SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 27, 1996
PENN NATIONAL GAMING, INC.
(Exact Name of Registrant Specified in Charter)
Pennsylvania 0-24206 23-2234473
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
Wyomissing Professional Center
825 Berkshire Blvd., Suite 203
Wyomissing, Pennsylvania 19610
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(Address of Principal Executive Offices) (Zip Code)
---------------
Registrant's telephone number, including area code: 610-373-2400
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
On November 27, 1996, Penn National Gaming, Inc. (the "Company")
completed its previously announced acquisition of Pocono Downs Racetrack,
located in Wilkes-Barre, Pennsylvania and its two off-track wagering facilities
located in Lehigh County, Pennsylvania and Erie, Pennsylvania (the "Pocono Downs
Acquisition"). The transaction was consummated by the purchase all of the issued
and outstanding shares of capital stock of The Plains Company, and all of the
limited partnership interests in Lehigh Off-Track Wagering, L.P. and Peach
Street Ltd. Partnership, pursuant to a Purchase Agreement, dated September 13,
1996 (the "Purchase Agreement"), between the Estate of Joseph B. Banks and the
Company. The purchase price for the Pocono Downs Acquisition was $47,000,000 in
cash, subject to adjustment based on a closing date balance sheet to be prepared
after the closing. The Purchase Agreement was attached as Exhibit 10.54 to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended September
30, 1996 and is incorporated herein by reference.
In addition, on November 27, 1996, the Company entered into a Credit
Agreement (the "Credit Agreement") with various banks, CoreStates Bank, N.A., as
Co-Agent, and Bankers Trust Company, as Agent. The Credit Agreement provides for
(i) a $47,000,000 term loan which was used to fund the Pocono Downs Acquisition,
(ii) a $23,000,000 term loan, available for the purchase by a joint venture in
which the Company holds an 80% ownership interest of all of the assets of
Charles Town Racing Limited Partnership and Charles Town Races, Inc. and (iii) a
$5,000,000 revolving loan. The Credit Agreement is attached hereto as Exhibit
10.1 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
To be filed on Form 8-K/A as soon as practicable, but not
later than 60 days after this Form 8-K must be filed.
(b) Pro Forma Financial Information (unaudited).
To be filed on Form 8-K/A as soon as practicable, but not
later than 60 days after this Form 8-K must be filed.
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(c) Exhibits.
2.1 Purchase Agreement, dated September 13, 1996, between
the Estate of Joseph B. Banks and Penn National Gaming,
Inc., incorporated by reference from the Company's
Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 1996 (Exhibit 10.54).
10.1 Credit Agreement, dated as of November 27, 1996, among
Penn National Gaming, Inc., various banks, CoreStates
Bank, N.A., as Co-Agent and Bankers Trust Company, as
Agent.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PENN NATIONAL GAMING, INC.
(Registrant)
By /s/ Robert S. Ippolito
Robert I. Ippolito
Chief Financial Officer
Secretary/Treasurer
Dated: December 12, 1996
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Exhibit Index
Exhibit
10.1 Credit Agreement, dated as of November 27, 1996, among Penn National
Gaming, Inc., various banks, CoreStates Bank, N.A., as Co-Agent and
Bankers Trust Company, as Agent.
