agent or
trustee for any such Collateral, shall be entitled to accept
the provisions of this Agreement as conclusive evidence of the
right of Secured Party to effect any transfer or exercise any
right hereunder or with respect to any such Collateral,
notwithstanding any other notice or direction to the contrary
heretofore or hereafter given by any Grantor or any other
Person to such issuers or such obligors or to any such
registrar or transfer agent or trustee.
3. Security Agreement. For valuable consideration,
Grantors and each of them hereby assign and pledge to Secured
Party, and grant to Secured Party a security interest in, all
presently existing and hereafter acquired Collateral, as
security for the timely payment and performance of the Secured
Obligations, and each of them, provided, however, that the
foregoing grant shall not extend to any Collateral in which HRN
has granted a security interest to secure the obligations of
TEGP and HRN under the TEGP Loan Agreement. This Agreement is
a continuing and irrevocable agreement and all the rights,
powers, privileges and remedies hereunder shall apply to any
and all Secured Obligations, including those arising under
successive transactions which shall either continue the Secured
Obligations, increase or decrease them, or from time to time
create new Secured Obligations after all or any prior Secured
Obligations have been satisfied, and notwithstanding the
bankruptcy of any Grantor or any other Person or any other
event or proceeding affecting any Person.
4. Grantors' Representations, Warranties and
Agreements. Except as otherwise disclosed to Secured Party in
writing concurrently herewith, Grantors represent, warrant and
agree that: (a) each Grantor will pay, prior to delinquency,
all taxes, charges, Liens and assessments against the portion
of the Collateral owned by it, except such as are timely
contested in good faith, and upon its failure to pay or so
contest such taxes, charges, Liens and assessments, Secured
Party at its option may pay any of them, and Secured Party
shall be the sole judge of the legality or validity thereof and
the amount necessary to discharge the same; (b) the Collateral
will not be used for any unlawful purpose or in violation of
any Law, regulation or ordinance, nor used in any way that will
void or impair any insurance required to be carried in
connection therewith; (c) each Grantor will, to the extent
consistent with good business practice, keep the portion of the
Collateral owned by it in reasonably good repair, working order
and condition, and from time to time make all needful and
proper repairs, renewals, replacements, additions and
improvements thereto and, as appropriate and applicable, will
otherwise deal with such portion of the Collateral in all such
ways as are considered good practice by owners of like
Property; (d) each Grantor will take all reasonable steps to
preserve and protect the Collateral; (e) each Grantor will
maintain, with responsible insurance companies, insurance
covering the Collateral against such insurable losses as is
required by the Loan Agreement and as is consistent with sound
business practice, and will cause Secured Party to be
designated as an additional insured and loss payee with respect
to all insurance (whether or not required by the Loan
Agreement), will obtain the written agreement of the insurers
that such insurance shall not be cancelled, terminated or
materially modified to the detriment of Secured Party without
at least 30 days prior written notice to Secured Party, and
will furnish copies of such insurance policies or certificates
to Secured Party promptly upon request therefor; (f) Grantors
will promptly notify Secured Party in writing in the event of
any substantial or material damage to the Collateral from any
source whatsoever, and, except for the disposition of
collections and other proceeds of the Collateral permitted by
Section 6 hereof, Grantors will not remove or permit to be
removed any part of the Collateral from their places of
business without the prior written consent of Secured Party,
except for such items of the Collateral as are removed in the
ordinary course of business or in connection with any
transaction or disposition otherwise permitted by the Loan
Documents; and (g) in the event any Grantor changes its name or
its address as either are set forth herein or in the Loan
Agreement, such Grantor will notify Secured Party of such name
and/or address change promptly, but in any event, within
five (5) Banking Days.
5. Secured Party's Rights Re Collateral. At any
time (whether or not an Event of Default has occurred), without
notice or demand and at the expense of each Grantor with regard
to the portion of the Collateral owned by it, Secured Party
may, to the extent it may be necessary or desirable to protect
the security hereunder, but Secured Party shall not be
obligated to: (a) at all reasonable times on reasonable notice,
enter upon any premises on which Collateral is situated and
examine the same or (b) perform any obligation of any Grantor
under this Agreement or any obligation of any other Person
under the Loan Documents. At any time and from time to time,
at the expense of each Grantor with regard to the portion of
the Collateral owned by it, Secured Party may, to the extent it
may be necessary or desirable to protect the security here-
under, but Secured Party shall not be obligated to, request
from obligors on the Collateral, in the name of any Grantor or
in the name of Secured Party, information concerning the
Collateral and the amounts owing thereon. Each Grantor shall
maintain books and records pertaining to the Collateral in such
detail, form and scope as Secured Party shall reasonably
require consistent with Secured Party's interests hereunder.
Each Grantor shall at any time at Secured Party's request mark
the Collateral and/or such Grantor's ledger cards, books of
account and other records relating to the Collateral with
appropriate notations satisfactory to Secured Party disclosing
that they are subject to Secured Party's security interests.
Secured Party shall at all reasonable times on reasonable
notice have full access to and the right to audit any and all
of Grantors' books and records pertaining to the Collateral,
and to confirm and verify the value of the Collateral and to do
whatever else Secured Party reasonably may deem necessary or
desirable to protect its interests; provided, however, that any
such action which involves communicating with customers of
Grantors shall be carried out by Secured Party through
Grantors' independent auditors unless Secured Party shall then
have the right directly to notify obligors on the Collateral as
provided in Section 9. Secured Party shall be under no duty or
obligation whatsoever to take any action to preserve any rights
of or against any prior or other parties in connection with the
Collateral, to exercise any voting rights or managerial rights
with respect to any Collateral, whether or not an Event of
Default shall have occurred, or to make or give any present-
ments, demands for performance, notices of non-performance,
protests, notices of protests, notices of dishonor or notices
of any other nature whatsoever in connection with the
Collateral or the Secured Obligations. Secured Party shall be
under no duty or obligation whatsoever to take any action to
protect or preserve the Collateral or any rights of any Grantor
therein, or to make collections or enforce payment thereon, or
to participate in any foreclosure or other proceeding in
connection therewith.
6. Collections on the Collateral. Except as
otherwise provided in any Loan Document, Grantors shall have
the right to use and to continue to make collections on and
receive dividends and other proceeds of all of the Collateral
in the ordinary course of business so long as no Event of
Default shall have occurred and be continuing. Upon the
occurrence and during the continuance of an Event of Default,
at the option of Secured Party, Grantors' right to make
collections on and receive dividends and other proceeds of the
Collateral and to use or dispose of such collections and
proceeds shall terminate, and any and all dividends, proceeds
and collections, including all partial or total prepayments,
then held or thereafter received on or on account of the
Collateral will be held or received by Grantors in trust for
Secured Party and immediately delivered in kind to Secured
Party. Any remittance received by any Grantor from any Person
shall be presumed to relate to the Collateral and to be subject
to Secured Party's security interests. Upon the occurrence and
during the continuance of an Event of Default, Secured Party
shall have the sole right at all times to receive, receipt for,
endorse, assign, deposit and deliver, in the name of Secured
Party or in the name of the appropriate Grantor, any and all
checks, notes, drafts and other instruments for the payment of
money constituting proceeds of or otherwise relating to the
Collateral; and each Grantor hereby authorizes Secured Party to
affix, by facsimile signature or otherwise, the general or
special endorsement of it, in such manner as Secured Party
shall deem advisable, to any such instrument in the event the
same has been delivered to or obtained by Secured Party without
appropriate endorsement, and Secured Party and any collecting
bank are hereby authorized to consider such endorsement to be a
sufficient, valid and effective endorsement by the appropriate
Grantor, to the same extent as though it were manually executed
by the duly authorized officer of the appropriate Grantor,
regardless of by whom or under what circumstances or by what
authority such facsimile signature or other endorsement
actually is affixed, without duty of inquiry or responsibility
as to such matters, and each Grantor hereby expressly waives
demand, presentment, protest and notice of protest or dishonor
and all other notices of every kind and nature with respect to
any such instrument.
7. Possession of Collateral by Secured Party. All
the Collateral now, heretofore or hereafter delivered to
Secured Party shall be held by Secured Party in its possession,
custody and control. Any or all of the Collateral delivered to
Secured Party may be held in an interest-bearing or non-
interest-bearing account, in Secured Party's sole and absolute
discretion, and Secured Party may, in its discretion, apply any
such interest to payment of the Secured Obligations. Nothing
herein shall obligate Secured Party to invest any Collateral or
obtain any particular return thereon. Upon the occurrence and
during the continuance of an Event of Default, whenever any of
the Collateral is in Secured Party's possession, custody or
control, Secured Party may use, operate and consume the
Collateral, whether for the purpose of preserving and/or
protecting the Collateral, or for the purpose of performing any
of Grantors' obligations with respect thereto, or otherwise,
subject to compliance with the requirements of applicable
Gaming Laws. Secured Party may at any time deliver or
redeliver the Collateral or any part thereof to Grantors, and
the receipt of any of the same by any Grantor shall be complete
and full acquittance for the Collateral so delivered, and
Secured Party thereafter shall be discharged from any liability
or responsibility therefor. So long as Secured Party exercises
reasonable care with respect to any Collateral in its posses-
sion, custody or control, Secured Party shall have no liability
for any loss of or damage to such Collateral, and in no event
shall Secured Party have liability for any diminution in value
of Collateral occasioned by economic or market conditions or
events. Secured Party shall be deemed to have exercised
reasonable care within the meaning of the preceding sentence if
the Collateral in the possession, custody or control of Secured
Party is accorded treatment substantially equal to that which
Secured Party accords its own property, it being understood
that Secured Party shall not have any responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters
relating to any Collateral, whether or not Secured Party has or
is deemed to have knowledge of such matters, or (b) taking any
necessary steps to preserve rights against any Person with
respect to any Collateral.
8. Events of Default. There shall be an Event of
Default hereunder upon the occurrence and during the
continuance of an Event of Default under the Loan Agreement.
9. Rights Upon Event of Default. Upon the
occurrence and during the continuance of an Event of Default,
subject to compliance with the requirements of applicable
Gaming Laws, Secured Party shall have, in any jurisdiction
where enforcement hereof is sought, in addition to all other
rights and remedies that Secured Party may have under appli-
cable Law or in equity or under this Agreement (including,
without limitation, all rights set forth in Section 6 hereof)
or under any other Loan Document, all rights and remedies of a
secured party under the Uniform Commercial Code as enacted in
any jurisdiction, and, in addition, the following rights and
remedies, all of which may be exercised with or without notice
to Grantors and without affecting the Obligations of Grantors
hereunder or under any other Loan Document, or the enforce-
ability of the Liens and security interests created hereby:
(a) to foreclose the Liens and security interests created
hereunder or under any other agreement relating to any
Collateral by any available judicial procedure or without
judicial process; (b) to enter any premises where any
Collateral may be located for the purpose of securing,
protecting, inventorying, appraising, inspecting, repairing,
preserving, storing, preparing, processing, taking possession
of or removing the same; (c) to sell, assign, lease or other-
wise dispose of any Collateral or any part thereof, either at
public or private sale or at any broker's board, in lot or in
bulk, for cash, on credit or otherwise, with or without
representations or warranties and upon such terms as shall be
acceptable to Secured Party, provided, however, that Secured
Party shall first apply for and receive all approvals of
applicable Gaming Boards to the extent required for the sale or
disposition of slot machines and other gaming devices; (d) to
notify obligors on the Collateral that the Collateral has been
assigned to Secured Party and that all payments thereon are to
be made directly and exclusively to Secured Party; (e) to
collect by legal proceedings or otherwise all dividends,
distributions, interest, principal or other sums now or
hereafter payable upon or on account of the Collateral; (f) to
cause the Collateral to be registered in the name of Secured
Party, as legal owner; (g) to enter into any extension,
reorganization, deposit, merger or consolidation agreement, or
any other agreement relating to or affecting the Collateral,
and in connection therewith Secured Party may deposit or
surrender control of the Collateral and/or accept other
Property in exchange for the Collateral; (h) to settle,
compromise or release, on terms acceptable to Secured Party, in
whole or in part, any amounts owing on the Collateral and/or
any disputes with respect thereto; (i) to extend the time of
payment, make allowances and adjustments and issue credits in
connection with the Collateral in the name of Secured Party or
in the name of any Grantor; (j) to enforce payment and
prosecute any action or proceeding with respect to any or all
of the Collateral and take or bring, in the name of Secured
Party or in the name of any Grantor, any and all steps,
actions, suits or proceedings deemed by Secured Party necessary
or desirable to effect collection of or to realize upon the
Collateral, including any judicial or nonjudicial foreclosure
thereof or thereon, and each Grantor specifically consents to
any nonjudicial foreclosure of any or all of the Collateral or
any other action taken by Secured Party which may release any
obligor from personal liability on any of the Collateral, and
each Grantor waives any right not expressly provided for in
this Agreement to receive notice of any public or private
judicial or nonjudicial sale or foreclosure of any security or
any of the Collateral; and any money or other property received
by Secured Party in exchange for or on account of the
Collateral, whether representing collections or proceeds of
Collateral, and whether resulting from voluntary payments or
foreclosure proceedings or other legal action taken by Secured
Party or Grantors may be applied by Secured Party without
notice to Grantors to the Secured Obligations in such order and
manner as Secured Party in its sole discretion shall determine;
(k) to insure, process and preserve the Collateral; (l) to
exercise all rights, remedies, powers or privileges provided
under any of the Loan Documents; (m) to remove, from any
premises where the same may be located, the Collateral and any
and all documents, instruments, files and records, and any
receptacles and cabinets containing the same, relating to the
Collateral, and Secured Party may, at the cost and expense of
each Grantor, use such of its supplies, equipment, facilities
and space at its places of business as may be necessary or
appropriate to properly administer, process, store, control,
prepare for sale or disposition and/or sell or dispose of the
portion of the Collateral owned by such Grantor or to properly
administer and control the handling of collections and reali-
zations thereon, and Secured Party shall be deemed to have a
rent-free tenancy of any premises of any Grantor for such
purposes and for such periods of time as reasonably required by
Secured Party; (n) to receive, open and dispose of all mail
addressed to any Grantor and notify postal authorities to
change the address for delivery thereof to such address as
Secured Party may designate; provided that Secured Party agrees
that it will promptly deliver over to the appropriate Grantor
such opened mail as does not relate to the Collateral; and
(o) to exercise all other rights, powers, privileges and
remedies of an owner of the Collateral; all at Secured Party's
sole option and as Secured Party in its sole discretion may
deem advisable. Grantors will, at Secured Party's request,
assemble the Collateral and make it available to Secured Party
at places which Secured Party may reasonably designate, whether
at the premises of Grantors or elsewhere, and will make avail-
able to Secured Party, free of cost, all premises, equipment
and facilities of Grantors for the purpose of Secured Party's
taking possession of the Collateral or storing same or removing
or putting the Collateral in salable form or selling or
disposing of same.
Upon the occurrence and during the continuance of an
Event of Default, Secured Party also shall have the right,
without notice or demand, either in person, by agent or by a
receiver to be appointed by a court (and Grantors hereby
expressly consent upon the occurrence and during the
continuance of an Event of Default to the appointment of such a
receiver), and without regard to the adequacy of any security
for the Secured Obligations, to take possession of the
Collateral or any part thereof and to collect and receive the
rents, issues, profits, income and proceeds thereof. Taking
possession of the Collateral shall not cure or waive any Event
of Default or notice thereof or invalidate any act done
pursuant to such notice. The rights, remedies and powers of
any receiver appointed by a court shall be as ordered by said
court.
Any public or private sale or other disposition of
the Collateral may be held at any office of Secured Party, or
at Grantors' places of business, or at any other place
permitted by applicable Law, and without the necessity of the
Collateral's being within the view of prospective purchasers.
With respect to any Collateral located in Nevada, Secured Party
may also request, in connection therewith, the Nevada Gaming
Commission to petition a District Court of the State of Nevada
for the appointment of a supervisor to conduct the normal
gaming activities on the premises following the appointment of
a receiver. Secured Party may direct the order and manner of
sale of the Collateral, or portions thereof, as it in its sole
and absolute discretion may determine, and Grantors expressly
waive any right to direct the order and manner of sale of any
Collateral. Secured Party or any Person on Secured Party's
behalf may bid and purchase at any such sale or other
disposition. The net cash proceeds resulting from the
collection, liquidation, sale, lease or other disposition of
the Collateral shall be applied, first, to the expenses
(including reasonable attorneys' fees and disbursements) of
retaking, holding, storing, processing and preparing for sale
or lease, selling, leasing, collecting, liquidating and the
like, and then to the satisfaction of the Secured Obligations
in such order as shall be determined by Secured Party in its
sole and absolute discretion. Grantors and any other Person
then obligated therefor shall pay to Secured Party on demand
any deficiency with regard thereto which may remain after such
sale, disposition, collection or liquidation of the Collateral.
Notwithstanding the foregoing or any other provision contained
in this Agreement, the remedies provided by this Agreement
shall in no way include the right to take any action in
contravention of applicable Gaming Laws.
Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a
recognized market, Secured Party will send or otherwise make
available to Parent, as agent for Grantors and each of them,
reasonable notice of the time and place of any public sale
thereof or of the time on or after which any private sale
thereof is to be made. The requirement of sending reasonable
notice conclusively shall be met if such notice is mailed,
first class mail, postage prepaid, to Parent at its address set
forth in the Loan Agreement, or delivered or otherwise sent to
Parent, at least five (5) days before the date of the sale.
Each Grantor other than Parent hereby irrevocably appoints
Parent as its agent for the purpose of receiving notice of sale
hereunder, and agrees that such Grantor conclusively shall be
deemed to have received notice of sale when notice of sale has
been given to Parent. Each Grantor expressly waives any right
to receive notice of any public or private sale of any
Collateral or other security for the Secured Obligations except
as expressly provided for in this paragraph.
With respect to any Collateral consisting of
securities, partnership interests, joint venture interests,
Investments or the like, and whether or not any of such
Collateral has been effectively registered under the Securities
Act of 1933, as amended, or other applicable Laws, Secured
Party may, in its sole and absolute discretion, subject to
compliance with the requirements of applicable Gaming Laws,
sell all or any part of such Collateral at private sale in such
manner and under such circumstances as Secured Party may deem
necessary or advisable in order that the sale may be lawfully
conducted. Without limiting the foregoing, Secured Party may
(i) approach and negotiate with a limited number of potential
purchasers, and (ii) restrict the prospective bidders or
purchasers to Persons who will represent and agree that they
are purchasing such Collateral for their own account for
investment and not with a view to the distribution or resale
thereof. In the event that any such Collateral is sold at
private sale, Grantors agree that if such Collateral is sold
for a price which Secured Party in good faith believes to be
reasonable under the circumstances then existing, then (a) the
sale shall be deemed to be commercially reasonable in all
respects, (b) Grantors shall not be entitled to a credit
against the Secured Obligations in an amount in excess of the
purchase price, and (c) Secured Party shall not incur any
liability or responsibility to Grantors in connection
therewith, notwithstanding the possibility that a substantially
higher price might have been realized at a public sale.
Grantors recognize that a ready market may not exist for such
Collateral if it is not regularly traded on a recognized
securities exchange, and that a sale by Secured Party of any
such Collateral for an amount substantially less than a pro
rata share of the fair market value of the issuer's assets
minus liabilities may be commercially reasonable in view of the
difficulties that may be encountered in attempting to sell a
large amount of such Collateral or Collateral that is privately
traded.
Upon consummation of any sale of Collateral
hereunder, Secured Party shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall
hold the Collateral so sold absolutely free from any claim or
right upon the part of any Grantor or any other Person, and
each Grantor hereby waives (to the extent permitted by
applicable Laws) all rights of redemption, stay and appraisal
which it now has or may at any time in the future have under
any rule of Law or statute now existing or hereafter enacted.
If the sale of all or any part of the Collateral is made on
credit or for future delivery, Secured Party shall not be
required to apply any portion of the sale price to the Secured
Obligations until such amount actually is received by Secured
Party, and any Collateral so sold may be retained by Secured
Party until the sale price is paid in full by the purchaser or
purchasers thereof. Secured Party shall not incur any
liability in case any such purchaser or purchasers shall fail
to pay for the Collateral so sold, and, in case of any such
failure, the Collateral may be sold again.
10. Voting Rights; Dividends; etc. With respect to
any Collateral consisting of securities, partnership interests,
joint venture interests, Investments or the like (referred to
collectively and individually in this Section 10 and in
Section 11 as the "Investment Collateral"), so long as no Event
of Default occurs and remains continuing:
10.1 Voting Rights. Grantors shall be entitled
to exercise any and all voting and other consensual rights
pertaining to the Investment Collateral, or any part thereof,
for any purpose not inconsistent with the terms of this
Agreement, the Loan Agreement, or the other Loan Documents;
provided, however, that Grantors shall not exercise, or shall
refrain from exercising, any such right if it would result in a
Default.
10.2 Dividend and Distribution Rights. Except
as otherwise provided in any Loan Document, Grantors shall be
entitled to receive and to retain and use any and all dividends
or distributions paid in respect of the Investment Collateral;
provided, however, that, subject to compliance with the
requirements of applicable Gaming Laws, any and all such
dividends or distributions received in the form of capital
stock, certificated securities, warrants, options or rights to
acquire capital stock or certificated securities forthwith
shall be, and the certificates representing such capital stock
or certificated securities, if any, forthwith shall be
delivered to Secured Party to hold as pledged Collateral and
shall, if received by any Grantor, be received in trust for the
benefit of Secured Party, be segregated from the other Property
of such Grantor, and forthwith be delivered to Secured Party as
pledged Collateral in the same form as so received (with any
necessary endorsements).
11. Rights During Event of Default. With respect to
any Investment Collateral, so long as an Event of Default has
occurred and is continuing:
11.1 Voting, Dividend, and Distribution Rights.
At the option of Secured Party, subject to compliance with the
requirements of applicable Gaming Laws, all rights of Grantors
to exercise the voting and other consensual rights which they
would otherwise be entitled to exercise pursuant to
Section 10.1 above, and to receive the dividends and
distributions which they would otherwise be authorized to
receive and retain pursuant to Section 10.2 above, shall cease,
and all such rights thereupon shall become vested solely in
Secured Party which thereupon shall have the sole right to
exercise such voting and other consensual rights and to receive
and to hold as pledged Collateral such dividends and
distributions.
11.2 Dividends and Distributions Held in Trust.
All dividends and other distributions which are received by
Grantors contrary to the provisions of this Agreement shall be
received in trust for the benefit of Secured Party, shall be
segregated from other funds of Grantors, and forthwith shall be
paid over to Secured Party as pledged Collateral in the same
form as so received (with any necessary endorsements).
11.3 Irrevocable Proxy. Subject to compliance
with the requirements of applicable Gaming Laws, each Grantor
does hereby revoke all previous proxies with regard to the
Investment Collateral and appoint Secured Party as its
proxyholder to attend and vote at any and all meetings of the
shareholders or other equity holders of the Persons that issued
the Investment Collateral and any adjournments thereof, held on
or after the date of the giving of this proxy and prior to the
termination of this proxy, and to execute any and all written
consents of shareholders or equity holders of such Persons
executed on or after the date of the giving of this proxy and
prior to the termination of this proxy, with the same effect as
if such Grantor had personally attended the meetings or had
personally voted its shares or other interests or had
personally signed the written consents; provided, however, that
the proxyholder shall have rights hereunder only upon the
occurrence and during the continuance of an Event of Default.
Each Grantor hereby authorizes Secured Party to substitute
another Person as the proxyholder and, upon the occurrence and
during the continuance of any Event of Default, hereby
authorizes the proxyholder to file this proxy and any
substitution instrument with the secretary or other appropriate
official of the appropriate Person. This proxy is coupled with
an interest and is irrevocable until such time as all Secured
Obligations have been paid and performed in full.
12. Attorney-in-Fact. Each Grantor hereby
irrevocably nominates and appoints Secured Party as its
attorney-in-fact for the following purposes, subject to
compliance with the requirements of applicable Gaming Laws:
(a) to do all acts and things which Secured Party may deem
necessary or advisable to perfect and continue perfected the
security interests created by this Agreement and, upon the
occurrence and during the continuance of an Event of Default,
to preserve, process, develop, maintain and protect the
Collateral; (b) upon the occurrence and during the continuance
of an Event of Default, to do any and every act which any
Grantor is obligated to do under this Agreement, at the expense
of the Grantor so obligated and without any obligation to do
so; (c) to prepare, sign, file and/or record, for any Grantor,
in the name of the appropriate Grantor, any financing
statement, application for registration, or like paper, and to
take any other action deemed by Secured Party necessary or
desirable in order to perfect or maintain perfected the
security interests granted hereby; and (d) upon the occurrence
and during the continuance of an Event of Default, to execute
any and all papers and instruments and do all other things
necessary or desirable to preserve and protect the Collateral
and to protect Secured Party's security interests therein;
provided, however, that Secured Party shall be under no
obligation whatsoever to take any of the foregoing actions,
and, absent bad faith or actual malice, Secured Party shall
have no liability or responsibility for any act taken or
omission with respect thereto.
13. Costs and Expenses. Each Grantor agrees to pay
to Secured Party all costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements)
incurred by Secured Party in the enforcement or attempted
enforcement of this Agreement, whether or not an action is
filed in connection therewith, and in connection with any
waiver or amendment of any term or provision hereof. All
advances, charges, costs and expenses, including reasonable
attorneys' fees and disbursements, incurred or paid by Secured
Party in exercising any right, privilege, power or remedy
conferred by this Agreement (including, without limitation, the
right to perform any Secured Obligation of any Grantor under
the Loan Documents), or in the enforcement or attempted
enforcement thereof, shall be secured hereby and shall become a
part of the Secured Obligations and shall be paid to Secured
Party by each Grantor, immediately upon demand, together with
interest thereon at the rate(s) provided for under the Loan
Agreement.
14. Statute of Limitations and Other Laws. Until
the Secured Obligations shall have been paid and performed in
full, the power of sale and all other rights, privileges,
powers and remedies granted to Secured Party hereunder shall
continue to exist and may be exercised by Secured Party at any
time and from time to time irrespective of the fact that any of
the Secured Obligations may have become barred by any statute
of limitations. Each Grantor expressly waives the benefit of
any and all statutes of limitation, and any and all Laws
providing for exemption of property from execution or for
valuation and appraisal upon foreclosure, to the maximum extent
permitted by applicable Law.
