<PAGE>
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended FEBRUARY 29, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________________
Commission file number 1-12802
HARVEYS CASINO RESORTS
(Exact Name of Registrant as Specified in its Charter)
NEVADA 88-0066882
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Highway 50 & Stateline Avenue
P.O. Box 128
LAKE TAHOE, NEVADA 89449
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (775) 588-2411
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
--- ---
The number of shares outstanding of the registrant's Class A Common Stock, $0.01
par value was 39,610 and the number of shares outstanding of the registrant's
Class B Common Stock, $0.01 par value was 3,961,000, each as of April 6, 2000.
1
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HARVEYS CASINO RESORTS
INDEX
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets,
February 29, 2000 and November 30, 1999 3
Condensed Consolidated Statements of Operations for the Three
Months Ended February 29, 2000, the Period of February 2, 1999
(the date of acquisition) through February 28, 1999 and the
Period of December 1, 1998 through February 1, 1999 4
Condensed Consolidated Statements of Cash Flows for the Three
Months Ended February 29, 2000, the Period of February 2, 1999
(the date of acquisition) through February 28, 1999 and the
Period of December 1, 1998 through February 1, 1999 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults Upon Senior Securities 18
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
</TABLE>
2
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PART 1-FINANCIAL INFORMATION
Item 1. Financial Statements
HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
February 29, November 30,
2000 1999
------------ ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 34,851 $ 32,496
Accounts and notes receivable, net 7,447 5,810
Prepaid expenses 4,062 2,228
Other current assets 6,466 6,846
-------- --------
Total current assets 52,826 47,380
Property and equipment (net of accumulated depreciation of
$25,325 and $18,872) 437,553 440,759
Cost in excess of net assets acquired 154,008 155,904
Other assets 24,349 29,876
-------- --------
Total assets $668,736 $673,919
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts and contracts payable $ 5,060 $ 9,752
Accrued expenses 37,664 34,468
-------- --------
Total current liabilities 42,724 44,220
Long-term debt, net of current portion 396,399 400,577
Deferred income taxes 58,091 58,091
Other liabilities 28,119 28,234
-------- --------
Total liabilities 525,333 531,122
-------- --------
Preferred stock, $.01 par value, 1,000,000 shares authorized; 10 Series A and
99,990 Series B 13 1/2% senior redeemable convertible cumulative shares
outstanding (liquidation value $55,000) 63,516 61,442
-------- --------
Stockholders' equity
Common stock, $.01 par value, 20,000,000 shares authorized; 4,000,610
shares issued at February 29, 2000, and 4,018,790 shares issued at
November 30, 1999, 40 40
Additional paid-in capital 74,960 74,960
Retained earnings 4,887 6,355
-------- --------
Total stockholders' equity 79,887 81,355
-------- --------
Total liabilities, preferred stock and stockholders' equity $668,736 $673,919
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
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HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months February 2, 1999 Predecessor Company
Ended (date of acquisition) December 1,1998 to
February 29, 2000 to February 28, 1999 February 1, 1999
----------------- -------------------- ----------------
<S> <C> <C> <C>
Revenues
Casino $ 90,159 $ 18,680 $ 41,454
Racing 1,337 - -
Lodging 8,695 2,855 5,958
Food and beverage 14,324 3,749 8,108
Other 2,333 756 1,271
Less: Casino promotional allowances (7,528) (2,079) (5,003)
--------- -------- ---------
Total net revenue 109,320 23,961 51,788
--------- -------- ---------
Costs and expenses
Casino 43,826 10,245 21,146
Racing 2,756 - -
Lodging 3,032 977 1,997
Food and beverage 9,927 2,238 4,727
Other operating 893 290 592
Selling, general and administrative 23,361 5,251 13,558
Depreciation and amortization 9,142 1,942 3,553
Consent fee and merger costs - - 19,879
--------- -------- ---------
Total cost and expenses 92,937 20,943 65,452
--------- -------- ---------
Operating income (loss) 16,383 3,018 (13,664)
--------- -------- ---------
Other income (expense)
Interest income 36 8 338
Interest expense (9,798) (2,248) (3,016)
Other, net (105) 17 77
--------- -------- ---------
Total other income (expense) (9,867) (2,223) (2,601)
--------- -------- ---------
Income (loss) before income taxes,
extraordinary item and cumulative effect of
accounting change
6,516 795 (16,265)
Income tax benefit (provision) (2,769) (311) 3,904
--------- -------- ---------
Income (loss) before extraordinary item and
cumulative effect of accounting change
3,747 484 (12,361)
Loss on retirement of debt, net of taxes - - (869)
Cumulative effect of accounting change, net of
taxes
(3,142) - -
--------- -------- ---------
Net income (loss) $ 605 $ 484 $(13,230)
========= ======== =========
</TABLE>
The accompanying notes are an integral part of these statements.
4
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HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months February 2, 1999 Predecessor Company
Ended (date of acquisition) December 1,1998 to
February 29, 2000 to February 28, 1999 February 1, 1999
----------------- --------------------- -------------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ 605 $ 484 $ (13,230)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Depreciation and amortization 9,142 1,942 3,553
Amortization of deferred compensation 170 88 1
Write-off of debt issuance costs, net of tax - - 869
Change in income taxes payable 1,014 231 (3,904)
Accrual of consent fee and merger costs - - 19,823
Other, net 547 (2,815) (2,261)
-------- -------- ---------
Net cash provided by (used in) operating
activities
11,478 (70) 4,851
-------- -------- ---------
Cash flows from investing activities
Capital expenditures (3,345) (2,549) (3,830)
Change in construction payables (1,873) - -
Proceeds from sale of marketable securities - - 10,000
Proceeds from notes receivable - 1,839 -
Other, net 20 8 (296)
-------- -------- ---------
Net cash provided by (used in) investing
activities
(5,198) (702) 5,874
-------- -------- ---------
Cash flows from financing activities
Principal payments on long-term debt (24,370) (27,000) (220)
Debt issuance costs (1) (2,865) -
Proceeds from long-term debt 20,446 - -
Consent fee and merger costs - (19,823) (56)
Other, net - - (31)
-------- -------- ---------
Net cash used in financing activities (3,925) (49,688) (307)
-------- -------- ---------
Increase (decrease) in cash and cash equivalents 2,355 (50,460) 10,418
Cash and cash equivalents at beginning of period 32,496 77,717 67,299
-------- -------- ---------
Cash and cash equivalents at end of period $ 34,851 $ 27,257 $ 77,717
======== ======== =========
</TABLE>
The accompanying notes are an integral part of these statements.
5
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HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the following footnotes, the words, "Company" and "Harveys" refer to Harveys
Casino Resorts, a Nevada corporation, and its wholly-owned subsidiaries unless
the context requires otherwise.
1. BASIS OF PRESENTATION AND CONSOLIDATION
Founded in 1944, Harveys has been engaged in the casino entertainment
industry for over 55 years. On February 2, 1999, Harveys Acquisition
Corporation merged with and into Harveys. Harveys was the surviving
corporation in the merger and is continuing business operations as conducted
prior to the merger. Harveys Tahoe Management Company, Inc., a wholly-owned
subsidiary, owns and operates Harveys Resort & Casino on the south shore of
Lake Tahoe, Nevada. Harveys Iowa Management Company, Inc., a wholly-owned
subsidiary, is the owner and operator of Harveys Casino Hotel, a riverboat
casino, hotel and convention center complex in Council Bluffs, Iowa. Harveys
C. C. Management Company, Inc., a wholly-owned subsidiary, owns and operates
Harveys Wagon Wheel Hotel/Casino in Central City, Colorado.
On October 6, 1999, HBR Realty Company, Inc., a wholly-owned subsidiary,
purchased the net assets (excluding the gaming equipment) of Bluffs Run
Casino, the greyhound racetrack and casino in Council Bluffs, Iowa. The
facilities were purchased pursuant to a Purchase and Sale Agreement and Joint
Escrow Instructions dated as of August 31, 1999 by and between HBR Realty
Company and Iowa West Racing Association. Immediately after closing of the
transaction, the Bluffs Run Casino facilities were leased back to Iowa West
Racing Association for an initial term of 25 years. At the same time, Iowa
West Racing Association retained Harveys BR Management Company, Inc., a
wholly-owned subsidiary, to manage the operations of Bluffs Run Casino. Iowa
West Racing Association continues to hold the pari- mutuel and gaming
licenses under Iowa law. Harveys, through its wholly-owned subsidiaries,
receives management fees and lease income generally equal to the ongoing cash
flow from the operations of Bluffs Run Casino.
The February 2, 1999 merger was accounted for as a purchase. This required an
allocation of the purchase price to the individual assets acquired and
liabilities assumed based on their fair value at the time of the merger. As a
result, the consolidated financial statements for the periods after the
merger are presented on a different basis of accounting from those for the
periods before the merger and therefore, are not directly comparable. The
accompanying condensed consolidated statements of operations and condensed
consolidated statements of cash flows for periods prior to the merger are
captioned as the predecessor company and are shown for informational
purposes.
6
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The October 6, 1999 acquisition of the net assets of Bluffs Run Casino was
accounted for as a purchase. Consequently, the net assets acquired are
included in the condensed consolidated balance sheet based on their fair
value as of the date of acquisition. The condensed consolidated statement of
operations includes the revenues and expenses of Bluffs Run Casino for the
period ended February 29, 2000.
The condensed consolidated financial statements include the accounts of
Harveys and its wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
The condensed consolidated balance sheet as of November 30, 1999 has been
prepared from the audited financial statements at that date. The
accompanying condensed consolidated financial statements at February 29, 2000
and February 28, 1999, have been prepared without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Accordingly,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.
Certain reclassifications have been made to prior periods to conform to the
current quarter presentation. These reclassifications had no effect on net
income (loss).
All adjustments, consisting only of normal recurring adjustments, necessary
for a fair presentation of financial condition, results of operations and
cash flows have been included. Results of operations for interim periods
should not be consider to be indicative of results for the full fiscal year.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Annual Report on Form 10-K for
the year ending November 30, 1999.
2. LONG-TERM DEBT
Long-term debt (in thousands) consisted of the following as of:
<TABLE>
<CAPTION>
FEBRUARY 29, 2000 NOVEMBER 30, 1999
<S> <C> <C>
10 5/8% Senior Subordinated Notes, due 2006 $ 150,000 $ 150,000
Unamortized premium on Senior Subordinated Note 6,399 6,654
----- -----
156,399 156,654
Note payable to banks 240,000 243,923
------- -------
$ 396,399 $ 400,577
========= =========
</TABLE>
Senior Subordinated Notes - The indenture governing the senior subordinated
notes contains certain covenants that impose limitations on among other
things: (i) the incurrence of additional indebtedness by the Company, (ii)
the payment of dividends, (iii) the repurchase of capital stock and the
making of certain other restricted payments and restricted investments
7
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(each defined in the indenture), (iv) mergers, consolidations and sales of
assets, (v) the creation or incurrence of liens on the assets of the Company,
and (vi) transactions by the Company or any of its subsidiaries with
affiliates (as defined in the indenture). These limitations are subject to a
number of qualifications and exceptions as described in the indenture. The
Company was in compliance with these covenants at February 29, 2000.
The premium on the senior subordinated notes is being amortized as a
reduction of interest expense over the remaining term of the notes.
Note Payable to Banks - A second amended and restated credit facility,
dated as of October 5, 1999, provides a revolving loan facility, a
swingline facility that allows borrowing on same- day notice and a letter
of credit facility. The Company can borrow up to $10 million dollars under
the swingline facility. The maximum available under the credit facility,
including amounts outstanding under the swingline facility and letters of
credit exposure, is $335 million. The maximum permitted principal balance
is reduced quarterly, beginning August 31, 2000.
At February 29, 2000, the Company had $240.0 million in outstanding
borrowings and approximately $46.0 million in letters of credit exposure.
Interest on outstanding borrowings accrues at a base rate plus an applicable
margin. The base rate is equal to the higher of the prime rate or the federal
funds rate plus one-half of one percent. The Company may, at its option and
under certain circumstances, elect to pay interest based on the London
Interbank Offered Rate ("LIBOR") plus an applicable margin. The applicable
margins are based on the ratio of total funded debt to earnings before
deductions for interest, taxes, depreciation and amortization ("EBITDA"). The
applicable margins are determined quarterly and are subject to change. At
February 29, 2000 the applicable margin relative to the base rate was 0.75%
and the applicable margin relative to the LIBOR was 1.75%.
The amounts the banks lend under the credit facility are secured by
substantially all of the Company's assets including a pledge of the capital
stock of its subsidiaries.
The credit facility contains a number of covenants that restrict the ability
to: (i) dispose of assets, (ii) incur additional indebtedness, (iii) prepay
the 10 5/8% senior subordinated notes, (iv) pay dividends, (v) create liens
on assets, (vi) make investments, loans or advances, (vii) engage in mergers
or consolidations, change the Company's business, engage in certain
transactions with affiliates, and (viii) engage in certain corporate
activities. The Company is required to maintain specified financial ratios
and net worth requirements, satisfy specified financial tests, including
interest coverage tests, and maintain certain levels of annual capital
expenditures. At February 29, 2000, the Company was in compliance
with these covenants.
8
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3. REDEEMABLE PREFERRED STOCK
At February 29, 2000, the Company had outstanding 10 shares of 13 1/2%
Series A Senior Redeemable Convertible Cumulative Preferred Stock and 99,990
shares of 13 1/2% Series B Senior Redeemable Convertible Cumulative
Preferred Stock. The Series A Preferred Stock and Series B Preferred Stock
each have a liquidation value of $550 per share. Both series of preferred
stock are entitled to quarterly dividends at an annual rate of 13 1/2% of the
liquidation value. If dividends are not paid in cash when due, they cumulate
and compound at an annual rate of 13 1/2%. The Company must redeem all the
outstanding preferred stock on February 1, 2011, for cash, at the liquidation
value plus any accrued and unpaid dividends, and has the right to redeem the
preferred stock, at any time, at the liquidation value plus any accrued and
unpaid dividends. The Series A and Series B Preferred Stock are convertible,
at any time on or prior to February 1, 2002, into corresponding shares of
Class A and Class B Common Stock. The right of conversion, as it relates to
the Series A and Series B Preferred Stock, only vests in, and is only
exercisable by, the current holders of preferred stock and their affiliates
(as that term is defined in the certificate of designation that governs the
preferred stock). The conversion rate is 28.7309164 shares of common stock
per share of preferred stock and is subject to customary antidilution
adjustments. The conversion of the preferred stock to common stock would
require the approval of all applicable gaming authorities. At the time of
conversion, the Company would have the option of satisfying any accrued and
unpaid dividends due on the preferred stock being converted by paying cash or
issuing additional shares of the corresponding Class A Common Stock or Class
B Common Stock having a market value equal to the amount of accrued
dividends.
The certificate of designation contains covenants which limit the ability to
make restricted payments or investments, limit consolidation, merger and the
sale of assets, require the Company to provide certain financial reports and
limit business activities. At February 29, 2000, the Company was in
compliance with these covenants.
The combined liquidation value of the Series A Preferred Stock and Series B
Preferred Stock at February 29, 2000 was $55 million. Additionally, on that
date, there were approximately $8.5 million of accrued and unpaid dividends
on the preferred stock.
9
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4. CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE
Effective December 1, 1999, the Company adopted Statement of Position ("SOP")
98-5, Reporting on the Costs of Start-Up Activities. SOP 98-5 was issued by
the Accounting Standards Executive Committee of the American Institute of
Certified Public Accountants and its provisions are effective for fiscal
years beginning after December 15, 1998. SOP 98-5 requires costs of start-up
activities (commonly referred to as preopening costs in the gaming industry)
to be expensed as incurred. The initial effect of adopting SOP 98-5 is
reported as the cumulative effect of a change in accounting principle. As
requied, all capitalized preopening costs as of December 1, 1999 were written
off. These costs included previously deferred organization and licensing
costs. The write-offs resulted in a charge of approximately $3.1 million, net
of an income tax benefit of approximately $1.4 million.
10
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
In the following discussion, the words "Harveys," "Company," "we," "our," and
"us" refer to Harveys Casino Resorts, a Nevada corporation, and its wholly-owned
subsidiaries, unless the context requires otherwise.
On February 2, 1999, Harveys Acquisition Corporation merged with and into
Harveys. The Company was the surviving corporation in the merger and we are
continuing our business operations as conducted prior to the merger. We
currently own and operate Harveys Resort & Casino, Harveys Casino Hotel and
Harveys Wagon Wheel. We also own the assets of, and manage, Bluffs Run Casino, a
facility under license from Iowa West Racing Association. The following table
presents certain operating results for the Company's properties. For comparative
purposes, results for the first quarter of fiscal 1999 have been presented on a
combined three-month basis by aggregating the results for the period December 1,
1998 through February 1, 1999 with the results for the period February 2, 1999
(the date of acquisition) through February 28, 1999.
<TABLE>
<CAPTION>
Results of Operations
Combined Three February 2, 1999 Predecessor Company
Three Months Ended Months Ended (date of acquisition) to December 1, 1998 to
February 29, 2000 February 28, 1999 February 28, 1999 February 1, 1999
------------------ ----------------- ------------------------ -------------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Net Revenues
Harveys Resort & Casino $ 32,619 $ 31,149 $ 9,736 $ 21,413
Harveys Casino Hotel 32,834 30,301 9,639 20,662
Bluffs Run Casino 30,288 - - -
Harveys Wagon Wheel 13,579 14,299 4,586 9,713
-------- -------- ------- ---------
$109,320 $ 75,749 $23,961 $ 51,788
======== ======== ======= =========
Operating Income (Loss)
Harveys Resort & Casino $ 4,686 $ 3,413 $ 1,039 $ 2,374
Harveys Casino Hotel 7,097 6,476 2,094 4,382
Bluffs Run Casino 5,667 - - -
Harveys Wagon Wheel 1,786 2,374 820 1,554
Corporate and Development (2,853) (3,030) (935) (2,095)
Consent fee and merger costs - (19,879) - (19,879)
-------- -------- ------- ---------
$ 16,383 $(10,646) $ 3,018 $(13,664)
======== ======== ======= ========
EBITDA (1)
Harveys Resort & Casino $ 7,400 $ 5,702 $ 1,780 $ 3,922
Harveys Casino Hotel 9,249 8,417 2,748 5,669
Bluffs Run Casino 8.318 - - -
Harveys Wagon Wheel 2,823 3,324 1,141 2,183
Corporate and Development (2,095) (2,586) (710) (1,876)
-------- -------- ------- ---------
$ 25,695 $ 14,857 $ 4,959 $ 9,898
======== ======== ======= ========
</TABLE>
11
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Note to the operating results
(1) EBITDA (operating income plus depreciation and amortization and excluding
non-recurring items) should not be construed as an indicator of the
Company's operating performance, or as an alternative to cash flows from
operating activities as a measure of liquidity. We have presented EBITDA
solely as supplemental disclosure because we believe that it allows for a
more complete analysis of results of operations. Because companies do not
calculate EBITDA identically, the presentation of EBITDA herein is not
necessarily comparable to similarly entitled measures of other companies.
EBITDA is not intended to represent and should not be considered more
meaningful than, or an alternative to, measures of operating performance as
determined in accordance with generally accepted accounting principles.
SUMMARY - Our first quarter 2000 results are significantly affected by our
October 6, 1999 acquisition of the net assets of Bluffs Run Casino and our
management of that facility.
Our consolidated net revenues for the first quarter of fiscal 2000 amounted
to $109.3 million, an increase of $33.6 million, or 44.3%, over our net
revenues for the first quarter of fiscal 1999. Bluffs Run Casino provided
$30.3 million of the net revenue growth. Excluding the net revenue
contribution from Bluffs Run Casino, our same-store net revenues improved by
$3.3 million, or 4.3%. Improvements in net revenues from Harveys Casino
Hotel at Council Bluffs and Harveys Resort & Casino at Lake Tahoe mitigated
our declining net revenues from Harveys Wagon Wheel in the increasingly
competitive Central City/Black Hawk, Colorado market.
Operating income amounted to $16.4 million for the first quarter of fiscal 2000.
This was a $7.2 million, or 74.9%, improvement from the prior year period,
excluding $19.9 million of consent fee and merger related costs incurred in the
first quarter of fiscal 1999. On a same-store basis, our operating income
improved $1.5 million, or 16.1%.
HARVEYS RESORT & CASINO - Our Lake Tahoe property produced net revenues for the
quarter of $32.6 million, an increase of $1.5 million , or 4.7%, over our net
revenues for the first quarter of fiscal 1999. Revenues improved as a result of
increased wagering volume and food covers. Our operating profit of $4.7 million
increased by $1.3 million, or 37.3%, primarily as a result of improvements in
casino profit margins.
HARVEYS CASINO HOTEL - Our Council Bluffs property provided net revenues for the
quarter of $32.8 million, an increase of $2.5 million, or 8.4% over our net
revenues recorded in the first quarter of fiscal 1999. Revenues improved as a
result of increased wagering volume and food covers. Our Council Bluffs
operating profit of $7.1 million increased by $0.6 million, or 9.6%, as a result
of the improvements.
BLUFFS RUN CASINO - The first quarter of fiscal 2000 was the first full quarter
of our management of Bluffs Run Casino. This Council Bluffs property provided
net revenues for the quarter of $30.3 million and operating profit of $5.7
million.
HARVEYS WAGON WHEEL - Net revenues from our Central City property amounted to
$13.6 million for the quarter, a decrease of $0.7 million, or 5.0%, from our net
revenues recorded in the first quarter of fiscal 1999. The decrease was
primarily in casino revenues, resulting from additional
12
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competition in nearby Black Hawk, Colorado. Our operating profit of $1.8
million declined by $0.6 million, or 24.7%, primarily as a result of the
decline in our casino revenues and profits and an increase in our marketing
and advertising expenditures in response to the new competition.
OTHER FACTORS AFFECTING RESULTS OF OPERATIONS - Our results for the first
quarter of fiscal 2000 were affected by several other factors, including:
increases in depreciation and amortization, increases in selling, general and
administrative expenses, increases in interest expense and the cumulative
effect of a change in accounting principle.
Depreciation and amortization expense amounted to approximately $9.1 million
in the first quarter of fiscal 2000 compared to approximately $5.5 million of
aggregate depreciation and amortization in the first quarter of the prior
year. This increase included approximately $2.6 million of amortization of
the costs in excess of net assets acquired in the merger and in the
acquisition of the net assets of Bluffs Run Casino. The balance of the
increase for the first quarter of fiscal 2000 was primarily the result of the
change in the accounting basis for property and equipment brought on by the
merger and additional depreciation from Bluffs Run Casino.
Our selling, general and administrative expenses increased by $4.6 million
over the aggregated selling, general and administrative expenses of the prior
year first quarter. This increase was primarily the result of assuming
management of the Bluffs Run Casino.
As a result of the merger financing and the 100% financing of the acquisition
of the net assets of Bluffs Run Casino, our average long-term debt during the
first quarter of fiscal 2000 was substantially higher than during the first
quarter of fiscal 1999. Consequently, our interest expense, net of interest
income, increased by $4.8 million to $9.8 million for the most recent quarter.
Effective December 1, 1999, we adopted Statement of Position 98-5, Reporting
on the Costs of Start-Up Activities. The provisions of this accounting
pronouncement require costs of start-up activities (commonly referred to as
preopening costs in the gaming industry) to be expensed as incurred. The
initial effect upon adoption is reported as the cumulative effect of a change
in accounting principle. As required, we wrote off all capitalized preopening
costs as of December 1, 1999. These costs included previously deferred
organization and licensing costs. The write-off resulted in a charge of
approximately $3.1 million, net of an income tax benefit of approximately
$1.4 million.
Liquidity and Capital Resources
Our primary source of cash during the first quarter of fiscal 2000 was
approximately $11.5 million of cash flow from operations, compared to
approximately $4.8 million of aggregate cash flow from operations in the
prior year first quarter. We expended approximately $3.3 million on capital
improvements and replacements and paid approximately $1.9 million of
construction payables on our parking structure at Harveys Casino Hotel in
Council Bluffs. We were also able to reduce our outstanding indebtedness
under our credit facility by approximately $3.9 million.
13
<PAGE>
As a result of the above, our cash and cash equivalents increased by $2.4
million, from $32.5 million at November 30, 1999 to $34.9 million at February
29, 2000. Additionally, our outstanding debt decreased from $393.9 million at
the end of fiscal 1999 to approximately $390.0 million at February 29, 2000,
excluding the unamortized premium on our senior subordinated notes. Our debt at
February 29, 2000 consisted of $150 million of senior subordinated notes and
$240.0 million outstanding under our credit facility.
In addition to our debt, we were obligated at February 29, 2000 for an aggregate
of approximately $63.5 million on our outstanding Series A Preferred Stock and
Series B Preferred Stock and the unpaid dividends accrued thereon.
Our credit facility matures and is fully due and payable on September 30, 2004.
The permitted principal balance of the credit facility reduces on a quarterly
basis, beginning August 31, 2000. Given our outstanding balance at February 29,
2000 and our anticipated sources and uses of cash for the balance of fiscal year
2000, we do not expect to be subject to any mandatory principal payment
requirements in fiscal year 2000. Interest on borrowings outstanding under the
credit facility are payable, at our option, at either LIBOR or an alternative
base rate, in each case plus an applicable margin. In the future, the applicable
margins may be changed, based on the ratio of our total funded debt to EBITDA.
The credit facility contains a number of covenants that, among other things,
subject to applicable gaming approvals, restrict our ability to dispose of
assets, incur additional indebtedness, prepay any principal amount of our $150
million senior subordinated notes, pay dividends, create liens on assets, make
investments, loans or advances, engage in mergers or consolidations, change the
nature of our business or engage in certain transactions with affiliates and
otherwise restrict certain corporate activities. In addition, under the credit
facility, we are required to maintain specified financial ratios and net worth
requirements, satisfy specified financial tests, including interest coverage
tests, and maintain certain levels of annual capital expenditures. The credit
facility contains events of default customary for facilities of this nature.
Our senior subordinated notes are governed by an indenture and are general
unsecured obligations of the Company, subordinated in right of payment to all
existing and future senior debt of the Company. Interest on the senior
subordinated notes is payable semi-annually on June 1 and December 1 of each
year. The senior subordinated notes mature on June 1, 2006. The senior
subordinated notes are redeemable at our option, in whole or in part, at any
time on or after June 1, 2001 at prices ranging from 105.313% of the principal
amount plus accrued and unpaid interest, to 100% of the principal amount plus
accrued and unpaid interest beginning June 1, 2004 and thereafter. The indenture
contains certain covenants that impose limitations on, among other things, the
incurrence of additional indebtedness, the payment of dividends, the repurchase
of capital stock and the making of certain other restricted payments and
restricted investments (as defined in the indenture), mergers, consolidations
and sales of assets by the
14
<PAGE>
Company, the creation or incurrence of liens on the assets of the Company, and
transactions by the Company or any of its subsidiaries with affiliates (as
defined in the indenture). These limitations are subject to a number of
qualifications and exceptions as described in the Indenture.
Our Series A Preferred and Series B Preferred are entitled to quarterly
dividends at an annual rate of 13 1/2% of the $550 per share liquidation value.
To the extent we do not pay the dividends in cash, dividends will cumulate and
compound quarterly at an annual rate of 13 1/2%. The Series A Preferred and
Series B Preferred are subject to mandatory redemption on February 1, 2011 for
cash at the liquidation value plus any accrued and unpaid dividends. We have the
right to redeem the Series A Preferred and the Series B Preferred at any time
for cash at the liquidation value plus any accrued and unpaid dividends. The
certificate of designation for the preferred stock contains covenants which
limit restricted payments or investments; limit consolidation, merger and the
sale of assets; mandate the provision of financial reports; and limit business
activities. Upon the receipt of all applicable gaming approvals the Series A
Preferred and Series B Preferred are convertible at any time on or before
February 1, 2002, at the per share rate of 28.7309164 shares of the Class A
Common and Class B Common, respectively, subject to customary anti-dilution
adjustments. The right of conversion, as it relates to our Series A and Series B
Preferred Stock, only vests in, and is only exercisable by, the current holders
of our preferred stock and their affiliates (as that term is defined in the
certificate of designation). Any accrued and unpaid dividends at the time of a
conversion will be required to be paid in cash or, at our election, may be
satisfied with additional shares of the corresponding common stock having a fair
market value equal to the amount of accrued dividends.
As of February 29, 2000, we were in compliance with the covenants under the
credit facility, the indenture and the certificate of designation.
At the end of the first quarter of fiscal 2000, we had approximately $49.0
million available to us under the bank credit facility, net of outstanding
letters of credit and subject to compliance with certain financial covenants. We
also had cash and cash equivalents of approximately $34.9 million.
We anticipate expending an additional $13.6 million for maintenance capital
expenditures and property improvements in fiscal 2000. We believe that our
existing cash and cash equivalents, cash flows from operations and our
borrowing capacity under the credit facility will be sufficient to meet the
cash requirements of our existing operations for at least the next twelve
months, including capital improvements and replacements at the operating
properties and debt service requirements. We currently believe that our cash
requirements beyond the next twelve months will consist of debt service
requirements and capital improvements and replacements in the ordinary
course, which we expect to be met by then-existing cash, cash flows from
operations and borrowing capacity under the credit facility. From time to
time the Company considers acquisitions of other gaming properties or other
companies in the gaming industry, which may require capital investments in
excess of current resources. Presently, the Company is not party to any
binding obligation to complete any such acquisition. However, on March 8,
2000, the Company announced that it had made an offer to acquire all of the
outstanding shares of common stock of Pinnacle Entertainment, Inc., formerly
known as Hollywood Park, Inc., for $25 per share. The companies have agreed
to negotiate on an exclusive basis through April 14, 2000. Other than the
possibility of acquisitions, we do not currently anticipate incurring
material capital expenditures, balloon or other extraordinary payments on
long-term obligations or any other extraordinary demands or commitments
beyond the next twelve months. We do not expect to pay cash dividends on the
preferred stock prior to 2004 because of, among other reasons, restrictions
in the credit facility and the indenture on the payment of cash dividends.
15
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk from changes in interest rates. Borrowings
outstanding under our credit facility are subject to variable interest rates.
The amount outstanding under our credit facility at February 29, 2000 was $240
million, subject to a weighted-average interest rate of 8.12%. Assuming an
identical outstanding balance for the remainder of the fiscal year, a
hypothetical immediate 100 basis point increase in interest rates would increase
interest expense for the remainder of the year by approximately $1.8 million.
Additionally, the fair value of the Company's fixed rate long-term debt,
consisting of our $150 million of senior subordinated notes and approximately
$6.4 million of unamortized premium on the senior subordinated notes at February
29, 2000, and the fair value of the Company's fixed rate preferred stock, are
sensitive to differences between market interest rates and rates at the time of
issuance. A hypothetical immediate 100 basis point increase in interest rates at
February 29, 2000 would have decreased the fair value of our fixed rate
long-term debt by approximately $14.0 million. Conversely, a 100 basis point
decrease in interest rates would have increased the fair value of our
outstanding long-term debt at February 29, 2000 by approximately $17.0 million.
A hypothetical immediate 100 basis point increase in interest rates would have
decreased the fair value of our fixed rate preferred stock by approximately $4.2
million at February 29, 2000. Conversely, a 100 basis point decrease in interest
rates would have increased the fair value of our preferred stock by
approximately $4.8 million.
The Company did not enter into any derivative financial contracts in fiscal 1999
or the first quarter of fiscal 2000. Effective March 1, 2000, the Company
entered into an interest rate cap agreement with a notional amount of $48
million. We may use derivative financial instruments in the future as a risk
management tool. We do not use derivative financial instruments for speculative
or trading purposes.
16
<PAGE>
CAUTIONARY STATEMENT FOR PURPOSES OF THE `SAFE HARBOR' PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
This document includes various `forward-looking statements' within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Sections 21E of
the Securities Exchange Act of 1934, as amended, which represent the Company's
expectations or beliefs concerning future events. Statements containing
expressions such as `believes', `anticipates', or `expects' used in the
Company's press releases and periodic reports on Forms 10-K and 10-Q filed with
the Securities and Exchange Commission are intended to identify forward-looking
statements. All forward-looking statements involve risks and uncertainties.
Although the Company believes its expectations are based upon reasonable
assumptions within the bounds of its knowledge of its business and operations,
there can be no assurances that actual results will not materially differ from
expected results. The Company cautions that these and similar statements
included in this report and in previously filed periodic reports, including
reports filed on Forms 10-K and 10-Q, are further qualified by important factors
that could cause actual results to differ materially from those in the
forward-looking statements. Such factors include, without limitation, the
following: increased competition in existing markets or the opening of new
gaming jurisdictions; a decline in the public acceptance of gaming; the
limitation, conditioning or suspension of any of the Company's gaming licenses;
increases in or new taxes imposed on gaming revenues or gaming devices; a
finding of unsuitability by regulatory authorities with respect to the Company's
officers, directors or key employees; loss or retirement of key executives;
significant increases in fuel or transportation prices; adverse economic
conditions in the company's key markets; severe and unusual weather in the
Company's key markets; adverse results of significant litigation matters.
Readers are cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date thereof. The Company undertakes no obligation to
publicly release any revision to such forward-looking statements to reflect
events or circumstances after the date thereof.
17
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable
Item 2. Changes in Securities.
Not Applicable
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
See attached Exhibit Index
(b) Reports on Form 8-K
On December 1, 1999, the Company filed Amendment No. 1 to a
Current Report on Form 8-K/A. On October 20, 1999, we filed a
Form 8-K describing our acquisition of a greyhound racetrack and
land-based casino in Council Bluffs, Iowa from Iowa West Racing
Association, Nonprofit Corporation, an Iowa nonprofit
corporation. At the time of the filing, the financial
information relative to Iowa West Racing Association's interim
operation of the racetrack and casino known as Bluffs Run Casino
was not available. As a result, the pro forma condensed
consolidated financial information required by the Securities
Exchange Act of 1934 could not be prepared. The purpose of the
Form 8-K/A was to amend our initial filing with respect to the
acquisition of Bluffs Run Casino and provide the required
financial statements and pro forma financial information.
18
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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.
HARVEYS CASINO RESORTS
Registrant
Date: April 13, 2000 /s/ CHARLES W. SCHARER
--------------------------------------
Charles W. Scharer,
President and Chief Executive Officer
(Authorized Officer)
Date: April 13, 2000 /s/ JOHN P. HEWITT
--------------------------------------
John P. Hewitt,
Corporate Controller
(Principal Accounting Officer)
19
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
NUMBER DESCRIPTION
- ------- ----------------------------------------------------------------------
<S> <C>
3.1 Amendments to Articles of Incorporation of Harveys Casino Resorts as
Surviving Constituent Entity (filed as Exhibit A to Articles of Merger
of Harveys Acquisition Corporation into Harveys Casino Resorts). (4)
(Articles of Incorporation are incorporated herein by reference to
Harveys Acquisition Corporations's Registration Statement on Form 10
(File No. 0-25093), filed November 20,1998).
3.2 Eighth Amended and Restated Bylaws of the Registrant (5)
4.1 Form of Stock Certificate of the Registrant (5)
4.2 Indenture, dated as of May 15, 1996 ( the "Original Indenture"), by and
among the Registrant, Harveys Wagon Wheel Casino Limited Liability
Company, Harveys C. C. Management Company, Inc., Harveys Iowa
Management Company, Inc. and Harveys L. V. Management Company, Inc.
(the `Guarantors') and IBJ Schroder Bank & Trust Company as Trustee
(including form of Note) (1)
4.3 First Supplemental Indenture, dated as of June 5, 1996, supplementing
the Original Indenture (2)
4.4 Second Supplemental Indenture, dated as of May 22, 1997, supplementing
the Original Indenture (3)
4.5 Third Supplemental Indenture, dated as of December 24, 1998, among the
Registrant, Harveys Tahoe Management Company, Inc., Harveys C. C.
Management Company, Inc., Harveys Iowa Management Company, Inc.,
Harveys L. V. Management Company, Inc. and IBJ Schroder Bank and Trust
Company, supplementing the Original Indenture (5)
4.6 Fourth Supplemental Indenture, dated as of December 24, 1998, among the
Registrant, Harveys Tahoe Management Company, Inc., Harveys C. C.
Management Company, Inc., Harveys Iowa Management Company, Inc.,
Harveys L. V. Management Company, Inc. and IBJ Schroder Bank and Trust
Company, supplementing the Original Indenture (5)
4.7 Certificate of Designation of the 13 1/2% Series A Senior Redeemable
Convertible Cumulative Preferred Stock ($0.01 par value per share) and
the 13 1/2% Series B Redeemable Convertible Cumulative Preferred Stock
($0.01 par value per share) of Harveys Casino Resorts (4)
4.8 Certificate of Amendment, dated as of February 7, 2000, to the
Certificate of Designation of the 13 1/2% Series A Senior Redeemable
Convertible Cumulative Preferred Stock ($0.01 par value per share) and
the 13 1/2% Series B Senior Redeemable Convertible Cumulative Preferred
Stock ($0.01 par value per share) of Harveys Casino Resorts (6)
</TABLE>
20
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<TABLE>
<S> <C>
10.1 Second Amended and Restated Credit Agreement, dated as of October 5,
1999, among Harveys Casino Resorts, a Nevada corporation, Harveys C. C.
Management Company, Inc., a Nevada corporation, Harveys Iowa Management
Company, Inc., a Nevada corporation, Harveys Tahoe Management Company,
Inc., a Nevada corporation, HBR Realty Company, Inc., a Nevada
corporation, Harveys BR Management Company, Inc., a Nevada corporation,
HCR Services Company, Inc., a Nevada corporation, as Borrowers, the
Lenders herein named, Wells Fargo Bank, National Association, as
Swingline Lender, L/C Issuer and Agent Bank, Credit Lyonnais Los
Angeles Branch, as Syndication Co-Agent, Deutsche Banc Securities, as
Documentation Agent, Societe Generale and Bank One, N. A. as
Co-Managing Agents. (6)
27 Financial Data Schedule (6)
</TABLE>
-----------------------------------------------
(1) Incorporated herein by reference to Registration Statement No.
333-3576
(2) Incorporated herein by reference to Registrant's Current Report on
Form 8-K filed June 14, 1996
(3) Incorporated herein by reference to Registrant's Quarterly Report on
Form 10-Q for the period ended August 31, 1997
(4) Incorporated herein by reference to Registrant's Current Report on
Form 8-K filed February 16, 1999
(5) Incorporated herein by reference to the Registrant's Annual Report on
Form 10-K for the period ended November 30, 1998
(6) Filed herewith
21
<PAGE>
CERTIFICATE OF AMENDMENT TO
THE CERTIFICATE OF DESIGNATION
OF THE
13 1/2% SERIES A SENIOR REDEEMABLE CONVERTIBLE
CUMULATIVE PREFERRED STOCK
($.01 PAR VALUE PER SHARE)
AND THE
13 1/2% SERIES B SENIOR REDEEMABLE CONVERTIBLE
CUMULATIVE PREFERRED STOCK
($.01 PAR VALUE PER SHARE)
OF
HARVEYS CASINO RESORTS
-----------------------
PURSUANT TO SECTION 78.1955 OF THE
NEVADA REVISED STATUTES
-----------------------
Harveys Casino Resorts, a corporation organized under the laws of the State
of Nevada (the "Company"), by its president and secretary does hereby certify:
1. That the board of directors of the Company adopted the following
resolution by unanimous written consent dated as of the 7 day of
February, 2000, with the same force and effect as if it were
approved and adopted at a duly constituted meeting of the board of
directors, declaring that the following change and amendment to the
Certificate of Designation is advisable.
2. RESOLVED that Section 6(a) of said Certificate of Designation be
amended to read as follows:
<PAGE>
"Section 6. CONVERSION.
(a) Each share of Series A Preferred Stock shall be convertible at
the option of Colony HCR Voteco, LLC, a Delaware limited liability company
("Voteco"), Colony Investors III, L.P., a Delaware limited partnership ("Colony
III") and Colony Capital, Inc., a Delaware corporation ("Colony Capital"), and
their respective Affiliates, and such right of conversion shall only vest in and
be exercisable by Voteco, Colony III, Colony Capital, and their respective
Affiliates, at any time on or prior to February 1, 2002 into the amount of
validly issued, fully paid and nonassessable shares of Class A Common Stock, par
value $.01 per share, determined in accordance with Subsections 6(e) and 6(f)
below. Each share of Series B Preferred Stock shall be convertible at the option
of Colony III, Colony Capital, and their respective Affiliates, and such right
of conversion shall only vest in and be exercisable by Colony III, Colony
Capital, and their respective Affiliates, at any time on or prior to February 1,
2002 into the amount of validly issued, fully paid and nonassessable shares of
Class B Common Stock, par value $.01 per share, determined in accordance with
Subsections 6(e) and 6(f) below. Common Stock of the class into which shares of
Preferred Stock may be converted pursuant to this Subsection 6(a) is hereinafter
referred to as 'CORRESPONDING COMMON STOCK.'"
3. That the amendment to Section 6(a) of the Certificate of Designation
as described immediately above has been approved by the unanimous
consent of the holders of shares of 13 1/2% Series A Senior Redeemable
Convertible Cumulative Preferred Stock, par value $.01 per share, of
the Company, which constitute all of the stockholders required to
approve such an amendment pursuant to the terms of the Certificate of
Designation.
2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this certificate to be signed by
its president and secretary this 7 day of February, 2000.
/s/ Charles W. Scharer
------------------------------------
Charles W. Scharer
President
/s/ John J. McLaughlin
------------------------------------
John J. McLaughlin
Secretary
State of Nevada )
: ss
County of Douglas )
This instrument was acknowledged before me on 2/7, 2000, by
CHARLES W. SCHARER as President of HARVEYS CASINO RESORTS, a Nevada corporation.
Connie M. Friedman
---------------------------
NOTARY PUBLIC
State of Nevada )
: ss
County of Douglas )
This instrument was acknowledged before me on 2/7, 2000, by
JOHN J. MCLAUGHLIN as Secretary of HARVEYS CASINO RESORTS, a Nevada corporation.
Connie M. Friedman
---------------------------
NOTARY PUBLIC
3
<PAGE>
--------------------------------------------------
-----------------------
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF OCTOBER 5, 1999
AMONG
HARVEYS CASINO RESORTS, A NEVADA CORPORATION,
HARVEYS C.C. MANAGEMENT COMPANY, INC.,
A NEVADA CORPORATION,
HARVEYS IOWA MANAGEMENT COMPANY, INC.,
A NEVADA CORPORATION,
HARVEYS TAHOE MANAGEMENT COMPANY, INC.,
A NEVADA CORPORATION,
HBR REALTY COMPANY, INC., A NEVADA CORPORATION,
HARVEYS BR MANAGEMENT COMPANY, INC.,
A NEVADA CORPORATION,
HCR SERVICES COMPANY, INC., A NEVADA CORPORATION,
AS BORROWERS
THE LENDERS HEREIN NAMED,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS SWINGLINE LENDER, L/C ISSUER AND AGENT BANK
CREDIT LYONNAIS LOS ANGELES BRANCH,
AS SYNDICATION CO-AGENT
DEUTSCHE BANC SECURITIES,
AS DOCUMENTATION AGENT
SOCIETE GENERALE AND
BANK ONE, N.A.,
AS CO-MANAGING AGENTS
- --------------------------------------------------
- -----------------------
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TABLE OF CONTENTS
<TABLE>
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RECITALS.............................................................................................. 1
ARTICLE I - DEFINITIONS............................................................................... 2
Section 1.01. Definitions................................................................ 2
Section 1.02. Interpretation and Construction............................................77
Section 1.03. Use of Defined Terms.......................................................79
Section 1.04. Cross-References...........................................................79
Section 1.05. Exhibits and Schedules.....................................................79
ARTICLE II - AMOUNT, TERMS AND SECURITY OF THE FACILITIES.............................................79
Section 2.01. The Credit Facility...............................................79
Section 2.02. Use of Proceeds of the Credit Facility............................82
Section 2.03. Notice of Borrowings..............................................83
Section 2.04. Conditions of Borrowings..........................................84
Section 2.05. The Revolving Credit Note and Exercise of Interest Rate Options...84
Section 2.06. Security for the Credit Facility..................................88
Section 2.07. Place and Manner of Payment.......................................88
Section 2.08. The Swingline Facility............................................91
Section 2.09. Issuance of Letters of Credit.....................................93
Section 2.10. Fees..............................................................96
Section 2.11. Interest on Overdue Amounts and Default Rate......................97
Section 2.12. Net Payments......................................................97
Section 2.13. Increased Costs..................................................99
Section 2.14. Mitigation; Exculpation; Replacement Lender......................100
ARTICLE III - REQUIREMENTS FOR THE OCCURRENCE OF THE AMENDMENT EFFECTIVE DATE AND ALL BORROWINGS.....101
</TABLE>
i
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<TABLE>
<S> <C>
A. Closing and Funding Conditions......................................................101
Section 3.01. Credit Agreement..................................................101
Section 3.02. The Notes.........................................................101
Section 3.03. Security Documentation............................................101
Section 3.04. Other Loan Documents..............................................102
Section 3.05. Articles of Incorporation, Bylaws, Corporate Resolution,
Certificate of Good Standing and Closing Certificate..............103
Section 3.06. Opinions of Counsel...............................................104
Section 3.07. Title Insurance Policies..........................................104
Section 3.08. Survey............................................................104
Section 3.09. Payment of Taxes..................................................105
Section 3.10. Insurance.........................................................105
Section 3.11. Payment of Accrued Interest and Fees under Existing Harveys
Credit Agreement..................................................105
Section 3.12. Reimbursement for Expenses and Fees...............................105
Section 3.13. Schedules of Spaceleases and Equipment Leases and Contracts.......106
Section 3.14. Leases............................................................106
Section 3.15. BR Acquisition Documentation......................................106
Section 3.16. Environmental Representations.....................................107
Section 3.17. Evidence of Right to Occupancy of Hotel/Casino Facilities.........107
Section 3.18. Regulatory Approvals, Permits, Consents, Etc......................107
Section 3.19. Restricted Subsidiaries Stock.....................................107
Section 3.20. Schedule of all Significant Litigation............................108
Section 3.21. Financial Statements..............................................108
Section 3.22. No Injunction or Other Litigation.................................108
Section 3.23. Additional Documents and Statements...............................108
Section 3.24. Occurrence of BR Acquisition......................................108
B. Conditions Precedent to all Borrowings..............................................108
Section 3.25. Notices of Borrowing..............................................109
Section 3.26. Certain Statements................................................109
Section 3.27. Gaming Permits....................................................109
</TABLE>
ii
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<TABLE>
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ARTICLE IV - REPRESENTATIONS AND WARRANTIES...........................................................110
Section 4.01. Organization; Power and Authorization.............................110
Section 4.02. No Conflict With, Violation of or Default Under Laws or Other
Agreements........................................................111
Section 4.03. Litigation........................................................111
Section 4.04. Agreements Legal, Binding, Valid and Enforceable..................112
Section 4.05. Information and Financial Data Accurate; Financial Statements;
No Material Adverse Change........................................112
Section 4.06. Governmental Approvals............................................112
Section 4.07. Payment of Taxes..................................................113
Section 4.08. Title to Properties...............................................113
Section 4.09. No Untrue Statements..............................................114
Section 4.10. Brokerage Commissions.............................................114
Section 4.11. No Defaults.......................................................115
Section 4.12. Employee Retirement Income Security Act of 1974...................115
Section 4.13. Park Cattle Lease and Hard Rock Lease.............................115
Section 4.14. Green Belt Leases.................................................116
Section 4.15. Iowa Leases, Iowa Sponsorship Agreement and BR Management
Agreement.........................................................116
Section 4.16. Availability of Utility Services..................................117
Section 4.17. Policies of Insurance.............................................117
Section 4.18. Spaceleases.......................................................117
Section 4.19. Equipment Leases and Contracts....................................118
Section 4.20. Gaming Permits and Approvals......................................118
Section 4.21. Environmental Certificate.........................................118
Section 4.22. New Venture Subsidiaries..........................................118
Section 4.23. Compliance with Statutes, etc.....................................118
Section 4.24. Investment Company Act............................................119
Section 4.25. Public Utility Holding Company Act................................119
Section 4.26. Labor Relations...................................................119
Section 4.27. Trademarks, Patents, Licenses, Franchises, Formulas and
Copyrights........................................................119
Section 4.28. Contingent Liabilities............................................119
</TABLE>
iii
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<TABLE>
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ARTICLE V - GENERAL COVENANTS OF BORROWERS............................................................120
Section 5.01. FF&E ..........................................................120
Section 5.02. Permits; Licenses and Legal Requirements..........................120
Section 5.03. Leases, Iowa Sponsorship Agreement and BR Management Agreement....121
Section 5.04. Protection Against Lien Claims....................................121
Section 5.05. No Change in Character Business...................................122
Section 5.06. Preservation and Maintenance of Properties and Assets;
Acquisition of Additional Property................................122
Section 5.07. Repair of Properties and Assets...................................122
Section 5.08. Financial Statements; Reports; Certificates and Books and
Records...........................................................123
Section 5.09. Insurance.........................................................126
Section 5.10. Taxes.............................................................132
Section 5.11. Notice of Contested Matters.......................................132
Section 5.12. Advances..........................................................133
Section 5.13. Further Assurances................................................133
Section 5.14. Indemnification...................................................133
Section 5.15. Inspection of the Collateral and Appraisal........................135
Section 5.16. Compliance With Other Loan Documents, Execution of Subsidiary
Guaranties and Pledge of Restricted Subsidiary Stock..............135
Section 5.17. Suits or Actions Affecting Borrowers..............................136
Section 5.18. Account Analysis of Operating Accounts............................136
Section 5.19. Consents of and Notices to Gaming Authorities.....................137
Section 5.20. Tradenames, Trademarks and Servicemarks...........................137
Section 5.21. Notice of Hazardous Materials.....................................137
Section 5.22. Compliance with Statutes, etc.....................................138
Section 5.23. Compliance with Access Laws.......................................138
Section 5.24. Interest Rate Protection..........................................139
Section 5.25. Prohibition on Prepayment or Defeasance of Senior Subordinated
Notes.............................................................139
Section 5.26. Year 2000 Compliance..............................................140
Section 5.27. Designation of Bank Facilities as Designated Senior Debt..........140
</TABLE>
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ARTICLE VI - FINANCIAL COVENANTS......................................................................140
Section 6.01. Leverage Ratio....................................................140
Section 6.02. Senior Leverage Ratio.............................................141
Section 6.03. Fixed Charge Coverage Ratio.......................................142
Section 6.04. Adjusted Fixed Charge Coverage Ratio..............................142
Section 6.05. Minimum Net Worth.................................................142
Section 6.06. Capital Expenditure Requirement...................................143
Section 6.07. Contingent Liability(ies).........................................143
Section 6.08. Investment Restrictions...........................................143
Section 6.09. Total Liens.......................................................145
Section 6.10. Limitation on Indebtedness........................................146
Section 6.11. Minimum Subordinated Debt.........................................148
Section 6.12. Restriction on Distributions......................................148
Section 6.13. No Change of Control..............................................149
Section 6.14. Consolidation, Merger, Sale of Assets, etc........................149
Section 6.15. Transactions with Affiliates......................................149
Section 6.16. No Transfer of Ownership..........................................150
Section 6.17. ERISA.............................................................150
Section 6.18. Margin Regulations................................................151
Section 6.19. Limitation on Additional Subsidiaries.............................151
Section 6.20. Limitation on Consolidated Tax Liability..........................151
Section 6.21. Change in Accounting Principles...................................151
ARTICLE VII - EVENTS OF DEFAULT.......................................................................152
Section 7.01. Events of Default.................................................152
Section 7.02. Default Remedies..................................................156
Section 7.03. Application of Proceeds...........................................157
Section 7.04. Notices...........................................................158
Section 7.05. Agreement to Pay Attorney's Fees and Expenses.....................158
Section 7.06. No Additional Waiver Implied by One Waiver........................158
Section 7.07. Licensing of Agent Bank and Lenders...............................158
Section 7.08. Exercise of Rights Subject to Applicable Law......................159
Section 7.09. Discontinuance of Proceedings.....................................159
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
ARTICLE VIII - DAMAGE, DESTRUCTION AND CONDEMNATION...................................................159
Section 8.01. No Abatement of Payments..........................................159
Section 8.02. Distribution of Capital Proceeds Upon Occurrence of Fire,
Casualty, Other Perils or Condemnation............................159
ARTICLE IX - AGENCY PROVISIONS........................................................................162
Section 9.01. Appointment.......................................................162
Section 9.02. Nature of Duties..................................................162
Section 9.03. Disbursement of Borrowings........................................163
Section 9.04. Distribution and Apportionment of Payments........................165
Section 9.05. Rights, Exculpation, Etc..........................................166
Section 9.06. Reliance..........................................................167
Section 9.07. Indemnification...................................................167
Section 9.08. Agent Individually................................................168
Section 9.09. Successor Agent Bank; Resignation of Agent Bank; Removal of
Agent Bank........................................................168
Section 9.10. Consent and Approvals.............................................169
Section 9.11. Agency Provisions Relating to Collateral..........................172
Section 9.12. Lender Actions Against Collateral and Restriction on Exercise
of Set-Off........................................................175
Section 9.13. Ratable Sharing...................................................175
Section 9.14. Delivery of Documents.............................................176
Section 9.15. Notice of Events of Default.......................................176
Section 9.16. Syndication Co-Agent, Documentation Agent and Co-Managing
Agents............................................................176
ARTICLE X - GENERAL TERMS AND CONDITIONS..............................................................177
Section 10.01. Amendments and Waivers............................................177
Section 10.02. Failure to Exercise Rights........................................178
Section 10.03. Notices and Delivery..............................................178
Section 10.04. Modification in Writing...........................................179
Section 10.05. Other Agreements..................................................179
Section 10.06. Counterparts......................................................179
Section 10.07. Rights, Powers and Remedies are Cumulative........................179
Section 10.08. Continuing Representations........................................180
</TABLE>
vi
<PAGE>
<TABLE>
<S> <C>
Section 10.09. Successors and Assigns............................................180
Section 10.10. Assignment of Loan Documents by by Borrowers or Syndication
Interests by Lenders..............................................180
Section 10.11. Action by Lenders.................................................182
Section 10.12. Time of Essence...................................................182
Section 10.13. Choice of Law and Forum...........................................182
Section 10.14. Arbitration ......................................................183
Section 10.15. Waiver of Jury Trial..............................................183
Section 10.16. Scope of Approval and Review......................................184
Section 10.17. Severability of Provisions........................................184
Section 10.18. Cumulative Nature of Covenants....................................184
Section 10.19. Costs to Prevailing Party.........................................184
Section 10.20. Expenses..........................................................185
Section 10.21. Security and Loan Documentation...................................185
Section 10.22. Setoff............................................................186
Section 10.23. Borrowers' Waivers and Consents...................................186
Section 10.24. Confidentiality...................................................191
Section 10.25. The Existing Harveys Credit Agreement.............................191
Section 10.26. Acknowledgement of Receipt of Documents...........................191
Section 10.27. Application of Gaming Laws........................................192
Section 10.28. Schedules Attached................................................192
Schedule 2.01(a) - Schedule of Lenders'
Proportions in Credit Facility
Schedule 2.01(c) - Aggregate Commitment
Reduction Schedule
Schedule 2.09(e) - Schedule of Outstanding
Letters of Credit
Schedule 3.11 - Schedule of Existing Bank
Loan Security Documents
Schedule 3.20 - Schedule of Significant Litigation
Schedule 4.18 - Schedules of Spaceleases
(A) Tahoe Schedule of Spaceleases
(B) Colorado Schedule of Spaceleases
(C) Iowa Schedule of Spaceleases
(D) Bluffs Run Schedule of Spaceleases
</TABLE>
vii
<PAGE>
<TABLE>
<S> <C>
Schedule 4.19 - Schedules of Equipment Leases
and Contracts
(A) Tahoe Schedule of
Equipment Leases and
Contracts
(B) Colorado Schedule of
Equipment Leases and
Contracts
(C) Iowa Schedule of
Equipment Leases and
Contracts
(D) Bluffs Run Schedule of
Equipment Leases and
Contracts
Schedule 4.22 - Schedule of Restricted and
Unrestricted Subsidiaries
Schedule 4.27 - Schedule of Trademarks,
Patents, Licenses,
Franchises, Formulas and Copyrights
Schedule 4.28 - Schedule of Contingent Liabilities
Schedule 6.09 - Schedule of Liens
Section 10.29. Exhibits Attached.................................................203
Exhibit A - Revolving Credit Note - Form
Exhibit B - Swingline Note - Form
Exhibit C - Notice of Borrowing - Form
Exhibit D - Continuation/Conversion Notice - Form
Exhibit E - Notice of Swingline Advance - Form
Exhibit F - Compliance Certificate - Form
Exhibit G - Pricing Certificate - Form
Exhibit H - Authorized Officer Certificate - Form
Exhibit I - Closing Certificate - Form
Exhibit J - Legal Opinions - Form
Exhibit K - Assumption and Consent Agreement - Form
Exhibit L - Assignment and Assumption Agreement - Form
Exhibit M - Cash Collateral Pledge Agreement - Form
</TABLE>
viii
<PAGE>
<TABLE>
<S> <C>
Exhibit N - Stock Pledge (Gaming) - Form
Exhibit O - Stock Pledge (General) - Form
Exhibit P - Subsidiary Guaranty - Form
Exhibit Q - Tahoe Real Property - Description
Exhibit R - Colorado Real Property - Description
Exhibit S - Iowa Real Property - Description
Exhibit T - Bluffs Run Real Property - Description
</TABLE>
ix
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT ("Credit
Agreement") is made and entered into as of the 5th day of October, 1999, by and
among HARVEYS CASINO RESORTS, a Nevada corporation ("HCR"), HARVEYS C.C.