CREDIT AGREEMENT
among
PENN NATIONAL GAMING, INC.,
VARIOUS BANKS,
CORESTATES BANK, N.A.,
as CO-AGENT,
and
BANKERS TRUST COMPANY,
as AGENT
----------------------------------
Dated as of November 27, 1996
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TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit.............................. 1
1.01 The Commitments......................................... 1
1.02 Minimum Amount of Each Borrowing........................ 2
1.03 Notice of Borrowing..................................... 3
1.04 Disbursement of Funds................................... 3
1.05 Notes................................................... 4
1.06 Conversions............................................. 6
1.07 Pro Rata Borrowings..................................... 6
1.08 Interest................................................ 6
1.09 Interest Periods........................................ 7
1.10 Increased Costs, Illegality, etc........................ 8
1.11 Compensation............................................ 10
1.12 Change of Lending Office................................ 11
1.13 Replacement of Banks.................................... 11
SECTION 2. Letters of Credit....................................... 12
2.01 Letters of Credit....................................... 12
2.02 Maximum Letter of Credit Outstandings; Final Maturities. 13
2.03 Letter of Credit Requests; Minimum Stated Amount........ 14
2.04 Letter of Credit Participations......................... 14
2.05 Agreement to Repay Letter of Credit Drawings............ 16
2.06 Increased Costs......................................... 17
SECTION 3. Commitment Commission; Fees; Reductions of Commitment... 18
3.01 Fees.................................................... 18
3.02 Voluntary Termination of Unutilized Commitments......... 19
3.03 Mandatory Reduction of Commitments...................... 20
SECTION 4. Prepayments; Payments; Taxes............................ 22
4.01 Voluntary Prepayments................................... 22
4.02 Mandatory Repayments and Commitment Reductions.......... 23
4.03 Method and Place of Payment............................. 28
4.04 Net Payments............................................ 28
SECTION 5. Conditions Precedent to Credit Events on the Initial
Borrowing Date ......................................... 30
(i)
Page
5.01 Execution of Agreement; Notes........................... 30
5.02 Officer's Certificate................................... 30
5.03 Opinions of Counsel..................................... 31
5.04 Corporate Documents; Proceedings; etc................... 31
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Employment Agreements; Non-Compete
Agreements; Collective Bargaining Agreements; Tax Sharing
Agreements; Existing Indebtedness Agreements; Joint
Venture Agreements...................................... 32
5.06 Consummation of Plains Company Acquisition.............. 33
5.07 Licenses................................................ 34
5.08 Adverse Change, etc..................................... 34
5.09 Litigation.............................................. 35
5.10 Pledge Agreement........................................ 35
5.11 Security Agreement...................................... 35
5.12 Subsidiaries Guaranty................................... 36
5.13 Mortgages; Title Insurance; Survey; etc................. 36
5.14 Projections; Pro Forma Balance Sheet; Financial Review.. 37
5.15 Solvency Certificate; Environmental Analyses; Insurance
Certificates............................................ 37
5.16 Fees, etc............................................... 38
5.17 Other Indebtedness...................................... 38
SECTION 6. Conditions Precedent to the Initial Borrowing of Tranche
B Term Loans............................................ 38
6.01 Initial Borrowing Date.................................. 38
6.02 Officer's Certificate................................... 38
6.03 Opinions of Counsel..................................... 39
6.04 Proceedings............................................. 39
6.05 Consummation of the Charles Town Acquisition............ 39
6.06 Licenses................................................ 40
6.07 Adverse Change, etc..................................... 40
6.08 Litigation.............................................. 41
6.09 Security Documents; etc................................. 41
6.10 Environmental Analyses.................................. 41
6.11 Solvency Certificate.................................... 41
6.12 Due Diligence........................................... 41
SECTION 7. Conditions Precedent to All Credit Events............... 42
7.01 No Default; Representations and Warranties.............. 42
7.02 Notice of Borrowing; Letter of Credit Request........... 42
SECTION 8. Representations, Warranties and Agreements.............. 43
8.01 Corporate and Other Status.............................. 43
(ii)
Page
8.02 Corporate and Other Power and Authority................. 43
8.03 No Violation............................................ 43
8.04 Approvals............................................... 44
8.05 Financial Statements; Financial Condition; Undisclosed
Liabilitie, Projections; etc............................ 44
8.06 Litigation.............................................. 46
8.07 True and Complete Disclosure............................ 47
8.08 Use of Proceeds; Margin Regulations..................... 47
8.09 Tax Returns and Payments................................ 47