15. Other Agreements. Nothing herein shall in any
way modify or limit the effect of terms or conditions set forth
in any other security or other agreement executed by any
Grantor or in connection with the Secured Obligations, but each
and every term and condition hereof shall be in addition
thereto. All provisions contained in the Loan Agreement or any
other Loan Document that apply to Loan Documents generally are
fully applicable to this Agreement and are incorporated herein
by this reference.
16. Waivers and Consents. Each Grantor acknowledges
that the Liens created or granted herein will or may secure
Obligations of Persons other than Grantor and, in full
recognition of that fact, each Grantor consents and agrees that
Secured Party may, at any time and from time to time, without
notice or demand, and without affecting the enforceability or
security hereof: (a) supplement, modify, amend, extend, renew
or otherwise change the time for payment or the terms of the
Secured Obligations or any part thereof, including any increase
or decrease of the rate(s) of interest thereon; (b) supplement,
modify, amend or waive, or enter into or give any agreement,
approval or consent with respect to, the Secured Obligations or
any part thereof, or any of the Loan Documents or any
additional security or guaranties, or any condition, covenant,
default, remedy, right, representation or term thereof or
thereunder; (c) accept new or additional instruments, documents
or agreements in exchange for or relative to any of the Loan
Documents or the Secured Obligations or any part thereof;
(d) accept partial payments on the Secured Obligations;
(e) receive and hold additional security or guaranties for the
Secured Obligations or any part thereof; (f) release, reconvey,
terminate, waive, abandon, fail to perfect, subordinate,
exchange, substitute, transfer and/or enforce any security or
guaranties, and apply any security and direct the order or
manner of sale thereof as Secured Party in its sole and
absolute discretion may determine; (g) release any Person from
any personal liability with respect to the Secured Obligations
or any part thereof; (h) settle, release on terms satisfactory
to Secured Party or by operation of applicable Laws or
otherwise liquidate or enforce any Secured Obligations and any
security or guaranty in any manner, consent to the transfer of
any security and bid and purchase at any sale; and/or
(i) consent to the merger, change or any other restructuring or
termination of the corporate existence of any Grantor or any
other Person, and correspondingly restructure the Secured
Obligations, and any such merger, change, restructuring or
termination shall not affect the liability of any Grantor or
the continuing existence of any Lien hereunder, under any other
Loan Document to which any Grantor is a party or the enforce-
ability hereof or thereof with respect to all or any part of
the Secured Obligations.
Upon the occurrence and during the continuance of any
Event of Default, Secured Party may enforce this Agreement
independently as to each Grantor and independently of any other
remedy or security Secured Party at any time may have or hold
in connection with the Secured Obligations secured hereby, and
it shall not be necessary for Secured Party to marshal assets
in favor of any Grantor or any other Person or to proceed upon
or against and/or exhaust any other security or remedy before
proceeding to enforce this Agreement. Each Grantor expressly
waives any right to require Secured Party to marshal assets in
favor of any Grantor or any other Person or to proceed against
any other Grantor or any Collateral provided by any other
Grantor, and agrees that Secured Party may proceed against
Grantors and/or the Collateral in such order as it shall
determine in its sole and absolute discretion. Secured Party
may file a separate action or actions against any Grantor,
whether action is brought or prosecuted with respect to any
other security or against any other Person, or whether any
other Person is joined in any such action or actions. Each
Grantor agrees that Secured Party and Borrowers and any
Affiliate of any Borrower may deal with each other in connec-
tion with the Secured Obligations or otherwise, or alter any
contracts or agreements now or hereafter existing between any
of them, in any manner whatsoever, all without in any way
altering or affecting the security of this Agreement. Each
Grantor expressly waives the benefit of any statute(s) of
limitations affecting its liability hereunder or the
enforcement of the Secured Obligations or any Liens created or
granted herein. Secured Party's rights hereunder shall be
reinstated and revived, and the enforceability of this
Agreement shall continue, with respect to any amount at any
time paid on account of the Secured Obligations which
thereafter shall be required to be restored or returned by
Secured Party upon the bankruptcy, insolvency or reorganization
of any Grantor or otherwise, all as though such amount had not
been paid. The Liens created or granted herein and the
enforceability of this Agreement at all times shall remain
effective to secure the full amount of all the Secured
Obligations even though the Secured Obligations, including any
part thereof or any other security or guaranty therefor, may be
or hereafter may become invalid or otherwise unenforceable as
against Borrowers or any other Grantor and whether or not
Borrowers or any other Grantor shall have any personal
liability with respect thereto. Each Grantor expressly waives
any and all defenses now or hereafter arising or asserted by
reason of (a) any disability or other defense of any Borrower
or any other Grantor with respect to the Secured Obligations,
(b) the unenforceability or invalidity of any security or
guaranty for the Secured Obligations or the lack of perfection
or continuing perfection or failure of priority of any security
for the Secured Obligations, (c) the cessation for any cause
whatsoever of the liability of any Borrower or any other
Grantor (other than by reason of the full payment and perfor-
mance of all Secured Obligations), (d) any failure of Secured
Party to marshal assets in favor of any Grantor or any other
Person, (e) except as required by Law or as otherwise provided
in this Agreement, any failure of Secured Party to give notice
of sale or other disposition of Collateral to any Grantor or
any other Person or any defect in any notice that may be given
in connection with any sale or disposition of Collateral,
(f) except as required by Law or as otherwise provided in this
Agreement, any failure of Secured Party to comply with
applicable Laws, other than Gaming Laws, in connection with the
sale or other disposition of any Collateral or other security
for any Secured Obligation, including, without limitation, any
failure of Secured Party to conduct a commercially reasonable
sale or other disposition of any Collateral or other security
for any Secured Obligation, (g) any act or omission of Secured
Party or others that directly or indirectly results in or aids
the discharge or release of any Borrower or any other Grantor
or the Secured Obligations or any other security or guaranty
therefor by operation of Law or otherwise, (h) any Law which
provides that the obligation of a surety or guarantor must
neither be larger in amount nor in other respects more
burdensome than that of the principal or which reduces a
surety's or guarantor's obligation in proportion to the
principal obligation, (i) any failure of Secured Party to file
or enforce a claim in any bankruptcy or other proceeding with
respect to any Person, (j) the election by Secured Party, in
any bankruptcy proceeding of any Person, of the application or
non-application of Section 1111(b)(2) of the United States
Bankruptcy Code, (k) any extension of credit or the grant of
any Lien under Section 364 of the United States Bankruptcy
Code, (l) any use of cash collateral under Section 363 of the
United States Bankruptcy Code, (m) any agreement or stipulation
with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person, (n) the avoidance of any
Lien in favor of Secured Party for any reason, (o) any
bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding
commenced by or against any Person, including any discharge of,
or bar or stay against collecting, all or any of the Secured
Obligations (or any interest thereon) in or as a result of any
such proceeding, (p) to the extent permitted in
paragraph 40.495(4) of the Nevada Revised Statutes ("NRS"), the
benefits of the one-action rule under NRS Section 40.430, or
(q) any action taken by Secured Party that is authorized by
this Section 16 or any other provision of any Loan Document.
Until such time, if any, as all of the Secured Obligations have
been paid and performed in full and no portion of the
Commitment remains in effect, no Grantor shall have any right
of subrogation, contribution, reimbursement or indemnity, and
each Grantor expressly waives any right to enforce any remedy
that Secured Party now has or hereafter may have against any
other Person and waives the benefit of, or any right to
participate in, any Collateral now or hereafter held by Secured
Party. Each Grantor expressly waives all setoffs and
counterclaims and all presentments, demands for payment or
performance, notices of nonpayment or nonperformance, protests,
notices of protest, notices of dishonor and all other notices
or demands of any kind or nature whatsoever with respect to the
Secured Obligations, and all notices of acceptance of this
Agreement or of the existence, creation or incurring of new or
additional Secured Obligations.
17. Condition of Borrowers and Their Subsidiaries.
Each Grantor represents and warrants to Secured Party that each
Grantor has established adequate means of obtaining from each
Borrower and its Subsidiaries, on a continuing basis, financial
and other information pertaining to the businesses, operations
and condition (financial and otherwise) of each Borrower and
its Subsidiaries and their Properties, and each Grantor now is
and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of each
Borrower and its Subsidiaries and their Properties. Each
Grantor hereby expressly waives and relinquishes any duty on
the part of Secured Party (should any such duty exist) to
disclose to any Grantor any matter, fact or thing related to
the businesses, operations or condition (financial or other-
wise) of any Borrower or its Subsidiaries or their Properties,
whether now known or hereafter known by Secured Party during
the life of this Agreement. With respect to any of the Secured
Obligations, Secured Party need not inquire into the powers of
any Borrower or any Subsidiaries thereof or the officers or
employees acting or purporting to act on their behalf, and all
Secured Obligations made or created in good faith reliance upon
the professed exercise of such powers shall be secured hereby.
18. Liens on Real Property. In the event that all
or any part of the Secured Obligations at any time are secured
by any one or more deeds of trust or mortgages or other
instruments creating or granting Liens on any interests in Real
Property, each Grantor authorizes Secured Party, upon the
occurrence of and during the continuance of any Event of
Default, at its sole option, without notice or demand and
without affecting any Secured Obligations of any Grantor, the
enforceability of this Agreement, or the validity or enforce-
ability of any Liens of Secured Party on any Collateral, to
foreclose any or all of such deeds of trust or mortgages or
other instruments by judicial or nonjudicial sale. Insofar as
the Liens created herein secure the obligations of other
Persons, (i) each Grantor expressly waives any defenses to the
enforcement of this Agreement or any Liens created or granted
hereby or to the recovery by Secured Party against Borrowers or
any guarantor or any other Person liable therefor of any
deficiency after a judicial or nonjudicial foreclosure or sale,
even though such a foreclosure or sale may impair the
subrogation rights of Grantors and may preclude Grantors from
obtaining reimbursement or contribution from any of the other
Grantors and (ii) each Grantor expressly waives any defenses or
benefits that may be derived from California Code of Civil
Procedure 580a, 580b, 580d or 726, or comparable provisions
of the Laws of any other jurisdiction, including, without
limitation, NRS Section 40.430 and judicial decisions relating
thereto, NRS Sections 40.451, 40.455, 40.457 and 40.459, and
all other suretyship defenses it otherwise might or would have
under California Law or other applicable Law. Each Grantor
expressly waives any right to receive notice of any judicial or
nonjudicial foreclosure or sale of any Real Property or
interest therein subject to any such deeds of trust or
mortgages or other instruments and any Grantor's failure to
receive any such notice shall not impair or affect such
Grantor's Obligations or the enforceability of this Agreement
or any Liens created or granted hereby.
19. Waiver of Rights of Subrogation. Notwithstand-
ing anything to the contrary elsewhere contained herein or in
any other Loan Document to which any Grantor is a party,
Grantors hereby waive with respect to Borrowers and their
successors and assigns (including any surety) and any other
Person, any and all rights at Law or in equity to subrogation,
to reimbursement, to exoneration, to contribution, to setoff or
to any other rights that could accrue to a surety against a
principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, or to a
holder or transferee against a maker and which Grantors may
have or hereafter acquire against any Borrower or any other
Party in connection with or as a result of Grantors' execution,
delivery and/or performance of this Agreement or any other Loan
Document to which any Grantor is a party. Grantors agree that
they shall not have or assert any such rights against any
Borrower or its successors and assigns or any other attempted
setoff to any action commenced against Grantors by any Borrower
(as borrower or in any other capacity) or any other Person.
Grantors hereby acknowledge and agree that this waiver is
intended to benefit Secured Party and shall not limit or
otherwise affect Grantors' liability hereunder, under any other
Loan Document to which any Grantor is a party, or the
enforceability hereof or thereof.
20. Waiver of Discharge. Without limiting the
generality of the foregoing and to the extent otherwise
applicable, each Grantor hereby waives discharge under NRS
Section 104.3605 by waiving all defenses based on suretyship or
impairment of collateral.
21. Understandings with Respect to Waivers and
Consents. Grantors and each of them warrant and agree that
each of the waivers and consents set forth herein are made
after consultation with legal counsel and with full knowledge
of their significance and consequences, with the understanding
that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which
Grantors otherwise may have against Borrowers, Secured Party or
others, or against Collateral, and that, under the circum-
stances, the waivers and consents herein given are reasonable
and not contrary to public policy or Law. If any of the
waivers or consents herein are determined to be contrary to any
applicable Law or public policy, such waivers and consents
shall be effective to the maximum extent permitted by Law.
22. Continuing Effect. This Agreement shall remain
in full force and effect and continue to be effective should
any petition be filed by or against any Grantor for liquidation
or reorganization, should any Grantor become insolvent or make
an assignment for the benefit of creditors or should a receiver
or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof,
is, pursuant to applicable Law, rescinded or reduced in amount,
or must otherwise be restored or returned by Managing Agent or
any Bank, whether as a "voidable preference," "fraudulent
conveyance," or otherwise, all as though such payment or
performance had not been made. In the event that any payment
or any part thereof is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
23. Additional Grantors. The initial Grantors
hereunder shall be Borrowers and the Significant Subsidiaries,
if any, as are signatories hereto. From time to time following
the Closing Date, additional Significant Subsidiaries of
Borrowers may become parties hereto, as additional Grantors, by
executing and delivering to Secured Party an Instrument of
Joinder substantially in the form of Exhibit A, accompanied by
such documentation as the Secured Party may require in
connection therewith, wherein such additional Grantors agree to
become a party hereto and to be bound hereby, provided,
however, that prior approval of the applicable Gaming Board
must be obtained for the pledge of the capital stock of any
additional Grantor that holds a Nevada gaming license. Upon
delivery of such Instrument of Joinder to and acceptance
thereof by Secured Party, notice of which acceptance is hereby
waived by Grantors, each such additional Grantor shall be as
fully a party hereto as if such Grantor were an original
signatory hereof. Each Grantor expressly agrees that its
Secured Obligations and the Liens upon its Property granted
herein shall not be affected or diminished by the addition or
release of additional Grantors hereunder, nor by any election
of Secured Party not to cause any Significant Subsidiary of
Borrowers to become an additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor who is or
becomes a party hereto regardless of whether any other Person
becomes or fails to become or ceases to be a Grantor hereunder.
24. Release of Grantors. This Agreement and all
Secured Obligations of Grantors hereunder shall be released
when all Secured Obligations have been paid in full in cash or
otherwise performed in full and when no portion of the
Commitment remains outstanding. Upon such release of Grantors'
Secured Obligations hereunder, Secured Party shall return any
pledged Collateral to Grantors, or to the Person or Persons
legally entitled thereto, and shall endorse, execute, deliver,
record and file all instruments and documents, and do all other
acts and things, reasonably required for the return of the
Collateral to Grantors, or to the Person or Persons legally
entitled thereto, and to evidence or document the release of
Secured Party's interests arising under this Agreement, all as
reasonably requested by, and at the sole expense of, Grantors.
25. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original and all of which, taken together, shall constitute one
and the same agreement.
26. Additional Powers and Authorization. Secured
Party shall be entitled to the benefits accruing to it as
Managing Agent under the Loan Agreement and the other Loan
Documents. Notwithstanding anything contained herein to the
contrary, Secured Party may employ agents, trustees, or
attorneys-in-fact and may vest any of them with any Property
(including, without limitation, any Collateral pledged here-
under), title, right or power deemed necessary for the purposes
of such appointment.
27. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF CALIFORNIA.
28. WAIVER OF JURY TRIAL. EACH GRANTOR AND SECURED
PARTY EXPRESSLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE LOAN
AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR PARTIES, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. EACH GRANTOR AND SECURED PARTY
AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT, THE LOAN AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS. ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, each Grantor has executed this
Agreement by its duly authorized officer as of the date first
written above.
"Grantors"
AZTAR CORPORATION,
a Delaware corporation
By:___________________________________
Craig F. Sullivan
Treasurer
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation
By:___________________________________
Craig F. Sullivan
Treasurer
RAMADA EXPRESS, INC.,
a Nevada corporation
By:___________________________________
Craig F. Sullivan
Treasurer
HOTEL RAMADA OF NEVADA,
a Nevada corporation
By:___________________________________
Title:_____________________________
AZTAR DEVELOPMENT CORPORATION,
a Delaware corporation
By:___________________________________
Title:_____________________________
AZTAR INDIANA GAMING CORPORATION,
an Indiana corporation
By:___________________________________
Title:_____________________________
AZTAR MISSOURI GAMING CORPORATION,
a Missouri corporation
By:___________________________________
Title:_____________________________
ATLANTIC-DEAUVILLE INC.,
a New Jersey corporation
By:___________________________________
Title:_____________________________
ADAMAR GARAGE CORPORATION,
a Delaware corporation
By:___________________________________
Title:_____________________________
MANCHESTER MALL, INC.,
a New Jersey corporation
By:___________________________________
Title:________________________________
RAMADA NEW JERSEY HOLDINGS
CORPORATION,
a Delaware corporation
By:___________________________________
Title:____________________________
RAMADA NEW JERSEY, INC.,
a New Jersey corporation
By:___________________________________
Title:____________________________
ACCEPTED AND AGREED
AS OF THE DATE FIRST
ABOVE WRITTEN:
"Secured Party"
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Managing Agent, and
for and on behalf of the Banks
By:___________________________
Title:________________________
<PAGE>
EXHIBIT A
TO
SECURITY AGREEMENT
INSTRUMENT OF JOINDER
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as
of _________________, 19___, by ______________________________,
a ___________________________ ("Joining Party"), and delivered
to Bank of America National Trust and Savings Association, as
Managing Agent, pursuant to the Security Agreement dated as of
October 4, 1994 made by Aztar Corporation, a Delaware
corporation ("Parent"), Adamar of New Jersey, Inc., a
New Jersey corporation, and Ramada Express, Inc., a Nevada
corporation, Hotel Ramada of Nevada, a Nevada corporation,
Aztar Development Corporation, a Delaware corporation, Aztar
Indiana Gaming Corporation, an Indiana corporation, Aztar
Missouri Gaming Corporation, a Missouri corporation, Atlantic-
Deauville Inc., a New Jersey corporation, Adamar Garage
Corporation, a Delaware corporation, Manchester Mall, Inc., a
New Jersey corporation, Ramada New Jersey Holdings Corporation,
a Delaware corporation, and Ramada New Jersey , Inc., a New
Jersey corporation, jointly and severally as Grantors in favor
of the Managing Agent and the Banks (the "Security Agreement").
Terms used but not defined in this Joinder shall have the
meanings defined for those terms in the Security Agreement.
RECITALS
(a) The Security Agreement was made by the Grantors
in favor of the Managing Agent for the ratable benefit of the
Banks that are parties to that certain Reducing Revolving Loan
Agreement dated as of October 4, 1994, by and among Aztar
Corporation, a Delaware corporation, Adamar of New Jersey,
Inc., a New Jersey corporation, and Ramada Express, Inc., a
Nevada corporation (collectively, "Borrowers" and individually,
"Borrower"), the Banks which are parties thereto, Societe
Generale and Midlantic Bank, N.A., as Lead Managers, Bank One,
Arizona, N A and Credit Lyonnais, as Co-Agents, Banker's Trust
Company, as Co-Managing Agent, and Bank of America National
Trust and Savings Association, as the Managing Agent for the
Banks.
(b) Joining Party has become a Significant
Subsidiary of Borrowers, and as such is required pursuant to
Section 5.13 of the Reducing Revolving Loan Agreement to become
a Grantor.
(c) Joining Party expects to realize direct and
indirect benefits as a result of the availability to Borrowers
of the credit facilities under the Reducing Revolving Loan
Agreement.
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
(1) By this Joinder, Joining Party becomes a
"Grantor" under and pursuant to Section 23 of the Security
Agreement. Joining Party agrees that, upon its execution
hereof, it will become a Grantor under the Security Agreement
with respect to all Obligations of Borrowers heretofore or
hereafter incurred under the Loan Documents, and will be bound
by all terms, conditions, and duties applicable to a Grantor
under the Security Agreement.
(2) The effective date of this Joinder is _________.
199___.
"Joining Party"
_________________________________
a _________________________
By:_____________________________
Title:___________________________
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Managing Agent
By:__________________________
Title:_______________________
<PAGE>
EXHIBIT M
TRADEMARK COLLATERAL ASSIGNMENT
This TRADEMARK COLLATERAL ASSIGNMENT (the
"Assignment") is made and entered into as of October 4, 1994 by
Aztar Corporation, a Delaware corporation ("Parent"), Adamar of
New Jersey, Inc., a New Jersey corporation, and Ramada
Express, Inc., a Nevada corporation (collectively, "Borrowers"
and individually, "Borrower"), and those Significant
Subsidiaries of Borrowers, if any, that are parties hereto, as
indicated on the signature pages hereof, and/or that become
parties hereto in the manner provided in Section 13 hereof, and
each of them, jointly and severally, as Grantors, in favor of
Bank of America National Trust and Savings Association, as the
Managing Agent under the Loan Agreement referred to below for
the ratable benefit of each of the Banks which are parties to
the Loan Agreement from time to time, as Secured Party, with
reference to the following facts:
RECITALS
A. Pursuant to the Reducing Revolving Loan
Agreement of even date herewith by and among Borrowers, the
lenders from time to time a party thereto (collectively, the
"Banks" and individually, a "Bank"), Societe Generale and
Midlantic Bank, N.A., as Lead Managers, Bank One, Arizona, N A
and Credit Lyonnais, as Co-Agents, Bankers Trust Company, as
Co-Managing Agent, and the Managing Agent (as such agreement
may from time to time be amended, extended, renewed,
supplemented or otherwise modified, the "Loan Agreement"), the
Banks have agreed to extend certain credit facilities to
Borrowers.
B. The Loan Agreement provides, as a condition of
the availability of such credit facilities, that Grantors shall
enter into this Assignment and shall grant security interests
to Secured Party as herein provided.
C. Each Grantor expects to realize direct and
indirect benefits as a result of the availability of the
aforementioned credit facilities.
AGREEMENT
NOW, THEREFORE, in order to induce the Banks to
extend the aforementioned credit facilities to Borrowers, and
for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantors hereby
jointly and severally represent, warrant, covenant and agree as
follows:
1. Definitions. This Assignment is the Trademark
Collateral Assignment referred to in the Loan Agreement. Terms
defined in the Loan Agreement and not otherwise defined in this
Assignment shall have the meanings defined for those terms in
the Loan Agreement. As used in this Assignment, the following
terms shall have the meanings respectively set forth after
each:
"Assignment" means this Trademark Collateral
Assignment, and any extensions, modifications, renewals,
restatements, supplements or amendments hereof, including,
without limitation, any documents or agreements by which
additional Grantors become party hereto.
"Collateral" means and includes all of the following:
(a) all of Grantors' now-existing, or hereafter acquired,
right, title, and interest in and to all of Grantors'
trademarks, trade names, trade styles, and service marks; all
prints and labels on which said trademarks, trade names, trade
styles, and service marks appear, have appeared, or will
appear, and all designs and general intangibles of a like
nature; all applications, registrations, and recordings
relating to the foregoing in the United States Patent and
Trademark Office ("USPTO") or in any similar office or agency
of the United States, any State thereof, or any political
subdivision thereof, or in any other countries, and all
reissues, extensions, and renewals thereof, including those
trademarks, terms, designs, and applications described in
Schedule 1 hereto (the "Trademarks"); (b) the goodwill of the
business symbolized by each of the Trademarks, including,
without limitation, all customer lists and other records
relating to the distribution of products or services bearing
the Trademarks; and (c) any and all proceeds of any of the
foregoing, including any claims by Grantors against third
parties for past, present and future infringement of the
Trademarks or any licenses with respect thereto.
"Grantors" means Borrowers and those Significant
Subsidiaries of Borrowers, if any, that are parties hereto as
indicated on the signature pages hereof, or that become parties
hereto as provided in Section 13 hereof, and each of them, and
any one or more of them, jointly and severally. At such times,
if any, as no Significant Subsidiaries of Borrowers are parties
hereto, the term "Grantors" shall refer solely to Borrowers.
"Secured Obligations" means any and all present and
future Obligations of any type or nature of Grantors or any one
or more of them to the Managing Agent, the Banks, and any one
or more of them, arising under or relating to the Loan
Documents or any one or more of them, whether due or to become
due, matured or unmatured, liquidated or unliquidated, or
contingent or noncontingent, including Obligations of
performance as well as Obligations of payment, and including
interest that accrues after the commencement of any bankruptcy
or insolvency proceeding by or against any Grantor.
"Secured Party" means the Managing Agent who shall
receive and hold the assignments made hereunder for the ratable
benefit of each of the Banks which are parties to the Loan
Agreement from time to time. Subject to the terms and
conditions of the Loan Agreement, any right, remedy, privilege,
or power of Secured Party shall be exercised by the Managing
Agent.
2. Incorporation of Representations, Warranties,
Covenants and Other Provisions of Loan Documents. This
Assignment is one of the "Loan Documents" referred to in the
Loan Agreement. All representations, warranties, affirmative
and negative covenants and other provisions contained in any
Loan Document that are applicable to Loan Documents generally
are fully applicable to this Agreement and are incorporated
herein by this reference as though fully set forth in full.
3. Assignment. For valuable consideration,
Grantors and each of them hereby jointly and severally grant,
assign, and convey to Secured Party, to secure the prompt and
indefeasible payment and performance of the Secured Obliga-
tions, and each of them, all of he presently existing and
hereafter acquired Collateral. This Assignment is a continuing
and irrevocable agreement and all the rights, powers,
privileges and remedies hereunder shall apply to any and all
Secured Obligations, including those arising under successive
transactions which shall either continue the Secured
Obligations, increase or decrease them, or from time to time
create new Secured Obligations after all or any prior Secured
Obligations have been satisfied, and notwithstanding the
bankruptcy of any Grantor or any other Person or any other
event or proceeding affecting any Person.
4. Representations, Warranties and Covenants.
Guarantors, and each of them, represent, warrant and agree
that:
(a) All of the existing Collateral is valid and
subsisting in full force and effect, and Guarantors own
the sole, full, and clear title thereto, and the right and
power to grant the security interests granted hereunder.