MANAGEMENT COMPANY, INC., a Nevada corporation ("HCCMC"), HARVEYS IOWA
MANAGEMENT COMPANY, INC., a Nevada corporation ("HIMC"), HARVEYS TAHOE
MANAGEMENT COMPANY, INC., a Nevada corporation ("HTMC"), HBR REALTY COMPANY,
INC., a Nevada corporation ("HBR"), HARVEYS BR MANAGEMENT COMPANY, INC., a
Nevada corporation ("HBRMC") and HCR SERVICES COMPANY, INC., a Nevada
corporation ("HCRSC" and together with HCR, HCCMC, HIMC, HTMC, HBR and HBRMC,
collectively the "Borrowers"), each financial institution whose name is set
forth on the signature pages of the Credit Agreement and each lender which may
hereafter become a party to this Credit Agreement pursuant to Section 2.01(d) or
Section 10.10(b) (each, together with their respective successors and assigns,
individually a "Lender" and collectively the "Lenders"), WELLS FARGO BANK,
National Association, as the swingline lender (herein in such capacity, together
with its successors and assigns, the "Swingline Lender"), WELLS FARGO BANK,
National Association, as the issuer of letters of credit hereunder (herein in
such capacity, together with its successors and assigns, the "L/C Issuer"),
CREDIT LYONNAIS LOS ANGELES BRANCH, as the Syndication Agent ("Syndication Co-
Agent"), DEUTSCHE BANC SECURITIES, as the Documentation Agent ("Documentation
Agent") and SOCIETE GENERALE and BANK ONE, N.A., as the Co-Managing Agents (the
"Co-Managing Agents") and WELLS FARGO BANK, National Association, as arranger,
administrative and collateral agent for the Lenders, Swingline Lender and L/C
Issuer (herein, in such capacity, called the "Agent Bank" and, together with the
Lenders, Swingline Lender and L/C Issuer, collectively referred to as the
"Banks").
R_E_C_I_T_A_L_S:
WHEREAS:
A. In this Credit Agreement all capitalized words
and terms shall have the respective meanings and be construed
herein as hereinafter provided in Section 1.01 of this Credit Agreement and
shall be deemed to incorporate such words and terms as a part hereof in the same
manner and with the same
<PAGE>
effect as if the same were fully set forth.
B. By Purchase and Sale Agreement and Joint Escrow
Instructions dated August 31, 1999, as amended by that certain First Amendment
to Purchase and Sale Agreement and Joint Escrow Instructions dated concurrently,
or substantially concurrent, herewith ("Purchase Agreement") by and between HBR,
IWRA and Purchase Escrow Agent, HBR has agreed to purchase and IWRA has agreed
to sell, the BR Purchase Property for the consideration and subject to the terms
and conditions therein contained.
C. Concurrently with the BR Closing (i) HBR, as landlord,
intends to lease the BR Purchase Property to IWRA, as tenant, pursuant to the
terms of the BR Master Lease, and (ii) IWRA intends to contract with HBRMC for
the management of the Bluffs Run Facility and the BR Gaming Operations in
accordance with the terms of the BR Management Agreement.
D. The Existing Harveys Borrowers and the Existing Harveys
Lenders are party to the Existing Harveys Credit Agreement. In connection with
the BR Acquisition, Borrowers and the Banks all desire to amend and restate the
Existing Harveys Credit Agreement for the purpose of: (i) increasing the
Aggregate Commitment from One Hundred Eighty-Five Million Dollars
($185,000,000.00) to Three Hundred Thirty-Five Million Dollars
($335,000,000.00), (ii) increasing the L/C Facility from Five Million Dollars
($5,000,000.00) to Fifty-Five Million Dollars ($55,000,000.00), (iii) increasing
the Swingline Facility from Five Million Dollars ($5,000,000.00) to Ten Million
Dollars ($10,000,000.00), (iv) providing a source of financing for a portion of
the BR Acquisition Consideration, and (v) making the amendments, modifications
and restatements to the Existing Harveys Credit Agreement and to the Existing
Loan Documents herein contained and/or hereinafter described.
NOW, THEREFORE, in consideration of the foregoing, and other
valuable considerations as hereinafter described, the parties hereto do promise,
covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. For the purposes of this Credit
Agreement, each of the following terms shall have the meaning specified with
respect thereto, unless a different meaning clearly appears from the context:
2
<PAGE>
"Access Laws" shall have the meaning set forth in
Section 5.23.
"Adjusted Fixed Charge Coverage Ratio" as of the end of any
Fiscal Quarter shall mean with reference to the Borrower Consolidation:
For the Fiscal Quarter under review, together with the most
recently ended three (3) preceding Fiscal Quarters, the sum
of: (i) EBITDA, less (ii) the aggregate amount of actually
paid federal and state taxes on or measured by income or
profits, less (iii) Distributions actually paid solely to the
extent not deducted in determining Net Income during such
Fiscal Quarters, but excluding Distributions paid on or prior
to the Amendment Effective Date, less (iv) the amount of the
Minimum Cap Ex Requirement for such period
Divided by ())
The sum of: (i) the aggregate amount of actually paid Interest
Expense (expensed and capitalized), plus (ii) the aggregate
amount of Scheduled Reductions actually paid, plus (iii) the
aggregate amount of actually paid principal payments or
reductions (without duplication) made on all other
Indebtedness, plus (iv) the current portion of Capitalized
Lease Liabilities, to the extent not included in (i) or (iii)
above; in each case of (i) through (iv) determined for the
Fiscal Quarter under review together with the most recently
ended three (3) preceding Fiscal Quarters.
"Affiliate(s)" of any Person means any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person. A Person shall be deemed to be "controlled by" any other
Person if such other Person possesses, directly or indirectly, power to:
(a) vote twenty percent (20%) or more of the equity
securities (on a fully diluted basis) having ordinary voting
power for the election of directors or managing general
partners; or
3
<PAGE>
(b) direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.
"Agent Bank" shall mean WFB in its capacity as administrative
and collateral agent for Lenders, Swingline Lender and L/C Issuer.
"Aggregate Commitment" shall mean reference to the aggregate
amount committed by Lenders for advance to or on behalf of the Borrower
Consolidation as Borrowings under the Credit Facility (inclusive of the
outstanding principal under the Existing Harveys Credit Facility as of the
Amendment Effective Date) in the initial principal amount of Three Hundred
Thirty-Five Million Dollars ($335,000,000.00), as may be increased by up to an
additional principal amount of One Hundred Million Dollars ($100,000,000.00) as
provided in Section 2.01(d), subject to: (i) the Scheduled Reductions as set
forth on the Total Commitment Reduction Schedule, (ii) the limitations for
advance as set forth in the definition of Maximum Permitted Balance, and (iii)
Voluntary Permanent Reductions as provided in Section 2.01(c).
"Aggregate Outstandings" shall mean collective reference to
the sum of the Funded Outstandings, Swingline Outstandings and L/C Exposure as
of any given date of determination.
"Amendment Effective Date" shall mean the date upon which: (i)
each requirement set forth in Article IIIA of this Credit Agreement has been
satisfied or waived, (ii) the BR Acquisition is consummated, and (iii) the BR
Acquisition Disbursement hereunder has been funded.
"Applicable Margin" means for any Base Rate Loan or LIBOR
Loan, the applicable percentage amount to be added to the Base Rate or LIBO
Rate, as the case may be, as follows: (i) commencing on the Amendment Effective
Date and continuing until the Rate Adjustment Date, one and one-half percent
(1.50%) to be added to the Base Rate, and two and one-half percent (2.50%) to be
added to the applicable LIBO Rate; (ii) commencing on the Rate Adjustment Date
and continuing until Bank Facilities Termination, the margin rates as set forth
in Table One below in each instance based on the Leverage Ratio calculated with
regard to the Borrower Consolidation as of each Fiscal Quarter end, commencing
with the Fiscal Quarter ending November 30, 1999, together with the immediately
preceding three (3) Fiscal Quarters on a four (4) Fiscal Quarter basis, any
change in the applicable percentage amount by reason thereof to be effective as
of the 1st day of the third (3rd) month immediately following each such Fiscal
Quarter end:
4
<PAGE>
<TABLE>
<CAPTION>
TABLE ONE TABLE TWO
------------------------------------------
BASE LIBO
LEVERAGE RATIO RATE RATE COMMITMENT
MARGIN MARGIN PERCENTAGE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Greater than 4.50 to 1.0 1.75% 2.75% 0.50%
- ---------------------------------------------------------------------------------------------------------
Greater than 4.00 to 1.0 but less than 1.50% 2.50% 0.50%
or equal to 4.50 to 1.00
- ---------------------------------------------------------------------------------------------------------
Greater than 3.50 to 1.0 but less than 1.00% 2.00% 0.375%
or equal to 4.00 to 1.00
- ---------------------------------------------------------------------------------------------------------
Greater than 3.00 to 1.0 but less than 0.75% 1.75% 0.375%
or equal to 3.50 to 1.00
- ---------------------------------------------------------------------------------------------------------
Greater than 2.00 to 1.0 but less than 0.50% 1.50% 0.375%
or equal to 3.00 to 1.00
- ---------------------------------------------------------------------------------------------------------
Less than or equal to 2.00 to 1.00 0.00% 1.00% 0.25%
=========================================================================================================
</TABLE>
"Assets" shall mean the total assets of the Borrower
Consolidation determined in accordance with GAAP.
"Assignment and Assumption Agreement" shall mean the document
evidencing an assignment of a Syndication Interest by any Lender to an Eligible
Assignee in the form of the Assignment, Assumption and Consent Agreement marked
"Exhibit L", affixed hereto and by this reference incorporated herein and made a
part hereof.
"Assignment of BR Billboard Lease" shall mean the Assignment
of BR Billboard Lease executed by HBR and Agent Bank on or before the Amendment
Effective Date pursuant to which HBR assigns to Agent Bank all of its right,
title and interest as lessee under the BR Billboard Lease, as such Assignment of
BR Billboard Lease may be amended, restated or otherwise modified from time to
time.
"Assignment of BR Management Agreement" shall mean the
Assignment of BR Management Agreement executed by HBRMC and Agent Bank on or
before the Amendment Effective Date pursuant to which HBRMC assigns to Agent
Bank all of its right, title and interest as manager under the BR Management
Agreement, as such Assignment of BR Management Agreement may be amended,
restated or otherwise modified from time to time.
"Assignment of California Greenbelt Lease" shall mean the
Amended and Restated Assignment of California Greenbelt Lease executed by HTMC
and Agent Bank on January 27, 1999, pursuant to which HTMC assigned to Agent
Bank all of its right, title and interest as lessee under the California
Greenbelt
5
<PAGE>
Lease, which assignment was recorded January 29, 1999, in the Official Records
of El Dorado County, California, as Document No. 99-0006390-00, as such Amended
and Restated Assignment of California Greenbelt Lease may be amended, restated
or otherwise modified from time to time.
"Assignment of Friendship Sublease" shall mean the Amended and
Restated Assignment of Friendship Park Sublease executed by HIMC and Agent Bank
on January 27, 1999 pursuant to which HIMC assigned to Agent Bank all of its
right, title and interest as sublessee under the Friendship Sublease, which
assignment was recorded January 29, 1999, in the Official Records of
Pottawattamie County, Iowa, in Book 99, at Page 39868, as Instrument No. 14027,
as such Amended and Restated Assignment of Friendship Park Sublease may be
amended, restated or otherwise modified from time to time.
"Assignment of Iowa Sponsorship Agreement" shall mean the
Assignment of Iowa Sponsorship Agreement executed by HIMC and Agent Bank on or
before the Amendment Effective Date pursuant to which HIMC assigns to Agent Bank
all of its right, title and interest as manager under the Iowa Sponsorship
Agreement, as such Assignment of Iowa Sponsorship Agreement may be amended,
restated or otherwise modified from time to time.
"Assignment of Park Cattle Lease" shall mean the Amended and
Restated Assignment of Park Cattle Lease executed by HTMC and Agent Bank on
January 27, 1999, pursuant to which HTMC assigned to Agent Bank all of its
right, title and interest as lessee under the Park Cattle Lease, which
assignment was recorded January 29, 1999, in the Official Records of Douglas
County, Nevada, in Book 199, at Page 5894, as Instrument No. 0459900, as such
Amended and Restated Assignment of Park Cattle Lease may be amended, restated or
otherwise modified from time to time.
"Assignment of BR Master Lease and Purchase Agreement" shall
mean the Assignment of BR Master Lease and Purchase Agreement executed by HBRMC
and Agent Bank on or before the Amendment Effective Date pursuant to which HBRMC
assigns to Agent Bank all of its right, title and interest as manager under the
BR Master Lease and Purchase Agreement, as such Assignment of BR Master Lease
and Purchase Agreement may be amended, restated or otherwise modified from time
to time.
"Assignment of Tahoe Greenbelt Lease" shall mean the
Amended and Restated Assignment of Tahoe Greenbelt Lease executed by HTMC and
Agent Bank on January 27, 1999, pursuant to which HTMC assigned to Agent Bank
all of its right, title and interest as lessee under the Tahoe Greenbelt Lease,
which assignment was recorded January 29, 1999, in the Official
6
<PAGE>
Records of Douglas County, Nevada, in Book 199, at Page 5824, as Instrument No.
0459907, as such Amended and Restated Assignment of Tahoe Greenbelt Lease may be
amended, restated or otherwise modified from time to time.
"Assignments" shall mean collective reference to the
Tahoe Assignments, the Iowa Assignments, the Colorado Assignments and the Bluffs
Run Assignments.
"Assignments of Permits, Licenses and Contracts" shall mean
collective reference to the Tahoe Assignment of Permits, Licenses and Contracts,
Colorado Assignment of Permits, Licenses and Contracts, the Iowa Assignment of
Permits, Licenses and Contracts and the Bluffs Run Assignment
of Permits, Licenses and Contracts.
"Assignments of Spaceleases, Contracts, Rents and Revenues"
shall mean collective reference to the Tahoe Assignment of Spaceleases,
Contracts, Rents and Revenues, Colorado Assignment of Spaceleases, Contracts,
Rents and Revenues, the Iowa Assignment of Spaceleases, Contracts, Rents and
Revenues and the Bluffs Run Assignment of Spaceleases, Contracts, Rents and
Revenues.
"Assumption and Consent Agreement" shall mean the document
evidencing an increase of the Aggregate Commitment and assumption of such
increase by a Lender or Eligible Assignee in the form of the Assumption and
Consent Agreement marked "Exhibit K", affixed hereto and by this reference
incorporated herein and made a part hereof.
"Authorized Officer Certificate" shall have the
meaning set forth in Section 3.05(iv).
"Authorized Officer(s)" shall mean, relative to the Borrowers,
those of the respective officers whose signatures and incumbency shall have been
certified to Agent Bank and the Banks as required in Section 3.05(iv) of the
Credit Agreement with the authority and responsibility to deliver Notices of
Borrowing, Continuation/Conversion Notices, Compliance Certificates, Pricing
Certificates, Notices of Swingline Advances, requests for the issuance of
Letters of Credit and all other requests, notices, reports, consents,
certifications and authorizations on behalf of Borrowers, or any of them.
"Available Borrowings" shall mean, at any time, and from time
to time, the aggregate amount available to Borrowers for a Borrowing, a
Swingline Advance or issuance of a Letter of Credit not exceeding the amount of
the Maximum Availability, as of each date of determination.
7
<PAGE>
"BR Acquisition" shall mean the acquisition of title to the BR
Purchase Property by HBR pursuant to the terms of the Purchase Agreement.
"BR Acquisition Consideration" shall have the meaning ascribed
to the term "Consideration" in Section 2.1 of the Purchase Agreement.
"BR Acquisition Disbursement" shall have the meaning
set forth in Section 2.02(a).
"BR Billboard Lease" shall mean that certain Lease Agreement,
under date of July 18, 1997, by and between Edwin B. Rasmussen and Minnie E.
Rasmussen, husband and wife, as lessors, and Iowa West Racing Association d/b/a
Bluffs Run Casino of Council Bluffs, Iowa, as lessee, with the lessee's interest
thereunder having been assigned to HBR concurrently, or substantially
concurrent, herewith, pursuant to which Lease Agreement a leasehold interest is
granted to HBR in that premises commonly referred to as "23rd Avenue and 24th
Street in Council Bluffs, Iowa", which premises is used for maintenance of an
advertising billboard for the Bluffs Run Facility.
"BR Closing" shall have the meaning to the term "Closing" in
Section 8.1 of the Purchase Agreement.
"BR EBITDA Adjustment" shall mean IWRA EBITDA during the
fiscal periods described below to be included in the calculation of EBITDA for
the first four (4) consecutive Fiscal Quarters following the Amendment Effective
Date, as follows:
a. For the four (4) consecutive Fiscal
Quarters ending November 30,1999, IWRA EBITDA for the period commencing on
December 1, 1998 through the Amendment Effective Date;
b. For the four (4) consecutive Fiscal
Quarters ending February 29, 2000, IWRA EBITDA for the period commencing on
March 1, 1999 through the Amendment Effective Date;
c. For the four (4) consecutive Fiscal
Quarters ending May 31, 2000, IWRA EBITDA for the periods commencing on June 1,
1999 through the Amendment Effective Date; and
d. For the four (4) consecutive Fiscal
Quarters ending August 31, 2000, IWRA EBITDA for the period commencing on
September 1, 1999 through the Amendment Effective Date.
8
<PAGE>
"BR Gaming Operations" shall mean the pari-mutuel race track
and casino operation and related activities incident thereto conducted at the
Bluffs Run Facility.
"BR Management Agreement" shall mean the Management Agreement
to be executed by and between HBRMC and IWRA and delivered as of the BR Closing
under the terms of which IWRA grants HBRMC the exclusive authority to manage,
control and operate the Bluffs Run Facility on behalf of IWRA subject to the
terms and conditions set forth in the Management Agreement, a copy of the form
of which is attached to the Purchase Agreement as Exhibit D.
"BR Management Agreement Estoppel Certificate" shall mean an
estoppel certificate duly executed by IWRA as owner of the enterprise and HBRMC
as manager under the BR Management Agreement, wherein each certifies and
represents to Agent Bank on behalf of Lenders that: (a) the BR Management
Agreement, as defined herein, represents the entire agreement between the
parties thereto, and supersedes all other previous documents and agreements
between them, (b) that the BR Management Agreement has not been modified,
supplemented or amended, except as described herein, (c) to the actual knowledge
of owner and to the best knowledge of manager there are no defaults presently
existing or continuing under any of the terms and provisions of the BR
Management Agreement, and (d) other provisions regarding notice to Agent Bank in
the event of a default thereunder, Agent Bank's right to cure any such default
and the rights of Banks and their successors and assigns to continue in
management of the Bluffs Run Real Property.
"BR Master Lease" shall mean the Lease to be executed by and
between HBR, as landlord, and IWRA, as tenant, and delivered effective as of the
BR Closing, under the terms of which the BR Purchase Property is leased by HBR
to IWRA in accordance with the terms thereof, a copy of the form of which is
attached to the Purchase Agreement as Exhibit C.
"BR Master Lease Subordination and Nondisturbance Agreement"
shall mean that certain Subordination, Attornment and Nondisturbance Agreement
executed by IWRA and Agent Bank, on or before the Amendment Effective Date,
pursuant to which: (i) IWRA makes certain representations with respect to the BR
Master Lease and the Purchase Agreement; and (ii) the BR Master Lease is
subordinated to the lien of the Bluffs Run Mortgage subject to the agreement by
Agent Bank not to disturb, and to recognize, the interest of IWRA as tenant
under the BR Master Lease, and also subject to the agreement by IWRA to attorn
to Agent Bank as lessor under the BR Master Lease; all upon the conditions, and
subject to the terms set forth therein.
9
<PAGE>
"BR Purchase Property" shall have the meaning ascribed to the
term "Property" in Recital Paragraph B of the Purchase Agreement.
"Bank Facilities" shall mean collective reference to the
Credit Facility, Swingline Facility and L/C Facility.
"Bank Facility Termination" or "Bank Facilities Termination"
shall mean payment in full of all sums owing under the Notes and each of the
other Loan Documents, the occurrence of the Stated Expiry Date or other
termination or cash collateralization of all outstanding Letters of Credit, and
the irrevocable termination of the obligation of Banks to advance Borrowings, to
advance Swingline Advances and to issue Letters of Credit.
"Banking Business Day" means (a) with respect to any
Borrowing, payment or rate determination of LIBOR Loans, a day, other than a
Saturday or Sunday, on which Agent Bank is open for business in San Francisco
and on which dealings in Dollars are carried on in the London interbank market,
and (b) for all other purposes any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of California, Nevada
and/or New York, or is a day on which banking institutions located in
California, Nevada and/or New York are required or authorized by law or other
governmental action to close.
"Bankruptcy Code" shall mean the United States Bankruptcy
Code, as amended, 11 U.S.C. Section 101, ET SEQ.
"Banks" shall have the meaning set forth in the
Preamble to this Credit Agreement.
"Base Rate" shall mean, as of any date of
determination, the rate per annum equal to the higher of (a) the Prime Rate in
effect on such date and (b) the Federal Funds Rate in effect on such date plus
one-half of one percent (1/2 of 1%) (fifty basis points).
"Base Rate Loan" shall mean reference to that portion of the
unpaid principal balance of the Credit Facility bearing interest with reference
to the Base Rate plus the Applicable Margin.
"Bluffs Run Assignment of Permits, Licenses and Contracts"
shall mean the Assignment of Permits, Licenses and Contracts (Bluffs Run) to be
executed by HBR and HBRMC, as Assignors, and by Agent Bank, as Assignee, on or
before the Amendment Effective Date, pursuant to which HBR and HBRMC assign to
Agent Bank all of their right, title and interest in
10
<PAGE>
and to all permits, licenses and contracts relating to the Bluffs Run Facility,
except those Gaming Permits and other licenses or permits which are
unassignable, as such Assignment of Permits, Licenses and Contracts (Bluffs Run)
may be amended, restated or otherwise modified from time to time.
"Bluffs Run Assignment of Spaceleases, Contracts, Rents and
Revenues" shall mean the Assignment of Spaceleases, Contracts, Rents and
Revenues (Bluffs Run) to be executed by HBR and HBRMC, as Assignors, and by
Agent Bank, as Assignee, on or before the Amendment Effective Date, pursuant to
which HBR and HBRMC assign to Agent Bank: (a) all of their right, title and
interest under the Bluffs Run Equipment Leases and Contracts, and under the
Bluffs Run Spaceleases relating to the Bluffs Run Facility, and (b) all rents,
issues, profits, revenues and income from the Bluffs Run Facility and any other
business activity conducted on the Bluffs Run Real Property, together with any
future expansions thereof, related thereto or used in connection therewith, as
such Assignment of Spaceleases, Contracts, Rents and Revenues (Bluffs Run) may
be amended, restated or otherwise modified from time to time.
"Bluffs Run Assignments" shall mean collective reference to
the Bluffs Run Assignment of Permits, Licenses and Contracts, the Bluffs Run
Assignment of Spaceleases, Contracts, Rents and Revenues, the Assignment of BR
Management Agreement, the Assignment of BR Master Lease and Purchase Agreement
and the Assignment of BR Billboard Lease.
"Bluffs Run Closing Instructions" shall mean theClosing
Instructions to be given by Agent Bank to the Bluffs Run Title Company on or
before the Amendment Effective Date setting forth the requirements of Lenders
for the issuance of the Bluffs Run Title Policy and other conditions for the
funding of the BR Closing Disbursement, to the reasonable satisfaction of Agent
Bank, Lenders and the Borrowers.
"Bluffs Run Collateral" shall mean collective reference to:
(i) all of the Bluffs Run Real Property and the personal property, furniture,
fixtures and equipment, contract rights, leases, intangibles and other interests
of HBR and/or HBRMC, which are subject to the liens and security interests of
the Bluffs Run Security Documents; (ii) all rights of HBR and/or HBRMC assigned
as additional security pursuant to the terms of the Bluffs Run Security
Documents; and (iii) any and all other property and/or intangible rights,
interest or benefits inuring to or in favor of HBR and/or HBRMC, which are in
any manner assigned, pledged, encumbered or otherwise hypothecated in favor of
Agent Bank on behalf of Lenders to secure payment of the Bank Facilities;
excluding, however, the IWRA Gaming Devices.
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"Bluffs Run Equipment Leases and Contracts" shall mean the
executed leases and purchase contracts pertaining to the Bluffs Run FF&E wherein
HBR and/or HBRMC are the lessee or vendee, as the case may be, as set forth on
that certain schedule marked "Schedule 4.19(d), affixed to the Credit Agreement
and by this reference incorporated herein and made a part hereof.
"Bluffs Run FF&E" shall mean the furniture, fixtures and
equipment which have been installed or are to be installed and used or owned by
HBR and/or HBRMC in connection with the operation of the Bluffs Run Facility,
excluding, however, the IWRA Gaming Devices.
"Bluffs Run Facility" shall mean the pari-mutuel race track
facility and casino business and related activities conducted in and on the
Bluffs Run Real Property and all improvements now or hereafter situate thereon
presently conducted under the style and name of Bluffs Run Casino.
"Bluffs Run Financing Statements" shall mean the Uniform
Commercial Code Financing Statements to be executed by HBR and HBRMC on or
before the Amendment Effective Date in favor of Agent Bank on behalf of Lenders,
to be filed with: (i) the Secretary of State of the State of Iowa; (ii) the
County Recorder of Pottawattamie County, Iowa; and (iii) the Nevada Secretary of
State; all in order to perfect the security interest granted to Agent Bank on
behalf of Lenders under the Bluffs Run Security Documents in accordance with the
requirements of the Iowa and Nevada Uniform Commercial Code, as they may be
amended, modified, extended, renewed or restated from time to time.
"Bluffs Run Mortgage" shall mean the Mortgage with Assignment
of Rents, Fixture Filing and Security Agreement (Bluffs Run) to be executed by
HBR and HBRMC, as mortgagors and debtors, on or before the Amendment Effective
Date, in favor of Agent Bank on behalf of Lenders, as mortgagee and secured
party, for the purposes of securing the Bank Facilities, encumbering the Bluffs
Run Collateral more particularly therein described as a first mortgage lien
subject only to the Bluffs Run Permitted Encumbrances, as such Mortgage with
Assignment of Rents, Fixture Filing and Security Agreement (Bluffs Run) may be
amended, restated or otherwise modified from time to time.
"Bluffs Run Permitted Encumbrances" shall mean, at any
particular time, (i) liens for taxes, assessments or governmental charges not
then due and payable or not then delinquent, (ii) statutory liens for labor
and/or materials and liens for taxes, assessments or governmental charges not
then required to be paid, released, discharged or expunged pursuant
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to Sections 5.04 and 5.10 of the Credit Agreement, respectively, provided that,
Borrowers shall have maintained adequate reserves in accordance with GAAP for
payment of same, (iii) liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money); (iv) leases or subleases granted to others (including, without
limitation, any Subsidiary) not interfering in any material respect with the
ordinary conduct of the business of the Bluffs Run Facility; (v) liens created
or contemplated by the Bluffs Run Security Documents, (vi) the liens,
encumbrances and restrictions on the Bluffs Run Real Property, Bluffs Run FF&E
and existing improvements which are shown as exceptions on Schedule B of the
Bluffs Run Title Insurance Policy, (vii) liens consented to in writing by Agent
Bank upon the approval of Requisite Lenders, (viii) liens of legally valid
capital leases and purchase money security interests for Bluffs Run FF&E and
other goods to the extent permitted by Section 6.09(c), (ix) each and every
easement, license, restriction or right-of-way that (A) is hereafter granted to
any Governmental Authority or public utility and (B) does not interfere in any
material respect with the Bluffs Run Facility; and (x) judgment liens, writs,
warrants, levies, distraints, attachments and other similar process which do not
constitute an Event of Default, (xi) Liens securing reimbursement obligations
with respect to letters of credit and banker's acceptances which encumber only
documents and other property relating to such letters of credit and banker's
acceptances and products or proceeds thereof; (xii) Liens arising out of
consignment or similar arrangements for the sale of goods; (xiii) any interest
or title of a lessor subject to any capital lease obligation or operating lease;
(xiv) Liens in existence on the Amendment Effective Date and referenced on the
Bluffs Run Schedule of Liens set forth as Schedule 6.09; (xv) easements, rights
of way, restrictions, minor defects or irregularities in title and other similar
liens, charges or encumbrances which do not interfere in any material respect
with the business of the Borrowers; (xvi) Liens on property of a Person existing
at the time such Person is merged into or consolidated with any Borrower or any
Subsidiary of the Borrowers or becomes a Subsidiary of the Borrowers; PROVIDED
that such Liens (other than replacement Liens) were not created in contemplation
of such merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with any Borrower or such Subsidiary
or acquired by any Borrower or such Subsidiary; (xvii) the replacement,
extension or renewal of any Lien permitted
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hereunder; (xviii) Liens arising from filing Uniform Commercial Code financing
statements regarding leases; (xix) Liens in favor of customs and revenue
authorities arising by operation of law to secure payment of customs duties in
connection with the importation of goods; (xx) licenses, leases or subleases
granted to other Persons in the ordinary course of business; (xxi) any interest
or title of a lessor, sublessor, licensee or licensor under any personal or real
property lease, sublease or license agreement; (xxii) Liens in favor of a
banking or other financial institution encumbering deposits (including the right
of set-off) held by such banking or other financial institutions incurred in the
ordinary course of business; and (xxiii) Liens for property taxes on real
property which is to be abandoned for which the sole recourse for such tax is to
such property (or to a Subsidiary of any Borrower whose sole asset is such
property).
"Bluffs Run Real Property" shall mean that real property which
is particularly described on "Exhibit T", attached hereto and incorporated by
reference herein.
"Bluffs Run Security Documents" shall mean collective
reference to the Bluffs Run Assignments, the Bluffs Run Mortgage, the Bluffs Run
Financing Statements and any other document or instrument which is executed or
delivered by HBR and/or HBRMC and accepted by Agent Bank, on behalf of Lenders,
as security for payment under the Bank Facilities.
"Bluffs Run Spaceleases" shall mean the executed leases and
concession agreements pertaining to the Bluffs Run Facility, or any portion
thereof, wherein HBR and/or HBRMC is the lessor as set forth on the certain
schedule marked "Schedule 4.18(D)", affixed to the Credit Agreement and by this
reference incorporated herein and made a part hereof.
"Bluffs Run Title Company" shall mean Fidelity National Title
Insurance Company, through its National Title Services Office at 700 Louisiana,
Suite 2600, Houston, Texas 77002, together with such reinsurers with direct
access as are requested by Agent Bank or other title insurance company or
companies as may be reasonably acceptable to Agent Bank.
"Bluffs Run Title Insurance Policy" shall mean an ALTA
Extended Coverage Lender's Policy of Title Insurance issued by the Bluffs Run
Title Company, insuring the lien and priority of the Bluffs Run Mortgage on the
Bluffs Run Real Property, subject only to such exceptions and conditions of
title as are acceptable to Agent Bank which policy shall be in a form and
substance, and shall include such endorsements, as are reasonably acceptable to
Agent Bank.
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"Borrower Consolidation" shall mean: (i) prior to the
Amendment Effective Date, collective reference to the Existing Harveys Borrowers
on a consolidated basis, and (ii) as of and after the Amendment Effective Date,
collective reference to Borrowers and each Restricted Subsidiary on a
consolidated basis, in each instance without regard to any Unrestricted
Subsidiary or other Affiliate.
"Borrowers" shall mean collective reference to HCR, HTMC,
HCRSC, HCCMC, HIMC, HBR and HBRMC.
"Borrowing(s)" shall mean the BR Acquisition Disbursement and
such amounts as Borrowers may borrow following a request by Notice of Borrowing
to Agent Bank from time to time to be advanced under the Credit Facility
following the Amendment Effective Date in accordance with the provisions of
Section 2.03 or at the request of Agent Bank pursuant to Section 2.08 or Section
2.09.
"Breakage Charges" shall have the meaning ascribed to such
term in Section 2.07(c) of the Credit Agreement.
"California Deed of Trust" shall mean the Existing California
Deed of Trust, as amended by the First Amendment to California Deed of Trust,
and as it may be further amended, restated or otherwise modified from time to
time.
"California Greenbelt Lease" shall mean that certain Net Lease
Agreement dated as of February 28, 1985, as amended by First Amendment to Lease
Agreement dated as of June 1, 1997, between Park Cattle Company, as lessor, and
HCR (formerly known as Harvey's Wagon Wheel, Inc., a Nevada corporation), as
lessee, the lessee's interest therein having been assigned by HCR to HTMC by
Assignment of Leases dated as of June 1, 1997, under the terms of which HTMC
leases the California Greenbelt Property from Park Cattle Co., as such Net Lease
Agreement may be further amended, extended, renewed, or otherwise modified from
time to time.
"California Greenbelt Lease Estoppel Certificate"shall mean
the Existing California Greenbelt Lease Estoppel Certificate as modified by the
Reaffirmation of California Greenbelt Lease Estoppel Certificate.
"California Greenbelt Property" shall mean that real property
which is particularly described as Parcel 5 on Exhibit Q attached hereto.
"Capital Expenditures" shall mean, for any period, without
duplication, the aggregate of all expenditures (whether paid in cash or accrued
as liabilities during that period and
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<PAGE>
including Capitalized Lease Liabilities) by the Borrower Consolidation during
such period that, in conformity with GAAP, are required to be included in or
reflected by the property, plant or equipment or similar fixed or capital asset
accounts reflected in the consolidated balance sheet of the Borrower
Consolidation (including amounts received by IWRA for the purchase of IWRA
Gaming Devices and further including equipment which is purchased simultaneously
with the trade-in of existing equipment owned by Borrowers to the extent of (a)
the gross amount of such purchase price LESS (b) the cash proceeds of trade-in
credit of the equipment being traded in at such time), but excluding capital
expenditures made in connection with the replacement or restoration of assets,
to the extent reimbursed or refinanced from insurance proceeds paid on account
of the loss of or damage to the assets being replaced or restored, or from
awards of compensation arising from the taking by condemnation of or the
exercise of the power of eminent domain with respect to such assets being
replaced or restored.
"Capital Proceeds" shall mean the net proceeds (after
deducting all reasonable or customary expenses incurred in connection therewith)
available to Borrowers in excess of Five Million Dollars ($5,000,000.00) in the
aggregate during any Fiscal Year from (i) partial or total condemnation or
destruction of any part of the Collateral, (ii) insurance proceeds (other than
rent insurance and business interruption insurance) received in connection with
damage to or destruction of the Collateral, and (iii) the sale or other
disposition of any portion of the Collateral in accordance with the provisions
of this Credit Agreement (not including, however, any proceeds received by
Borrowers, or any of them, from a sale, condemnation, damage or destruction of
FF&E or other personal property if such FF&E or other personal property is
replaced by items of equivalent value or utility, in each case such exclusion to
apply only during any period in which no Default in the payment of any principal
or interest owing under the terms of the Bank Facilities or an Event of Default
has occurred and is continuing).
"Capitalized Lease Liabilities" means all monetary obligations
of the Borrowers, or any of them, under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Credit Agreement, the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with GAAP, and the
stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Cash" shall mean, when used in connection with any
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Person, all monetary and non-monetary items owned by that Person that are
treated as cash or the equivalent of cash in accordance with GAAP, consistently
applied.
"Cash Collateral Account" shall mean the restricted depository
savings account to be established by Borrowers or Agent Bank on behalf of
Borrowers with L/C Issuer at its offices located at One East First Street, Reno,
Nevada, or at such other office located in the United States as may be
designated from time to time by L/C Issuer, for the purpose of depositing cash
collateral for the aggregate L/C Exposure upon the occurrence of any Event of
Default.
"Cash Collateral Pledge Agreement" shall mean the Pledge and
Assignment of Savings Account Agreement executed by Borrowers in favor of L/C
Issuer as of the Closing Date as the same may be amended or modified from time
to time under the terms of which all sums held from time to time in the Cash
Collateral Account are pledged in favor of L/C Issuer to secure repayment of any
funding required under any outstanding Letters of Credit, a copy of which Cash
Collateral Pledge Agreement is marked "Exhibit M", affixed hereto and by this
reference incorporated herein and made a part hereof.
"Cash Equivalents" shall mean, when used in connection with
any Person, that Person's Investments in:
(a) Government Securities maturing within one
(1) year after the date of the making of the
Investment;
(b) readily marketable direct obligations of any
State of the United States of America or any political
subdivision or agency of the foregoing 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 maturing within one (1) 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 Lender or, if not a Lender, any bank incorporated
under the laws of the United States of America or any State
thereof and having on the date of such Investment combined
capital, surplus and undivided profits of at least Two Hundred
Fifty Million Dollars ($250,000,000.00), or total assets of at
least Five Billion Dollars ($5,000,000,000.00), in each case
maturing within
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one (1) year after the date of the making of the Investment;
(d) certificates of deposit issued by, bank deposits
in, eurodollar deposits through, bankers' acceptances of, and
repurchase agreements covering Government Securities executed
by, any branch or office located in the United States of
America of a bank incorporated under the laws of any
jurisdiction outside the United States of America having on
the date of such Investment combined capital, surplus and
undivided profits of at least Five Hundred Million Dollars
($500,000,000.00), or total assets of at least Fifteen Billion
Dollars ($15,000,000,000.00) in each case maturing within one
year after the date of the making of the Investment;
(e) repurchase agreements covering Government
Securities executed by a broker or dealer registered under
Section 15(b) of the Securities Exchange Act of 1934 having on
the date of the Investment capital of at least One Hundred
Million Dollars ($100,000,000.00), maturing within thirty (30)
days after the date of the making of the Investment; PROVIDED
that the maker of the Investment receives written confirmation
of the transfer to it of record ownership of the Government
Securities on the books of a "primary dealer" in such
Government Securities on the books of such registered broker
or dealer, as soon as practicable after the making of the
Investment;
(f) readily marketable commercial paper of
corporations doing business in and incorporated under the laws
of the United States of America or any State thereof or of any
corporation that is the holding company for a bank described
in clauses (c) or (d) above given on the date of such
Investment a credit rating of at least P-1 by Moody's
Investors Service, Inc. or A-1 by Standard & Poor's
Corporation, in each case maturing within three hundred
sixty-five (365) days after the date of the making of the
Investment;
(g) "money market preferred stock" issued by a
corporation incorporated under the laws of the United States
of America or any State thereof given on the date of such
Investment a credit rating of at least Aa by Moody's Investors
Service, Inc. or AA by Standard & Poor's Corporation, in each
case having
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an investment period not to exceed fifty (50) days; PROVIDED
that (i) the amount of all such Investments issued by the same
issuer does not exceed Five Million Dollars ($5,000,000.00)
and (ii) the aggregate amount of all such Investments does not
exceed Fifteen Million Dollars ($15,000,000.00); and
(h) a readily redeemable "money market mutual fund"
advised by a bank described in clauses (c) or (d) hereof, or
an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, that has and maintains an
investment policy limiting its investments primarily to
instruments of the types described in clauses (a) through (g)
hereof and having on the date of such Investment total assets
of at least One Billion Dollars ($1,000,000,000.00).
"Change in Control" shall mean the occurrence of any
of the following:
(a) Any "person" or "group" (as such terms are
defined in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) other than any such "person" or
"group" which is or which includes the holders of the common
stock (voting and non-voting) and preferred stock of HCR as of
the Merger Effective Time or their Affiliates, own or control,
more than forty percent (40%) of the common voting stock of
HCR; or
(b) Other than with respect to the election of
directors specifically contemplated by the Merger Agreement,
during any period of twenty-four (24) consecutive months
commencing after the Closing Date, individuals who at the
beginning of such period constituted HCR's Board of Directors
(together with any new or replacement directors whose election
by HCR's Board of Directors or whose nomination for election
by HCR's shareholders, was approved by a vote of at least a
majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors then in
office; or
(c) HCR fails to own, directly or indirectly, one
hundred percent (100%) of the capital stock interests of HTMC,
HCRSC, HCCMC, HIMC, HBR and HBRMC.
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"Closing Certificate" shall have the meaning ascribed
to such term in Section 3.05(v).
"Closing Date" shall mean February 2, 1999.
"Closing Instructions" shall mean collective reference to the
Tahoe Amendment Closing Instructions, Iowa Amendment Closing Instructions,
Colorado Amendment Closing Instructions, and Bluffs Run Closing Instructions.
"Collateral" shall mean: (a) a collective reference to the
Tahoe Collateral, Colorado Collateral, the Iowa Collateral and Bluffs Run
Collateral; (b) the HCR Stock Pledges; and (c) any and all other property and/or
intangible rights, interests or benefits inuring to or in favor of Borrowers
which are in any manner assigned, pledged, encumbered or otherwise hypothecated
in favor of Lenders or Agent Bank on behalf of the Lenders to secure repayment
of the Bank Facilities, but shall not include the Gaming Permits.
"Collateral Properties" shall mean collective reference to the
real properties, improvements and associated FF&E which are pledged and
encumbered as Collateral securing repayment of the Bank Facilities, which shall
consist of the Tahoe Real Property, California Greenbelt Property, Iowa Real
Property, Colorado Real Property and Bluffs Run Real Property, together with any
other real property or interests therein which may be held by Agent Bank from
time to time to secure repayment of the Bank Facilities.
"Colorado Amendment Closing Instructions" shall mean the
Closing Instructions to be given by Agent Bank to the Colorado Title Company on
or before the Amendment Effective Date setting forth the requirements of Lenders
for the issuance of the Colorado Title Endorsements and other conditions for the
funding of the BR Closing Disbursement, to the reasonable satisfaction of Agent
Bank, Lenders and the Borrowers.
"Colorado Assignment of Permits, Licenses and Contracts" shall
mean the Amended and Restated Assignment of Permits, Licenses and Contracts
(Colorado) executed by HCCMC and Agent Bank on January 27, 1999, whereby HCCMC
assigned to Agent Bank all of its right, title and interest in and to all
permits, licenses and contracts relating to the Colorado Hotel/Casino Facility,
except those Gaming Permits and other licenses or permits which are
unassignable, which assignment was recorded January 29, 1999, in the Office of
the Gilpin County Clerk and Recorder, in Book 661, Page 127, under Reception No.
98928, as such Amended and Restated Assignment of Permits, Licenses and
Contracts (Colorado) may be amended, restated or otherwise modified from time to
time.
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"Colorado Assignment of Spaceleases, Contracts, Rents and
Revenues" shall mean the Amended and Restated Assignment of Spaceleases,
Contracts, Rents and Revenues (Colorado) executed by HCCMC and Agent Bank on
January 27, 1999, pursuant to which HCCMC assigned to Agent Bank: (a) all of its
right, title and interest under the Colorado Equipment Leases and Contracts, and
under the Colorado Spaceleases relating to the Colorado Hotel/Casino Facility,
and (b) all rents, issues, profits, revenues and income from the Colorado
Hotel/Casino Facility and any other business activity conducted on the Colorado
Real Property, together with any future expansions thereof, related thereto or
used in connection therewith, which assignment was recorded January 29, 1999, in
the Office of the Gilpin County Clerk and Recorder, in Book 661, Page 108, under
Reception No. 98927, as such Amended and Restated Assignment of Spaceleases,
Contracts, Rents and Revenues (Colorado) may be amended, restated or otherwise
modified from time to time.
"Colorado Assignments" shall mean collective reference to the
Colorado Assignment of Permits, Licenses and Contracts and the Colorado
Assignment of Spaceleases, Contracts, Rents and Revenues.
"Colorado Collateral" shall mean collective reference to: (i)
all of the Colorado Real Property and the personal property, furniture, fixtures
and equipment, contract rights, leases, intangibles and other interests of
HCCMC, which are subject to the liens and security interests of the Colorado
Security Documents; (ii) all rights of HCCMC assigned as additional security
pursuant to the terms of the Colorado Security Documents; and (iii) any and all
other property and/or intangible rights, interest or benefits inuring to or in
favor of HCCMC, which are in any manner assigned, pledged, encumbered or
otherwise hypothecated in favor of Agent Bank on behalf of Lenders to secure
payment of the Bank Facilities.
"Colorado Deed of Trust" shall mean the Existing Colorado Deed
of Trust, as amended by the First Amendment to Colorado Deed of Trust, and as it
may be further amended, restated or otherwise modified from time to time.
"Colorado Equipment Leases and Contracts" shall mean the
executed leases and purchase contracts pertaining to the Colorado FF&E wherein
HCCMC is the lessee or vendee, as the case may be, as set forth on that certain
schedule marked "Schedule 4.16(B)", affixed hereto and by this reference
incorporated herein and made a part hereof.
"Colorado FF&E" shall mean the furniture, fixtures and
equipment and all gaming equipment and Gaming Devices which have been installed
or are to be installed and used or owned by
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HCCMC in connection with the operation of the Colorado Hotel/Casino Facility.
"Colorado Financing Statements" shall mean the Uniform
Commercial Code Financing Statements executed by HCCMC on January 27, 1999, in
favor of Agent Bank, registered in the Colorado Central Index Filing System and
filed with: (i) the Secretary of State of the State of Colorado; (ii) the County
Recorder of Gilpin County, Colorado; and (iii) the Nevada Secretary of State;
all in order to perfect the security interest granted to Agent Bank on behalf of
Lenders under the Colorado Security Documents in accordance with the
requirements of the Colorado and Nevada Uniform Commercial Code, as they may be
amended, modified, extended, renewed or restated from time to time.
"Colorado Gaming Authorities" shall mean, without limitation,
the Division of Gaming of the Colorado Department of Revenue, the Colorado
Limited Gaming Control Commission and any other applicable governmental or
administrative state or local agency involved in the regulation of gaming and
gaming activities conducted by any member of the Borrower Consolidation in the
State of Colorado.
"Colorado Hotel/Casino Facility" shall mean the hotel and
casino business and related activities conducted by HCCMC in and on the Colorado
Real Property and all improvements now or hereafter situate thereon, presently
conducted under the style and name of Harvey's Wagon Wheel Hotel/Casino.
"Colorado Permitted Encumbrances" shall mean, at any
particular time, (i) liens for taxes, assessments or governmental charges not
then due and payable or not then delinquent, (ii) statutory liens for labor
and/or materials and liens for taxes, assessments or governmental charges not
then required to be paid, released, discharged or expunged pursuant to Sections
5.04 and 5.10 of the Credit Agreement, respectively, provided that, Borrowers
shall have maintained adequate reserves in accordance with GAAP for payment of
same, (iii) liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money); (iv) leases or
subleases granted to others (including, without limitation, any Subsidiary) not
interfering in any material respect with the ordinary conduct of the business of
the Colorado Hotel/Casino Facility; (v) liens created or contemplated by the
Colorado Security Documents,
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(vi) the liens, encumbrances and restrictions on the Colorado Real Property,
Colorado FF&E and existing improvements which are shown as exceptions on
Schedule B of the Colorado Title Insurance Policy, (vii) liens consented to in
writing by Agent Bank upon the approval of Requisite Lenders, (viii) liens of
legally valid capital leases and purchase money security interests for Colorado
FF&E and other goods to the extent permitted by Section 6.09(c), (ix) each and
every easement, license, restriction or right-of-way that (A) is hereafter
granted to any Governmental Authority or public utility and (B) does not
interfere in any material respect with the Colorado Hotel/Casino Facility; and
(x) judgment liens, writs, warrants, levies, distraints, attachments and other
similar process which do not constitute an Event of Default, (xi) Liens securing
reimbursement obligations with respect to letters of credit and banker's
acceptances which encumber only documents and other property relating to such
letters of credit and banker's acceptances and products or proceeds thereof;
(xii) Liens arising out of consignment or similar arrangements for the sale of
goods; (xiii) any interest or title of a lessor subject to any capital lease
obligation or operating lease; (xiv) Liens in existence on the Closing Date and
referenced on Schedule of Liens set forth as Schedule 6.09; (xv) easements,
rights of way, restrictions, minor defects or irregularities in title and other
similar liens, charges or encumbrances which do not interfere in any material
respect with the business of the Borrowers; (xvi) Liens on property of a Person
existing at the time such Person is merged into or consolidated with any
Borrower or any Subsidiary of the Borrowers or becomes a Subsidiary of the
Borrowers; PROVIDED that such Liens (other than replacement Liens) were not
created in contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with any
Borrower or such Subsidiary or acquired by any Borrower or such Subsidiary;
(xvii) the replacement, extension or renewal of any Lien permitted hereunder;
(xviii) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xix) Liens in favor of customs and revenue authorities
arising by operation of law to secure payment of customs duties in connection
with the importation of goods; (xx) licenses, leases or subleases granted to
other Persons in the ordinary course of business; (xxi) any interest or title of
a lessor, sublessor, licensee or licensor under any personal or real property
lease, sublease or license agreement; (xxii) Liens in favor of a banking or
other financial institution encumbering deposits (including the right of
set-off) held by such banking or other financial institutions incurred in the
ordinary course of business; and (xxiii) Liens for property taxes on real
property which is to be abandoned for which the sole recourse for such tax is to
such property (or to a Subsidiary of any Borrower whose sole asset is such
property).
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"Colorado Real Property" shall mean that real property which
is particularly described as Parcels 1 through 6 on "Exhibit R" attached hereto
and incorporated by reference herein.
"Colorado Security Documents" shall mean collective reference
to the Colorado Assignment of Permits, Licenses and Contracts, the Colorado
Assignment of Spaceleases, Contracts, Rents and Revenues, the Colorado Deed of
Trust, the Colorado Financing Statements and any other document or instrument
which is executed or delivered by HCCMC and accepted by Agent Bank, on behalf of
Lenders, as security for payment under the Bank Facilities relating to the
Colorado Hotel/Casino Facility.
"Colorado Spaceleases" shall mean the executed leases and
concession agreements pertaining to the Colorado Hotel/Casino Facility, or any
portion thereof, wherein HCCMC is the lessor as set forth on the certain
schedule marked "Schedule 4.15(B)", affixed hereto and by this reference
incorporated herein and made a part hereof.
"Colorado Title Company" shall mean First American Title
Company and its issuing agent, Clear Creek-Gilpin Abstract & Title Corp., 619
Fifth Street in Georgetown, Colorado, together with such reinsurers with direct
access as are requested by Agent Bank or other title insurance company or
companies as may be reasonably acceptable to Agent Bank.
"Colorado Title Endorsements" shall mean a collective
reference to a Colorado Form 108.8 Endorsement to the Existing Colorado Title
Policy and to such other endorsements to the Existing Colorado Title Policy as
are requested by Agent Bank, in order to cause the Existing Colorado Title
Policy to insure the lien and priority of the Colorado Deed of Trust, subject
only to such exceptions and conditions of title as are acceptable to Agent Bank,
all of which endorsements shall be issued by the Colorado Title Company and
shall be in a form and substance acceptable to Agent Bank.
"Colorado Title Insurance Policy" shall mean a collective
reference to the Existing Colorado Title Policy and the Colorado Title
Endorsements.
"Co-Managing Agents" shall have the meaning set forth in the
Preamble of this Credit Agreement.
"Commitment Fee" shall have the meaning ascribed to such term
in Section 2.10(b) of this Credit Agreement.
"Commitment Increase" shall have the meaning set forth in
Section 2.01(d) of the Credit Agreement.
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<PAGE>
"Commitment Increase Conditions" shall have the meaning set
forth in Section 2.01(d) to the Credit Agreement.
"Commitment Increase Effective Date" shall mean the date upon
which each of the Commitment Increase Conditions have occurred and the Aggregate
Commitment has been increased by the Commitment Increase.
"Commitment Percentage" shall mean the per annum percentage to
be used in the calculation of the Commitment Fee on and after the Amendment
Effective Date based on the Leverage Ratio of the Borrower Consolidation,
determined as set forth in Table Two of the definition of Applicable Margin.
"Compliance Certificate" shall mean a compliance certificate
as described in Section 5.08(a)(v) substantially in the form of "Exhibit F",
affixed hereto and by this reference incorporated herein and made a part hereof.
"Contingent Liability(ies)" shall mean, as to any Person,
without duplication among Persons, collectively, any obligation of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness,
leases or dividends ("primary obligations") of any other Person (the "primary
obligor") (other than Indebtedness or other obligations of the Borrower
Consolidation, or any of them) in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (by means of loans, capital contributions or otherwise) (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or support the solvency or level of any balance sheet item of the
primary obligor or any "keep well," "make well" or other arrangement of whatever
nature given for the purpose of assuring or holding harmless an obligee against
loss with respect to any obligation of such primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, (d) to make payment in respect of any net
liability arising in connection with any Interest Rate Hedges, foreign currency
exchange agreement, commodity hedging agreement or any similar agreement or
arrangement in any such case if the purpose or intent of such agreement is to
provide assurance that such primary obligation will be paid or discharged, or
that any agreements relating thereto will be complied with, or that the holders
of such primary obligation will be protected (in whole or in part)
25
<PAGE>
against loss in respect thereof or (e) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Liability shall not include endorsements of
instruments for deposit or collection in the ordinary course of business or
indemnification of directors, officers or employees. The amount of any
Contingent Liability shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Liability is made (unless the Contingent Liability 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 Borrowers in good faith, PROVIDED that (y) the amount
of any Contingent Liability consisting of a completion guaranty shall be deemed
to be zero unless and until Borrowers' independent auditors have quantified the
amount of the exposure thereunder (and thereafter shall be deemed to be the
amount so quantified from time to time), and (z) the amount of any Contingent
Liability consisting of a "keep-well", "make well" or other similar arrangement
shall be deemed to be zero unless and until any Borrower or any Restricted
Subsidiary is required to make payment with respect thereto (and shall
thereafter be deemed during the relevant period to be the amount required to be
paid and after paid in full, zero).
"Continuation/Conversion Notice" shall mean a notice of
continuation or conversion of or to a LIBOR Loan and certificate duly executed
by an Authorized Officer, substantially in the form of that certain exhibit
marked "Exhibit D", affixed hereto and by this reference incorporated herein and
made a part hereof.
"Convert, Conversion and Converted" shall refer to a Borrowing
at or continuation of a particular interest rate basis or conversion of one
interest rate basis to another pursuant to Section 2.05(c).
"Credit Agreement" shall mean this Second Amended and Restated
Credit Agreement, together with all Schedules and Exhibits attached hereto,
executed by and among Borrowers and Banks setting forth the terms and conditions
of the Credit Facility, Swingline Facility and L/C Facility, together with all
other attachments thereto, as may be amended, modified, extended, renewed or
restated from time to time.
"Credit Facility" shall mean the agreement of Lenders to fund
a revolving line of credit, subject to the terms and conditions set forth in
this Credit Agreement and the Revolving Credit Note, up to the Maximum Permitted
Balance.
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<PAGE>
"Deeds of Trust" shall mean collective reference to the Tahoe
Deed of Trust, the California Deed of Trust and the Colorado Deed of Trust.
"Default" shall mean the occurrence or non-occurrence, as the
case may be, of any event that with the giving of notice or passage of time, or
both, would become an Event of Default.
"Default Rate" shall have the meaning set forth in
Section 2.11(b).
"Defaulting Lender" means any Lender which fails or refuses to
perform its obligations under the Credit Facility within the time period
specified for performance of such obligation or, if no time frame is specified,
if such failure or refusal continues for a period of five (5) Banking Business
Days after notice from Agent Bank.
"Designated Deposit Account" shall mean a deposit account to
be maintained by Borrowers with Agent Bank, as from time to time designated in
writing by an Authorized Officer.
"Dispute" shall have the meaning set forth in Section
10.14(a).
"Distributions" shall mean and collectively refer to any and
all Cash dividends paid by any member of the Borrower Consolidation, management
fees paid by any member of the Borrower Consolidation, payments, advances or
other distributions, fees or compensation of any kind or character whatsoever,
other than within the Borrower Consolidation, paid by any member of the Borrower
Consolidation, but shall not include: (i) Investments in Unrestricted
Subsidiaries, (ii) consideration paid for tangible and intangible assets in an
arms length exchange for fair value, (iii) trade payments made and other
payments for liabilities incurred in the ordinary course of business, (iv)
compensation to officers, directors and employees of Borrowers in the ordinary
course of business, (v) payment of indemnification obligations to or incurred on
behalf of officers, directors and employees of the Borrower Consolidation, (vi)
payment or reimbursement of, or advances for, expenses incurred or to be
incurred by officers, directors and employees of the Borrower Consolidation and
of Affiliates of the Borrower Consolidation in excess of One Hundred Fifty
Thousand Dollars ($150,000.00) during any Fiscal Year as permitted under Section
6.12(v), (vii) loans or advances to officers, directors or employees of the
Borrower Consolidation to the extent permitted under Section 6.08(e), and (viii)
payments, up to the aggregate amount of One Million Dollars ($1,000,000.00)
during any Fiscal Year, to redeem and
27
<PAGE>
repurchase capital stock of HCR or options, warrants or other securities
exercisable or convertible into common stock of HCR from employees, officers or
directors of HCR upon the death, disability or termination of employment or
directorship of such employee, officer or director.
"Documentation Agent" shall have the meaning set forth in the
Preamble of this Credit Agreement.
"Documents" shall have the meaning set forth in
Section 10.14(a).
"Dollars" and "$" means the lawful money of the
United States of America.
"EBITDA" shall mean with reference to any Person, for any
fiscal period under review, the sum of (i) Net Income for that period, plus (ii)
any extraordinary loss to the extent reflected in such Net Income, minus (iii)
any extraordinary gain to the extent reflected in such Net Income, plus (iv)
Interest Expense for that period, plus (v) the aggregate amount of the provision
for federal and state taxes on or measured by income or profit for that period
(whether or not payable during that period), plus (vi) depreciation,
amortization and all other non-cash expenses for that period, plus (vii)
pre-opening expenses for that period, plus (viii) all fees, costs and expenses
(including salaries and compensation) related to the long term incentive plan
and the supplemental executive retirement plan and any director fees paid prior
to the beginning of the first Fiscal Quarter following the Closing Date, plus
(ix) to the extent not included in Interest Expense (and in any case without
duplication), all charges and expenses (including, without limitation, legal and
investment banking fees and expenses) incurred in connection with the Merger,
the Existing Harveys Credit Facility, the Bank Facilities, the issuance of
preferred stock by HAC or HCR, the offer to purchase to the holders of the
Senior Subordinated Notes made following the Merger, consent fees paid to the
holders of the Senior Subordinated Notes, the BR Acquisition and the
transactions contemplated thereby and hereby, in each case determined in
accordance with GAAP and, in the case of items (ii), (iv), (v), (vi), (vii),
(viii) and (ix), only to the extent deducted in the determination of Net Income
for that period, plus (x) for the first four (4) consecutive Fiscal Quarters
following the Amendment Effective Date, the amount of BR EBITDA Adjustment, plus
(xi) the aggregate amount of the Initial Payment (as defined in the BR
Management Agreement) received by IWRA during such period, plus (xii) amounts
received by IWRA for the purchase of IWRA Gaming Devices.
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"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eligible Assignee" means (a) another Lender, (b) with respect
to any Lender, any Affiliate of that Lender, (c) any commercial bank having a
combined capital and surplus of Fifty Million Dollars ($50,000,000.00) or more
that is (i) organized under the Laws of the United States of America, any State
thereof or the District of Columbia or (ii) organized under the Laws of any
other country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of such a country, PROVIDED that (A)
such bank is acting through a branch or agency located in the United States of
America and (B) such Bank is otherwise exempt from withholding of tax on
interest and delivers Form 1001 or Form 4224 at the time of any assignment, (d)
a financial institution which is an accredited investor as defined by the
Securities Act of 1934 and is otherwise exempt from withholding tax on interest
at the time of any assignment, and (e) with respect to such commercial bank or
financial institution as described in (a) through (d) above, no finding of
unsuitability has been made or determined by any Gaming Authority or the gaming
authorities of any other States of the United States of America.