8.10 Compliance with ERISA................................... 48
8.11 The Security Documents.................................. 49
8.12 Representations and Warranties in the Documents......... 50
8.13 Properties.............................................. 50
8.14 Capitalization.......................................... 50
8.15 Subsidiaries............................................ 50
8.16 Compliance with Statutes, etc........................... 51
8.17 Investment Company Act.................................. 51
8.18 Public Utility Holding Company Act...................... 51
8.19 Environmental Matters................................... 51
8.20 Labor Relations......................................... 52
8.21 Patents, Licenses, Franchises and Formulas.............. 52
8.22 Licenses................................................ 53
8.23 Indebtedness............................................ 53
8.24 Plains Company Acquisition.............................. 53
8.25 Charles Town Acquisition................................ 54
SECTION 9. Affirmative Covenants................................... 54
9.01 Information Covenants................................... 54
9.02 Books, Records and Inspections.......................... 58
9.03 Maintenance of Property; Insurance...................... 58
9.04 Corporate Franchises.................................... 59
9.05 Compliance with Statutes, etc........................... 59
9.06 Compliance with Environmental Laws...................... 60
9.07 ERISA................................................... 60
9.08 End of Fiscal Years; Fiscal Quarters.................... 61
9.09 Performance of Obligations.............................. 62
9.10 Payment of Taxes........................................ 62
9.11 Interest Rate Protection................................ 62
9.12 Additional Security; Further Assurances................. 62
SECTION 10. Negative Covenants..................................... 63
(iii)
Page
10.01 Liens.................................................. 63
10.02 Consolidation, Merger, Purchase or Sale of Assets, etc. 66
10.03 Dividends.............................................. 68
10.04 Indebtedness........................................... 68
10.05 Advances, Investments and Loans........................ 69
10.06 Transactions with Affiliates........................... 70
10.07 Leases................................................. 71
10.08 Capital Expenditures................................... 71
10.09 Minimum Consolidated Net Worth......................... 73
10.10 Consolidated Cash Interest Coverage Ratio.............. 73
10.11 Maximum Leverage Ratio................................. 73
10.13 Limitation on Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements; etc75
10.14 Limitation on Certain Restrictions on Subsidiaries..... 76
10.15 Limitation on Issuance of Capital Stock................ 76
10.16 Business............................................... 76
10.17 Limitation on Creation of Subsidiaries................. 77
SECTION 11. Events of Default...................................... 77
11.01 Payments............................................... 77
11.02 Representations, etc................................... 77
11.03 Covenants.............................................. 77
11.04 Default Under Other Agreements......................... 78
11.05 Bankruptcy, etc........................................ 78
11.06 ERISA.................................................. 78
11.07 Security Documents..................................... 79
11.08 Subsidiaries Guaranty.................................. 79
11.09 Judgments.............................................. 79
11.10 Change of Control...................................... 80
11.11 Licenses............................................... 80
11.12 Applications........................................... 80
11.13 Legality............................................... 80
SECTION 12. Definitions and Accounting Terms....................... 81
12.01 Defined Terms.......................................... 81
SECTION 13. The Agent..............................................108
13.01 Appointment............................................108
13.02 Nature of Duties.......................................108
13.03 Lack of Reliance on the Agent and the Co-Agent.........109
13.04 Certain Rights of the Agent and the Co-Agent...........109
(iv)
Page
13.05 Reliance...............................................110
13.06 Indemnification........................................110
13.07 The Agent and the Co-Agent in their Individual
Capacities.............................................110
13.08 Holders................................................110
13.09 Resignation by the Agent or the Co-Agent...............111
SECTION 14. Miscellaneous..........................................111
14.01 Payment of Expenses, etc...............................111
14.02 Right of Setoff........................................113
14.03 Notices................................................113
14.04 Benefit of Agreement; Assignments; Participations......113
14.05 No Waiver; Remedies Cumulative.........................115
14.06 Payments Pro Rata......................................115
14.07 Calculations; Computations; Accounting Terms...........116
14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL..................................117
14.09 Counterparts...........................................118
14.10 Effectiveness..........................................118