Grantors will, at their expense, perform all acts and
execute all documents necessary to maintain the existence
of the Collateral as valid, subsisting, and registered
trademarks, including, without limitation, the filing of
any renewal affidavits and applications. The Collateral
is not subject to any Liens, claims, mortgages, assign-
ments or licenses of any nature whatsoever, whether
recorded or unrecorded, except as provided in favor of
Secured Party and except as listed in Schedule 2 hereto.
(b) As of the date hereof, none of Grantors or
their Subsidiaries has any Trademarks registered, or
subject to pending applications, in the USPTO, or any
similar office or agency in the United States, or any
other country other than those described in Schedule 1.
(c) Except as listed on Schedule 3, to the best
of each Grantor's knowledge, there are no actions, suits,
proceedings or investigations pending or threatened
against Grantors before any Governmental Agency which, if
determined adversely to Grantors, would cause the Collat-
eral, or any portion thereof, to be adjudged invalid or
unenforceable, in whole or in part.
(d) Grantors shall not assign, sell, mortgage,
lease, transfer, pledge, hypothecate, grant a security
interest in or Lien upon, encumber, grant an exclusive or
nonexclusive license or sublicense relating thereto,
except as permitted herein, or otherwise dispose of any of
the Collateral without the prior written consent of
Secured Party. Nothing in this Assignment shall be deemed
a consent by Secured Party to any such action, except as
such action is expressly permitted hereunder.
(e) No Grantor nor any Subsidiary of any
Grantor shall file any application for the registration of
a trademark with the USPTO or any similar office or agency
in the United States, any State therein, or any other
country, unless such Grantor or Subsidiary has, by thirty
(30) days' prior written notice, informed Secured Party of
such action. Upon request of Secured Party, Grantors
shall execute and deliver to Secured Party any and all
assignments, agreements, instruments, documents, and such
other papers as may be requested by Secured Party to evi-
dence the assignment to Secured Party of such trademark.
Each Grantor authorizes Secured Party to modify this
Assignment by amending Schedule 1 to include any new
trademark or service mark, and any trademark or service
mark renewal of any Grantor applied for and obtained
hereafter.
(f) No Grantor nor any Subsidiary of any
Grantor has abandoned any of the Trademarks, and no
Grantor nor any Subsidiary of any Grantor will do any act,
or omit to do any act, whereby the Trademarks may become
abandoned, cancelled, invalidated, unenforceable, avoided,
or avoidable. Each Grantor shall notify Secured Party
immediately if it knows, or has reason to know, of any
reason why any application, registration, or recording may
become abandoned, cancelled, invalidated, or
unenforceable.
(g) Grantors will render any assistance, as
Secured Party may determine is necessary, to Secured Party
in any proceeding before the USPTO, any federal or state
court, or any similar office or agency in the United
States, or any State therein, or any other country, to
maintain the Trademarks and to protect Secured Party's
interest therein, including, without limitation, filing of
renewals, affidavits of use, affidavits of incontestabil-
ity, and opposition, interference, and cancellation
proceedings.
(h) Each Grantor will promptly notify Secured
Party if such Grantor (or any Affiliate or Subsidiary
thereof) learns of any use by any Person of any term or
design likely to cause confusion with any of the
Trademarks, or of any use by any Person of any other
process or product which infringes upon any of the
Trademarks. If requested by Secured Party, Grantors, at
their expense, shall join with Secured Party in such
action as Secured Party in Secured Party's discretion, may
deem advisable for the protection of Secured Party's
interest in and to the Trademarks.
(i) Grantors assume all responsibility and
liability arising from the use of the Trademarks, and each
Grantor hereby indemnifies and holds the Managing Agent
and each of the Banks harmless from and against any claim,
suit, loss, damage, or expense (including reasonable
attorneys' fees) arising out of any alleged defect in any
product manufactured, promoted, or sold by any Grantor (or
any Affiliate or Subsidiary thereof) in connection with
any Trademark or out of the manufacture, promotion,
labeling, sale, or advertisement of any such product by
any Grantor or any Affiliate or Subsidiary thereof.
(j) In any action or proceeding instituted by
Secured Party in connection with any matters arising at
any time out of, or with respect to, this Assignment,
Grantors will not interpose any counterclaim of any
nature.
(k) The execution, delivery and performance of
this Assignment is within the power of Grantors and have
been duly authorized by all necessary corporate action and
to the best of each Grantor's knowledge do not contravene
any Law, rule, regulation or any judgment, decree or order
of any tribunal or of any agreement to which any Grantor
is a party or by which any of its property is bound.
(l) Grantors shall promptly notify Secured
Party in writing of any adverse determination in any
proceeding in the USPTO or any other foreign or domestic
Governmental Agency, court or body, regarding any
Grantor's claim of ownership in any of the Trademarks. In
the event of any material infringement of any of the
Trademarks by a third party, Grantors shall promptly
notify Secured Party of such infringement and sue for and
diligently pursue damages for such infringement. If any
Grantor shall fail to take such action within one (1)
month after such notice is given to Secured Party, Secured
Party may, but shall not be required to, itself take such
action in the name of any or all Grantors, and each
Grantor hereby appoints Secured Party the true and lawful
attorney of Grantors, for them and in their name, place
and stead, on behalf of Grantors, to commence judicial
proceedings in any court or before any other tribunal to
enjoin and recover damages for such infringement, any such
damages due to Grantors, net of costs and reasonable
attorneys' fees, to be applied to the Secured Obligations.
(m) Each Grantor shall, at its sole expense,
do, make, execute and deliver all such additional and
further acts, things, deeds, assurances, and instruments,
in each case in form and substance satisfactory to Secured
Party, relating to the creation, validity, or perfection
of the security interests and collateral assignments pro-
vided for in this Assignment under 35 U.S.C. Section 261,
15 U.S.C. Section 1051 et seq., the Uniform Commercial
Code or other Law of the United States, the State of
California, or of any countries or other States as Secured
Party may from time to time reasonably request, and shall
take all such other action as the Secured Party may
reasonably require to more completely vest in and assure
to Secured Party its rights hereunder or in any of the
Collateral, and each Grantor hereby irrevocably authorizes
Secured Party or its designee, at such Grantor's expense,
to execute such documents, and file such financing state-
ments with respect thereto with or without such Grantor's
signature, as Secured Party may reasonably deem appropri-
ate. In the event that any recording or refiling (or the
filing of any statement of continuation or assignment of
any financing statement) or any other action, is required
at any time to protect and preserve such security interest
and collateral assignments, Grantors shall, at their sole
cost and expense, cause the same to be done or taken at
such time and in such manner as may be necessary and as
may be reasonably requested by Secured Party. Each
Grantor further authorizes Secured Party to have this or
any other similar assignment or security agreement
recorded or filed with the Commissioner of Patents and
Trademarks or other appropriate federal, state or
government office.
(n) Secured Party is hereby irrevocably
appointed by each Grantor as its lawful attorney and
agent, with full power of substitution to execute and
deliver on behalf of and in the name of any or all
Grantors, such financing statements, collateral assign-
ments, pledges and other documents and agreements, and to
take such other action as Secured Party may deem necessary
for the purpose of perfecting, protecting or effecting the
security interests granted herein and effected hereby, and
any mortgages or Liens necessary or desirable to implement
or effectuate the same, under any applicable Law, and
Secured Party is hereby authorized to file on behalf of
and in the name of any or all Grantors, at Grantors' sole
expense, such financing statements, collateral assign-
ments, documents, and agreements in any appropriate
governmental office.
(o) Secured Party may, in its sole discretion,
pay any amount, or do any act which Grantors fail to pay
or do as required hereunder or as requested by Secured
Party to preserve, defend, protect, maintain, record,
amend, or enforce the Secured Obligations, the Collateral,
or the security interest granted hereunder, including, but
not limited to, all filing or recording fees, court costs,
collection charges, and reasonable attorneys' fees.
Grantors will be liable to Secured Party for any such
payment, which payment shall be deemed an advance by the
Banks to Grantors, shall be payable on demand, together
with interest at the rate(s) set forth in the Loan
Agreement, and shall be part of the Secured Obligations.
5. License. Secured Party hereby grants to
Grantors the exclusive, nontransferable, royalty-free right and
license to use the Collateral, for Grantors' sole account and
benefit, in the ordinary course of Grantors' business, so long
as Secured Party shall not have foreclosed its Lien on the
Collateral in connection with the exercise of its rights and
remedies hereunder.
6. Inspection. Each Grantor hereby grants to
Secured Party and its representatives the right to inspect such
Grantor's properties wherein the Trademarks are used and the
products and records relating thereto.
7. Events of Default. Any "Event of Default" as
defined in the Loan Agreement shall constitute an Event of
Default hereunder.
8. Rights and Remedies. Upon the occurrence of any
such Event of Default, and at any time thereafter, in addition
to all other rights and remedies of Secured Party, whether
provided under Law, the Loan Agreement or otherwise, Secured
Party shall have the following rights and remedies which may be
exercised without notice to, or consent by, any Grantor, except
as such notice or consent is expressly provided for hereunder.
(a) Secured Party may use any of the Trademarks
for the sale of goods, completion of work in process, or
rendering of services in connection with enforcing any
security interest granted to Secured Party by Grantors or
any Subsidiary of any Grantor.
(b) Secured Party may grant such license or
licenses relating to the Collateral for such term or
terms, on such conditions and in such manner, as Secured
Party shall, in its sole discretion, deem appropriate.
Such license or licenses may be general, special, or
otherwise, and may be granted on an exclusive or nonex-
clusive basis throughout all or part of the United States
of America, its territories and possessions, and all
foreign countries.
(c) Secured Party may assign, sell, or other-
wise dispose of the Collateral, or any part thereof,
either with or without special conditions or stipulations,
except that Secured Party agrees to provide Grantors with
five (5) days' prior written notice of any proposed dispo-
sition of the Collateral. The requirement of sending
notice conclusively shall be met if such notice is mailed,
first class mail, postage prepaid, to Parent, on behalf of
all Grantors. Each Grantor hereby irrevocably appoints
Parent as its agent for the purpose of receiving notice of
sale hereunder, and agrees that such Grantor conclusively
shall be deemed to have received notice of sale when
notice of sale has been given to Parent. Each Grantor
expressly waives any right to receive notice of any public
or private sale of any Collateral or other security for
the Secured Obligations except as expressly provided in
this Section 8(c). Secured Party shall have the power to
buy the Collateral, or any part thereof, and Secured Party
shall also have the power to execute assurances and
perform all other acts which Secured Party may, in Secured
Party's sole discretion, deem appropriate or proper to
complete such assignment, sale, or disposition. In any
such event, Grantors shall be liable for any deficiency.
(d) In addition to the foregoing, in order to
implement the assignment, sale or other disposition of any
of the Collateral pursuant to Section 8(c) hereof, Secured
Party may, at any time, execute and deliver, on behalf of
Grantors, and each of them, pursuant to the authority
granted in powers of attorney, one or more instruments of
assignment of the Trademarks (or any application, regis-
tration, or recording relating thereto), in form suitable
for filing, recording, or registration. Grantors agree to
pay Secured Party, on demand, all costs incurred in any
such transfer of the Collateral, including, but not
limited to any taxes, fees, and reasonable attorneys'
fees.
(e) Secured Party may first apply the proceeds
actually received from any such license, assignment, sale,
or other disposition of Collateral first to the reasonable
costs and expenses thereof, including, without limitation,
reasonable attorneys' fees and all legal, travel, and
other expenses which may be incurred by Secured Party.
Thereafter, Secured Party may apply any remaining proceeds
to such of the Secured Obligations as provided in the Loan
Agreement. Grantors shall remain liable to Secured Party
for any expenses or Secured Obligations remaining unpaid
after the application of such proceeds, and Grantors will
pay Secured Party, on demand, any such unpaid amount,
together with interest at the rate(s) set forth in the
Loan Agreement.
(f) If any such license, assignment, sale, or
other disposition of the Collateral (or any part thereof)
is made after the occurrence of an Event of Default,
Grantors shall supply to Secured Party, or Secured Party's
designee, Grantors' knowledge and expertise relating to
the manufacture and sale of the products and services
bearing the Trademarks and Grantors' customer lists and
other records relating to the Trademarks and the
distribution hereof.
Nothing contained herein shall be construed as
requiring Secured Party to take any such action at any time.
All of Secured Party's rights and remedies, whether provided
under Law, the Loan Agreement, this Assignment, or otherwise
shall be cumulative, and none is exclusive of any right or
remedy otherwise provided herein or in any of the other Loan
Documents, at law or in equity. Such rights and remedies may
be enforced alternatively, successively, or concurrently.
9. Waivers.
(a) Each Grantor hereby waives any and all
rights that it may have to a judicial hearing, if any, in
advance of the enforcement of any of Secured Party's
rights hereunder, including, without limitation, its
rights following any Event of Default to take immediate
possession of the Collateral and exercise its rights with
respect thereto.
(b) Secured Party shall not be required to
marshal any present or future security for (including, but
not limited to, this Assignment and the Collateral subject
to a security interest hereunder), or guaranties of, the
Secured Obligations or any of them, or to resort to such
security or guaranties in any particular order. Each
Grantor hereby agrees that it will not invoke any Law
relating to the marshalling of collateral which might
cause delay in or impede the enforcement of Secured
Party's rights under this Assignment or any other
instrument evidencing any of the Secured Obligations or by
which any of such Secured Obligations is secured or
guaranteed, and each Grantor hereby irrevocably waives the
benefits of all such Laws.
(c) Except for notices specifically provided
for herein, each Grantor hereby expressly waives demand,
notice, protest, notice of acceptance of this Assignment,
notice of loans made, credit extended, collateral received
or delivered or other action taken in reliance hereon and
all other demands and notices of any description. With
respect both to Secured Obligations and any collateral
therefor, each Grantor assents to any extension or
postponement of the time of payment or any other
indulgence, to any substitution, of any Person primarily
or secondarily liable, to the acceptance of partial
payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such
time or times as Secured Party may deem advisable.
Secured Party shall have no duty as to the protection of
the Collateral or any income thereon, nor as to the
preservation of rights against prior parties, nor as to
the preservation of any rights pertaining thereto except
as otherwise required by Law. Secured Party may exercise
its rights with respect to the Collateral without
resorting or regard to other collateral or sources of
reimbursement for liability. Secured Party shall not be
deemed to have waived any of its rights upon or under the
Loan Agreement or the Collateral unless such waiver be in
writing and signed by the Secured Party. No delay or
omission on the part of the Secured Party in exercising
any right shall operate as a waiver of any right on any
future occasion. All rights and remedies of the Secured
Party under the Loan Agreement or on the Collateral,
whether evidenced hereby or by any other instrument or
papers, shall be cumulative and may be exercised
singularly or concurrently.
10. Costs and Expenses.
(a) Grantors will pay any and all charges,
costs and taxes incurred in implementing or subsequently
amending this Assignment, including, without limitation,
recording and filing fees, appraisal fees, stamp taxes,
and reasonable fees and disbursements of Secured Party's
counsel incurred by Secured Party, and the allocated cost
of in-house counsel to Secured Party, in connection with
this Assignment, and in the enforcement of this Assignment
and in the enforcement or foreclosure of any Liens,
security interests or other rights of the Secured Party
under this Assignment, or under any other documentation
heretofore, now, or hereafter given to Secured Party in
furtherance of the transactions contemplated hereby.
(b) Grantors agree to reimburse Secured Party
for and indemnify it against, any and all losses, expenses
and liabilities (including liabilities for penalties) of
whatever kind or nature sustained and reasonably incurred
in connection with any claim, demand, suit or legal or
arbitration proceeding relating to this Assignment, or the
exercise of any rights or powers hereunder, including rea-
sonable attorneys' fees and disbursements, and the
allocated cost of in-house counsel to the Secured Party.
11. Miscellaneous.
(a) Grantors and Secured Party may from time to
time agree in writing to the release of certain of the
Collateral from the security interest created hereby.
(b) This Assignment and all rights and
obligations hereunder, including matters of construction,
validity and performance, shall be governed by the Laws of
the United States, and, to the extent that the Laws of the
United States are not applicable, by the Laws of the State
of California.
(c) Any notice, request, demand or other com-
munication required or permitted under this Assignment
shall be in writing and shall be deemed to be properly
given if done in accordance with Section 11.6 of the Loan
Agreement.
(d) Except as otherwise set forth in the Loan
Agreement, the provisions of this Assignment may not be
modified, amended, restated or supplemented, whether or
not the modification, amendment, restatement or supplement
is supported by new consideration, except by a written
instrument duly executed and delivered by Secured Party
and Grantors.
(e) Except as otherwise set forth in the Loan
Agreement or this Assignment, any waiver of the terms and
conditions of this Assignment, or any Event of Default and
its consequences hereunder or thereunder, and any consent
or approval required or permitted by this Assignment to be
given, may be made or given with, but only with, the
written consent of Secured Party on such terms and condi-
tions as specified in the written instrument granting such
waiver, consent or approval.
(f) Any failure or delay by Secured Party to
require strict performance by Grantors of any of the
provisions, warranties, terms, and conditions contained
herein, or in any other agreement, document, or instru-
ment, shall not affect Secured Party's right to demand
strict compliance and performance therewith, and any
waiver of any default shall not waive or affect any other
default, whether prior or subsequent thereto, and whether
of the same or of a different type. None of the warran-
ties, conditions, provisions, and terms contained herein,
or in any other agreement, document, or instrument, shall
be deemed to have been waived by any act or knowledge of
Secured Party, its agents, officers, or employees, but
only by an instrument in writing, signed by an officer of
Secured Party and directed to Grantors, specifying such
waiver.
(g) If any term or provision of this Assignment
conflicts with any term or provision of the Loan
Agreement, the term or provision of the Loan Agreement
shall control.
(h) If any provision hereof shall be deemed to
be invalid by any court, such invalidity shall not affect
the remainder of this Assignment.
(i) This Assignment shall be binding upon, and
for the benefit of, the parties hereto and their respec-
tive legal representatives, successors, and assigns.
(j) This Assignment may be executed in one or
more counterparts, each of which shall be deemed an
original and all of which, taken together, shall
constitute one and the same agreement.
12. Continuing Effect. This Assignment shall remain
in full force and effect and continue to be effective should
any petition be filed by or against any Grantor for liquidation
or reorganization, should any Grantor become insolvent or make
an assignment for the benefit of creditors or should a receiver
or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof,
is, pursuant to applicable Law, rescinded or reduced in amount,
or must otherwise be restored or returned by Managing Agent or
any Bank, whether as a "voidable preference," "fraudulent
conveyance," or otherwise, all as though such payment or
performance had not been made. In the event that any payment
or any part thereof is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
13. Additional Grantors. The initial Grantors
hereunder shall be Borrowers and the Significant Subsidiaries,
if any, as are signatories hereto. From time to time following
the Closing Date, additional Significant Subsidiaries of
Borrowers may become parties hereto, as additional Grantors, by
executing and delivering to Secured Party an Instrument of
Joinder substantially in the form of Exhibit A, accompanied by
such documentation as Secured Party may require in connection
therewith, wherein such additional Grantors agree to become a
party hereto and to be bound hereby. Upon delivery of such
Instrument of Joinder to and acceptance thereof by Secured
Party, notice of which acceptance is hereby waived by Grantors,
each such additional Grantor shall be as fully a party hereto
as if such Grantor were an original signatory hereof. Each
Grantor expressly agrees that its Secured Obligations and the
Liens upon its Property granted herein shall not be affected or
diminished by the addition or release of additional Grantors
hereunder, nor by any election of Secured Party not to cause
any Significant Subsidiary of Borrowers to become an additional
Grantor hereunder. This Assignment shall be fully effective as
to any Grantor who is or becomes a party hereto regardless of
whether any other Person becomes or fails to become or ceases
to be a Grantor hereunder.
14. Release of Grantors. This Assignment and all
Secured Obligations of Grantors hereunder shall be released
when all Secured Obligations have been paid in full in cash or
otherwise performed in full and when no portion of the
Commitment remains outstanding. Upon such release of Grantors'
Secured Obligations hereunder, Secured Party shall return any
Collateral to Grantors, or to the Person or Persons legally
entitled thereto, and shall endorse, execute, deliver, record
and file all instruments and documents, and do all other acts
and things, reasonably required for the return of the
Collateral to Grantors, or to the Person or Persons legally
entitled thereto, and to evidence or document the release of
Secured Party's interests arising under this Assignment, all as
reasonably requested by, and at the sole expense of, Grantors.
15. Additional Powers and Authorization. Secured
Party shall be entitled to the benefits accruing to it as
Managing Agent under the Loan Assignment and the other Loan
Documents. Notwithstanding anything contained herein to the
contrary, Secured Party may employ agents, trustees, or
attorneys-in-fact and may vest any of them with any Property
(including, without limitation, any Collateral assigned here-
under), title, right or power deemed necessary for the purposes
of such appointment.
16. Suretyship Provisions. The attached Exhibit B,
"Suretyship Provisions and Waivers," is hereby incorporated by
this reference as though set forth in full.
17. WAIVER OF JURY TRIAL. EACH GRANTOR AND SECURED
PARTY EXPRESSLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS ASSIGNMENT, THE LOAN
ASSIGNMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR PARTIES, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. EACH GRANTOR AND SECURED PARTY
AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS ASSIGNMENT, THE LOAN ASSIGNMENT OR THE
OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS ASSIGNMENT, THE LOAN
ASSIGNMENT AND THE OTHER LOAN DOCUMENTS. ANY PARTY HERETO MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, each Grantor has executed this
Assignment by its duly authorized officer as of the date first
written above.
"Grantors"
AZTAR CORPORATION,
a Delaware corporation
By:___________________________________
Craig F. Sullivan
Treasurer
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation
By:___________________________________
Craig F. Sullivan
Treasurer
RAMADA EXPRESS, INC.,
a Nevada corporation
By:___________________________________
Craig F. Sullivan
Treasurer
HOTEL RAMADA OF NEVADA,
a Nevada corporation
By:___________________________________
Title:_____________________________
ACCEPTED AND AGREED
AS OF THE DATE FIRST
ABOVE WRITTEN:
"Secured Party"
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Managing Agent, and for
and on behalf of the Banks
By:___________________________
Title:________________________
<PAGE>
SCHEDULE 1
Existing and Pending Trademarks
Registration Registration
Mark Class Number Date
<PAGE>
SCHEDULE 2
Existing Encumbrances on Trademarks
<PAGE>
SCHEDULE 3
Pending Litigation
<PAGE>
EXHIBIT A
TO
TRADEMARK COLLATERAL ASSIGNMENT
INSTRUMENT OF JOINDER
THIS INSTRUMENT OF JOINDER ("Joinder") is executed as
of _________________, 19___, by ______________________________,
a ___________________________ ("Joining Party"), and delivered
to Bank of America National Trust and Savings Association, as
Managing Agent, pursuant to the Trademark Collateral Assignment
dated as of October 4, 1994 made by Aztar Corporation, a
Delaware corporation, Adamar Of New Jersey, Inc., a New Jersey
corporation, Ramada Express, Inc., a Nevada corporation, and
Hotel Ramada of Nevada, a Nevada corporation in favor of the
Managing Agent and the Banks (the "Trademark Assignment").
Terms used but not defined in this Joinder shall have the
meanings defined for those terms in the Trademark Assignment.
RECITALS
(a) The Trademark Assignment was made by the
Grantors in favor of the Managing Agent for the ratable benefit
of the Banks that are parties to that certain Reducing
Revolving Loan Agreement dated as of October 4, 1994, by and
among Aztar Corporation, a Delaware corporation, Adamar of
New Jersey, Inc., a New Jersey corporation, and Ramada
Express, Inc., a Nevada corporation (collectively, "Borrowers"
and individually, "Borrower"), the Banks which are parties
thereto, Societe Generale and Midlantic Bank, N.A., as Lead
Managers, Bank One, Arizona, N A and Credit Lyonnais, as Co-
Agents, Bankers Trust Company, as Managing Co-Agent, and Bank
of America National Trust and Savings Association, as the
Managing Agent for the Banks.
(b) Joining Party has become a Significant
Subsidiary of Borrowers, and as such is required pursuant to
Section 5.13 of the Reducing Revolving Loan Agreement to become
a Grantor.
(c) Joining Party expects to realize direct and
indirect benefits as a result of the availability to Borrowers
of the credit facilities under the Reducing Revolving Loan
Agreement.
<PAGE>
NOW THEREFORE, Joining Party agrees as follows:
AGREEMENT
(1) By this Joinder, Joining Party becomes a
"Grantor" under and pursuant to Section 13 of the Trademark
Assignment. Joining Party agrees that, upon its execution
hereof, it will become a Grantor under the Trademark Assignment
with respect to all Obligations of Borrowers heretofore or
hereafter incurred under the Loan Documents, and will be bound
by all terms, conditions, and duties applicable to a Grantor
under the Trademark Assignment.
(2) Attached hereto as Schedule 1 is a complete list
of all of Joining Party's trademarks, trade names, trade
styles, and service marks which shall also constitute
"Collateral" as defined in the Trademark Assignment.
(3) The effective date of this Joinder is _________.
199___.
"Joining Party"
_________________________________
a _________________________
By:_____________________________
Title:___________________________
ACKNOWLEDGED:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Managing Agent
By:__________________________
Title:_______________________
<PAGE>
SCHEDULE 1 TO INSTRUMENT OF JOINDER
Existing and Pending Trademarks
Registration Registration
Mark Class Number Date
<PAGE>
EXHIBIT B
SURETYSHIP PROVISIONS AND WAIVERS
1. Waivers and Consents. Each Grantor acknowledges
that the Liens and security interests created or granted herein
will or may secure obligations of Persons other than such
Grantor and, in full recognition of that fact, each Grantor
consents and agrees that Secured Party may, at any time and
from time to time, without notice or demand, and without
affecting the enforceability or security hereof:
(a) supplement, modify, amend, extend, renew,
or otherwise change the time for payment or the terms of
the Obligations or any part thereof, including any
increase or decrease of the rate(s) of interest thereon;
(b) supplement, modify, amend or waive, or
enter into or give any agreement, approval or consent with
respect to, the Obligations or any part thereof or any of
the Loan Documents or any additional security or
guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder;
(c) accept new or additional instruments,
documents or agreements in exchange for or relative to any
of the Loan Documents or the Obligations or any part
thereof;
(d) accept partial payments on the Obligations;
(e) receive and hold additional security or
guaranties for the Obligations or any part thereof;
(f) release, reconvey, terminate, waive,
abandon, subordinate, exchange, substitute, transfer and
enforce any security or guaranties, and apply any security
and direct the order or manner of sale thereof as Secured
Party in its sole and absolute discretion may determine;
(g) release any Person or any guarantor from
any personal liability with respect to the Obligations or
any part thereof;
(h) settle, release on terms satisfactory to
Secured Party or by operation of applicable laws or
otherwise liquidate or enforce any Obligations and any
security or guaranty therefor in any manner, consent to
the transfer of any security and bid and purchase at any
sale; and
(i) consent to the merger, change or any other
restructuring or termination of the corporate existence of
any Borrower or any other Person, and correspondingly
restructure the Obligations, and any such merger, change,
restructuring or termination shall not affect the liabil-
ity of any Grantor or the continuing existence of any
Liens hereunder, under any other Loan Document to which
any Grantor is a party or the enforceability hereof or
thereof with respect to all or any part of the
Obligations.