"Eligible Subparticipant" shall mean any Person which is a
bank, savings and loan association or other financial or lending institution
which has not been found unsuitable as a lender by any Gaming Authority.
"Environmental Certificate" shall mean the Amended and
Restated Certificate and Indemnification Regarding Hazardous Materials to be
executed by Borrowers on or before the Amendment Effective Date, as a further
inducement to the Banks to amend and restate the Existing Loan Documents for the
purposes set forth herein, which shall completely amend and restate the
Certificate and Indemnification Regarding Hazardous Materials that was executed
by the Existing Harveys Borrowers as of the Closing Date, as such Amended and
Restated Environmental Certificate may be amended, modified, extended, renewed
or restated from time to time.
"Equipment Leases and Contracts" shall mean collective
reference to the Tahoe Equipment Leases and Contract, Colorado Equipment Leases
and Contracts, Iowa Equipment Leases and Contracts and the Bluffs Run Equipment
Leases and Contracts.
"Equity Offering" shall mean the issuance and sale of shares
of common voting stock by HCR to the public after the Closing Date in exchange
for Cash or Cash Equivalents.
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<PAGE>
"Estoppel Certificates" shall mean collective reference to the
California Greenbelt Lease Estoppel Certificate, Tahoe Greenbelt Lease Estoppel
Certificate, Park Cattle Lease Estoppel Certificate, Friendship Master Lease
Estoppel Certificate, Friendship Sublease Estoppel Certificate, BR Management
Agreement Estoppel Certificate and Iowa Sponsorship Agreement Estoppel
Certificate.
"Event of Default" shall mean any event of default as defined
in Section 7.01 hereof.
"Excess Capital Proceeds" shall have the meaning ascribed to
such term in Section 5.01 of this Credit Agreement.
"Existing California Deed of Trust" shall mean that certain
Amended and Restated Leasehold Deed of Trust, Fixture Filing and Security
Agreement with Assignment of Rents (California) which was executed by HTMC, as
trustor and debtor, and by Agent Bank, as beneficiary and secured party, for the
purpose, among other things, of encumbering HTMC's interest under the California
Greenbelt Lease as security for performance under the Existing Harveys Credit
Facility, and which was recorded January 29, 1999 in the Official Records of El
Dorado County, California, as Document No. 99-0006389.
"Existing California Greenbelt Lease Estoppel Certificate"
shall mean that certain Ground Lease Estoppel Certificate (California Greenbelt
Lease), which was executed on January 27, 1999 by Park Cattle Co., Agent Bank,
HTMC and HCR and recorded in the Official Records of El Dorado County,
California on January 29, 1999 as Document No. 99-0006391-00, pursuant to which,
among other things, Park Cattle Co. made certain representations and granted
certain consents regarding the California Greenbelt Lease and encumbrance of
HTMC's interest in the California Greenbelt Lease with the Existing California
Deed of Trust.
"Existing Colorado Deed of Trust" shall mean that certain
Amended and Restated Deed of Trust, Fixture Filing and Security Agreement with
Assignment of Rents and Notice of Additional Commitment (Colorado) which was
executed by HCCMC, as trustor and debtor, and by Agent Bank, as beneficiary and
secured party, for the purpose, among other things, of encumbering the Colorado
Collateral described therein as security for performance under the Existing
Harveys Credit Facility, and which was recorded January 29, 1999 in the Official
Records of Gilpin County, Colorado, in Book 661 at Page 70 as Document No.
98926.
"Existing Colorado Title Policy" shall mean the ALTA Extended
Coverage Lender's Policy of Title Insurance, which the
30
<PAGE>
Colorado Title Company issued to Agent Bank under Policy No. 992052, and dated
as of February 8, 1999, insuring, among other things, the lien and priority of
the Existing Colorado Deed of Trust, with coverage in the aggregate amount of
Thirty- five Million Dollars ($35,000,000.00), together with the endorsements
attached thereto.
"Existing Friendship Master Lease Estoppel Certificate" shall
mean the Ground Lease Estoppel Certificate (Friendship Park Master Lease) duly
executed on August 11, 1995, by the Iowa Department of Natural Resources, as
lessor under the Friendship Master Lease, as reaffirmed by that certain
Reaffirmation of Ground Lease Estoppel Certificate (Friendship Park Master
Lease) which was executed by the Iowa Department of Natural Resources under date
of January 27, 1999 and which was recorded in the Official Records of
Pottawattamie County, Iowa on January 29, 1999 in Book 99 at Page 39868; all
pursuant to which, among other things, the Iowa Department of Natural Resources
made certain representations and granted certain consents, regarding the
Friendship Park Master Lease, the Friendship Park Sublease, and encumbrance of
HIMC's interest in the Friendship Park Sublease with the Existing Iowa Mortgage.
"Existing Friendship Sublease Estoppel Certificate" shall mean
the Ground Lease Estoppel Certificate duly executed on August 4, 1995, by the
City of Council Bluffs, as sublessor under the Friendship Sublease, as
reaffirmed by that certain Reaffirmation of Ground Lease Estoppel Certificate
(Friendship Park Sublease) which was executed by the City of Council Bluffs
under date of January 27, 1999 and which was recorded in the Official Records of
Pottawattamie County, Iowa on January 29, 1999 in Book 99 at Page 39854; all
pursuant to which, among other things, the City of Council Bluffs made certain
representations and granted certain consents, regarding the Friendship Park
Master Lease, the Friendship Park Sublease, and encumbrance of HIMC's interest
in the Friendship Park Sublease with the Existing Iowa Mortgage.
"Existing HCR Security Agreement" shall mean that certain
Security Agreement (HCR/HCRSC) which was executed under date of January 27, 1999
by HCR and HCRSC, as debtors, and by Agent Bank, as secured party, for the
purpose, among other things, of granting a security interest in the personal
property Collateral of HCR and HCRSC described therein as security for
performance under the Existing Harveys Credit Facility.
"Existing HCR Security Agreement and Stock Pledge" shall mean
that certain Security Agreement and Pledge of Stock which was executed on
January 27, 1999 by HCR, as debtor, and
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by Agent Bank, as secured party, for the purpose, among other things, of
granting a security interest in all of the outstanding stock of HTMC, HCRSC,
HCCMC and HIMC as security for performance under the Existing Harveys Credit
Facility.
"Existing Hard Rock Subordination Agreement" shall mean the
Subordination Agreement; Acknowledgement of Lease Assignment, Estoppel,
Attornment and Nondisturbance Agreement which was executed by and among HTMC,
Hard Rock and Agent Bank under date of March 31, 1998, and which was recorded on
April 9, 1998, in the Official Records of Douglas County, Nevada, in Book 498 of
Official Records, at Page 1475, as Instrument No. 0436882, as reaffirmed by that
certain Reaffirmation of Subordination Agreement; Acknowledgement of Lease
Assignment, Estoppel, Attornment and Nondisturbance Agreement which was executed
by HTMC, Hard Rock, and Agent Bank under date of January 27, 1999 and which was
recorded in the Official Records of Douglas County, Nevada on April 9, 1999 in
Book 0199 at Page 5886 as Document No. 0459905; all pursuant to which, among
other things, Hard Rock's interest under the Hard Rock Lease was subordinated to
the Existing Tahoe Deed of Trust and Agent Bank made certain agreements
regarding nondisturbance of, and attornment to, the Hard Rock Lease.
"Existing Harveys Bank Loan Security Documents" shall mean
collective reference to all pledges, security agreements, mortgages, financing
statements, ship mortgage and other documents and instruments securing repayment
of the Existing Harveys Credit Facility.
"Existing Harveys Borrowers" shall mean collective reference
to HCR, HCCMC, HIMC, HTMC and HCRSC.
"Existing Harveys Credit Agreement" shall mean the Amended and
Restated Credit Agreement dated as of December 9, 1998, executed by and among
the Existing Harveys Borrowers and the Existing Harveys Lenders.
"Existing Harveys Credit Facility" shall mean the Indebtedness
evidenced by the Existing Harveys Credit Agreement and the Existing Revolving
Credit Note.
"Existing Harveys Lenders" shall mean collective reference to
the lenders party to the Existing Harveys Credit Agreement.
"Existing Iowa Financing Statements" shall mean the Uniform
Commercial Code Financing Statements executed by HIMC on January 27, 1999 and
filed: (i) in the office of the Secretary of State of the State of Iowa; (ii) in
the office of the County Recorder of Pottawattamie County, Iowa; and (iii) in
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the office of the Nevada Secretary of State; all in order to perfect the
security interest granted to Agent Bank on behalf of the Lenders under the
Existing Iowa Mortgage and other Security Documentation in accordance with the
requirements of the Iowa and Nevada Uniform Commercial Code.
"Existing Iowa Mortgage" shall mean that certain Amended and
Restated Mortgage with Assignment of Rents, Fixture Filing and Security
Agreement and Notice of Additional Commitment which was executed by HIMC, as
Mortgagor, for the benefit of Agent Bank, as Mortgagee for the purpose, among
other things of encumbering the Iowa Collateral described therein as security
for performance under the Existing Harveys Credit Facility, and which was
recorded January 29, 1999, in the Official Records of Pottawattamie County, Iowa
in Book 99, at Page 39630 as Instrument No. 14023.
"Existing Iowa Ship Mortgage" shall mean that certain First
Preferred Ship Mortgage executed by HIMC under date of January 27, 1999 and
filed in the National Vessel Document Center on January 29, 1999, in Book 99-01
at Page 200, as amended by that certain First Amendment to First Preferred Ship
Mortgage executed by HIMC and Agent Bank under date of February 25, 1999 and
filed in the National Vessel Document Center, in Book 99-27 at Page 474, all for
the purpose, among other things, of securing performance under the Existing
Harveys Credit Facility.
"Existing Iowa Title Policy" shall mean collective reference
to: (i) the ALTA Extended Coverage Lender's Policy of Title Insurance, under
Policy No. 135-00-754457, which the Iowa Title Company issued to FINV (as the
predecessor to Agent Bank), under date of August 16, 1995, with coverage in the
aggregate amount of Fifty Million Dollars ($50,000,000.00), together with the
endorsements issued concurrently therewith; and (ii) the Form 100 Modification
and Form 100 Mechanics Lien Endorsements, both of which were issued to such
policy under date of January 29, 1999; all of which insure, among other things,
the lien and priority of the Existing Iowa Mortgage.
"Existing Loan Documents" shall mean a collective reference to
the Existing Harveys Credit Agreement, the Existing Revolving Credit Note, the
Existing Swingline Note, the Existing Harveys Bank Loan Security Documents and
all other instruments and agreements required to be executed by or on behalf of
the Existing Harveys Borrowers, or any of them, or any other Person, in
connection with the Existing Harveys Credit Agreement or the Credit Facilities
provided thereunder for the benefit of any of the Banks thereunder.
"Existing Park Cattle Lease Estoppel Certificate" for
33
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the benefit of the Existing Harveys Lenders or any of the other Banks under the
Existing Harveys Credit Agreement shall mean that certain Ground Lease Estoppel
Certificate (Park Cattle Lease), which was executed on January 27, 1999 by Park
Cattle Co., Agent Bank, HTMC and HCR and recorded in the Official Records of
Douglas County, Nevada on January 29, 1999 in Book 199 at Page 5894, pursuant to
which, among other things, Park Cattle Co. made certain representations and
granted certain consents regarding the Park Cattle Lease and encumbrance of
HTMC's interest in the Park Cattle Lease with the Existing Tahoe Deed of Trust.
"Existing Revolving Credit Note" shall mean that certain
Amended and Restated Revolving Credit Promissory Note dated January 27, 1999, in
the original principal amount of One Hundred Eighty-Five Million Dollars
($185,000,000.00), executed by the Existing Harveys Borrowers, payable to the
order of Agent Bank on behalf of the Existing Harveys Lenders.
"Existing Swingline Note" shall mean that certain Amended and
Restated Swingline Note dated January 27, 1999, in the original principal sum of
Five Million Dollars ($5,000,000.00) executed by the Existing Harveys Borrowers,
payable to the order of Swingline Lender.
"Existing Tahoe Deed of Trust" shall mean that certain Amended
and Restated Leasehold and Fee Deed of Trust, Fixture Filing and Security
Agreement with Assignment of Rents and Notice of Additional Commitment (Tahoe)
which was executed by HCR, as trustor and debtor, and by Agent Bank, as
beneficiary and secured party, for the purpose, among other things, of
encumbering the Tahoe Collateral described therein, as security for performance
under the Existing Harveys Credit Facility, and which was recorded January 29,
1999, in the Official Records of Douglas County, Nevada, in Book 199, at Page
5766, as Document No. 0459899.
"Existing Tahoe Greenbelt Lease Estoppel Certificate" shall
mean that certain Ground Lease Estoppel Certificate (Tahoe Greenbelt Lease),
which was executed on January 27, 1999 by Park Cattle Co., Agent Bank, HTMC and
HCR and recorded in the Official Records of Douglas County, Nevada on January
29, 1999 in Book 199 at Page 5910, pursuant to which, among other things, Park
Cattle Co. made certain representations and granted certain consents regarding
the Tahoe Greenbelt Lease and encumbrance of HTMC's interest in the Tahoe
Greenbelt Lease with the Tahoe Deed of Trust.
"Existing Tahoe Title Policy" shall mean the ALTA Extended
Coverage Lender's Policy of Title Insurance, under Policy No. 290016-107-00009,
which the Tahoe Title Company
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issued to Agent Bank, and under date of January 29, 1999, insuring, among other
things, the lien and priority of the Existing Tahoe Deed of Trust and the
Existing California Deed of Trust, with coverage in the aggregate amount of One
Hundred Million Dollars ($100,000,000.00), together with the endorsements
attached thereto.
"Existing Trademark Security Agreement" shall mean that
certain Amended and Restated Trademark Security Agreement which was executed
under date of January 27, 1999 by Borrowers, as debtors, and by Agent Bank, as
secured party, for the purpose, among other things, of securing performance
under the Existing Harveys Credit Facility, and which was filed with: (i) the
United States Patent and Trademark Office on February 3, 1999 at Reel 1851,
Frame 0935; and (ii) the U.S. Copyright Office on February 3, 1999 in Volume
3428 at Page 627.
"Existing Westwood Subordination and Nondisturbance Agreement"
shall mean that certain Subordination, Attornment and Nondisturbance Agreement
which was executed by the City of Council Bluffs and FINV (as the predecessor to
Agent Bank) under date of August 14, 1995, and which was recorded August 16,
1995, in the Official Records of Pottawattamie County, Iowa, in Book 96, at Page
4598, as reaffirmed by that certain Reaffirmation of Subordination, Attornment
and Nondisturbance Agreement which was executed by the City of Council Bluffs
and Agent Bank under date of January 27, 1999 and which was recorded January 29,
1999 in the Official Records of Pottawattamie County, Iowa in Book 99 at Page
39847; all pursuant to which, among other things, the Westwood Lease was
subordinated to the lien of the Existing Iowa Mortgage subject to the agreement
by Agent Bank not to disturb, and to recognize, the interest of the City of
Council Bluffs, as lessee under the Westwood Lease.
"FF&E" shall mean reference to the Tahoe FF&E, Colorado FF&E,
the Iowa FF&E and the Bluffs Run FF&E and any other furniture, fixtures and
equipment, including, without limitation, all gaming devices and associated
equipment used in connection with the Hotel/Casino Facilities (excluding the
Bluffs Run Facility) and those items of furniture, fixtures and equipment (other
than the IWRA Gaming Devices) which have been purchased or leased or are
hereafter purchased or leased by Borrowers, or any of them, in connection with
the Hotel/Casino Facilities.
"FINV" shall mean First Interstate Bank of Nevada, N.A.
"FIRREA" shall mean the Financial Institutions
35
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Reform, Recovery and Enforcement Act of 1989.
"Federal Funds Rate" means, as of any date of determination,
the rate set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such date opposite the caption "Federal Funds
(Effective)". If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any successor, the "Composite 3:30 p.m.
Quotation") for such date under the caption "Federal Funds Effective Rate". If
on any relevant date the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such date
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York City time) on that date by
each of three leading brokers of Federal funds transactions in New York City
selected by the Agent Bank. For purposes of the Credit Agreement, any change in
the Base Rate due to a change in the Federal Funds Rate shall be effective as of
the opening of business on the effective date of such change.
"Fee Side Letter" shall mean the Confidential Fee Letter dated
September 3, 1999, executed by and between Agent Bank and HCR, concerning
payment of fees in connection with the Credit Facility, as more particularly
therein described.
"Financial Covenants" shall mean collective reference to the
financial covenants set forth in Sections 6.01 through 6.10, 6.12, 6.13 and 6.14
of this Credit Agreement.
"Financing Statements" shall mean collective reference to the
Tahoe Financing Statements, Colorado Financing Statements, Iowa Financing
Statements and Bluffs Run Financing Statements.
"First Amendment to California Deed of Trust" shall mean that
certain First Amendment to Amended and Restated Leasehold Deed of Trust with
Assignment of Rents and Notice of Additional Commitment (California) which is to
be executed by HTMC and by Agent Bank, on or before the Amendment Effective
Date, and is to be recorded in the Official Records of El Dorado County,
California, concurrently, or substantially concurrent, with occurrence of the
Amendment Effective Date, for the purpose of amending the Existing California
Deed of Trust in order to provide, among other things, for the Existing
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California Deed of Trust to reflect the Credit Agreement and to secure
performance under the Bank Facilities.
"First Amendment to Colorado Deed of Trust" shall mean that
certain First Amendment to Amended and Restated Deed of Trust, Fixture Filing
and Security Agreement with Assignment of Rents and Notice of Additional
Commitment (Colorado) which is to be executed by HCCMC and by Agent Bank, on or
before the Amendment Effective Date, and is to be recorded in the Official
Records of Gilpin County, Colorado, concurrently, or substantially concurrent,
with occurrence of the Amendment Effective Date, for the purpose of amending the
Existing Colorado Deed of Trust in order to provide, among other things, for the
Existing Colorado Deed of Trust to reflect the Credit Agreement and to secure
performance under the Bank Facilities.
"First Amendment to HCR Security Agreement" shall mean that
certain First Amendment to Security Agreement which is to be executed by HCR and
HCRC, as debtors, and by Agent Bank, as secured party on or before the Amendment
Effective Date for the purpose of amending the Existing HCR Security Agreement
in order to provide, among other things, for the Existing HCR Security Agreement
to reflect the Credit Agreement and to secure performance under the Bank
Facilities.
"First Amendment to HCR Security Agreement and Stock Pledge"
shall mean that certain First Amendment to Security Agreement and Stock Pledge
which is to be executed by HCR, as debtor, and by Agent Bank, as secured party
on or before the Amendment Effective Date for the purpose of amending the
Existing HCR Security Agreement and Stock Pledge in order to provide, among
other things, for the Existing HCR Security Agreement to reflect the Credit
Agreement, to encumber the capital stock of HBR and HBRMC and to secure
performance under the Bank Facilities.
"First Amendment to Iowa Mortgage" shall mean that certain
First Amendment to Amended and Restated Mortgage with Assignment of Rents,
Fixture Filing and Security Agreement and Notice of Additional Commitment which
is to be executed by HIMC and by Agent Bank, on or before the Amendment
Effective Date, and is to be recorded in the Official Records of Pottawattamie
County, Iowa, concurrently, or substantially concurrent, with occurrence of the
Amendment Effective Date, for the purpose of amending the Existing Iowa Mortgage
in order to provide, among other things, for the Existing Iowa Mortgage to
reflect the Credit Agreement and to secure performance under the Bank
Facilities.
"First Amendment to Tahoe Deed of Trust" shall mean that
certain First Amendment to Amended and Restated Leasehold
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and Fee Deed of Trust with Assignment of Rents and Notice of Additional
Commitment (Tahoe) which is to be executed by HTMC and by Agent Bank on or
before the Amendment Effective Date and is to be recorded in the Official
Records of Douglas County, Nevada, concurrently, or substantially concurrent,
with the Amendment Effective Date, for the purpose of amending the Existing
Tahoe Deed of Trust in order to provide, among other things, for the Existing
Tahoe Deed of Trust to reflect the Credit Agreement and to secure performance
under the Bank Facilities.
"First Amendment to Trademark Security Agreement" shall mean
that certain First Amendment to Trademark Security Agreement which is to be
executed by Borrowers and by Agent Bank, on or before the Amendment Effective
Date, and filed with the U.S. Patent and Trademark Office and the U.S. Copyright
Office for the purpose of amending the Existing Trademark Security Agreement in
order to provide, among other things, for the Existing Trademark Security
Agreement to reflect the Credit Agreement and to secure performance under the
Bank Facilities.
"Fiscal Quarter" shall mean the consecutive three (3) month
periods during each Fiscal Year beginning on December 1, March 1, June 1 and
September 1 and ending on February 28 (or February 29, as the case may be), May
31, August 31 and November 30, respectively.
"Fiscal Year" shall mean the fiscal year period beginning
December 1 of each calendar year and ending on the following November 30.
"Fiscal Year End" shall mean November 30 of each calendar
year.
"Fixed Charge Coverage Ratio" as of the end of any Fiscal
Quarter shall mean with reference to the Borrower Consolidation:
The sum of EBITDA during the Fiscal Quarter under review, plus
EBITDA during each of the most recently ended three (3)
preceding Fiscal Quarters,
Divided by ())
The sum of: (i) Interest Expense (expensed and capitalized),
plus (ii) the aggregate amount of Scheduled Reductions
actually paid, plus (iii) the aggregate amount of actually
paid principal payments or reductions (without duplication)
made on all other Indebtedness, plus (iv) the current portion
of
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Capitalized Lease Liabilities to the extent not included in
(i) or (iii) above, plus (v) payments of dividends in Cash or
Cash Equivalents on Permitted Preferred Stock to the extent
not included in (i) above; in each case of (i) through (v)
determined for the Fiscal Quarter under review together with
the most recently ended three (3) preceding Fiscal Quarters.
"Friendship Master Lease" shall mean that certain Management
Agreement which is executed by the Iowa Department of Natural Resources under
date of September 2, 1994 and by the City of Council Bluffs, Iowa under date of
August 8, 1994, pursuant to which the City of Council Bluffs is obligated and
entitled to perform the care and maintenance of the Friendship Park Property and
is authorized to sublease a portion of the Friendship Park Property to HIMC, as
such Management Agreement may be amended, restated, extended, renewed, or
otherwise modified from time to time.
"Friendship Master Lease Estoppel Certificate" shall mean the
Existing Friendship Park Master Lease Estoppel Certificate as reaffirmed by the
Second Reaffirmation of Friendship Park Master Lease Estoppel Certificate.
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"Friendship Park Property" shall mean the real property
located in the State of Iowa more particularly described as Parcel C on that
certain exhibit marked "Exhibit S" affixed hereto and by this reference
incorporated herein and made a part hereof, which is contiguous to the Iowa
Hotel Property and upon which the Iowa Docking Facility is to be primarily
situate.
"Friendship Sublease" shall mean that certain Sublease
Agreement which is executed by the City of Council Bluffs and HIMC under date of
March 1, 1995 pursuant to which the City of Council Bluffs did sublease the
Friendship Park Property to HIMC pursuant to the City of Council Bluffs'
interest as lessee under the Friendship Master Lease, as such Sublease Agreement
may be amended, restated, extended, renewed or otherwise modified from time to
time.
"Friendship Sublease Estoppel Certificate" shall mean the
Existing Friendship Park Sublease Estoppel Certificate as reaffirmed by the
Second Reaffirmation of Friendship Park Sublease Estoppel Certificate.
"Funded Outstandings" shall mean the unpaid principal amount
outstanding on the Credit Facility as of any given date of determination, not
including Swingline Outstandings or the amount of any L/C Exposure.
"Funding Date" shall mean the date on which the BR Acquisition
Disbursement is advanced by Lenders and each date upon which Lenders fund
Borrowings requested by Borrowers in accordance with the provisions of Section
2.03 or at the request of Agent Bank pursuant to Section 2.08 or Section 2.09.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination, in each instance consistently applied.
"Gaming Authority(ies)" shall mean any agency, authority,
board, bureau, commission, department, office or instrumentality of any nature
whatsoever of the United States federal or foreign government, any state,
province or any city or other political subdivision or otherwise and whether now
or hereafter in existence or any officer or official thereof, including, without
limitation, Nevada Gaming Authorities,
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Colorado Gaming Authorities and Iowa Gaming Authorities, with authority to
regulate any gaming operation (or proposed gaming operation) owned, managed or
operated by the Borrower Consolidation.
"Gaming Devices" shall mean slot machines, gaming tables,
chips, tokens and other equipment which constitute gaming devices, cashless
wagering systems and associated equipment, including all racing equipment,
together with simulcast and pari-mutuel totalizing equipment.
"Gaming Laws" means all statutes, rules, regulations,
ordinances, codes and administrative or judicial precedents pursuant to which
any Gaming Authority possesses regulatory, licensing or permit authority over
gambling, gaming, pari- mutuel or casino activities conducted by any member of
the Borrower Consolidation within its jurisdiction, including, without
limitation, the Nevada Gaming Control Act and the rules and regulations
promulgated thereunder, the Colorado Limited Gaming Act and the rules and
regulations promulgated thereunder and Chapter 99D and 99F of the Code of Iowa
and the rules and regulations promulgated thereunder.
"Gaming Permits" shall mean collective reference to every
license, registration, finding of suitability, approvals, permit or other
authorization required to own, operate and otherwise conduct nonrestricted
gaming operations at the Tahoe Hotel/Casino Facility which are required by the
Nevada Gaming Authorities, at the Colorado Hotel/Casino Facility which are
required by the Colorado Gaming Authorities, at the Iowa Riverboat/Hotel
Facilities which are required by the Iowa Gaming Authorities, and/or at the
Bluffs Run Facility which are required by the Iowa Gaming Authorities, as the
context may require.
"Government Securities" means readily marketable (a) direct
full faith and credit obligations of the United States of America or obligations
guaranteed by the full faith and credit of the United States of America and (b)
obligations of an agency or instrumentality of, or corporation owned, controlled
or sponsored by, the United States of America that are generally considered in
the securities industry to be implicit obligations of the United States of
America.
"Governmental Authority" or "Governmental Authorities" shall
mean any federal, state, regional, county or municipal governmental agency,
board, commission, officer or official whose consent or approval is required or
whose regulations must be followed as a prerequisite to (i) the continued
operation and occupancy of the Hotel/Casino Facilities or (ii) the performance
of any act or obligation or
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the observance of any agreement, provision or condition of whatever nature
herein contained.
"Greenbelt Leaseholds" shall mean collective reference to the
interest of HTMC in and to the Tahoe Greenbelt Lease and the California
Greenbelt Lease.
"HAC" shall mean Harveys Acquisition Corporation, a Nevada
corporation.
"HBR" shall have the meaning set forth in the Preamble of this
Credit Agreement.
"HBRMC" shall have the meaning set forth in the Preamble of
the Credit Agreement.
"HCCMC" shall mean Harveys C.C. Management Company, Inc., a
Nevada corporation.
"HCR" shall mean Harveys Casino Resorts, a Nevada
corporation.
"HCR Financing Statements" shall mean the Uniform Commercial
Code Financing Statements to be executed by HCR and HCRSC on or before the
Closing Date in favor of Agent Bank on behalf of Lenders, to be filed with the
Secretary of State of the State of Nevada, the Secretary of State of the State
of Iowa and the Secretary of State of the State of Colorado (with such Colorado
filing to be registered in the Colorado Central Index Filing System) in order to
effect and perfect the security interest granted to Agent Bank on behalf of
Lenders under the HCR Security Agreement in accordance with the requirements of
Nevada, Iowa and Colorado Uniform Commercial Codes, respectively, as they may be
extended, renewed, amended, restated or otherwise modified from time to time.
"HCR Security Agreement" shall mean the Existing HCR Security
Agreement as amended by the First Amendment to HCR Security Agreement and as it
may be further amended, restated or modified from time to time.
"HCR Security Agreement and Stock Pledge" shall mean a
collective reference to the Existing HCR Security Agreement and Stock Pledge
as amended by the First Amendment to HCR Security Agreement and Stock Pledge,
and as it may be further amended, restated or modified from time to time.
"HCR Stock Pledge" shall mean individual reference and "HCR
Stock Pledges" shall mean collective reference to: (i) the HCR Security
Agreement and Stock Pledge and; and (ii) the Irrevocable Stock Powers executed
and delivered by HCR
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as of the Closing Date as to HTMC, HCRSC, HCCMC and HIMC and to be executed and
delivered by HCR as of the Amendment Effective Date as to HBR and HBRMC; all
pursuant to which all of the issued and outstanding stock of HTMC, HCRSC, HCCMC,
HIMC, HBR and HBRMC is pledged to Agent Bank on behalf of Lenders as additional
security for the Bank Facilities and all other sums which may be owing by
Borrowers to the Banks from time to time under the terms of the Credit
Agreement.
"HCR Stock Redemption" shall mean the purchase, redemption or
other acquisition by any member of the Borrower Consolidation of shares of the
common voting and/or non-voting stock of HCR from its shareholders.
"HCRSC" shall mean HCR Services Company, Inc., a Nevada
corporation.
"HIMC" shall mean Harveys Iowa Management Co., Inc., a Nevada
corporation.
"HLVMC" shall mean Harveys L.V. Management Company, Inc., a
Nevada corporation.
"HTMC" shall mean Harveys Tahoe Management Company, Inc., a
Nevada corporation.
"Hard Rock" shall mean Hard Rock Cafe International (USA),
Inc., dba Hard Rock Cafe - Lake Tahoe, a Florida corporation.
"Hard Rock Lease" shall mean that certain Lease Agreement
under the terms of which a portion of the Tahoe Hotel/Casino Facility consisting
of approximately seven thousand five hundred eighty-seven (7,587) square feet of
space in the aggregate, together with additional rights and appurtenances as
therein provided, is leased by HTMC to Hard Rock for an initial term of ten (10)
years subject to two (2) separate consecutive additional periods of five (5)
years each, as such Lease Agreement may be amended, restated, extended, renewed
or otherwise modified from time to time.
"Hard Rock Subordination Agreement" shall mean the Existing
Hard Rock Subordination Agreement as reaffirmed by the Second Reaffirmation of
Hard Rock Subordination Agreement.
"Hazardous Materials Claims" shall have the meaning set forth
in Section 5.21.
"Hazardous Materials Laws" shall have the meaning ascribed to
such term in the Environmental Certificate.
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"Hotel/Casino Facilities" shall mean collective reference to
the Tahoe Hotel/Casino Facility, the Colorado Hotel/Casino Facility, Iowa
Riverboat/Hotel Facilities and Bluffs Run Facility, together with any future
expansions thereof, related thereto or used in connection therewith, and all
appurtenances thereto.
"IWRA" shall mean Iowa West Racing Association Nonprofit
Corporation, an Iowa non-profit corporation.
"IWRA EBITDA" shall mean during the fiscal periods set forth
below:
a. for the Fiscal Quarter commencing on December 1,
1998 and ending on February 28, 1999, Six million Three Hundred Thirty-Eight
Thousand Eight Hundred Twenty-One Dollars ($6,338,821.00);
b. for the Fiscal Quarter commencing on March 1,
1999 and ending on May 31, 1999, Nine Million Eight Hundred Seventy-Three
Thousand Nine Hundred Thirty-Three Dollars ($9,873,933.00);
c. for the Fiscal Quarter commencing on June 1, 1999
and ending on August 31, 1999, Twelve Million One Hundred Eighty-Three Thousand
One Hundred Five Dollars ($12,183,105.00);
d. for the fiscal period commencing on September 1,
1999 and ending on Amendment Effective Date, the amount of EBITDA realized by
IWRA at the Bluffs Run Facility during such fiscal period, which amount shall be
calculated by Borrowers and reasonably approved by Agent Bank.
"IWRA Gaming Devices" shall mean collective reference to all
Gaming Devices and replacement parts or additions, replacements and
modifications thereto, which are owned by IWRA and are situate in and about the
Bluffs Run Facility.
"IWRA Letter of Credit" shall mean the letter to be issued by
L/C Issuer pursuant to Section 2.09 of the Credit Agreement on or as of the
Amendment Effective Date for the benefit of IWRA for the purposes and to be
delivered and held by the Purchase Escrow Agent as provided in Section 2.3 of
the Purchase Agreement.
"Indebtedness" shall mean, as to any Person, with-out
duplication, (a) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money, (b) the deferred purchase price of
property or services (other than obligations owed to IWRA under the BR Purchase
Agreement,
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accrued expenses, tax liability, deferred taxes, and trade accounts payable less
than one hundred twenty (120) days past due and other accrued or deferred
liabilities incurred in the ordinary course of business) which in accordance
with GAAP would be shown on the liability side of the balance sheet of such
Person, (c) the face amount of all letters of credit, including, without
limitation, all letters of credit issued under the terms of the BR Purchase
Agreement, to the extent not secured with Cash or Cash Equivalents, issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (d) all obligations under conditional sale or other title retention
agreements relating to property purchased by such Person, (e) all liabilities of
other Persons of the type described in clauses (a) through (d) or (f) of this
definition secured by (or for which the holder of any such liability has an
existing right, contingent or otherwise, to be secured by) any lien or
encumbrance on any property owned by such Person, whether or not such
liabilities have been assumed by such Person, (f) all Capitalized Lease
Liabilities of such Person, and (g) all Contingent Liabilities of such Person in
respect of any Indebtedness of any other Person of the type referred to in
clauses (a)-(f) of this definition; provided that the amount of Indebtedness of
the type referred to in (x) clause (e) shall be the lesser of (i) the
outstanding principal amount of Indebtedness secured by such lien or encumbrance
or (ii) the fair market value of the property subject to such lien or
encumbrance; and (y) clause (g) shall be valued as provided in the definition of
"Contingent Liabilities."
"Indenture" shall mean that certain Indenture dated as of May
15, 1996, executed by and among HCR, as issuer, HCCMC, Harveys Wagon Wheel
Casino Limited Company, HIMC and HLVMC, as guarantors, each other Subsidiary of
HCR that is or becomes a guarantor, and IBJ Schroder Bank & Trust Company, as
trustee, pursuant to which HCR issued the Senior Subordinated Notes.
"Intangibles" shall mean the aggregate goodwill, trademarks,
patents, organizational expense and other similar intangible items of the
Borrower Consolidation determined on a consolidated basis in accordance with
GAAP.
"Interest Expense" shall mean with respect to any Person, as
of the last day of any fiscal period under review, the sum of (i) all interest,
fees, charges and related expenses actually paid or payable in Cash (without
duplication, but including capitalized interest) for that fiscal period by such
Person to a lender in connection with borrowed money or in connection with the
issuance of preferred stock (including any obligations for fees, charges and
related expenses payable to the issuer of any letter of credit) or the deferred
purchase
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price of assets that are considered "interest expense" under GAAP, plus (ii) the
portion of the up front costs and expenses for Interest Rate Hedges (to the
extent not included in (i)) fairly allocated to such Interest Rate Hedges as
expenses for such period, plus (iii) the portions of Capital Lease Liabilities
that should be treated as interest in accordance with GAAP, which amounts as set
forth in (i), (ii) and (iii) above shall be offset (without duplication) with
any amounts payable to the Borrower Consolidation under Interest Rate Hedges to
the extent received by the Borrower Consolidation in Cash.
"Interest Period(s)" shall have the meaning set forth
in Section 2.05(d).
"Interest Rate Hedges" shall mean, with respect to any Person,
all liabilities of such Person under interest rate swap agreements, interest
rate cap agreements (at a strike price no greater than seven and one-half
percent (7.5%) per annum), basis swap, forward rate agreement and interest
collar or floor agreements and all other agreements or arrangements designed to
protect such Person against fluctuations in interest rates or currency exchange
rates.
"Interest Rate Option" shall have the meaning ascribed to such
term in Section 2.05(b) of the Credit Agreement.
"Investment" shall mean, when used in connection with any
Person, any investment by or of that Person, whether by means of purchase or
other acquisition of stock or other securities of any other Person or by means
of a loan, advance creating a debt, capital contribution, guaranty or other debt
or equity participation or interest in any other Person, INCLUDING any
partnership and joint venture interests of such Person. The amount of any
Investment shall be the amount actually invested without adjustment for
subsequent increases or decreases in the value of such Investment (but with
deduction for amounts received as Investment Returns). In no event shall the
term "Investment" be deemed or construed to include the Merger Consideration or
accounts receivable created in the ordinary course of business or the BR
Acquisition.
"Investment Return(s)" shall mean the aggregate amount
received by the Borrower Consolidation in Cash or Cash Equivalents from
Unrestricted Subsidiaries in return of Investments in such Unrestricted
Subsidiaries, whether as interest, principal, dividends, distributions or
otherwise or from the sale of an Unrestricted Subsidiary or New Venture or any
interest therein.
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"Iowa Amendment Closing Instructions" shall mean the Closing
Instructions to be given by Agent Bank to the Iowa Title Company on or before
the Amendment Effective Date setting forth the requirements of Lenders for the
issuance of the Iowa Title Endorsements and other conditions for the funding of
the BR Closing Disbursement, to the reasonable satisfaction of Agent Bank,
Lenders and the Borrowers.
"Iowa Assignment of Permits, Licenses and Contracts" shall
mean the Amended and Restated Assignment of Permits, Licenses and Contracts
(Iowa) executed by HIMC and Agent Bank on January 27, 1999, pursuant to which
HIMC assigned to Agent Bank all of its right, title and interest in and to all
assignable permits, licenses and contracts relating to the Iowa Riverboat/Hotel
Facilities, which assignment was recorded January 29, 1999, in the Official
Records of Pottawattamie County, Iowa, in Book 99, at Page 39812, as such
Amended and Restated Assignment of Permits, Licenses and Contracts (Iowa) may be
amended, restated or otherwise modified from time to time.
"Iowa Assignment of Spaceleases, Contracts, Rents and
Revenues" shall mean the Amended and Restated Assignment of Spaceleases,
Contracts, Rents and Revenues (Iowa) executed by HIMC and Agent Bank on January
27, 1999, pursuant to which HIMC assigned to Agent Bank: (a) all of its right,
title and interest under all Iowa Equipment Leases and Contracts and Iowa
Spaceleases relating to the Iowa Riverboat/Hotel Facilities, and (b) all rents,
issues, profits, revenues and income from the Iowa Real Property and the Iowa
Riverboat/Hotel Facilities and any other business activity conducted on the Iowa
Real Property, together with any future expansions thereof, related thereto or
used in connection therewith; which assignment was recorded January 29, 1999, in
the Official Records of Pottawattamie County, Iowa, in Book 99, at Page 39787,
as such Amended and Restated Assignment of Spaceleases, Contracts, Rents and
Revenues (Iowa) may be amended, restated or otherwise modified from time to
time.
"Iowa Assignments" shall mean collective reference to
the Iowa Assignment of Permits, Licenses and Contracts, Iowa Assignment of
Spaceleases, Contracts, Rents and Revenues, Assignment of Friendship Sublease
and Assignment of Iowa Sponsorship Agreement.
"Iowa Collateral" shall mean collective reference to: (i) all
of the Iowa Real Property and the personal property, furniture, fixtures and
equipment, contract rights, leases, intangibles and other interests of HIMC,
which are subject to the liens and security interests of the Iowa Security
Documents; (ii) all rights of HIMC assigned as additional
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security pursuant to the terms of the Iowa Security Documents; and (iii) any and
all other property and/or intangible rights, interest or benefits inuring to or
in favor of HIMC, which are in any manner assigned, pledged, encumbered or
otherwise hypothecated in favor of Agent Bank on behalf of Lenders to secure
payment of the Bank Facilities.
"Iowa Docking Facility" shall mean the mooring basin and
docking facility constructed primarily upon the Friendship Park Property which
provides a docking facility for the Riverboat, which facility is connected to
the Iowa Hotel Facility.
"Iowa Equipment Leases and Contracts" shall mean the executed
leases and purchase contracts pertaining to the Iowa FF&E wherein HIMC is the
lessee or vendee, as the case may be, as set forth on that certain schedule
marked "Schedule 4.16(C)", affixed hereto and by this reference incorporated
herein and made a part hereof.
"Iowa FF&E" shall mean the furniture, fixtures and equipment
and all gaming equipment and devices which have been installed or are to be
installed and used or owned by HIMC in connection with the operation of the Iowa
Riverboat/Hotel Facilities.
"Iowa Financing Statement Amendments" shall mean the Uniform
Commercial Code Financing Statement Amendments to be executed by HIMC and Agent
Bank on or before the Amendment Effective Date, and filed: (i) in the office of
the Secretary of State of the State of Iowa; (ii) in the office of the County
Recorder of Pottawattamie County, Iowa; and (iii) in the office of the Nevada
Secretary of State; all in order to amend the Existing Iowa Financing Statements
by adding HIMC's interest in the Iowa Sponsorship Agreement to the collateral
which is described by the Existing Iowa Financing Statements.
"Iowa Financing Statements" shall mean the Existing Iowa
Financing Statements as amended by the Iowa Financing Statement Amendments, and
as they may be amended, modified, extended, renewed or restated from time to
time.
"Iowa Gaming Authorities" shall mean, without limitation, the
Iowa Racing and Gaming Commission and any other applicable governmental or
administrative state or local agency involved in the regulation of gaming,
pari-mutuel racing and gaming activities conducted by HIMC, HBR and/or HBRMC in
the State of Iowa.
"Iowa Hotel Facility" shall mean the hotel complex, including
two hundred fifty-one (251) rooms, a twenty-one
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thousand (21,000) square foot convention center, restaurants, retail shops, a
link to the Iowa Docking Facility and other amenities, constructed on the Iowa
Hotel Property.
"Iowa Hotel Property" shall mean that real property more
particularly described as Parcel A on that certain exhibit marked "Exhibit S"
affixed hereto and by this reference incorporated herein and made a part hereof,
which is contiguous to the Friendship Park Property and upon which the Iowa
Hotel Facility is constructed.
"Iowa Land Base Facilities" shall mean the real property
located in the State of Iowa more particularly described as Parcels A and D
through F on "Exhibit S", affixed hereto and by this reference incorporated
herein and made a part hereof, upon which the land based portions of the Iowa
Riverboat/Hotel Facilities is constructed, together with any other land, real
estate, rights, interests and appurtenances thereto which are or become
Collateral securing repayment of the Credit Facility which are located thereon
or used in connection therewith.
"Iowa Mortgage" shall mean the Existing Iowa Mortgage as
amended by the First Amendment to Iowa Mortgage and as it may be further
amended, restated or modified from time to time.
"Iowa Permitted Encumbrances" shall mean, at any particular
time, (i) liens for taxes, assessments or governmental charges not then due and
payable or not then delinquent, (ii) statutory liens for labor and/or materials
and liens for taxes, assessments or governmental charges not then required to be
paid pursuant to Sections 5.04 and 5.10 of the Credit Agreement, respectively,
provided that, Borrowers shall have maintained adequate reserves in accordance
with GAAP for payment of same, (iii) liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money); (iv) leases or subleases granted to others (including, without
limitation, any Subsidiary) not interfering in any material respect with the
ordinary conduct of the business of the Riverboat/Hotel Facilities; (v) liens
created or contemplated by the Iowa Security Documents, (vi) the liens,
encumbrances and restrictions on the Iowa Real Property, Iowa FF&E and existing
improvements which are shown as exceptions on Schedule B of the Iowa Title
Insurance Policy, (vii) liens consented to in writing by Agent Bank upon the
approval of Requisite Lenders,
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(viii) liens of legally valid capital leases and purchase money security
interests for Iowa FF&E and other goods to the extent permitted by Section
6.09(c), (ix) each and every easement, license, restriction or right-of-way that
(A) is hereafter granted to any Governmental Authority or public utility and (B)
does not interfere in any material respect with the Iowa Riverboat/Hotel
Facilities; (x) judgment liens, writs, warrants, levies, distraints, attachments
and other similar process which do not constitute an Event of Default, (xi)
Liens securing reimbursement obligations with respect to letters of credit and
banker's acceptances which encumber only documents and other property relating
to such letters of credit and banker's acceptances and products or proceeds
thereof; (xii) Liens arising out of consignment or similar arrangements for the
sale of goods; (xiii) any interest or title of a lessor subject to any capital
lease obligation or operating lease; (xiv) Liens in existence on the Closing
Date and referenced on Schedule of Liens set forth as Schedule 6.09; (xv)
easements, rights of way, restrictions, minor defects or irregularities in
title and other similar liens, charges or encumbrances which do not interfere in
any material respect with the business of the Borrowers; (xvi) Liens on property
of a Person existing at the time such Person is merged into or consolidated with
any Borrower or any Subsidiary of the Borrowers or becomes a Subsidiary of the
Borrowers; provided that such Liens (other than replacement Liens) were not
created in contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with any
Borrower or such Subsidiary or acquired by any Borrower or such Subsidiary;
(xvii) the replacement, extension, or renewal of any Lien permitted hereunder;
(xviii) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xix) Liens in favor of customs and revenue authorities
arising by operation of law to secure payment of customs duties in connection
with the importation of goods; (xx) licenses, leases or subleases granted to
other Persons in the ordinary course of business; (xxi) any interest or title of
a lessor, sublessor, licensee or licensor under any personal or real property
lease, sublease or license agreement; (xxii) Liens in favor of a banking or
other financial institution encumbering deposits (including the right of
set-off) held by such banking or other financial institutions incurred in the
ordinary course of business; and (xxiii) Liens for property taxes on real
property which is to be abandoned for which the sole recourse for such tax is to
such property (or to a Subsidiary of any Borrower whose sole asset is such
property).
"Iowa Real Property" shall mean collective reference to the
Friendship Park Property, the Iowa Land Base Facilities and the Westwood Golf
Course Property.
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"Iowa Riverboat/Hotel Facilities" shall mean the hotel and
riverboat casino business and related activities conducted by HIMC in and on the
Riverboat and the Iowa Real Property and all improvements now or hereafter
situate thereon, presently conducted under the style and name of Harveys
Casino/Hotel.
"Iowa Security Documents" shall mean collective reference to
the Iowa Mortgage, Iowa Ship Mortgage, Iowa Financing Statements, Iowa
Assignments and any other document or instrument which is executed or delivered
by HIMC, and accepted by Agent Bank, on behalf of Lenders, as security for
payment of the Bank Facilities.
"Iowa Ship Mortgage" shall mean the Existing Iowa Ship
Mortgage, as amended by the Second Amendment to Iowa Mortgage, and as it may be
further amended, restated or otherwise modified from time to time.
"Iowa Spaceleases" shall mean the executed leases and
concession agreements pertaining to the Iowa Riverboat/Hotel Facilities, or any
portion thereof, wherein HIMC is the lessor as set forth on the certain schedule
marked "Schedule 4.15(C)", affixed hereto and by this reference incorporated
herein and made a part hereof.
"Iowa Sponsorship Agreement" shall mean that certain Amended
and Restated Excursion Boat Sponsorship Agreement which is to be executed and
delivered by IWRA, as sponsor, and by HIMC as operator, to be effective as of
the BR Closing, pursuant to which the terms and conditions of IWRA's agreement
to Sponsor HIMC as operator of the Riverboat under Iowa Code Chapter 99F (which
terms and conditions are set forth by an Excursion Boat Sponsorship and
Operations Agreement dated August 22, 1994) are amended and restated.
"Iowa Sponsorship Agreement Estoppel Certificate" shall mean
an estoppel certificate duly executed by IWRA as sponsor and HIMC as operator
under the Iowa Sponsorship Agreement, wherein each certifies and represents to
Agent Bank on behalf of Lenders that: (a) the Iowa Sponsorship Agreement, as
defined herein, represents the entire agreement between the parties thereto, and
supersedes all other previous documents and agreements between them, (b) that
the Iowa Sponsorship Agreement has not been modified, supplemented or amended,
except as described herein, (c) to the actual knowledge of owner and to the best
knowledge of manager there are no defaults presently existing or continuing
under any of the terms and provisions of the Iowa Sponsorship Agreement, and (d)
other provisions regarding notice to Agent Bank in the event of a default
thereunder, Agent Bank's right to cure any
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such default and the rights of Banks and their successors and assigns to
continue as the operator under the Iowa Sponsorship Agreement.
"Iowa Title Company" shall mean Lawyers Title Insurance
Corporation and its issuing agent Dakota Title and Escrow Co. with offices at
1801 St. Mary's Avenue, in Omaha, Nebraska, together with such reinsurers with
direct access as are requested by Agent Bank or other title insurance company or
companies as may be reasonably acceptable to Agent Bank.
"Iowa Title Endorsements" shall mean a collective reference to
a modification endorsement to the Existing Iowa Title Policy and such other
endorsements to the Existing Iowa Title Policy as are requested by Agent Bank,
in order to cause the Existing Iowa Title Policy to insure the lien and priority
of the Iowa Mortgage, subject only to such exceptions and conditions of title as
are acceptable to Agent Bank, all of which endorsements shall be issued by the
Iowa Title Company and shall be in a form and substance acceptable to Agent
Bank.
"Iowa Title Insurance Policy" shall mean a collective
reference to the Existing Iowa Title Policy and the Iowa Title Endorsements.
"L/C Agreement(s)" shall mean reference to the Application and
Agreement for Standby Letter of Credit and addendum(s) thereto executed by an
Authorized Officer of Borrowers in favor of L/C Issuer in L/C Issuer's standard
form, setting forth the terms and conditions upon which L/C Issuer shall issue a
Letter(s) of Credit, as the same may be amended or modified from time to time.
"L/C Exposure" shall mean the aggregate amount which L/C
Issuer may be required to fund or is contingently liable for disbursement under
all issued and outstanding Letter(s) of Credit, which amount shall be determined
by subtracting from the aggregate of the Stated Amount of each such Letter(s) of
Credit (to the extent such Letter of Credit is not secured by Cash deposited
into the Cash Collateral Account and subject to the Cash Collateral Pledge
Agreement), the principal amount of all L/C Reimbursement Obligations which have
accrued and have been fully satisfied as of each date of determination.
"L/C Facility" shall mean the agreement of L/C Issuer to issue
Letters of Credit subsequent to the Amendment Effective Date, subject to the
terms and conditions and up to the maximum amounts and duration as set forth in
Section 2.09 of this Credit Agreement.
"L/C Fee" shall have the meaning set forth in
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Section 2.10(c) of this Credit Agreement.
"L/C Issuer" shall have the meaning set forth in the Preamble
of this Credit Agreement.
"L/C Reimbursement Obligation(s)" shall mean the obligation of
Borrowers to reimburse L/C Issuer for amounts funded or disbursed under a
Letter(s) of Credit, together with accrued interest thereon.
"LIBO Rate" means, relative to any Interest Period for any
LIBOR Loan, the per annum rate (reserve adjusted as hereinbelow provided) as
published on the applicable Banking Business Day in "Telerate System Reports" by
the British Bankers Association for interest settlement rates relating to London
Interbank Offerings as of 11:00 a.m., London, England time, two (2) Banking
Business Days prior to the beginning of the applicable Interest Period for
delivery on the first day of such Interest Period, for the number of months
comprised therein and in a minimum amount and multiples as set forth in this
Credit Agreement. The foregoing rate of interest shall be reserve adjusted by
dividing the applicable LIBO Rate by a one (1.00) minus the LIBOR Reserve
Percentage, with such quotient to be rounded upward, if necessary, to the
nearest whole multiple of one-hundredth of one percent (0.01%). All references
in this Credit Agreement or other Loan Documents to a LIBO Rate include the
aforesaid reserve adjustment.
"LIBOR Loan" shall mean each portion of the total unpaid
principal under the Credit Facility which bears interest at a rate determined by
reference to the LIBO Rate plus the Applicable Margin.
"LIBOR Reserve Percentage" means, relative to any Interest
Period for LIBOR Loans made by any Lender, the reserve percentage (expressed as
a decimal) equal to the actual aggregate reserve requirements (including all
basic, emergency, supplemental, marginal and other reserves and taking into
account any transactional adjustments or other scheduled changes in reserve
requirements) announced within Agent Bank as the reserve percentage applicable
to Agent Bank as specified under regulations issued from time to time by the
Federal Reserve Board. The LIBOR Reserve Percentage shall be based on Regulation
D of the Federal Reserve Board or other regulations from time to time in effect
concerning reserves for "Eurocurrency Liabilities" from related institutions as
though Agent Bank were in a net borrowing position.
"Land Leases" shall mean collective reference to the Park
Cattle Lease, Tahoe Green Belt Lease, California Green Belt Lease, Westwood
Lease, Friendship Master Lease and
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Friendship Sublease.
"Laws" means, collectively, all international, foreign,
federal, state and local statutes, maritime laws, treaties, rules, regulations,
ordinances, codes and administrative or judicial precedents.
"Lender Reply Period" shall have the meaning set forth in
Section 9.10(d).
"Lenders" shall have the meaning ascribed to such term in the
Preamble to this Credit Agreement. With respect to matters requiring the consent
to or approval of all Lenders at any given time, all then existing Defaulting
Lenders will be disregarded and excluded, and, for voting purposes only, "all
Lenders" shall be deemed to mean "all Lenders other than Defaulting Lenders".
"Letter(s) of Credit" shall mean collective reference to the
Standby Letter(s) of Credit issued by L/C Issuer on behalf of Borrowers, or any
of them, as the same may be extended, renewed or reissued from time to time.
"Leverage Ratio" as of the end of any Fiscal Quarter shall
mean the ratio resulting by dividing (a) Total Funded Debt for the Fiscal
Quarter under review by (b) the sum of EBITDA for the Fiscal Quarter under
review plus EBITDA for each of the most recently ended three (3) preceding
Fiscal Quarters.
"Liabilities and Costs" means all claims, judgments,
liabilities, obligations, responsibilities, losses, damages (including lost
profits), punitive or treble damages, costs, disbursements and expenses
(including, without limitation, reasonable attorneys', experts' and consulting
fees and costs of investigation and feasibility studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan Documents" shall mean the collective reference to this
Credit Agreement, the Revolving Credit Note, the Swingline Note, the Security
Documentation, Environmental Certificate, the documents described in Section
3.04 and all other instruments and agreements required to be executed by or
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on behalf of Borrowers, or any of them, or any other Person in connection with
the Bank Facilities for the benefit of Banks or Agent Bank on behalf of the
Lenders, the Swingline Lender and the L/C Issuer.
"Majority Lenders" means, as of any date of determination
prior to the occurrence of an Event of Default, Lenders holding Syndication
Interests in excess of fifty percent (50%) of the Credit Facility; and at all
times during which an Event of Default has occurred and remains continuing,
Lenders holding a percentage equal to or in excess of sixty-six and two-thirds
percent (66-2/3%) of the Funded Outstandings; PROVIDED THAT, (i) in determining
such percentage at any given time, all then existing Defaulting Lenders will be
disregarded and excluded and the Pro Rata Shares of Lenders shall be
redetermined, for voting purposes only, to exclude the Pro Rata Shares of such
Defaulting Lenders, and (ii) notwithstanding the foregoing, at all times when
three (3) or more Lenders are party to this Credit Agreement, the term Majority
Lenders shall in no event mean less than three (3) Lenders.
"Margin Stock" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System.
"Material Adverse Change" shall mean: (i) any set of
circumstances or events which, other than with respect to the Representations
and Warranties set forth in Article IV of the Credit Agreement which shall be
construed to be applicable to circumstances and events existing both as of the
Amendment Effective Date (or such earlier date as may be referenced in each
particular provision) and subsequent to the Amendment Effective Date, are not in
existence as of the Amendment Effective Date, which are material and adverse to
the Collateral or the condition (financial or otherwise), business operations or
prospects of (a) the Borrower Consolidation taken as a whole, or (b) the ability
of Borrowers to perform their respective Obligations under the Loan Documents,
or (c) the ability of any of the Lenders to enforce any of their material rights
or remedies under any of the Loan Documents, or (ii) any events or changes,
which, other than with respect to the Representations and Warranties set forth
in Article IV of the Credit Agreement which shall be construed to be applicable
to events and changes existing both as of the Amendment Effective Date (or such
earlier date as may be referenced in each particular provision) and subsequent
to the Amendment Effective Date, are not in existence as of the Amendment
Effective Date or which have or result in a material adverse effect upon (a) the
value of the Hotel/Casino Facilities or the priority of the security interests
granted to Agent Bank (other than as a result of any action or inaction by Agent
Bank or any Lender),
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(b) the validity of any of the Loan Documents, or (c) the use, occupancy or
operation of the Hotel/Casino Facilities.
"Maturity Date" shall mean September 30, 2004.
"Maximum Availability" shall mean the Maximum Permitted
Balance less the Aggregate Outstandings.
"Maximum Permitted Balance" shall mean the maximum amount of
principal which may be outstanding on the Bank Facilities from time to time,
which shall be the lesser of: (a) the Maximum Scheduled Balance, or (b) the
amount to which the Maximum Scheduled Balance is permanently voluntarily reduced
by Borrower pursuant to Section 2.01(c) or is otherwise further reduced or
limited pursuant to Sections 5.01, 6.10(c) or 8.02 or by Scheduled Reductions.
"Maximum Scheduled Balance" shall mean the amount of the Total
Commitment, as reduced on each Reduction Date by the Scheduled Reductions.
"Merger" shall mean the merger of HAC with and into HCR, with
HCR remaining as the surviving entity, and the cessation of HAC as a separate
entity, which occurred as of the Merger Effective Date on the terms and
conditions set forth in the Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger
dated as of February 28, 1998 between HCR and HAC.
"Merger Consideration" shall have the meaning ascribed to such
term in the Merger Agreement.
"Merger Effective Date" shall mean February 2, 1999, the date
upon which the Merger occurred.
"Merger Effective Time" shall mean the time on the Merger
Effective Date at which the Merger became effective.
"Minimum Cap Ex Requirement" shall have the meaning ascribed
to such term in Section 6.06 of the Credit Agreement, which, for purposes of the
definition of "Adjusted Fixed Charge Coverage Ratio" shall be deemed to be equal
to two percent (2%) of gross revenues derived from the Hotel/Casino Facilities
by the Borrower Consolidation during each applicable Fiscal Quarter or other
applicable fiscal period.
"Mortgages" shall mean collective reference to the Deeds of
Trust, Iowa Mortgage, Iowa Ship Mortgage and Bluffs Run Mortgage.
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"Net Income" shall mean with respect to any Person for any
fiscal period, the net income of such Person during such fiscal period
determined in accordance with GAAP, consistently applied.