14.11 Headings Descriptive...................................118
14.12 Amendment or Waiver; etc...............................118
14.13 Survival...............................................120
14.14 Domicile of Loans......................................120
14.15 Register...............................................120
14.16 Confidentiality........................................121
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Existing Letters of Credit
SCHEDULE IV Real Property
SCHEDULE V Subsidiaries
SCHEDULE VI Existing Indebtedness
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Existing Investments
SCHEDULE X Indebtedness to be Refinanced
SCHEDULE XI Projections
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Tranche A Term Note
EXHIBIT B-2 Tranche B Term Note
(v)
EXHIBIT B-3 Revolving Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Opinion of Morgan, Lewis & Bockius, counsel to the Credit
Parties
EXHIBIT E-2 Opinion of Mesirov Gelman Jaffe Cramer & Jamieson, counsel to
the Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Security Agreement
EXHIBIT I Subsidiaries Guaranty
EXHIBIT J Solvency Certificate
EXHIBIT K Assignment and Assumption Agreement
EXHIBIT L Intercompany Note
(vi)
CREDIT AGREEMENT, dated as of November 27, 1996, among PENN NATIONAL
GAMING, INC., a Pennsylvania corporation (the "Borrower"), the Banks party
hereto from time to time, CORESTATES BANK, N.A., as Co-Agent, and BANKERS TRUST
COMPANY, as Agent (all capitalized terms used herein and defined in Section 12
are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 01. Amount and Terms of Credit.
10.011 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with a Tranche A Term Loan Commitment
severally agrees to make a term loan or term loans (each a "Tranche A Term Loan"
and, collectively, the "Tranche A Term Loans") to the Borrower, which Tranche A
Term Loans (i) only may be incurred by the Borrower on the Initial Borrowing
Date, (ii) shall, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided that (A)
except as otherwise specifically provided in Section 1.10(b), all Tranche A Term
Loans comprising the same Borrowing shall at all times be of the same Type and
(B) no Tranche A Term Loans maintained as Eurodollar Loans may be incurred prior
to the earlier of (1) the 90th day after the Initial Borrowing Date and (2) that
date (the "Syndication Date") upon which the Agent shall have determined in its
sole discretion (and shall have notified the Borrower) that the primary
syndication (and resultant addition of institutions as Banks pursuant to Section
14.04(b)) has been completed and (iii) shall be made by each such Bank in that
aggregate principal amount which does not exceed the Tranche A Term Loan
Commitment of such Bank on the Initial Borrowing Date (before giving effect to
any reductions thereto on such date pursuant to Section 3.03(b)(i) but after
giving effect to any reductions thereto on or prior to such date pursuant to
Section 3.03(b)(ii)). Once repaid, Tranche A Term Loans incurred hereunder may
not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Tranche B Term Loan Commitment severally agrees to make, on any
Tranche B Term Loan Borrowing Date occurring on or prior to the Tranche B Term
Loan Commitment Termination Date, a term loan or term loans (each a "Tranche B
Term Loan" and, collectively, the "Tranche B Term Loans") to the Borrower, which
Tranche B Term Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that (A) except as otherwise specifically provided in Section 1.10(b),
all Tranche B Term Loans comprising the same Borrowing shall at all times be of
the same Type and (B) no Tranche B Term Loans maintained as Eurodollar Loans may
be incurred prior to the earlier of (1) the 90th day after the Initial Borrowing
Date and (2) the Syndication Date and (ii) shall be made by each such Bank in
that aggregate principal amount which does not exceed the Tranche B Term Loan
Commitment of such Bank on any such Tranche B Term Loan Borrowing Date (before
giving effect to any reductions thereto on such date pursuant to Section
3.03(c)(i) or (ii) but after giving effect to any reductions thereto on or prior
to such date pursuant to Section 3.03(c)(iii)). Once repaid, Tranche B Term
Loans incurred hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees to make, at any time
and from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, a revolving loan or revolving loans (each a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Revolving Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that (A) except as otherwise speci fically provided in Section 1.10(b),
all Revolving Loans comprising the same Borrowing shall at all times be of the
same Type and (B) no Revolving Loans maintained as Eurodollar Loans may be in
curred prior to the earlier of (1) the 90th day after the Initial Borrowing Date
and (2) the Syndication Date, (ii) may be repaid and reborrowed in accordance
with the provisions hereof, (iii) shall not exceed for any such Bank at any time
outstanding that aggregate principal amount which, when added to the product of
such Bank's RL Percentage and the aggregate amount of all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time, equals the Available Revolving Loan Commitment of
such Bank at such time and (iv) shall not exceed for all such Banks at any time
outstanding that aggregate principal amount which, when added to the amount of
all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals the Total Available
Revolving Loan Commitment at such time.