Upon the occurrence of and during the continuance of
any Event of Default, Secured Party may enforce this Agreement
independently as to each Grantor and independently of any other
remedy or security Secured Party at any time may have or hold
in connection with the Obligations, and it shall not be neces-
sary for Secured Party to marshal assets in favor of any
Grantor, any Borrower or any other Person or to proceed upon or
against and/or exhaust any other security or remedy before
proceeding to enforce this Agreement. Each Grantor expressly
waives any right to require Secured Party to marshal assets in
favor of such Grantor, any Borrower or any other Person or to
proceed against any other Person or any collateral provided by
any other Person, and agrees that Secured Party may proceed
against any Person and/or collateral in such order as it shall
determine in its sole and absolute discretion. Secured Party
may file a separate action or actions against any Grantor,
whether action is brought or prosecuted with respect to any
other security or against any other Grantor, any Borrower or
any other Person, or whether any other Person is joined in any
such action or actions. Each Grantor agrees that Secured Party
and Borrowers and any other Person may deal with each other in
connection with the Obligations or otherwise, or alter any
contracts or agreements now or hereafter existing between any
of them, in any manner whatsoever, all without in any way
altering or affecting the security of this Agreement. Secured
Party's rights hereunder shall be reinstated and revived, and
the enforceability of this Agreement shall continue, with
respect to any amount at any time paid on account of the
Obligations which thereafter shall be required to be restored
or returned by Secured Party upon the bankruptcy, insolvency or
reorganization of any Borrower, any Grantor or any other
Person, or otherwise, all as though such amount had not been
paid. The Liens created or granted herein and the enforceabil-
ity of this Agreement at all times shall remain effective to
secure the full amount of all the Obligations including, with-
out limitation, the amount of all loans and interest thereon at
the rates provided for in the Loan Agreement and the note(s)
thereunder, even though the Obligations, including any part
thereof or any other security or guaranty therefor, may be or
hereafter may become invalid or otherwise unenforceable as
against Borrowers or any other Person and whether or not
Borrowers or any other Person shall have any personal liability
with respect thereto. Each Grantor expressly waives any and
all defenses now or hereafter arising or asserted by reason of
(a) any disability or other defense of any Borrower or any
other Person with respect to the Obligations, (b) the unen-
forceability or invalidity of any security or guaranty for the
Obligations or the lack of perfection or continuing perfection
or failure of priority of any security for the Obligations,
(c) the cessation for any cause whatsoever of the liability of
any Borrower or any other Person (other than by reason of the
full payment and performance of all Obligations), (d) any
failure of Secured Party to marshal assets in favor of such
Grantor or any other Person, (e) except as otherwise required
by Law or as provided in this Agreement, any failure of Secured
Party to give notice of sale or other disposition of collateral
to such Grantor or any other Person or any defect in any notice
that may be given in connection with any sale or disposition of
collateral, (f) except as otherwise required by Law or as
provided in this Agreement, any failure of Secured Party to
comply with applicable Laws in connection with the sale or
other disposition of any collateral or other security for any
Obligation, including without limitation any failure of Secured
Party to conduct a commercially reasonable sale or other dispo-
sition of any collateral or other security for any Obligation,
(g) any act or omission of Secured Party or others that
directly or indirectly results in or aids the discharge or
release of any Borrower, any Grantor or any other Person or the
Obligations or any other security or guaranty therefor by
operation of law or otherwise, (h) any Law which provides that
the obligation of a surety or guarantor must neither be larger
in amount nor in other respects more burdensome than that of
the principal or which reduces a surety's or guarantor's
obligation in proportion to the principal obligation, (i) any
failure of Secured Party to file or enforce a claim in any
bankruptcy or other proceeding with respect to any Person,
(j) the election by Secured Party, in any bankruptcy proceeding
of any Person, of the application or non-application of
Section 1111(b)(2) of the United States Bankruptcy Code,
(k) any extension of credit or the grant of any Liens under
Section 364 of the United States Bankruptcy Code, (l) any use
of cash collateral under Section 363 of the United States
Bankruptcy Code, (m) any agreement or stipulation with respect
to the provision of adequate protection in any bankruptcy
proceeding of any Person, (n) the avoidance of any Liens in
favor of Secured Party for any reason, (o) any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
liquidation or dissolution proceeding commenced by or against
any Person, including any discharge of, or bar or stay against
collecting, all or any of the Obligations (or any interest
thereon) in or as a result of any such proceeding, or (p) to
the extent permitted in paragraph 40.495(4) of the Nevada
Revised Statutes ("NRS"), the benefits of the one-action rule
under NRS Section 40.430. Until no part of any commitment to
lend remains outstanding and all of the Obligations have been
paid and performed in full, Grantors shall have no right of
subrogation, contribution, reimbursement or indemnity, and each
Grantor expressly waives any right to enforce any remedy that
Secured Party now has or hereafter may have against any other
Person and waives the benefit of, or any right to participate
in, any other security now or hereafter held by Secured Party.
Each Grantor expressly waives all setoffs and counterclaims and
all presentments, demands for payment or performance, notices
of nonpayment or nonperformance, protests, notices of protest,
notices of dishonor and all other notices or demands of any
kind or nature whatsoever with respect to the Obligations, and
all notices of acceptance of this Agreement or of the exis-
tence, creation or incurring of new or additional Obligations.
2. Condition of Borrowers and their Subsidiaries.
Each Grantor represents and warrants to Secured Party that such
Grantor has established adequate means of obtaining from each
Borrower and its Subsidiaries, on a continuing basis, financial
and other information pertaining to the businesses, operations
and condition (financial and otherwise) of each of Borrower and
its Subsidiaries and their properties, and such Grantor now is
and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of each
Borrower and its Subsidiaries and their properties. Each
Grantor hereby expressly waives and relinquishes any duty on
the part of Secured Party to disclose to such Grantor any
matter, fact or thing related to the businesses, operations or
condition (financial or otherwise) of any Borrower or its
Subsidiaries or their properties, whether now known or here-
after known by Secured Party during the life of this Agreement.
With respect to any of the Obligations, Secured Party need not
inquire into the powers of any Borrower or any Subsidiaries
thereof or the officers or employees acting or purporting to
act on their behalf, and all Obligations made or created in
good faith reliance upon the professed exercise of such powers
shall be secured hereby.
3. Liens on Real Property. In the event that all
or any part of the Obligations at any time are secured by any
one or more deeds of trust or mortgages creating or granting
Liens on any interests in real property, each Grantor autho-
rizes Secured Party, upon the occurrence of and during the
continuance of any Event of Default, at its sole option, with-
out notice or demand and without affecting any Obligations, the
enforceability of this Agreement, or the validity or enforce-
ability of any Liens of any Secured Party on any collateral, to
foreclose any or all of such deeds of trust or mortgages by
judicial or nonjudicial sale. Insofar as the Liens created
herein secure the obligations of other Persons, (i) each
Grantor expressly waives any defenses to the enforcement of
this Agreement or any Liens created or granted hereby or to the
recovery by Secured Party against Borrowers or any other Person
liable therefor of any deficiency after a judicial or nonjudi-
cial foreclosure or sale, even though such a foreclosure or
sale may impair the subrogation rights of such Grantor and may
preclude such Grantor from obtaining reimbursement or contribu-
tion from any other Person and (ii) each Grantor expressly
waives any defenses or benefits that may be derived from
California Code of Civil Procedure 580a, 580b, 580d or 726,
or comparable provisions of the Laws of any other jurisdiction,
including, without limitation, NRS Section 40.430 and judicial
decisions relating thereto, NRS Sections 40.451, 40.455, 40.457
and 40.459, and all other suretyship defenses it otherwise
might or would have under California Law or other applicable
Law. Each Grantor expressly waives any right to receive notice
of any judicial or nonjudicial foreclosure or sale of any real
property or interest therein subject to any such deeds of trust
or mortgages and such Grantor's failure to receive any such
notice shall not impair or affect such Grantor's obligations
hereunder or the enforceability of this Agreement or any Liens
created or granted hereby.
4. Waiver of Rights of Subrogation. Notwithstand-
ing anything to the contrary elsewhere contained herein or in
any other Loan Document to which any Grantor is a Party, each
Grantor hereby waives with respect to Borrowers and their
successors and assigns (including any surety) and any other
Party any and all rights at Law or in equity, to subrogation,
to reimbursement, to exoneration, to contribution, to setoff or
to any other rights that could accrue to a surety against a
principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, or to a
holder or transferee against a maker and which such Grantor may
have or hereafter acquire against any Borrower or any other
Party in connection with or as a result of such Grantor's
execution, delivery and/or performance of this Agreement or any
other Loan Document to which such Grantor is a party. Each
Grantor agrees that it shall not have or assert any such rights
against any Borrower or its successors and assigns or any other
Person (including any surety), either directly or as an
attempted setoff to any action commenced against such Grantor
by any Borrower (as borrower or in any other capacity) or any
other Person. Each Grantor hereby acknowledges and agrees that
this waiver is intended to benefit Secured Party and shall not
limit or otherwise affect such Grantor's liability hereunder,
under any other Loan Document to which such Grantor is a party,
or the enforceability hereof or thereof.
5. Waiver of Discharge. Without limiting the
generality of the foregoing and to the extent otherwise
applicable, each Grantor hereby waives discharge under NRS
Section 104.3605 by waiving all defenses based on suretyship or
impairment of collateral.
6. Understandings with Respect to Waivers and
Consents. Each Grantor warrants and agrees that each of the
waivers and consents set forth herein is made with full knowl-
edge of its significance and consequences, with the understand-
ing that events giving rise to any defense waived may diminish,
destroy or otherwise adversely affect rights which such Grantor
otherwise may have against Borrowers, Secured Party or others,
or against collateral, and that, under the circumstances, the
waivers and consents herein given are reasonable and not
contrary to public policy or Law. If any of the waivers or
consents herein are determined to be contrary to any applicable
Law or public policy, such waivers and consents shall be
effective to the maximum extent permitted by law.
<PAGE>
EXHIBIT N
_______________________________________________________________
_______________________________________________________________
MORTGAGE
by and between
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
a national banking association,
as Managing Agent for certain banks,
as Mortgagee
and
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation,
as Mortgagor
Dated: As of October 4, 1994
_______________________________________________________________
_______________________________________________________________
Record and Return to: Kirk Wallace, Esq.
Sheppard, Mullin, Richter & Hampton
333 South Hope Street, 48th Floor
Los Angeles, California 90071<PAGE>
MORTGAGE
THIS MORTGAGE is made as of October 4, 1994, by and
between ADAMAR OF NEW JERSEY, INC., a New Jersey corporation
("Mortgagor"), as mortgagor, and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, a national banking association
("Mortgagee"), as "Managing Agent" for the "Banks," the "Swing
Line Bank" and the "Issuing Bank" (as each of those four terms
is defined in the Loan Agreement), as mortgagee. Capitalized
terms used and not otherwise defined herein shall have the
meanings given to them in that certain Reducing Revolving Loan
Agreement of even date herewith among Aztar Corporation, a
Delaware corporation ("Parent"), Mortgagor, Ramada
Express, Inc., a Nevada corporation ("Ramada"), Mortgagee, and
each of the Banks which executed such agreement (as amended,
the "Loan Agreement"). Parent, Ramada and Mortgagor are
collectively referred to herein as "Borrowers."
1. Grant and Secured Obligations.
1.1 Grant. For the purpose of securing payment and
performance of the Secured Obligations defined and described in
Section 1.2, Mortgagor has mortgaged, given, granted, released,
assigned, transferred and set over unto Mortgagee, and by these
presents does hereby mortgage, give, grant, release, assign,
transfer and set over unto Mortgagee, its successors and
assigns forever, all estate, right, title and interest which
Mortgagor now has or may later acquire in and to the following
property (all or any part of such property, or any interest in
all or any part of it, as the context may require, the
"Property"):
(a) The real property located in the City of
__________, County of _________ (the "County"), State of
New Jersey, as described in Exhibit A, together with all
existing and future easements and rights affording access to it
(the "Land"); together with
(b) All buildings, structures and improvements now
located or later to be constructed on the Land, including,
without limitation, all parking areas, roads, driveways, walks,
fences, walls, docks, berms, landscaping, recreation
facilities, drainage facilities, lighting facilities and other
site improvements (the "Improvements"); together with
(c) All existing and future appurtenances,
privileges, easements, franchises, hereditaments and tenements
of the Land, including all minerals, oil, gas, other
hydrocarbons and associated substances, sulphur, nitrogen,
carbon dioxide, helium and other commercially valuable
substances which may be in, under or produced from any part of
the Land, all development rights and credits, air rights,
water, water courses, water rights (whether riparian,
appropriative or otherwise, and whether or not appurtenant) and
water stock (together with the statutory right to file
applications to change, and any and all applications to
change), easements, rights of way, rights of ingress and
egress, drainage rights, gores or strips of land, any land
lying in the streets, highways, ways, sidewalks, alleys,
passages, roads or avenues, open or proposed, in front of or
adjoining the Land and Improvements, any land in the bed of any
body of water adjacent to the Land, any land adjoining the Land
created by artificial means or by accretion, all air space and
rights to use such air space, and all development and similar
rights; together with
(d) Subject to Article 2, below, all existing and
future leases, subleases, subtenancies, licenses (except for
gaming licenses and liquor licenses that are not transferable),
occupancy agreements, concessions and any other agreement
devising any portion of the Property or relating to the use and
enjoyment of all or any part of the Land and Improvements, and
any and all guaranties and other agreements relating to or made
in connection with any of the foregoing, whether written or
oral and whether in existence at or upon the recordation of
this Mortgage or entered into after the recordation of this
Mortgage (some or all collectively, as the context may require,
"Leases"), and all rents, security deposits, royalties, issues,
profits, receipts, earnings, revenue, income, products and
proceeds and other benefits of the Land and Improvements,
whether now due, past due or to become due, including, without
limitation, all prepaid rents, security deposits, fixed,
additional and contingent rents, deficiency rents and
liquidated damages, occupancy charges, hotel room charges,
cabana charges, casino revenues, show ticket revenues, food and
beverage revenues, room service revenues, merchandise sales
revenues, parking, maintenance, common area, tax, insurance,
utility and service charges and contributions, proceeds of sale
of electricity, gas, heating, air-conditioning, cable and other
utilities and services, green fees, cart rental fees,
instruction fees, membership charges, restaurant, snack bar and
pro shop revenues, liquidated damages, and all other rights to
payments (some or all collectively, as the context may require,
"Rents"); together with
(e) [INTENTIONALLY OMITTED]; together with
(f) All goods, materials, supplies, chattels,
furniture, fixtures, equipment, machinery and other property
now or later to be attached to, placed in or on, or used in
connection with the use, enjoyment, occupancy or operation of
all or any part of the Land and Improvements, whether stored on
the Land or elsewhere, including all pumping plants, engines,
pipes, ditches and flumes, and also all gas, electric, cooking,
heating, cooling, air conditioning, lighting, refrigeration and
plumbing fixtures and equipment, all water, sanitary and storm
sewer, drainage, electricity, steam, gas, telephone, cable and
other utility equipment and facilities, all plumbing, lighting,
heating, ventilating, air conditioning, refrigerating,
incinerating, compacting, fire protection and sprinkler,
surveillance and security, vacuum cleaning, public address and
communications equipment and systems, all kitchen and laundry
appliances, screens, awnings, floor coverings, partitions,
elevators, escalators, motors, machinery, pipes, fittings and
other items of equipment and property of every kind and
description, all of which shall be considered to the fullest
extent of the law to be real property for purposes of this
Mortgage (it being agreed that, if the lien of this Mortgage
shall be subject to a conditional bill of sale, chattel
mortgage, or other security interest covering any such
property, then all the right, title and interest of Mortgagor
in and to such property, together with the benefits of any
deposits or payments now or hereafter made thereon, are and
shall be covered by the lien of this Mortgage); together with
(g) All building materials, equipment, work in
process or other personal property of any kind, whether stored
on the Land or elsewhere, which have been or later will be
acquired for the purpose of being delivered to, incorporated
into or installed in or about the Land or Improvements;
together with
(h) All rights to the payment of money, accounts,
accounts receivable, reserves, deferred payments, refunds, cost
savings, payments and deposits, whether now or later to be
received from third parties (including all earnest money sales
deposits) or deposited by Mortgagor with third parties
(including all utility deposits), contract rights, development
and use rights, governmental permits and licenses (except for
gaming licenses and liquor licenses that are not transferable),
authorizations, certificates, variances, consents and
approvals, applications, architectural and engineering plans,
specifications and drawings, as-built drawings, guaranties,
warranties, management agreements, operating and/or licensing
agreements, supply and service contracts for water, sanitary
and storm sewer, drainage, electricity, steam, gas, telephone,
cable, and other utilities, title insurance policies and
proceeds thereof, chattel paper, instruments, documents, notes,
certificates of deposit, securities, other investments, drafts
and letters of credit (other than letters of credit in favor of
Mortgagee), which arise from or relate to construction on the
Land or to any business now or later to be conducted on it, or
to the Land and Improvements generally; together with
(i) All proceeds, including all rights and claims
to, dividends of and demands for them, of the voluntary or
involuntary conversion of any of the Land, Improvements or the
other property described above into cash or liquidated claims,
including proceeds of all present and future fire, hazard or
casualty insurance policies and all condemnation awards or
payments now or later to be made by any public body or decree
by any court of competent jurisdiction for any taking or in
connection with any condemnation or eminent domain proceeding,
and all causes of action and their proceeds for any damage or
injury to the Land, Improvements or the other property
described above or any part of them, or breach of warranty in
connection with the construction of the Improvements, including
causes of action arising in tort, contract, fraud or
concealment of a material fact; together with
(j) All books and records pertaining to any and all
of the property described above, including computer readable
memory and any computer hardware or software necessary to
access and process such memory ("Books and Records"); together
with
(k) All proceeds of, additions and accretions to,
substitutions and replacements for, changes in, and greater
right, title and interest in, to and under or derived from, any
of the property described above and all extensions, improve-
ments, betterments, renewals, substitutions and replacements
thereof and additions and appurtenances thereto, including all
proceeds of any voluntary or involuntary disposition or claim,
right and remedy respecting any such property (arising out of
any judgment, condemnation or award, or otherwise arising) and
all goods, documents, general intangibles, chattel paper and
accounts, wherever located, acquired with cash proceeds of any
of the foregoing or its proceeds.
TO HAVE AND TO HOLD the above granted Property unto Mortgagee,
its successors and assigns, to its and their own proper use,
benefit and behoof forever.
1.2 Secured Obligations.
1.2.1 Mortgagor makes the grant, bargain,
conveyance, sale, transfer and assignment set forth in
Section 1.1 and grants the security interest set forth in
Article 3 for the purpose of securing the following obligations
(collectively, the "Secured Obligations") in any order of
priority that Mortgagee may choose:
(a) Except as specified in Section 1.2.2 below,
the payment and performance of all Obligations of
Mortgagor and each other Borrower, including, without
limitation, (i) payment of all amounts owing by Mortgagor
and each other Borrower under the Notes, including,
without limitation, principal in the aggregate amount of
up to the Commitment (which is initially $207,477,346.14,
subject to increase to $212,477,346.14 under certain
circumstances) and interest thereon; (ii) payment of all
amounts owing by Mortgagor and each other Borrower under
Section 2.4(d) of the Loan Agreement for reimbursement of
draws, and all amounts owing by Mortgagor and each other
Borrower under Section 9.2(a)(2) of the Loan Agreement for
payment of cash collateral for the undrawn amounts, under
the Letters of Credit in the aggregate face amount of up
to $30,000,000, and interest thereon; (iii) payment of all
amounts owing by Mortgagor and each other Borrower under
the Swing Line Documents, including, without limitation,
principal in an amount of up to $10,000,000 and interest
thereon; (iv) payment of all amounts owing by Mortgagor
and each other Borrower under any and all Secured Swap
Agreements; (v) payment of all fees, charges, costs and
other amounts owing by Mortgagor and each other Borrower
under the Loan Documents, including, without limitation,
the agency fees described in Section 3.7 of the Loan
Agreement; (vi) payment and performance of all obligations
of Mortgagor under this Mortgage; (vii) payment and
performance of all obligations of Ramada under the Ramada
Express Deed of Trust, and of all obligations of each
Borrower other than Mortgagor under any other Loan
Document to which Mortgagor is not a party; and
(b) The payment and performance of all future
advances and other obligations that Mortgagor or any other
person may owe to Mortgagee and/or any Banks (whether as
principal, surety or guarantor), when a writing evidences
Mortgagor's and Mortgagee's agreement that such advances
or obligations be secured by this Mortgage; and
(c) The payment and performance of all
modifications, amendments, extensions and renewals,
however evidenced, of any of the Secured Obligations
described in clause (a) or (b), above.
1.2.2 Notwithstanding any provision of this Mortgage
or any other Loan Document, the obligations and liability of
Mortgagor, any Borrower or any other person arising under
Sections 4.18, 5.14, and/or 11.22 of the Loan Agreement (and/or
under any separate agreement relating to Hazardous Materials
which states that it is not secured by real property) are not
and shall not be Secured Obligations under this Mortgage.
1.2.3 All persons who may have or acquire an
interest in all or any part of the Property will be considered
to have notice of, and will be bound by, the terms of the
Secured Obligations and each other agreement or instrument made
or entered into in connection with each of the Secured
Obligations. Such terms include any provisions in the Loan
Agreement or the other Loan Documents which permit borrowing,
repayment and reborrowing, or which provide that the interest
rate on one or more of the Secured Obligations may vary from
time to time.
2. Assignment of Rents and Leases.
2.1 Assignment. Mortgagor hereby irrevocably,
absolutely, presently and unconditionally assigns, transfers
and sets over to Mortgagee all of the right, title and interest
which Mortgagor now has or may later acquire in and to the
Rents and the Leases, and confers upon Mortgagee the right to
collect such Rents and enforce the provisions of the Leases
with or without taking possession of the Property. This is an
absolute assignment, not an assignment for security only.
2.2 Grant of License. Mortgagee hereby confers upon
Mortgagor a license ("License") to collect and retain the Rents
as they become due and payable, so long as no Event of Default,
as defined in Section 6.2, shall exist and be continuing. If
an Event of Default has occurred and is continuing, Mortgagee
shall have the right, which it may choose to exercise in its
absolute discretion, to terminate this License without notice
to or demand upon Mortgagor, and without regard to the adequacy
of Mortgagee's security under this Mortgage.
2.3 Collection and Application of Rents. Subject to the
License granted to Mortgagor under Section 2.2, Mortgagee has
the right, power and authority to collect any and all Rents and
exercise Mortgagor's right, title and interest under the
Leases. Mortgagor hereby appoints Mortgagee its attorney-
in-fact to perform any and all of the following acts, if and at
the times when Mortgagee in its absolute discretion may so
choose:
(a) Demand, receive and enforce payment of any and
all Rents and any other right, title and interest of Mortgagor
under the Leases; or
(b) Give receipts, releases and satisfactions for
any and all Rents and any other obligations and duties under
the Leases; or
(c) Sue either in the name of Mortgagor or in the
name of Mortgagee for any and all Rents and to enforce any
other obligations and duties under the Leases.
Mortgagee's right to the Rents and the Leases does not depend
on whether or not Mortgagee takes possession of the Property as
permitted under Section 6.3.3. In Mortgagee's absolute
discretion, Mortgagee may choose to collect Rents and exercise
the right, title and interest of Mortgagor under the Leases
either with or without taking possession of the Property.
Mortgagee shall apply all Rents collected by it in the manner
provided under Section 6.6. If an Event of Default occurs
while Mortgagee is in possession of all or part of the Property
and is collecting and applying Rents and exercising any right,
title and interest of Mortgagor under the Leases as permitted
under this Mortgage, then Mortgagee and any receiver shall
nevertheless be entitled to exercise and invoke every right and
remedy afforded any of them under this Mortgage and at law and
in equity.
2.4 Mortgagee Not Responsible. Under no circumstances
shall Mortgagee have any duty to produce Rents from the
Property or maintain the Leases. Regardless of whether or not
Mortgagee, in person or by agent, takes actual possession of
the Land and Improvements, Mortgagee is not and shall not be
deemed to be:
(a) a "mortgagee in possession" for any purpose; or
(b) responsible for performing any of the
obligations under any Lease; or
(c) responsible for any waste committed by lessees
or any other parties, any dangerous or defective condition of
the Property, or any negligence in the management, upkeep,
repair or control of the Property; or
(d) liable in any manner for the Property or the
use, occupancy, enjoyment or operation of all or any part of
it.
2.5 Leasing. Without Mortgagee's prior written consent,
Mortgagor shall not accept any deposit or prepayment of Rents
for any period exceeding one (1) month, and Mortgagor shall not
lease the Property or any part of it except strictly in
accordance with the Loan Documents. Mortgagor shall not apply
any Rents in any manner prohibited by the Loan Documents.