"Net Proceeds" shall mean the aggregate cash proceeds received
by the Borrower Consolidation in respect of any sale, transfer, conveyance or
disposition of FF&E, net of the direct costs relating to such sale, transfer,
conveyance or disposition of FF&E, amounts required to be applied to the
repayment of Indebtedness secured by a Lien on the asset or assets that were the
subject of such sale, transfer, conveyance or disposition of FF&E, any reserve
for adjustment in respect of the sale price of such FF&E or liabilities
associated with such sale, transfer, conveyance or disposition of FF&E and
retained by the Borrower Consolidation and all Indebtedness assumed by the
purchaser in connection with such sale, transfer, conveyance or disposition of
FF&E and all taxes paid or payable as a result of such sale, transfer,
conveyance or disposition.
"Net Worth" shall mean Assets, less Total Liabilities.
"Nevada Gaming Authority" shall mean, without limitation, the
Nevada Gaming Commission and the State Gaming Control Board and any other
applicable governmental or administrative state or local agency involved in the
regulation of gaming and gaming activities conducted by the Borrower
Consolidation in the State of Nevada.
"New Venture" means a casino, hotel, casino/hotel, resort,
casino/resort, riverboat casino, dock casino, golf course, horse racing
business, entertainment center, shopping center or similar facility or any
business mandated by a Gaming Authority in order to obtain or retain a Gaming
Permit (or any site or proposed site for any of the foregoing or entity that
provides management or other services or goods to any of the foregoing) owned or
to be owned in whole or in part by any New Venture Subsidiary or owned or to be
owned by a Person in which any member of the Borrower Consolidation or a New
Venture Subsidiary is an owner or equity investor.
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"New Venture Investment" shall mean any Investment or
Distributions made by any member of the Borrower Consolidation in or to any New
Venture or New Venture Subsidiary after the Amendment Effective Date.
"New Venture Investments" shall mean collective reference to
each and every New Venture Investment.
"New Venture Subsidiary" shall mean a Subsidiary of HCR or any
of its Subsidiaries (other than HTMC, HCRSC, HCCMC, HIMC, HBR or HBRMC) that is
the direct or indirect owner in whole or part of a New Venture.
"Non Pro Rata Borrowing" means a Borrowing with respect to
which fewer than all Lenders have funded their respective Pro Rata Shares of
such Borrowing and the failure of the non-funding Lender or Lenders to fund its
or their respective Pro Rata Shares of such Borrowing constitutes a breach of
this Credit Agreement.
"Notes" shall mean collective reference to the Revolving
Credit Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning set forth in
Section 2.03.
"Notice of Swingline Advance" shall have the meaning set forth
in Section 2.08(b).
"Obligations" means, from time to time, all Indebtedness of
Borrowers owing to Agent Bank, any Lender or any Person entitled to
indemnification pursuant to Section 5.14, or any of their respective successors,
transferees or assigns, of every type and description, whether or not evidenced
by any note, guaranty or other instrument, arising under or in connection with
this Credit Agreement or any other Loan Document, whether or not for the payment
of money, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired. The term includes, without limitation, all interest,
charges, expenses, fees, reasonable attorneys' fees and disbursements,
reasonable fees and disbursements of expert witnesses and other consultants, and
any other sum now or hereinafter chargeable to Borrowers under or in connection
with Credit Agreement or any other Loan Document. Notwithstanding the foregoing
definition of "Obligations", Borrowers' obligations under any environmental
indemnity agreement constituting a Loan Document, or any environmental
representation, warranty, covenant, indemnity or similar provision in this
Credit Agreement or any
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other Loan Document, shall be secured by the Collateral only to the extent, if
any, specifically provided in the Security Documentation.
"Operating Subsidiaries" shall mean collective reference to
HTMC, HCRSC, HCCMC, HIMC, HBR and HBRMC.
"Park Cattle Co." shall mean Park Cattle Co., a Nevada
corporation.
"Park Cattle Lease" shall mean that certain Lease dated July
9, 1973, as amended on April 27, 1979, February 28, 1985 and June 1, 1997,
wherein Park Cattle Co. is lessor and HCR (formerly Harvey's Wagon Wheel, Inc.)
is lessee of the Park Cattle Property, the lessee's interest therein having been
assigned by HCR to HTMC by Assignment of Leases dated June 1, 1997, as such
Lease may be further amended, restated, extended, renewed or otherwise modified
from time to time.
"Park Cattle Lease Estoppel Certificate" shall mean the
Existing Park Cattle Lease Estoppel Certificate as modified by the Reaffirmation
of Park Cattle Lease Estoppel Certificate.
"Park Cattle Property" shall mean that real property which is
particularly described as Parcel 3 on Exhibit Q attached hereto.
"Pension Plan" means any "employee pension benefit plan" that
is subject to Title IV of ERISA and which is maintained for employees of
Borrowers, or any of them, or any of their respective ERISA Affiliates.
"Permitted Encumbrances" shall mean collective reference to
the Tahoe Permitted Encumbrances, the Colorado Permitted Encumbrances, the Iowa
Permitted Encumbrances, the Bluffs Run Permitted Encumbrances and the Restricted
Subsidiary Permitted Encumbrances.
"Permitted Preferred Stock" shall mean preferred stock issued
by HCR which (a) has no provision or requirement for the payment of dividends in
Cash or Cash Equivalents prior to the Maturity Date, or (b) if providing for or
requiring the payment of dividends in Cash or Cash Equivalents prior to the
Maturity Date, such preferred stock (i) is not issued for or in the face amount
in excess of Sixty-Five Million Dollars ($65,000,000.00) in the aggregate (it
being understood that the face amount of each preferred stock may exceed
Sixty-Five Million Dollars ($65,000,000.00) in the aggregate as a result, and
only as a result, of the payment of dividends in additional preferred stock
which meets the requirements of clauses (b)(ii) and (iii) immediately
hereinbelow or cumulation of additional
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liquidation amounts in lieu of dividends), (ii) contains a dividend deferral
option (allowing dividends to be paid in a manner other than Cash or Cash
Equivalents or otherwise deferred) exercisable at the discretion of HCR for a
period or multiple periods aggregating no less than five (5) years or otherwise
does not require the payment of dividends in Cash or Cash Equivalents for a
period or multiple periods aggregating no less than five (5) years, and (iii)
does not require any redemptions (other than in connection with asset sales and
changes of control the provision for which shall be no more restrictive on HCR
or the Borrower Consolidation than the provisions concerning asset sales and
changes of control contained in the Credit Agreement) prior to the Maturity
Date.
"Person" means an individual, firm, corporation, limited
liability company, trust, association, partnership, joint venture, tribunal or
other entity.
"Policies of Insurance" shall mean the insurance to be
obtained and maintained by Borrowers throughout the term of this Credit
Agreement as provided by Schedule 5.09(a) herein.
"Post Foreclosure Plan" shall have the meaning set forth in
Section 9.11(e).
"Pricing Certificate" shall have the meaning set forth in
Section 5.08(a)(ii).
"Prime Rate" means at any time, and from time to time, the
rate of interest most recently announced within WFB at its principal office in
San Francisco, California, as its "Prime Rate", with the understanding that
WFB's "Prime Rate" is one of its base rates and serves as the basis upon which
effective rates of interest are calculated for those loans and extensions of
credit making reference thereto, and is evidenced by the recording thereof after
its announcement in such internal publication or publications as WFB may
designate. Each change in the Prime Rate shall be effective on the day the
change is announced within WFB.
"Principal Prepayments" shall have the meaning set forth in
Section 2.07(a) of this Credit Agreement.
"Pro Rata" or "Pro Rata Share" shall mean with respect to any
Lender, a percentage or proportion equal to such Lender's Syndication Interest
in the Credit Facility as set forth on the Schedule of Lenders' Proportions in
Credit Facility.
"Protective Advance" means all sums expended as determined by
Agent Bank to be necessary to: (a) protect the
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priority, validity and enforceability of the Security Documentation on, and
security interests in, any Collateral and the instruments evidencing or securing
the Obligations, or (b) prevent the value of any Collateral from being
materially diminished (assuming the lack of such a payment within the necessary
time frame could potentially cause such Collateral to lose value), or (c)
protect any of the Collateral from being materially damaged, impaired,
mismanaged or taken, including, without limitation, any amounts expended in
accordance with Section 10.21 or post-foreclosure ownership, maintenance,
operation or marketing of any Collateral.
"Purchase Agreement" shall have the meaning set forth in
Recital Paragraph B of this Credit Agreement, as may be further amended or
modified upon the prior written consent of Agent Bank.
"Purchase Escrow Agent" shall mean Fidelity National Title
Insurance Company, defined as the "Escrow Agent" in the Preamble of the Purchase
Agreement, with respect to the transactions contemplated by the Purchase
Agreement.
"Qualified Appraisal" shall mean reference to an appraisal or
appraisals of the Hotel/Casino Facilities and Collateral, or any portion
thereof, acceptable to Agent Bank, prepared at Borrowers' expense in compliance
with FIRREA by an appraiser acceptable to Agent Bank, with sufficient copies
delivered to Agent Bank for distribution to each of the Lenders.
"RPI" shall mean Reno Projects, Inc., a Nevada corporation,
which is a wholly owned Subsidiary of HCR.
"Rate Adjustment Date" shall mean February 1, 2000.
"Reaffirmation of California Greenbelt Lease Estoppel
Certificate" shall mean that certain Reaffirmation of Ground Lease Estoppel
Certificate (California Greenbelt Lease) duly executed by Park Cattle Co., HTMC,
HCR and Agent Bank, pursuant to which, among other things, Park Cattle Co.
represents to Agent Bank, among other things, that: (a) as of the date thereof,
the representations set forth by the Existing California Greenbelt Lease
Estoppel Certificate are true and correct; (b) the provisions of the Existing
California Greenbelt Lease Estoppel Certificate, with regard to the Existing
California Deed of Trust, are applicable to the California Deed of Trust; and
(c) except as modified thereby, the Existing California Greenbelt Lease Estoppel
Certificate remains in full force and effect.
"Reaffirmation of Park Cattle Lease Estoppel
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Certificate" shall mean that certain Reaffirmation of Ground Lease Estoppel
Certificate (Park Cattle Lease) duly executed by Park Cattle Co., HTMC, HCR and
Agent Bank, pursuant to which, among other things, Park Cattle Co. represents to
Agent Bank, among other things, that: (a) as of the date thereof, the
representations set forth by the Existing Park Cattle Lease Estoppel Certificate
are true and correct; (b) the provisions of the Existing Park Cattle Lease
Estoppel Certificate, with regard to the Existing Tahoe Deed of Trust, are
applicable to the Tahoe Deed of Trust; and (c) except as modified thereby, the
Existing Park Cattle Lease Estoppel Certificate remains in full force and
effect.
"Reaffirmation of Tahoe Greenbelt Lease Estoppel Certificate"
shall mean that certain Reaffirmation of Ground Lease Estoppel Certificate
(Tahoe Greenbelt Lease) duly executed by Park Cattle Co., HTMC, HCR and Agent
Bank, pursuant to which, among other things, Park Cattle Co. represents to Agent
Bank, among other things, that: (a) as of the date thereof, the representations
set forth by the Existing Tahoe Greenbelt Lease Estoppel Certificate are true
and correct; (b) the provisions of the Existing Tahoe Greenbelt Lease Estoppel
Certificate, with regard to the Existing Tahoe Deed of Trust, are applicable to
the Tahoe Deed of Trust; and (c) except as modified thereby, the Existing Tahoe
Greenbelt Lease Estoppel Certificate remains in full force and effect.
"Real Properties" shall mean collective reference to the Tahoe
Real Property, the California Greenbelt Property, the Colorado Real Property,
the Iowa Real Property and the Bluffs Run Real Property.
"Reduction Date(s)" shall mean reference to each date or the
dates, as the context may require upon which the Total Commitment is reduced by
a Scheduled Reduction as set forth on the Total Commitment Reduction Schedule.
"Related Entities" shall mean collective reference to all
stockholders, Affiliates and Subsidiaries of the Borrowers, or any of them,
other than another Borrower.
"Replacement Note(s)" shall have the meaning set forth in
Section 2.05(i) of this Credit Agreement.
"Reportable Event" shall mean a reportable event as defined in
Title IV of ERISA, except actions of general applicability by the Secretary of
Labor under Section 110 of ERISA.
"Requisite Lenders" means, as of any date of determination
prior to the occurrence of an Event of Default,
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Lenders holding Syndication Interests equal to or in excess of sixty-six and
two-thirds percent (66-2/3%) of the Credit Facility; and at all times during
which an Event of Default has occurred and remains continuing, Lenders holding a
percentage equal to or in excess of sixty-six and two-thirds percent (66- 2/3%)
of the Funded Outstandings; PROVIDED THAT, (i) in determining such percentage at
any given time, all then existing Defaulting Lenders will be disregarded and
excluded and the Pro Rata Shares of Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of such Defaulting Lenders, and
(ii) notwithstanding the foregoing, at all times when three (3) or more Lenders
are party to this Credit Agreement, the term Requisite Lenders shall in no event
mean less than three (3) Lenders.
"Restricted Subsidiary" shall mean a wholly owned Subsidiary
of HCR which: (a) has not incurred any Indebtedness other than to the extent
permitted under this Credit Agreement, (b) is not subject to any Liens except to
the extent permitted under this Credit Agreement, (c) has executed and delivered
to Agent Bank a Subsidiary Guaranty within the period required under Section
5.16, (d) all of the stock or other evidence of ownership thereof has been
pledged in favor of Agent Bank by a Stock Pledge within the period required
under Section 5.16, and (e) has been designated by HCR to be a Restricted
Subsidiary by written notice thereof to Agent Bank, subject to HCR's right to
redesignate any New Venture Subsidiary as an Unrestricted Subsidiary so long as:
(i) no Default or Event of Default has occurred and remains continuing, and (ii)
giving effect to such redesignation as of the end of the most recently ended
Fiscal Quarter on a pro forma basis, no Default or Event of Default would exist
under Article VI of the Credit Agreement.
"Restricted Subsidiary Permitted Encumbrances" shall mean, at
any particular time with respect to a Restricted Subsidiary, (i) liens for
taxes, assessments or governmental charges not then due, payable and delinquent,
(ii) statutory Liens for labor or materials or liens for taxes, assessments or
governmental charges not then required to be paid pursuant to Section 5.10,
(iii) liens in favor of Agent Bank or any Lender created or contemplated by the
Security Documentation, (iv) liens in favor of Agent Bank for the benefit of the
Lenders or consented to in writing by Agent Bank upon the approval of Requisite
Lenders, (v) purchase money security interests for acquired FF&E up to the
maximum amount permitted under Section 6.09(c), (vi) liens of legally valid
leases for FF&E, (vii) easements, licenses or rights-of-way, now existing or
hereafter granted to any Governmental Authority or public utility providing
services to the Restricted Subsidiary or Restricted Subsidiary Venture, (viii)
judgment liens, writs, warrants, levys, distraints, attachments and other
similar
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process which do not constitute an Event of Default, (ix) statutory liens of
landlords and liens of carriers, warehousemen, mechanics, customs and revenue
authorities and materialmen and other similar liens imposed by law incurred in
the ordinary course of business which could not reasonably be expected to cause
a Material Adverse Change and which are discharged in accordance with Section
5.04, (x) liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations; (xi) leases
or subleases granted to others not interfering in any material respect with the
ordinary conduct of the business of such Restricted Subsidiary; (xii) minor
defects, encroachments or irregularities in title not interfering in any
material respect with the ordinary conduct of the business of such Restricted
Subsidiary; (xiii) Liens securing reimbursement obligations with respect to
letters of credit and banker's acceptances which encumber only documents and
other property relating to such letters of credit and banker's acceptances and
products or proceeds thereof; (xiv) Liens arising out of consignment or similar
arrangements for the sale of goods; (xv) any interest or title of a lessor
subject to any capital lease obligation or operating lease; (xvi) Liens in
existence on the Closing Date referenced on Schedule of Liens set forth as
Schedule 6.09; (xvii) easements, rights of way, restriction, minor defects or
irregularities in title and other similar liens, charges or encumbrances which
do not interfere in any material respect with the business of the Borrowers;
(xviii) Liens on property of a Person existing at the time such Person is merged
into or consolidated with any Borrower or any Subsidiary of the Borrowers or
becomes a Subsidiary of the Borrowers; provided that such Liens (other than
replacement Liens) were not created in contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with any Borrower or such Subsidiary or acquired by
any Borrower or such Subsidiary; (xix) the replacement, extension, or renewal of
any Lien permitted hereunder; (xx) Liens arising from filing Uniform Commercial
Code financing statements regarding leases; (xxi) Liens in favor of customs and
revenue authorities arising by operation of law to secure payment of customs
duties in connection with the importation of goods; (xxii) licenses, leases or
subleases granted to other Persons in the ordinary course of business; (xxiii)
any interest or title of a lessor, sublessor, licensee or licensor under any
personal or real property lease, sublease or license agreement; (xxiv) Liens in
favor of a banking or other financial institution encumbering deposits
(including the right of set-off) held by such banking
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or other financial institutions incurred in the ordinary course of business; and
(xxv) Liens for property taxes on real property which is to be abandoned for
which the sole recourse for such tax is to such property (or to a Subsidiary of
the Borrower whose sole asset is such property).
"Restricted Subsidiary Stock Pledges" shall mean collective
reference to the Stock Pledge (Gaming) and the Stock Pledge (General).
"Restricted Subsidiary Venture" shall mean a New Venture owned
in whole or in part by a Borrower or a Restricted Subsidiary.
"Revolving Credit Note" shall mean the Second Amended and
Restated Revolving Credit Promissory Note, a copy of which is marked "Exhibit
A", affixed hereto and by this reference incorporated herein and made a part
hereof, to be executed by Borrowers on or before the Amendment Effective Date,
payable to the order of Agent Bank on behalf of the Lenders, evidencing the
Credit Facility as the same may be amended, modified, extended, renewed or
restated from time to time, which shall constitute a full amendment and
restatement of the Existing Revolving Credit Note, together with all prior
amendments thereto.
"Riverboat" shall mean the whole of the vessel named
below and described as follows:
VESSEL NAME USCG OFFICIAL NUMBER
Kanesville Queen 1037706
"Schedule of Lenders' Proportions in Credit Facility" shall
mean the Schedule of Lenders' Proportions in Credit Facility, a copy of which is
marked "Schedule 2.01(a), affixed hereto and by this reference incorporated
herein and made a part hereof, setting forth the respective Syndication Interest
and maximum amount to be funded under the Credit Facility by each Lender as such
schedule may be amended, modified or restated from time to time in connection
with an Assignment and Assumption Agreement.
"Schedule of Liens" shall mean the Schedule of Liens, a copy
of which is set forth as Schedule 6.09, affixed hereto and by this reference
incorporated herein and made a part hereof, setting forth certain Liens
encumbering the Collateral as of the Amendment Effective Date.
"Schedule of Outstanding Letters of Credit" shall mean the
Schedule of Outstanding Letters of Credit, a copy of
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which is set forth as Schedule 2.09(e), affixed hereto and by this reference
incorporated herein and made a part hereof, setting forth each Letter of Credit
issued and outstanding under the Existing Harveys Credit Agreement that will be
deemed issued hereunder as of the Amendment Effective Date.
"Schedule of Significant Litigation" shall mean the Schedule
of Significant Litigation, a copy of which is set forth as Schedule 3.20,
affixed hereto and by this reference incorporated herein and made a part hereof,
setting forth the information described in Section 3.20 with respect to each
Significant Litigation.
"Schedule of Subsidiaries" shall mean the Schedule of
Subsidiaries, a copy of which is marked "Schedule 4.22", affixed hereto and by
this reference incorporated herein and made a part hereof, setting forth the
name of each Subsidiary of HCR as of the Amendment Effective Date, stating
whether each such Subsidiary is a Restricted Subsidiary or an Unrestricted
Subsidiary and if the Subsidiary is a New Venture Subsidiary setting forth a
description of the applicable New Venture.
"Scheduled Reduction(s)" shall mean the amount by which the
Aggregate Commitment is reduced on each Reduction Date (calculated as a
percentage of the Total Commitment) as set forth on the Total Commitment
Reduction Schedule.
"Second Amendment to Iowa Ship Mortgage" shall mean that
certain Second Amendment to First Preferred Ship Mortgage which is to be
executed by HIMC and by Agent Bank concurrently, or substantially concurrent,
with the Amendment Effective Date, and filed with the USCG for the purpose of
amending the Existing Iowa Ship Mortgage in order to provide, among other
things, for the Existing Iowa Ship Mortgage to reflect the Credit Agreement and
to secure performance under the Bank Facilities.
"Second Reaffirmation of Friendship Master Lease Estoppel
Certificate" shall mean that certain Second Reaffirmation of Ground Lease
Estoppel Certificate (Friendship Park Master Lease) duly executed by the Iowa
Department of Natural Resources wherein it certifies and represents to Agent
Bank, on behalf of Lenders, among other things, that: (a) as of the date
thereof, the representations set forth by the Existing Friendship Master Lease
Estoppel Certificate are true and correct; (b) the provisions of the Existing
Friendship Master Lease Estoppel Certificate, with regard to the Existing Iowa
Mortgage, are applicable to the Iowa Mortgage; and (c) except as modified
thereby, the Existing Friendship Master Lease Estoppel Certificate remains in
full force and effect.
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"Second Reaffirmation of Friendship Sublease Estoppel
Certificate" shall mean that certain Second Reaffirmation of Ground Lease
Estoppel Certificate (Friendship Park Sublease) duly executed by the City of
Council Bluffs, Iowa, as sublessor under the Friendship Sublease, wherein it
certifies and represents to Agent Bank, on behalf of Lenders, among other
things, that: (a) as of the date thereof, the representations set forth by the
Existing Friendship Sublease Estoppel Certificate are true and correct; (b) the
provisions of the Existing Friendship Sublease Estoppel Certificate, with regard
to the Existing Iowa Mortgage, are applicable to the Iowa Mortgage; and (c)
except as modified thereby, the Existing Friendship Sublease Estoppel
Certificate remains in full force and effect.
"Second Reaffirmation of Hard Rock Subordination Agreement"
shall mean that certain Second Reaffirmation of Subordination Agreement;
Acknowledgement of Lease Agreements, Estoppel, Attornment and Nondisturbance
Agreement duly executed by HTMC, as lessor, Hard Rock, as lessee, and Agent
Bank, pursuant to which, among other things: (a) Hard Rock consents to the First
Amendment to Tahoe Deed of Trust; (b) HTMC and Hard Rock agree that the
provisions of the Existing Hard Rock Subordination Agreement, with regard to the
Existing Tahoe Deed of Trust, are applicable to the Tahoe Deed of Trust; and (c)
HTMC and Hard Rock agree that, except as modified thereby, the Existing Hard
Rock Subordination Agreement remains in full force and effect.
"Second Reaffirmation of Westwood Subordination and
NonDisturbance Agreement" shall mean that certain Second Reaffirmation of
Subordination, Attornment and Nondisturbance Agreement duly executed by HIMC, as
lessor, the City of Council Bluffs, Iowa, as lessee, and Agent Bank, pursuant to
which, among other things: (a) the City of Council Bluffs certifies that certain
representations set forth by the Existing Westwood Subordination and
Nondisturbance Agreement are true and correct as of the date thereof; (b) the
City of Council Bluffs consents to the First Amendment to Iowa Mortgage; and (c)
the City of Council Bluffs and Agent Bank agree that, except as modified
thereby, the Existing Westwood Subordination and Nondisturbance Agreement
remains in full force and effect.
"Secured Interest Rate Hedge(s)" shall mean any Interest Rate
Hedge entered into between any Borrower and any Lender, or Affiliate of any
Lender, which is secured by the Security Documentation.
"Security Documentation" shall mean collective reference to
the Tahoe Security Documents, Colorado Security Documents, Iowa Security
Documents, Bluffs Run Security
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Documents, HCR Security Agreement, HCR Financing Statements and HCR Stock
Pledges, Subsidiary Guaranties, Trademark Security Agreement and all other
instruments and agreements to be executed by or on behalf of members of the
Borrower Consolidation or other applicable Persons, in favor of Agent Bank on
behalf of the Lenders securing repayment of the Bank Facilities.
"Security Documentation Amendments" shall mean a collective
reference to the First Amendment to Tahoe Deed of Trust, the First Amendment to
California Deed of Trust, the First Amendment to Trademark Security Agreement,
the First Amendment to Iowa Mortgage, the Second Amendment to Iowa Ship
Mortgage, the First Amendment to Iowa Deed of Trust, the First Amendment to HCR
Security Agreement, the First Amendment to HCR Security Agreement and Stock
Pledge, the Bluffs Run Mortgage, the Bluffs Run Financing Statements, the Bluffs
Run Assignment of Spaceleases, Contracts, Rents and Revenues, the Bluffs Run
Assignment of Permits, Licenses and Contracts, the Assignment of BR Management
Agreement, the Assignment of BR Billboard Lease, the Assignment of Iowa
Sponsorship Agreement, Irrevocable Stock Powers for HBR and HBRMC and all other
documents to be executed by and on behalf of Borrowers, or any of them, for the
purpose of amending any of the Security Documentation as of the Amendment
Effective Date.
"Senior Debt" shall mean with reference to the Borrower
Consolidation for any period the Total Funded Debt of the Borrower
Consolidation, less the daily average of the aggregate Subordinated Debt for
such period.
"Senior Leverage Ratio" as of the end of any Fiscal Quarter
shall mean the ratio resulting by dividing (a) Senior Debt for the Fiscal
Quarter under review by (b) the sum of EBITDA for the Fiscal Quarter under
review plus EBITDA for each of the most recently ended three (3) preceding
Fiscal Quarters.
"Senior Subordinated Notes" shall mean reference to the
10-5/8% Senior Subordinated Notes due 2006 in the original aggregate amount of
One Hundred Fifty Million Dollars ($150,000,000.00) issued by HCR pursuant to
the Indenture.
"Significant Litigation" shall mean each action, suit,
proceeding, litigation and controversy involving Borrowers, or any of them, not
fully covered by insurance or that is subject to a reservation of rights and
involving claims in excess of Five Million Dollars ($5,000,000.00) or which is
reasonably expected to result in a Material Adverse Change.
"Significant Repair Funds" shall have the meaning set forth in
Section 8.02.
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"Spaceleases" shall mean collective reference to the Tahoe
Spaceleases, Colorado Spaceleases, Iowa Spaceleases and Bluffs Run Spaceleases.
"Standby Letter(s) of Credit" shall mean collective reference
to: (i) the IWRA Letter of Credit, and (ii) each other letter or letters of
credit issued by L/C Issuer pursuant to Section 2.09 of the Credit Agreement for
the purpose of securing payment or performance of a financial obligation of
Borrowers, or any of them.
"Stated Amount" shall mean the maximum amount which L/C Issuer
may be required to disburse to the beneficiary(ies) of a Letter(s) of Credit
under the terms thereof.
"Stated Expiry Date(s)" shall mean the date set forth on the
face of a Letter(s) of Credit as the date when all obligations of L/C Issuer to
advance funds thereunder will terminate, as the same may be extended from time
to time.
"Stock Pledge (Gaming)" shall mean the Security Agreement and
Stock Pledge, the form of which is marked "Exhibit N", affixed hereto and by
this reference incorporated herein and made a part hereof, pursuant to which the
stock of each Restricted Subsidiary which is a gaming licensee in any
jurisdiction within the United States of America is pledged by HCR to Agent Bank
on behalf of Lender as security for the Bank Facilities and all other sums which
may be owing by Borrowers to the Banks from time to time under the terms of the
Credit Agreement.
"Stock Pledge (General)" shall mean the Security Agreement and
Stock Pledge, the form of which is marked "Exhibit O", affixed hereto and by
this reference incorporated herein and made a part hereof, to be executed by HCR
from time to time for the purpose of pledging the stock of each Restricted
Subsidiary which is not a gaming licensee as security for the Bank Facilities
and all other sums which may be owing by Borrowers to the Banks from time to
time under the terms of the Credit Agreement.
"Subordinated Debt" shall mean: (i) the Indebtedness evidenced
by the Indenture and Senior Subordinated Notes, and (ii) all other unsecured
Indebtedness of the Borrower Consolidation which is contractually subordinated
to the Bank Facilities and for which (a) there is no principal or sinking fund
payment requirement maturing or otherwise coming due prior to ninety (90) days
after the Maturity Date (other than in connection with changes of control and
asset sales); (b) the maturity date of the Subordinated Debt shall not be
earlier than ninety (90) days subsequent to the Maturity Date; (c) all
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covenants of the Subordinated Debt shall be no more restrictive on HCR and the
Borrower Consolidation than the Financial Covenants (to the extent such
covenants of the Subordinated Debt address the matters covered by the Financial
Covenants) applicable under this Credit Agreement; and (d) the events of default
and subordination provisions of the Subordinated Debt shall be acceptable (from
the perspective of a senior lender) to Agent Bank, which acceptance shall not be
unreasonably withheld or delayed (in this regard Banks agree that if the events
of default and subordination provisions of the Subordinated Debt are
substantially similar in all material respects as the events of default and
subordination provisions contained in the Indenture, such events of default and
subordination provisions shall be deemed acceptable by Agent Bank).
"Subsidiary" shall mean, on the date in question, any Person
of which an aggregate of more than 50% of the stock of any class or classes (or
equivalent interests) is owned of record or beneficially, directly or
indirectly, by another Person and/or any of its Subsidiaries, if the holders of
the stock of such class or classes (or equivalent interests) (a) are ordinarily,
in the absence of contingencies, entitled to vote for the election of a majority
of the directors (or individuals performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are entitled, as such holders, to vote for the election of a
majority of the directors (or individuals performing similar functions) of such
Person, whether or not the right so to vote exists by reason of the happening of
a contingency.
"Subsidiary Guarantor" shall mean each Restricted Subsidiary
which has executed the Subsidiary Guaranty.
"Subsidiary Guaranty" shall mean the General Continuing
Subsidiary Guaranty to be executed by each Restricted Subsidiary in favor of the
Agent Bank on behalf of Banks substantially in the form of the General
Continuing Subsidiary Guaranty marked "Exhibit P", affixed hereto and by this
reference incorporated herein and made a part hereof, under the terms of which
each Restricted Subsidiary irrevocably and unconditionally guaranties to Agent
Bank on behalf of the Banks the full and prompt payment and performance of all
Obligations of Borrowers under the Credit Agreement, Notes and other Loan
Documents.
"Swingline Advance" shall mean each advance made by Swingline
Lender to Borrowers under the Swingline Facility.
"Swingline Facility" shall mean the agreement of
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Swingline Lender to make Swingline Advances to Borrowers subsequent to the
Closing Date, subject to the terms and conditions and up to the maximum amounts
and for the duration as set forth in Section 2.08 of this Credit Agreement.
"Swingline Lender" shall have the meaning set forth in the
Preamble of this Credit Agreement.
"Swingline Note" shall mean the Second Amended and Restated
Swingline Note, a copy of which is marked "Exhibit B", affixed hereto and by
this reference incorporated herein and made a part hereof, to be executed by
Borrowers on or before the Amendment Effective Date, payable to the order of
Swingline Lender, evidencing the Swingline Facility, as the same may be amended,
modified, extended, renewed or restated from time to time, which shall
constitute a full amendment and restatement of the Existing Swingline Note,
together with all prior amendments thereto.
"Swingline Outstandings" shall mean the aggregate amount of
all outstanding and unpaid Swingline Advances as of each date of determination.
"Syndication Co-Agent" shall have the meaning set forth in the
Preamble of this Credit Agreement.
"Syndication Interest" shall mean the proportionate interest
of each Lender in the Credit Facility as set forth on the Schedule of Lenders'
Proportions in Credit Facility, a copy of which is marked Schedule 2.01(a),
affixed hereto and by this reference incorporated herein and made a part hereof,
as the same may be amended or restated from time to time.
"Tahoe Amendment Closing Instructions" shall mean the Closing
Instructions to be given by Agent Bank to Tahoe Title Company on or before the
Closing Date setting forth the requirements of Lenders for the issuance of the
Tahoe Title Endorsements and other conditions for the funding of the BR Closing
Disbursement to the reasonable satisfaction of Agent Bank, Lenders and the
Borrowers.
"Tahoe Assignment of Permits, Licenses and Contracts" shall
mean the Amended and Restated Assignment of Permits, Licenses and Contracts
(Tahoe) executed by HTMC and Agent Bank on January 27, 1999, whereby HTMC
assigned to Agent Bank all of its right, title and interest in and to all
permits, licenses and contracts relating to the Tahoe Hotel/Casino Facility,
except those Gaming Permits and other licenses or permits which are
unassignable, which assignment was recorded January 29, 1999, in the Official
Records of Douglas County, Nevada, in Book 199, at Page 5857, as Instrument No.
0459903, as such
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Amended and Restated Assignment of Permits, Licenses and
Contracts (Tahoe) may be amended, restated or otherwise modified from time to
time.
"Tahoe Assignment of Spaceleases, Contracts, Rents and
Revenues" shall mean the Amended and Restated Assignment of Spaceleases,
Contracts, Rents and Revenues (Tahoe) executed by HTMC and Agent Bank on January
27, 1999, pursuant to which HTMC assigned to Agent Bank: (a) all of its right,
title and interest under the Tahoe Equipment Leases and Contracts, and under the
Tahoe Spaceleases relating to the Tahoe Hotel/Casino Facility, and (b) all
rents, issues, profits, revenues and income from the Tahoe Hotel/Casino Facility
and any other business activity conducted on the Tahoe Real Property, together
with any future expansions thereof, related thereto or used in connection
therewith, which assignment was recorded January 29, 1999, in the Official
Records of Douglas County, Nevada, in Book 199, at Page 5838, as Instrument No.
0459902, as such Amended and Restated Assignment of Spaceleases, Contracts,
Rents and Revenues (Tahoe) may be amended, restated or otherwise modified from
time to time.
"Tahoe Assignments" shall mean collective reference to the
Tahoe Assignment of Permits, Licenses and Contracts, Tahoe Assignment of
Spaceleases, Contracts, Rents and Revenues, the Assignment of California
Greenbelt Lease, Assignment of Tahoe Greenbelt Lease and Assignment of Park
Cattle Lease.
"Tahoe Collateral" shall mean collective reference to: (i) all
of the Tahoe Real Property, the California Greenbelt Property and the personal
property, furniture, fixtures and equipment, contract rights, leases,
intangibles and other interests of HTMC, which are subject to the liens and
security interests of the Tahoe Security Documents; (ii) all rights of HTMC
assigned as additional security pursuant to the terms of the Tahoe Security
Documents; and (iii) any and all other property and/or intangible rights,
interest or benefits inuring to or in favor of HTMC, which are in any manner
assigned, pledged, encumbered or otherwise hypothecated in favor of Agent Bank
on behalf of Lenders to secure payment of the Bank Facilities.
"Tahoe Deed of Trust" shall mean the Existing Tahoe Deed of
Trust as amended by the First Amendment to Tahoe Deed of Trust and as it may be
further amended, restated or otherwise modified from time to time.
"Tahoe Equipment Leases and Contracts" shall mean the executed
leases and purchase contracts pertaining to the Tahoe FF&E wherein HTMC is the
lessee or vendee, as the case may be, as set forth on that certain schedule
marked
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"Schedule 4.16(A)", affixed hereto and by this reference incorporated herein and
made a part hereof.
"Tahoe FF&E" shall mean the furniture, fixtures and equipment
and all gaming equipment and devices which have been installed or are to be
installed and used or owned by HTMC in connection with the operation of the
Tahoe Hotel/Casino Facility.
"Tahoe Financing Statements" shall mean the Uniform Commercial
Code Financing Statements executed by HTMC on January 27, 1999 and filed with
the Secretary of State of the State of Nevada and the County Recorder of Douglas
County, Nevada, in order to effect and perfect the security interest granted to
Agent Bank on behalf of Lenders under the Tahoe Deed of Trust in accordance with
the requirements of Nevada Uniform Commercial Code, as they may be extended,
renewed, amended, restated or otherwise modified from time to time.
"Tahoe Greenbelt Lease" shall mean that certain Net Lease
Agreement dated as of February 28, 1985, as amended on June 1, 1997, between
Park Cattle Co., as lessor, and HCR as lessee, under the terms of which HCR
leases the Tahoe Greenbelt Property from Park Cattle Co., the lessee's interest
therein having been assigned by HCR to HTMC by Assignment of Leases dated June
1, 1997, as such Net Lease Agreement may be further amended, extended, renewed,
or otherwise modified from time to time.
"Tahoe Greenbelt Lease Estoppel Certificate" shall mean the
Existing Tahoe Greenbelt Lease Estoppel Certificate as modified by the
Reaffirmation of Tahoe Greenbelt Lease Estoppel Certificate.
"Tahoe Greenbelt Property" shall mean that property which is
particularly described as Parcel 4 on Exhibit Q attached hereto.
"Tahoe Hotel/Casino Facility" shall mean the hotel and casino
business and related activities conducted by HTMC in and on the Tahoe Real
Property and all improvements now or hereafter situate thereon, presently
conducted under the style and name of Harveys Resort Hotel/Casino.
"Tahoe Permitted Encumbrances" shall mean, at any particular
time, (i) liens for taxes, assessments or governmental charges not then due and
payable or not then delinquent, (ii) statutory liens for labor and/or materials
and liens for taxes, assessments or governmental charges not then required to be
paid pursuant to Sections 5.04 and 5.10 of the Credit Agreement, respectively,
provided that, Borrowers shall
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have maintained adequate reserves in accordance with GAAP for payment of same,
(iii) liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money); (iv) leases or subleases
granted to others (including, without limitation, any Subsidiary) not
interfering in any material respect with the ordinary conduct of the business of
the Tahoe Hotel/Casino Facility; (v) liens created or contemplated by the Tahoe
Security Documents, (vi) the liens, encumbrances and restrictions on the Tahoe
Real Property, Tahoe FF&E and existing improvements which are shown as
exceptions on Schedule B of the Tahoe Title Insurance Policy, (vii) liens
consented to in writing by Agent Bank upon the approval of Requisite Lenders,
(viii) liens of legally valid capital leases and purchase money security
interests for Tahoe FF&E and other goods to the extent permitted by Section
6.09(c), (ix) each and every easement, license, restriction or right-of-way that
(A) is hereafter granted to any Governmental Authority or public utility and (B)
does not interfere in any material respect with the Tahoe Hotel/Casino Facility;
(x) judgment liens, writs, warrants, levies, distraints, attachments and other
similar process which do not constitute an Event of Default, (xi) Liens securing
reimbursement obligations with respect to letters of credit and banker's
acceptances which encumber only documents and other property relating to such
letters of credit and banker's acceptances and products or proceeds thereof;
(xii) Liens arising out of consignment or similar arrangements for the sale of
goods; (xiii) any interest or title of a lessor subject to any capital lease
obligation or operating lease; (xiv) Liens in existence on the Closing Date and
referenced on Schedule of Liens set forth as Schedule 6.09; (xv) easements,
rights of way, restrictions, minor defects or irregularities in title and other
similar liens, charges or encumbrances which do not interfere in any material
respect with the business of the Borrowers; (xvi) Liens on property of a Person
existing at the time such Person is merged into or consolidated with any
Borrower or any Subsidiary of the Borrowers or becomes a Subsidiary of the
Borrowers; provided that such Liens (other than replacement Liens) were not
created in contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with any
Borrower or such Subsidiary or acquired by any Borrower or such Subsidiary;
(xvii) the replacement, extension, or renewal of any Lien permitted hereunder;
(xviii) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xix) Liens in favor of customs and revenue authorities
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arising by operation of law to secure payment of customs duties in connection
with the importation of goods; (xx) licenses, leases or subleases granted to
other Persons in the ordinary course of business; (xxi) any interest or title of
a lessor, sublessor, licensee or licensor under any personal or real property
lease, sublease or license agreement; (xxii) Liens in favor of a banking or
other financial institution encumbering deposits (including the right of
set-off) held by such banking or other financial institutions incurred in the
ordinary course of business; and (xxiii) Liens for property taxes on real
property which is to be abandoned for which the sole recourse for such tax is to
such property (or to a Subsidiary of any Borrower whose sole asset is such
property).
"Tahoe Real Property" shall mean that real property which is
particularly described as Parcels 1 through 4 on "Exhibit Q" attached hereto and
incorporated by reference herein.
"Tahoe Security Documents" shall mean collective reference to
the Tahoe Assignment of Permits, Licenses and Contracts, the Tahoe Assignment of
Spaceleases, Contracts, Rents and Revenues, the Tahoe Deed of Trust, the
California Deed of Trust, the Tahoe Financing Statements, the Assignment of
California Greenbelt Lease, Assignment of Tahoe Greenbelt Lease, Assignment of
Park Cattle Lease and any other document or instrument which is executed or
delivered by HTMC and accepted by Agent Bank, on behalf of Lenders, as security
for payment under the Bank Facilities relating to the Tahoe Hotel/Casino
Facility.
"Tahoe Spaceleases" shall mean the executed leases and
concession agreements pertaining to the Tahoe Hotel/Casino Facility, or any
portion thereof, wherein HTMC is the lessor as set forth on the certain schedule
marked "Schedule 4.15(A)", affixed hereto and by this reference incorporated
herein and made a part hereof.
"Tahoe Title Company" shall mean Chicago Title Insurance
Company and its issuing agent, Western Title Company, 225 So. Arlington Avenue,
Reno, Nevada 89501, together with such reinsurers with direct access as are
requested by Agent Bank or other title insurance company or companies as may be
reasonably acceptable to Agent Bank.
"Tahoe Title Endorsements" shall mean a collective reference
to a 110.10 Form Endorsement to the Existing Tahoe Title Policy and to such
other endorsements to the Existing Tahoe Title Policy as are requested by Agent
Bank, in order to cause the Existing Tahoe Title Policy to insure the lien and
priority of the Tahoe Deed of Trust and the lien and priority
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of the California Deed of Trust, subject only to such exceptions and conditions
of title as are acceptable to Agent Bank, all of which endorsements shall be
issued by the Tahoe Title Company and shall be in a form and substance
acceptable to Agent Bank.
"Tahoe Title Insurance Policy" shall mean a collective
reference to the Existing Tahoe Title Policy and the Tahoe Title Endorsements.
"Taxes" shall have the meaning set forth in Section 2.12.
"Third Anniversary Date" shall mean the third annual
anniversary of the Amendment Effective Date.
"Title Company" shall mean individual reference and "Title
Companies" shall mean collective reference to the Tahoe Title Company, Colorado
Title Company, Iowa Title Company and Bluffs Run Title Company, as the context
may require.
"Title Endorsement" shall mean individual reference and "Title
Endorsements" shall mean collective reference to the Colorado Title
Endorsements, the Iowa Title Endorsements and the Tahoe Title Endorsements.
"Title Insurance Policy" shall mean individual reference and
"Title Insurance Policies" shall mean collective reference to the Tahoe Title
Insurance Policy, Iowa Title Insurance Policy and the Colorado Title Insurance
Policy, as the context may require.
"Total Commitment" shall mean the amount of Three Hundred
Thirty-Five Million Dollars ($335,000,000.00) (the amount of the Aggregate
Commitment on the Amendment Effective Date), plus, on and after the Commitment
Increase Effective Date, the aggregate amount of the Commitment Increase.
"Total Commitment Reduction Schedule" shall mean the Total
Commitment Reduction Schedule marked "Schedule 2.01(c)", affixed hereto, setting
forth as of each Reduction Date the amount of each Scheduled Reduction as a
percentage of the Total Commitment.
"Total Funded Debt" shall mean with reference to the Borrower
Consolidation for any period the daily average of the Aggregate Outstandings for
such period, plus the total as of the last day of such period of both the
long-term and current portions (without duplication) of all other Indebtedness.
"Total Liabilities" shall mean the total liabilities
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of the Borrower Consolidation determined in accordance with GAAP.
"Trademark Security Agreement" shall mean the Existing
Trademark Security Agreement as amended by the First Amendment to Trademark
Security Agreement, and as it may be further amended, restated or otherwise
modified from time to time.
"USCG" shall mean the United States Coast Guard.
"Unrestricted Subsidiary" shall mean RPI, HLVMC and each
Subsidiary which is not a Restricted Subsidiary.
"Unsuitable Lender" shall have the meaning set forth in
Section 10.10(d).
"Voluntary Permanent Reduction" shall have the meaning set
forth in Section 2.01(c).
"WFB" shall mean Wells Fargo Bank, National Association.
"Westwood Golf Course Property" shall mean that property which
is particularly described as Parcel B on "Exhibit S" attached hereto and
incorporated by reference herein.
"Westwood Lease" shall mean that certain Lease Agreement under
date of March 1, 1995 pursuant to which the Westwood Golf Course Property is
leased by HIMC to the City of Council Bluffs, subject to the terms and
conditions set forth therein, as such Lease Agreement may be amended and
restated, extended, renewed or otherwise modified from time to time.
"Westwood Subordination and Nondisturbance Agreement" shall
mean the Existing Westwood Subordination and Nondisturbance Agreement as
reaffirmed by the Second Reaffirmation of Westwood Subordination and
Nondisturbance Agreement.
Section 1.02. INTERPRETATION AND CONSTRUCTION. In this
Credit Agreement, unless the context otherwise requires:
(a) Articles and Sections mentioned by number only
are the respective Articles and Sections of this Credit Agreement as so
numbered;
(b) Words importing a particular gender mean and
include every other gender, and words importing the singular number mean and
include the plural number and VICE
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VERSA;
(c) All times specified herein, unless otherwise
specifically referred, shall be the time in San Francisco, California;
(d) Any headings preceding the texts of the
several Articles and Sections of this Credit Agreement, and any table of
contents or marginal notes appended to copies hereof, shall be solely for
convenience of reference and shall not constitute a part of this Credit
Agreement, nor shall they affect its meaning, construction or effect;
(e) If any clause, provision or Section of this
Credit Agreement shall be ruled invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any of the remaining provisions hereof;
(f) The terms "herein", "hereunder", "hereby",
"hereto", "hereof" and any similar terms as used in the Credit Agreement refer
to this Credit Agreement; the term "heretofore" means before the date of the
execution of this Credit Agreement; and the term "hereafter" means after the
date of the execution of this Credit Agreement;
(g) The parties hereto agree that each has
contributed to the drafting of this Credit Agreement and each of the Loan
Documents and that the provisions herein contained shall not be construed
against Borrowers or Banks as having been the person or persons responsible for
the preparation thereof;
(h) All accounting terms used herein which are not
otherwise specifically defined shall be used in accordance with GAAP;
(i) Each reference to a Loan Document or the
Security Documentation, or any of them, as used in this Credit Agreement shall
be deemed a reference to such Loan Document or the Security Documentation as the
same may be amended, modified, supplemented, replaced or restated from time to
time;
(j) All contracts, documents, indentures, leases or
other agreements referred to herein shall, unless expressly indicated to the
contrary, refer to such contract, document, indenture or other agreement as the
same may be amended, restated, supplemented or otherwise modified from time to
time; and
(k) Every affirmative duty, covenant and
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obligation of Borrowers hereunder shall be equally applicable to each of the
Borrowers individually and where the context would result in the best interests
or rights of Banks shall be construed to mean "Borrowers or any of them" or
"Borrowers and each of them", as applicable.
Section 1.03. USE OF DEFINED TERMS. Unless otherwise defined
or the context otherwise requires, terms for which meanings are provided in this
Credit Agreement shall have such meanings when used in the Notes and in each
Loan Document and other communication delivered from time to time in connection
with this Credit Agreement or any other Loan Document.
Section 1.04. CROSS-REFERENCES. Unless otherwise specified,
references in this Credit Agreement and in each other Loan Document to any
Article or Section are references to such Article or Section of this Credit
Agreement or such other Loan Document, as the case may be, and, unless otherwise
specified, references in any Article, Section or definition to any clause are
references to such clause of such Article, Section or definition.
Section 1.05. EXHIBITS AND SCHEDULES. All Exhibits and
Schedules to this Credit Agreement, either as originally existing or as the same
may from time to time be supplemented, modified or amended, are incorporated
herein by this reference.
ARTICLE II
AMOUNT, TERMS AND SECURITY OF THE FACILITIES
Section 2.01. THE CREDIT FACILITY.
a. Subject to the conditions and upon the terms
hereinafter set forth and in accordance with the terms and provisions of the
Revolving Credit Note, each Lender severally agrees in the proportions set forth
on the Schedule of Lenders' Proportions in Credit Facility, marked Schedule
2.01(a) attached hereto and by this reference incorporated herein and made a
part hereof, to fund the BR Acquisition Disbursement and continue the
outstanding balance of principal and accrued interest under the Existing Harveys
Credit Facility as Funded Outstandings hereunder and to lend and advance
Borrowings to Borrowers, on and after the Amendment Effective Date, in the
aggregate up to the Maximum Permitted Balance, such amounts as Borrowers may
request by Notice of Borrowing duly executed by an Authorized Officer and
delivered to Agent Bank from time to time as provided in Section 2.03.
b. Subject to the uses and purposes set forth
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in Section 2.02, on and after the Amendment Effective Date, Borrowers may
borrow, repay and reborrow Borrowings up to the Available Borrowings from time
to time; provided, however, amounts of Funded Outstandings bearing interest with
reference to a LIBO Rate shall be subject to Breakage Charges incident to
prepayment to the extent repaid other than on the last day of the Interest
Period applicable to such Funded Outstandings. The Credit Facility shall be for
a term commencing as of the Closing Date and terminating on the Maturity Date,
on which date the Aggregate Outstandings, all unpaid accrued interest thereon
and all other amounts owing hereunder shall be fully paid and Bank Facility
Termination shall occur. In no event shall any Lender be liable to fund any
amounts under the Credit Facility in excess of its respective Syndication
Interest in any Borrowing. In the event the Aggregate Outstandings exceed the
Maximum Permitted Balance at any time, Borrowers shall immediately cause the
Aggregate Outstandings to be reduced by such amount as may be necessary to cause
the Aggregate Outstandings to be equal to or less than the Maximum Permitted
Balance.
c. Borrowers may voluntarily reduce the Maximum
Permitted Balance from time to time (a "Voluntary Permanent Reduction") on the
following conditions:
(i) that each such Voluntary Permanent
Reduction be in the minimum amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00) and made in writing by an
Authorized Officer, effective on the third (3rd) Banking
Business Day following receipt by Agent Bank;
(ii) that each such Voluntary Permanent
Reduction shall be irrevocable and a permanent reduction to
the Maximum Permitted Balance;
(iii) In the event any Voluntary Permanent
Reduction reduces the Maximum Permitted Balance to less than
the sum of the Aggregate Outstandings, the Borrowers shall
immediately cause the Aggregate Outstandings to be reduced by
such amount as may be necessary to cause the Aggregate
Outstandings to be equal to or less than the Maximum Permitted
Balance.
d. INCREASE OF AGGREGATE COMMITMENT. So long as no
Default or Event of Default has occurred and remains continuing, Borrowers
may, by written notice to the Agent Bank and the Lenders, increase the Aggregate
Commitment by an additional amount up to One Hundred Million Dollars
($100,000,000.00) (the "Commitment Increase") for a Total
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Commitment of up to the maximum aggregate principal amount of Four Hundred
Thirty-Five Million Dollars ($435,000,000.00), subject to the satisfaction of
each of the following conditions precedent ("Commitment Increase Conditions")
(i) the Third Anniversary Date shall not have occurred, (ii) the obligation to
fund the Commitment Increase is assumed by a Lender or Lenders then party to
this Credit Agreement and/or by a Person or Persons that are Eligible Assignees,
in each case acceptable to Borrowers and, in the latter case, reasonably
acceptable to the Agent Bank, and in each instance evidenced in writing by
execution of an Assumption and Consent Agreement in the form of Exhibit K
attached hereto, executed by such assuming Lender or Eligible Assignee, Agent
Bank and Borrowers, provided that no Lender shall have any obligation to
increase the maximum amount to be funded under its respective Syndication
Interest as set forth on the Schedule of Lender's Proportions in Credit Facility
in effect as of the Amendment Effective Date, (iii) each such assuming Lender or
Eligible Assignee concurrently purchases an amount equivalent to its respective
Pro Rata Share of the Funded Outstandings from the Lenders party to the Credit
Agreement (and each Lender hereby agrees to sell such a share at par value to
such assuming Lender or Eligible Assignee and, in this regard, Borrowers agree
to pay any Breakage Charges which may be owing to such selling Lender as a
consequence of such sale) that is equivalent to the increased new Pro Rata Share
of such assuming Lender or Eligible Assignee after giving effect to the
Commitment Increase and such Lender's Syndication Interest in the Total
Commitment; (iv) Borrowers pay Agent Bank such fees relating to the Commitment
Increase as may be agreed by Borrowers and Agent Bank, together with any amount
owing under Section 2.07(c), (v) the Commitment Increase shall not increase the
Pro Rata Share of the Aggregate Commitment and the Pro Rata Share of the Funded
Outstandings held by any other Lender absent the express written consent of that
Lender, and (vi) Borrowers, at Borrowers' expense, shall cause the Title
Insurance Policies to be endorsed with an 110.10 or other appropriate
endorsements for the purpose of assuring continuing coverage of the Security
Documentation insured thereunder as such Security Documentation may be amended
or modified, as reasonably determined by Agent Bank, in connection with the
Commitment Increase, (vii) the Commitment Increase shall be made on a one-time
basis only, (viii) Borrowers cause one or more opinions of counsel to the
Borrowers to be delivered to Agent Bank, in each case addressed to the Agent
Bank on behalf of itself and each of the Banks, together with their respective
successors and assigns, opining as to such matters as are reasonably required by
Agent Bank and the Requisite Lenders, (ix) Borrowers shall cause such Commitment
Increase to be designated as Designated Senior Debt in the same manner as
required for the Bank Facilities in Section 5.27, and (x) Borrowers reimburse
Agent Bank for all
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reasonable fees and out-of-pocket expenses incurred by Agent Bank in connection
with the Commitment Increase. Giving effect to the Commitment Increase and
purchase of Pro Rata Shares of the Funded Outstandings, adjustments shall be
made to the Pro Rata Shares of the Lenders in the Total Commitment and the Pro
Rata Shares of Funded Outstandings such that the Pro Rata Shares of each Lender
in the Total Commitment shall be identical to its Pro Rata Share of the Funded
Outstandings. The Agent Bank shall promptly thereafter prepare and circulate to
Borrowers and the Banks a revised Schedule of Lenders' Proportions in Credit
Facility reflecting the Total Commitment and the revised Pro Rata Shares of the
Lenders in the Credit Facility, and such revised Schedule of Lenders'
Proportions in Credit Facility shall supersede and replace the then existing
Schedule of Lenders' Proportions in Credit Facility.
Section 2.02. USE OF PROCEEDS OF THE CREDIT FACILITY.
Available Borrowings shall be used for the following purposes:
a. On the Amendment Effective Date for the purposes
of (the "BR Acquisition Disbursement"):
(i) continuing the outstanding principal balance
under the Existing Harveys Credit Facility as Funded
Outstandings under the Credit Facility;
(ii) funding a portion of the BR Acquisition
Consideration and issuing a letter of credit as required under
the BR Purchase Agreement;
(iii) paying in full the fees due Agent Bank as set
forth in the Fee Side Letter, the costs, fees and expenses of
Title Company incurred in connection with the issuance of the
Title Endorsements, the costs, fees and expenses of Henderson
& Morgan, LLC, attorneys for Agent Bank, and associate counsel
and insurance consultants retained by them incurred to the
Amendment Effective Date; and
(iv) paying other costs, fees, charges and expenses
incurred by Borrowers (including, without limitation, legal
and investment banking fees and expenses) incurred in
connection with the BR Acquisition and the transactions
contemplated thereby and hereby.
b. Subsequent to the Amendment Effective Date for
the purposes of providing financing for general corporate purposes,
including financing Capital Expenditures, working
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capital requirements and New Venture Investments of the Borrower Consolidation,
paying fees and expenses incurred in connection with the BR Acquisition and
paying any portion of the BR Acquisition Consideration payable after the
Amendment Effective Date, in each case subject to the terms, covenants and
limitations hereinafter set forth.
Section 2.03. NOTICE OF BORROWINGS.
a. An Authorized Officer shall give Agent Bank, no
later than 9:00 a.m. on a Banking Business Day at Agent Bank's office
specified in Section 2.07, at least three (3) full Banking Business Days prior
written notice in the form of the Notice of Borrowing ("Notice of Borrowing"), a
copy of which is marked "Exhibit C", affixed hereto and by this reference
incorporated herein and made a part hereof, for each proposed Borrowing to be
made with reference to a LIBO Rate and at least one (1) full Banking Business
Day prior written notice for all other Borrowings, specifying the date and
amount of each proposed Borrowing. Agent Bank shall give prompt notice of each
Notice of Borrowing to Lenders of the amount to be funded and specifying the
Funding Date. Not later than 11:00 a.m. on the Funding Date specified, each
Lender shall disburse to Agent Bank the Pro Rata Share of the amount to be
advanced by each such Lender in lawful money of the United States of America and
in immediately available funds. Agent Bank shall make the proceeds of such
fundings received by it on or before 11:00 a.m. from the Lenders available to
Borrowers by depositing, prior to 1:00 p.m. on the day so received (but not
prior to the Funding Date), in the Designated Deposit Account maintained with
Agent Bank the amounts received from the Lenders. No Borrowing may exceed the
Available Borrowings. Each Borrowing to be made with reference to the Base Rate
shall be in a minimum amount of One Million Dollars ($1,000,000.00) and in
increments of One Hundred Thousand Dollars ($100,000.00). Borrowers shall be
entitled to no more than five (5) Borrowings during each calendar month,
exclusive of Borrowings made for the sole purpose of funding repayment of a
Swingline Advance or L/C Reimbursement Obligation.
b. The failure of any Lender to fund its Pro Rata
Share of any Borrowing on any Funding Date shall neither relieve any other
Lender of any obligation hereunder to fund its Pro Rata Share of such Borrowing
on such Funding Date nor relieve the Lender which has failed to fund any of its
obligations to Borrowers hereunder. No Lender shall be responsible for the
failure of any other Lender to fund its Pro Rata Share of such Borrowing on any
Funding Date nor shall any Lender be responsible for the failure of any other
Lender to perform its respective obligations hereunder. The provisions set forth
in Section 10.10(d) shall be applicable to a
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Defaulting Lender to the same extent as if such Defaulting Lender was found to
be an Unsuitable Lender.
Section 2.04. CONDITIONS OF BORROWINGS. Borrowings, other
than Borrowings made at the request of Agent Bank for the purpose of funding
repayment of Swingline Outstandings and/or L/C Reimbursement Obligations as
hereinafter provided, will only be made so long as Borrowers are in full
compliance with each of the requirements and conditions precedent set forth in
Article III B of this Credit Agreement. Provided, however, upon the consent of
the Requisite Lenders, Lenders shall advance Borrowings notwithstanding the
existence of less than full compliance with the requirements of Article III B
and Borrowings so made shall be deemed to have been made pursuant to this Credit
Agreement.