10.012 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of Loans under a respective Tranche shall not be less
than the Minimum Borrowing Amount for such Tranche. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than
eight Borrowings of Eurodollar Loans.
10.013 Notice of Borrowing. (a) Whenever the Borrower desires to
incur (x) Eurodollar Loans hereunder, the Borrower shall give the Agent at its
Notice Office at least three Busi ness Days' prior notice of each Eurodollar
Loan to be incurred hereunder and (y) Base Rate Loans hereunder, the Borrower
shall give the Agent at its Notice Office notice thereof no later than the date
on which each Base Rate Loan is to be incurred hereunder, provided that (in each
case) any such notice shall be deemed to have been given on a certain day only
if given before 11:00 A.M. (New York time)
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on such day. Each such notice (each a "Notice of Borrowing"), except as
otherwise expressly provided in Section 1.10, shall be irrevocable and shall be
given by the Borrower in writing, or by telephone promptly confirmed in writing,
in the form of Exhibit A, appropriately completed to specify the aggre gate
principal amount of the Loans to be incurred pursuant to such Borrowing, the
date of such Bor rowing (which shall be a Business Day), whether the Loans being
incurred pursuant to such Borrowing shall constitute Tranche A Term Loans,
Tranche B Term Loans or Revolving Loans and whether the Loans being incurred
pursuant to such Borrowing are to be initially maintained as Base Rate Loans or,
to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans,
the initial Interest Period to be applicable thereto. The Agent shall promptly
give each Bank which is required to make Loans of the Tranche specified in the
respective Notice of Borrowing, notice of such proposed Borrowing, of such
Bank's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Agent may act without liability upon the basis of telephonic notice
of such Borrowing or prepayment, believed by the Agent in good faith to be from
the Chairman of the Board, the President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer or the Controller of the Borrower, or from
any other authorized officer of the Borrower designated in writing by the
Borrower to the Agent as being authorized to give such notices, prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the right
to dispute the Agent's record of the terms of such telephonic notice of such
Borrowing or prepayment of Loans, absent manifest error.
10.014 Disbursement of Funds. No later than 12:00 Noon (New York
time) (or 2:00 P.M. (New York time) in the case of Base Rate Loans made on same
day notice) on the date specified in each Notice of Borrowing, each Bank with a
Commitment of the respective Tranche will make available its pro rata portion
(determined in accordance with Section 1.07) of each such Borrowing requested to
be made on such date. All such amounts will be made available in Dollars and in
immedi ately available funds at the Payment Office of the Agent, and the Agent
will make available to the Borrower at the Payment Office the aggregate of the
amounts so made available by the Banks. Unless the Agent shall have been
notified by any Bank prior to the date of Borrowing that such Bank does not
intend to make available to the Agent such Bank's portion of any Borrowing to be
made on such date, the Agent may assume that such Bank has made such amount
available to the Agent on such date of Borrowing and the Agent may (but shall
not be obligated to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Bank, the Agent shall be entitled to recover
such corresponding amount on demand from such Bank. If such Bank does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
on demand from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower until the date such
corresponding amount is recovered by the Agent, at a rate
-3-
per annum equal to (i) if recovered from such Bank, at the overnight Federal
Funds Rate and (ii) if recovered from the Borrower, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 1.08.
Nothing in this Section 1.04 shall be deemed to relieve any Bank from its
obligation to make Loans hereunder or to prejudice any rights which the Borrower
may have against any Bank as a result of any failure by such Bank to make Loans
hereunder.