3. Grant of Security Interest.
3.1 Security Agreement. The parties intend for this
Mortgage to create a lien on and security interest in the
Property, and an absolute assignment of the Rents and the
Leases, all in favor of Mortgagee. The parties acknowledge
that some of the Property and some of the Rents and Leases may
be determined under applicable law to be personal property or
fixtures. To the extent such Property, Rents or Leases
constitute personal property, Mortgagor, as debtor, hereby
grants to Mortgagee, as secured party, a security interest in
all such Property, Rents and Leases, to secure payment and
performance of the Secured Obligations, and Mortgagor, as
debtor, also has granted a security interest in such Property,
Rents and Leases pursuant to that certain Security Agreement of
even date herewith, executed by each of Mortgagor and the other
Borrowers and certain other parties, as debtor, in favor of
Mortgagee, as secured party. This Mortgage constitutes a
security agreement under the New Jersey Uniform Commercial
Code, as amended or recodified from time to time, covering all
such Property, Rents and Leases. To the extent such Property,
Rents or Leases are not real property encumbered by the lien
created by Section 1.1, above, and are not absolutely assigned
by the assignment set forth in Section 2.1, above, it is the
intention of the parties that such Property, Rents and/or
Leases shall constitute "proceeds, products, offspring, rents
or profits" (as defined in and for the purposes of Section
552(b) of the United States Bankruptcy Code, as such section
may be modified or supplemented) of the Land and Improvements.
Notwithstanding any release of any or all of that property
included in the Property which is deemed "real property," and
proceedings to foreclose this Mortgage or its satisfaction of
record, the terms hereof shall survive as a security agreement
with respect to the security interest created hereby and
referred to above until the repayment or satisfaction in full
of all obligations now or hereafter secured hereby.
3.2 Financing Statements. Mortgagor shall execute one or
more financing statements and such other documents as Mortgagee
may from time to time require to perfect or continue the
perfection of Mortgagee's security interest in any Property,
Rents or Leases. As provided in Section 5.11, Mortgagor shall
pay all fees and costs that Mortgagee may incur in filing such
documents in public offices and in obtaining such record
searches as Mortgagee may reasonably require. If Mortgagor
fails to execute any financing statements or other documents
for the perfection or continuation of any security interest,
Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact to execute any such documents on its behalf.
If any financing statement or other document is filed in the
records normally pertaining to personal property, that filing
shall never be construed as in any way derogating from or
impairing this Mortgage or the rights or obligations of the
parties under it.
4. Fixture Filing. This Mortgage constitutes a financing
statement filed as a fixture filing under the New Jersey
Uniform Commercial Code, as amended or recodified from time to
time, covering any Property which now is or later may become
fixtures attached to the Land or Improvements. In connection
therewith, the addresses of Mortgagor, as debtor, and
Mortgagee, as secured party, are as set forth in Section 7.11,
below. The foregoing address of Mortgagee, as secured party,
is also the address from which information concerning the
security interest may be obtained by any interested party. The
property subject to this fixture filing is described in
Section 1.1, above. Portions of the property subject to this
fixture filing as identified in this Section are or are to
become fixtures related to the real estate described in
Exhibit A attached hereto.
5. Rights and Duties of the Parties.
5.1 Representations and Warranties. Mortgagor represents
and warrants that, except as previously disclosed to Mortgagee
in a writing making reference to this Section 5.1:
(a) Mortgagor lawfully possesses and holds fee
simple title to all of the Land and Improvements thereon;
(b) Mortgagor has or will have good title to all
Property other than the Land and Improvements;
(c) Mortgagor has the full and unlimited power,
right and authority to encumber the Property and assign the
Rents and the Leases;
(d) This Mortgage creates a first and prior lien on
and security interest in the Property, subject only to the
Permitted Encumbrances;
(e) The Property includes all property and rights
which may be reasonably necessary or desirable to promote the
present and any reasonable future beneficial use and enjoyment
of the Land and Improvements;
(f) Mortgagor owns any Property which is personal
property free and clear of any security agreements, reserva-
tions of title or conditional sales contracts, and there is no
financing statement affecting such personal property on file in
any public office; and
(g) Mortgagor's place of business, or its chief
executive office if it has more than one place of business, is
located at the address specified below.
5.2 Taxes and Assessments. Mortgagor shall pay prior to
delinquency all taxes, levies, charges and assessments,
including assessments on appurtenant water stock, imposed by
any public or quasi-public authority or utility company which
are (or if not paid, may become) a lien on or security interest
in all or part of the Property or any interest in it, or which
may cause any decrease in the value of the Property or any part
of it. If any such taxes, levies, charges or assessments
become delinquent, Mortgagee may require Mortgagor to present
evidence that they have been paid in full, on ten (10) days'
written notice by Mortgagee to Mortgagor. This Section 5.2 is
subject to the right granted in Section 5.1 of the Loan
Agreement to contest in good faith certain taxes, assessments,
charges and levies.
5.3 Performance of Secured Obligations. Mortgagor shall
promptly pay and perform each Secured Obligation (exclusive of
Secured Obligations of other Borrowers under documents to which
Mortgagor is not a party and for which Mortgagor is not
otherwise liable) in accordance with its terms. All of the
terms and covenants in the Notes and the Loan Agreement are
made a part hereof as though set forth herein at length.
5.4 Liens, Charges and Encumbrances. Mortgagor shall
immediately discharge any lien on or security interest in the
Property to which Mortgagee has not consented in writing,
except any Permitted Encumbrances and Permitted Rights of
Others. Subject to any applicable rights to contest set forth
in the Loan Agreement, Mortgagor shall pay when due each
obligation secured by or reducible to a lien, security
interest, charge or encumbrance which now does or later may
encumber or appear to encumber all or part of the Property or
any interest in it, whether the lien, security interest, charge
or encumbrance is or would be senior or subordinate to this
Mortgage.
5.5 Damages and Insurance and Condemnation Proceeds.
5.5.1 Mortgagor hereby absolutely and irrevocably
assigns to Mortgagee, and authorizes the payor to pay to
Mortgagee, the following claims, causes of action, awards,
payments and rights to payment:
(a) All awards of damages and all other
compensation payable directly or indirectly because of a
condemnation, proposed condemnation or taking for public
or private use which affects all or part of the Property
or any interest in it; and
(b) All other awards, claims and causes of
action, arising out of any warranty affecting all or any
part of the Property, or for damage or injury to or
decrease in value of all or part of the Property or any
interest in it; and
(c) All proceeds of any insurance policies
payable because of loss sustained to all or part of the
Property; and
(d) All interest which may accrue on any of the
foregoing.
5.5.2 Mortgagor shall immediately notify Mortgagee
in writing if:
(a) Any damage occurs or any injury or loss is
sustained in the amount of $2,000,000 or more to all or
part of the Property, or any action or proceeding relating
to any such damage, injury or loss is commenced; or
(b) Any offer is made, or any action or
proceeding is commenced, which relates to any actual or
proposed condemnation or taking of all or part of the
Property.
5.5.3 If Mortgagee chooses to do so, Mortgagee may
in its own name appear in or prosecute any action or proceeding
to enforce any cause of action based on warranty, or for
damage, injury or loss to all or part of the Property, and
Mortgagee may make any compromise or settlement of the action
or proceeding. Mortgagee, if it so chooses, may participate in
any action or proceeding relating to condemnation or taking of
all or part of the Property, and may join Mortgagor in
adjusting any loss covered by insurance. Mortgagor hereby
irrevocably appoints Mortgagee its true and lawful
attorney-in-fact for all such purposes. Mortgagor shall not
settle, adjust or compromise any such action or proceeding
without the prior written approval of Mortgagee.
5.5.4 All proceeds of these assigned claims, other
property and rights which Mortgagor may receive or be entitled
to (collectively, "Proceeds") shall be paid to Mortgagee. In
each instance, Mortgagee shall apply such Proceeds first toward
reimbursement of all of Mortgagee's costs and expenses of
recovering the Proceeds, including attorneys' fees. If, in any
instance, each and all of the following conditions are
satisfied in Mortgagee's reasonable judgment, Mortgagee shall
permit Mortgagor to use the balance of such Proceeds ("Net
Claims Proceeds") to pay costs of repairing or reconstructing
the Property in the manner described below:
(a) The plans and specifications, cost
breakdown, construction contract, construction schedule,
contractor and payment and performance bond for the work
of repair or reconstruction must all be acceptable to
Mortgagee; and
(b) Mortgagee must receive evidence
satisfactory to it that, after repair or reconstruction,
the Property will be at least as valuable as it was
immediately before the damage or condemnation occurred;
and
(c) The Net Claims Proceeds must be sufficient
in Mortgagee's determination to pay for the total cost of
repair or reconstruction, including all associated
development costs and interest projected to be payable on
the Secured Obligations until the repair or reconstruction
is complete; or Mortgagor must provide its own funds in an
amount equal to the difference between the Net Claims
Proceeds and a reasonable estimate, made by Mortgagor and
found acceptable by Mortgagee, of the total cost of repair
or reconstruction; and
satisfactory to it that all Leases which Mortgagee may
find acceptable will continue after the repair or
reconstruction is complete; and
(e) No Event of Default shall have occurred and
be continuing.
If Mortgagee finds that such conditions have been met,
Mortgagee shall hold the Net Claims Proceeds and any funds
which Mortgagor is required to provide in a noninterest-bearing
account and shall disburse them to Mortgagor to pay costs of
repair or reconstruction upon presentation of evidence
reasonably satisfactory to Mortgagee that repair or
reconstruction has been completed satisfactorily and lien-free
and security interest-free. However, if Mortgagee finds that
one or more of such conditions have not been satisfied,
Mortgagee may apply the Net Claims Proceeds to pay or prepay
(without premium) some or all of the Secured Obligations in
such order and proportions as Mortgagee in its absolute
discretion may choose (subject to the provisions for priority
of application of payments set forth in the Loan Agreement).
Any and all Proceeds (including, without limitation, any Net
Claims Proceeds) held by Mortgagee from time to time shall be
collateral for the Secured Obligations, and Mortgagor hereby
grants to Mortgagee a security interest in and lien on such
Proceeds and all rights and remedies available under applicable
laws with respect to such Proceeds, including, without
limitation, all rights and remedies under the New Jersey
Uniform Commercial Code. Mortgagor shall execute and deliver
to Mortgagee and the Banks any and all documents reasonably
requested by Mortgagee in order to confirm, create and perfect
such security interest in and lien on such Proceeds. In the
event that any Proceeds are applied to pay any Secured
Obligations, then Mortgagee shall have no obligation to
disburse or release such applied Proceeds to Mortgagor under
this Section 5.5.
5.5.5 Mortgagor hereby specifically, unconditionally
and irrevocably waives all rights of a property owner granted
under applicable law which provide for allocation of
condemnation proceeds between a property owner and a
lienholder, and any other law or successor statute of similar
import. Mortgagor hereby specifically, unconditionally and
irrevocably waives all right to recover against Mortgagee or
any Bank (or any officer, employee, agent or representative of
Mortgagee or any Bank) for any loss incurred by Mortgagor from
any cause insured against or required by any Loan Document to
be insured against; provided, however, that this waiver of
subrogation shall not be effective with respect to any
insurance policy if the coverage thereunder would be materially
reduced or impaired as a result.
5.6 Maintenance and Preservation of Property.
5.6.1 Except as permitted in the Loan Agreement,
Mortgagor shall not remove or demolish the Property or any part
of it, or alter, restore or add to the Property, or initiate or
allow any change in any zoning or other land use classification
which affects the Property or any part of it, except as
permitted or required by the Loan Agreement or with Mortgagee's
express prior written consent in each instance.
5.6.2 If all or part of the Property becomes damaged
or destroyed, Mortgagor shall promptly and completely repair
and/or restore the Property in a good and workmanlike manner in
accordance with sound building practices, regardless of whether
or not Mortgagee agrees to disburse insurance proceeds or other
sums to pay costs of the work of repair or reconstruction under
Section 5.5.
5.6.3 Mortgagor shall not commit or allow any act
upon or use of the Property which would violate: (i) any
applicable law or order of any Governmental Agency, whether now
existing or later to be enacted and whether foreseen or
unforeseen (except to the extent that noncompliance would not
cause a Material Adverse Effect or a License Revocation); or
(ii) any public or private covenant, condition, restriction,
equitable servitude, Contractual Obligation or Right of Others
affecting the Property. Mortgagor shall not bring or keep any
article on the Property or cause or allow any condition to
exist on it, that could invalidate or would be prohibited by
any insurance coverage required to be maintained by Mortgagor
on the Property or any part of it under this Mortgage.
5.6.4 Mortgagor shall not commit or allow waste of
the Property.
5.6.5 Mortgagor shall perform all other acts which
from the character or use of the Property may be reasonably
necessary to maintain and preserve its value.
5.7 Insurance.
5.7.1 Mortgagor shall maintain the following
insurance with respect to the Property:
(a) Mortgagor shall provide, maintain and keep
in force at all times during any period of construction with
respect to the portion of the Property affected by such
construction a policy or policies of builder's "all risk"
insurance in nonreporting form in an amount not less than the
full insurable completed value of such portion of the Property
on a replacement cost basis. The policy or policies shall
insure against loss or damage by hazards customarily included
within such "all risk" policies and any other risks or hazards
which Mortgagee may reasonably specify (and shall include
boiler and machinery insurance), and each shall contain a
Lender's Loss Payable Endorsement (Form 438 BFU or equivalent)
in favor of Mortgagee.
(b) Mortgagor shall provide, maintain and keep
in force at all times for all portions of the Property not
covered by a policy or policies described in Section 5.7.1(a),
above, a policy or policies of fire and hazards "all risk"
insurance providing extended coverage, in an amount not less
than the full insurable value of such portions of the Property
on a replacement cost basis. The policy or policies shall
insure against loss or damage by hazards customarily included
within "all risk" and "extended coverage" policies and any
other risks or hazards which Mortgagee may reasonably specify
(and shall include boiler and machinery insurance), and each
shall contain a Lender's Loss Payable Endorsement (Form 438 BFU
or equivalent) in favor of Mortgagee.
(c) Mortgagor shall provide, maintain and keep
in force at all times for all portions of the Property any
policy or policies of business interruption insurance that
Mortgagee reasonably requires (including insurance against
income loss during a period of at least one (1) year), and each
such policy shall contain a Lender's Loss Payable Endorsement
(Form 438 BFU or equivalent) in favor of Mortgagee.
(d) Mortgagor shall provide, maintain and keep
in force at all times a policy or policies of comprehensive
liability insurance naming Mortgagee and the Banks as
additional insureds, on an "occurrence" basis, against claims
for "personal injury" liability, including bodily injury, death
or property damage liability, with a limit of not less than
Fifty Million Dollars ($50,000,000). Such insurance shall be
primary and noncontributory with any other insurance carried by
Mortgagee and/or any Bank(s).
(e) Mortgagor shall provide, maintain and keep
in force at all times such policies of worker's compensation
insurance as may be required by applicable laws (including
employer's liability insurance, if required by Mortgagee),
covering all employees of Mortgagor and each contractor and
subcontractor.
(f) If the Property is required to be insured
pursuant to the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Act of 1968, and the regulations
promulgated thereunder, because it is located in an area which
has been identified by the Secretary of Housing and Urban
Development as a Flood Hazard Area, then Mortgagor shall
provide, maintain and keep in force at all times a flood
insurance policy covering the Property in limits that would
exceed the damage caused by what is expected to be the most
severe flood (or any greater limits to the extent required by
applicable law from time to time), containing a Lender's Loss
Payable Endorsement (Form 438 BFU or equivalent) in favor of
Mortgagee.
(g) Mortgagor shall provide, maintain and keep
in force at all times any and all additional insurance that
Mortgagee in its reasonable judgment may from time to time
require, so long as such insurance is available in the
commercial market at reasonable rates.
5.7.2 All such policies of insurance shall be issued
by companies approved by Mortgagee having a minimum A.M. Best's
rating of A-:X and authorized or licensed to do business in the
State of New Jersey. The limits, coverage, forms, deductibles,
inception and expiration dates and cancellation provisions of
all such policies shall be acceptable to Mortgagee. Each
property insurance policy maintained in connection with any of
the Property shall contain a Lender's Loss Payable Endorsement
(Form 438 BFU or equivalent) in favor of Mortgagee, and shall
provide that all proceeds be payable to Mortgagee, without
contribution, to the extent of its interest. Each liability
insurance policy maintained in connection with any of the
Property shall name Mortgagee and the Banks as additional
insureds. An approval by Mortgagee is not, and shall not be
deemed to be, a representation of the solvency of any insurer
or the sufficiency of any amount of insurance. Each policy of
insurance required hereunder shall provide that it may not be
modified or cancelled without at least thirty (30) days' prior
written notice to Mortgagee, and shall permit a waiver of
subrogation by Mortgagor in favor of Mortgagee and the Banks.
5.7.3 Mortgagor shall supply Mortgagee with
certificates of each policy required hereunder and any other
policy of insurance maintained in connection with any of the
Property, together with an original or underlyer of each such
policy and all endorsements thereto. When any insurance policy
required hereunder expires, Mortgagor shall furnish Mortgagee
with proof acceptable to Mortgagee that the policy has been
reinstated or a new policy issued, continuing in force the
insurance covered by the policy which expired. If Mortgagor
fails to pay any such premium, Mortgagee shall have the right,
but not the obligation, to obtain current coverage and advance
funds to pay the premiums for it. Mortgagor shall repay
Mortgagee immediately on demand for any advance for such
premiums, which shall be considered to be an additional loan to
Mortgagor bearing interest at the Default Rate, and secured by
this Mortgage and any other collateral held by Mortgagee in
connection with the Secured Obligations.
5.8 No Credit for Taxes Paid. Mortgagor shall not be
entitled to any credit against payments due hereunder by reason
of the payment of any taxes, assessments, water or sewer rent
or other governmental charges levied against the Property.
5.9 Releases, Extensions, Modifications and Additional
Security. From time to time, Mortgagee may perform any of the
following acts without incurring any liability or giving notice
to any person, and without affecting the personal liability of
any person for the payment of the Secured Obligations (except
as provided below), and without affecting the security hereof
for the full amount of the Secured Obligations on all Property
remaining subject hereto, and without the necessity that any
sum representing the value of any portion of the Property
affected by Mortgagee's action(s) be credited on the Secured
Obligations:
(a) Release any person liable for payment of
any Secured Obligation;
(b) Extend the time for payment, or otherwise
alter the terms of payment, of any Secured Obligation;
(c) Accept additional real or personal property
of any kind as security for any Secured Obligation,
whether evidenced by deeds of trust, mortgages, security
agreements or any other instruments of security; or
(d) Alter, substitute or release any property
securing the Secured Obligations.
5.10 Release. Upon the satisfaction of all of the
conditions to the reconveyance hereof set forth in
Section 11.26 of the Loan Agreement, Mortgagee shall release
the Property and renounce any other rights granted to it
herein, and shall execute, at the request of Mortgagor (and
upon payment of all fees and other sums owing to Mortgagee
under Section 5.11), a release of this Mortgage and any other
instrument to that effect deemed necessary or desirable. In
the release, the grantee may be described as "the person or
persons legally entitled thereto," and the recitals of any
matters or facts shall be conclusive proof of their
truthfulness. Mortgagee shall have no duty to determine the
rights of persons claiming to be rightful grantees of any such
release.
5.11 Compensation, Exculpation, Indemnification.
5.11.1 Mortgagor agrees to pay fees in the maximum
amounts legally permitted, or reasonable fees as may be charged
by Mortgagee when the law provides no maximum limit, for any
services that Mortgagee may render in connection with this
Mortgage, including Mortgagee's providing a statement of the
Secured Obligations or Mortgagee's rendering of services in
connection with a release of the lien hereof. Mortgagor shall
also pay or reimburse all of Mortgagee's costs and expenses
which may be incurred in rendering any such services.
Mortgagor further agrees to pay or reimburse Mortgagee for all
costs, expenses and other advances which may be incurred or
made by Mortgagee in any efforts to enforce any terms of this
Mortgage, including any rights or remedies afforded to
Mortgagee under Section 6.3, whether any lawsuit is filed or
not, or in defending any action or proceeding arising under or
relating to this Mortgage, including attorneys' fees and other
legal costs, costs of any Foreclosure Sale (as defined in
Section 6.3.7) and any cost of evidence of title. If Mortgagee
chooses to dispose of the Property through more than one
Foreclosure Sale, Mortgagor shall pay all costs, expenses or
other advances that may be incurred or made by Mortgagee in
each of such Foreclosure Sales.
5.11.2 Mortgagee shall not be directly or indirectly
liable to Mortgagor or any other person as a consequence of any
of the following:
(a) Mortgagee's exercise of, or failure to
exercise, any rights, remedies or powers granted to
Mortgagee in this Mortgage;
(b) Mortgagee's failure or refusal to perform
or discharge any obligation or liability of Mortgagor
under any agreement related to the Property or under this
Mortgage; or
third party resulting from Mortgagee's failure to lease or
operate the Property, or from any other act or omission of
Mortgagee in managing the Property, after an Event of
Default, unless the loss is caused by the willful
misconduct and bad faith of Mortgagee.
Mortgagor hereby expressly waives and releases all liability of
the types described above, and agrees that no such liability
shall be asserted against or imposed upon Mortgagee.
5.11.3 Mortgagor agrees to indemnify Mortgagee and
the Banks (collectively, the "Indemnitees") against and hold
them harmless from all losses, damages, liabilities, claims,
causes of action, judgments, court costs, reasonable attorneys'
fees and other reasonable legal expenses, cost of evidence of
title, cost of evidence of value, and other costs and expenses
which any of them may suffer or incur:
(a) In performing any act required or permitted
by this Mortgage or any of the other Loan Documents or by
law;
(b) Because of any failure of Mortgagor to
perform any of Mortgagor's obligations; or
(c) Because of any alleged obligation of or
undertaking by Mortgagee to perform or discharge any of
the representations, warranties, conditions, covenants or
other obligations in any document relating to the Property
other than the Loan Documents.
Notwithstanding the foregoing, no Indemnitee shall be entitled
to indemnification for any loss caused by its own gross
negligence or willful misconduct or for any loss asserted
against it by another Indemnitee. If any claim, demand, action
or cause of action is asserted against any Indemnitee, such
Indemnitee shall promptly notify Mortgagor, but the failure to
so promptly notify Mortgagor shall not affect Mortgagor's
obligations under this Section unless such failure materially
prejudices Mortgagor's right to participate in the contest of
such claim, demand, action or cause of action, as hereinafter
provided. Such Indemnitee may (and shall, if requested by
Mortgagor in writing) contest the validity, applicability and
amount of such claim, demand, action or cause of action and
shall permit Mortgagor to participate in such contest. Any
Indemnitee that proposes to settle or compromise any claim or
proceeding for which Mortgagor may be liable for payment of
indemnity hereunder shall give Mortgagor written notice of the
terms of such proposed settlement or compromise reasonably in
advance of settling or compromising such claim or proceeding
and shall obtain Mortgagor's prior consent (which shall not be
unreasonably withheld or delayed). In connection with any
claim, demand, action or cause of action covered by this
Section 5.11.3 against more than one Indemnitee, all such
Indemnitees shall be represented by the same legal counsel
(which may be a law firm engaged by the Indemnitees or attor-
neys employed by an Indemnitee or a combination of the forego-
ing) selected by the Indemnitees and reasonably acceptable to
Mortgagor; provided, that if such legal counsel determines in
good faith that representing all such Indemnitees would or
could result in a conflict of interest under Laws or ethical
principles applicable to such legal counsel or that a defense
or counterclaim is available to an Indemnitee that is not
available to all such Indemnitees, then to the extent reason-
ably necessary to avoid such a conflict of interest or to
permit unqualified assertion of such a defense or counterclaim,
each Indemnitee shall be entitled to separate representation by
legal counsel selected by that Indemnitee and reasonably
acceptable to Mortgagor, with all such legal counsel using
reasonable efforts to avoid unnecessary duplication of effort
by counsel for all Indemnitees; and further provided that
Mortgagee (as an Indemnitee) shall at all times be entitled to
representation by separate legal counsel (which may be a law
firm or attorneys employed by Mortgagee or a combination of the
foregoing). Any obligation or liability of Mortgagor to any
Indemnitee under this Section 5.11.3 shall survive the release
and cancellation of any or all of the Secured Obligations and
the full or partial release and/or reconveyance of this
Mortgage.
5.11.4 Mortgagor shall pay all obligations to pay
money arising under this Section 5.11 immediately upon demand
by Mortgagee. Each such obligation shall be added to, and
considered to be part of, the principal of the Notes in favor
of Mortgagee, and shall bear interest from the date the
obligation arises at the Default Rate.
5.12 Defense and Notice of Claims and Actions. At
Mortgagor's sole expense, Mortgagor shall protect, preserve and
defend the Property and title to and right of possession of the
Property, and the security of this Mortgage and the rights and
powers of Mortgagee created under it, against all adverse
claims. Mortgagor shall give Mortgagee prompt notice in
writing if any claim is asserted which does or could affect any
of such matters, or if any action or proceeding is commenced
which alleges or relates to any such claim.
5.13 Title Insurance. At any time and from time to time
at the request of Mortgagee, Mortgagor, at its sole cost and
expense, shall deliver to Mortgagee such additional or
increased title insurance coverage and title insurance
indorsements and reinsurance issued by title insurance
companies, all in form and substance and reasonably
satisfactory to Mortgagee, with respect to this Mortgage,
including, without limitation, ALTA form equivalents of CLTA
122 endorsements insuring that each advance is secured by this
Mortgage (without any exception not set forth in the policy of
title insurance insuring this Mortgage other than (i) liens for
taxes and assessments not yet due and payable and
(ii) Permitted Encumbrances insured to be subordinate to this
Mortgage), and CLTA 101.4 endorsements insuring the priority of
the Mortgage over any mechanic's lien; provided that Mortgagor
shall be obligated under this Section 5.13 to increase the
stated amount of the policy of title insurance insuring this
Mortgage only if improvements have been constructed on the
Property after the date of recordation of this Mortgage, and
provided further that the amount of any such increase in the
amount of such policy of title insurance shall equal the sum of
the amounts of soft costs and hard costs of constructing such
improvements.
5.14 Subrogation. Mortgagee shall be subrogated to the
liens and security interests of all encumbrances, whether
released of record or not, which are discharged in whole or in
part by Mortgagee in accordance with this Mortgage or with the
proceeds of any loan secured by this Mortgage.