Section 2.05. THE REVOLVING CREDIT NOTE AND EXERCISE OF
INTEREST RATE OPTIONS.
a. The Credit Facility shall be further evidenced by
the Revolving Credit Note payable to the order of Agent Bank on behalf of the
Lenders. Agent Bank shall record manually or electronically the date and amount
of each Borrowing advanced by the Lenders together with the applicable Interest
Period in the case of portions of the unpaid principal under the Credit Facility
bearing interest with reference to a LIBO Rate, and the amount of each repayment
of principal made thereunder by Borrowers and the entry of such records shall be
prima facie evidence as to such matters; provided, however, the failure to make
such a record or notation with respect to any Borrowing or repayment thereof, or
an error in making such a record or notation, shall not limit or otherwise
affect the obligations of Borrowers hereunder or under the Revolving Credit
Note.
b. Interest shall accrue on the entire outstanding
principal balance at a rate per annum equal to the Base Rate plus the Applicable
Margin, unless Borrowers request a LIBOR Loan pursuant to Section 2.03 or elect
pursuant to Section 2.05(c) hereinbelow to have interest accrue on a portion or
portions of the outstanding principal balance at a LIBO Rate ("Interest Rate
Option"), in which case interest on such portion or portions shall accrue at a
rate per annum equal to such LIBO Rate plus the Applicable Margin; provided
that: (i) each such LIBOR Loan is in a minimum amount of Five Million Dollars
($5,000,000.00) and in minimum increments of One Million Dollars
($1,000,000.00), and (ii) no more than eight (8) LIBOR Loans may be outstanding
at any one time. As of the Amendment Effective Date, the Applicable Margin for
the Base Rate Loan shall be one and one-half percent (1.50%) and for each LIBOR
Loan shall be two and one-half percent (2.50%).
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Interest accrued on each Base Rate Loan shall be due and payable in arrears on
the first day of each Fiscal Quarter following the Amendment Effective Date, on
the first day of each successive Fiscal Quarter thereafter, and on the Maturity
Date. For each LIBOR Loan, interest shall be due and payable in arrears at the
end of each Interest Period applicable thereto, but in any event no less
frequently than at the end of each three (3) month period during the term of
such LIBOR Loan. Agent Bank shall notify HCR in writing five (5) Banking
Business Days prior to each payment of interest due herewith, detailing the
amount owed and the calculation thereof. Except as qualified above, the
outstanding principal balance of the Credit Facility may be a Base Rate Loan or
one or more LIBOR Loans, or any combination thereof, as Borrowers shall specify.
c. So long as no Default or Event of Default shall
have occurred and remains continuing, Borrowers may Convert from one Interest
Rate Option to another Interest Rate Option or continue an Interest Rate Option
for another Interest Period by giving irrevocable notice to Agent Bank of such
Conversion or Continuation by 9:00 a.m., on a day which is at least three (3)
Banking Business Days prior to the proposed date of such Conversion to or
Continuation of each LIBOR Loan or at least one (1) Banking Business Day prior
to the proposed date of such Conversion to each Base Rate Loan. Each such notice
shall be made by an Authorized Officer by telephone or telex and thereafter
immediately confirmed in writing by delivery to Agent Bank of a
Continuation/Conversion Notice specifying the date of such Conversion or
Continuation, the amounts to be so Converted or Continued and the Interest
Period if the Conversion or Continuation is being made with reference to a LIBOR
Loan. Upon receipt of such Continuation/Conversion Notice, Agent Bank shall
promptly in accordance with such Continuation/Conversion Notice set the
applicable interest rate (which in the case of a LIBOR Loan shall be the LIBO
Rate plus the Applicable Margin as of the second Banking Business Day prior to
the first day of the applicable Interest Period) and the applicable Interest
Period if the Conversion or Continuation is being made with reference to a LIBOR
Loan and shall confirm the same in writing to Borrowers and Lenders. Each
Conversion or Continuation shall be on a Banking Business Day. No LIBOR Loan
shall be converted to a Base Rate Loan or renewed on any day other than the last
day of the current Interest Period relating to such amounts outstanding unless
Borrowers pay any applicable Breakage Charges. All Borrowings advanced at the
request of Agent Bank under Sections 2.08 or 2.09 of the Credit Agreement shall
bear interest with reference to the Base Rate plus the Applicable Margin,
subject to Borrowers' right to Convert such Borrowing to a LIBOR Loan or LIBOR
Loans as provided herein. If Borrowers fail to give a Continuation/Conversion
Notice for the continuation of a LIBOR
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Loan as a LIBOR Loan for a new Interest Period in accordance with this Section
2.05(c), such LIBOR Loan shall automatically become a Base Rate Loan at the end
of its then current Interest Period.
d. Each interest period (each individually an
"Interest Period" and collectively the "Interest Periods") for a LIBOR Loan
shall commence on the date such LIBOR Loan is made or the date of Conversion or
Continuation of any amount or amounts of the outstanding Borrowings hereunder as
a LIBOR Loan, as the case may be, and shall end on the date which is one (1),
two (2), three (3) or six (6) months thereafter. However, no Interest Period may
extend beyond the Maturity Date. Each Interest Period for a LIBOR Loan shall
commence and end on a Banking Business Day. If any Interest Period commences on
a date for which there is no corresponding date in the month in which it is
scheduled to end, such Interest Period shall end on the last Banking Business
Day of such month. If any Interest Period would otherwise expire on a day which
is not a Banking Business Day, the Interest Period shall be extended to expire
on the next succeeding Banking Business Day, unless the result of such extension
would be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding Banking
Business Day.
e. The applicable LIBO Rate and Base Rate shall be
determined by the Agent Bank, and notice thereof shall be given promptly to
Borrowers and Lenders. Each determination of the applicable Base Rate and LIBO
Rate shall be conclusive and binding upon the Borrowers, in the absence of
manifest or demonstrable error. The Agent Bank shall, upon written request of
Borrowers or any Lender, deliver to Borrowers or such Lender, as the case may
be, a statement showing the computations used by the Agent Bank in determining
any rate hereunder.
f. Computation of fees and interest on LIBOR Loans
shall be calculated on the basis of a year of three hundred sixty (360) days and
the actual number of days elapsed. Computation of interest on Base Rate Loans
shall be calculated on the basis of a year of three hundred sixty-five (365) or
three hundred sixty-six (366) days, as the case may be, and the actual number of
days elapsed. The applicable Base Rate shall be effective the same day as a
change in the Base Rate is announced by WFB as being effective.
g. If with respect to any Interest Period, (a) the
Agent Bank reasonably determines (which determination shall be binding and
conclusive on Borrowers) that by reason of circumstances affecting the
inter-bank eurodollar market
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adequate and reasonable means do not exist for ascertaining the applicable LIBO
Rate, or (b) Requisite Lenders advise Agent Bank that the LIBO Rate as
determined by Agent Bank will not adequately and fairly reflect the cost to such
Lenders of maintaining or funding, for such Interest Period, a LIBOR Loan under
the Credit Facility, then so long as such circumstances shall continue: (i)
Agent Bank shall promptly notify Borrowers thereof, (ii) the Agent Bank shall
not be under any obligation to make a LIBOR Loan or Convert a Base Rate Loan
into a LIBOR Loan for which such circumstances exist, and (iii) on the last day
of the then current Interest Period, the LIBOR Loan for which such circumstances
exist shall, unless then repaid in full, automatically Convert to a Base Rate
Loan.
h. Notwithstanding any other provisions of the
Credit Agreement, if, after the Amendment Effective Date, any law, rule,
regulation, treaty, interpretation or directive (whether having the force of law
or not) or any change therein shall make it unlawful for any Lender to make or
maintain LIBOR Loans, (i) the commitment and agreement to maintain LIBOR Loans
as to such Lender shall immediately be suspended, and (ii) unless required to be
terminated earlier, LIBOR Loans as to such Lender, if any, shall be Converted on
the last day of the then current Interest Period applicable thereto to Base Rate
Loans. If it shall become lawful for such Lender to again maintain LIBOR Loans,
then Borrowers may once again as to such Lender request Conversions to the LIBO
Rate or LIBOR Loans. During any period of such suspension, such Lender shall
make Base Rate Loans.
i. The Borrowers agree that upon written notice by:
(y) Agent Bank or (z) any Lender to the Borrowers (with a copy of such notice
concurrently delivered to Agent Bank) to the effect that a promissory note or
other evidence of indebtedness is required for such Lender by a Governmental
Authority, banking regulatory agency or regulatory audit in order for such
Lender to evidence (whether for the purposes of pledge, enforcement or
otherwise) the Borrowings owing to, or to be made by, such Lender:
(i) The Borrowers shall promptly execute and
deliver to each Lender a promissory note payable to the order
of each such Lender (each individually a "Replacement Note"
and collectively the "Replacement Notes") in the form of the
Revolving Credit Note in the amount of each Lender's
respective Syndication Interest in the Credit Facility subject
to Scheduled Reductions to be allocated amongst Lenders in
accordance with their respective Syndication Interests;
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(ii) The Replacement Notes shall, in the
aggregate, fully replace the Revolving Credit Note and each
reference to the Revolving Credit Note in this Credit
Agreement and each of the Loan Documents shall be deemed to be
a collective reference to the Replacement Notes;
(iii) Borrowings, Interest Rate Options,
Continuation/Conversion Notices and all other provisions for
the disbursement of funds, setting of interest rates and
collection of repayments of interest and principal shall
continue to be made by Agent Bank as the administrative and
collateral agent for the Lenders in the same manner and to the
same extent as provided in the Revolving Credit Note and this
Credit Agreement as fully applicable to each of the
Replacement Notes;
(iv) the Agent Bank, upon the consent of
Requisite Lenders, shall cause the Title Insurance Company to
issue, at the expense of Borrowers, such endorsements to the
Title Insurance Policies as may be reasonably necessary to
assure the aggregate obligation evidenced by the Replacement
Notes is secured by the Deed of Trust with the same coverage
and priority as the obligation evidenced by the Revolving
Credit Note; and
(v) Concurrently with the delivery of the
Replacement Notes, Agent Bank shall return the original
Revolving Credit Note to Borrower marked as superseded and
replaced by the Replacement Notes.
Section 2.06. SECURITY FOR THE CREDIT FACILITY. In order to
provide security for the due and punctual payment and performance of the terms
and provisions of this Credit Agreement, the Notes and all of the other Loan
Documents, the Security Documentation Amendments shall be executed on or before
the Amendment Effective Date by the respective parties to each of the Security
Documentation Amendments and recorded and/or filed in each applicable
jurisdiction as required by the Closing Instructions.
Section 2.07. PLACE AND MANNER OF PAYMENT.
a. All amounts payable by Borrowers to the Lenders
shall be made to Agent Bank on behalf of Lenders pursuant to the terms of this
Credit Agreement and the Notes and shall be made on a Banking Business Day in
lawful money of the United States of America and in immediately available funds.
Other than in connection with: (i) the Scheduled
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Reductions of principal, or (ii) principal payments which may be required to
decrease the Aggregate Outstandings to an amount equal to or less than the
Maximum Permitted Balance, Borrowers shall not make repayments ("Principal
Prepayments") of the outstanding balance of principal owing under the Revolving
Credit Note more frequently than five (5) such Principal Prepayments during each
calendar month. Each such Principal Prepayment of a Base Rate Loan shall be in a
minimum amount of One Million Dollars ($1,000,000.00) (or, if less, the
outstanding principal amount of Base Rate Loans) and in increments of One
Hundred Thousand Dollars ($100,000.00) in excess thereof. Each such Principal
Prepayment of a LIBOR Loan shall be in a minimum amount of Five Million Dollars
($5,000,000.00) (or, if less, the outstanding principal amount of such LIBOR
Loan) and in increments of One Million Dollars ($1,000,000.00) in excess
thereof.
b. All such amounts payable by Borrowers shall
be made to Agent Bank at its office located at Wells Fargo Bank, Syndications
Division, 201 Third Street, Eighth Floor, San Francisco, California 94103, or at
such other address as may be directed in writing by Agent Bank from time to
time. If such payment is received by Agent Bank prior to 11:00 a.m., Agent Bank
shall credit Borrowers with such payment on the day so received and shall
disburse to the appropriate Lenders on the same day the Pro Rata Share of
payments relating to the Credit Facility, in immediately available funds. If
such payment is received by Agent Bank after 11:00 a.m., Agent Bank shall credit
Borrowers with such payment as of the next Banking Business Day and disburse to
the appropriate Lenders on the next Banking Business Day such Pro Rata Share of
such payment relating to the Credit Facility, in immediately available funds.
Any payment on the Credit Facility made by Borrowers to Agent Bank pursuant to
the terms of this Credit Agreement or the Revolving Credit Note for the account
of Lenders shall constitute payment to the appropriate Lenders. If the Revolving
Credit Note or any payment required to be made thereon or hereunder, is or
becomes due and payable on a day other than a Banking Business Day, the due date
thereof shall be extended to the next succeeding Banking Business Day and
interest thereon shall be payable at the then applicable rate during such
extension.
c. Subject to Section 2.07(a), the outstanding
principal owing under the Credit Facility and the Revolving Credit Note may be
prepaid at any time in whole or in part without penalty; provided, however, that
any portion or portions of the unpaid principal balance which is accruing
interest at a LIBO Rate may only be prepaid or repaid on the last day of the
applicable Interest Period unless Borrowers give three (3) days prior written
notice to Agent Bank and in
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the case of such prepayment or repayment on a date other than the last day of
the applicable Interest Period, or in the event of the Commitment Increase any
reduction in the Pro Rata Share of Funded Outstandings accruing interest at a
LIBO Rate on a date other than the last day of the applicable Interest Period,
additionally pay concurrently (or if notice of the amount of such Breakage
Charges has not been given as of such prepayment, promptly following reasonable
demand therefor) with such prepayment such additional amount or amounts as will
compensate Lenders for any losses, costs or expenses which they may incur as a
result of such payment, including, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such LIBOR Loan ("Breakage Charges"). A certificate of a Lender as to
amounts payable hereunder shall be conclusive and binding on Borrowers for all
purposes, absent manifest or demonstrable error. Any calculation hereunder shall
be made on the assumption that each Lender has funded or will fund each LIBOR
Loan in the London interbank market; PROVIDED that no Lender shall have any
obligation to actually fund any LIBOR Loan in such manner.
d. Unless the Agent Bank receives notice from an
Authorized Officer prior to the date on which any payment is due to the Lenders
that the Borrowers will not make such payment in full as and when required, the
Agent Bank may assume that the Borrowers have made such payment in full to the
Agent Bank on such date in immediately available funds and the Agent Bank may
(but shall not be so required), in reliance upon such assumption, distribute to
each Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent the Borrowers have not made such payment in full to the
Agent Bank, each Lender shall repay to the Agent Bank on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Lender until
the date repaid.
e. If, other than as expressly provided elsewhere
herein, any Lender shall obtain any payment with respect to the Bank Facilities
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its Syndication Interest, such Lender shall
immediately (i) notify the Agent Bank of such fact, and (ii) purchase from the
other Lenders such participations in the Credit Facility as shall be necessary
to cause such purchasing Lender to share the excess payment with each of them in
proportion to their respective Syndication Interests; PROVIDED, however, that if
all or any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase
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shall to that extent be rescinded and each other Lender shall repay to the
purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (x)
the amount of such paying Lender's required repayment to (y) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrowers agree that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by law, exercise all its rights of
payment with respect to such participation as fully as if such Lender were the
direct creditor of the Borrowers in the amount of such participation. The Agent
Bank will keep records (which shall be conclusive and binding in the absence of
manifest error) of each participation purchased under this section and will in
each case notify the Lenders following any such purchases or repayments.
Section 2.08. THE SWINGLINE FACILITY.
a. Subject to the conditions and upon the terms
hereinafter set forth and in accordance with the terms and provisions of the
Swingline Note, Exhibit B affixed hereto, on and after the Closing Date,
Swingline Lender agrees to lend and advance Swingline Advances to Borrowers in
the amounts and at the times provided below. Notwithstanding anything herein
contained to the contrary, however, Borrower shall not be entitled to any
Swingline Advances on and after the date which is ten (10) calendar days prior
to the Maturity Date.
b. With respect to each proposed Swingline Advance,
an Authorized Officer shall give Swingline Lender written notice in the form of
the Notice of Swingline Advance ("Notice of Swingline Advance"), a copy of which
is marked "Exhibit E", affixed hereto and by this reference incorporated herein
and made a part hereof, to be received by Swingline Lender no later than 12:00
noon on the date for each proposed Swingline Advance specifying the requested
amount to be funded or oral notice to be received by Swingline Lender no later
than 12:00 noon on such date, to be followed by a duly completed and executed
Notice of Swingline Advance no later than 3:00 p.m. on the same date. Swingline
Lender shall, on the date for each proposed Swingline Advance, deposit into the
Designated Deposit Account in lawful money of the United States of America in
immediately available funds such amounts as Borrowers may request; provided,
that: (i) after giving effect to such Swingline Advance, the Swingline
Outstandings shall not exceed Ten Million Dollars ($10,000,000.00), (ii) the
amount requested does not exceed the Available Borrowings, (iii) no Default or
Event of Default has occurred and is continuing, and (iv) the conditions
precedent set forth in Sections 3.29 and 3.30 shall
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have been satisfied. Within the foregoing limitations, Borrowers may borrow,
repay and reborrow under the Swingline Facility. Each Swingline Advance shall be
in an integral multiple of One Hundred Thousand Dollars ($100,000.00). Promptly
after receipt of each request for a Swingline Advance, Swingline Lender shall
obtain telephonic verification from Agent Bank that, giving effect to such
request, the amount of such request does not exceed the then Available
Borrowings (such verification to be promptly confirmed in writing). Unless
notified to the contrary by the Swingline Lender, each repayment of a Swingline
Advance shall be in an amount which is an integral multiple of One Hundred
Thousand Dollars ($100,000.00), together with the accrued interest thereon. The
Swingline Lender shall promptly notify the Agent Bank of the Swingline
Outstandings each time there is a change therein.
c. Each Swingline Advance shall bear interest at the
Base Rate plus the Applicable Margin and shall be payable at the times and in
the manner set forth below and, in any event, on or before ten (10) days prior
to the Maturity Date. Unless otherwise paid, interest accrued on the unpaid
balance of Swingline Outstandings shall be paid monthly in arrears on or before
the fifth (5th) day following receipt by Borrowers of an invoice from Swingline
Lender setting forth the amount of such accrued interest. In the event any
Swingline Advance is outstanding for thirty (30) consecutive Banking Business
Days or as of the tenth (10th) day prior to the Maturity Date, then on the next
Banking Business Day (unless Borrowers have made other arrangements acceptable
to the Swingline Lender to pay the Swingline Outstanding in full or to continue
such Swingline Outstanding), Borrowers shall request a Borrowing under the
Credit Facility in an amount sufficient to pay the applicable Swingline Advance
in full, together with all interest accrued thereon. Upon receipt of the amount
of the Borrowing from the Lenders, the Agent Bank shall provide such amount to
the Swingline Lender for repayment of the applicable Swingline Advance and the
balance of the Borrowing, if any, shall be deposited in immediately available
funds to the Designated Deposit Account. In the event Borrowers fail to request
a Borrowing within the period specified above, Agent Bank shall, without notice
to the Borrowers and without regard to any other conditions precedent for the
making of Borrowings under the Credit Facility, including, without limitation
the remedies set forth in Section 7.02, promptly (but subject to the notice
periods for Borrowings set forth in Section 2.03) cause a Borrowing to be made
and funded by the Lenders under the Credit Facility in the amount necessary to
pay the applicable Swingline Advance in full, together with all interest accrued
thereon, to the extent of Available Borrowings, and the Borrowers shall be
deemed to have requested such Borrowing and consented to its being made as
provided for
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herein.
d. Each Lender's obligation to advance Borrowings in
the proportionate amount of its Syndication Interest in the Credit Facility of
any unreimbursed Swingline Outstandings pursuant hereto is several, and not
joint or joint and several. The failure of any Lender to perform its obligation
to advance a Borrowing in a proportionate amount of such Lender's Syndication
Interest of any unreimbursed Swingline Outstandings shall neither relieve any
other Lender of its obligation hereunder to advance such Borrowing in the amount
of such other Lender's proportionate Syndication Interest of such amount, nor
relieve the Lender which has failed to fund of its obligations to Borrowers
hereunder. The Borrowers agree to accept the Borrowings for payment of Swingline
Outstandings as provided hereinabove, whether or not such Borrowings could have
been made pursuant to the terms of Article III B or any other section of this
Credit Agreement.
Section 2.09. ISSUANCE OF LETTERS OF CREDIT.
a. Any Authorized Officer of Borrowers may from time
to time following the Closing Date request that a Letter of Credit be issued by
delivering to L/C Issuer (with a facsimile copy to the Agent Bank) on a Banking
Business Day, at least three (3) Banking Business Days prior to the date of such
proposed issuance, an L/C Agreement in L/C Issuer's then standard form
(consistent with the terms of the Credit Agreement), completed to the
satisfaction of L/C Issuer and such other certificates as the L/C Issuer may
reasonably request; provided, however, that no Letter of Credit shall be issued
if (a) any Default or Event of Default has occurred and remains continuing, or
(b) the Stated Amount of the requested IWRA Letter of Credit exceeds Fifty
Million Dollars ($50,000,000.00), or (c) after giving effect to the issuance
thereof, the aggregate Stated Amount of outstanding Letters of Credit, exclusive
of the IWRA Letter of Credit, would exceed Five Million Dollars ($5,000,000.00),
or (d) after giving effect to the issuance thereof, the aggregate Stated Amount
of all outstanding Letters of Credit would exceed Fifty-Five Million Dollars
($55,000,000.00), or (e) the Stated Amount of the requested Letter of Credit
exceeds the Maximum Availability. Each Letter of Credit shall be issued by the
L/C Issuer on the Banking Business Day specified in the Borrowers' application
therefor. Each request for a Letter of Credit and each Letter of Credit shall be
subject to the Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce Publication New 1994 Revision No. 500, or any
successor publication then in effect. Each Letter of Credit will be issued for a
term not greater than one (1) year (and may include any provision for automatic
renewal, subject to the
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payment of any applicable L/C Fee for such renewal period); provided, however,
in no event shall any Letter of Credit have a Stated Expiry Date later than
thirty (30) days prior to the Maturity Date. Promptly after receipt of each
request for the issuance of a Letter of Credit and immediately prior to the
issuance thereof, L/C Issuer shall obtain telephonic verification from Agent
Bank that the amount of such request does not exceed the then Available
Borrowings. The L/C Issuer shall promptly notify the Agent Bank of the aggregate
L/C Exposure of outstanding Letters of Credit each time there is a change
therein.
b. Upon presentation of a draft drawn under any
Letter of Credit, L/C Issuer shall promptly notify the Agent Bank and Borrowers
of the amount under such draft and the date upon which such draft is to be
funded. On or before two (2) Banking Business Days following such notice (unless
Borrowers have made other arrangements acceptable to the L/C Issuer to pay the
amount of such draft in full), Borrowers shall request a Borrowing under the
Credit Facility in an amount sufficient to pay the amount of such draft in full.
The Agent Bank, upon receipt of such funds from the Lenders, shall automatically
provide such amount to the L/C Issuer for payment of the amount of such draft
and the balance of the Borrowing shall be deposited in immediately available
funds to the Designated Deposit Account. In the event Borrowers fail to advance
to L/C Issuer the amount of such draft from Borrowers' available funds or
request a Borrowing within two (2) Banking Business Days from receipt of the
notice as specified above, on the third (3rd) Banking Business Day following
Agent Bank's receipt of such notice, Agent Bank shall, without notice to or
consent of the Borrowers and without regard to any other conditions precedent
for the making of Borrowings under the Credit Facility, including, without
limitation the remedies set forth in Section 7.02, cause (subject to the notice
periods for Borrowings set forth in Section 2.03) a Borrowing to be made and
funded by the Lenders under the Credit Facility in the amount necessary to pay
the amount of such draft in full. Upon the occurrence and continuance of any
Event of Default, L/C Issuer shall, without prior notice or further
authorization or consent of Borrowers whatsoever, be authorized to immediately
cause the Cash Collateral Account to be established and funded by Lenders with a
Borrowing advanced to Agent Bank equal to the aggregate amount of the L/C
Exposure then outstanding. All amounts held by L/C Issuer in the Cash Collateral
Account shall be held as security for the repayment of any L/C Reimbursement
Obligation thereafter arising pursuant to the terms of the L/C Agreement(s) and
the Cash Collateral Pledge Agreement. Borrowings advanced by Lenders to pay
drafts drawn upon or to secure repayment of the L/C Exposure under Letters of
Credit pursuant to this subsection shall: (i) constitute Borrowings
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under the Credit Facility, (ii) initially be Base Rate Loans and (iii) be
subject to all of the provisions of this Credit Agreement concerning Borrowings
under the Credit Facility, except that such Borrowings shall be made upon demand
of the Agent Bank as set forth above rather than upon Notice of Borrowing by
Borrowers and shall be made, notwithstanding anything in this Credit Agreement
to the contrary, without regard to any other conditions precedent to the making
of Borrowings under the Credit Facility and notwithstanding any Default or Event
of Default thereunder. All amounts paid by L/C Issuer on a draft drawn under any
Letter of Credit which has not been funded or concurrently reimbursed by
Borrowers or through a Borrowing as provided hereinabove, shall bear interest at
the Base Rate plus the Applicable Margin per annum until repaid or reimbursed to
L/C Issuer.
c. Each Lender's obligation to advance Borrowings in
the proportionate amount of its Syndication Interest in the Credit Facility of
any unreimbursed amounts outstanding under any Letter of Credit pursuant hereto
is several, and not joint or joint and several. The failure of any Lender to
perform its obligation to advance a Borrowing in a proportionate amount of such
Lender's Syndication Interest of any unreimbursed amounts outstanding under a
Letter of Credit will not relieve any other Lender of its obligation hereunder
to advance such Borrowing in the amount of such other Lender's proportionate
Syndication Interest of such amount, nor relieve the Lender which has failed to
fund of its obligations to Borrowers hereunder. The Borrowers agree to accept
the Borrowings for payment of Letters of Credit as provided hereinabove, whether
or not such Borrowings could have been made pursuant to the terms of Article III
B or any other section of this Credit Agreement.
d. Letters of Credit shall be used and issued for
the benefit of Borrowers for the general corporate purposes of Borrowers, or
any of them, relating to the Hotel/Casino Facilities or any New Venture,
including, without limitation, the BR Acquisition.
e. On the Closing Date, each Letter of Credit issued
and outstanding under the Existing Harveys Credit Agreement in accordance with
its terms shall be deemed for all purposes to be issued and outstanding
hereunder, and each Lender shall be deemed to have a risk participation therein
pursuant to the terms of this Section 2.09. Each such issued and outstanding
Letter of Credit is detailed on the Schedule of Outstanding Letters of Credit
attached hereto as Schedule 2.09(e).
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Section 2.10. FEES.
a. On the Amendment Effective Date and on each
other applicable date, Borrowers shall pay the fees as required in the Fee Side
Letter, the obligation for which shall be and is hereby assumed by Borrowers,
each of such fees to be retained by Agent Bank or distributed to Lenders as
agreed between Agent Bank and each Lender.
b. Borrowers shall pay a quarterly nonusage fee (the
"Commitment Fee") to the Agent Bank for the account of Lenders based on the
Leverage Ratio, calculated as of each Fiscal Quarter end following the Amendment
Effective Date with reference to the Borrower Consolidation, to determine the
applicable Commitment Percentage determined as set forth in Table Two of the
definition of Applicable Margin. As of the Amendment Effective Date, the
Commitment Percentage shall be one-half of one percent (0.50%).
The Commitment Fee shall commence to accrue on the Amendment
Effective Date and shall be calculated as the product of (i) the applicable
Commitment Percentage multiplied by (ii) the daily average of the Maximum
Permitted Balance less the daily average of the Funded Outstandings and less the
daily average of the aggregate L/C Exposure computed on the basis of a three
hundred sixty (360) day year based on the number of actual days elapsed. Each
Commitment Fee shall be payable in arrears on a quarterly basis on or before the
first (1st) day of the third (3rd) month following each applicable Fiscal
Quarter end and upon Bank Facility Termination. Each Commitment Fee shall be
promptly distributed by Agent Bank to Lenders in proportion to their respective
Syndication Interests in the Credit Facility, as in effect from time to time
during each applicable Fiscal Quarter.
c. Other than with respect to the Letters of Credit
set forth in Schedule 2.09(e), Borrowers shall pay a letter of credit issuance
fee to the L/C Issuer ("L/C Fee") in an amount equal to the daily average of the
L/C Exposure of each Letter of Credit multiplied by two percent (2.0%) with
reference to the IWRA Letter of Credit and multiplied by two and one-quarter
percent (2.25%) with respect to each other Letter of Credit, in each case
calculated on a per annum basis for the number of days each such Letter of
Credit is issued and outstanding during each Fiscal Quarter, payable in arrears
on a quarterly basis on or before the first (1st) day of each Fiscal Quarter and
upon the Stated Expiry Date of each such Letter of Credit. From each L/C Fee
(other than the L/C Fees collected with respect to the IWRA Letter of Credit),
one-quarter of one percent (.25%) of the daily average of the L/C Exposure of
each such Letter of Credit, calculated on a per
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annum basis as provided hereinabove, shall be retained by L/C Issuer for its own
account from each quarterly payment received as provided hereinabove, and the
balance of each L/C Fee shall be promptly distributed by Agent Bank to Lenders
in proportion to their respective Syndication Interests in the Credit Facility,
as in effect from time to time during each applicable Fiscal Quarter. All L/C
Fees paid by Borrowers are nonrefundable.
Section 2.11. INTEREST ON OVERDUE AMOUNTS AND DEFAULT RATE.
a. If any payment due under the Revolving Credit
Note is not paid within one (1) Banking Business Day after receipt by Borrowers
of written notice of such nonpayment from Agent Bank, Borrowers promise to pay a
late charge in the amount of three percent (3%) of the amount of such delinquent
payment and Agent Bank need not accept any late payment made unless it is
accompanied by such three percent (3%) late payment charge. Any late charge
shall be paid to Lenders in proportion to their respective Syndication
Interests.
b. In the event of the existence of an Event of
Default, commencing on the first (1st) Banking Business Day following the
receipt by Borrowers of written notice of the occurrence of such Event of
Default from Agent Bank, the total of the unpaid balance of the principal and
the then accrued and unpaid interest owing under the Notes shall collectively
commence accruing interest at a rate equal to two percent (2.0%) over the Base
Rate (the "Default Rate") until such time as all payments and additional
interest are paid, together with the curing of any Events of Default which may
exist, at which time the interest rate shall revert to that rate of interest
otherwise accruing pursuant to the terms of the Notes.
c. In the event of the occurrence and continuance of
an Event of Default, Borrowers agree to pay all reasonable costs of collection,
including a reasonable attorneys' fee and costs, at the time of the payment of
such sum of money to the Agent Bank and/or the performance of such acts as may
be required to cure such Event of Default. In the event legal action is
commenced for the collection of any sums owing hereunder or under the terms of
the Revolving Credit Note the Borrowers agree that any judgment issued as a
consequence of such action against Borrowers and/or any Subsidiary Guarantor
shall bear interest at a rate equal to the Default Rate until fully paid.
Section 2.12. NET PAYMENTS. All payments under this Credit
Agreement, the Revolving Credit Note, the Swingline Note and/or a L/C
Reimbursement Obligation shall be made without
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set-off, counterclaim, recoupment or defense of any kind and in such amounts as
may be necessary in order that all such payments, after deduction or withholding
for or on account of any future taxes, levies, imposts, duties or other charges
of whatsoever nature imposed by the United States or any Governmental Authority,
other than franchise taxes or any tax on or measured by the gross receipts or
overall net income of any Lender pursuant to the income tax laws of the United
States or any State, or the jurisdiction where each Lender's principal office is
located (collectively "Taxes"), shall not be less than the amounts otherwise
specified to be paid under this Credit Agreement and the Revolving Credit Note.
Each Lender that is a foreign Person (i.e., a Person other than a United States
Person for Federal income tax purposes) shall deliver to Borrowers through Agent
Bank, no later than the Closing Date (or if such Lender becomes a party to this
Credit Agreement after the Closing Date, the date upon which a Lender becomes a
party hereto), a complete and correct signed original Internal Revenue Service
("IRS") Form 4224 (or any successor thereto) or IRS Form 1001 (or any successor
thereto) indicating that such Lender is on the date of delivery thereof entitled
to receive all payments under this Credit Agreement free from withholding of
United States Federal income tax and shall deliver updated or corrected Forms
4224 or 1001 to Borrowers to the extent and in the manner required under the
United States tax law. Borrower shall not be required to pay any additional
amounts under this Section 2.12 as a result of (i) a Lender's failure to comply
with the requirements under this Section 2.12 or (ii) a Lender's failure to
qualify for a full reduction or exemption from deduction or withholding of
United States Federal income tax in respect of payments by Borrowers hereunder
for any reason other than a change in the United States tax law, any applicable
tax treaty or the official interpretation thereof, in each case, after the
delivery of Form 4224 or 1001, as the case may be.
A certificate as to any additional amounts payable to the
Lenders under this Section 2.12 submitted to the Borrowers by the Lenders shall
certify that such payments were actually incurred by the applicable Lenders and
shall show in reasonable detail an accounting of the amount payable and the
calculations used to determine in good faith such amount and shall be conclusive
absent manifest or demonstrable error. Any amounts payable by the Borrowers
under this Section 2.12 with respect to past payments shall be due within ten
(10) days following receipt by the Borrowers of such certificate from the
Lenders; any such amounts payable with respect to future payments shall be due
within ten (10) days after demand with such future payments. With respect to
each deduction or withholding for or on account of any Taxes, the Borrowers
shall promptly furnish to the Lenders such certificates, receipts and other
documents
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as may be required (in the reasonable judgment of the Lenders) to establish any
tax credit to which the Lenders may be entitled.
Section 2.13. INCREASED COSTS. If after the Amendment
Effective Date hereof the adoption of, or any change in, any applicable law,
rule or regulation (including without limitation Regulation D of the Board of
Governors of the Federal Reserve System and any successor thereto), or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender with any future request or
future directive (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency:
a. Shall subject any Lender to any duty or other charge (except with
respect to any taxes imposed by the United States or any foreign country
(including any political subdivisions or agencies thereof)) with respect to the
Credit Facility, the Revolving Credit Note, the Swingline Note and/or a L/C
Reimbursement Obligation or such Lender's obligation to make any funding of the
Credit Facility; or
b. With respect to the Bank Facilities or the obligation of the
Lenders to advance Borrowings under the Credit Facility, or to issue or
participate in Letters of Credit under the L/C Facility, shall impose, modify or
deem applicable any reserve imposed by the Board of Governors of the Federal
Reserve System, special deposit, capitalization, capital adequacy or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender;
and the result of any of the foregoing, as set forth in subsections (a) or (b)
above is to increase the cost to (or in the case of Regulation D or reserve
requirements referred to above or a successor thereto, to impose a cost on) such
Lender of making or maintaining the Credit Facility, or to reduce the amount of
any sum or rate of return received or receivable by such Lender under the
Revolving Credit Note, then within ten (10) days after demand by such Lender
(which demand shall be accompanied by a certificate setting forth the basis of
such demand), the Borrowers shall pay directly to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost (or in
the case of Regulation D or reserve requirements referred to above or a
successor thereto, such costs which may be imposed upon such Lender) or such
reduction of any sum or rate of return received or receivable under the
Revolving Credit Note. A certificate as to any additional amounts payable to any
Lender under this Section 2.13 submitted
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to the Borrowers by such Lender shall certify that such amounts were actually
incurred by such Lender and shall show in reasonable detail an accounting of the
amount payable and the calculations used to determine in good faith such amount
and shall be conclusive absent manifest or demonstrable error. Each Lender
agrees to use its reasonable efforts not materially disadvantageous to it (in
its reasonable determination) to minimize such increased or imposed costs or
such reduction.
Section 2.14. MITIGATION; EXCULPATION; REPLACEMENT LENDER.
a. Each Lender agrees that it will promptly notify the Borrowers in
writing upon its becoming aware that any payments are to become due to it under
this Credit Agreement pursuant to Section 2.12 or 2.13. Each Lender further
agrees that it will use reasonable efforts not materially disadvantageous to it
(in its reasonable determination) in order to avoid or minimize, as the case may
be, the payment by the Borrowers of any additional amounts pursuant to Section
2.12 or 2.13. Each Lender represents, to the best of its knowledge, to the
Borrowers that as of the Amendment Effective Date no such amounts are payable to
it.
b. Borrowers shall not be liable to any Lender for any payments
under Section 2.12 or 2.13 arising to the extent of such Lender's gross
negligence or wilful misconduct or breach of any laws (other than as a result of
Borrowers' or Subsidiary Guarantor's breach), or for amounts which were incurred
more than ninety (90) days prior to the date Borrowers are notified of the
incurrence of such amount. Each Bank shall be entitled to be compensated for
amounts pursuant to Section 2.12 and 2.13 only to the extent such Bank makes the
same demands for compensation from all of its other customers facing the same or
similar circumstances.
c. In the event that (x) any Lender becomes a Defaulting Lender or
otherwise defaults in its obligations to make loans or fund Borrowings,
including but not limited to, Borrowings to be made pursuant to Section 2.05,
2.08 and 2.09 or (y) any Lender makes demand for compensation pursuant to
Section 2.12 or Section 2.13, the Borrower shall have the right to request a
replacement Lender for such Lender and (a) Agent Bank shall use its best efforts
to find such a replacement Lender which shall acquire all of such Lender's
Syndication Interest pursuant to Section 10.01, (b) Borrowers shall have the
right to make a Voluntary Reduction in the amount necessary to reduce the
Aggregate Commitment by the amount of the Syndication Interest held by such
Lender (without any penalties, including any Breakage Charges) until a
replacement Lender, if any, commits to acquire the Syndication Interest of
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such Lender, at which time the Aggregate Commitment shall be increased by the
amount of such Voluntary Reduction (any payments required in connection with
such Voluntary Reduction shall be made to such Lender and not on a pro rata
basis to all Lenders), and (c) upon full payment of all outstanding amounts of
principal and interest owing it, such Defaulting Lender shall execute such
documents as may be required by Agent Bank or Borrowers to evidence the
termination of its Syndication Interest in the Credit Facility.
ARTICLE III
REQUIREMENTS FOR THE OCCURRENCE OF THE AMENDMENT EFFECTIVE
DATE AND ALL BORROWINGS
A. CLOSING AND FUNDING CONDITIONS. The obligation of each of the Banks to
fund the BR Acquisition Disbursement hereunder is subject to the following
requirements having been received by Agent Bank, in each case in form and
substance reasonably satisfactory to Agent Bank, or in the case of an
occurrence, action or event, the occurrence of each of the following on or
before the respective dates indicated below:
Section 3.01. CREDIT AGREEMENT. On or before the Amendment
Effective Date, executed counterparts of this Credit Agreement in sufficient
duplicate originals for Borrowers and each of the Banks shall be executed by
Borrowers and Banks and delivered to Agent Bank.
Section 3.02. THE NOTES.
a. On or before the Amendment Effective Date, the Revolving Credit
Note duly executed by the Borrowers in favor of Agent Bank shall be delivered to
Agent Bank.
b. On or before the Amendment Effective Date, the Swingline Note
duly executed by the Borrowers in favor of Swingline Lender shall be delivered
to Swingline Lender.
Section 3.03. SECURITY DOCUMENTATION. On or before the
Amendment Effective Date, the Security Documentation Amendments described below,
duly executed by each applicable Borrower or other party thereto, shall be
delivered to Agent Bank:
a. First Amendment to Tahoe Deed of Trust;
b. First Amendment to California Deed of Trust;
c. First Amendment to Trademark Security Agreement;
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d. First Amendment to Iowa Mortgage;
e. Second Amendment to Iowa Ship Mortgage;
f. First Amendment to Colorado Deed of Trust;
g. Irrevocable Stock Power of all issued and outstanding
stock of HBR;
h. Irrevocable Stock Power of all issued and outstanding stock of
HBRMC;
i. First Amendment to HCR Security Agreement;
j. First Amendment to HCR Security Agreement and Stock Pledge;
k. Bluffs Run Mortgage;
l. Bluffs Run Financing Statements;
m. Bluffs Run Assignment of Spaceleases, Contracts, Rents and
Revenues;
n. Bluffs Run Assignment of Permits, Licenses and Contracts;
o. Assignment of BR Management Agreement;
p. Assignment of BR Master Lease and Purchase Agreement;
q. Assignment of BR Billboard Lease;
r. Assignment of Iowa Sponsorship Agreement; and
s. Iowa Financing Statement Amendments.
Section 3.04. OTHER LOAN DOCUMENTS. The following
Loan Documents duly executed by each applicable Borrower and any other
applicable party thereto, consisting of the following shall be delivered or
caused to be delivered to Agent Bank on or before the Amendment Effective Date:
a. Environmental Certificate;
b. Reaffirmation of Park Cattle Lease Estoppel Certificate;
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c. Reaffirmation of Tahoe Green Belt Lease Estoppel Certificate;
d. Reaffirmation of California Green Belt Lease Estoppel
Certificate;
e. Second Reaffirmation of Hard Rock Subordination Agreement;
f. Second Reaffirmation of Friendship Master Lease Estoppel
Certificate;
g. Second Reaffirmation of Friendship Sublease Estoppel Certificate;
h. Second Reaffirmation of Westwood Subordination, Non-Disturbance
and Attornment Agreement;
i. BR Master Lease Subordination and Nondisturbance Agreement; and
j. Iowa Sponsorship Agreement Estoppel Certificate.
Section 3.05. ARTICLES OF INCORPORATION, BYLAWS, CORPORATE
RESOLUTION, CERTIFICATE OF GOOD STANDING AND CLOSING CERTIFICATE. Agent Bank
shall have received from each of the Borrowers on or before the Amendment
Effective Date: (i) a Certificate of Good Standing each issued by the Secretary
of State of the State of Nevada (together with a Certificate of Good Standing as
a foreign corporation issued by the Colorado Secretary of State with respect to
HCCMC and the Iowa Secretary of State with respect to HIMC, HBR and HBRMC) and
together with a "Long Form Good Standing Certificate" with respect to HCR issued
by the Nevada Secretary of State, and each dated within thirty (30) calendar
days of the Closing Date, (ii) a copy of the respective articles of
incorporation and by-laws certified as of the Amendment Effective Date to be
true, correct and complete by a duly Authorized Officer of each of the
Borrowers, respectively, (iii) an original Certificate of Corporate Resolution
and Certificate of Incumbency executed by the Secretary of each of the Borrowers
and attested to by its respective President, Vice President, or Treasurer
authorizing each such Borrower to enter into all documents and agreements to be
executed by it pursuant to this Credit Agreement and further authorizing and
empowering the officer or officers who will execute such documents and
agreements with the authority and power to execute such documents and agreements
on behalf of each respective corporation, (iv) designation by corporate
resolution and an original certificate ("Authorized Officer Certificate"),
substantially in the form of the Authorized
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Officer Certificate marked "Exhibit H", affixed hereto and by this reference
incorporated herein and made a part hereof, of the officers of Borrowers who are
authorized to give Notices of Borrowing, Continuation/Conversion Notices,
Pricing Certificates, Compliance Certificates, Notices of Swingline Advances,
request for the issuance of Letters of Credit and all other notices, requests,
reports, consents, certifications and authorizations on behalf of the Borrowers
(each individually an "Authorized Officer" and collectively the "Authorized
Officers"), and (v) an original closing certificate ("Closing Certificate"),
substantially in the form of the Closing Certificate marked "Exhibit I", affixed
hereto and by this reference incorporated herein and made a part hereof, duly
executed by each of the Borrowers.
Section 3.06. OPINIONS OF COUNSEL. One or more opinions of
counsel to the Borrowers and addressed to the Agent Bank and each of the Banks,
together with their respective successors and assigns, substantially in the form
of the legal opinions marked "Exhibit J", affixed hereto and by this reference
incorporated herein and made a part hereof, dated as of the Amendment Effective
Date.
Section 3.07. TITLE INSURANCE POLICIES. On or before the
Amendment Effective Date:
a. The Tahoe Title Endorsements to the Existing Tahoe Title
Insurance Policy (or proforma commitment for the issuance thereof) together with
such re-insurance requirements as set forth in the Tahoe Amendment Closing
Instructions.
b. The Iowa Title Endorsements to the Existing Iowa Title Insurance
Policy (or proforma commitment for the issuance thereof) together with such
re-insurance requirements as set forth in the Iowa Amendment Closing
Instructions.
c. The Colorado Title Endorsements to the Existing Colorado Title
Insurance Policy (or proforma commitment for the issuance thereof) together with
such re- insurance requirements as set forth in the Colorado Amendment Closing
Instructions.
d. The Bluffs Run Title Insurance Policy (or proforma commitment for
the issuance thereof), together with such reinsurance requirements as set forth
in the Bluffs Run Closing Instructions.
Section 3.08. SURVEY. In the event any Title Company requires
a survey as a condition of issuing the applicable Title Endorsements consistent
with the applicable
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Closing Instructions, subject to exceptions approved by Agent Bank prior to the
Amendment Effective Date, a current boundary and location survey for each of the
applicable Collateral Properties, which must (i) be certified to Agent Bank and
the applicable Title Insurance Company, (ii) show each of the applicable
Collateral Properties to be free of material encroachments, overlaps, and other
survey defects, (iii) show the courses and distances of the boundary lines for
each of the applicable Collateral Properties, (iv) show that all existing or to
be constructed improvements are located within said boundary lines, and (v) show
the location of all above and below ground easements, improvements,
appurtenances, utilities, rights-of-way, water rights, if any, and ingress and
egress, by reference to book and page numbers and/or filed map reference, to the
extent possible.
Section 3.09. PAYMENT OF TAXES. On or before the Amendment
Effective Date, evidence satisfactory to Agent Bank that all past and current
real and personal property taxes and assessments which are presently due and
payable applicable to the Collateral Properties, except those being contested in
good faith, have been paid in full.
Section 3.10. INSURANCE. On or before the Amendment
Effective Date, copies of the declaration pages of each of the insurance
policies certified to be true and correct by an Authorized Officer of the
Borrowers, together with original binders evidencing Borrowers as named insured,
and original certificates of insurance, loss payable and mortgagee endorsements
naming Agent Bank as mortgagee, loss payee and additional insured, as required
by the applicable insurance provisions set forth in Section 5.09 of this Credit
Agreement.
Section 3.11. PAYMENT OF ACCRUED INTEREST AND FEES
UNDER EXISTING HARVEYS CREDIT AGREEMENT. On the Amendment Effective Date, all
unpaid accrued interest and fees under the Existing Harveys Credit Agreement
(including commitment fees pro rated to the Amendment Effective Date) shall be
fully paid.
Section 3.12. REIMBURSEMENT FOR EXPENSES AND FEES. On or
before the Amendment Effective Date: (i) reimbursement by Borrowers for all
reasonable fees and out-of-pocket expenses incurred by Agent Bank in connection
with the Credit Facility, including, but not limited to, escrow charges, title
insurance premiums, environmental examinations, recording fees, appraisal fees,
reasonable attorney's fees of Henderson & Morgan, LLC and gaming, California,
Colorado, Iowa and maritime co-counsel retained by Henderson & Morgan, LLC,
insurance consultant fees, and all other like fees and expenses remaining unpaid
as of the Amendment Effective Date to the extent then due and payable and
appropriately invoiced on the Amendment Effective Date,
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provided that the amount then invoiced shall not thereafter preclude Borrowers'
obligation to pay such costs and expenses relating to the Credit Facility
following the Amendment Effective Date or to reimburse Agent Bank for the
payment thereof, and (ii) payment by Borrowers to Agent Bank of the fees
required in the Fee Side Letter as provided in Section 2.10(a).
Section 3.13. SCHEDULES OF SPACELEASES AND EQUIPMENT LEASES
AND CONTRACTS. On or before the Amendment Effective Date, a Schedule of
Spaceleases (Schedules 4.18(A) through (D)) and Equipment Leases and Contracts
(Schedules 4.19(A) through (D)) in each instance setting forth the name of the
other party thereto, a brief description of each spacelease providing for the
payment of One Hundred Thousand Dollars ($100,000.00), or more, per year,
equipment lease and contract providing for the payment of Fifty Thousand Dollars
($50,000.00), or more, per year and the commencement and ending date thereof.
Section 3.14. LEASES. On or before the Amendment
Effective Date:
a. A true and correct copy of the Park Cattle Lease, Tahoe Greenbelt
Lease, California Greenbelt Lease and Hard Rock Lease and of all amendments and
modifications to any of such instruments; and
b. A true and correct copy of the Westwood Lease, Friendship Master
Lease and Friendship Sublease and of all amendments and modifications to any of
such instruments.
Section 3.15. BR ACQUISITION DOCUMENTATION. On or
before the Amendment Effective Date:
a. A true and correct copy of the Purchase Agreement, together with
all amendments and modifications thereto;
b. Written evidence, to the reasonable satisfaction of Agent Bank,
that concurrently with the advance of the BR Acquisition Disbursement, HBR will
receive fee title to the Bluffs Run Real Property, leasehold title under the BR
Billboard Lease and the BR Print Shop Lease and ownership of the remaining BR
Purchase Property;
c. A true and correct copy of the BR Master Lease, together with
written evidence to the reasonable satisfaction of Agent Bank that such BR
Master Lease shall be fully effective and enforceable in all respects
concurrently with the advance of the BR Acquisition Disbursement;
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d. A true and correct copy of the BR Management Agreement, together
with written evidence to the reasonable satisfaction of Agent Bank that such BR
Management Agreement shall be fully effective and enforceable in all respects
concurrently with the advance of the BR Acquisition Disbursement;
e. A true and correct copy of the Iowa Sponsorship Agreement,
together with written evidence to the reasonable satisfaction of Agent Bank that
such Iowa Sponsorship Agreement shall be fully effective and enforceable in all
respects concurrently with the advance of the BR Acquisition Disbursement;
f. Written evidence, to the reasonable satisfaction of Agent Bank,
that each of the remaining conditions for the BR Closing as contained in the
Purchase Agreement have occurred or will occur concurrently with the advance of
the BR Acquisition Disbursement.
Section 3.16. ENVIRONMENTAL REPRESENTATIONS. On or before the
Amendment Effective Date, Borrower shall confirm that the representations
contained in Sections 2.1 and 2.2 of the Environmental Certificate are true and
correct in all material respects with respect to each of the Hotel/Casino
Facilities.
Section 3.17. EVIDENCE OF RIGHT TO OCCUPANCY OF
HOTEL/CASINO FACILITIES. As of the Amendment Effective Date, the Borrower
Consolidation shall have the right to use and hold open for the use and
occupancy of the public of each of the Hotel/Casino Facilities.
Section 3.18. REGULATORY APPROVALS, PERMITS, CONSENTS, ETC..
On or before the Amendment Effective Date, copies of those material permits,
approvals or consents by all Governmental Authorities permitting the use and
operation of the Hotel/Casino Facilities, together with all supporting documents
and materials, reasonably requested by Agent Bank at least three (3) Banking
Business Days prior to the Amendment Effective Date. On or before the Amendment
Effective Date, a copy of each necessary approval of or other consent to this
Credit Agreement, Notes and the BR Acquisition by each of the applicable Gaming
Authorities.
Section 3.19. RESTRICTED SUBSIDIARIES STOCK. On the Amendment
Effective Date, original stock certificates of HCCMC, HTMC, HCRSC, HIMC, HBR and
HBRMC shall be in the possession of or delivered to Agent Bank on behalf of
Lenders pursuant to the HCR Stock Pledges.
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Section 3.20. SCHEDULE OF ALL SIGNIFICANT LITIGATION. On or
before the Amendment Effective Date, a Schedule of Significant Litigation
(Schedule 3.20), involving any member of the Borrower Consolidation, in each
instance setting forth the names of the other parties thereto, a brief
description of such litigation, whether or not such litigation is covered by
insurance and, if so, whether the defense thereof and liability therefor has
been accepted by the applicable insurance company indicating whether such
acceptance of such defenses is with or without a reservation of rights, the
commencement date of such litigation and the amount sought to be recovered by
the adverse parties thereto or the amount which is otherwise in controversy.
Section 3.21. FINANCIAL STATEMENTS. On or before the Amendment
Effective Date, audited financial statements of HCR, on a consolidated and
consolidating basis, for the last Fiscal Year for which such financial
statements are available, together with a statement from the Chief Financial
Officer of HCR to the effect that no Material Adverse Change has occurred with
respect to the Borrowers since the date of the financial statements most
recently given to Agent Bank.
Section 3.22. NO INJUNCTION OR OTHER LITIGATION. As of the
Amendment Effective Date, no law or regulation shall prohibit, and no order,
judgment or decree of any Governmental Authority shall, and no litigation shall
be pending or threatened which in the reasonable judgment of the Agent Bank
would or would reasonably be expected to, enjoin, prohibit, limit or restrain
the occurrence of the BR Acquisition or the execution and delivery of this
Credit Agreement or the making of the Base Rate Loans or the LIBOR Loans or the
performance by the Borrowers of any other obligations in respect thereof or the
ability of the Borrowers to conduct their business substantially as presently
conducted.
Section 3.23. ADDITIONAL DOCUMENTS AND STATEMENTS. On or
before the Amendment Effective Date, such additional documents, affidavits,
certificates and opinions as Lenders may reasonably require to insure compliance
with this Credit Agreement. The statements set forth in Section 3.26 shall be
true and correct.
Section 3.24. OCCURRENCE OF BR ACQUISITION. As of the
Amendment Effective Date, the BR Acquisition shall have occurred and HBRMC shall
have the authority to manage, control and operate the Bluffs Run Facility
pursuant to the BR Management Agreement.
B. CONDITIONS PRECEDENT TO ALL BORROWINGS. The obligation of each Lender
and Agent Bank to make any Borrowing
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requested to be made on any Funding Date, except Borrowings made upon the demand
of Agent Bank for the purpose of funding repayment of Swingline Outstandings
and/or L/C Reimbursement Obligations, is subject to the occurrence of each of
the following conditions precedent as of such Funding Date:
Section 3.25. NOTICES OF BORROWING. With respect to each
Borrowing, the Agent Bank shall have received in accordance with Section 2.03 on
or before such Funding Date an original and duly executed Notice of Borrowing or
facsimile copy thereof, to be promptly followed by an original.
Section 3.26. CERTAIN STATEMENTS. On each such Funding Date
and as of the Amendment Effective Date the following statements shall be true
and correct:
a. The representations and warranties made by the Borrowers
contained in Article IV hereof or in any of the Loan Documents (other than
representations and warranties which expressly speak only as of a different date
which shall be true and correct as of such date) are true and correct on and as
of the Funding Date and as of the Amendment Effective Date in all material
respects as though made on and as of that date, except to the extent that such
representations and warranties are not true and correct as a result of a change
which is permitted by this Credit Agreement or by any other Loan Document, or
which is otherwise consented to by Agent Bank upon the approval of Requisite
Lenders;
b. The representations and certifications contained in the
Environmental Certificate are true and correct in all material respects (other
than representations and warranties which expressly speak only as of a different
date which shall be true and correct as of such date);
c. Since the date of the most recent financial statements referred
to in Sections 3.21 and 5.08, no Material Adverse Change shall have occurred;
and
d. No event has occurred or as a result of any Borrowings
contemplated hereby would occur and is continuing, or would result from the
making thereof, which constitutes a Default or Event of Default hereunder.
Section 3.27. GAMING PERMITS. The Borrower Consolidation shall
have all Gaming Permits material to or required for the conduct of the gaming
businesses and the conduct of games of chance at the Hotel/Casino Facilities (it
being understood and agreed that the Gaming Permits relating to the Bluffs Run
Facility will be held by IWRA) and such Gaming Permits shall not then be
suspended, enjoined or prohibited
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(for any length of time) by any Gaming Authority or any other Governmental
Authority.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Banks to enter into this Credit Agreement, Borrowers make the
following representations and warranties as of the Amendment Effective Date:
Section 4.01. ORGANIZATION; POWER AND AUTHORIZATION.
a. Each Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada. Each Borrower (i)
has all requisite power, authority and legal right to execute and deliver each
document, agreement or certificate to which it is a party or by which it is
bound in connection with the Bank Facilities, to consummate the transactions and
perform its obligations hereunder and thereunder, and to own its properties and
assets and to carry on and conduct its business as presently conducted or
proposed to be conducted, (ii) has taken all necessary action to authorize the
execution, delivery and performance by it of this Credit Agreement and the other
Loan Documents to which it is a party or by which it is bound and to consummate
the transactions contemplated hereunder and thereunder and (iii) is duly
qualified as a foreign corporation, and is licensed and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification or license
and where the failure to so qualify and be licensed (other than with respect to
the Gaming Permits) would result in a Material Adverse Change.
b. Each Restricted Subsidiary, when formed: (i) is a corporation,
limited partnership, limited liability company or general partnership 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 and assets makes such
qualification necessary where the failure to so qualify would result in a
Material Adverse Change and has all requisite power and authority to conduct its
business and to own and lease its properties and assets, and (ii) has taken all
necessary action to authorize the execution, delivery and performance by it of
the Subsidiary Guaranty executed and delivered by it to Agent Bank as of the
date of such execution and delivery.
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Section 4.02. NO CONFLICT WITH, VIOLATION OF OR DEFAULT UNDER
LAWS OR OTHER AGREEMENTS. Neither the execution and delivery of this Credit
Agreement, the Revolving Credit Note, the Swingline Note, or any other Loan
Document, or any other agreement, certificate or instrument to which Borrowers
are a party or by which they, or any of them, are bound in connection with the
Bank Facilities, nor the consummation of the transactions contemplated hereunder
or thereunder, or the compliance with or performance of the terms and conditions
herein or therein, is prevented by, limited by, conflicts in any material
respect with, or will result in a material breach or violation of, or a material
default (with due notice or lapse of time or both) under, or the creation or
imposition of any lien, charge, or encumbrance of any nature whatsoever upon any
of their respective property or assets by virtue of, the terms, conditions or
provisions of (a) the Articles of Incorporation, Bylaws or other documents of
organization or charter of any of the Borrowers, (b) any indenture, evidence of
indebtedness, loan or financing agreement, or other agreement or instrument of
whatever nature to which they, or any of them, are a party or by which they, or
any of them, are bound (other than the Loan Documents), including, without
limitation, the Indenture and the Senior Subordinated Notes, (c) the Park Cattle
Lease, the Tahoe Green Belt Lease, the California Green Belt Lease or the Hard
Rock Lease, (d) the Westwood Lease, Friendship Lease, the Friendship Sublease,
BR Master Lease or BR Management Agreement, or (e) any provision of any existing
law, rule, regulation, order, writ, injunction or decree of any court or
Governmental Authority to which they, or any of them, are subject where, in the
case of each of clauses (a), (b), (c), (d) and (e), such breach, conflict,
violation, default, lien, charge or encumbrance could reasonably be expected to
result in a Material Adverse Change.