10.015 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made by each Bank shall be evidenced (i) if Tranche A
Term Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1, with blanks appropriately completed in
conformity herewith (each a "Tranche A Term Note" and, collectively, the
"Tranche A Term Notes"), (ii) if Tranche B Term Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit B-2,
with blanks appropriately completed in conformity herewith (each a "Tranche B
Term Note" and, collectively, the "Tranche B Term Notes") and (iii) if Revolving
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-3, with blanks appropriately completed in
conformity herewith (each a "Revolving Note" and, collectively, the "Revolving
Notes").
(b) The Tranche A Term Note issued to each Bank that has a Tranche A
Term Loan Commitment or outstanding Tranche A Term Loans shall (i) be executed
by the Borrower, (ii) be payable to such Bank or its registered assigns and be
dated the Initial Borrowing Date (or, if issued after the Initial Borrowing
Date, be dated the date of the issuance thereof), (iii) be in a stated principal
amount equal to the Tranche A Term Loan Commitment of such Bank on the Initial
Borrowing Date (before giving effect to the making of any Tranche A Term Loans
on such date by such Bank) (or, if issued after the Initial Borrowing Date, be
in a stated principal amount equal to the outstanding principal amount of
Tranche A Term Loans of such Bank at such time) and be payable in the
outstanding principal amount of Tranche A Term Loans evidenced thereby, (iv)
mature on the Tranche A Term Loan Maturity Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(c) The Tranche B Term Note issued to each Bank that has a Tranche B
Term Loan Commitment or outstanding Tranche B Term Loans shall (i) be executed
by the Borrower, (ii) be payable to such Bank or its registered assigns and be
dated the Tranche B Term Loan Borrowing Date (or, if issued after the Initial
Borrowing Date, be dated the date of the issuance of the thereof), (iii) be in a
stated principal amount equal to the Tranche B Term Loan Commitment of such Bank
on the Initial Borrowing Date (before giving effect to the making of any Tranche
B Term Loans on such date by such Bank) (or, if issued after the Initial
Borrowing Date, be in a stated principal amount equal to any outstanding Tranche
B Term Loan Commitment of such Bank at such time plus the outstanding principal
amount of any Tranche B Term Loans of such Bank at such time) and be payable in
the outstanding principal amount of Tranche B Term Loans evidenced thereby, (iv)
mature on the Tranche B Term Loan Maturity Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in
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respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) The Revolving Note issued to each Bank that has a Revolving Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower,
(ii) be payable to such Bank or its registered assigns and be dated the Initial
Borrowing Date (or, if issued after the Initial Borrowing Date, be dated the
date of the issuance thereof), (iii) be in a stated principal amount equal to
the Revolving Loan Commitment of such Bank (or, if issued after the termination
thereof, be in a stated principal amount equal to the outstanding Revolving
Loans of such Bank at such time) and be payable in the outstanding principal
amount of the Revolving Loans evidenced thereby, (iv) mature on the Revolving
Loan Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02 and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(e) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.
10.016 Conversions. The Borrower shall have the option to convert,
on any Business Day occurring after the earlier of (1) the 90th day following
the Initial Borrowing Date and (2) the Syndication Date, all or a portion equal
to at least the Minimum Borrowing Amount of the outstanding principal amount of
Loans made pursuant to one or more Borrowings (so long as of the same Tranche)
of one or more Types of Loans into a Borrowing (of the same Tranche) of another
Type of Loan, provided that, (i) except as otherwise provided in Section
1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on the last
day of an Interest Period applicable to the Loans being converted and no such
partial conversion of Eurodollar Loans shall reduce the outstanding principal
amount of such Eurodollar Loans made pursuant to a single Borrowing to less than
the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may only
be converted into Eurodollar Loans if no Default or Event of Default is in
existence on the date of the conversion and (iii) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings of Eurodollar Loans
than is permitted under Section 1.02. Each such conversion shall be effected by
the Borrower by giving the Agent at its Notice Office prior to 11:00 A.M. (New
York time) at least three Business Days' prior notice (each a "Notice of
Conversion") specifying the Loans to be so converted, the Borrowing or
Borrowings pursuant to which such Loans were made and, if to be converted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Loans. Upon any such conversion the proceeds thereof will
be deemed to be applied directly on the day of such conversion to prepay the
outstanding principal amount of the Loans being converted.