5.15 Site Visits, Observation and Testing. Mortgagee and
its agents and representatives shall have the right at any
reasonable time to enter and visit the Property for the purpose
of performing appraisals. In addition, each person indemnified
by each of the Borrowers under Section 11.22 of the Loan
Agreement (collectively, "Indemnified Parties") and their
agents and representatives shall have the right at any
reasonable time to enter and visit the Property for the pur-
poses of observing the Property, taking and removing soil or
groundwater samples, and conducting tests on any part of the
Property. The Indemnified Parties have no duty, however, to
visit or observe the Property or to conduct tests, and no site
visit, observation or testing by any Indemnified Party shall
impose any liability on any Indemnified Party. In no event
shall any site visit, observation or testing by any Indemnified
Party be a representation that Hazardous Materials are or are
not present in, on, or under the Property, or that there has
been or shall be compliance with any Hazardous Materials Law,
or any other applicable governmental law. Neither Mortgagor
nor any other party is entitled to rely on any site visit,
observation or testing by any Indemnified Party. The
Indemnified Parties owe no duty of care to protect Mortgagor or
any other party against, or to inform Mortgagor or any other
party of, any Hazardous Material or any other adverse condition
affecting the Property. Any Indemnified Party shall give
Mortgagor reasonable notice before entering the Property. The
Indemnified Party shall make reasonable efforts to avoid
interfering with Mortgagor's use of the Property in exercising
any rights provided in this Section.
5.16 Notice of Change. Mortgagor shall give Mortgagee
prior written notice of (a) any change in the location of
Mortgagor's place of business or its chief executive office if
it has more than one place of business, (b) any change in the
location of any of the Property, including the Books and
Records, and (c) any change to Mortgagor's name or business
structure. Unless otherwise approved by Mortgagee in writing,
all Property that consists of personal property (other than the
Books and Records) will be located on the Land and all Books
and Records for the portion of the Property owned by Mortgagor
will be located at such Mortgagor's place of business or chief
executive office if such Mortgagor has more than one place of
business.
6. Accelerating Transfers, Defaults and Remedies.
6.1 Accelerating Transfers.
6.1.1 "Accelerating Transfer" means any sale,
contract to sell, conveyance, encumbrance, lease, alienation or
further encumbrance not expressly permitted under the Loan
Agreement, or other transfer of all or any material part of the
Property or any interest in it, whether voluntary, involuntary,
by operation of law or otherwise, unless Mortgagee has given
its prior written consent to such "Accelerating Transfer,"
which consent may be given or not given in the absolute
discretion of Mortgagee. If Mortgagor is a corporation or
limited liability company, "Accelerating Transfer" also means
any transfer or transfers of shares possessing, in the aggre-
gate, more than fifty percent (50%) of the voting power. If
Mortgagor is a partnership or limited liability company,
"Accelerating Transfer" also means withdrawal or removal of any
general partner or manager, as the case may be, dissolution of
the partnership or limited liability company under New Jersey
law, or any transfer or transfers of, in the aggregate, more
than fifty percent (50%) of the partnership interests or
ownership interests in the limited liability company.
6.1.2 Mortgagor acknowledges that Mortgagee and the
Banks are making one or more advances under the Loan Agreement
in reliance on the expertise, skill and experience of
Mortgagor; thus, the Secured Obligations include material
elements similar in nature to a personal service contract. In
consideration of Mortgagee's reliance, Mortgagor agrees that
Mortgagor shall not make any Accelerating Transfer, unless the
transfer is preceded by Mortgagee's written consent to the
particular transaction and transferee. Mortgagee may withhold
such consent in its absolute discretion. If any Accelerating
Transfer occurs, Mortgagee may, in its absolute discretion
(provided that it has received any consents or approvals of any
other Banks required under the Loan Agreement), declare all of
the Secured Obligations to be immediately due and payable, and
Mortgagee may invoke any rights and remedies provided by
Section 6.3 of this Mortgage.
6.2 Events of Default. Mortgagor will be in default
under this Mortgage upon the occurrence of any one or more of
the following events ("Events of Default"):
(a) Mortgagor fails to perform any obligation to pay
money which arises under this Mortgage within five (5) Banking
Days after written demand therefor; or
(b) Mortgagor fails to perform any other obligation
arising under this Mortgage within ten (10) Banking Days after
the giving of written notice by Mortgagee of such failure; or
(c) Any Event of Default (as defined in the Loan
Agreement or any other Loan Document) occurs; or any other
default occurs under any of the Secured Obligations (subject to
any applicable cure period).
6.3 Remedies. At any time after and during the
continuance of an Event of Default and provided that Mortgagee
has received any consents or approvals of any other Banks
required under the Loan Agreement, Mortgagee shall be entitled
to invoke any or all of the following rights and remedies
(subject to any restrictions on those rights and remedies
imposed by applicable Gaming Laws), all of which will be
cumulative, and the exercise of any one or more of which shall
not constitute an election of remedies:
6.3.1 Acceleration. Mortgagee may declare any or
all of the Secured Obligations to be due and payable
immediately, without presentment, demand or notice of any kind,
all of which are expressly waived, notwithstanding anything to
the contrary contained in this Mortgage, the Loan Agreement
and/or any Note.
6.3.2 Receiver. Mortgagee may apply to any court of
competent jurisdiction for, and obtain appointment of, a
receiver for the Property; and Mortgagee may request, in
connection with any foreclosure proceeding hereunder, that the
New Jersey Casino Control Commission petition a District Court
of the State of New Jersey for the appointment of a conservator
to conduct the normal gaming activities on the Property
following such foreclosure proceeding. Mortgagee may obtain
the appointment of such a receiver or conservator without the
necessity of proving either the depreciation or the inadequacy
of the value of the security or the insolvency of Mortgagor or
any person who may be legally or equitably liable to pay moneys
secured hereby, and Mortgagor and each such person waive such
proof and consent to the appointment of such a receiver or
conservator.
6.3.3 Entry. Mortgagee, in person, by agent or by
court-appointed receiver, may enter, take possession of, manage
and operate all or any part of the Property, and may also do
any and all other things in connection with those actions that
Mortgagee may in its absolute discretion consider necessary and
appropriate to protect the security of this Mortgage. Such
other things may include any act or thing which Mortgagor (or
the successors or assigns of Mortgagor who may then own the
Property) might or could do in connection with the management
and operation of the Property, including, without limitation:
taking and possessing all of Mortgagor's or the then owner's
Books and Records; entering into, enforcing, modifying, or
cancelling Leases on such terms and conditions as Mortgagee may
consider proper; obtaining and evicting tenants; collecting and
receiving any payment of money owing to Mortgagor; completing
construction; and/or contracting for and making repairs and
alterations. If Mortgagee so requests, Mortgagor shall
assemble all of the Property that has been removed from the
Land and make all of it available to Mortgagee at the site of
the Land. Mortgagor hereby irrevocably constitutes and
appoints Mortgagee as Mortgagor's attorney-in-fact to perform
such acts and execute such documents as Mortgagee in its
absolute discretion may consider to be appropriate in
connection with taking these measures, including endorsement of
Mortgagor's name on any instruments. Regardless of any
provision of this Mortgage or the Loan Agreement, Mortgagee
shall not be considered to have accepted any property other
than cash or immediately available funds in satisfaction of any
obligation of Mortgagor to Mortgagee unless Mortgagee has given
express written notice of Mortgagee's election of that remedy.
6.3.4 Cure; Protection of Security. Mortgagee may
cure any breach or default of Mortgagor and, if it chooses to
do so in connection with any such cure, Mortgagee may also
enter the Property and/or do any and all other things which
Mortgagee may in its absolute discretion consider necessary and
appropriate to protect the security of this Mortgage. Such
other things may include, without limitation: appearing in
and/or defending any action or proceeding which purports to
affect the security of, or the rights or powers of Mortgagee
under, this Mortgage; paying, purchasing, contesting or
compromising any encumbrance, charge, lien, security interest
or claim of lien or security interest which (in Mortgagee's
sole judgment) is or may be senior in priority to this
Mortgage, such judgment of Mortgagee to be conclusive as
between Mortgagor and Mortgagee; obtaining insurance and/or
paying any premiums or charges for insurance required to be
carried under this Mortgage and the other Loan Documents;
otherwise caring for and protecting any and all of the
Property; and/or employing counsel, accountants, contractors
and other appropriate persons to assist Mortgagee. Mortgagee
may take any of the actions permitted under this Section 6.3.4
either with or without giving notice to any person.
6.3.5 Foreclosure. Mortgagee may institute an
action of mortgage foreclosure, or take other action as the law
may allow, at law or in equity, for the enforcement of this
Mortgage, and proceed thereon to final judgment and execution
of the entire unpaid balance of any and/or all Notes, including
costs of suit, interest and reasonable attorneys' fees. In
case of any sale of the Property by virtue of judicial
proceedings, the Property may be sold in one parcel and as an
entirety or in such parcels, manner or order as Mortgagee in
its sole discretion may elect. The failure to make any tenants
parties defendant to a foreclosure proceeding and to foreclose
their rights will not be asserted by Mortgagor as a defense in
any proceeding instituted by Mortgagee to collect the
obligations secured hereby or any deficiency remaining unpaid
after the foreclosure sale of the Property.
6.3.6 Personal Property Remedies.
(a) Mortgagee may exercise any or all of the
remedies granted to a secured party under the New Jersey
Uniform Commercial Code, as amended or recodified from time to
time.
(b) Mortgagee may elect to treat as personal
property any Property which is intangible or which can be
severed from the Land or Improvements without causing
structural damage. If it chooses to do so, Mortgagee may
dispose of any personal property separately from the sale of
real property, in any manner permitted by the New Jersey
Uniform Commercial Code, as amended or recodified from time to
time, including any public or private sale, or in any manner
permitted by any other applicable law. Any proceeds of any
such disposition shall not cure any Event of Default or
reinstate any Secured Obligation.
(c) In connection with any sale or other
disposition of such Property, Mortgagor agrees that the
following procedures constitute a commercially reasonable sale:
Mortgagee shall mail written notice of the sale to Mortgagor
not later than five (5) days prior to such sale. Once per week
during the three weeks immediately preceding such sale,
Mortgagee will publish notice of the sale in a local daily
newspaper of general circulation. Upon receipt of any written
request, Mortgagee will make the Property available to any bona
fide prospective purchaser for inspection during reasonable
business hours. Notwithstanding any provision to the contrary,
Mortgagee shall be under no obligation to consummate a sale if,
in its judgment, none of the offers received by it equals the
fair value of the Property offered for sale. The foregoing
procedures do not constitute the only procedures that may be
commercially reasonable.
(d) Mortgagee may choose to dispose of some or
all of the Property which consists solely of real property in
any manner then permitted by applicable law. In its
discretion, Mortgagee may also or alternatively choose to
dispose of some or all of the Property, in any combination
consisting of both real and personal property, together in one
sale to the extent then permitted by applicable law. Mortgagor
agrees that such a sale of personal property together with real
property constitutes a commercially reasonable sale of the
personal property.
6.3.7 Single or Multiple Foreclosure Sales. If the
Property consists of more than one lot, parcel or item of
property, Mortgagee may:
(a) Designate the order in which the lots,
parcels and/or items shall be sold or disposed of or
offered for sale or disposition; and
(b) Elect to dispose of the lots, parcels
and/or items through a single consolidated sale or
disposition or through two or more such sales or
dispositions; or in any other manner Mortgagee may deem to
be in its best interests (any such sale or disposition
being referred to herein as a "Foreclosure Sale").
If Mortgagee chooses to have more than one Foreclosure Sale,
Mortgagee at its option may cause the Foreclosure Sales to be
held simultaneously or successively, on the same day, or on
such different days and at such different times and in such
order as Mortgagee may deem to be in its best interests. No
Foreclosure Sale shall terminate or affect the liens or
security interests of this Mortgage on any part of the Property
which has not been sold until all of the Secured Obligations
have been paid in full and the Commitment has been fully and
finally terminated.
6.3.8 Excess Monies. Mortgagee may apply on account
of the unpaid indebtedness evidenced by the Notes (including
any unpaid accrued interest) owed to Mortgagee after a
foreclosure sale of the Property, whether or not a deficiency
action shall have been instituted, any unexpended monies still
retained by Mortgagee that were paid by Mortgagor to Mortgagee
(i) for the payment of, or as security for the payment of,
taxes, assessments, municipal or governmental rates, charges,
impositions, liens, water or sewer rents, or insurance
premiums, if any, or (ii) in order to secure the performance of
some act by Mortgagor.
6.3.9 Other Permitted Remedies. Mortgagee and the
Banks may refuse to make any advance to, or issue any Letter of
Credit for the account of, any Borrower. Mortgagee and the
Banks may exercise any and all other rights and remedies
available under the Loan Documents and applicable law,
including, without limitation, the right to file applications
to change, and to exercise all other rights and remedies
available under applicable law with respect to, the water
permits and rights described on Exhibit B attached hereto;
provided however that, notwithstanding the foregoing or any
other provision contained in this Mortgage, the remedies
provided by this Mortgage shall not include the right to take
any action that violates applicable Gaming Laws.
6.4 Credit Bids. At any Foreclosure Sale, any person,
including Mortgagor, or Mortgagee, may bid for and acquire the
Property or any part thereof to the extent permitted by then
applicable law. Instead of paying cash for such property,
Mortgagee may settle for the purchase price by crediting the
sales price of the property against the following obligations:
(a) First, the portion of the Secured Obligations
attributable to the expenses of sale, costs of any action and
any other sums for which Mortgagor is obligated to pay or
reimburse Mortgagee or the Banks under Section 5.11; and
(b) Second, all other Secured Obligations in any
order and proportions as Mortgagee in its absolute discretion
may choose (subject to any applicable provisions for priority
of application of payments set forth in the Loan Agreement).
6.5 Application of Foreclosure Sale Proceeds. Mortgagee
shall apply the proceeds of any Foreclosure Sale in the manner
required by applicable law.
6.6 Application of Rents and Other Sums. Mortgagee shall
apply any and all Rents collected by it, and any and all sums
other than proceeds of a Foreclosure Sale which Mortgagee may
receive or collect under Section 6.3, in the following manner:
(a) First, to pay the portion of the Secured
Obligations attributable to the costs and expenses of operation
and collection that may be incurred by Mortgagee or any
receiver;
(b) Second, to pay all other Secured Obligations in
any order and proportions as Mortgagee in its absolute
discretion may choose (subject to the provisions for priority
of application of payments set forth in the Loan Agreement);
and
(c) Third, to remit the remainder, if any, to the
person or persons entitled to it. Mortgagee shall have no
liability for any funds which it does not actually receive.
7. Miscellaneous Provisions.
7.1 Additional Provisions. The Loan Documents fully
state all of the terms and conditions of the parties' agreement
regarding the matters mentioned in or incidental to this
Mortgage. The Loan Documents also grant further rights to
Mortgagee and contain further agreements and affirmative and
negative covenants by Mortgagor which apply to this Mortgage
and to the Property.
7.2 No Waiver or Cure.
7.2.1 Each waiver by Mortgagee must be in writing,
and no waiver shall be construed as a continuing waiver. No
waiver shall be implied from any delay or failure by Mortgagee
to take action on account of any default of Mortgagor. Consent
by Mortgagee to any act or omission by Mortgagor shall not be
construed as a consent to any other or subsequent act or
omission or to waive the requirement for Mortgagee's consent to
be obtained in any future or other instance.
7.2.2 If any of the events described below occurs,
that event alone shall not: cure or waive any breach, Event of
Default or notice of default under this Mortgage or invalidate
any act performed pursuant to any such default or notice; or
nullify the effect of any notice of default or sale (unless all
Secured Obligations then due have been paid and performed and
all other defaults under the Loan Documents have been cured);
or impair the security of this Mortgage; or prejudice Mortgagee
or any receiver in the exercise of any right or remedy afforded
any of them under this Mortgage; or be construed as an
affirmation by Mortgagee of any tenancy, lease or option, or a
subordination of the lien or security interest of this
Mortgage.
(a) Mortgagee, its agent or a receiver takes
possession of all or any part of the Property in the
manner provided in Section 6.3.3.
(b) Mortgagee collects and applies Rents as
permitted under Sections 2.3 and 6.6 or exercises
Mortgagor's right, title and interest under the Leases,
either with or without taking possession of all or any
part of the Property.
(c) Mortgagee receives and applies to any
Secured Obligation proceeds of any Property, including any
proceeds of insurance policies, condemnation awards, or
other claims, property or rights assigned to Mortgagee
under Section 5.5.
(d) Mortgagee makes a site visit, observes the
Property and/or conducts tests as permitted under Section
5.15.
(e) Mortgagee receives any sums under this
Mortgage or any proceeds of any collateral held for any of
the Secured Obligations, and applies them to one or more
Secured Obligations.
(f) Mortgagee or any receiver invokes any right
or remedy provided under this Mortgage.
7.3 Powers of Mortgagee.
7.3.1 If Mortgagee performs any act which it is
empowered or authorized to perform under this Mortgage,
including any act permitted by Section 5.9 or Section 6.3.4,
that act alone shall not release or change the personal
liability of any person for the payment and performance of the
Secured Obligations then outstanding, or the lien or security
interest of this Mortgage on all or the remainder of the
Property for full payment and performance of all outstanding
Secured Obligations. The liability of the original Mortgagor
shall not be released or changed if Mortgagee grants any
successor in interest to any Borrower or Mortgagor any
extension of time for payment, or modification of the terms of
payment, of any Secured Obligation. Mortgagee shall not be
required to comply with any demand by any original Mortgagor
that Mortgagee refuse to grant such an extension or
modification to, or commence proceedings against, any such
successor in interest.
7.3.2 Mortgagee may take any of the actions
permitted under Sections 6.3.2 and/or 6.3.3 regardless of the
adequacy of the security for the Secured Obligations, or
whether any or all of the Secured Obligations have been
declared to be immediately due and payable, or whether notice
of default and election to sell has been given under this
Mortgage.
7.3.3 From time to time Mortgagee may apply to any
court of competent jurisdiction for aid and direction in
executing the trust and enforcing the rights and remedies
created under this Mortgage. Mortgagee may from time to time
obtain orders or decrees directing, confirming or approving
acts in executing this trust and enforcing these rights and
remedies.
7.4 Merger. No merger shall occur as a result of
Mortgagee's acquiring any other estate in or any other lien on
or security interest in the Property unless Mortgagee consents
to a merger in writing.
7.5 Applicable Law. This Mortgage shall be governed by
and construed in accordance with the laws of the State of
California, except that the laws of the State of New Jersey
shall govern the creation, perfection and enforcement of the
liens and security interests created hereby.
7.6 Successors in Interest. The terms, covenants and
conditions of this Mortgage shall be binding upon and inure to
the benefit of the heirs, successors and assigns of the
parties. However, this Section 7.6 does not waive the
provisions of Section 6.1.
7.7 Interpretation.
7.7.1 Whenever the context requires, all words used
in the singular will be construed to have been used in the
plural, and vice versa, and each gender will include any other
gender. The captions of the sections of this Mortgage are for
convenience only and do not define or limit any terms or
provisions. The word "include(s)" means "include(s), without
limitation," and the word "including" means "including, but not
limited to."
7.7.2 The word "obligations" is used in its broadest
and most comprehensive sense, and includes all primary,
secondary, direct, indirect, fixed and contingent obligations.
It further includes all principal, interest, prepayment
charges, late charges, loan fees and any other fees and charges
accruing or assessed at any time, as well as all obligations to
perform acts or satisfy conditions.
7.7.3 No listing of specific instances, items or
matters in any way limits the scope or generality of any
language of this Mortgage. All Exhibits and/or Schedules
attached to this Mortgage are hereby incorporated in this
Mortgage.
7.8 In-House Counsel Fees. Whenever Mortgagor is
obligated to pay or reimburse Mortgagee for any attorneys'
fees, those fees shall include the allocated costs for services
of in-house counsel.
7.9 Waiver of Marshalling. To the extent permitted by
applicable law, Mortgagor waives all rights, legal and
equitable, it may now or hereafter have to require marshalling
of assets or to require foreclosure sales of assets in a
particular order. Each successor and assign of Mortgagor,
including any holder of a lien or security interest subordinate
to this Mortgage, by acceptance of its interest or lien or
security interest, agrees that it shall be bound by the above
waiver, as if it had given the waiver itself.
7.10 Severability. Any provision in this Mortgage that
is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or
jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions or the operation,
enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the
provisions of this Mortgage are declared to be severable.
7.11 Notices. Mortgagor hereby requests that a copy of
notice of default and notice of sale be mailed to it at the
address set forth below. That address is also the mailing
address of Mortgagor as debtor under the New Jersey Uniform
Commercial Code, as amended or recodified from time to time.
Mortgagee's address given below is the address for Mortgagee as
secured party under the New Jersey Uniform Commercial Code, as
amended or recodified from time to time.
Addresses Where
Notices to Mortgagor
Are to Be Sent:
c/o Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Attn: Craig F. Sullivan
Treasurer
Address Where
Notices to Mortgagee
Are to Be Sent:
Bank of America NT&SA
Global Agency #5596
1455 Market Street
13th Floor
San Francisco, CA 94103
Attn: Peggy A. Fujimoto
7.12 Seisin and Warranty. Mortgagor is seized of an
indefeasible estate in fee simple in the Property, and
Mortgagor warrants the title to the Property. Mortgagor hereby
covenants that Mortgagor shall (i) preserve such title and the
validity and priority of the lien of this Mortgage and shall
forever warrant and defend the same to Mortgagee against all
lawful claims whatsoever and the claims of all persons
whomsoever claiming or threatening to claim the same or any
part thereof, and (ii) make, execute, acknowledge and deliver
all such further or other deeds, documents, instruments or
assurances, and cause to be done all such further acts and
things as may at any time hereafter be reasonably required by
Mortgagee to fully protect the lien of this Mortgage.
7.13 No Assignment by Mortgagor. This Mortgage shall not
be assigned by Mortgagor without the prior express written
consent of Mortgagee.
7.14 Changes in Mortgage. Mortgagor and Mortgagee may
agree to change the interest rate and/or the maturity date of
the Notes or other terms or terms of this Mortgage or of the
obligation secured by this Mortgage. If Mortgagor and
Mortgagee agree to any such change, which change shall be
deemed a "modification" as defined in P.L. 1985 c.353, this
Mortgage shall be subject to the priority provisions of said
P.L. 1985 c.353.
MORTGAGOR HEREBY DECLARES THAT MORTGAGOR HAS READ THIS
MORTGAGE, HAS RECEIVED A COMPLETELY FILLED IN COPY OF IT
WITHOUT CHARGE THEREFOR AND HAS SIGNED THIS MORTGAGE AS OF THE
DATE FIRST WRITTEN ABOVE.
IN WITNESS WHEREOF, Mortgagor has caused this
Mortgage to be duly executed and delivered///// by its
appropriate authorized corporate officers and its corporate
seal to be hereunto affixed and attested, pursuant to the
resolution of its Board of Directors///// by its appropriate
authorized general partner(s)/////, all as of the date first
written above.
"Mortgagor":
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation
By __________________________________
Its ______________________________
<PAGE>
[CORPORATE ACKNOWLEDGMENT
NEW JERSEY]
STATE OF NEW JERSEY :
: ss.
COUNTY OF :
BE IT REMEMBERED, that on this ___________ day of
_______________, 1994, before me, the subscriber, an officer
duly authorized pursuant to N.J.S.A. 46:14-6 to take
acknowledgments for use in the State of New Jersey, personally
appeared __________________________________, who, I am
satisfied is the person who executed the within Instrument as
the ___________________________ of ________________________,
the corporation named therein, and I having first made known to
[him] [her] the contents thereof, [he] [she] did thereupon
acknowledge that the said Instrument made by the said
corporation and sealed with its corporate seal and delivered by
[him] [her] as such officer, is the voluntary act and deed of
said corporation, made by virtue of authority from its Board of
Directors, for the uses and purposes therein expressed.
______________________________
<PAGE>
[PARTNERSHIP ACKNOWLEDGMENT
NEW JERSEY]
STATE OF NEW JERSEY :
: ss.
COUNTY OF :
BE IT REMEMBERED, that on this _______ day of
__________________ 1994, before me, the subscriber, an officer
duly authorized pursuant to N.J.S.A. 46:14-6 to take
acknowledgments for use in the State of New Jersey, personally
appeared _____________________________, who, I am satisfied is
the person who executed the within Instrument, as a general
partner of _________________________________________________,
the partnership named therein, and I having first made known to
[him] [her] the contents thereof, [he] [she] did thereupon
acknowledge that the said Instrument made by the said
partnership and delivered by [him] [her] as such officer, is
the voluntary act and deed of said partnership, made by virtue
of authority from said partnership's partnership agreement, for
the uses and purposes therein expressed.
___________________________
<PAGE>
EXHIBIT "A"
(Legal Description of Land)
<PAGE>
ASSIGNMENT OF LEASES, RENTS, INCOME AND PROFITS
by and between
ADAMAR OF NEW JERSEY, INC., a New Jersey corporation,
as Assignor,
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
a national banking association,
as Managing Agent for certain banks,
as Assignee
Dated as of October 4, 1994
Record and Return to: Steve Ross, Esq.
Sheppard, Mullin, Richter & Hampton
333 South Hope Street, 48th Floor
Los Angeles, California 90071
Prepared by: ____________________________
Steve Ross, Esq.
<PAGE>
ASSIGNMENT OF LEASES, RENTS, INCOME AND PROFITS
THIS ASSIGNMENT OF LEASES, RENTS, INCOME AND PROFITS
(hereinafter referred to as this "Assignment"), is made as of
October 4, 1994 by and between ADAMAR OF NEW JERSEY, INC., a
New Jersey corporation having///// a mailing address///// its
principal office///// located at _____________________
(hereinafter referred to as the "Assignor"),
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association (hereinafter
referred to as the "Assignee") having its principal/////
administrative///// office located at ___________________, as
"Managing Agent" for the "Banks," the "Swing Line Bank" and the
"Issuing Bank" (as each of those four terms is defined in the
Loan Agreement). Capitalized terms used and not otherwise
defined herein shall have the meanings given to them in that
certain Reducing Revolving Loan Agreement of even date herewith
among Aztar Corporation, a Delaware corporation ("Parent"),
Assignor, Ramada Express, Inc., a Nevada corporation
("Ramada"), Assignee, and each of the Banks which executed such
agreement (as amended, the "Loan Agreement"). Parent, Ramada
and Mortgagor are collectively referred to herein as
"Borrowers."