Section 4.03. LITIGATION. Except as disclosed on
the Schedule of Significant Litigation delivered in connection with Section 3.20
there is no action, suit, proceeding, inquiry, hearing or investigation pending
or, to the best knowledge of Borrowers, threatened, in any court of law or in
equity, or before any Governmental Authority, which could reasonably be expected
to result in any Material Adverse Change. To the best knowledge of Borrowers,
Borrowers are not in violation of or default with respect to any order, writ,
injunction, decree or demand of any such court or Governmental Authority where
such default could reasonably be expected to result in a Material Adverse
Change.
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Section 4.04. AGREEMENTS LEGAL, BINDING, VALID AND
ENFORCEABLE.
a. This Credit Agreement, the Revolving Credit Note, the Swingline
Note, the Security Documentation and all other Loan Documents, when executed and
delivered by Borrowers in connection with the Bank Facilities will, as of the
Amendment Effective Date, constitute legal, valid and binding obligations of
Borrowers, enforceable against Borrowers in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws of general application relating to or affecting the
enforcement of creditors' rights and the exercise of judicial discretion in
accordance with general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law).
b. Each of the Land Leases, the BR Master Lease and the BR
Management Agreement have been duly authorized and executed by the applicable
member of the Borrower Consolidation and to the best knowledge of Borrowers by
each other respective party thereto and, during the term hereof, shall
constitute legal, valid and binding obligations of the applicable member of the
Borrower Consolidation and to the best knowledge of Borrowers each other
respective party thereto, enforceable against such parties in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws of general application relating to or
affecting the enforcement of creditors' rights and the exercise of judicial
discretion in accordance with general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
Section 4.05. INFORMATION AND FINANCIAL DATA ACCURATE;
FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. Any and all financial
statements heretofore furnished to Banks by Borrowers, or any of them: (a)
present fairly the financial position of the entity to which they relate as at
their respective dates and the results of operations and changes in cash flows
for the periods to which they apply, and (b) have been prepared in conformity
with GAAP applied on a consistent basis throughout the periods involved. Since
the date of the most recent financial statements referred to in this Section
4.05, there has been no Material Adverse Change in the financial condition,
business or operations of the Borrower Consolidation.
Section 4.06. GOVERNMENTAL APPROVALS. All consents,
approvals, orders or authorizations of, or registrations, declarations, notices
or filings with any Governmental
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Authority and any other Person, which may be required in connection with the
valid execution and delivery of this Credit Agreement and the other Loan
Documents by Borrowers and the carrying-out or performance of any of the
transactions required or contemplated hereunder, or thereunder, by Borrowers,
have been obtained or accomplished and are in full force and effect, except as
may be required in connection with the exercise of remedies under the Security
Documentation following an Event of Default, or can be obtained by Borrowers.
All consents, approvals, orders or authorizations of, or registrations,
declarations, notices or filings with any Governmental Authority and any other
Person, the failure of which could reasonably be expected to result in a
Material Adverse Change, which may be required by Borrowers in connection with
the use and operation of the Hotel/Casino Facilities have been obtained or
accomplished and are in full force and effect.
Section 4.07. PAYMENT OF TAXES. Borrowers have duly filed or
caused to be filed all material federal, state and local tax reports and returns
which are required to be filed by them and have paid or made provisions for the
payment of, all material taxes, assessments, fees and other governmental charges
which have or may have become due pursuant to said returns or otherwise pursuant
to any assessment received by Borrowers except such taxes, assessments, fees or
other governmental charges, if any, as are being contested in good faith by
Borrowers by appropriate proceedings and for which Borrowers have maintained
adequate reserves for the payment thereof in accordance with GAAP.
Section 4.08. TITLE TO PROPERTIES. As of the Amendment
Effective Date, HTMC has good and marketable title to all of its properties and
assets reflected in the most recent financial statements of the Borrower
Consolidation delivered to Agent Bank prior to the Amendment Effective Date, as
owned by it, including, but not limited to, the Tahoe Real Property and the
Tahoe Hotel/Casino Facility and the lessee's interest in the Park Cattle Lease,
the Tahoe Green Belt Lease, the California Green Belt Lease and all other Tahoe
Collateral (except for those properties and assets disposed of since the date of
said financial statements in the ordinary course of business or those properties
and assets which are no longer used or useful in the conduct of its business or
those properties and assets permitted to be disposed of under this Credit
Agreement). As of the Amendment Effective Date, HIMC has good and marketable
title to all of its properties and assets reflected in the most recent financial
statements of the Borrower Consolidation delivered to Agent Bank prior to the
Closing Date, as owned by it, including, but not limited to, the Iowa Land Base
Facilities, the Riverboat and the lessor's interest in the Westwood Lease and
sublessee's interest in the
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Friendship Sublease (except for those properties and assets disposed of since
the date of said financial statements in the ordinary course of business or
those properties and assets which are no longer used or useful in the conduct of
its business or those properties and assets permitted to be disposed of under
this Credit Agreement). As of the Amendment Effective Date, HBR has or will have
good and marketable fee title to the Bluffs Run Real Property and leasehold
title under the BR Billboard Lease and title to the remaining BR Purchase
Property. As of the Amendment Effective Date, HCCMC has good and marketable
title to all of its properties and assets reflected in the most recent financial
statements of the Borrower Consolidation delivered to Agent Bank prior to the
Amendment Effective Date, as owned by it, including, but not limited to, the
Colorado Hotel/Casino Facility (except for those properties and assets disposed
of since the date of said financial statements in the ordinary course of
business or those properties and assets which are no longer used or useful in
the conduct of its business or those properties and assets permitted to be
disposed of under this Credit Agreement). The Collateral is not subject to any
liens, encumbrances or restrictions except Permitted Encumbrances.
Section 4.09. NO UNTRUE STATEMENTS. All representations
and warranties made by Borrowers, or any of them, in this Credit Agreement, any
other Loan Document and any other agreement, document, certificate or instrument
furnished by Borrowers, or any of them, to Banks pursuant to the provisions of
Article III of this Credit Agreement, including, without limitation, all
financial information and other data previously furnished in writing by
Borrowers, or any of them, in connection with the Bank Facilities, on and as of
the Closing Date: (a) are and shall be true, correct and complete in all
material respects at the time made, (b) do not and shall not contain (at the
time they were made) any untrue statement of a material fact, and (c) do not and
shall not omit to state a material fact, the absence of which makes the
information contained herein or therein materially misleading or incomplete.
Borrowers understand that all such statements, representations and warranties
shall be deemed to have been relied upon by Banks as a material inducement to
establish the Bank Facilities.
Section 4.10. BROKERAGE COMMISSIONS. No Person
(other than the Banks) is entitled to receive any brokerage commission, finder's
fee or similar fee or payment in connection with the extensions of credit
contemplated by this Credit Agreement as a result of any
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agreement entered into by Borrowers. No brokerage or other fee, commission or
compensation is to be paid by Banks with respect to the extensions of credit
contemplated hereby as a result of any agreement entered into by Borrowers, and
Borrowers agree to indemnify Banks against any such claims for brokerage fees or
commissions and to pay all expenses including, without limitation, reasonable
attorney's fees incurred by Banks in connection with the defense of any action
or proceeding brought to collect any such brokerage fees or commissions.
Section 4.11. NO DEFAULTS. To the best of Borrowers'
knowledge, none of the Borrowers are in violation of or in default with respect
to any applicable laws and/or regulations which materially and adversely affect
the Iowa Riverboat/Hotel Facilities, Tahoe Hotel/Casino Facility or Colorado
Hotel/Casino Facility, Bluffs Run Facility or the business, financial condition,
property of Borrowers or operations of the Borrowers, or any of them which could
reasonably be expected to result in a Material Adverse Change. Without limiting
the generality of the foregoing, Borrowers are not in violation or default (nor
is there any waiver in effect which, if not in effect, would result in a
violation or default) in any material and adverse respect under the Indenture,
Senior Subordinated Notes, the Park Cattle Lease, the Tahoe Green Belt Lease,
the California Green Belt, the Hard Rock Lease, the Westwood Lease, the
Friendship Sublease, BR Master Lease, BR Management Agreement or under any
indenture, evidence of indebtedness, loan or financing agreement or other
agreement or instrument of whatever nature to which it is a party or by which it
is bound, which in any case could reasonably be expected to result in Material
Adverse Change.
Section 4.12. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.
To the best knowledge of Borrowers, no Reportable Event has occurred with
respect to any Pension Plan under ERISA, that gives rise to material liabilities
that materially adversely affect the financial condition or operations of
Borrowers, or any of them.
Section 4.13. PARK CATTLE LEASE AND HARD ROCK LEASE.
The copies of the Park Cattle Lease and Hard Rock Lease and all modifications
and amendments thereto (if any) which have been delivered to Agent Bank in
accordance with Section 3.14: (a) are a true, correct and complete copy of the
respective originals thereof, as in effect on the Amendment Effective Date, and
no amendments or modifications have been made to such Park Cattle Lease and/or
the Hard Rock Lease prior to the Amendment Effective Date, except as set forth
by the documents delivered to Agent Bank in accordance with said Section 3.14 or
otherwise reasonably approved in writing by Requisite Lenders, and (b) have not
been terminated and are in full force and effect. There is no default in the
observance or performance by HTMC of any of its obligations under the Park
Cattle Lease and/or the Hard Rock Lease which would entitle Park Cattle Co.
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or Hard Rock to terminate such lease and HTMC has done all things required to be
done as of the Closing Date to keep unimpaired its rights thereunder.
Section 4.14. GREEN BELT LEASES. The copies of the Tahoe Green
Belt Lease, California Green Belt Lease and all modifications and amendments
thereto (if any) which have been delivered to Agent Bank in accordance with
Section 3.14: (a) is a true, correct and complete copy of the respective
original thereof, as in effect on the Amendment Effective Date, and no
amendments or modifications have been made to such Tahoe Green Belt Lease or
California Green Belt Lease prior to the Amendment Effective Date, except as set
forth by documents delivered to Agent Bank in accordance with said Section 3.14
or otherwise reasonably approved in writing by Requisite Lenders, and (b) has
not been terminated and is in full force and effect. There is no default by HTMC
in the observance or performance of any of its obligations under the Tahoe Green
Belt Lease and California Green Belt Lease which would entitle Park Cattle Co.
to terminate such lease and HTMC has done all things required to be done as of
the Amendment Effective Date to keep unimpaired its rights thereunder.
Section 4.15. IOWA LEASES, IOWA SPONSORSHIP AGREEMENT
AND BR MANAGEMENT AGREEMENT. The copy of each of the Westwood Lease, Friendship
Master Lease, Friendship Sublease, Iowa Sponsorship Agreement, BR Master Lease,
and BR Management Agreement and all modifications and amendments thereto (if
any) which have been delivered to Agent Bank in accordance with Section 3.14:
(a) is a true, correct and complete copy of the respective original thereof, as
in effect on the Amendment Effective Date, and no amendments or modifications
have been made to such Westwood Lease, Friendship Master Lease, Friendship
Sublease, Iowa Sponsorship Agreement, BR Master Lease or BR Management Agreement
prior to the Amendment Effective Date, except as set forth by documents
delivered to Agent Bank in accordance with said Section 3.14 or otherwise
reasonably approved in writing by Requisite Lenders or Agent Bank, as applicable
under Section 5.03, and (b) has not been terminated and is in full force and
effect. To the actual knowledge of HIMC, there is no default by the City of
Council Bluffs, Iowa, in the observance or performance of any of its obligations
under the Friendship Master Lease which would entitle the Iowa Department of
Natural Resources to terminate such lease and the City of Council Bluffs, Iowa,
has done all things required to be done as of the Amendment Effective Date to
keep unimpaired its rights thereunder. There is no default in the observance or
performance by HIMC of any of its obligations under the Iowa Sponsorship
Agreement which would entitle IWRA to terminate such agreement and HIMC has done
all things required to be done as of the Amendment Effective Date
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to keep unimpaired its rights thereunder. There is no default in the observance
or performance by HIMC of any of its obligations under the Westwood Lease or
Friendship Sublease which would entitle the City of Council Bluffs to terminate
such lease and HIMC has done all things required to be done as of the Closing
Date to keep unimpaired its rights thereunder. There is no default in the
observance or performance by HBR of any of its obligations under the BR Master
Lease which would entitle IWRA to terminate such lease and HBR has done all
things required to be done as of the Amendment Effective Date to keep unimpaired
its rights thereunder. There is no default in the observance or performance by
HBRMC of any of its obligations under the BR Management Agreement which would
entitle IWRA to terminate such BR Management Agreement and HBRMC has done all
things required to be done as of the Amendment Effective Date to keep unimpaired
its rights thereunder.
Section 4.16. AVAILABILITY OF UTILITY SERVICES. All utility
services necessary for the Hotel/Casino Facilities including, without
limitation, electrical, water, gas and sewage services and facilities are
available at the boundaries of the Tahoe Real Property, the Iowa Real Property,
the Bluffs Run Real Property and the Colorado Real Property, respectively.
Section 4.17. POLICIES OF INSURANCE. As of the
Amendment Effective Date, each of the copies of the declaration pages, original
binders and certificates of insurance evidencing the Policies of Insurance
relating to the Hotel/Casino Facilities delivered to Agent Bank by Borrowers (i)
is a true, correct and complete copy of the respective original thereof as in
effect on the date hereof, and no amendments or modifications of any of said
documents or instruments not included in such copies have been made as of the
Amendment Effective Date, and (ii) has not been terminated and is in full force
and effect. There is no default by Borrowers in the observance or performance of
their respective obligations under said documents and instruments which would
entitle the insurers party thereto to terminate the Policies of Insurance or
deny coverage thereunder, and Borrowers, and each of them, have done all things
required to be done as of the date of this Credit Agreement to keep unimpaired
their rights thereunder.
Section 4.18. SPACELEASES. A schedule of all executed
Spaceleases pertaining to the Hotel/Casino Facilities under which the lessee
thereunder is required to pay One Hundred Thousand Dollars ($100,000.00), or
more, per year, respectively, or any portion thereof, in existence as of the
Amendment Effective Date hereof, is set forth on Schedules 4.18(A) through (D)
attached hereto.
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Section 4.19. EQUIPMENT LEASES AND CONTRACTS. A schedule of
all executed Equipment Leases and Contracts pertaining to the Hotel/Casino
Facilities providing for the payment by the lessee of Fifty Thousand Dollars
($50,000.00), or more, per year, respectively, or any portion thereof, in
existence on the date hereof, is set forth on Schedules 4.19 (A) through (D)
attached hereto.
Section 4.20. GAMING PERMITS AND APPROVALS. All Gaming
Permits required to be held by Borrowers in connection with the Tahoe
Hotel/Casino Facility, the Iowa Riverboat/Hotel Facilities and the Colorado
Hotel/Casino Facility are current and in good standing and Borrowers presently
hold all Gaming Permits necessary for the continued operation of the Tahoe
Hotel/Casino Facility, the Iowa Riverboat/Hotel Facilities and the Colorado
Hotel/Casino Facility. IWRA holds all Gaming Permits necessary for the continued
operation of the Bluffs Run Facility by HBRMC pursuant to the BR Management
Agreement. Each of the Gaming Authorities have given all necessary approvals of
this Credit Agreement, the Notes and each Loan Document to be executed by
Borrowers in connection with the Bank Facilities.
Section 4.21. ENVIRONMENTAL CERTIFICATE. The
representations and certifications contained in the Environmental Certificate
are true and correct in all material respects.
Section 4.22. NEW VENTURE SUBSIDIARIES. A schedule
of each Restricted Subsidiary and Unrestricted Subsidiary (exclusive of HBR,
HBRMC, HTMC, HIMC, HCRSC and HCCMC) existing as of the Amendment Effective Date
and a description of the New Venture owned in whole or part by each such
Restricted Subsidiary and Unrestricted Subsidiary is marked "Schedule 4.22",
affixed hereto and by this reference incorporated herein and made a part hereof.
As of the Amendment Effective Date, HTMC, HIMC, HCRSC, HCCMC, HBR and HBRMC do
not have any Subsidiaries.
Section 4.23. COMPLIANCE WITH STATUTES, ETC. Except for
matters related to the compliance by the Borrowers with Hazardous Materials
Laws, which matters are governed by the Environmental Certificate and the
Mortgages, to the best knowledge of Borrowers, each of the Borrowers is in
compliance with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all Governmental Authorities, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property, except such noncompliance as would not, in the aggregate, reasonably
be expected to result in a Material Adverse Change.
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Section 4.24. INVESTMENT COMPANY ACT. Neither HCR
nor any of its Subsidiaries is an "investment company" or a company "controlled"
by an "investment company," which is required to be registered under the
Investment Company Act of 1940, as amended.
Section 4.25. PUBLIC UTILITY HOLDING COMPANY ACT. Neither
HCR nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 4.26. LABOR RELATIONS. There is no strike or work
stoppage in existence, or to the best knowledge of Borrowers threatened
involving any Borrower or any of the Hotel/Casino Facilities that could
reasonably be expected to result in a Material Adverse Change.
Section 4.27. TRADEMARKS, PATENTS, LICENSES, FRANCHISES,
FORMULAS AND COPYRIGHTS. Except as disclosed in Schedule 4.27, each of HCR and
its Restricted Subsidiaries own all the patents, trademarks, permits, service
marks, trade names, copyrights, licenses, franchises and formulas, or has a
valid license or sublicense of rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights of others which, or the failure to obtain which, as the case may
be, could reasonably be expected to result in a Material Adverse Change in the
business, operations, property, assets or condition (financial or otherwise) of
HCR and its Restricted Subsidiaries taken as a whole. Each of the patents,
trademarks, servicemarks, tradenames and copyrights owned by Borrowers, or any
of them, relating to the Tahoe Hotel/Casino Facility, Iowa Riverboat/Hotel
Facilities, Colorado Hotel/Casino Facility and/or Bluffs Run Facility which is
registered with any Governmental Authority is set forth on Schedule 4.27,
attached hereto.
Section 4.28. CONTINGENT LIABILITIES. As of the Amendment
Effective Date, Borrowers have incurred no material Contingent Liabilities (any
Contingent Liability in excess of One Million Dollars ($1,000,000.00) being
deemed material) other than those described on Schedule 4.28.
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ARTICLE V
GENERAL COVENANTS OF BORROWERS
To induce the Banks to enter into this Credit Agreement and
establish the Bank Facilities, Borrowers covenant to Banks as follows from and
after the Amendment Effective Date until the occurrence of Bank Facility
Termination:
Section 5.01. FF&E. The Borrower Consolidation shall furnish,
fixture and equip the Hotel/Casino Facilities with FF&E it reasonably deems
appropriate for the operation of the Hotel/Casino Facilities. All FF&E that is
purchased and installed in the Hotel/Casino Facilities shall be purchased free
and clear of any liens, encumbrances or claims, other than Permitted
Encumbrances. If Borrowers should sell, transfer, convey or otherwise dispose of
any FF&E to any Person other than a member of the Borrower Consolidation (other
than obsolete or worn out FF&E or other FF&E no longer useful in the business of
the Borrowers) and not within thirty (30) days of such sale, transfer,
conveyance or other disposition replace such FF&E with purchased items of
equivalent value and utility or replace said FF&E with leased FF&E of equivalent
value and utility or replace such FF&E with other assets useful in the business
of the Borrower Consolidation, within the permissible leasing and purchase
agreement limitation set forth in Section 6.10(b) herein, to the extent the Net
Proceeds thereof not used to replace FF&E exceeds a cumulative aggregate value
of Seven Million Five Hundred Thousand Dollars ($7,500,000.00) during any Fiscal
Year or a cumulative aggregate value of Fifteen Million Dollars ($15,000,000.00)
during the term of the Credit Facility (in either instance the "Excess Capital
Proceeds"), Borrowers shall be required to, on, or at Borrowers' option, prior
to thirty (30) days following such sale, transfer, conveyance or other
dispositions, permanently reduce the Maximum Permitted Balance of the Credit
Facility by a Voluntary Permanent Reduction in the amount of the Excess Capital
Proceeds of the FF&E so disposed of, subject, however, to the right of Agent
Bank to verify to its reasonable satisfaction the amount of said Excess Capital
Proceeds.
Section 5.02. PERMITS; LICENSES AND LEGAL REQUIREMENTS.
Borrowers shall comply in all material respects with and keep in full force and
effect, as and when required, all Gaming Permits and all material permits,
licenses and approvals obtained from any Governmental Authorities which are
required for the operation and use of the Tahoe Hotel/Casino Facility, the Iowa
Riverboat/Hotel Facilities and the Colorado Hotel/Casino Facilities. Borrowers
shall cause IWRA to comply in all material respects with and keep in full force
and effect, as and when required, all Gaming Permits and all
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material permits, licenses and approvals obtained from any Governmental
Authorities which are required for the operation and use of the Bluffs Run
Facility. Borrowers, and each of them, shall comply in all material respects
with all applicable material existing and future laws, rules, regulations,
orders, ordinances and requirements of all Governmental Authorities, and with
all recorded restrictions affecting the Hotel/Casino Facilities where the
failure of such compliance could reasonably be expected to result in a Material
Adverse Change.
Section 5.03. LEASES, IOWA SPONSORSHIP AGREEMENT AND BR
MANAGEMENT AGREEMENT. Until Bank Facility Termination: (a) HTMC shall fully
perform and comply in all material respects with all agreements, covenants,
terms and conditions imposed or assumed by HTMC as: (i) lessee under Park Cattle
Lease; (ii) as lessee under the Tahoe Green Belt Lease; (iii) as lessee under
the California Green Belt Lease; and (iv) as lessor under the Hard Rock Lease,
(b) HIMC shall fully perform and comply in all material respects with all
agreements, covenants, terms and conditions imposed or assumed by HIMC as: (i)
lessor under the Westwood Lease, (ii) as lessee under the Friendship Sublease,
and (iii) as operator under the Iowa Sponsorship Agreement, (c) HBR shall fully
perform and comply in all material respects with all agreements, covenants,
terms and conditions imposed or assumed by HBR as lessor under the BR Master
Lease and (d) HBRMC shall fully perform and comply in all material respects with
all agreements, covenants, terms and conditions imposed or assumed by HBRMC as
manager under the BR Management Agreement. Borrowers shall not amend, modify or
terminate, or enter into any agreement to amend, modify or terminate the Park
Cattle Lease, the Tahoe Green Belt Lease, California Green Belt Lease, the Hard
Rock Lease, Westwood Lease and/or Friendship Sublease, BR Master Lease and/or BR
Management Agreement without the prior written consent of Agent Bank, which
consent shall not be unreasonably withheld, or if in the opinion of Agent Bank
such amendment or modification is materially adverse to any member of the
Borrower Consolidation or could reasonably be expected to have a detrimental
effect on the Agent Bank or the Lenders or any of their rights or remedies under
the Credit Agreement or the Security Documentation, without the prior written
consent of Requisite Lenders.
Section 5.04. PROTECTION AGAINST LIEN CLAIMS. Borrowers shall
promptly pay and discharge or cause to be paid and discharged all claims and
liens for labor done and materials and services supplied and furnished in
connection with the Hotel/Casino Facilities in accordance with this Section
5.04, except such claims and liens, if any, as are being contested in good faith
by Borrowers by appropriate proceedings and for which Borrowers have maintained
adequate
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reserves for the payment thereof in accordance with GAAP. If any mechanic's lien
or materialman's lien for a sum in excess of Five Hundred Thousand Dollars
($500,000.00) shall be recorded, filed or suffered to exist against the
Hotel/Casino Facilities, or any of them, or any interest therein by reason of
work, labor, services or materials supplied, furnished or claimed to have been
supplied and furnished in connection with the Hotel/Casino Facilities, or any of
them, upon Borrowers receipt of written notice from Agent Bank demanding the
release and discharge of such lien, said lien or claim shall be paid, released
and discharged or expunged of record within sixty (60) days following its
receipt of such notice.
Section 5.05. NO CHANGE IN CHARACTER OF BUSINESS.
Until Bank Facility Termination, (i) the Hotel/Casino Facilities shall be
operated by members of the Borrower Consolidation (whether through direct
ownership or, in the case of the Bluffs Run Facility, pursuant to the BR
Management Agreement), and (ii) the Borrower Consolidation shall not effect a
Material Adverse Change in the nature and character of its business at the
Hotel/Casino Facilities as presently conducted and as presently contemplated and
disclosed to Banks. Notwithstanding the foregoing, upon written notice to Agent
Bank, the Borrower Consolidation may make such changes to its business operation
as may be necessary or advisable to remain competitive in the gaming industry.
Section 5.06. PRESERVATION AND MAINTENANCE OF PROPERTIES AND
ASSETS; ACQUISITION OF ADDITIONAL PROPERTY. Until Bank Facility Termination,
Borrowers shall not remove, demolish, materially alter, discontinue the use of,
sell, transfer, assign, hypothecate or otherwise dispose of to any Person, any
part of their respective properties and assets necessary for the continuance of
their respective businesses, as presently conducted and as presently
contemplated, other than in the normal course of Borrowers' business and as
provided in Sections 5.01, 5.07 and 6.14. Furthermore, in the event Borrowers,
or any of them, or any Subsidiary thereof, shall acquire any other real property
or rights to the use of real property or any interest therein which is used in
any material manner in connection with the Hotel/Casino Facilities, Borrowers
shall or shall cause the Subsidiary, as applicable, concurrently with the
acquisition of such real property or the rights to the use of such real
property, to execute or cause the execution of such documents as may be
necessary to add such real property or rights to the use of real property as
Collateral under the Credit Facility.
Section 5.07. REPAIR OF PROPERTIES AND ASSETS. Until Bank
Facility Termination, Borrowers shall, at their own cost and expense, (a)
maintain, preserve and keep in a manner
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consistent with hotel and gaming casino operating practices generally applicable
to hotel/casino operations operating in the Lake Tahoe, Nevada, Central City,
Colorado and Council Bluffs, Iowa areas, their respective assets and properties,
including, but not limited to, the Collateral and all FF&E owned or leased by
Borrowers in good and substantial repair, working order and condition, ordinary
wear and tear excepted, (b) from time to time, make or cause to be made, all
necessary and proper repairs, replacements, renewals, improvements and
betterments to the Hotel/Casino Facilities, and (c) from time to time, make such
substitutions, additions, modifications and improvements as may be necessary and
as shall not materially impair the structural integrity, operating efficiency
and economic value of said assets included within the Hotel/Casino Facilities
(it being understood that the activities referred to above may, on a temporary
basis, impair the operating efficiency and economic value of such assets). All
alterations, replacements, renewals, or additions made pursuant to this Section
5.07 shall become and constitute a part of said assets and property and subject,
INTER ALIA, to the provisions of Section 5.01 and subject to the lien of the
Security Documentation.
Section 5.08. FINANCIAL STATEMENTS; REPORTS; CERTIFICATES
AND BOOKS AND RECORDS.
a. Until Bank Facility Termination, Borrowers shall, unless the
Agent Bank (with the written approval of the Requisite Lenders) otherwise
consents, at Borrowers' sole expense, deliver to the Agent Bank and each of the
Lenders a full and complete copy of each of the following and shall comply with
each of the following financial requirements:
(i) As soon as practicable, and in any event within forty-five
(45) days after the end of the first three (3) Fiscal Quarters of each
Fiscal Year, (a) the consolidated balance sheet of the Borrower
Consolidation as at the end of such Fiscal Quarter and the
consolidated statement of operations for such Fiscal Quarter, and a
statement of cash flows for the portion of the Fiscal Year ended with
such Fiscal Quarter and (b) the consolidating balance sheets and
statements of operations of the Borrower Consolidation 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 an
Authorized Officer of the Borrower Consolidation as fairly presenting
the financial condition, results of operations and cash flows of the
Borrower Consolidation in accordance with GAAP (other than footnote
disclosures) as at
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such date and for such periods, subject only to normal year-end
accruals and audit adjustments;
(ii) As soon as practicable, and in any event within forty-five
(45) days after the end of each Fiscal Quarter (including the fourth
(4th) Fiscal Quarter in any Fiscal Year), a pricing certificate in the
form marked "Exhibit G", affixed hereto and by this reference
incorporated herein and made a part hereof (the "Pricing Certificate")
setting forth a preliminary calculation of the Leverage Ratio as of
the last day of such Fiscal Quarter, and providing reasonable detail
as to the calculation thereof, which calculations shall be based on
the preliminary unaudited financial statements of the Borrower
Consolidation for such Fiscal Quarter, and as soon as practicable
thereafter, in the event of any material variance in the actual
calculation of the Leverage Ratio from such preliminary calculation, a
revised Pricing Certificate setting forth the actual calculation
thereof; provided, however, that in the event that Borrowers do not
deliver a Pricing Certificate when due, then until (but only until)
such Pricing Certificate is delivered as provided herein, the Leverage
Ratio shall be deemed, for the purpose of determining the Applicable
Margin, to be greater than 4.5 to 1.0 and the Applicable Margin
determined with respect thereto.
(iii) As soon as practicable, and in any event within one hundred
twenty (120) days after the end of each Fiscal Year, the consolidated
and consolidating balance sheet, income statement, statement of
retained earnings and cash flows (reconciled with year end audited
statements) of the Borrower Consolidation as at the end of such Fiscal
year, all in reasonable detail. Such financial statements shall be
prepared in accordance with GAAP and shall be accompanied by a report
of independent public accountants of recognized standing selected by
HCR and reasonably satisfactory to the Agent Bank (it being understood
that any "Big 5" accounting firm shall be automatically deemed
satisfactory to the Agent Bank), which report shall be prepared in
accordance with generally accepted auditing standards as at such date,
and shall not be subject to any qualifications or exceptions as to the
scope of the audit nor to any other qualification or exception
determined by the Requisite Lenders in their good faith business
judgment to be adverse to
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the interests of the Banks. Such accountants' report shall be
accompanied by a certificate stating that, in making the examination
pursuant to generally accepted auditing standards necessary for the
certification of such financial statements and such report, such
accountants have obtained no knowledge of any Default or, if, in the
opinion of such accountants, any such Default shall exist, stating the
nature and status of such Default, and stating that such accountants
have reviewed the Financial Covenants as at the end of such Fiscal
Year (which shall accompany such certificate) under Sections 6.01
through 6.07, have read such Sections (including the definitions of
all defined terms used therein) and that nothing has come to the
attention of such accountants in the course of such examination that
would cause them to believe that the same were not calculated by the
Borrower Consolidation in the manner prescribed by this Credit
Agreement. Such financial statements shall be certified by an
Authorized Officer of the Borrower Consolidation in the same manner as
required with respect to financial statements delivered pursuant to
Section 5.08(a)(i);
(iv) As soon as practicable, and in any event no later than
ninety (90) days following the commencement of each Fiscal Year, a
budget (including a Capital Expenditure budget) and projection by
Fiscal Quarter for that Fiscal Year and by Fiscal Year for the next
occurring two (2) consecutive Fiscal Years, INCLUDING for the first
such Fiscal Year, projected consolidated and consolidating balance
sheets, statements of operations and statements of cash flow of the
Borrower Consolidation, all in reasonable detail;
(v) Concurrently with the financial statements and reports
required pursuant to Sections 5.08(a)(i) and 5.08(a)(iii), Compliance
Certificate signed by an Authorized Officer;
(vi) As soon as practicable, and in any event within forty-five
(45) days (or, in the case of the fourth (4th) Fiscal Quarter in each
Fiscal Year, ninety (90) days) after the end of each Fiscal Quarter, a
written report (to the extent not reported under Section 5.08(vii)
hereinbelow), in form and detail reasonably acceptable to the Agent
Bank, with respect to the status of each New Venture, including the
amounts of New Venture
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Capital Expenditures and New Venture Investments made, and reasonably
anticipated to be made, with respect thereto; and
(vii) Promptly after the same are available, copies of each
annual report, proxy or financial statement or other report or
communication that shall have been sent to the stockholders of HCR,
and copies of all annual, regular, periodic and special reports
(including, without limitation, each 10Q and 10K report) and
registration statements which HCR shall have filed or be required to
file with the Securities and Exchange Commission under Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, and not
otherwise required to be delivered to the Banks pursuant to other
provisions of this Section 5.08.
b. Until Bank Facility Termination, Borrowers, and each of them,
shall keep and maintain complete and accurate books and records in accordance
with GAAP in all material respects, consistently applied. Borrowers, and each of
them, shall permit Banks and any authorized representatives of Banks to have
reasonable access to and to inspect, examine and make copies of the books and
records, any and all accounts, data and other documents of Borrowers at all
reasonable times upon the giving of reasonable notice of such intent. In
addition: (i) in the event of the occurrence of any Default or Event of Default,
or (ii) in the event any Material Adverse Change occurs, Borrowers shall
promptly, and in any event within three (3) Banking Business Days after actual
knowledge thereof by the corporate controller or a senior executive officer,
notify Agent Bank in writing of such occurrence.
c. Until Bank Facility Termination, Borrowers, and each of them,
shall furnish to Agent Bank, with sufficient copies for distribution to each of
the Banks any financial information or other information bearing on the
financial status of the Borrowers or their Subsidiaries, or any of them, which
is reasonably requested by Agent Bank or Requisite Lenders.
Section 5.09. INSURANCE. Until Bank Facility Termination,
Borrowers shall obtain, or cause to be obtained, and shall maintain or cause to
be maintained with respect to the Hotel/Casino Facilities, including without
limitation, the Riverboat, at their own cost and expense:
a. PROPERTY INSURANCE. Borrowers shall maintain a special causes of
loss (ISO or equivalent), including flood and earthquake, perils policy covering
the
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buildings and improvements, and any other permanent structures for one hundred
percent (100%) of the replacement cost. Upon the request of Agent Bank,
replacement cost for insurance purposes will be established by an independent
appraiser mutually selected by Borrowers and Agent Bank. The policy will include
Agreed Amount (waiving co-insurance), replacement cost valuation and building
ordinance endorsements. The policy will include a standard mortgagee clause (ISO
form or equivalent, i.e. Borrowers' acts will not impair mortgagee's right to
recover, exclusive payment of a loss to mortgagee and automatic notice of
cancellation or non-renewal to mortgagee) and provide that all losses in excess
of One Million Dollars ($1,000,000.00) be adjusted with the Agent Bank. The
Borrowers waive any and all rights of subrogation against Banks.
b. PERSONAL PROPERTY (INCLUDING MACHINERY, EQUIPMENT, FURNITURE,
FIXTURES, STOCK). Borrowers shall maintain "All Risk" property coverage for all
personal property owned, leased or for which Borrowers are legally liable. The
coverage will include a lender's loss payable endorsement in favor of Agent
Bank.
The policy providing real property and personal property coverages, as
specified in 5.09(a) and (b) hereinabove, may include a deductible of no more
than One Hundred Thousand Dollars ($100,000.00) for any single occurrence. Flood
deductibles can be no more than Two Hundred Fifty Thousand Dollars ($250,000.00)
for the Colorado Real Property and Tahoe Real Property and Five Hundred Thousand
Dollars ($500,000.00) for the Iowa Real Property, if a separate deductible
applies and earthquake deductibles can be no more than five percent (5%) of
insured value, if a separate deductible applies.
c. BUSINESS INTERRUPTION/EXTRA EXPENSE. Borrowers shall maintain
combined Business Interruption/Extra Expense coverage with a limit representing
no less than one hundred percent (100%) of the projected annual net profit plus
continuing expenses (including debt service) for the Hotel/Casino Facilities
with respect to all land-based facilities. Such coverage shall include
extensions for Off Premises Power losses at a Two Million Dollar ($2,000,000.00)
limit and an extended period of indemnity provision at ninety (90) days. These
coverages may have deductible of no greater than forty-eight (48) hours, or One
Hundred Thousand ($100,000.00), if a separate deductible applies. This coverage
will be specifically endorsed to include Agent Bank as loss payee.
d. BOILER AND MACHINERY. Borrowers shall maintain a Boiler and
Machinery policy for the Hotel/Casino
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Facilities written on a Comprehensive Form with a combined direct and indirect
limit of no less than Twenty Million Dollars ($20,000,000.00). The policy shall
include extensions for Agreed Amount (waiving co-insurance) and Replacement Cost
Valuation. The policy may contain deductibles of no greater than One Hundred
Thousand Dollars ($100,000.00) direct and forty-eight (48) hours indirect.
e. CRIME INSURANCE. Borrowers shall obtain a comprehensive crime
policy, including the following coverages:
(i) employee dishonesty - Two Million Dollars ($2,000,000.00);
(ii) money and securities (inside) - Two Million Dollars
($2,000,000.00);
(iii) money and securities (outside) - Two Million Dollars
($2,000,000.00);
(iv) depositor's forgery - Two Million Dollars ($2,000,000.00);
(v) computer fraud - Two Million Dollars ($2,000,000.00).
The policy must be amended so that money is defined to include "tokens and
chips" (as defined in Regulation 12.010 of the Nevada Gaming Authorities). The
policy may contain deductibles of no greater than One Hundred Thousand Dollars
($100,000.00) for all coverages listed above.
f. COMMERCIAL GENERAL LIABILITY (1996 FORM OR EQUIVALENT). Borrowers
shall maintain a Commercial General Liability policy with a One Million Dollar
($1,000,000.00) combined single limit for bodily injury and property damage,
including Products Liability, Contractual Liability, and all standard policy
form extensions. The policy must provide a Two Million Dollar ($2,000,000.00)
general aggregate (per location, if multi-location risk) and be written on an
"occurrence form". The policy will include extensions for Liquor Legal Liability
and Employee Benefits Legal Liability coverages. The policy will also include
Professional Liability coverage for all exposures associated with the operation
of health clubs/spa facilities. If the general liability policy contains a
self-insured retention, it shall be no greater than One Hundred Thousand Dollars
($100,000.00) per occurrence, with an aggregate retention of no more than Two
Million Five Hundred Thousand Dollars ($2,500,000.00), including expenses.
The policy shall be endorsed to include Agent
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Bank as an additional insured on behalf of the Banks. Definition of additional
insured shall include all officers, directors, employees, agents and
representatives of the additional insured. The coverage for additional insured
shall apply on a primary basis irrespective of any other insurance whether
collectible or not (ISO Endorsement Form CG 20261185 Additional Insured -
Designated Person or Organization or Equivalent).
g. AUTOMOBILE. Borrowers shall maintain a comprehensive Automobile
Liability Insurance Policy written under coverage "symbol 1", providing a One
Million Dollar ($1,000,000.00) combined single limit for bodily injury and
property damage covering all owned, non-owned and hired vehicles of the
Borrowers. If the policy contains a self insured retention it shall be no
greater than One Hundred Thousand Dollars ($100,000.00) per occurrence with an
aggregate retention of no more than Two Million Five Hundred Thousand Dollars
($2,500,000.00) including expenses. The following additional coverages must be
purchased by Borrowers:
(i) GARAGE LIABILITY. A One Million Dollar ($1,000,000.00)
combined single limit for bodily and property damage for the garage
operation.
(ii) GARAGEKEEPERS LEGAL LIABILITY. One Million Dollar
($1,000,000.00) limit for comprehensive and collision coverages for
physical damage to vehicles in the Borrowers' care, custody and
control. The policy can be subject to a deductible of no greater than
Five Thousand Dollars ($5,000.00) for each auto and Twenty-Five
Thousand Dollars ($25,000.00) for each loss.
h. WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE. Borrowers
shall maintain a standard workers compensation policy or policies covering the
states of Nevada, Colorado, Iowa and any other state where the Borrower
Consolidation is operating, including employers liability coverage subject to a
limit of no less than One Million Dollars ($1,000,000.00) each employee, One
Million Dollars ($1,000,000.00) each accident, One Million Dollars
($1,000,000.00) policy limit. The policy shall include endorsements for
Voluntary Compensation Coverage, Stop Gap Liability, Long-Shoreman's and Harbors
Workmans Compensation Act and Maritime Coverages (as applicable). If the
Borrowers have elected to self-insure Workers Compensation coverage in the State
of Nevada, the Agent Bank must be furnished with a copy of the certificate from
the state permitting self-insurance and evidence of a Stop Loss/Aggregate Excess
Workers Compensation policy with a specific retention of no greater
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than Three Hundred Thousand Dollars ($300,000.00).
i. MARINE INSURANCE (FOR ALL VESSELS OWNED, LEASED OR FOR WHICH
THE BORROWER IS LEGALLY LIABLE).
(i) HULL AND MACHINERY COVERAGE. This policy will provide the
broadest "all risk" form available (including SR & CC and war risk
extensions) property coverage covering each vessel for physical damage
at a value that represents one hundred percent (100%) of the
replacement cost for each vessel. The policy will include Agreed
Amount (waving co-insurance), Replacement Cost Valuation and Liner
Negligence Clause endorsements. The policy may contain a deductible of
no greater than Two Hundred Fifty Thousand Dollars ($250,000.00) per
occurrence. This policy shall include appropriate mortgagee, breach of
warranty and loss payee endorsements in favor of Agent Bank.
(ii) CASINO BOAT BUSINESS INTERRUPTION. Borrowers will purchase
business interruption coverage under a "comprehensive facility form"
indemnifying each vessel operation for loss of net profits and
continuing expenses (including debt service) for loss arising from
casualty to the vessel and any other cause beyond the control of the
Borrowers. The limit purchase must represent no less than seventy-five
percent (75%) of the annual net profit plus continuing expenses. The
policy may have a deductible of no greater than fourteen (14) days for
each vessel. This coverage will be specifically endorsed to include
Agent Bank as loss payee.
(iii) PROTECTION AND INDEMNITY. The protection and indemnity
coverage will be written with One Million Dollars ($1,000,000.00)
combined single limit for bodily injury and property damage, including
all standard policy form extensions. The policy shall be written on an
occurrence form. The Agent Bank on behalf of the Lenders will be
included as an additional insured under the policy.
(iv) COMPREHENSIVE POLLUTION LIABILITY. Borrower shall purchase
Comprehensive Pollution Liability coverage with a limit of no less
than Ten Million Dollars ($10,000,000.00) per incident covering any
loss or damage resulting from any discharge, emission, spillage or
leakage on or into water, including governmental mandated cleanups.
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The limits can be secured through the purchase of Primary and Excess
policies as long as all coverages follow form. The Agent Bank and
other Lenders will be included as Additional Insureds under the
policy.
j. AIRCRAFT POLICY. Borrowers shall maintain aircraft liability
coverage with a limit of no less Fifty Million Dollars ($50,000,000.00) on all
owned and leased aircraft. The policy shall also provide physical damage
coverage for all "owned" aircraft with a deductible of no greater than Fifty
Thousand Dollars ($50,000.00).
k. UNDERGROUND STORAGE TANK LIABILITY. Borrowers shall maintain an
underground storage tank liability policy providing first party (property
damage) and third party (bodily/property damage) coverages for environmental
claims resulting from underground storage tanks at the Hotel/Casino Facilities.
The policy will include coverage for all governmental and regulatory agency
mandated clean ups. The policy shall provide a limit of no less than Five
Million Dollars ($5,000,000.00) for each occurrence. The policy may contain a
deductible of no greater than Five Hundred Thousand Dollars ($500,000.00) for
first and third party claims. This provision may be satisfied in part by HTMC's
participation in and compliance with NRS 590.700 through 590.920, inclusive, and
the regulations promulgated thereunder. Borrowers shall provide Agent Bank proof
of registration of all regulated underground storage tanks.
l. If Borrowers' general liability and automobile policies include a
self-insured retention, it is agreed and fully understood that Borrowers are
solely responsible for payment of all amounts due within said self-insured
retentions. Any Indemnification/Hold Harmless provision is extended to cover all
liabilities associated with said self-insured retentions.
m. UMBRELLA/BUMBERSHOOT LIABILITY. An Umbrella/Bumbershoot Liability
policy shall be purchased with a limit of not less than One Hundred Million
Dollars ($100,000,000.00) providing excess coverage over all limits and
coverages indicated in paragraphs (f), (g), (h) and subsections (iii) and (iv)
of (i) above. The limits can be obtained by a combination of Primary and Excess
Umbrella/Bumbershoot policies, provided that all layers follow form with the
underlying policies indicated in (f), (g), (h) and subsections (iii) and (iv) of
(i) and are written on an "occurrence" form. This policy shall be endorsed to
include the Agent Bank as an additional insured on behalf of the Banks.
n. All policies indicated above shall be
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written with insurance companies licensed and admitted to do business in all
states where the Borrower Consolidation, or any of them, is operating and shall
be rated no lower than "A XII" in the most recent addition of A.M. Best and "AA"
in the most recent edition of Standard & Poor's, or such other carrier
reasonably acceptable to Agent Bank. All policies discussed above shall be
endorsed to provide that in the event of a cancellation, non-renewal or material
modification, Agent Bank shall receive thirty (30) days prior written notice
thereof. The Borrowers shall furnish Agent Bank with Certificates of Insurance
executed by an authorized agent evidencing compliance with all insurance
provisions discussed above on an annual basis. The Borrowers shall also furnish
policy endorsements evidencing Agent Bank's appropriate status (mortgagee, loss
payee, additional insured, etc.) under each policy. Certificates of Insurance
executed by an authorized agent of each carrier providing insurance evidencing
continuation of all coverages will be provided on the Amendment Effective Date
and annually on or before ten (10) days prior to the expiration of each policy.
All certificates and other notices related to the insurance program shall be
delivered to Agent Bank concurrently with the delivery of such certificates or
notices to such carrier or to Borrowers, or any of them, as applicable.
o. Any other insurance reasonably requested by Agent Bank or
Requisite Lenders in such amounts and covering such risks as may be reasonably
required and customary in the hotel/casino industry in locations of the
Hotel/Casino Facilities.
Section 5.10. TAXES. Throughout the term of the Credit
Facility, Borrowers shall prepare and timely file or cause to be prepared and
timely filed all material federal, state and local tax returns required to be
filed by them, and Borrowers shall pay and discharge prior to delinquency all
material taxes, assessments and other governmental charges or levies imposed
upon them, or in respect of any of their respective properties and assets except
such taxes, assessments and other governmental charges or levies, if any, as are
being contested in good faith by Borrowers in the manner which is set forth for
such contests by Section 4.07 herein.
Section 5.11. NOTICE OF CONTESTED MATTERS. Borrowers shall
promptly, but in any event no later than thirty (30) days following actual
knowledge thereof by any senior executive officer, give Agent Bank written
notice of all matters described in Section 5.04 and 5.10, which are being
contested in the manner described therein, involving amounts in excess of Two
Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate.
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Section 5.12. ADVANCES. Until Bank Facility Termination, if
any Borrower should fail (i) to perform or observe, or (ii) to cause to be
performed or observed, any covenant or obligation of such Borrower under this
Credit Agreement or any of the other Loan Documents to pay any premium for the
maintenance of the insurance coverages required under Section 5.09 or fail to
pay any rent or payment obligation under any of the Land Leases, the failure of
which could reasonably be expected to result in a Material Adverse Change, then
Agent Bank, upon the giving of reasonable notice to the Borrowers and the
approval of Requisite Lenders, may (but shall be under no obligation to) take
such steps as are necessary to remedy any such non-performance or non-observance
and provide for payment thereof. All amounts reasonably advanced by Agent Bank
or Lenders pursuant to this Section 5.12 shall become an additional obligation
of Borrowers to Lenders secured by the Security Documentation and other Loan
Documents, shall reduce the amount of Available Borrowings and shall become due
and payable by Borrowers on the next interest payment date, together with
interest thereon at a rate per annum equal to the Default Rate (such interest to
be calculated from the date of such advancement to the date of payment thereof
by Borrowers).
Section 5.13. FURTHER ASSURANCES. Borrowers, Agent Bank
and each of the Banks will, at the expense of the Borrowers, do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, such amendments or supplements hereto or to any of the Loan Documents
and such further documents, instruments and transfers as any such party may
reasonably require for the curing of any defect in the execution or
acknowledgement hereof or in any of the Loan Documents, or in the description of
the Collateral Properties or other Collateral or for the proper evidencing of
giving notice of each lien or security interest securing repayment of the Bank
Facilities. Further, upon the execution and delivery of the Security
Documentation and each of the Loan Documents and thereafter, from time to time,
Borrowers shall cause the Security Documentation and each of the Loan Documents
and each amendment and supplement thereto to be filed, registered and recorded
and to be refiled, re-registered and re-recorded in such manner and in such
places as may be reasonably required by the Requisite Lenders or Agent Bank, in
order to publish notice of and fully protect the liens of the Security
Documentation and to protect or continue to perfect the security interests
created by the Security Documentation in the Collateral and to perform or cause
to be performed from time to time any other actions required by law and execute
or cause to be executed any and all instruments of further assurance that may be
necessary for such publication, perfection, continuation and protection.
Section 5.14. INDEMNIFICATION. Borrowers agree to
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and do hereby jointly and severally indemnify, protect, defend and save harmless
Agent Bank and each of the Banks and their respective directors, trustees,
officers, employees, agents, attorneys and shareholders (individually an
"Indemnified Party" and collectively the "Indemnified Parties") from and against
any and all losses, damages, expenses or liabilities of any kind or nature from
any investigations, suits, claims, demands or other proceedings, including
reasonable counsel fees incurred in investigating or defending such claim,
suffered by any of them and caused by, relating to, arising out of, resulting
from, or in any way connected with this Credit Agreement, with any other Loan
Document or with the transactions contemplated herein and thereby; provided,
however, Borrowers shall not be obligated to indemnify, protect, defend or save
harmless an Indemnified Party if, and to the extent, the loss, damage, expense
or liability was caused by (a) the gross negligence or intentional misconduct of
such Indemnified Party, or (b) the breach of this Credit Agreement or any other
Loan Document by such Indemnified Party or the breach of any laws, rules or
regulations by an Indemnified Party (other than those breaches of laws arising
from any Borrower's default). In case any action shall be brought against any
Indemnified Party based upon any of the above and in respect to which indemnity
may be sought against Borrowers, Agent Bank shall promptly notify Borrowers in
writing, and Borrowers shall assume the defense thereof, including the
employment of counsel selected by Borrowers and reasonably satisfactory to Agent
Bank, the payment of all costs and expenses and the right to negotiate and
consent to settlement. Upon reasonable determination made by an Indemnified
Party that such counsel would have a conflict representing such Indemnified
Party and Borrowers, the applicable Indemnified Party shall have the right to
employ, at the expense of Borrowers, one separate counsel in any such action and
to participate in the defense thereof. Borrowers shall not be liable for any
settlement of any such action effected without their consent, but if settled
with Borrowers' consent, or if there be a final judgment for the claimant in any
such action, Borrowers agree to indemnify, defend and save harmless such
Indemnified Parties from and against any loss or liability by reason of such
settlement or judgment. In the event that any Person is adjudged by a court of
competent jurisdiction not to have been entitled to indemnification under this
Section 5.14, it shall repay all amounts with respect to which it has been so
adjudged, together with interest thereon at the Base Rate plus the Applicable
Margin. If and to the extent that the indemnification provisions contained in
this Section 5.14 are unenforceable for any reason, the Borrowers hereby agree
to make the maximum contribution to the payment and satisfaction of such
obligations that is permissible under applicable law. The provisions of this
Section 5.14 shall
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survive the termination of this Credit Agreement, the repayment of the Bank
Facilities and the assignment or subparticipation of all or any portion of the
Syndication Interest held by any Lender pursuant to Section 10.10.
Section 5.15. INSPECTION OF THE COLLATERAL AND APPRAISAL.
Until Bank Facility Termination, Borrowers shall provide or cause to be provided
to Banks and any authorized representatives of Banks, accompanied by
representatives of Borrowers, the reasonable right of entry and free access to
the Hotel/Casino Facilities to inspect same on reasonable prior notice to
Borrowers during normal business hours. If at any time a Qualified Appraisal of
the Hotel/Casino Facilities, or any of them, is required to be made by any
banking regulatory authority or, after the occurrence of an Event of Default,
determined to be necessary by Agent Bank or Requisite Lenders, Borrowers agree
to pay all reasonable fees, costs and expenses incurred by Agent Bank in
connection with the preparation of such Qualified Appraisal; provided that
Borrowers shall not be required to pay for more than one (1) Qualified Appraisal
during each Fiscal Year.
Section 5.16. COMPLIANCE WITH OTHER LOAN DOCUMENTS, EXECUTION
OF SUBSIDIARY GUARANTIES AND PLEDGE OF RESTRICTED SUBSIDIARY STOCK. Borrowers
shall comply with each and every term, condition and agreement contained in the
Loan Documents to which they, or any of them, are a party. Borrowers shall
notify Agent Bank in writing on or before ten (10) Banking Business Days
following the creation of each Subsidiary, together with a description of each
New Venture owned or to be acquired by such Subsidiary. Borrowers shall cause
each Subsidiary which is to become a Restricted Subsidiary created or otherwise
occurring from time to time following the Closing Date to join in the execution
of the Subsidiary Guaranty in favor of Agent Bank and to deliver the original
thereof, or a duly executed Certificate of Joinder in the form attached to the
Subsidiary Guaranty as Exhibit A, to Agent Bank promptly, but in no event later
than thirty (30) days following the creation or other occurrence of such
Restricted Subsidiary. HCR shall deliver the applicable original stock
certificates and shall execute or cause to be executed a Stock Pledge (Gaming)
or Stock Pledge (General), as applicable, no later than thirty (30) days
following the creation or other occurrence of each Restricted Subsidiary. In the
case of a Stock Pledge (Gaming), HCR shall use all reasonable efforts to cause
all necessary Governmental Authorities to consent to the delivery of the
applicable stock certificates, together with a stock power executed in blank, to
Agent Bank as soon as reasonably practical. In the case of a Stock Pledge
(General), the applicable stock certificates, together with a stock power
executed in blank, shall be delivered to Agent Bank
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concurrently with the execution of the Stock Pledge (General). If any Restricted
Subsidiary is redesignated as an Unrestricted Subsidiary in accordance with this
Credit Agreement, then the Lenders and the Agent Bank shall promptly take such
actions as may be reasonably required by the Borrowers, at Borrowers' expense,
to cause such Person to be released from its obligations under the Subsidiary
Guaranty and the stock of such Person to be released from the Stock Pledge
(General) or Stock Pledge (Gaming), as applicable.
Section 5.17. SUITS OR ACTIONS AFFECTING BORROWERS. Until Bank
Facility Termination, Borrowers shall promptly advise Agent Bank in writing
within ten (10) Banking Business Days of Borrowers' knowledge of (a) any claims,
litigation, proceedings or disputes (whether or not purportedly on behalf of
Borrowers, or any of them) against, or to the actual knowledge of Borrowers,
threatened or affecting Borrowers, or any of them, which could reasonably be
expected to result in an award of monetary damages in excess of Three Million
Dollars ($3,000,000.00), (b) any material labor controversy resulting in or
threatening to result in a strike against the Hotel/Casino Facilities, or (c)
any proposal by any Governmental Authority to acquire any of the material assets
or business of Borrowers.
Section 5.18. ACCOUNT ANALYSIS OF OPERATING ACCOUNTS.
Until Bank Facility Termination, the Borrower Consolidation shall maintain the
Designated Deposit Account at the principal office of Agent Bank to facilitate
the operational process of the Bank Facilities. Until Bank Facility Termination,
all operating and payroll accounts maintained by Borrowers at a branch of the
Agent Bank shall be maintained on at least a break-even basis, in accordance
with monthly analysis reports, settled quarterly.
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Section 5.19. CONSENTS OF AND NOTICES TO GAMING
AUTHORITIES.
a. On or before the Amendment Effective Date, HCR shall make all
necessary applications to and procure all necessary consents and approvals of
the applicable Gaming Authorities to the: (i) pledge of the stock of HTMC,
HCRSC, HCCMC, HIMC, HBR and HBRMC pursuant to the HCR Stock Pledges, (ii) the
restrictions on transfer and hypothecation of the stock of HTMC, HCRSC, HIMC,
HCCMC, HBR and HBRMC contained in Sections 6.16 and 7.01(o) and (p), and (iii)
the terms set forth in the Credit Agreement and each of the Loan Documents, to
the extent which may be required by Colorado Gaming Authorities and the Iowa
Gaming Authorities, except as may be required in connection with the exercise or
remedies under the Security Documentation following an Event of Default; and
b. Borrowers shall make all required reports and disclosures to the
applicable Gaming Authorities, including, but not limited to, reporting this
Credit Facility transaction within the time period required by Regulation
8.130(2) of the Regulations of the Nevada Gaming Authorities and as may be
required by the Colorado Gaming Authorities and the Iowa Gaming Authorities.
Section 5.20. TRADENAMES, TRADEMARKS AND SERVICEMARKS.
Borrowers shall not assign or in any other manner alienate their interest in any
material tradenames, trademarks or servicemarks relating or pertaining to the
Hotel/Casino Facilities during the term of the Credit Facility, except pursuant
to the Security Documentation. Borrowers shall not change their names without
first giving thirty (30) days prior written notice to Agent Bank, together with
evidence reasonably satisfactory to the Agent Bank that all notices and other
documents required to be delivered, recorded or filed in order to perfect and
protect the security interest granted by the Borrowers to the Banks in such
trademarks, tradenames and servicemarks and the other Collateral have been so
delivered, recorded and/or filed.
Section 5.21. NOTICE OF HAZARDOUS MATERIALS. Within
ten (10) Banking Business Days after Borrowers obtaining actual knowledge
thereof, Borrowers shall immediately advise Agent Bank in writing and deliver a
copy of (a) any and all enforcement, clean-up, removal or other governmental or
regulatory actions expected to cost in excess of One Million Dollars
($1,000,000.00) instituted, completed or threatened pursuant to any applicable
Hazardous Materials Laws relating to any Hazardous Materials (as defined in the
Environmental Certificate) affecting the Collateral; (b) all claims made or
threatened by any third party against Borrowers or the
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Hotel/Casino Facilities in excess of One Million Dollars ($1,000,000.00)
relating to damage, contribution, cost recovery compensation, loss or injury
resulting from any Hazardous Materials (the matters set forth in clauses (a) and
(b) above are hereinafter referred to as "Hazardous Materials Claims"); and (c)
the discovery of any occurrence or condition on any real property adjoining or
in the vicinity of the Hotel/Casino Facilities that could reasonably be expected
to cause the Borrowers, or any of them, or any part thereof to be classified as
a "border-zone property" under the provisions of, or to be otherwise subject to
any restrictions on the ownership, occupancy, transferability or use of the
Hotel/Casino Facilities under, any Hazardous Materials Laws.