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10.017 Pro Rata Borrowings. All Borrowings of Tranche A Term Loans,
Tranche B Term Loans and Revolving Loans under this Agreement shall be incurred
from the Banks pro rata on the basis of their Tranche A Term Loan Commitments,
Tranche B Term Loan Commitments or Revolving Loan Commitments, as the case may
be. It is understood that no Bank shall be responsible for any default by any
other Bank of its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans provided to be made by it hereunder, regardless of
the failure of any other Bank to make its Loans hereunder.
10.018 Interest. (a) The Borrower agrees to pay interest in respect
of the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the maturity thereof (whether
by acceleration or otherwise) at a rate per annum which shall be equal to the
sum of the Applicable Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Borrower until the maturity thereof (whether by
acceleration or otherwise) at a rate per annum which shall, during each Interest
Period applicable thereto, be equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the rate which
is 2% per annum in excess of the rate then borne by such Borrowings, in each
case, with such interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall determine
the Eurodollar Rate for each Interest Period applicable to Eurodollar Loans and
shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
10.019 Interest Periods. At the time the Borrower gives any Notice
of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrower shall have the right to elect, by giving the
Agent notice thereof, the interest period (each
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an "Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of the Borrower, be a one, two, three or six-month period,
provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a day for
which there is no numerically corresponding day in the calendar month at
the end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, however, that if any
Interest Period for a Eurodollar Loan would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time when a Default
or an Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche of
Loans shall be selected which extends beyond the respective Maturity Date
for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of Tranche A Term
Loans or Tranche B Term Loans, as the case may be, shall be selected which
extends beyond any date upon which a mandatory repayment of such Tranche
of Term Loans will be required to be made under Section 4.02(b)(i) or
(ii), as the case may be, if the aggregate principal amount of Tranche A
Term Loans or Tranche B Term Loans, as the case may be, which have
Interest Periods which will expire after such date will be in excess of
the aggregate principal amount of Tranche A Term Loans or Tranche B Term
Loans, as the case may be, then outstanding less the aggregate amount of
such required repayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected
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to convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
inter pretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, order, guideline or
request, such as, for example, but not limited to: (A) a change in the
basis of taxation of payment to any Bank of the principal of or interest
on the Notes or any other amounts payable hereunder (except for changes in
the rate of tax on, or determined by reference to, the net income or
profits of such Bank pursuant to the laws of the jurisdiction in which it
is organized or in which its principal office or applicable lending office
is located or any subdivision thereof or therein) or (B) a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate and/or (y) other circumstances since the date of this
Agreement affecting the interbank Eurodollar market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good
faith with any governmental request (whether or not having force of law)
or (z) impracticable as a result of a contingency occurring after the date
of this Agreement which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (by telephone promptly confirmed in writing)
to the Borrower and, except in the case of clause (i) above, to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred (including by way of conversion) shall be deemed rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to such
Bank, upon such Bank's written request
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therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculat ing, interest or otherwise as such Bank in its sole
discretion shall determine) as shall be required to compensate such Bank for
such increased costs or reductions in amounts received or receivable hereunder
(a written notice as to the additional amounts owed to such Bank, showing in
reasonable detail the basis for the calculation thereof, submitted to the
Borrower by such Bank shall, absent manifest error, be final and conclusive and
binding on all the parties hereto) and (z) in the case of clause (iii) above,
the Borrower shall take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Agent telephonic
notice (confirmed in writing) on the same date that the Borrower was notified by
the affected Bank or the Agent pursuant to Section 1.10(a)(ii) or (iii) or (y)
if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' written notice to the Agent, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan, provided that, if more than one Bank