W I T N E S S E T H:
FOR VALUE RECEIVED, the Assignor hereby sells,
transfers, assigns, sets over and delivers unto the Assignee
all the right, title and interest of the Assignor in, under or
by virtue of any of the following:
1. Any and all leases, tenancies and rental arrange-
ments between the Assignor, as landlord, and any other person
or entity, as tenant, existing as of the date hereof, if any,
or entered into in the future (hereinafter referred to as the
"Leases"), with respect to the use, occupancy, management, or
ownership of any portion of the real property located in the
_____________ of ______________, County of ___________ and
State of New Jersey, all as more fully described on
Schedule "A" attached hereto and made a part hereof
(hereinafter referred to as the "Premises"), including (i) any
renewals, extensions, modifications or replacements thereof and
all guaranties of the obligations of the Leases under any
provisions thereof or otherwise, (ii) the immediate and
continuing right to collect and receive all rents, income,
issues and profits arising from the Leases, and (iii) any and
all payments derived from or relating to the Leases, including,
but not limited to, (a) claims for the recovery of damages done
to the Premises, or for the abatement of any nuisance existing
thereon, (b) claims for damages resulting from acts of
insolvency or acts of bankruptcy or otherwise, and (c) lump sum
payments for the cancellation or termination of said Leases or
the waiver of any obligation or term thereof prior to the
expiration date, and the return of any insurance premiums or ad
valorem tax payments made in advance and subsequently refunded;
and
2. The proceeds of any rental insurance carried by
the Assignor with respect to the Premises.
FOR THE PURPOSE OF MAKING:
1. Except for the Excluded Obligations (as defined
below), the payment of all Obligations of Assignor and each
other Borrower, including, without limitation, (i) payment of
all amounts owing by Assignor and each other Borrower under the
Notes, including, without limitation, principal in the
aggregate amount of up to the Commitment (which is initially
$207,477,346.14, subject to increase to $212,477,346.14 under
certain circumstances) and interest thereon; (ii) payment of
all amounts owing by Assignor and each other Borrower under
Section 2.4(d) of the Loan Agreement for reimbursement of
draws, and all amounts owing by Assignor and each other
Borrower under Section 9.2(a)(2) of the Loan Agreement for
payment of cash collateral for the undrawn amounts, under the
Letters of Credit in the aggregate face amount of up to
$30,000,000, and interest thereon; (iii) payment of all amounts
owing by Assignor and each other Borrower under the Swing Line
Documents, including, without limitation, principal in an
amount of up to $10,000,000 and interest thereon; (iv) payment
of all amounts owing by Assignor and each other Borrower under
any and all Secured Swap Agreements; (v) payment of all fees,
charges, costs and other amounts owing by Assignor and each
other Borrower under the Loan Documents, including, without
limitation, the agency fees described in Section 3.7 of the
Loan Agreement; (vi) payment of all obligations of Assignor
under this Mortgage; (vii) payment and performance of all
obligations of Ramada under the Ramada Express Deed of Trust,
and of all obligations of each Borrower other than Assignor
under any other Loan Document to which Assignor is not a party;
and
2. The payment of all future advances and other
obligations that Assignor or any other person may owe to
Assignee and/or any Banks (whether as principal, surety or
guarantor), when a writing evidences Assignor's and Assignee's
agreement that such advances or obligations be made by this
Assignment; and
3. The payment of all modifications, amendments,
extensions and renewals, however evidenced, of any of the
obligations described in Paragraph 1 or 2, above.
The foregoing obligations (the "Obligations") are secured by,
inter alia, a certain valid first lien fee mortgage on the
Premises of even date herewith, executed by Assignor in favor
of Assignee (hereinafter referred to as the "Mortgage").
Notwithstanding any provision of this Assignment or any other
Loan Document, the obligations and liability of Assignor, any
Borrower or any other person arising under Sections 4.18, 5.14,
and/or 11.22 of the Loan Agreement (collectively, the "Excluded
Obligations") are not and shall not be Obligations under this
Assignment.
IN FURTHERANCE OF THIS ASSIGNMENT:
1. The Assignor represents and warrants to the
Assignee as follows: (i) the Assignor is the sole owner of the
entire landlord's interest in the Leases; (ii) the terms of the
Leases heretofore submitted to the Assignee are all the terms
of the Leases and embody the entire agreements now existing
between the Assignor and the Tenants under the Leases;
(iii) there are no existing defaults by the Assignor or by any
Tenant under the Leases; (iv) all conditions precedent to the
effectiveness of the Leases have been satisfied; (v) the
Assignor has not executed or granted any modification
whatsoever to the Leases, either orally or in writing; (vi) the
Leases are in full force and effect according to the terms set
forth in the Lease instruments heretofore submitted to the
Assignee; (vii) the Assignor has not executed any prior
assignment of the Leases nor has the Assignor performed any
acts or executed any other instrument which might prevent the
Assignee from operating under any of the terms and conditions
of this Assignment; and (viii) no rent for any period
subsequent to the date of this Assignment has been collected in
advance of the time when the same became due under the terms of
any of the Leases.
2. The Assignor covenants and agrees as follows:
(i) to observe and perform all of the obligations imposed upon
the Assignor, as the landlord under said Leases, and not to do
or permit to be done anything to impair the value thereof;
(ii) not to receive or collect any of the rent, income and
profits arising or accruing from the Premises in advance of the
time when the same become due under the terms of said Leases;
(iii) not to discount any future accruing rents, except in the
ordinary course of the Assignor's business; (iv) not to execute
any other assignment of lease or assignment of rents of said
Premises unless the same shall recite that it is subject to the
terms of this Assignment; (v) not to alter, modify or change
the terms of the Leases or surrender, cancel or terminate the
Leases, unless the Assignor shall have (a) provided notice to
the Assignee and a copy of any said amendments, alterations or
modifications, and (b) received the Assignee's prior express
written consent to such alteration, modification, change,
surrender, cancellation or termination; (vi) not to subordinate
the Leases to any mortgage or other encumbrance or permit,
consent or agree to such subordination without the Assignee's
prior express written consent; (vii) not to consent to any
assignment of or subletting under the Leases, whether or not in
accordance with their respective terms, without the prior
express written consent of the Assignee; and (viii) not to
enter into any Lease subsequent to the date hereof, without the
form and substance of said Lease having been approved by the
Assignee in writing first.
3. Notwithstanding the automatic applicability of
this Assignment to all future Leases, the Assignor covenants
and agrees to assign and transfer to the Assignee any and all
further Leases upon all or any part of the Premises and to
execute and deliver, at the written request of the Assignee,
all such further assurances and assignments in the Premises as
the Assignee may from time to time reasonably require.
IT IS MUTUALLY AGREED THAT:
1. So long as there shall exist no "Event of
Default", as such term is defined in the Loan Agreement, any
Note, the Mortgage or any other loan document, there is
reserved to the Assignor a license to collect as they become
due, but not prior to accrual, all rents, income, issues and
profits from the Premises and to retain, use and enjoy the
same. Upon the occurrence of an Event of Default under the
Loan Agreement, any Note, the Mortgage or any other loan
document, such license granted to the Assignor shall be
immediately revoked without further demand or notice from the
Assignee, and the Assignee is hereby empowered to enter upon
and take possession of the Premises as provided in Paragraph 2
below.
2. Upon or at any time after the occurrence of an
Event of Default under the Loan Agreement, any Note, the
Mortgage or any other loan document, the Assignee, without in
any way waiving such Event of Default, may at its option,
without notice and without regard to the adequacy of the
security for the Obligations, either in person or by agent,
with or without bringing any action or proceeding, or by a
receiver appointed by a court, take possession of the Premises
and have, hold, manage, lease and operate the same on such
terms and for such periods of time as the Assignee may deem
proper; and may demand, sue for or otherwise collect and
receive from the Tenants now or hereafter in possession of the
Premises, or any part thereof, all rents, income, issues and
profits which have not been collected by the Assignor, with
full power to make from time to time all alterations,
renovations, repairs or replacements thereto or thereof as may
seem proper to the Assignee and to apply such rents, issues,
income and profits to the payment of (i) the cost of all such
alterations, renovations, repairs and replacements and expenses
incident to taking and retaining possession of the Premises and
the management and operation thereof, and keeping the same
insured, (ii) all taxes, charges, claims, assessments, water
rents, sewer rents and any other liens which may be prior in
lien or payment to the Obligations, and premiums for said
insurance, with interest on all such items, and (iii) the
Obligations, together with all costs and attorneys' fees, in
such order or priority as to any of such items, as the Assignee
in its sole discretion may determine, any statute, law, custom
or use to the contrary notwithstanding. In addition, the
Assignee may endorse the name of the Assignor or any subsequent
owner of the Premises on any checks, notes or other instruments
for the payment of money, to deposit the same in bank accounts,
to give any and all acquittances or any other instrument in
relation thereto in the name of the Assignor, and to institute,
prosecute, settle or compromise any summary or legal
proceedings in the name of the Assignor for the recovery of
such rents, income, issues or profits, or for the recovery of
any damages done to the Premises, or for the abatement of any
nuisance thereon, and to defend any legal proceedings brought
against the Assignor arising out of the operation of the
Premises. The Assignor shall reimburse the Assignee for any
charges, expenses or fees, including attorneys' fees and costs,
incurred by the Assignee.
By accepting this Assignment, the Assignee agrees
that if it shall, upon the occurrence of an Event of Default
under the Loan Agreement, any Note, the Mortgage or any other
Loan Document, exercise its option herein and if such Event of
Default shall be remedied prior to the declaration of such
Event of Default by the Assignee, or subsequent to such
declaration, only upon the waiver of such Event of Default by
the Assignee, and all necessary charges and expenses incurred
by reason thereof paid, the parties hereto shall each be
restored to and reinstated in their respective rights and
estates as if an Event of Default had not occurred. The
Assignor shall thereupon hold said Premises subject to this
Assignment as if the Assignee had not exercised any option
hereunder, but nothing hereinbefore contained shall impair any
right of the Assignee consequent upon any subsequent breach.
3. The Assignee shall not be obligated to perform or
discharge, nor does it undertake to perform or discharge, any
obligation, duty or liability under any of the Leases, or under
or by reason of this Assignment. If requested by the Assignee,
the Assignor shall, and does hereby agree to, enforce the
applicable Lease, and all remedies available to the Assignor
against the applicable Tenant, in case of default under any of
the Leases by any of the Tenants. The Assignor shall and does
hereby agree to indemnify the Assignee for and to hold the
Assignee harmless of and from any and all liability, loss or
damage (except for any liability, loss or damage caused by or
resulting from the Assignee's own gross negligence or willful
misconduct) which the Assignee may or might incur under any of
the Leases or under or by reason of this Assignment and of and
from any and all claims and demands whatsoever which may be
asserted against it by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the
terms, covenants or agreements contained in said Leases; and
further, the Assignor hereby agrees to defend, at its own cost
and expense, any action or actions brought against itself or
the Assignee relative to the Leases or this Assignment thereof.
The Assignor's failure to properly defend any such action or
actions, or to properly pursue all rights and remedies relative
to any such dispute, in the reasonable opinion of the Assignee,
shall entitle the Assignee to defend such action or pursue such
remedies in the Assignor's place and stead. Should the
Assignee incur any such liability, loss or damage under any of
the Leases or under or by reason of this Assignment, or in the
defense of any such claims or demands, the amount thereof,
including cost, expenses and reasonable attorneys' fees, shall
be part of the Obligations, and the Assignor shall reimburse
the Assignee therefor immediately upon demand, and, upon the
failure of the Assignor so to do, the Assignee may declare all
of the Obligations immediately due and payable.
4. The Assignor hereby irrevocably appoints the
Assignee as its agent whereby the Assignee may, at its
election, upon the occurrence of an Event of Default under the
Loan Agreement, any Note, the Mortgage or any other Loan
Document, (i) perform any of the Assignor's obligations to the
Tenants under the Leases, (ii) exercise any of the Assignor's
rights, powers or privileges under the Leases, (iii) modify the
Leases, and (iv) execute new Leases for any or all property
covered by the Leases. All obligations created by the exercise
of such agency shall be those of the Assignor and not those of
the Assignee except as otherwise provided herein. The Assignor
hereby irrevocably appoints the Assignee as the true and lawful
attorney-in-fact (coupled with an interest) of the Assignor in
its name and stead and on its behalf, for the purpose of
executing and delivering any such assignment on behalf of the
Assignor and delivering to the Tenant to whose Lease such
assignment relates written notice thereof. Notwithstanding the
above granted power, the Assignee may perform any of the
Assignor's obligations as the Assignor's agent, and the
Assignee may, at its election, subsequent to any default by the
Assignor under the Leases and by the giving of written notice
to the Assignor, assume any of the obligations of the Assignor
or its assigns to the Tenants under the Leases.
5. This Assignment shall not operate to place
responsibility upon the Assignee for the control, care, manage-
ment or repair of the Premises nor for the carrying out of any
of the terms and conditions of said Leases, unless such
responsibility is specifically assumed by the Assignee in
writing; nor shall it operate to make the Assignee responsible
or liable for any waste committed on the Premises by any Tenant
or any other party, or for any dangerous or defective condition
of the Premises, or for any negligence in the management,
upkeep, repair or control of the Premises, resulting in loss or
injury or death to any Tenant, licensee, employee or stranger.
6. The Assignee assumes no liability for any
security deposited by any Tenant with the Assignor, as the
landlord under the terms of any Leases hereinafter executed,
unless and until such deposits are assigned and delivered to
the Assignee.
7. (i) The Assignor shall, without charge and
within ten (10) days after any request by the Assignee,
execute, acknowledge and deliver to the Assignee its
certification, with respect to any or all of the Leases, as to
the following:
(a) The dates of the Leases, the dates when the
terms thereof commenced, and the dates when any rents,
charges and other sums payable by the Tenants thereunder
commenced to be payable thereunder;
(b) That the Leases are unmodified and in full
force and effect; or, if there have been any
modifications, that the Leases are in full force and
effect as modified and stating the modifications and the
dates thereof;
(c) Whether or not, to the best of the
Assignor's knowledge after due inquiry and investigation,
there are any then existing valid enforceable setoffs or
defenses against the enforcement of any of the terms
and/or conditions of the Leases (or of amendments or
modifications of the Leases, if any) upon the part of the
Tenants thereunder to be performed or complied with; and,
if so, specifying the same;
(d) The dates, if any, to which any rents,
charges, and other sums on the part of the Tenants to be
paid under the Leases have been paid in advance;
(e) The dates of expiration of the terms of the
Leases; and
(f) The rate or rates of rent (including a
breakdown thereof into annual rent, percentage rents and
any other additional rents and charges provided for in the
Leases).
(ii) Similarly, upon request as stated in
subparagraph 7(i) above, the Assignor shall also use its best
efforts to procure and deliver to the Assignee, within the
aforesaid time period, certifications of all the foregoing by
the Tenants under the Leases.
8. The Assignor irrevocably consents that the
Tenants under the Leases, upon demand and notice from the
Assignee of the occurrence of an Event of Default under the
Loan Agreement, any Note, the Mortgage or any other Loan
Document, shall pay the aforesaid rents, income, issues and
profits under the Leases to the Assignee without liability of
the Tenants for the determination of the actual existence of
any Event of Default claimed by the Assignee. The Assignor
hereby irrevocably authorizes and directs the Tenants, upon
receipt of any notice from the Assignee stating that such an
Event of Default exists, to pay to the Assignee the rents,
income, issues and profits due and to become due under the
Leases, and the Assignor hereby irrevocably constitutes and
appoints the Assignee with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power
and authority (coupled with an interest) in the place and stead
of such Assignor and in the name of such Assignor or in the
Assignee's own name, for the purpose of executing and
delivering such notices to the Tenants and such other documents
which may be necessary to effect the foregoing. Upon the
curing of all such defaults, the Assignee shall give written
notice thereof to the Tenants, and thereafter, until further
notice from the Assignee, the Tenants shall pay such rents,
income and profits to the Assignor.
9. Notwithstanding the license granted by the
Assignee in Paragraph 1 hereof, the Assignee, and not the
Assignor, shall be deemed to be the creditor of each Tenant in
respect of any assignment for the benefit of creditors and
bankruptcy, reorganization, insolvency, dissolution or
receivership proceedings affecting such Tenant, with an option
to the Assignee to have any money received by the Assignee as
such creditor (i) applied to reduce the principal or interest
due on any Note or applied to reduce any other Obligation, or
(ii) paid over to the Assignor; provided, however, that the
Assignee shall be obligated to file or make timely filings of
claims in such proceedings and to otherwise pursue creditor's
rights therein.
10. Upon the payment in full of all of the
Obligations as evidenced by a recorded release or satisfaction
of the Mortgage and a termination and cancellation of the Notes
and the Loan Agreement, this Assignment shall become and be
void and of no effect but the affidavit, certificate, letter or
statement of any representative, supervisor or attorney of the
Assignee showing any part of the Obligations to remain unpaid
shall be and constitute conclusive evidence of the validity,
effectiveness and continuing force of this Assignment, and any
person may and is hereby authorized to rely thereon. A demand
on the Tenant by the Assignee for the payment of the rent, upon
the occurrence of an Event of Default under the Loan Agreement,
any Note, the Mortgage or any other Loan Document, claimed by
the Assignee, shall be sufficient warrant to said Tenant to
make further payments of rent to the Assignee without the
necessity for further consent by the Assignor and proof of the
Event of Default.
11. The Assignee may take or release security; may
release any party primarily or secondarily liable for any
Obligation; may grant extensions, renewals, modifications, or
indulgences with respect to any Note, the Mortgage or any other
Loan Document without prejudice to any of its rights hereunder.
12. The term "Leases" as used herein shall mean the
Leases hereby assigned or any extension or renewal thereof, and
any Leases subsequently executed by the Assignor covering the
Premises or any part thereof. In this Assignment, whenever the
context so requires, the masculine gender includes the feminine
and neuter, and the singular number includes the plural, and
conversely. The term "Tenant" or "Tenants" as used herein
shall mean all present and future lessees, users or occupants
of the Premises or any part thereof.
13. Nothing herein contained and no act done or
omitted by the Assignee pursuant to the powers and rights
granted it herein shall be deemed to be a waiver by the
Assignee of its rights and remedies under the Loan Agreement,
the Notes, the Mortgage or any other Loan Document, and this
Assignment is made and accepted without prejudice to any of the
rights and remedies possessed by the Assignee under the terms
thereof. The right of the Assignee to collect any Obligation
and to enforce any security therefor held by it may be
subsequent to any action taken by it hereunder.
14. This Assignment is binding upon and inures to
the benefit of the Assignee and the Assignor, including their
respective heirs, executors, administrators, successors and
assigns. The words "Assignor", "Assignee" and "Tenants"
wherever used herein shall include the person named herein and
designated as such and their respective successors and assigns.
15. This Assignment shall be governed by and
construed in accordance with the laws of the State of
California, except that the laws of the State of New Jersey
shall govern the creation, perfection and enforcement of the
assignments set forth herein.
16. Unless otherwise indicated differently, all
notices, payments, requests, reports, information or demands
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 overnight air courier, telex
(answer back received), 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:
If to the Assignor: Adamar of New Jersey, Inc.
c/o Aztar Corporation
2390 East Camelback Road, Suite 400
Phoenix, Arizona 85016
Attn: Craig F. Sullivan, Treasurer
If to the Assignee: Bank of America NT&SA
Global Agency #5596
1455 Market Street, 13th Floor
San Francisco, California 94103
Attn: Peggy A. Fujimoto
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 day
following the date of mailing, whichever occurs first, except
that any notice of change in address shall be effective only
upon receipt by the party to whom said notice is addressed.
IN WITNESS WHEREOF, the Assignor has caused this
Assignment to be duly executed and delivered by its appropriate
authorized corporate officers, and its corporate seal to be
hereunto affixed and attested, pursuant to the resolution of
its Board of Directors, all as of the day and year first above
written.
[SEAL]
[ATTEST][WITNESS]: ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation
_________________________ By _____________________________
Its _________________________
<PAGE>
[CORPORATE ACKNOWLEDGMENT
NEW JERSEY]
STATE OF NEW JERSEY :
: ss.
COUNTY OF :
BE IT REMEMBERED, that on this ___________ day of
_______________, 1994, before me, the subscriber, an officer
duly authorized pursuant to N.J.S.A. 46:14-6 to take
acknowledgments for use in the State of New Jersey, personally
appeared __________________________________, who, I am
satisfied is the person who executed the within Instrument as
the ___________________________ of ________________________,
the corporation named therein, and I having first made known to
[him] [her] the contents thereof, [he] [she] did thereupon
acknowledge that the said Instrument made by the said
corporation and sealed with its corporate seal and delivered by
[him] [her] as such officer, is the voluntary act and deed of
said corporation, made by virtue of authority from its Board of
Directors, for the uses and purposes therein expressed.
______________________________
<PAGE>
[PARTNERSHIP ACKNOWLEDGMENT
NEW JERSEY]
STATE OF NEW JERSEY :
: ss.
COUNTY OF :
BE IT REMEMBERED, that on this _______ day of
__________________ 1994, before me, the subscriber, an officer
duly authorized pursuant to N.J.S.A. 46:14-6 to take
acknowledgments for use in the State of New Jersey, personally
appeared _____________________________, who, I am satisfied is
the person who executed the within Instrument, as a general
partner of _________________________________________________,
the partnership named therein, and I having first made known to
[him] [her] the contents thereof, [he] [she] did thereupon
acknowledge that the said Instrument made by the said
partnership and delivered by [him] [her] as such officer, is
the voluntary act and deed of said partnership, made by virtue
of authority from said partnership's partnership agreement, for
the uses and purposes therein expressed.
___________________________
<PAGE>
SCHEDULE "A"
ATTACHED TO AND MADE A PART OF THAT CERTAIN ASSIGNMENT OF
LEASES, RENTS, INCOME AND PROFITS EXECUTED BY AND BETWEEN
ADAMAR OF NEW JERSEY, INC., A NEW JERSEY CORPORATION, AS
ASSIGNOR, AND BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, AS MANAGING AGENT FOR CERTAIN BANKS MORE
PARTICULARLY DESCRIBED THEREIN, AS ASSIGNEE, DATED AS OF
OCTOBER 4, 1994.
(Description of Premises)
<PAGE>
EXHIBIT O
UNSECURED HAZARDOUS MATERIALS AGREEMENT
This Unsecured Hazardous Materials Agreement
("Agreement"), dated as of October 4, 1994, is executed by
ADAMAR OF NEW JERSEY, INC., a New Jersey corporation
("Mortgagor"), in favor of BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association
("Mortgagee"), as "Managing Agent" for the "Banks," the "Swing
Line Bank" and the "Issuing Bank" (as each of those four terms
is defined in the Loan Agreement), as mortgagee. Capitalized
terms used and not otherwise defined herein shall have the
meanings given to them in that certain Reducing Revolving Loan
Agreement of even date herewith among Aztar Corporation, a
Delaware corporation ("Parent"), Mortgagor, Ramada
Express, Inc., a Nevada corporation ("Ramada"), Mortgagee, and
each of the Banks which executed such agreement (as amended,
the "Loan Agreement"). Parent, Ramada and Mortgagor are
collectively referred to herein as "Borrowers." This Agreement
is also entered into with reference to the following facts:
A. Pursuant to the Loan Agreement, Mortgagor and
Mortgagee have executed, or are executing substantially
concurrently herewith, one or more Mortgages (collectively, the
"Mortgages") encumbering Mortgagor's interests in certain real
property located in the State of New Jersey and more
particularly described in the Mortgages (collectively,
including all improvements, easements, appurtenances and other
real property interests of every kind encumbered by such
Mortgages, the "Property").
B. As used in this Agreement, (1) "Hazardous
Materials" means flammable explosives, radioactive materials,
hazardous wastes, toxic substances and similar substances and
materials, including all substances and materials defined as
hazardous or toxic wastes, substances or materials under any
applicable law, and (2) "Environmental Laws" means,
collectively, all federal, state and local laws, rules,
regulations, codes and administrative and judicial precedents
relating to Hazardous Materials.
C. The execution and delivery of this Agreement is a
condition to one or more extensions of credit described in the
Loan Agreement.
In consideration of the foregoing, and for other
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Mortgagor hereby agrees as follows:
1. Environmental Provisions. Mortgagor hereby
represents, warrants and agrees as follows:
1.1 To the best of Mortgagor's knowledge, after due
inquiry and investigation, none of the real property owned
and/or occupied by Mortgagor and located in the State of New
Jersey, including without limitation the Property, has ever
been used by previous owners and/or operators to refine,
produce, store, handle, transfer, process or transport
Hazardous Materials, and Mortgagor has not used in the past,
nor does Mortgagor intend to use in the future, said real
property, including without limitation the Property, for the
purpose of refining, producing, storing, handling,
transferring, processing or transporting Hazardous Materials.
1.2 None of the real property owned and/or occupied
by Mortgagor and located in the State of New Jersey, including
without limitation the Property, has or is now being used as a
"Major Facility", as such term is defined in N.J.S.A.
58:10-23.11b(1), and said real property, including without
limitation the Property, will not be used as a "Major Facility"
without the prior express written consent of Mortgagee, which
may be withheld in Mortgagee's absolute discretion.
1.3 Should Mortgagor, any tenant of the Property or
any other person cause or permit any intentional or
unintentional action or omission resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying or
dumping of Hazardous Materials into the waters or onto the
lands of the State of New Jersey, or into the waters outside
the jurisdiction of the State of New Jersey resulting in damage
to the lands, waters, fish, shellfish, wildlife, biota, air or
other resources owned, managed or held in trust or otherwise
controlled by the State of New Jersey, without having obtained
a permit issued by the appropriate governmental authorities,
Mortgagor shall promptly clean up such spill, leak, etc., in
accordance with the provisions of all applicable Environmental
Laws.