Section 5.22. COMPLIANCE WITH STATUTES, ETC. HCR
will, and will cause each of its Subsidiaries to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all Governmental Authorities, domestic or foreign, in respect of the conduct of
its business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls) where non- compliance could reasonably be expected to result in a
Material Adverse Change.
Section 5.23. COMPLIANCE WITH ACCESS LAWS.
a. Borrowers agree that Borrowers, the Hotel/Casino Facilities and
the Collateral Properties shall at all times comply in all material respects
with the requirements of the Americans with Disabilities Act of 1990; the Fair
Housing Amendments Act of 1988; and other federal, state or local laws or
ordinances related to disabled access; or any statute, rule, regulation,
ordinance, order of Governmental Authorities, or order or decree of any court
adopted or enacted with respect thereto, as now existing or hereafter amended or
adopted (collectively, the "Access Laws"). At any time (but no more frequently
than once annually), Agent Bank may require a certificate of compliance with the
Access Laws. Agent Bank may also require a certificate of compliance (but no
more frequently than once annually) with the Access Laws from an architect,
engineer, or other third party acceptable to Agent Bank.
b. Borrowers agree to give prompt written notice to Agent
Bank of the receipt by Borrowers of any claims of violation of any of the Access
Laws and of the commencement of any proceedings or investigations which relate
to compliance with any of the Access Laws (except proceedings or investigations
which do not involve material claims of violation or non-compliance).
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c. Borrowers shall indemnify, defend and hold harmless
Indemnified Parties from and against any and all claims, demands, damages,
costs, expenses, losses, liabilities, penalties, fines and other proceedings
including, without limitation, reasonable attorneys' fees and expenses arising
directly or indirectly from or out of or in any way connected with any failure
of the Hotel/Casino Facilities or the Collateral Properties to comply with any
of the Access Laws. The obligations and liabilities of Borrowers under this
section shall survive Bank Facility Termination, but shall terminate upon any
satisfaction, assignment, judicial or nonjudicial foreclosure proceeding, or
delivery of a deed in lieu of foreclosure for violations relating to conditions
not in existence as of the date of such satisfaction, assignment, judicial or
nonjudicial foreclosure proceeding or deed in lieu of foreclosure.
Section 5.24. INTEREST RATE PROTECTION.
a. On or before one hundred eighty (180) days following the
Amendment Effective Date, Borrowers shall enter into Interest Rate Hedges for an
aggregate principal amount of no less than fifty percent (50.0%) of the Total
Funded Debt then outstanding (exclusive of Contingent Liabilities) which
Interest Rate Hedges shall be for a term of no less than three (3) years.
b. On or before one hundred eighty (180) days following the
Commitment Increase Effective Date, Borrowers shall enter into Interest Rate
Hedges for an aggregate principal amount of no less than fifty percent (50.0%)
of the amount of the Commitment Increase and for a term of no less than three
(3) years.
Section 5.25. PROHIBITION ON PREPAYMENT OR DEFEASANCE
OF SENIOR SUBORDINATED NOTES. Notwithstanding anything contained in the Credit
Agreement to the contrary, none of Borrowers nor any Subsidiary of Borrowers
shall, except with the prior written consent of the Requisite Lenders, purchase,
redeem, retire or otherwise acquire for value, or set apart any money for a
sinking, defeasance or other analogous fund for, the purchase, redemption,
retirement or other acquisition of, or make any voluntary payment or prepayment
of the principal of or interest on, or any other amount owing in respect of, the
Senior Subordinated Notes, except: (i) for regularly scheduled payments of
principal and interest in respect of such Senior Subordinated Notes required
pursuant to the instruments evidencing such Senior Subordinated Notes, or (ii)
prepayments, purchases, redemptions retirements, acquisitions or setting apart
of money as aforesaid financed with the proceeds of other Subordinated Debt or
as otherwise
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permitted under Section 6.11 herein.
Section 5.26. YEAR 2000 COMPLIANCE. Borrowers shall
perform all acts reasonably necessary to ensure that (i) Borrowers and the hotel
casino and related businesses conducted by Borrowers at the Hotel/Casino
Facilities become Year 2000 Compliant in a timely manner. Such acts shall
include, without limitation, performing a comprehensive review and assessment of
all of Borrowers' material systems and adopting a detailed plan, with itemized
budget, for the remediation, monitoring and testing of such systems. As used in
this paragraph, "Year 2000 Compliant" shall mean, in regard to any entity, that
all material software, hardware, firmware, equipment, goods or systems of the
Borrower Consolidation material to the business operations or financial
condition of the Borrower Consolidation, will properly perform date sensitive
functions before, during and after the year 2000. Borrowers shall, promptly upon
request, provide to Agent Bank such certifications or other evidence of
Borrowers' compliance with the terms of this paragraph as Agent Bank or
Requisite Lenders may from time to time reasonably require.
Section 5.27. DESIGNATION OF BANK FACILITIES AS DESIGNATED
SENIOR DEBT. Concurrently with the occurrence of the Amendment Effective Date,
HCR shall cause the Bank Facilities to be designated as "Designated Senior Debt"
as defined and described in the Indenture pursuant to an officers' certificate
issued by HCR and delivered to the trustee under the Indenture, all in
accordance with the requirements and procedures set forth in the Indenture.
ARTICLE VI
FINANCIAL COVENANTS
From and after the Amendment Effective Date, until payment in
full of all sums owing hereunder and under the Notes and the occurrence of Bank
Facilities Termination, the Borrower Consolidation agrees, as set forth below,
to comply or cause compliance with the following:
Section 6.01. LEVERAGE RATIO. Commencing as of the first
Fiscal Quarter ending subsequent to the Amendment Effective Date and continuing
as of each Fiscal Quarter end thereafter occurring until Bank Facilities
Termination, the Borrower Consolidation shall maintain a Leverage Ratio no
greater than the ratios described hereinbelow to be calculated as of the end of
each Fiscal Quarter in accordance with the following schedule:
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<TABLE>
<CAPTION>
MAXIMUM
FISCAL QUARTER END LEVERAGE RATIO
------------------ --------------
<S> <C>
As of the end of the first Fiscal
Quarter following the Amendment
Effective Date, through the end of
the eighth Fiscal Quarter following
the Amendment Effective Date 4.75 to 1.00
As of the end of the ninth Fiscal
Quarter following the Amendment
Effective Date through the end of
the twelfth Fiscal Quarter
following the Amendment Effective 4.25 to 1.00
Date
As of the end of the thirteenth
Fiscal Quarter following the
Amendment Effective Date through
the end of the sixteenth Fiscal
Quarter following the Amendment 3.75 to 1.00
Effective Date
As of the end of the seventeenth
Fiscal Quarter following the
Amendment Effective Date, and as of
the end of each Fiscal Quarter
thereafter occurring until the
occurrence of Bank Facilities 3.50 to 1.00
Termination
</TABLE>
Section 6.02. SENIOR LEVERAGE RATIO. Commencing as of the
first Fiscal Quarter ending subsequent to the Amendment Effective Date and
continuing as of each Fiscal Quarter end until Bank Facilities Termination, the
Borrower Consolidation shall maintain a Senior Leverage Ratio no greater than
the ratios described hereinbelow to be calculated as of the end of each Fiscal
Quarter in accordance with the following schedule:
<TABLE>
<CAPTION>
MAXIMUM
FISCAL QUARTER END LEVERAGE RATIO
------------------ --------------
<S> <C>
As of the end of the first Fiscal
Quarter following the Amendment
Effective Date through the end of
the sixth Fiscal Quarter following
the Amendment Effective Date 3.30 to 1.00
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As of the end of the seventh Fiscal
Quarter following the Amendment
Effective Date through the end of
the twelfth Fiscal Quarter
following the Amendment Effective
Date 3.00 to 1.00
As of the end of the thirteenth
Fiscal Quarter following the
Amendment Effective Date through
the end of the sixteenth Fiscal
Quarter following the Amendment 2.50 to 1.00
Effective Date
As of the end of the seventeenth
Fiscal Quarter following the
Amendment Effective Date and as of
the end of each Fiscal Quarter
thereafter occurring until the
occurrence of Bank Facilities
Termination 2.25 to 1.00
</TABLE>
Section 6.03. FIXED CHARGE COVERAGE RATIO. Commencing as of
the first Fiscal Quarter ending subsequent to the Amendment Effective Date and
continuing as of each Fiscal Quarter end until the occurrence of Bank Facilities
Termination, the Borrower Consolidation shall maintain a Fixed Charge Coverage
Ratio no less than 1.50 to 1.00.
Section 6.04. ADJUSTED FIXED CHARGE COVERAGE RATIO. Commencing
as of the first Fiscal Quarter ending subsequent to the Amendment Effective Date
and continuing as of each Fiscal Quarter end until the occurrence of Bank
Facilities Termination, the Borrower Consolidation shall maintain an Adjusted
Fixed Charge Coverage Ratio no less than 1.10 to 1.00.
Section 6.05. MINIMUM NET WORTH. The Borrower Consolidation
shall maintain as of the end of each Fiscal Quarter following the Amendment
Effective Date, a Net Worth equal to or greater than the sum of (a) ninety
percent (90%) of the Net Worth of the Borrower Consolidation as of the Amendment
Effective Date, after giving effect to the BR Acquisition, the payment of the BR
Acquisition Consideration and all related fees and expenses incurred in
connection therewith, and the incurrence of Indebtedness in connection
therewith, plus (b) commencing with the Fiscal Quarter ending February 29, 2000,
ninety percent (90%) of Net Income of the Borrower Consolidation after taxes
realized as of each Fiscal Quarter end (without reduction for any net losses),
plus (c) seventy-five percent (75%) of the proceeds received in Cash or Cash
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Equivalents (net of reasonable expenses, including, without limitation,
underwriting commissions and discounts and legal and accounting costs, if any)
from all additional Equity Offerings made after the Amendment Effective Date,
other than with respect to the proceeds of Equity Offerings which have been
declared and identified for Investment in Unrestricted Subsidiaries under
Section 6.08(p), less (d) one hundred percent (100%) of all Investments in
Unrestricted Subsidiaries, exclusive of any Investments made pursuant to Section
6.08(p), plus (e) to the extent not included as Net Income of the Borrower
Consolidation in subsection (b) above, one hundred percent (100%) of the amount
of all Investment Returns (other than Investment Returns with respect to
Investments made pursuant to Section 6.08(p) or Investment Returns constituting
interest).
Section 6.06. CAPITAL EXPENDITURE REQUIREMENT. During
each Fiscal Year, commencing with the Fiscal Year commencing December 1, 1998,
Borrowers shall make or cause to be made, Capital Expenditures to the
Hotel/Casino Facilities in a minimum aggregate amount equal to or greater than
two percent (2%) of gross revenues ("Minimum Cap Ex Requirement") derived from
the Hotel/Casino Facilities by the Borrower Consolidation during the immediately
preceding Fiscal Year. Provided further, however, to the extent Borrowers spend
less than the minimum amount required for Capital Expenditures during any Fiscal
Year, the unused amount shall be set aside in a reserve account and shall be
expended by Borrowers during the next occurring Fiscal Year in addition to the
minimum aggregate amount required during the next occurring Fiscal Year. No
Default or Event of Default under this Section 6.06 will be deemed to occur
until such time as the unused amount set aside in the reserve account is not
utilized in such next occurring Fiscal Year.
Section 6.07. CONTINGENT LIABILITY(IES). The Borrower
Consolidation shall not directly or indirectly incur any Contingent
Liability(ies) in excess of the cumulative aggregate principal amount of Ten
Million Dollars ($10,000,000.00) at any time outstanding without the prior
written consent of Majority Lenders. In no event shall any Contingent
Liabilities be secured by a Lien on any property or assets of any member of the
Borrower Consolidation.
Section 6.08. INVESTMENT RESTRICTIONS. Other than
Investments permitted herein or approved in writing by Majority Lenders, the
Borrower Consolidation shall not make any Investments (whether by way of loan,
stock purchase, capital contribution, or otherwise) other than the following:
(a) Cash, Cash Equivalents and direct
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obligations of the United States Government;
(b) Prime commercial paper (AA rated or better);
(c) Certificates of Deposit or Repurchase Agreement issued by a
commercial bank having capital surplus in excess of One Hundred Million Dollars
($100,000,000.00);
(d) Money market or other funds of nationally recognized institutions
investing solely in obligations described in (a), (b) and (c) above;
(e) Loans and advances to officers, employees and directors in the
ordinary course of business not exceeding Five Hundred Thousand Dollars
($500,000.00) in the aggregate at any one time; and
(f) Investments in Unrestricted Subsidiaries at the discretion of
Borrowers up to the maximum cumulative aggregate amount of Sixty Million Dollars
($60,000,000.00) (without giving effect to Investments made pursuant to
subsection (p) below), measured by the amount actually invested without
adjustment for subsequent increases or decreases in the value of such
Investment, but the outstanding aggregate amount of such Investments shall be
deemed reduced by the aggregate amount of Investment Returns received by the
Borrower Consolidation;
(g) Investments in Restricted Subsidiaries and any member of the
Borrower Consolidation, so long as after giving effect to such Investment no
Default or Event of Default would result from the making of such Investment;
(h) Capital Expenditures for the Hotel/Casino Facilities during
each Fiscal Year;
(i) Investments received by any member of the Borrower Consolidation
from any other member of the Borrower Consolidation;
(j) Investments received in settlement of arms- length disputes with
non-Affiliates of Borrowers;
(k) Investments received as consideration for asset sales made in
arms-length transactions for fair market consideration;
(l) extensions of credit to customers in the ordinary course of
business;
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(m) Contingent Liabilities and Indebtedness permitted to be incurred
under Sections 6.07 and 6.10;
(n) Accounts receivable, endorsements for collection or deposits
arising in the ordinary course of business;
(o) Investments relating to obligations of employees or management of
Borrower Consolidation relating to the purchase by such Persons of equity
interests in the Borrower Consolidation;
(p) Investments in Unrestricted Subsidiaries may be made in excess of
the amount permitted pursuant to clause (f), provided that such excess amount is
funded through capital contributions, additional paid in capital or equity
investments in HCR or through Equity Offerings, in each case which have been
declared and identified by HCR prior to the funding of such capital
contribution, additional paid in capital, equity investment or Equity Offering
for investment in Unrestricted Subsidiaries and provided further that
Investments pursuant to this subsection (p) may be made at any time, regardless
of whether Investments are then permitted to be made under Subsection (f) above;
(q) Investments by the Borrower Consolidation in a Person engaged in
a business related to the business of the Borrower Consolidation if as a result
thereof such Person becomes a member of the Borrower Consolidation or such
Person is merged, consolidated or amalgamated with or into or transfers or
conveys all or substantially all of its assets to, or is liquidated into any
member of the Borrower Consolidation; and
(r) Investments of a Person that becomes a member of the Borrower
Consolidation or is merged, consolidated or amalgamated with or into or
transfers or conveys all or substantially all of its assets to, or is liquidated
into any member of the Borrower Consolidation.
Section 6.09. TOTAL LIENS. The Borrower Consolidation shall
not directly or indirectly, create, incur, assume or permit to exist any Lien on
or with respect to any of their respective assets or any of the Collateral,
whether now owned or hereafter acquired, or any income or profits therefrom, or
file or permit the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any of the
Collateral under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
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(a) Permitted Encumbrances;
(b) Liens granted or permitted pursuant to the Security
Documentation, which secure obligations of the Borrower Consolidation under the
Loan Documents and Secured Interest Rate Hedges;
(c) Liens on the FF&E and other goods securing Indebtedness to
finance the purchase price thereof; PROVIDED that (i) such Liens shall extend
only to the equipment and other goods and FF&E so financed and the proceeds
thereof, and (ii) such Liens shall not secure an outstanding principal amount of
Indebtedness in excess of Twenty-Five Million Dollars ($25,000,000.00) in the
aggregate at any time; and
(d) The Liens set forth on the Schedule of Liens marked "Schedule
6.09" attached hereto and by this reference incorporated herein and made a part
hereof.
Section 6.10. LIMITATION ON INDEBTEDNESS. The Borrower
Consolidation will not incur any Indebtedness, except as specifically permitted
hereinbelow:
a. Interest Rate Hedges up to the maximum aggregate notional
principal amount of One Hundred Fifty Million Dollars ($150,000,000.00) at any
time outstanding;
b. Unsecured Indebtedness, Secured Indebtedness permitted under
Section 6.09(c) and Capital Lease Liabilities up to the maximum cumulative
aggregate principal amount of Twenty-Five Million Dollars ($25,000,000.00) at
any time outstanding, provided that in no event shall unsecured Indebtedness
under this subsection (b) exceed Ten Million Dollars ($10,000,000.00) in the
aggregate;
c. Subordinated Debt, provided that one hundred percent (100%) of
the principal amount of such Subordinated Debt, not otherwise applied to repay,
retire, redeem, defease or otherwise acquire other Subordinated Debt, in excess
of the sum of (x) One Hundred Fifty Million Dollars ($150,000,000.00) plus (y)
all costs, fees and expenses (including without limitation underwriting,
placement, financial advisory and similar fees and expenses) incurred in
connection with the placement or incurrence of such Subordinated Debt plus (z)
all premium and interest paid with respect to Indebtedness refinanced, retired,
defeased, replaced or repaid with the proceeds of such Subordinated Debt, shall
be used by the Borrower Consolidation to make a Voluntary Permanent Reduction
promptly following the incurrence of such Subordinated Debt;
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d. The Bank Facilities and the Merger Consideration;
e. Indebtedness (other than as described in clause (d)) existing as
of the Merger Effective Date and not repaid on such date and any Indebtedness
incurred to refinance, retire, renew, defease or replace such Indebtedness, so
long as such Indebtedness so incurred does not have (i) a principal amount
greater than the unpaid balance of Indebtedness being refinanced, retired,
renewed, defeased or replaced or (ii) a maturity date earlier than the
Indebtedness being refinanced, retired, renewed, defeased or replaced;
f. Indebtedness between members of the Borrower Consolidation;
g. Indebtedness constituting Investments permitted under
Section 6.08;
h. Indebtedness constituting Contingent Liabilities permitted to be
incurred under Section 6.07;
i. Indebtedness incurred by the Borrower Consolidation arising from
agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guarantees, letters of credit, bankers'
acceptances, surety bonds or performance bonds securing the performance of the
Borrower Consolidation to any Person acquiring all or a portion of the business
or assets of the Borrower Consolidation to the extent such transfer is permitted
by Section 6.14;
j. Indebtedness in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds entered into by the
Borrower Consolidation in the ordinary course of their business;
k. Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business; and
l. Indebtedness of a Restricted Subsidiary acquired after the date
hereof and Indebtedness of a corporation merged or consolidated with or into the
Borrower or a Subsidiary after the date hereof, which Indebtedness in each case
exists at the time of such acquisition, merger or consolidation and is not
created in contemplation of such event and where such acquisition, merger or
consolidation is permitted by this Credit Agreement.
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Section 6.11. MINIMUM SUBORDINATED DEBT. The Borrower
Consolidation shall maintain at all times commencing on the Amendment Effective
Date and continuing until the occurrence of Bank Facilities Termination,
Subordinated Debt in an aggregate principal amount no less than One Hundred
Fifty Million Dollars ($150,000,000.00), provided that the required minimum
amount of Subordinated Debt as set forth above shall be reduced by the amount of
(i) capital contributions, additional paid in capital, equity investments
received by HCR and/or proceeds of Equity Offerings subsequent to the Merger
Effective Date, other than those capital contributions, additional paid in
capital, equity investments and/or Equity Offerings made pursuant to Section
6.08(p), and (ii) the net proceeds received by the Borrower Consolidation from
the issuance of Permitted Preferred Stock.
Section 6.12. RESTRICTION ON DISTRIBUTIONS. HCR shall not
pay or declare any dividends or Distributions on capital stock (voting and
non-voting) or Permitted Preferred Stock to its shareholders, other than
dividends payable in kind in the form of additional shares of capital stock.
Notwithstanding the foregoing so long as no Event of Default has occurred and
remains continuing or would result from the payment or making of such
Distribution, the Borrower Consolidation may (i) purchase, redeem, defease,
retire or otherwise acquire any shares of its capital stock effected through the
issuance of capital stock (other than capital stock which, by its terms, matures
or is mandatorily or optionally redeemable (other than in connection with a
change of control, merger, consolidation or asset sale) prior to the Maturity
Date), (ii) pay Distributions to redeem or purchase capital stock of Borrower
Consolidation or options, warrants, or other securities convertible into capital
stock of Borrower Consolidation from employees or directors of Borrower
Consolidation, (iii) make Distributions for the purpose of permitting payments
in lieu of fractional shares, (iv) make Distributions which are funded with
Investment Returns received from Unrestricted Subsidiaries, in an amount not to
exceed the aggregate amount of Investments (without deduction for Investment
Returns received in respect of Investments) made in Unrestricted Subsidiaries
pursuant to Section 6.08(p), (v) make Distributions to Affiliates which are
otherwise prohibited under this Section 6.12, up to the maximum aggregate amount
of Two Hundred Fifty Thousand Dollars ($250,000.00) during any Fiscal Year, for
the purpose of paying (a) ordinary operating expenses of such Affiliate relating
to such Affiliate's ownership of HCR, and (b) such Affiliate for performing
services for the Borrower Consolidation, and (vi) pay Distributions to the
holders of the capital stock (voting and non-voting) of HCR and to the holders
of Permitted Preferred Stock so long as the Leverage Ratio of the Borrower
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Consolidation is less than or equal to 3.00 to 1.00 as of the most recently
ended Fiscal Quarter.
Section 6.13. NO CHANGE OF CONTROL. Until the occurrence
of Bank Facility Termination, no Change of Control shall occur.
Section 6.14. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Other than as approved in writing by Majority Lenders, no member of the Borrower
Consolidation shall wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation (except a merger or consolidation with
another entity within the Borrower Consolidation), or convey, sell, lease or
otherwise dispose of (or agree to do any of the foregoing at any future time
prior to Bank Facility Termination) all or any material part of its respective
property or assets (except to another entity within the Borrower Consolidation),
except that the following shall be permitted: (i) HBR may lease the BR Purchase
Property to IWRA pursuant to the BR Master Lease, (ii) the Borrowers may make
sales of inventory and other assets in the ordinary course of business, (iii)
the Borrowers may, in the ordinary course of business, sell equipment and FF&E
as provided in Section 5.01, (iv) HCR or any of its Subsidiaries may sell any
Unrestricted Subsidiary or New Venture Investment (or all or a portion of its
Investment therein) in exchange for its fair value, (v) mergers or
consolidations so long as (x) no Default or Event of Default will occur after
giving pro forma effect thereto for the prior four (4) Fiscal Quarters, (y) a
Borrower is the surviving Person of such merger or consolidation and (z) the Net
Worth of the Person being so merged or consolidated into a member of the
Borrower Consolidation immediately prior to such merger or consolidation shall
not exceed seventy-five percent (75%) of the Net Worth of the Borrower
Consolidation immediately prior to such merger or consolidation, (vi) the
license of software, trademarks, patents and other intellectual property, in a
manner which will not materially adversely affect the Borrower Consolidation,
and (vii) any sale or transfer permitted under Section 6.16.
Section 6.15. TRANSACTIONS WITH AFFILIATES. Other than:
(i) between and amongst the Borrower Consolidation, or (ii) in connection with
Investments in a New Venture and/or New Venture Subsidiaries, (iii) payments
permitted under Section 6.12, (iv) payments made in accordance with any
employment agreements entered into by the Borrower or any Subsidiary in the
ordinary course of business, and (v) payments by the Borrower Consolidation
pursuant to any indemnification agreements with its directors and officers with
respect to any action taken or omitted to be taken by such director or officer
in such director's or officer's capacity as a director or
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officer of any Borrower or Subsidiary, no transactions shall be made by the
Borrower Consolidation with Affiliates or Subsidiaries of the Borrower
Consolidation other than arms length transactions for fair market value.
Section 6.16. NO TRANSFER OF OWNERSHIP. HCR shall
not transfer or hypothecate its ownership interests in any of the Operating
Subsidiaries or any Restricted Subsidiary except in connection with the Security
Documentation. Provided, however, Borrowers shall have the right to sell any
Unrestricted Subsidiary or New Venture Investment (or all or a portion of its
Investment therein) in exchange for its fair value.
Section 6.17. ERISA. Borrowers shall:
a. Not permit at any time any Pension Plan which is maintained by
such Borrower, and use its best efforts not to permit any Pension Plan with
respect to which such Borrower is obligated to contribute on behalf of its
perspective employees, to:
(i) engage in any nonexempt "prohibited transaction", as such
term is defined in Section 4975 of the Code, which may reasonably be
expected to result in material liability of such Borrower to the
Pension Plan or the Pension Benefit Guaranty Corporation,
(ii) incur any material "accumulated funding deficiency", as that
term is defined in Section 302 of ERISA, which may reasonably be
expected to result in material liability of such Borrower to the
Pension Plan or the Pension Benefit Guaranty Corporation.
b. Upon such Borrower becoming aware thereof, promptly notify the
Agent Bank of the occurrence of any "reportable event" (as defined in Section
4043 of ERISA) or of any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code) with respect to any Pension Plan which is maintained
by such Borrower or to which such Borrower is obligated to contribute on behalf
of its employees or any trust created thereunder.
c. Not, at any time, permit any Pension Plan which is maintained by
such Borrower to fail to comply with ERISA or other applicable laws that would
result in a Material Adverse Effect.
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Section 6.18. MARGIN REGULATIONS. No part of the proceeds of
the Credit Facility, Swingline Facility or L/C Facility will be used by
Borrowers, or any of them, in violation of or inconsistent with the provisions
of Regulations T, U or X of the Board of Governors of the Federal Reserve
System.
Section 6.19. LIMITATION ON ADDITIONAL SUBSIDIARIES.
No Operating Subsidiary shall create any additional Subsidiaries without the
prior written consent of Majority Lenders.
Section 6.20. LIMITATION ON CONSOLIDATED TAX LIABILITY. No
Borrower shall be liable for federal income taxes relating to the taxable income
of any Subsidiary or Affiliate of the Borrowers, or any of them, in excess of
the amount of federal income taxes it would pay if reporting as a separate
entity, unless such Borrower is fully reimbursed by such Subsidiary or Affiliate
on or before the payment of such taxes.
Section 6.21. CHANGE IN ACCOUNTING PRINCIPLES. Except as
otherwise provided herein, if any changes in accounting principles from those
used in the preparation of the most recent financial statements delivered to
Agent Bank pursuant to the terms hereof are hereinafter required or permitted by
the rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Borrowers with the agreement of their independent certified public accountants
and such changes result in a change in the method of calculation of any of the
financial covenants, standards or terms found herein, the parties hereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
the financial condition of Borrowers shall be the same after such changes as if
such changes had not been made; provided, however, that no change in GAAP that
would affect the method of calculation of any of the financial covenants,
standards or terms shall be given effect in such calculations until such
provisions are amended, in a manner reasonably satisfactory to Agent Bank and
Requisite Lenders, to so reflect such change in accounting principles.
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ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. EVENTS OF DEFAULT. Any of the following
events and the passage of any applicable notice and cure periods shall
constitute an Event of Default hereunder:
(a) Any representation or warranty made by Borrowers or any
Subsidiary of Borrowers pursuant to or in connection with this Credit Agreement,
the Notes, the Environmental Certificate, or any other Loan Document or in any
report, certificate, financial statement or other writing furnished by Borrowers
or any Subsidiary of Borrowers in connection herewith, shall prove to be false,
incorrect or misleading in any materially adverse aspect as of the date when
made unless cured within thirty (30) days of the date when made if such
representation or warranty is capable of being cured.
(b) Borrowers shall have defaulted in the payment of any interest on
the Revolving Credit Note or Swingline Note for a period of five (5) days from
the date such payment is due or shall have defaulted in the payment of any
principal on the Revolving Credit Note when due;
(c) Any of the Security Documentation or any provision thereof shall
cease to be in full force and effect in any material respect or shall cease to
give the Agent Bank in any material respect the liens, rights, powers and
privileges purported to be created thereby (other than as a result of any action
or inaction by Agent Bank or any Bank) or the Borrowers shall default in the due
performance or observance of any term, covenant or agreement on their part to be
performed or observed pursuant to the Security Documentation for a period of
thirty (30) days after written notice thereof is delivered to Borrowers by Agent
Bank (or such shorter period following such notice as may be specified in any
Loan Document);
(d) Borrowers shall have defaulted in the payment of any fees
required to be paid under the Fee Side Letter, late charge, Commitment Fees,
expenses, indemnities or any other amount owing under any Loan Document for a
period of five (5) days after notice thereof to Borrowers from Agent Bank;
(e) Borrowers or any Restricted Subsidiary shall fail duly and
punctually to perform or comply with: (i) any term, covenant, condition or
promise contained in Sections 5.25, 6.01, 6.02, 6.03, 6.04, 6.05, 6.07, 6.08,
6.09, 6.10, 6.11, 6.12, 6.13, 6.16, 6.18 or 6.19, or (ii) any other term,
covenant, condition or promise contained in this Credit
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Agreement, the Notes, or any other Loan Document (other than the Security
Documentation) and, in the case of any term, covenant, condition or promise
covered by this clause (ii), such failure shall continue thirty (30) days after
written notice thereof is delivered to Borrowers by Agent Bank (or such shorter
period following such notice as may be specified in any Loan Document);
(f) Any Borrower or any Restricted Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to it or its debts under the Bankruptcy Code or any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official, for all or substantially all of its property, or shall consent
to any such relief or to the appointment or taking possession by any such
official in any involuntary case or other proceeding against it;
(g) An involuntary case or other proceeding shall be commenced
against any Borrower or any Restricted Subsidiary seeking liquidation,
reorganization or other relief with respect to itself or its debts under the
Bankruptcy Code or any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official, for all or substantially all of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of ninety (90) days;
(h) Any Borrower or any Restricted Subsidiary makes an assignment of
all or substantially all of their assets for the benefit of its creditors;
(i) Borrowers default, beyond any applicable grace period, under the
terms of the Indenture or the terms of any Subordinated Debt if the effect
thereof (provided such Default shall be deemed cured if waived by the requisite
holders of the Subordinated Debt) is to permit the acceleration thereof by the
holders thereof or Borrowers shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, offer to purchase, redemption,
acceleration, demand or otherwise, in each case beyond the grace period provided
with respect to such Indebtedness) on any Indebtedness (other than any
Indebtedness under this Credit Agreement), if the aggregate outstanding
principal amount of such Indebtedness is Ten Million Dollars ($10,000,000.00),
or more, or any breach, default or event of default shall occur, or any other
event shall occur or condition shall exist, under any instrument, agreement or
indenture pertaining thereto if the effect thereof is to accelerate, the
maturity of any such Indebtedness; or any
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such Indebtedness shall be declared to be due and payable or shall be required
to be prepaid, purchased or redeemed (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof, or the holder of any
lien in any amount, shall commence foreclosure of such lien upon property of
Borrowers having a value in excess of Ten Million Dollars ($10,000,000.00) and
such foreclosure shall continue against such property to a date less than thirty
(30) days prior to the date of the proposed foreclosure sale;
(j) The occurrence of any event of default, beyond any applicable
grace period, under the terms of any agreement with any Lender in connection
with a Secured Interest Rate Hedge relating to the Credit Facility;
(k) The occurrence of any Reportable Event as defined under ERISA,
which constitutes proper grounds for the termination of any employee pension
benefit plan or pension plan of Borrowers covered by ERISA by the Pension
Benefit Guaranty Corporation or for the appointment by an appropriate United
States District Court of a trustee to administer any such plan, which results in
a Material Adverse Change and should continue for thirty (30) days after written
notice of such determination shall have been received by Borrowers from Agent
Bank;
(l) Any money judgment, writ or warrant of attachment or similar
process involving in the aggregate at any time an amount in excess of Ten
Million Dollars ($10,000,000.00) (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against any Borrower or any of
their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of sixty (60) days (or in any event later than five (5)
days prior to the date of any proposed sale thereunder);
(m) The loss, revocation or suspension (for a period in excess of ten
(10) calendar days) of the Gaming Permits issued by the applicable Gaming
Authorities for the Hotel/Casino Facilities, or any of them, or the failure of
Borrowers to maintain gaming activities at the Hotel/Casino Facilities, other
than on account of force majeure or periodic drydocking in compliance with USCG
requirements, at least to the same general extent as is presently conducted
thereon for a period in excess of thirty (30) consecutive days;
(n) Any order, judgment or decree shall be entered against any
Borrower or any Restricted Subsidiary decreeing its involuntary dissolution and
such order shall remain undischarged and unstayed for a period in excess of
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thirty (30) days, or any Borrower shall otherwise dissolve or cease to exist,
other than as permitted under Section 6.14;
(o) The occurrence of any Change in Control following the Amendment
Effective Date;
(p) HTMC shall fail to perform, in a timely manner, any material
obligation which it may have under the Park Cattle Lease, which continues beyond
the expiration of any applicable cure period;
(q) The failure of HTMC to timely perform any material obligation
which it may have under the Tahoe Greenbelt Lease, the California Greenbelt
Lease or the Hard Rock Lease, which in either case continues beyond the
expiration of any applicable cure period;
(r) The failure of HIMC to timely perform any material obligation
which it may have under the Westwood Lease, the Friendship Sublease or the Iowa
Sponsorship Agreement, which in any such case continues beyond the expiration of
any applicable cure period;
(s) The failure of HBR to timely perform any material obligation
which it may have under the BR Master Lease, which continues beyond the
expiration of any applicable cure period;
(t) The failure of HBRMC to timely perform any material obligation
which it may have under the BR Management Agreement, which continues beyond the
expiration of any applicable cure period;
(u) Any Subsidiary Guaranty shall cease to be in full force or effect
in any material respect (other than as a result of a merger or consolidation or
sale of equity permitted hereunder or as a result of any Restricted Subsidiary
being re-designated as an Unrestricted Subsidiary), or any Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under the
Subsidiary Guaranty, or such Subsidiary Guarantor shall default for a period of
thirty (30) days after notice thereof from Agent Bank in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to the Subsidiary Guaranty;
(v) The Hard Rock Subordination Agreement shall cease to be in full
force or effect in any material respect, other than on account of termination of
the Hard Rock Lease;
(w) The Westwood Subordination and Non-
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Disturbance Agreement shall cease to be in full force or effect in any material
respect, other than on account of termination of the Westwood Lease;
(x) The BR Master Lease Subordination and Non- Disturbance Agreement
shall cease to be in full force or effect in any material respect, other than on
account of termination of the BR Master Lease; or
(y) The occurrence of a Material Adverse Change with respect to the
Borrower Consolidation taken as a whole which has continued for more than sixty
(60) days.
Section 7.02. DEFAULT REMEDIES. Upon the occurrence and during
the continuance of any Event of Default, and upon the consent of Requisite
Lenders, Agent Bank shall declare the unpaid balance of the Notes, together with
the interest thereon, to be fully due and payable, and, in addition, the
applicable Banks, as set forth below may, at their option, or shall, as
indicated below, exercise any or all of the following remedies:
(a) Agent Bank may, upon the consent of Requisite Lenders, or at the
direction of the Requisite Lenders shall terminate the obligation of Lenders to
make any advances for Borrowings and/or declare all outstanding unpaid
Indebtedness hereunder and under the Notes and other Loan Documents together
with all accrued interest thereon immediately due and payable without
presentation, demand, protest or notice of any kind. This remedy will be deemed
to have been automatically exercised on the occurrence of any event set out in
Sections 7.01(f), (g) or (h) with respect to any member of the Borrower
Consolidation.
(b) The Swingline Lender shall, upon receipt of written notice of the
occurrence of an Event of Default, terminate its obligation to make any advances
under the Swingline Facility and may declare all outstanding unpaid Indebtedness
hereunder and under the Swingline Note, together with all accrued interest
thereon immediately due and payable without presentation, demand, protest or
notice of any kind. This remedy will be deemed to have been automatically
exercised on the occurrence of any event set out in Sections 7.01(f), (g) or (h)
with respect to any member of the Borrower Consolidation.
(c) The L/C Issuer shall, upon receipt of written notice of the
occurrence of an Event of Default, terminate its obligation to issue Letters of
Credit. This remedy will be deemed to have been automatically exercised on the
occurrence of any event set out in Sections 7.01(f), (g) or
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(h) with respect to any Borrower.
(d) Agent Bank and/or L/C Issuer may, or at the direction of the
Requisite Lenders will, direct the Borrowers to pay (and each of the Borrowers
hereby jointly and severally agree upon receipt of such notice to pay) to the
L/C Issuer an amount in Cash equal to the then outstanding L/C Exposure, such
Cash to be held by L/C Issuer in the Cash Collateral Account as security for the
repayment of all L/C Reimbursement Obligations thereafter occurring.
(e) The Banks and/or Agent Bank may exercise any and all remedies
available to Banks or Agent Bank under the Loan Documents.
(f) The Banks and/or Agent Bank may exercise any other remedies
available to Banks or Agent Bank at law or in equity, including requesting the
appointment of a receiver to perform any acts required of Borrowers, or any of
them, under this Credit Agreement, and Borrowers hereby specifically consent to
any such request by Banks.
For the purpose of carrying out this section and exercising these rights,
powers and privileges, Borrowers hereby irrevocably constitute and appoint Agent
Bank as their true and lawful attorney-in-fact following the occurrence and
during the continuance of an Event of Default to execute, acknowledge and
deliver any instruments and do and perform any acts such as are referred to in
this paragraph in the name and on behalf of Borrowers. Agent Bank on behalf of
Lenders may exercise one or more of Lenders' remedies simultaneously and all its
remedies are nonexclusive and cumulative. Lenders shall not be required to
pursue or exhaust any Collateral or remedy before pursuing any other Collateral
or remedy. Lenders' failure to exercise any remedy for a particular default
shall not be deemed a waiver of (i) such remedy, nor their rights to exercise
any other remedy for that default, nor (ii) their right to exercise that remedy
for any subsequent default.
Section 7.03. APPLICATION OF PROCEEDS. All payments and
proceeds received and all amounts held or realized from the sale or other
disposition of the Collateral Properties and other Collateral, which are to be
applied hereunder towards satisfaction of Borrowers' obligations under this
Credit Agreement, shall be applied in the following order of priority:
(a) First, to the payment of all reasonable fees, costs and expenses
(including reasonable attorney's fees and expenses) incurred by Agent Bank and
Banks, their agents or representatives in connection with the realization upon
any of
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the Collateral;
(b) Next, to the payment in full of any other amounts due under this
Credit Agreement and any other Loan Documents (other than the principal and
interest under Notes, an L/C Reimbursement Obligations or any liability under
Secured Interest Rate Hedges);
(c) Next, to the balance of interest remaining unpaid on the Notes;
(d) Next, to the balance of principal remaining unpaid on the Notes,
L/C Reimbursement Obligations and Secured Interest Rate Hedges on a pari passu
basis; and
(e) Next, the balance, if any, of such payments or proceeds to
whomever may be legally entitled thereto.
Section 7.04. NOTICES. In order to entitle Agent Bank and/or
Banks to exercise any remedy available hereunder, it shall not be necessary for
Agent Bank and/or Banks to give any notice, other than such notice as may be
required expressly herein.
Section 7.05. AGREEMENT TO PAY ATTORNEY'S FEES AND EXPENSES.
Subject to the provisions of Section 10.14, upon the occurrence of an Event of
Default, as a result of which Agent Bank and/or Banks shall require and employ
attorneys or incur other expenses for the collection of payments due or to
become due or the enforcement or performance or observance of any obligation or
agreement on the part of Borrowers contained herein, Borrowers shall, on demand,
pay to Agent Bank and Banks the actual and reasonable fees of such attorneys
(including actual and reasonable allocated costs of in-house legal counsel) and
such other reasonable expenses so incurred by Agent Bank and Banks.
Section 7.06. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In
the event any agreement contained in this Credit Agreement should be breached by
either party and thereafter waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder.
Section 7.07. LICENSING OF AGENT BANK AND LENDERS. In the
event of the occurrence and continuance of an Event of Default hereunder or
under any of the Loan Documents and it shall become necessary, or in the opinion
of Requisite Lenders advisable, for an agent, supervisor, receiver or other
representative of Agent Bank and Banks to become licensed under the provisions
of the laws of the States of Nevada, Colorado or
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Iowa or rules and regulations adopted pursuant thereto, as a condition to
receiving the benefit of any Collateral encumbered by the Security Documentation
or other Loan Documents for the benefit of Lenders or otherwise to enforce their
rights hereunder or thereunder, Borrowers do hereby give their consent to the
granting of such license or licenses and agrees to execute such further
documents as may be reasonably required in connection with the evidencing of
such consent.
Section 7.08. EXERCISE OF RIGHTS SUBJECT TO APPLICABLE LAW.
All rights, remedies and powers provided by this Article VII may be exercised
only to the extent that the exercise thereof does not violate any applicable
provision of the laws of any Governmental Authority and all of the provisions of
this Article VII are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to the extent
necessary so that they will not render this Credit Agreement invalid,
unenforceable or not entitled to be recorded or filed under the provisions of
any applicable law.
Section 7.09. DISCONTINUANCE OF PROCEEDINGS. In case
Agent Bank and/or Banks shall have proceeded to enforce any right, power or
remedy under this Credit Agreement, the Notes, the Security Documentation or any
other Loan Document by foreclosure, entry or otherwise, and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to Banks, then and in every such case Borrowers, Agent Bank
and/or Banks shall be restored to their former positions and rights hereunder
with respect to the Collateral, and all rights, remedies and powers of Agent
Bank and Banks shall continue as if such proceedings had not been taken, subject
to any binding ruling, order of judgment by the applicable court or other
tribunal in any such proceeding.
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 8.01. NO ABATEMENT OF PAYMENTS. If all or any part of
the Collateral shall be materially damaged or destroyed, or if title to or the
temporary use of the whole or any part of any of the Collateral shall be taken
or condemned by a competent authority for any public use or purpose, or by
exercise of the power of eminent domain, there shall be no abatement or
reduction in the amounts payable by Borrowers hereunder or under the Notes, and
Borrowers shall continue to be obligated to make such payments.
Section 8.02. DISTRIBUTION OF CAPITAL PROCEEDS UPON
OCCURRENCE OF FIRE, CASUALTY, OTHER PERILS OR CONDEMNATION.
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All Capital Proceeds received from "All Risk" including flood and earthquake
insurance policies covering any of the Collateral or from condemnation or
similar actions in regard to said Collateral, shall be paid directly to Agent
Bank. In the event the amount paid to Agent Bank is equal to or less than Five
Million Dollars ($5,000,000.00), such amount shall be paid to Borrowers, unless
a Default in the payment of any principal or interest owing under the terms of
the Bank Facilities or an Event of Default shall have occurred hereunder and is
continuing, for repair or replacement of the property destroyed or condemned or
to reimburse Borrowers for the costs of such repair or replacement incurred
prior to the date of such release. In the event the amount of Capital Proceeds
paid to Agent Bank is greater than Five Million Dollars ($5,000,000.00)
("Significant Repair Funds"), then, unless a Default in the payment of any
principal or interest owing under the terms of the Bank Facilities or Event of
Default has occurred hereunder and is then continuing, the entire amount so
collected or so much thereof as may be required to repair or replace the
destroyed or condemned property, shall, subject to the conditions set forth
below, be released to Borrowers for repair or replacement of the property
destroyed or condemned or to reimburse Borrowers for the costs of such repair or
replacement incurred prior to the date of such release. If a Default in the
payment of any principal or interest owing under the terms of the Bank
Facilities or Event of Default has occurred hereunder and is then continuing
such amount may, at the option of Requisite Lenders, be applied to pay the
outstanding balance of the Credit Facility. In the event the amount of Capital
Proceeds so collected is applied to pay or reduce the outstanding balance of the
Credit Facility, the amount received by Agent Bank shall be applied in the
priority set forth in Section 7.03. In the event Banks are required to release
all or a portion of the Significant Repair Funds to Borrowers for such repair or
replacement of the property destroyed or condemned, such release of funds shall
be made in accordance with the following terms and conditions:
a. The repairs, replacements and rebuilding shall be made in
accordance with plans and specifications to be reasonably approved by Requisite
Lenders and in accordance with all applicable laws, ordinances, rules,
regulations and requirements of Governmental Authorities;
b. Borrowers shall provide Agent Bank with a reasonable detailed
estimate of the costs of such repairs or restorations;
c. Borrowers shall satisfy the Requisite Lenders that after the
reconstruction is completed, the value of the Collateral, as determined by the
Requisite Lenders in
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their reasonable discretion, will not be less than the value of the
Collateral immediately prior to the damage, destruction, condemnation
or taking, as reasonably determined by the Requisite Lenders
pursuant to this Credit Agreement;
d. If, in the Requisite Lenders' reasonable opinion, any undisbursed
portion of the Available Borrowings, after deposit of such proceeds, is
insufficient to pay all costs of reconstruction of the Hotel/Casino
Facilities or other Collateral, Borrowers shall within ten (10) days of the
date such additional funds will be required deposit additional funds with the
Agent Bank or raise additional equity capital, sufficient to pay such
additional costs of reconstructing the Collateral;
e. Borrowers have delivered to the Agent Bank a construction contract
for the work of reconstruction in form and content, including insurance
requirements, reasonably acceptable to the Requisite Lenders with a
contractor reasonably acceptable to the Requisite Lenders;
f. The Requisite Lenders in their reasonable discretion have
determined that after the work of reconstruction is completed, the
Hotel/Casino Facilities will produce income sufficient to pay all costs of
operations and maintenance of the Hotel/Casino Facilities with a reasonable
reserve for repairs, and service all Indebtedness secured by the Collateral;
g. No Default in the payment of any principal or interest owing under
the terms of the Bank Facilities, and no Event of Default, has occurred and
is continuing;
h. Before commencing any such work, Borrowers shall, at their own
cost and expense, furnish Agent Bank with appropriate endorsements, if
needed, to the "All Risk" insurance policy which Borrowers are then presently
maintaining to cover all of the risks during the course of such work;
i. Such work shall be commenced by Borrowers within one hundred
twenty (120) days after (i) settlement shall have been made with the
insurance companies, and (ii) all the necessary governmental approvals shall
have been obtained, and such work shall be completed within a reasonable
time, free and clear of all liens and encumbrances other than Permitted
Encumbrances; and
j. Disbursements of such insurance or condemnation proceeds shall be
made in the customary manner used by Agent Bank for the disbursement of
construction loans.
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ARTICLE IX
AGENCY PROVISIONS
Section 9.01. APPOINTMENT.
a. Each Lender hereby (i) designates and appoints WFB as the
Agent Bank of such Lender under this Credit Agreement and the Loan Documents,
(ii) authorizes and directs Agent Bank to enter into the Loan Documents other
than this Credit Agreement for the benefit of Lenders, and (iii) authorizes
Agent Bank to take such action on its behalf under the provisions of this
Credit Agreement and the Loan Documents and to exercise such powers as are
set forth herein or therein, together with such other powers as are
reasonably incidental thereto, subject to the limitations referred to in
Sections 9.10(a) and 9.10(b). Agent Bank agrees to act as such on the express
conditions contained in this Article IX.
b. The provisions of this Article IX are solely for the
benefit of Agent Bank and Lenders, and Borrowers shall not have any rights to
rely on or enforce any of the provisions hereof (other than as set forth in
the provisions of Sections 9.03, 9.09 and 9.10), provided, however, that the
foregoing shall in no way limit Borrowers' obligations under this Article IX.
In performing its functions and duties under this Credit Agreement, Agent
Bank shall act solely as Agent Bank of Lenders and does not assume and shall
not be deemed to have assumed any obligation toward or relationship of agency
or trust with or for Borrowers or any other Person.
Section 9.02. NATURE OF DUTIES. Agent Bank shall not have any duties
or responsibilities except those expressly set forth in this Credit Agreement
or in the Loan Documents. The duties of Agent Bank shall be administrative in
nature. Subject to the provisions of Sections 9.05 and 9.07, Agent Bank shall
administer the Bank Facilities in the same manner as it administers its own
loans. Promptly following the effectiveness of this Credit Agreement, Agent
Bank shall send to each Lender a duplicate executed original, to the extent
the same are available in sufficient numbers, of the Credit Agreement and a
copy of each other Loan Document in favor of Lenders and a copy of the filed
or recorded Security Documentation, with the originals of the latter to be
held and retained by Agent Bank for the benefit of all Lenders. Agent Bank
shall not have by reason of this Credit Agreement a fiduciary relationship in
respect of any Lender. Nothing in this Credit Agreement or any of the Loan
Documents, expressed or implied, is intended or shall be construed to impose
upon Agent Bank any obligation in respect of this Credit Agreement or any of
the Loan Documents except as expressly set forth
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herein or therein. Each Lender shall make its own independent investigation
of the financial condition and affairs of the Borrowers and the Collateral in
connection with the making and the continuance of the Bank Facilities
hereunder and shall make its own appraisal of the creditworthiness of the
Borrowers and the Collateral, and, except as specifically provided herein,
Agent Bank shall not have any duty or responsibility, either initially or on
a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before
the Closing Date or at any time or times thereafter.
Section 9.03. DISBURSEMENT OF BORROWINGS.
a. Not later than the same Banking Business Day with respect to Base
Rate Loans and the next Banking Business Day with respect to LIBOR Loans, in
each case following receipt of a Notice of Borrowing, Agent Bank shall send a
copy thereof by facsimile to each Lender and shall otherwise notify each
Lender of the proposed Borrowing and the Funding Date. Each Lender shall make
available to Agent Bank (or the funding bank or entity designated by Agent
Bank), the amount of such Lender's Pro Rata Share of such Borrowing in
immediately available funds not later than the times designated in Section
9.03(b). Unless Agent Bank shall have been notified by any Lender not later
than the close of business (San Francisco time) on the Banking Business Day
immediately preceding the Funding Date in respect of any Borrowing that such
Lender does not intend to make available to Agent Bank such Lender's Pro Rata
Share of such Borrowing, Agent Bank may assume that such Lender shall make
such amount available to Agent Bank. If any Lender does not notify Agent Bank
of its intention not to make available its Pro Rata Share of such Borrowing
as described above, but does not for any reason make available to Agent Bank
such Lender's Pro Rata Share of such Borrowing, such Lender shall pay to
Agent Bank forthwith on demand such amount, together with interest thereon at
the Federal Funds Rate. In any case where a Lender does not for any reason
make available to Agent Bank such Lender's Pro Rata Share of such Borrowing,
Agent Bank, in its sole discretion, may, but shall not be obligated to, fund
to Borrowers such Lender's Pro Rata Share of such Borrowing. If Agent Bank
funds to Borrowers such Lender's Pro Rata Share of such Borrowing and if such
Lender subsequently pays to Agent Bank such corresponding amount, such amount
so paid shall constitute such Lender's Pro Rata Share of such Borrowing.
Nothing in this Section 9.03(a) shall alter the respective rights and
obligations of the parties hereunder in respect of a Defaulting Lender or a
Non-Pro Rata Borrowing.
b. Requests by Agent Bank for funding by
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Lenders of Borrowings will be made by telecopy. Each Lender shall make the
amount of its Pro Rata Share of such Borrowing available to Agent Bank in
Dollars and in immediately available funds, to such bank and account, in San
Francisco, California as Agent Bank may designate, not later than 9:00 A.M.
(San Francisco time) on the Funding Date designated in the Notice of
Borrowing with respect to such Borrowing, but in no event later than one (1)
Banking Business Day notice with respect to Bank Rate Loans and two (2)
Banking Business Days notice with respect to LIBOR Loans, in each case
following Lender's receipt of the applicable Notice of Borrowing.
c. Nothing in this Section 9.03 shall be deemed to relieve any Lender
of its obligation hereunder to make its Pro Rata Share of Borrowings on any
Funding Date, nor shall any Lender be responsible for the failure of any
other Lender to perform its obligations to advance its Pro Rata Share of any
Borrowing hereunder, and the Pro Rata Share of the Aggregate Commitment of
any Lender shall not be increased or decreased as a result of the failure by
any other Lender to perform its obligation to advance its Pro Rata Share of
any Borrowing.
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Section 9.04. DISTRIBUTION AND APPORTIONMENT OF PAYMENTS.
a. Subject to Section 9.04(b), payments actually received by Agent
Bank for the account of Lenders shall be paid to them promptly after receipt
thereof by Agent Bank, but in any event within one (1) Banking Business Day,
provided that Agent Bank shall pay to Lenders interest thereon, at the
Federal Funds Rate from the Banking Business Day following receipt of such
funds by Agent Bank until such funds are paid in immediately available funds
to Lenders. Subject to Section 9.04(b), all payments of principal and
interest in respect of Aggregate Outstandings, all payments of the fees
described in this Credit Agreement, and all payments in respect of any other
Obligations shall be allocated among such Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares or otherwise as provided
herein. Agent Bank shall promptly distribute, but in any event within one (1)
Banking Business Day, to each Lender at its primary address set forth on the
appropriate signature page hereof or on the applicable Assignment and
Assumption Agreement, or at such other address as a Lender may request in
writing, such funds as it may be entitled to receive, provided that Agent
Bank shall in any event not be bound to inquire into or determine the
validity, scope or priority of any interest or entitlement of any Lender and
may suspend all payments and seek appropriate relief (including, without
limitation, instructions from Requisite Lenders or all Lenders, as
applicable, or an action in the nature of interpleader) in the event of any
doubt or dispute as to any apportionment or distribution contemplated hereby.
The order of priority herein is set forth solely to determine the rights and
priorities of Lenders as among themselves and may at any time or from time to
time be changed by Lenders as they may elect, in writing in accordance with
Section 10.01, without necessity of notice to or consent of or approval by
Borrowers or any other Person. All payments or other sums received by Agent
Bank for the account of Lenders (including, without limitation, principal and
interest payments, the proceeds of any and all insurance maintained with
respect to any of the Collateral, and any and all condemnation proceeds with
respect to any of the Collateral) shall not constitute property or assets of
the Agent Bank and shall be held by Agent Bank, solely in its capacity as
administrative and collateral agent for itself and the other Lenders, subject
to the Loan Documents.
b. Notwithstanding any provision hereof to the contrary, until such
time as a Defaulting Lender has funded its Pro Rata Share of Borrowing which
was previously a Non Pro Rata Borrowing, or all other Lenders have received
payment in full (whether by repayment or prepayment) of the principal due in
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respect of such Non Pro Rata Borrowing, all principal sums owing to such
Defaulting Lender hereunder shall be subordinated in right of payment to the
prior payment in full of all principal, in respect of all Non Pro Rata
Borrowing in which the Defaulting Lender has not funded its Pro Rata Share.
This provision governs only the relationship among Agent Bank, each
Defaulting Lender, and the other Lenders; nothing hereunder shall limit the
obligation of Borrowers to repay all Borrowings in accordance with the terms
of this Credit Agreement. The provisions of this section shall apply and be
effective regardless of whether an Event of Default occurs and is then
continuing, and notwithstanding (i) any other provision of this Credit
Agreement to the contrary, (ii) any instruction of Borrowers as to their
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters which are subject to the consent or
approval of Requisite Lenders or all Lenders. No Commitment Fee or L/C Fees
shall accrue in favor of, or be payable to, such Defaulting Lender from the
date of any failure to fund Borrowings or reimburse Agent Bank for any
Liabilities and Costs as herein provided until such failure has been cured,
and Agent Bank shall be entitled to (A) withhold or setoff, and to apply to
the payment of the defaulted amount and any related interest, any amounts to
be paid to such Defaulting Lender under this Credit Agreement, and (B) bring
an action or suit against such Defaulting Lender in a court of competent
jurisdiction to recover the defaulted amount and any related interest. In
addition, the Defaulting Lender shall indemnify, defend and hold Agent Bank
and each of the other Lenders harmless from and against any and all
Liabilities and Costs, plus interest thereon at the Default Rate, which they
may sustain or incur by reason of or as a direct consequence of the
Defaulting Lender's failure or refusal to abide by its obligations under this
Credit Agreement.
Section 9.05. RIGHTS, EXCULPATION, ETC. Neither Agent Bank, any
Affiliate of Agent Bank, nor any of their respective officers, directors,
employees, agents, attorneys or consultants, shall be liable to any Lender
for any action taken or omitted by them hereunder or under any of the Loan
Documents, or in connection herewith or therewith, except that Agent Bank
shall be liable for its gross negligence or willful misconduct. In the
absence of gross negligence or willful misconduct, Agent Bank shall not be
liable for any apportionment or distribution of payments made by it in good
faith pursuant to Section 9.04, and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Person to whom payment was due, but not made, shall be to recover from the
recipients of such payments any payment in excess of the amount to which they
are determined to have been entitled. Agent Bank shall not be responsible to any
Lender for any recitals, statements, representations or warranties herein or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Credit Agreement, any of the Security
Documentation or any of the other Loan Documents, or any of the transactions
contemplated hereby and thereby; or for the financial condition of the Borrowers
or any of their Affiliates. Agent Bank shall not be
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required to make any inquiry concerning either the performance or observance
of any of the terms, provisions or conditions of this Credit Agreement or any
of the Loan Documents or the financial condition of the Borrowers or any of
their Affiliates, or the existence or possible existence of any Default or
Event of Default.
Section 9.06. RELIANCE. Agent Bank shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents,
telecopies or any telephone message believed by it in good faith to be
genuine and correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this Credit Agreement
or any of the Loan Documents and its duties hereunder or thereunder, upon
advice of legal counsel (including counsel for Borrowers), independent public
accountant and other experts selected by it.
Section 9.07. INDEMNIFICATION. To the extent that Agent Bank is not
reimbursed and indemnified by Borrowers, Lenders will reimburse, within ten
(10) Banking Business Days after notice from Agent Bank, and indemnify and
defend Agent Bank for and against any and all Liabilities and Costs which may
be imposed on, incurred by, or asserted against it in any way relating to or
arising out of this Credit Agreement, the Security Documentation or any of
the other Loan Documents or any action taken or omitted by Agent Bank or
under this Credit Agreement, the Security Documentation or any of the other
Loan Documents, in proportion to each Lender's Pro Rata Share; provided that
no Lender shall be liable for any portion of such Liabilities and Costs
resulting from Agent Bank's gross negligence or willful misconduct. The
obligations of Lenders under this Section 9.07 shall survive the payment in
full of all Obligations and the termination of this Credit Agreement. In the
event that after payment and distribution of any amount by Agent Bank to
Lenders, any Lender or third party, including Borrowers, any creditor of
Borrowers or a trustee in bankruptcy, recovers from Agent Bank any amount
found to have been wrongfully paid to Agent Bank or disbursed by Agent Bank
to any Lender, then such Lender shall reimburse Agent Bank for all such
amounts. Notwithstanding the foregoing, Agent Bank shall not be obligated to
advance Liabilities and Costs and may require the deposit by each Lender of
its Pro Rata Share of any material Liabilities and Costs anticipated by Agent
Bank before
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they are incurred or made payable.