1.4 To the best of Mortgagor's knowledge, after due
inquiry and investigation, no lien has been attached to any
revenues or any real or personal property owned by Mortgagor
and located in the State of New Jersey, including without
limitation the Property, as a result of the administrator of
the New Jersey Spill Compensation Fund expending monies from
said fund to pay for "Damages", as such term is described in
N.J.S.A. 58:10-23.11(g) and/or "Cleanup and Removal Costs", as
such term is defined in N.J.S.A. 58:10-23.11b(d), arising from
an intentional or unintentional action or omission of Mortgagor
or any previous owner and/or operator of said real property,
including without limitation the Property, resulting in the
releasing, spilling, pumping, pouring, emitting, emptying or
dumping of Hazardous Materials into the waters or onto the
lands of the State of New Jersey, or into waters outside the
jurisdiction of the State of New Jersey where damage may have
resulted to the lands, waters, fish, shellfish, wildlife,
biota, air and other resources owned, managed, held in trust or
otherwise controlled by the State of New Jersey.
1.5 Mortgagor has furnished the New Jersey
Department of Environmental Protection with all the information
required by N.J.S.A. 58:10-23.11d with respect to the Property
and any other real property owned and/or operated by Mortgagor
and located in New Jersey which is used as a "Major Facility",
as such term is defined in N.J.S.A. 58:10-23.11b(1).
1.6 Mortgagor has not received a summons, citation,
directive, letter or other communication, written or oral, from
the New Jersey Department of Environmental Protection
concerning any intentional or unintentional action
or omission on Mortgagor's part resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying or
dumping of Hazardous Materials into the waters or onto the
lands of the State of New Jersey, or into the waters outside
the jurisdiction of the State of New Jersey resulting in damage
to the land, waters, fish, shellfish, wildlife, biota, air and
other resources owned, managed, held in trust or otherwise
controlled by the State of New Jersey.
1.7 To the best of Mortgagor's knowledge, after due
inquiry and investigation, none of the real property owned
and/or occupied by Mortgagor and located in the State of New
Jersey, including without limitation the Property, has ever
been used by previous owners and/or operators to generate,
manufacture, refine, transport, heat, store, handle or dispose
of Hazardous Materials, and Mortgagor does not intend to use
any of Mortgagor's real property including without limitation
the Property, for such purpose.
1.8 In connection with the purchase of the Property
and any other real property in the State of New Jersey acquired
by Mortgagor on or after January 1, 1984, Mortgagor required
that the seller of said real property, including the Property,
comply with the provisions of the New Jersey Environmental
Cleanup Responsibility Act, as amended by the Industrial Site
Recovery Act (Senate No. 1070) (N.J.S.A. 13:lK-6 et seq.), and
the seller did comply therewith.///// The seller submitted a
"Negative Declaration", as such term is defined in N.J.A.C.
7:1-3.3, to the New Jersey Department of Environmental
Protection, a true and complete copy of which is attached
hereto as Schedule " ".///// The seller submitted a "Cleanup
Plan", as such term is defined in N.J.A.C. 7:1-3.3, to the New
Jersey Department of Environmental Protection, a true and
complete copy of which is attached hereto as Schedule " ," and
the seller has posted with the New Jersey Department of
Environmental Protection and Energy, a surety bond or other
financial security approved by the New Jersey Department of
Environmental Protection and Energy./////
1.9 Mortgagor is not presently an owner or operator
of a "Major Facility" in the State of New Jersey, as such term
is defined in N.J.S.A. 58:10-23.11b(1), but if Mortgagor ever
becomes such an owner or operator, then Mortgagor shall furnish
the New Jersey Department of Environmental Protection and
Energy with all the information required by N.J.S.A.
58:10-23.11d.
1.10 Mortgagor shall not cause or permit to exist,
as a result of an intentional or unintentional action or
omission on the part of Mortgagor, a releasing, spilling,
leaking, pumping, emitting, pouring, emptying or dumping of any
Hazardous Material into waters or onto the lands of the State
of New Jersey, or into waters outside the jurisdiction of the
State of New Jersey, where damage may result to the lands,
waters, fish, shellfish, wildlife, biota, air and other
resources owned, managed, held in trust or otherwise controlled
by the State of New Jersey, unless said release, spill, leak,
etc., is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal or state governmental
authorities.
1.11 So long as Mortgagor shall own or operate any
real property located in the State of New Jersey which is used
as a "Major Facility", as such term is defined in N.J.S.A.
58:10-23.11b(1), Mortgagor shall duly file or cause to be duly
filed with the Director of the Division of Taxation in the New
Jersey Department of the Treasury, a tax report or return and
shall pay or make provision for the payment of all taxes due
therewith, all in accordance with and pursuant to N.J.S.A.
58:10-23.11h.
1.12 In the event that there shall be filed a lien
against the Property by the New Jersey Department of
Environmental Protection pursuant to and in accordance with the
provisions of N.J.S.A. 58:10-23.11f(f) as a result of the
administrator of the New Jersey Spill Compensation Fund having
expended monies from said fund to pay for "Damages", as such
term is described in N.J.S.A. 58:10-23.11g, and/or "Cleanup and
Removal Costs", as such term is defined in N.J.S.A.
58:10-23.11b(d), arising from an intentional or unintentional
action or omission of Mortgagor, any tenant of the Property or
any other person resulting in the releasing, spilling, pumping,
pouring, emitting, emptying or dumping of Hazardous Materials
into the waters or onto the lands of the State of New Jersey or
into waters outside the jurisdiction of the State of New Jersey
where damage resulted to the lands, waters, or natural
resources within the jurisdiction of the State of New Jersey,
then Mortgagor shall, within thirty (30) days from the date
that Mortgagor is given notice that the lien has been placed
against the Property or within such shorter period of time in
the event that the State of New Jersey has commenced steps to
cause the Property to be sold pursuant to the lien, either
(a) pay the claim and remove the lien from the Property, or
(b) furnish (1) a bond satisfactory to Lawyers Title Insurance
Company and Mortgagee in the amount of the claim out of which
the lien arises, (2) a cash deposit in the amount of the claim
out of which the lien arises, or (3) other security reasonably
satisfactory to Mortgagee in an amount sufficient to discharge
the claim out of which the lien arises (subject to Mortgagee's
agreement, which agreement shall not be unreasonably withheld
or delayed, that the commitment of Lawyers Title Insurance
Company to affirmatively insure over or omit such claim shall
constitute such reasonably satisfactory security).
1.13 Mortgagor hereby agrees that in the event the
provisions of the New Jersey Environmental Cleanup
Responsibility Act, as amended by the Industrial Site Recovery
Act (Senate No. 1070) (N.J.S.A. 13:lK-6 et seq.), become
applicable to the Property subsequent to the date hereof,
Mortgagor shall give prompt written notice thereof to Mortgagee
and shall take immediate requisite action to insure full
compliance with such Act.
1.14 Mortgagor shall not use or cause the Property
to be used as an "industrial establishment," as such term is
defined in the New Jersey Environmental Cleanup Responsibility
Act, as amended by the Industrial Site Recovery Act (Senate
No. 1070) (N.J.S.A. 13:lK-6, et seq.), without the prior
express written consent of Mortgagee.
1.15 Mortgagor agrees that Mortgagee shall have the
right to conduct or have conducted by its agents or
contractors, such environmental inspections as Mortgagee shall
reasonably deem necessary or advisable from time to time at the
sole cost and expense of Mortgagor. Mortgagor shall, and shall
cause each tenant of the Property to, cooperate with such
inspection efforts; such cooperation shall include, without
limitation, supplying such information concerning the
operations conducted, and Hazardous Materials located at the
Property.
1.16 To the best of Mortgagor's knowledge, after due
inquiry and investigation, no lien has been attached to any
real property owned by Mortgagor and located within the State
of New Jersey, including without limitation the Property, as a
result of the Administrator of the United States Environmental
Protection Agency expending monies from the Hazardous Substance
Superfund for "Damages" and/or "Response Action Costs" as such
terms are described in 42 U.S.C. Section 9607(a), arising from
an intentional or unintentional action or omission of Mortgagor
or any previous owner and/or operator of said real property,
including without limitation the Property, resulting in any
spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or
disposing of any Hazardous Materials into the navigable waters,
the waters of the contiguous zone, or the ocean waters of which
the natural resources are under exclusive managing authority of
the United States under the Magnuson Fishery Conservation and
Management Act (16 U.S.C. Section 1801 et seq.), or any other
surface water, ground water, drinking water supply, land
surface or subsurface strata, or ambient air within the United
States or under the jurisdiction of the United States when
damage may have resulted to the land, fish, wildlife, biota,
air, water, ground water, drinking water supplies, and other
such resources belonging to, managed by, held in trust by,
appertaining to or otherwise controlled by the United States
and any State or local government.
1.17 In the event that there shall be filed a lien
against the Property by the United States Environmental
Protection Agency pursuant to and in accordance with the
provisions of 42 U.S.C. Section 9607(1), as a result of the
Administrator of the Hazardous Substance Superfund having
expended monies from said fund to pay for "Damages" and
"Response Action Costs," as such terms are described in 42
U.S.C. Section 9607(a), arising from an intentional or
unintentional action of Mortgagor, resulting in any spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of any
Hazardous Materials into the navigable waters, the waters of
the contiguous zone, or the ocean waters of which the natural
resources are under exclusive managing authority of the United
States under the Magnuson Fishery Conservation and Management
Act (16 U.S.C. Section 1801 et seq.), or any other surface
water, ground water, drinking water supply, land surface or
subsurface strata or ambient air within the United States or
under the jurisdiction of the United States where damage
resulted to the lands, waters, or natural resources of the
United States, then Mortgagor shall, within thirty (30) days
from the date that Mortgagor is given notice that the lien has
been placed against the Property, or within such shorter period
of time in the event that the United States Government has
commenced steps to cause the Property to be sold pursuant to
the lien, either (a) pay the claim and remove the lien from the
Property, or (b) furnish (1) a bond satisfactory to Lawyers
Title Insurance Company and Mortgagee in the amount of the
claim out of which the lien arises, (2) a cash deposit in the
amount of the claim out of which the lien arises, or (3) other
security reasonably satisfactory to Mortgagee in an amount
sufficient to discharge the claim out of which the lien arises
(subject to Mortgagee's agreement, which agreement shall not be
unreasonably withheld or delayed, that the commitment of
Lawyers Title Insurance Company to affirmatively insure over or
omit such claim shall constitute such reasonably satisfactory
security).
1.18 Mortgagor represents and warrants that neither
Mortgagor nor the Property is in violation of or subject to any
existing, pending or threatened investigation or inquiry by any
governmental authority pertaining to any applicable
Environmental Law. Mortgagor shall not cause or permit the
Property to be in violation of, or do anything which would
subject the Property to any remedial obligations under, any
applicable Environmental Law, and shall promptly notify
Mortgagee, in writing, of any existing, pending or threatened
investigation or inquiry by any governmental authority in
connection with any applicable Environmental Law.
2. Agreement Not Secured By Real Property. Mortgagor
hereby acknowledges and agrees that, notwithstanding any other
provision of any of the other Loan Documents to the contrary,
the obligations of Mortgagor under this Agreement shall be
unlimited personal obligations of Mortgagor and shall not be
secured by any Mortgage or any other real property now or
hereafter assigned to Mortgagee as security for any Loan
Document.
3. Interest. All payment obligations of Mortgagor to
Mortgagee hereunder shall be payable immediately upon receipt
of Mortgagee's written demand and shall bear interest following
such receipt at the highest rate at which interest is then
accruing upon any portion of the obligations secured by any
Mortgage or, if no portion of any such obligation remains
outstanding, at a variable annual rate that is 5% above the
rate announced by Mortgagee from time to time as its "prime
rate."
4. Further Assurances. Mortgagor shall execute,
acknowledge and deliver to Mortgagee all documents, and shall
take all actions, reasonably required by Mortgagee from time to
time to confirm or effect the matters set forth herein, or
otherwise to carry out the purposes of this Agreement.
5. Attorneys' Fees. In the event that any litigation
shall be commenced concerning this Agreement by any party
hereto, the party prevailing in such litigation shall be
entitled to recover, in addition to such other relief as may be
granted, its reasonable costs and expenses, including without
limitation reasonable attorneys' fees and court costs, whether
or not taxable, as awarded by a court of competent
jurisdiction.
6. Miscellaneous. This Agreement shall bind, and shall
inure to the benefit of, the successors and assigns of the
parties. This Agreement shall be governed by the laws of the
State of New Jersey (without regard to any choice of law
provisions thereof).
IN WITNESS WHEREOF, Mortgagor has caused this
Agreement to be duly executed as of the date first written
above.
"Mortgagor":
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation
By __________________________________
Its ______________________________
<PAGE>
EXHIBIT P
Joint Borrower Provisions.
1. For the purpose of implementing the joint
borrower provisions of the Loan Documents, Borrowers hereby
irrevocably appoint each other as their agent and attorney-in-
fact for all purposes of the Loan Documents, including the
giving and receiving of notices and other communications.
2. It is understood and agreed that the handling of
this credit facility on a joint borrowing basis as set forth in
this Agreement is solely as an accommodation to the Borrowers
and at their request, and that the Managing Agent and the Banks
shall incur no liability to Borrowers as a result thereof. To
induce the Managing Agent and the Banks to do so, and in
consideration thereof, the Borrowers hereby agree on the terms
set forth in Section 11.11 of this Agreement to indemnify the
Managing Agent and the Banks and hold the Managing Agent and
the Banks harmless from and against any and all liabilities,
expenses, losses, damages and/or claims of damage or injury
asserted against the Managing Agent or any Bank by Borrowers or
by any other Person arising from or incurred by reason of the
Managing Agent's or any Bank's handling of the financing
arrangement of Borrowers as herein provided and reliance by the
Managing Agent and the Banks on any requests or instructions
from Borrowers, or any other action taken by the Managing Agent
or any Bank with respect to this Agreement or the other Loan
Documents.
3. Each Borrower acknowledges that the Liens
created or granted herein and by the other Loan Documents will
or may secure obligations of Persons other than such Borrower
and, in full recognition of that fact, Borrowers consent and
agree that the Managing Agent for the benefit of the Banks may,
at any time and from time to time, without notice or demand,
and without affecting the enforceability or security hereof or
of any other Loan Document:
(a) supplement, modify, amend, extend, renew,
or otherwise change the time for payment or the terms of
the Obligations or any part thereof, including any
increase or decrease of the rate(s) of interest thereon;
(b) supplement, modify, amend or waive, or
enter into or give any agreement, approval or consent with
respect to, the Obligations or any part thereof or any of
the Loan Documents or any additional security or
guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder;
(c) accept new or additional instruments,
documents or agreements in exchange for or relative to any
of the Loan Documents or the Obligations or any part
thereof;
(d) accept partial payments on the Obligations;
(e) receive and hold additional security or
guaranties for the Obligations or any part thereof;
(f) release, reconvey, terminate, waive,
abandon, subordinate, exchange, substitute, transfer and
enforce any security or guaranties, and apply any security
and direct the order or manner of sale thereof as the
Managing Agent, on behalf of the Banks, in its sole and
absolute discretion may determine;
(g) release any Person or any guarantor from
any personal liability with respect to the Obligations or
any part thereof;
(h) settle, release on terms satisfactory to
the Managing Agent and the Banks or by operation of
applicable Laws or otherwise liquidate or enforce any
Obligations and any security or guaranty therefor in any
manner, consent to the transfer of any security and bid
and purchase at any sale; and
(i) consent to the merger, change or any other
restructuring or termination of the corporate existence of
any Borrower or any other Person, and correspondingly
restructure the Obligations, and any such merger, change,
restructuring or termination shall not affect the liabil-
ity of Borrowers or the continuing existence of any Lien
hereunder, under any other Loan Document to which any
Borrower is a Party or the enforceability hereof or
thereof with respect to all or any part of the
Obligations.
Upon the occurrence of and during the continuance of
any Event of Default, the Managing Agent and the Banks may
enforce this Agreement and the other Loan Documents
independently as to each Borrower and independently of any
other remedy or security the Managing Agent and the Banks at
any time may have or hold in connection with the Obligations,
and it shall not be necessary for the Managing Agent and the
Banks to marshal assets in favor of any of the Borrowers or any
other Person or to proceed upon or against and/or exhaust any
other security or remedy before proceeding to enforce this
Agreement and the other Loan Documents. Each of the Borrowers
expressly waives any right to require the Managing Agent or any
Bank to marshal assets in favor of any Borrower or any other
Person or to proceed against any other Person or any Collateral
provided by any other Person, and agrees that the Managing
Agent and the Banks may proceed against any Persons and/or
Collateral in such order as they shall determine in their sole
and absolute discretion. The Managing Agent and the Banks may
file a separate action or actions against any Borrower, whether
action is brought or prosecuted with respect to any other
security or against any other Person, or whether any other
Person is joined in any such action or actions. Each of the
Borrowers agrees that the Managing Agent and the Banks and each
of the Borrowers and any other Person may deal with each other
in connection with the Obligations or otherwise, or alter any
contracts or agreements now or hereafter existing between any
of them, in any manner whatsoever, all without in any way
altering or affecting the security of this Agreement or the
other Loan Documents. Each of the Borrowers expressly waives
the benefit of any statute(s) of limitations affecting its
liability hereunder or the enforcement of the Obligations or
any Liens created or granted herein or by any other Loan
Document. The rights of the Managing Agent and the Banks
hereunder and under the other Loan Documents shall be
reinstated and revived, and the enforceability of this
Agreement and the other Loan Documents shall continue, with
respect to any amount at any time paid on account of the
Obligations which thereafter shall be required to be restored
or returned by the Managing Agent or any Bank upon the
bankruptcy, insolvency or reorganization of any Borrower or any
other Person, or otherwise, all as though such amount had not
been paid. The enforceability of this Agreement and the other
Loan Documents at all times shall remain effective even though
the Obligations, including any part thereof or any other
security or guaranty therefor, may be or hereafter may become
invalid or otherwise unenforceable as against any of the
Borrowers or any other Person and whether or not any of the
Borrowers or any other Person shall have any personal liability
with respect thereto. Each of the Borrowers expressly waives
any and all defenses now or hereafter arising or asserted by
reason of (a) any disability or other defense of any of the
other Borrowers or any other Person with respect to the
Obligations, (b) the unenforceability or invalidity of any
security or guaranty for the Obligations or the lack of
perfection or continuing perfection or failure of priority of
any security for the Obligations, (c) the cessation for any
cause whatsoever of the liability of any other Borrower or any
other Person (other than by reason of the full payment and
performance of all Obligations), (d) any failure of the
Managing Agent or any Bank to marshal assets in favor of any of
the Borrowers or any other Person, (e) except as otherwise
required by Law or as provided in any Loan Document, any
failure of the Managing Agent or any Bank to give notice of
sale or other disposition of Collateral to any of the other
Borrowers or any other Person or any defect in any notice that
may be given in connection with any sale or disposition of
Collateral, (f) except as otherwise required by Law or as
provided in any Loan Document, any failure of the Managing
Agent or any Bank to comply with applicable Laws in connection
with the sale or other disposition of any Collateral or other
security for any Obligation, including without limitation, any
failure of Managing Agent or any Bank to conduct a commercially
reasonable sale or other disposition of any Collateral or other
security for any Obligation, (g) any act or omission of the
Managing Agent or any Bank or others that directly or
indirectly results in or aids the discharge or release of any
Borrower or any other Person or the Obligations or any other
security or guaranty therefor by operation of law or otherwise,
(h) any Law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other
respects more burdensome than that of the principal or which
reduces a surety's or guarantor's obligation in proportion to
the principal obligation, (i) any failure of the Managing Agent
or any Bank to file or enforce a claim in any bankruptcy or
other proceeding with respect to any Person, (j) the election
by the Managing Agent or any Bank, in any bankruptcy proceeding
of any Person, of the application or non-application of
Section 1111(b)(2) of the United States Bankruptcy Code,
(k) any extension of credit or the grant of any Lien under
Section 364 of the United States Bankruptcy Code, (l) any use
of cash collateral under Section 363 of the United States
Bankruptcy Code, (m) any agreement or stipulation with respect
to the provision of adequate protection in any bankruptcy
proceeding of any Person, (n) the avoidance of any Lien in
favor of the Managing Agent or the Banks for any reason,
(o) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding
commenced by or against any Person, including any discharge of,
or bar or stay against collecting, all or any of the Obliga-
tions (or any interest thereon) in or as a result of any such
proceeding, or (p) to the extent permitted in
paragraph 40.495(4) of the Nevada Revised Statutes ("NRS"), the
benefits of the one-action rule under NRS Section 40.430.
4. Each of the Borrowers represents and warrants to
the Managing Agent and the Banks that such Borrower has
established adequate means of obtaining from the other
Borrowers, on a continuing basis, financial and other
information pertaining to the businesses, operations and
condition (financial and otherwise) of the other Borrowers and
their respective Properties, and each of the Borrowers now is
and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of the other
Borrowers and their respective Properties. Each of the
Borrowers hereby expressly waives and relinquishes any duty on
the part of the Managing Agent and the Banks to disclose to
such Borrower any matter, fact or thing related to the
businesses, operations or condition (financial or otherwise) of
any other Borrower or such other Borrower's Properties, whether
now known or hereafter known by the Managing Agent and the
Banks during the life of this Agreement. With respect to any
of the Obligations, the Managing Agent and the Banks need not
inquire into the powers of any of the Borrowers or the officers
or employees acting or purporting to act on its behalf.
5. In the event that all or any part of the
Obligations at any time are secured by any one or more deeds of
trust or mortgages creating or granting Liens on any interests
in Real Property, each of the Borrowers authorizes the Managing
Agent and the Banks, upon the occurrence of and during the
continuance of any Event of Default, at the their sole option,
without notice or demand and without affecting any Obligations,
the enforceability of this Agreement, or the validity or
enforceability of any Liens of the Managing Agent and the Banks
on any Collateral, to foreclose any or all of such deeds of
trust or mortgages by judicial or nonjudicial sale. Insofar as
the Liens created by the Loan Documents secure the obligations
of other Persons (i) each of the Borrowers expressly waives any
defenses to the enforcement of this Agreement or the other Loan
Documents or any Liens created or granted hereby or by the
other Loan Documents or to the recovery by the Managing Agent
and the Banks against any other Borrower or any other Person
liable therefor of any deficiency after a judicial or
nonjudicial foreclosure or sale, even though such a foreclosure
or sale may impair the subrogation rights of such Borrower and
may preclude any of them from obtaining reimbursement or
contribution from any other Person and (ii) each of the
Borrowers expressly waives any defenses or benefits that may be
derived from California Code of Civil Procedure 580a, 580b,
580d or 726, or comparable provisions of the Laws of any other
jurisdiction, including, without limitation, NRS Section 40.430
and judicial decisions relating thereto, NRS Sections 40.451,
40.455, 40.457 and 40.459, and all other suretyship defenses it
otherwise might or would have under California Law or other
applicable Law. Each of the Borrowers expressly waives any
right to receive notice of any judicial or nonjudicial fore-
closure or sale of any Real Property or interest therein sub-
ject to any such deeds of trust or mortgages and failure of
Borrowers to receive any such notice shall not impair or affect
Borrowers' Obligations hereunder or the enforceability of this
Agreement or the other Loan Documents or any Liens created or
granted hereby or thereby.
6. Notwithstanding anything to the contrary
elsewhere contained herein or in any other Loan Document to
which any Borrower is a Party, each of the Borrowers hereby
waives with respect to each other Borrower and its respective
successors and assigns (including any surety) and any other
party any and all rights at Law or in equity, to subrogation,
to reimbursement, to exoneration, to contribution, to setoff or
to any other rights that could accrue to a surety against a
principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, or to a
holder or transferee against a maker and which each of the
Borrowers may have or hereafter acquire against any other
Borrower or any other party in connection with or as a result
of any Borrower's execution, delivery and/or performance of
this Agreement or any other Loan Document to which any such
Borrower is a party. Each of the Borrowers agrees that it
shall not have or assert any such rights against any other
Borrower or any such Borrower's successors and assigns or any
other Person (including any surety), either directly or as an
attempted setoff to any action commenced against such Borrower
by the other such Borrower (as borrower or in any other
capacity) or any other Person. Each of the Borrowers hereby
acknowledges and agrees that this waiver is intended to benefit
the Managing Agent and the Banks and shall not limit or
otherwise affect any of the Borrowers' liability hereunder,
under any other Loan Document to which any Borrower is a party,
or the enforceability hereof or thereof.
7. Without limiting the generality of the foregoing
and to the extent otherwise applicable, each of the Borrowers
hereby waives discharge under NRS Section 104.3605 by waiving
all defenses based on suretyship or impairment of collateral.
8. Each of the Borrowers warrants and agrees that
each of the waivers and consents set forth herein is made with
full knowledge of its significance and consequences, with the
understanding that events giving rise to any defense waived may
diminish, destroy or otherwise adversely affect rights which
each of the Borrowers otherwise may have against the other
Borrowers, the Managing Agent, the Banks, or others, or against
any Collateral. If any of the waivers or consents herein are
determined to be contrary to any applicable Law or public
policy, such waivers and consents shall be effective to the
maximum extent permitted by Law.
9. For purposes of this Agreement, the provisions
of Sections 5, 6 and 7 above shall apply and be effective only
to the extent that any court, tribunal or other Governmental
Agency shall have deemed Borrowers to be sureties of one
another rather than co-borrowers.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet at September 29, 1994 and the Consolidated Statement
of Operations for the year-to-date period ended September 29, 1994 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-29-1994
<PERIOD-END> SEP-29-1994
<CASH> 29,799
<SECURITIES> 8,250
<RECEIVABLES> 29,684
<ALLOWANCES> 10,269
<INVENTORY> 5,426
<CURRENT-ASSETS> 78,333
<PP&E> 921,267
<DEPRECIATION> 173,952
<TOTAL-ASSETS> 883,345
<CURRENT-LIABILITIES> 74,063
<BONDS> 391,964
<COMMON> 4,504
0
414
<OTHER-SE> 365,368
<TOTAL-LIABILITY-AND-EQUITY> 883,345
<SALES> 32,490
<TOTAL-REVENUES> 413,160
<CGS> 29,647
<TOTAL-COSTS> 208,699
<OTHER-EXPENSES> 25,434
<LOSS-PROVISION> 1,963
<INTEREST-EXPENSE> 35,398
<INCOME-PRETAX> 24,360
<INCOME-TAX> 2,680
<INCOME-CONTINUING> 18,701
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,701
<EPS-PRIMARY> .48
<EPS-DILUTED> .46
</TABLE>