Section 9.08. AGENT INDIVIDUALLY. With respect to its Pro Rata Share of
the Credit Facility, Agent Bank shall have and may exercise the same rights
and powers hereunder and is subject to the same obligations and liabilities
as and to the extent set forth herein for any other Lender. The terms
"Lenders", "Requisite Lenders" or any similar terms may include Agent Bank in
its individual capacity as a Lender or one of the Requisite Lenders, but
Requisite Lenders shall not include Agent Bank solely in its capacity as
Agent Bank and need not necessarily include Agent Bank in its capacity as a
Lender. Agent Bank and any Lender and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or
other business with Borrowers or any of their Affiliates as if it were not
acting as Agent Bank or Lender pursuant hereto.
Section 9.09. SUCCESSOR AGENT BANK; RESIGNATION OF AGENT BANK; REMOVAL
OF AGENT BANK.
a. Agent Bank may resign from the performance of all its functions
and duties hereunder at any time by giving at least thirty (30) Banking
Business Days' prior written notice to Lenders and Borrowers, and shall
automatically cease to be Agent Bank hereunder in the event a petition in
bankruptcy shall be filed by or against Agent Bank or the Federal Deposit
Insurance Corporation or any other Governmental Authority shall assume
control of Agent Bank or Agent Bank's interests under the Bank Facilities.
Further, Lenders (other than Agent Bank) may unanimously remove Agent Bank at
any time upon the occurrence of gross negligence or wilful misconduct by
Agent Bank by giving at least thirty (30) Banking Business Days' prior
written notice to Agent Bank, Borrowers and all other Lenders. Such
resignation or removal shall take effect upon the acceptance by a successor
Agent Bank of appointment pursuant to clause (b) or (c).
b. Upon any such notice of resignation by or removal of Agent Bank,
Requisite Lenders shall appoint a successor Agent Bank which appointment
shall be subject to Borrowers' consent (other than upon the occurrence and
during the continuance of any Event of Default), which shall not be
unreasonably withheld or delayed. Any successor Agent Bank must be a Bank (i)
the senior debt obligations of which (or such bank's parent's senior
unsecured debt obligations) are rated not less than Baa-2 by Moody's
Investors Services, Inc. or a comparable rating by a rating agency acceptable
to Requisite Lenders and (ii) which has total assets in excess of Ten Billion
Dollars ($10,000,000,000.00).
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c. If a successor Agent Bank shall not have been so appointed within
said thirty (30) Banking Business Day period, the retiring or removed Agent
Bank, with the consent of Borrowers (other than upon the occurrence and
during the continuance of any Event of Default) (which may not be
unreasonably withheld or delayed), shall then appoint a successor Agent Bank
who shall meet the requirements described in subsection (b) above and who
shall serve as Agent Bank until such time, if any, as Requisite Lenders, with
the consent of Borrowers (other than upon the occurrence and during the
continuance of any Event of Default), appoint a successor Agent Bank as
provided above.
Section 9.10. CONSENT AND APPROVALS.
a. Each consent, approval, amendment, modification or waiver
specifically enumerated in this Section 9.10(a) shall require the consent of
Requisite Lenders:
(i) Approval of Borrowings with less than full compliance with
requirements of Article IIIB (Section 2.04);
(ii) Consent to modification of the Leases (Sections 5.03);
(iii) Consent to modification to or waiver of financial reporting
requirements or production of additional financial or other information
(Section 5.08);
(iv) Approval of a change in the method of calculation of any financial
covenants, standards or terms as a result of a change in accounting
principle (Section 6.21);
(v) Direct Agent Bank to declare the unpaid balance of the Credit
Facility fully due and payable (Section 7.02);
(vi) Direct the disposition of insurance proceeds or condemnation
awards under certain circumstances (Section 8.02);
(vii) Approval of appointment of successor Agent Bank (Section 9.09);
(viii) Approval of certain Protective Advances (Section 9.11(a));
(ix) Approval of a Post-Foreclosure Plan
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and related matters (Section 9.11(e));
(x) Consent to action or proceeding against Borrowers or the
Collateral by any Lender (Section 9.12); or
(xi) Except as referred to in subsection (b) and (c) below, approval
of any amendment, modification or termination of this Credit Agreement or
any other Loan Documents, or waiver of any provision herein
(Section 10.01).
b. Each consent, approval, amendment, modification or waiver
specifically enumerated in this Section 9.10(b) shall require the consent of
Majority Lenders:
(i) Consents, approvals, amendments, modifications or waivers relating
to Contingent Liabilities in excess of Ten Million Dollars ($10,000,000.00)
(Section 6.07);
(ii) Consents, approvals, amendments, modifications or waivers relating
to Investments (Section 6.08);
(iii) Consents, approvals, amendments, modifications or waivers
relating to creation of Subsidiaries by an Operating Subsidiary
(Section 6.19);
(iv) Consents, approvals, amendments, modifications or waivers relating
to Consolidations, Mergers and Sale of Assets (Section 6.14); and
(v) waiver of covenants proposed to be contained in any Subordinated
Debt that are more restrictive than the Financial Covenants as provided
in subsection (c) in the definition of Subordinated Debt.
c. Each consent, approval, amendment, modification or waiver
specifically enumerated in Section 10.01(i), (ii) or (iii) shall require the
consent of all Lenders.
d. In addition to the required consents or approvals referred to in
subsection (a) above, Agent Bank may at any time request instructions from
Requisite Lenders with respect to any actions or approvals which, by the
terms of this Credit Agreement or of any of the Loan Documents, Agent Bank is
permitted or required to take or to grant without instructions
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from any Lenders, and if such instructions are promptly requested, Agent Bank
shall be absolutely entitled to refrain from taking any action or to withhold
any approval and shall not be under any liability whatsoever to any Person
for refraining from taking any action or withholding any approval under any
of the Loan Documents until it shall have received such instructions from
Requisite Lenders. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against Agent Bank as a result of Agent Bank
acting or refraining from acting under this Credit Agreement, the Security
Documentation or any of the other Loan Documents in accordance with the
instructions of Majority Lenders or Requisite Lenders or, where applicable,
all Lenders. Agent Bank shall promptly notify each Lender at any time that
the Requisite Lenders have instructed Agent Bank to act or refrain from
acting pursuant hereto.
e. Each Lender agrees that any action taken by Agent Bank at the
direction or with the consent of Majority Lenders or Requisite Lenders, as
applicable, in accordance with the provisions of this Credit Agreement or any
Loan Document, and the exercise by Agent Bank at the direction or with the
consent of Majority Lenders or Requisite Lenders, as applicable, of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all
Lenders, except for actions specifically requiring the approval of all
Lenders. All communications from Agent Bank to Lenders requesting Lenders'
determination, consent, approval or disapproval (i) shall be given in the
form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or thing as to which such determination, approval,
consent or disapproval is requested, or shall advise each Lender where such
matter or thing may be inspected, or shall otherwise describe the matter or
issue to be resolved, (iii) shall include, if reasonably requested by a
Lender and to the extent not previously provided to such Lender, written
materials provided to Agent Bank by Borrowers in respect of the matter or
issue to be resolved, and (iv) shall include Agent Bank's recommended course
of action or determination in respect thereof. Each Lender shall reply
promptly, but in any event within ten (10) Banking Business Days (the "Lender
Reply Period"). Unless a Lender shall give written notice to Agent Bank that
it objects to the recommendation or determination of Agent Bank (together
with a written explanation of the reasons behind such objection) within the
Lender Reply Period, such Lender shall be deemed to have approved of or
consented to such recommendation or determination. With respect to decisions
requiring the approval of Majority Lenders, Requisite Lenders or all Lenders,
Agent Bank shall submit its recommendation or determination for approval of
or consent to such recommendation
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or determination to all Lenders and upon receiving the required approval or
consent shall follow the course of action or determination recommended to
Lenders by Agent Bank or such other course of action recommended by Majority
Lenders or Requisite Lenders, as applicable, and each non-responding Lender
shall be deemed to have concurred with such recommended course of action.
Section 9.11. AGENCY PROVISIONS RELATING TO COLLATERAL.
a. Agent Bank is hereby authorized on behalf of all Lenders, without
the necessity of any notice to or further consent from any Lender, from time
to time prior to an Event of Default, to take any action with respect to any
Collateral or Loan Document which may be necessary to perfect and maintain
Liens of the Security Documentation upon the Collateral granted pursuant to
the Loan Documents. Agent Bank may make, and shall be reimbursed by Lenders
(in accordance with their Pro Rata Shares), to the extent not reimbursed by
Borrowers, for, Protective Advance(s) during any one (1) calendar year with
respect to the Collateral up to the sum of (i) amounts expended to pay real
estate taxes, assessments and governmental charges or levies imposed upon
such Collateral, (ii) amounts expended to pay insurance premiums for policies
of insurance related to such Collateral, and (iii) One Hundred Thousand
Dollars ($100,000.00). Protective Advances in excess of said sum during any
calendar year for any Collateral shall require the consent of Requisite
Lenders.
b. Lenders hereby irrevocably authorize Agent Bank, at its option and
in its discretion, to release any Security Documentation granted to or held
by Agent Bank upon all or substantially all of the Collateral (i) upon Bank
Facility Termination and repayment and satisfaction of all Borrowings, and
all other Obligations and the termination of this Credit Agreement, or (ii)
if approved, authorized or ratified in writing by Agent Bank at the direction
of all Lenders. Lenders hereby irrevocably authorize Agent Bank to release
any Collateral that may be sold, transferred, disposed of or otherwise
conveyed by the Borrower Consolidation in accordance with the terms of this
Credit Agreement or as contemplated in Section 5.16. Agent Bank shall not be
required to execute any document to evidence the release of the Security
Documentation granted to Agent Bank for the benefit of Lenders herein or
pursuant hereto upon any Collateral if, in Agent Bank's opinion, such
document would expose Agent Bank to liability or create any obligation or
entail any consequence other than the release of such Security Documentation
without recourse or warranty, and such release shall not in any manner
discharge, affect or impair the Obligations or any Security
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Documentation upon (or obligations of Borrowers in respect of) any property
which shall continue to constitute part of the Collateral.
c. Except as provided in this Credit Agreement, Agent Bank shall have
no obligation whatsoever to any Lender or to any other Person to assure that
the Collateral exists or is owned by Borrowers or is cared for, protected or
insured or has been encumbered or that the Security Documentation granted to
Agent Bank herein or in any of the other Loan Documents or pursuant hereto or
thereto have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority.
d. Should Agent Bank (i) employ counsel for advice or other
representation (whether or not any suit has been or shall be filed) with
respect to any Collateral or any part thereof, or any of the Loan Documents,
or the attempt to enforce any security interest or Security Documentation on
any of the Collateral, or (ii) commence any proceeding or in any way seek to
enforce its rights or remedies under the Loan Documents, irrespective of
whether as a result thereof Agent Bank shall acquire title to any Collateral,
either through foreclosure, deed in lieu of foreclosure or otherwise, each
Lender, upon demand therefor from time to time, shall contribute its share
(based on its Pro Rata Share) of the reasonable costs and/or expenses of any
such advice or other representation, enforcement or acquisition, including,
but not limited to, fees of receivers or trustees, court costs, title company
charges, filing and recording fees, appraisers' fees and fees and expenses of
attorneys to the extent not otherwise reimbursed by Borrowers; provided that
Agent Bank shall not be entitled to reimbursement of its attorneys' fees and
expenses incurred in connection with the resolution of disputes between Agent
Bank and other Lenders unless Agent Bank shall be the prevailing party in any
such dispute. Any loss of principal and interest resulting from any Event of
Default shall be shared by Lenders in accordance with their respective Pro
Rata Shares. It is understood and agreed that in the event Agent Bank
determines it is necessary to engage counsel for Lenders from and after the
occurrence of an Event of Default, said counsel shall be selected by Agent
Bank.
e. In the event that all or any portion of the Collateral is acquired
by Agent Bank as the result of a foreclosure or the acceptance of a deed or
assignment in lieu of foreclosure, or is retained in satisfaction of all or
any part of Borrowers' obligations, title to any such Collateral or any
portion thereof shall be held in the name of Agent Bank or a nominee or
subsidiary of Agent Bank, as agent, for the
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ratable benefit of Agent Bank and Lenders. Agent Bank shall prepare a
recommended course of action for such Collateral (the "Post-Foreclosure
Plan"), which shall be subject to the approval of the Requisite Lenders. In
the event that Requisite Lenders do not approve such Post-Foreclosure Plan,
any Lender shall be permitted to submit an alternative Post-Foreclosure Plan
to Agent Bank, and Agent Bank shall submit any and all such additional
Post-Foreclosure Plans to the Lenders for evaluation and the approval of
Requisite Lenders. In accordance with the approved Post-Foreclosure Plan,
Agent Bank shall manage, operate, repair, administer, complete, construct,
restore or otherwise deal with the Collateral acquired and administer all
transactions relating thereto, including, without limitation, employing a
management agent, leasing agent and other agents, contractors and employees,
including agents of the sale of such Collateral, and the collecting of rents
and other sums from such Collateral and paying the expenses of such
Collateral; actions taken by Agent Bank with respect to the Collateral, which
are not provided for in the approved PostForeclosure Plan or reasonably
incidental thereto, shall require the consent of Requisite Lenders by way of
supplement to such Post-Foreclosure Plan. Upon demand therefor from time to
time, each Lender will contribute its share (based on its Pro Rata Share) of
all reasonable costs and expenses incurred by Agent Bank pursuant to the
Post-Foreclosure Plan in connection with the construction, operation,
management, maintenance, leasing and sale of such Collateral. In addition,
Agent Bank shall render or cause to be rendered by the managing agent, to
each of the Lenders, monthly, an income and expense statement for such
Collateral, and each of the Lenders shall promptly contribute its Pro Rata
Share of any operating loss for such Collateral, and such other expenses and
operating reserves as Agent Bank shall deem reasonably necessary pursuant to
and in accordance with the Post-Foreclosure Plan. To the extent there is net
operating income from such Collateral, Agent Bank shall, in accordance with
all applicable Gaming Laws and the Post-Foreclosure Plan, determine the
amount and timing of distributions to Lenders. All such distributions shall
be made to Lenders in accordance with their respective Pro Rata Shares.
Lenders acknowledge that if title to any Collateral is obtained by Agent Bank
or its nominee, such Collateral will not be held as a permanent investment
but will be liquidated as soon as practicable. Agent Bank shall undertake to
sell such Collateral, at such price and upon such terms and conditions as the
Requisite Lenders shall reasonably determine to be most advantageous. Any
purchase money mortgage or deed of trust taken in connection with the
disposition of such Collateral in accordance with the immediately preceding
sentence shall name Agent Bank, as agent for Lenders, as the beneficiary or
mortgagee. In such case, Agent Bank and Lenders shall enter into an agreement
with respect to such purchase money mortgage
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defining the rights of Lenders in the same Pro Rata Shares as provided
hereunder, which agreement shall be in all material respects similar to this
Article IX insofar as the same is appropriate or applicable.
Section 9.12. LENDER ACTIONS AGAINST COLLATERAL AND RESTRICTION ON
EXERCISE OF SET-OFF. Each Lender agrees that it will not take any action, nor
institute any actions or proceedings, against Borrowers or any other obligor
hereunder, under the Security Documentation or under any other Loan Documents
with respect to exercising claims against or rights in any Collateral or
exercise any set-off under Section 10.23 or under common law without the
prior consent of Requisite Lenders.
Section 9.13. RATABLE SHARING. Subject to Section 9.03 and 9.04, upon
the occurrence of an Event of Default, Lenders agree among themselves that
(i) with respect to all amounts received by them which are applicable to the
payment of the Obligations, equitable adjustment will be made so that, in
effect, all such amounts will be shared among them ratably in accordance with
their Pro Rata Shares, whether received by voluntary payment, by counterclaim
or cross action or by the enforcement of any or all of the Obligations, or
the Collateral, (ii) if any of them shall by voluntary payment or by the
exercise of any right of counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of the Obligations held by it which is
greater than its Pro Rata Share of the payments on account of the
Obligations, the one receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall
be deemed to have done simultaneously upon the receipt of such payment) in
such Obligations owed to the others so that all such recoveries with respect
to such Obligations shall be applied ratably in accordance with their Pro
Rata Shares; provided, that if all or part of such excess payment received by
the purchasing party is thereafter recovered from it, those purchases shall
be rescinded and the purchase prices paid for such participations shall be
returned to that party to the extent necessary to adjust for such recovery,
but without interest except to the extent the purchasing party is required to
pay interest in connection with such recovery. Borrowers agree that any
Lender so purchasing a participation from another Lender pursuant to this
Section 9.13 may, to the fullest extent permitted by law, exercise all its
rights of payment with respect to such participation as fully as if such
Lender were the direct creditor of Borrowers in the amount of such
participation. No Lender shall exercise any setoff, banker's lien or other
similar right in respect to any Obligations without the prior written
approval by Agent Bank.
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Section 9.14. DELIVERY OF DOCUMENTS. Agent Bank shall as soon as
reasonably practicable distribute to each Lender at its primary address set
forth on the appropriate counterpart signature page hereof, or at such other
address as a Lender may request in writing, (i)copies of all documents to
which such Lender is a party or of which is executed or held by Agent Bank on
behalf of such Lender, (ii) all documents of which Agent Bank receives copies
from Borrowers pursuant to Article VI and Section 10.03, (iii) all other
documents or information which Agent Bank is required to send to Lenders
pursuant to the terms of this Credit Agreement, (iv) other information or
documents received by Agent Bank at the request of any Lender, and (v) all
notices received by Agent Bank pursuant to Section 5.21. In addition, within
fifteen (15) Banking Business Days after receipt of a request in writing from
a Lender for written information or documents provided by or prepared by
Borrowers, Agent Bank shall deliver such written information or documents to
such requesting Lender if Agent Bank has possession of such written
information or documents in its capacity as Agent Bank or as a Lender.
Section 9.15. NOTICE OF EVENTS OF DEFAULT. Agent Bank shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event
of Default (other than nonpayment of principal of or interest on the Bank
Facilities) unless Agent Bank has received notice in writing from a Lender or
Borrowers referring to this Credit Agreement or the other Loan Documents,
describing such event or condition and expressly stating that such notice is
a notice of a Default or Event of Default. Should Agent Bank receive such
notice of the occurrence of a Default or Event of Default, or should Agent
Bank send Borrowers a notice of Default or Event of Default, Agent Bank shall
promptly give notice thereof to each Lender.
Section 9.16. SYNDICATION CO-AGENT, DOCUMENTATION AGENT AND CO-MANAGING
AGENTS. Syndication Co-agent, Documentation Agent and Co-Managing Agents
shall not have any right, power, obligation, liability, responsibility or
duty under this Credit Agreement or any of the Loan Documents, other than
those applicable to them in their respective capacity as a Lender. Without
limiting the foregoing, neither Syndication Co-Agent, Documentation Agent nor
Co-Managing Agents shall have or be deemed to have any fiduciary or special
relationship with any of the Banks. Notwithstanding the foregoing,
Syndication Co-Agent, Documentation Agent and Co-Managing Agents shall be
entitled to the benefits of Section 5.14. Each Bank acknowledges that it has
not relied, and will not rely, on Syndication Co-Agent, Documentation Agent
or Co-Managing Agents in deciding to enter into this Credit Agreement or in
taking or not taking any action hereunder or under any of the Loan Documents.
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ARTICLE X
GENERAL TERMS AND CONDITIONS
The following terms and conditions shall be applicable until
Bank Facility Termination:
Section 10.01. AMENDMENTS AND WAIVERS. (a) No amend ment or modification
of any provision of this Credit Agreement shall be effective without the
written agreement of Majority Lenders or Requisite Lenders, as set forth in
Section 9.10 or otherwise herein required (after notice to all Lenders) and
Borrowers (except for rights and priorities of Lenders as amongst themselves
as provided in Section 9.04(a) which do not require the consent of
Borrowers), and (b) no termination or waiver of any provision of this Credit
Agreement, or consent to any departure by Borrowers therefrom shall in any
event be effective without the written concurrence of Majority Lenders or
Requisite Lenders, as set forth in Section 9.10 or otherwise herein required
(after notice to all Lenders), which Majority Lenders or Requisite Lenders,
as applicable, shall have the right to grant or withhold at their sole
discretion, except that the following amendments, modifications or waivers
shall require the consent of all Lenders:
(i) modify any requirement hereunder that any particular action be
taken by all the Lenders or by the Requisite Lenders or by the Majority
Lenders, modify this Section 10.01 or change the definition of "Requisite
Lenders" or "Majority Lenders", or remove Agent Bank under Section 9.09(a)
(without regard to the vote of Agent Bank as a Lender);
(ii) except as provided in Section 2.01(d) increase the Aggregate
Commitment or increase the Syndication Interest of any Lender or release any
material portion of the Collateral or release any Borrower or Subsidiary
Guarantor except as specifically provided in the Credit Agreement or extend
the Maturity Date; or
(iii) reduce any fees described in Section 2.10(b) or (c) or extend the
due date for, or reduce or postpone the amount of, any payments on the Credit
Facility, or reduce the rate of interest or postpone the payment of interest
on the Credit Facility.
No amendment, modification, termination or waiver of any provision of Article IX
or any other provision referring to Agent Bank shall be effective without the
written concurrence of Agent Bank, but only if such amendment, modification,
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termination or waiver alters the obligations or rights of Agent Bank. Any
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on
Borrowers in any case shall entitle Borrowers to any other further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.01
shall be binding on each assignee, transferee or recipient of Agent Bank's or
any Lender's respective Syndication Interest in the Credit Facility at the
time outstanding. No modification of Section 2.08 or the Swingline Note shall
be made without the consent of the Swingline Lender. No modification of
Section 2.09 shall be made without the consent of the L/C Issuer.
Section 10.02. FAILURE TO EXERCISE RIGHTS. Nothing herein contained
shall impose upon Banks or Borrowers any obligation to enforce any terms,
covenants or conditions contained herein. Failure of Banks or Borrowers, in
any one or more instances, to insist upon strict performance by Borrowers or
Banks of any terms, covenants or conditions of this Credit Agreement or the
other Loan Documents, shall not be considered or taken as a waiver or
relinquishment by Banks or Borrowers of their right to insist upon and to
enforce in the future, by injunction or other appropriate legal or equitable
remedy, strict compliance by Borrowers or Banks with all the terms, covenants
and conditions of this Credit Agreement and the other Loan Documents. The
consent of Banks or Borrowers to any act or omission by Borrowers or Banks
shall not be construed to be a consent to any other or subsequent act or
omission or to waive the requirement for Banks' or Borrowers' consent to be
obtained in any future or other instance.
Section 10.03. NOTICES AND DELIVERY. Unless otherwise specifically
provided herein, any consent, notice or other communication herein required
or permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or United States mail and shall be
deemed to have been given when delivered in person or by courier service,
upon receipt of a telecopy (or on the next Banking Business Day if such
telecopy is received on a nonBanking Business Day or after 5:00 p.m. on a
Banking Business Day) or four (4) Banking Business Days after deposit in the
United States mail (registered or certified, with postage prepaid and
properly addressed). Notices to Agent Bank pursuant to Articles II shall not
be effective until received by Agent Bank. For the purposes hereof, the
addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 10.03) shall be as set forth below each
party's name on the signature pages hereof, or, as to each party, at such
other address as may be designated by such party
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in an Assignment and Assumption Agreement or in a written notice to all of
the other parties. All deliveries to be made to Agent Bank for distribution
to the Lenders shall be made to Agent Bank at the addresses specified for
notice on the signature page hereto and in addition, a sufficient number of
copies of each such delivery shall be delivered to Agent Bank for delivery to
each Lender at the address specified for deliveries on the signature page
hereto or such other address as may be designated by Agent Bank in a written
notice.
Section 10.04. MODIFICATION IN WRITING. This Credit Agreement and the
other Loan Documents constitute the entire agreement between the parties and
supersede all prior agreements whether written or oral with respect to the
subject matter hereof, including, but not limited to, the Existing Credit
Agreement, the Existing Revolving Credit Note, Existing Swingline Note and
any term sheets furnished by any of the Banks to Borrowers. Neither this
Credit Agreement, nor any other Loan Documents, nor any provision herein, or
therein, may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
Section 10.05. OTHER AGREEMENTS. If the terms of any documents,
certificates or agreements delivered in connection with this Credit Agreement
are inconsistent with the terms of the Loan Documents, Borrowers shall use
their best efforts to amend such document, certificate or agreement to the
satisfaction of Agent Bank to remove such inconsistency.
Section 10.06. COUNTERPARTS. This Credit Agreement may be executed by
the parties hereto in any number of separate counterparts with the same
effect as if the signatures hereto and hereby were upon the same instrument.
All such counterparts shall together constitute but one and the same document.
Section 10.07. RIGHTS, POWERS AND REMEDIES ARE CUMULATIVE. None of the
rights, powers and remedies conferred upon or reserved to Agent Bank, Banks
or Borrowers in this Credit Agreement are intended to be exclusive of any
other available right, power or remedy, but each and every such right, power
and remedy shall be cumulative and not alternative, and shall be in addition
to every right, power and remedy herein specifically given or now or
hereafter existing at law, in equity or by statute. Any forbearance, delay or
omission by Agent Bank, Banks or Borrowers in the exercise of any right,
power or remedy shall not impair any such right, power or remedy or be
considered or taken as a waiver or relinquishment of the right to insist upon
and to enforce in
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the future, by injunction or other appropriate legal or equitable remedy, any
of said rights, powers and remedies given to Agent Bank, Banks or Borrowers
herein. The exercise of any right or partial exercise thereof by Agent Bank,
Banks or Borrowers shall not preclude the further exercise thereof and the
same shall continue in full force and effect until specifically waived by an
instrument in writing executed by Agent Bank or Banks, as the case may be.
Section 10.08. CONTINUING REPRESENTATIONS. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Credit Agreement, the making of the Bank Facilities
hereunder and the execution and delivery of each other Loan Document until
final payment of all sums owing under the Bank Facilities and Bank Facility
Termination has occurred.
Section 10.09. SUCCESSORS AND ASSIGNS. All of the terms, covenants,
warranties and conditions contained in this Credit Agreement shall be binding
upon and inure to the sole and exclusive benefit of the parties hereto and
their respective successors and assigns.
Section 10.10. ASSIGNMENT OF LOAN DOCUMENTS BY BORROWERS OR SYNDICATION
INTERESTS BY LENDERS.
a. This Credit Agreement and the other Loan Documents to which
Borrowers are a party will be binding upon and inure to the benefit of
Borrowers, the Agent Bank, each of the Banks, and their respective successors
and assigns, EXCEPT that, Borrowers may not assign their rights hereunder or
thereunder or any interest herein or therein without the prior written
consent of all the Lenders. Any attempted assignment or delegation in
contravention of the foregoing shall be null and void. Any Lender may at any
time pledge its Syndication Interest in the Credit Facility, the Credit
Agreement and the Loan Documents to a Federal Reserve Bank, but no such
pledge shall release that Lender from its obligations hereunder or grant to
such Federal Reserve Bank the rights of a Lender hereunder absent foreclosure
of such pledge.
b. Each Lender may assign all or any part of its Syndication Interest
in the Credit Facility to any Affiliate of such Lender or to any other Lender
without consent and to one or more financial institutions that are Eligible
Assignees with the prior consent of the Agent Bank (which consent shall not
be unreasonably withheld or delayed) and, so long as no Default or Event of
Default has occurred and remains continuing, with the prior consent of the
Borrowers (which consent shall not be unreasonably withheld or delayed);
PROVIDED, however, that the minimum amount of each such
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assignment shall be Five Million Dollars ($5,000,000.00), or such lesser
amount as constitutes the remaining amount of a Lender's Syndication Interest
in the Credit Facility (except that there shall be no minimum assignment
among the Lenders or to their Affiliates), and each assignee Lender (or
assignor if so agreed between the assignee Lender and such assignor) shall
pay to the Agent Bank an assignment fee of Three Thousand Five Hundred
Dollars ($3,500.00) with respect to each such assignment. Each such
assignment shall be evidenced by an assignment substantially in the form of
an Assignment and Assumption Agreement or other form reasonably acceptable to
Agent Bank and Borrowers. Upon any such assignment, the assignee financial
institution shall become a Lender for all purposes under the Credit Agreement
and each of the Loan Documents and the assigning Lender shall be released
from its further obligations hereunder to the extent of such assignment.
Notwithstanding the foregoing, the rights of the Lenders to make assignments
shall be subject to the approval by the Gaming Authorities of the assignee or
participant, to the extent required by applicable Gaming Laws, and to
applicable securities laws.
c. Each Lender may sell participations without notice to or consent
of the Borrowers, or any of them, or Agent Bank to any bank or financial
institution which is not a competitor or an Affiliate of any competitor of
the Casino Facilities in the gaming industry (it being acknowledged that a
bank or financial institution shall not be deemed a competitor or Affiliate
of a competitor merely because it lends money or otherwise extends credit to
any such competitor or Affiliate of a competitor), for all or any part of its
Syndication Interest in the Credit Facility; PROVIDED, however, that (i) such
Lender shall remain responsible for its total obligations under the Credit
Agreement and each of the Loan Documents, (ii) the Borrowers and the Agent
Bank shall continue to deal solely with such Lender in connection with such
Lender's rights and obligations under the Credit Agreement and each of the
Loan Documents, and (iii) such Lender shall not sell any participation under
which the participant would have rights to approve any amendment or waiver
relating to the Credit Agreement or any Loan Document except to the extent
any such amendment or waiver would (w) extend the final maturity date or the
date for the payment of any installments of fees, principal or interest due
in respect of the Credit Facility, (x) reduce the interest rates applicable
to the Credit Facility or (y) release any material portion of the Collateral
or any Borrower or Subsidiary Guarantor. Notwithstanding the foregoing, the
rights of the Lenders to grant participations shall be subject to the
approval by the Gaming Authorities of the assignee or participant, to the
extent required by applicable Gaming Laws, and to applicable securities laws.
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d. In the event any Lender is found unsuitable as a Lender under the
Credit Facility by the Gaming Authorities or the Governmental Authorities of
any State of the United States ("Unsuitable Lender"): (a) Agent Bank shall
use its best efforts to find a replacement Lender, (b) Borrowers shall have
the right to make a Voluntary Reduction in the amount necessary to reduce the
Aggregate Commitment by the amount of the Syndication Interest held by the
Unsuitable Lender, and any payments required in connection with such
Voluntary Reduction shall be made to the Unsuitable Lender and not on a pro
rata basis to all Lenders, (without any penalties, including any Breakage
Charges) until a replacement Lender, if any, commits to acquire the
Syndication Interest of the Unsuitable Lender, at which time the Aggregate
Commitment shall be increased by the amount of the Voluntary Reduction, and
(c) upon full payment of all outstanding amounts of principal and interest
owing it, such Unsuitable Lender shall execute such documents as may be
required by Agent Bank, Borrowers or any applicable gaming authorities to
evidence the termination of its Syndication Interest in the Credit Facility.
Section 10.11. ACTION BY LENDERS. Whenever Banks shall have the right
to make an election, or to exercise any right, or their consent shall be
required for any action under this Credit Agreement or the Loan Documents,
then such election, exercise or consent shall be given or made for all Banks
by Agent Bank in accordance with the provisions of Sections 10.01. Notices,
reports and other documents required to be given by Borrowers to Banks
hereunder may be given by Borrowers to Agent Bank on behalf of Banks, with
sufficient copies for distribution to each of the Banks, and the delivery to
Agent Bank shall constitute delivery to Banks. In the event any payment or
payments are received by a Lender other than Agent Bank, Borrowers consent to
such payments being shared and distributed as provided herein.
Section 10.12. TIME OF ESSENCE. Time shall be of the essence of this
Credit Agreement.
Section 10.13. CHOICE OF LAW AND FORUM. This Credit Agreement shall be
governed by and construed in accordance with the internal laws of the State
of Nevada without regard to principles of conflicts of law. Borrowers,
Lenders and Agent Bank further agree that a non-exclusive forum for the
determination of any action relating to this Credit Agreement, the Loan
Documents, or any other document or instrument delivered in favor of Banks
pursuant to the terms hereof may include an appropriate Court of the State of
Nevada or the United States District Court or United States Bankruptcy Court
for the District of Nevada and the Borrowers, Lenders and Agent Bank hereby
irrevocably submit to the jurisdiction thereof.
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Section 10.14. ARBITRATION.
a. Upon the request of any party, whether made before or after the
institution of any legal proceeding, any action, dispute, claim or
controversy of any kind (e.g., whether in contract or in tort, statutory or
common law, legal or equitable) ("Dispute") now existing or hereafter arising
between the parties in any way arising out of, pertaining to or in connection
with the Credit Agreement, Loan Documents or any related agreements,
documents, or instruments (collectively the "Documents"), may, by summary
proceedings (e.g., a plea in abatement or motion to stay further
proceedings), bring an action in court to compel arbitration of any Dispute.
b. All Disputes between the parties shall be resolved by binding
arbitration governed by the Commercial Arbitration Rules of the American
Arbitration Association, which shall use the Federal Rules of Civil Procedure
with respect to all discovery matters. Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction.
c. No provision of, nor the exercise of any rights under this
arbitration clause shall limit the rights of any party, and the parties shall
have the right during any Dispute, to seek, use and employ ancillary or
preliminary remedies, judicial or otherwise, for the purposes of realizing
upon, preserving, protecting or foreclosing upon any property, real or
personal, which is involved in a Dispute, or which is subject to, or
described in, the Documents, including, without limitation, rights and
remedies relating to: (i) foreclosing against any real or personal property
collateral or other security by the exercise of a power of sale under the
Security Documentation or other security agreement or instrument, or
applicable law, (ii) exercising self-help remedies (including setoff rights)
or (iii) obtaining provisional or ancillary remedies such as injunctive
relief, sequestration, attachment, garnishment or the appointment of a
receiver from a court having jurisdiction before, during or after the
pendency of any arbitration. The institution and maintenance of an action for
judicial relief or pursuit of provisional or ancillary remedies or exercise
of self-help remedies shall not constitute a waiver of the right of any
party, including the plaintiff, to submit the Dispute to arbitration nor
render inapplicable the compulsory arbitration provision hereof.
Section 10.15. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, BORROWERS AND EACH OF THE BANKS EACH MUTUALLY HEREBY EXPRESSLY WAIVE ANY
RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR
PROCEEDING
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ARISING UNDER OR WITH RESPECT TO THIS CREDIT AGREEMENT, THE NOTES OR ANY OF
THE LOAN DOCUMENTS, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE DEALINGS OF BORROWERS AND BANKS WITH RESPECT TO THIS CREDIT AGREEMENT,
THE NOTES OR ANY OF THE LOAN DOCUMENTS, OR THE TRANSACTIONS RELATED HERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, BORROWERS AND EACH OF THE BANKS EACH MUTUALLY AGREE THAT
ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDINGS SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT THE DEFENDING PARTY MAY FILE
AN ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS
WRITTEN EVIDENCE OF THE CONSENT OF THE COMPLAINING PARTY TO THE WAIVER OF ITS
RIGHT TO TRIAL BY JURY.
Section 10.16. SCOPE OF APPROVAL AND REVIEW. Any inspection of the
Casino Facilities shall be deemed to be made solely for Banks' internal
purposes and shall not be relied upon by the Borrowers or any third party. In
no event shall Lenders be deemed or construed to be joint venturers or
partners of Borrowers.
Section 10.17. SEVERABILITY OF PROVISIONS. In the event any one or more
of the provisions contained in this Credit Agreement shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
Section 10.18. CUMULATIVE NATURE OF COVENANTS. All covenants contained
herein are cumulative and not exclusive of each other covenant. Any action
allowed by any covenant shall be allowed only if such action is not
prohibited by any other covenant.
Section 10.19. COSTS TO PREVAILING PARTY. If any action or arbitration
proceeding is brought by any party against any other party under this Credit
Agreement or any of the Loan Documents, the prevailing party shall be
entitled to recover such costs and attorney's fees as the court in such
action or proceeding may adjudge reasonable.
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Section 10.20. EXPENSES.
a. GENERALLY. Borrowers agree within ten (10) Banking Business Days
following demand to pay, or reimburse Agent Bank for, all of Agent Bank's
documented reasonable out-of-pocket costs and expenses of every type and
nature incurred by Agent Bank at any time (whether prior to, on or after the
date of this Credit Agreement) in connection with (i) any requests for
consent, waiver or other modification of any Loan Document made by Borrowers,
other than to correct errors attributable to the Banks; (ii) the negotiation,
preparation and execution of this Credit Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the
conditions set forth in Article III), the Security Documentation and the
other Loan Documents and the advance of Borrowings; (iii) the subordination
of any Collateral requested by Borrowers, including title charges, recording
fees and reasonable attorneys' fees and costs incurred in connection
therewith; (iv) any appraisals performed after the occurrence of an Event of
Default; (v) the creation, perfection or protection of the Security
Documentation on the Collateral (including, without limitation, any fees and
expenses for title and lien searches, local counsel in various jurisdictions,
filing and recording fees and taxes, duplication costs and corporate search
fees); and (vi) the protection, collection or enforcement of any of the
Obligations or the Collateral, including Protective Advances.
b. AFTER EVENT OF DEFAULT. Borrowers further agree to pay, or
reimburse Agent Bank and Lenders, for all reasonable out-of-pocket costs and
expenses, including without limitation reasonable attorneys' fees and
disbursements incurred by Agent Bank or Lenders after the occurrence of an
Event of Default (i) in enforcing any Obligation or in foreclosing against
the Collateral or exercising or enforcing any other right or remedy available
by reason of such Event of Default; (ii) in connection with any refinancing
or restructuring of the credit arrangements provided under this Credit
Agreement in the nature of a "work-out" or in any insolvency or bankruptcy
proceeding; (iii) in commencing, defending or intervening in any litigation
or in filing a petition, complaint, answer, motion or other pleadings in any
legal proceeding relating to Borrowers and related to or arising out of the
transactions contemplated hereby (whether in bankruptcy or otherwise); (iv)
in protecting, preserving, collecting, leasing, selling, taking possession
of, or liquidating any of the Collateral; or (v) in attempting to enforce or
enforcing any lien in any of the Collateral or any other rights under the
Security Documentation.
Section 10.21. SECURITY AND LOAN DOCUMENTATION. The
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Security Documentation and other Loan Documents (other than this Credit
Agreement) may be held in the name of WFB as the Agent Bank of all Banks
hereunder pursuant to the terms of this Credit Agreement.
Section 10.22. SETOFF. In addition to any rights and remedies of the
Banks provided by law, if any Event of Default exists, Agent Bank is
authorized at any time and from time to time, without prior notice to the
Borrowers, any such notice being waived by the Borrowers to the fullest
extent permitted by law, to set-off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held by such
Bank to or for the credit or the account of Borrowers against any and all
obligations of Borrowers under the Bank Facilities, now or hereafter
existing, irrespective of whether or not the Agent Bank or any such Bank
shall have made demand under this Credit Agreement or any Loan Document and
although such amounts owed may be contingent or unmatured. Agent Bank agrees
promptly to notify the Borrowers and the Agent Bank (and Agent Bank shall
promptly notify each other Bank) after any such setoff and application made
by Agent Bank; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Bank under this Section 10.22 are in addition to the other rights and
remedies (including other rights of setoff) which each such Bank may have.
Section 10.23. BORROWERS' WAIVERS AND CONSENTS.
a. Each Borrower shall be jointly and severally liable for the
repayment of all Aggregate Outstandings.
b. Each Borrower agrees that neither the Agent Bank nor any Bank
shall have any responsibility to inquire into the apportionment, allocation
or disposition of any Borrowings, Swingline Advances and/or Letters of Credit
as among the Borrowers.
c. For the purpose of implementing the joint borrower provisions of
this Credit Agreement and each of the Loan Documents, each Borrower hereby
irrevocably appoints each other Borrower as its agent and attorney-in-fact
for all purposes of this Credit Agreement and each of the Loan Documents,
including without limitation the giving and receiving of notices and other
communications, the making of requests for, or conversions or continuations
of, Borrowings, Swingline Advances and/or Letters of Credit, the execution
and delivery of certificates and the receipt and allocation of disbursements
from the Banks.
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d. Each Borrower acknowledges that the handling of the Bank
Facilities on a joint borrowing basis as set forth in this Credit Agreement
is solely an accommodation to Borrowers and is done at their request. Each
Borrower agrees that neither the Agent Bank, nor any Bank, shall incur any
liability to any Borrower as a result thereof (except as a result of the
breach hereof by any such Person or such Person's gross negligence or wilful
misconduct). To induce the Agent Bank and the Banks to enter into this Credit
Agreement, and in consideration thereof, in accordance with the provisions
set forth in Section 5.14 of this Credit Agreement, each Borrower hereby
agrees to indemnify the Agent Bank and each Bank and hold each such entity
harmless from and against any and all liabilities, expenses, losses, damages
and/or claims of damage or injury asserted against such entity (except as a
result of the breach hereof by any such Person or such Person's gross
negligence or wilful misconduct) by any member of the Borrower Consolidation
arising from or incurred by reason of the structuring of the Bank Facilities
as herein provided, reliance by the Agent Bank or the Banks on any requests
or instructions from any Borrower. This Section shall survive Bank Facility
Termination.
e. Each Borrower represents and warrants to the Agent Bank and the
Banks that (i) it has established adequate means of obtaining from each other
Borrower on a continuing basis financial and other information pertaining to
the business, operations and condition (financial and otherwise) of each of
the other Borrowers and its respective property, and (ii) each Borrower now
is and hereafter will be familiar with the business, operations and condition
(financial and otherwise) of each other Borrower, and its property. Each
Borrower hereby waives and relinquishes any duty on the part of the Agent
Bank or any Bank to disclose to such Borrower any matter, fact or thing
relating to the business, operations or condition (financial or otherwise) of
any other Borrower, or the property of any other Borrower, whether now or
hereafter known by the Agent Bank or any Bank at any time through Bank
Facility Termination.
f. Each Borrower acknowledges that the Aggregate Outstandings, or
portions thereof, may derive from value provided directly to another Person
and, in full recognition of that fact, each Borrower consents and agrees that
the Agent Bank and any Bank may, at any time and from time to time, without
notice or demand, and without affecting the enforceability or security of the
Loan Documents:
(i) accept partial payments on the Bank Facilities;
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(ii) receive and hold additional security or guaranties for the Bank
Facilities or any part thereof;
(iii) release, reconvey, terminate, waive, abandon, subordinate,
exchange, substitute, transfer and enforce any security or guaranties, and
apply any security and direct the order or manner of sale thereof, as the
Agent Bank or such Bank in its sole and absolute discretion may determine,
in accordance with the terms of the Loan Documents;
(iv) release any party or any guarantor from any personal liability with
respect to the Bank Facilities or any part thereof;
(v) settle, release on terms satisfactory to the Agent Bank or such
Bank or by operation of applicable laws or otherwise liquidate or enforce
any Bank Facilities and any security or guaranty in any manner, consent to
the transfer of any security and bid and purchase at any sale, in
accordance with the terms of the Loan Documents; and/or
(vi) consent to the merger, change or any other restructuring or
termination of the corporate existence of any other Borrower or any other
Person, and correspondingly restructure the Bank Facilities, continuing
existence of any lien or encumbrance under any other Loan Document to which
any Borrower is a party or the enforceability hereof or thereof with
respect to all or any part of the Bank Facilities.
Each Borrower expressly waives any right to require the Agent Bank or
any Bank to marshal assets in favor of any Borrower, any other party or any
other Person or to proceed against any other Borrower or any other party or
any Collateral provided by any other Borrower or any other party, and
agrees that the Agent Bank and any Bank may proceed against Borrowers
and/or the Collateral in such order as they shall determine in their sole
and absolute discretion. The Agent Bank and any Bank may file a separate
action or actions against any Borrower, whether action is brought or
prosecuted with respect to any other security or against any other Person,
or whether any other Person is joined in any such action or actions. Each
Borrower agrees that the Agent Bank or any Bank and any other Borrower may
deal with each other in connection with
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the Bank Facilities or otherwise, or alter any contracts or agreements
now or hereafter existing between any of them, in any manner whatsoever,
all without in any way altering or affecting the obligations of such
Borrower under the Loan Documents. Each Borrower expressly waives any and
all defenses now or hereafter arising or asserted by reason of: (a) any
disability or other defense of any other Borrower or any other party with
respect to any Bank Facilities, (b) the unenforceability or invalidity as
to any other Borrower or any other party of the Bank Facilities, (c) the
unenforceability or invalidity of any security or guaranty for the Bank
Facilities granted by any other Borrower or the lack of perfection or
continuing perfection or failure of priority of any security for the Bank
Facilities, (d) the cessation for any cause whatsoever of the liability of
any other Borrower or any other party (other than by reason of the full
payment of all Bank Facilities), (e) any failure of the Agent Bank or any
Bank to give notice of sale or other disposition to any other Borrower or
any defect in any notice that may be given in connection with any sale or
disposition, (f) any act or omission of the Agent Bank or any Bank or
others that directly or indirectly results in or aids the discharge or
release of any Borrower or any other Person or the Bank Facilities or any
other security or guaranty therefor by operation of law or otherwise,
(g) any law which provides that the obligation of a surety or guarantor
must neither be larger in amount nor in other respects more burdensome than
that of the principal or which reduces a surety's or guarantor's obligation
in proportion to the principal obligation, (h) any failure of the Agent
Bank or any Bank to file or enforce a claim in any bankruptcy or other
proceeding with respect to any Person, (i) the election by the Agent Bank
or any 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, (j) any extension of credit or the grant of any lien or
encumbrance under Section 364 of the United States Bankruptcy Code, (k) any
use of cash collateral under Section 363 of the United States Bankruptcy
Code, (l) any agreement or stipulation with respect to the provision of
adequate protection in any bankruptcy proceeding of any Person, (m) the
avoidance of any lien or encumbrance in favor of the Agent Bank or any Bank
for any reason, (n) any
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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 (o) any election of remedies by the Agent Bank or any Bank,
even if the effect thereof is to destroy or impair any Borrower's right to
subrogation, reimbursement, xeoneration, indemnification or contribution.
g. In the event that all or any part of the Bank Facilities 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 Borrower authorizes
the Agent Bank and any Bank, upon the occurrence of any Default Notice
Recording and the acceleration of the Indebtedness then owing under the Bank
Facilities, at their sole option, without any other notice or demand and
without affecting any of the Bank Facilities or the validity or
enforceability of any liens or encumbrance in favor of the Agent Bank or any
Bank on any Collateral, to foreclose any or all of such deeds of trust or
mortgages by judicial or nonjudicial sale. To the extent permitted by
applicable law, each Borrower expressly waives any defenses to the
enforcement of the Loan Documents or any liens or encumbrances created or
granted under the Loan Documents or to the recovery by the Agent Bank or any
Bank against any other Borrower or any guarantor or any other Person liable
therefor of any deficiency after a judicial or nonjudicial foreclosure or
sale, even though such a foreclosure or sale may impair the subrogation
rights of a Borrower and may preclude a Borrower from obtaining reimbursement
or contribution from any Borrower.
h. Notwithstanding anything to the contrary elsewhere contained
herein or in any other Loan Document to which any Borrower is a party, each
Borrower hereby expressly agrees with respect to the other Borrowers and
their successors and assigns (including any surety) and any other Person
which is directly or indirectly a creditor of the other Borrowers or any
surety for any other Borrower, not to exercise, until Bank Facility
Termination has irrevocably occurred, any rights at law or in equity to
subrogation, to reimbursement, to exoneration, to contribution, to setoff or
to any other rights that could accrue to a surety against a principal, to a
guarantor against a maker or obligor, to an accommodation party against the
party accommodated, or to a holder or transferee against a maker, and which
such Borrower may have or hereafter acquire against the other Borrowers or
any other such Person in connection with or as a result of such Borrower's
execution, delivery and/or performance of this Credit Agreement or any
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other Loan Document to which such Borrower is a party.
Section 10.24. CONFIDENTIALITY. Each of the Banks agrees to hold any
non-public information that it may receive from Borrowers pursuant to this
Credit Agreement (or pursuant to any other Loan Document) in confidence and
consistent with their respective policies for handling material non-public
information, EXCEPT for disclosure: (a) To the other Banks; (b) To legal
counsel and accountants for Borrowers or any of the Banks; (c) To the other
professional advisors to Borrowers or any of the Banks, provided that the
recipient has accepted such information subject to a confidentiality
agreement substantially similar to this Section 10.24; (d) To regulatory
officials having jurisdiction over that Bank; (e) To any Gaming Authority
having regulatory jurisdiction over Borrowers or their respective
Subsidiaries, provided that each of the Banks shall notify Borrowers of any
such disclosure prior to such disclosure, if such prior notice is reasonably
possible; (f) As required by law or legal process or in connection with any
legal proceeding, provided that such disclosing Bank uses reasonable efforts
to notify Borrowers prior to any such disclosure; and (g) To another
financial institution in connection with a disposition or proposed
disposition to that financial institution of all or part of that Lender's
Syndication Interest hereunder or in the Revolving Credit Note, provided that
the recipient has accepted such information subject to a confidentiality
agreement substantially similar to this Section 10.24. For purposes of the
foregoing, "non-public information" shall mean any information respecting
Borrowers or their respective Subsidiaries reasonably considered by Borrowers
to be material and not available to the public, OTHER THAN (i) information
previously filed with any governmental agency and available to the public,
(ii) information which is available to the general public at the time of use
or disclosure, (iii) information which becomes available to the general
public, other than by manner of unauthorized disclosure or use, or (iv)
information previously published in any public medium from a source other
than, directly or indirectly, that Bank. Nothing in this Section shall be
construed to create or give rise to any fiduciary duty on the part of the
Agent Bank or the Banks to Borrowers.
Section 10.25. THE EXISTING HARVEYS CREDIT AGREEMENT. The parties
hereto agree that as of the Amendment Effective Date the Existing Harveys
Credit Agreement shall be and is hereby amended, superseded and restated in
its entirety by this Credit Agreement.
Section 10.26. ACKNOWLEDGMENT OF RECEIPT OF DOCUMENTS. Borrowers hereby
acknowledge receipt of a complete and accurate copy of this Credit Agreement
and all other Loan
191
<PAGE>
Documents executed by Borrowers in connection with the Credit Agreement at
the time of execution.
Section 10.27. APPLICATION OF GAMING LAWS. Notwithstanding anything
contained in this Credit Agreement or any of the Loan Documents to the
contrary, all provisions of this Credit Agreement and each of the Loan
Documents, including, but not limited to, the rights and remedies of Agent
Bank, are subject to the provisions and requirements of, and approvals
required by, all Gaming Laws.
Section 10.28. SCHEDULES ATTACHED. Schedules are
attached hereto and incorporated herein and made a part hereof
as follows:
Schedule 2.01(a) - Schedule of Lenders' Proportions
in Credit Facility
Schedule 2.01(c) - Aggregate Commitment Reduction
Schedule
Schedule 2.09(e) - Schedule of Outstanding Letters
of Credit
Schedule 3.11 - Schedule of Existing Bank Loan
Security Documents
Schedule 3.20 - Schedule of Significant
Litigation
Schedule 4.18 - Schedules of Spaceleases
(A) Tahoe Schedule of
Spaceleases
(B) Colorado Schedule of
Spaceleases
(C) Iowa Schedule of
Spaceleases
(D) Bluffs Run Schedule of
Spaceleases
Schedule 4.19 - Schedules of Equipment Leases
and Contracts
(A) Tahoe Schedule of Equipment
Leases and Contracts
(B) Colorado Schedule of
Equipment Leases and
192
<PAGE>
Contracts
(C) Iowa Schedule of Equipment
Leases and Contracts
(D) Bluffs Run Schedule of
Equipment Leases and
Contracts
Schedule 4.22 - Schedule of Restricted and
Unrestricted Subsidiaries
Schedule 4.27 - Schedule of Trademarks, Patents,
Licenses, Franchises, Formulas
and Copyrights
Schedule 4.28 - Schedule of Contingent
Liabilities
Schedule 6.09 - Schedule of Liens
Section 10.29. EXHIBITS ATTACHED. Exhibits are attached hereto and
incorporated herein and made a part hereof as follows:
Exhibit A - Revolving Credit Note - Form
Exhibit B - Swingline Note - Form
Exhibit C - Notice of Borrowing - Form
Exhibit D - Continuation/Conversion Notice - Form
Exhibit E - Notice of Swingline Advance - Form
Exhibit F - Compliance Certificate - Form
Exhibit G - Pricing Certificate - Form
Exhibit H - Authorized Officer Certificate - Form
Exhibit I - Closing Certificate - Form
Exhibit J - Legal Opinions - Form
Exhibit K - Assumption and Consent Agreement - Form
Exhibit L - Assignment and Assumption Agreement - Form
193
<PAGE>
Exhibit M - Cash Collateral Pledge Agreement - Form
Exhibit N - Stock Pledge (Gaming) - Form
Exhibit O - Stock Pledge (General) - Form
Exhibit P - Subsidiary Guaranty - Form
Exhibit Q - Tahoe Real Property - Description
Exhibit R - Colorado Real Property - Description
Exhibit S - Iowa Real Property - Description
Exhibit T - Bluffs Run Real Property - Description
194
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Credit Agreement to be executed as of the day and year first above written.
BORROWERS:
HARVEYS CASINO RESORTS,
a Nevada corporation
By /s/ Charles W. Scharer
----------------------
Charles W. Scharer,
President and CEO
By /s/ John McLaughlin
-------------------
John McLaughlin,
Senior Vice President,
Treasurer and CFO
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
- ---------------------------------------------------------------------------
S-1
<PAGE>
HARVEYS C.C. MANAGEMENT
COMPANY, INC.,
a Nevada corporation
By /s/ Charles W. Scharer
----------------------
Charles W. Scharer,
President
By /s/ John McLaughlin
-------------------
John McLaughlin,
Secretary/Treasurer
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
- ----------------------------------------------------------------------------
S-2
<PAGE>
HARVEYS IOWA MANAGEMENT
COMPANY, INC.,
a Nevada corporation
By /s/ Charles W. Scharer
----------------------
Charles W. Scharer,
President
By /s/ Charles W. Scharer
----------------------
John McLaughlin,
Secretary/Treasurer
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
- ----------------------------------------------------------------------------
S-3
<PAGE>
HARVEYS TAHOE MANAGEMENT
COMPANY, INC., a Nevada
corporation
By /s/ Charles W. Scharer
----------------------
Charles W. Scharer,
President
By /s/ John McLaughlin
-------------------
John McLaughlin,
Secretary/Treasurer
Address:
Highway 50
P.O. Box 128
Stateline, NV 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
- ---------------------------------------------------------------------------
S-4
<PAGE>
HCR SERVICES COMPANY, INC.,
a Nevada corporation
By /s/ Charles W. Scharer
----------------------
Charles W. Scharer,
President
By /s/ John McLaughlin
-------------------
John McLaughlin,
Secretary/Treasurer
Address:
Highway 50
P.O. Box 128
Stateline, NV 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
- ----------------------------------------------------------------------------
S-5
<PAGE>
HBR REALTY COMPANY, INC.,
a Nevada corporation
By /s/Charles W. Scharer
---------------------
Charles W. Scharer,
President
By /s/ John McLaughlin
-------------------
John McLaughlin,
Secretary/Treasurer
Address:
Highway 50
P.O. Box 128
Stateline, NV 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
- ----------------------------------------------------------------------------
S-6
<PAGE>
HARVEYS BR MANAGEMENT
COMPANY, INC.,
a Nevada corporation
By /s/ Charles W. Scharer
----------------------
Charles W. Scharer,
President
By /s/John McLaughlin
------------------
John McLaughlin,
Secretary/Treasurer
Address:
Highway 50
P.O. Box 128
Stateline, NV 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
- ----------------------------------------------------------------------------
S-7
<PAGE>
BANKS:
WELLS FARGO BANK,
National Association,
Agent Bank, Lender,
Swingline Lender and L/C
Issuer
By /s/ Sue Fuller
--------------
Sue Fuller,
Vice President
Address:
One East First Street
Reno, Nevada 89501
Telephone: (702) 334-5633
Facsimile: (702) 334-5637
with a copy to:
Wells Fargo Bank, N.A.
Commercial Loan Service
Center
Agency Dept. 2840
201 Third Street, 8th Floor
San Francisco, CA 94103
Attn: Lissette G. Carrillo,
Syndication Specialist
Telephone: (415) 477-5330
Facsimile: (415) 512-9408
S-8
<PAGE>
CREDIT LYONNAIS
LOS ANGELES BRANCH,
Lender and Syndication
Agent
By /s/ Dianne M. Scott
-------------------
Dianne M. Scott
First Vice President
Address:
515 S. Flower Street
Suite 2200
Los Angeles, CA 90071
Telephone: (213) 362-5955
Facsimile: (213) 623-3437
- -----------------------------------------------------------------------------
S-9
<PAGE>
BANKERS TRUST COMPANY,
Lender
By /s/ Steven P. Lapham
--------------------
Name Steven P. Lapham
----------------
Title Director
--------
Address:
130 Liberty Street
25th Floor
New York, NY 10086
Telephone: (212) 250-2781
Facsimile: (212) 669-0743
- -----------------------------------------------------------------------------
S-10
<PAGE>
SOCIETE GENERALE,
Lender and Co-Managing Agent
By /s/ Alex Y. Kim
---------------
Name Alex Y. Kim
-----------
Title Vice President
--------------
Address:
2029 Century Park East
Suite 2900
Los Angeles, CA 90067
Telephone: (310) 788-7108
Facsimile: (310) 551-1537
- -------------------------------------------------------------------------
S-11
<PAGE>
BANK ONE, N.A.,
Lender and Co-Managing
Agent
By /s/ Kandis A. Jaffrey
---------------------
Name Kandis A. Jaffrey
-----------------
Title Vice President
--------------
Address:
777 South Figueroa Street
4th Floor
Los Angeles, CA 90017-5800
Telephone: (213) 683-4948
Facsimile: (213) 683-4999
- --------------------------------------------------------------------------
S-12
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<PAGE>
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<S> <C>
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<FISCAL-YEAR-END> NOV-30-2000
<PERIOD-START> DEC-01-1999
<PERIOD-END> FEB-29-2000
<CASH> 34,851
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63,516
0
<COMMON> 40
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<TOTAL-LIABILITY-AND-EQUITY> 668,736
<SALES> 16,657
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