is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If any Bank determines that after the date of this Agreement the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency, will have the effect of increasing the amount of capital required or
expected to be maintained by such Bank or any corporation controlling such Bank
based on the existence of such Bank's Commitments hereunder or its obligations
hereunder, then the Borrower shall pay to such Bank, upon its written demand
therefor, such additional amounts as shall be required to compensate such Bank
or such other corporation for the increased cost to such Bank or such other
corporation or the reduction in the rate of return to such Bank or such other
corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, provided that such
Bank's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for calculation
of such additional amounts.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding loss of
anticipated profits) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or the Agent) a Borrowing of, or
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conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.01, 4.02 or
as a result of an acceleration of the Loans pursuant to Section 11) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Loans when required by the terms of this
Agreement or any Note held by such Bank or (y) any election made pursuant to
Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Bank,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank
or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings,
(y) upon the occurrence of an event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect
to any Bank which results in such Bank charging to the Borrower increased costs
in excess of those being generally charged by the other Banks or (z) in the case
of a refusal by a Bank to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Banks as (and to the extent) provided in Section
14.12(b), the Borrower shall have the right, if no Default or Event of Default
then exists (or, in the case of preceding clause (z), no Default or Event of
Default will exist immediately after giving effect to such replacement), to
replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferees, none of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank") and each of whom shall be
required to be reasonably acceptable to the Agent, provided that (i) at the time
of any replacement pursuant to this Section 1.13, the Replacement Bank shall
enter into one or more Assignment and Assumption Agreements pursuant to Section
14.04(b) (and with all fees payable pursuant to said Section 14.04(b) to be paid
by the Replacement Bank) pursuant to which the Replacement Bank shall acquire
all of the Commitments and outstanding Loans of, and in each case participations
in Letters of Credit by, the Replaced Bank and, in connection therewith, shall
pay to (x) the Replaced Bank in respect thereof an amount equal to the sum of
(I) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Bank, (II) an amount equal to all Unpaid
Drawings that have been funded by (and not reimbursed to) such Replaced Bank,
together with all then unpaid interest with respect thereto at such time and
(III) an amount equal to all accrued, but theretofore unpaid, Fees owing to the
Replaced Bank pursuant to Section 3.01 and
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(y) each Issuing Bank an amount equal to such Replaced Bank's RL Percentage of
any Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent
such amount was not theretofore funded by such Replaced Bank to such Issuing
Bank and (ii) all obligations of the Borrower due and owing to the Replaced Bank
at such time (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Bank concurrently with such
replacement. Upon the execution of the respective Assignment and Assumption
Agreement, the payment of amounts referred to in clauses (i) and (ii) above and,
if so requested by the Replacement Bank, delivery to the Replacement Bank of the
appropri ate Note or Notes executed by the Borrower, the Replacement Bank shall
become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.06
and 14.01), which shall survive as to such Replaced Bank. It is understood and
agreed that replacements pursuant to this Section 1.13 shall be effected by
means of assignments which otherwise meet the applicable requirements of Section
14.04(b).
SECTION 2. Letters of Credit.
2.021 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request that an Issuing Bank
issue, at any time and from time to time on and after the Initial Borrowing Date
and prior to the Revolving Loan Maturity Date, for the account of the Borrower
and for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable Obligations of the
Borrower or any of its Subsidiaries, an irrevocable standby letter of credit, in
a form customarily used by such Issuing Bank or in such other form as has been
approved by such Issuing Bank (each such standby letter of credit, a "Letter of
Credit") in support of such L/C Supportable Obligations. It is hereby
acknowledged and agreed that each of the letters of credit described in Schedule
III (the "Existing Letters of Credit") which were issued by CoreStates for the
account of the Borrower prior to the Initial Borrowing Date and which remain
outstanding on the Initial Borrowing Date shall constitute a "Letter of Credit"
for all purposes of this Agreement and shall be deemed issued for purposes of
Sections 2.04(a), 3.01(c) and 3.01(d) on the Initial Borrowing Date. All Letters
of Credit shall be denominated in Dollars and shall be issued on a sight basis
only.
(b) Subject to and upon the terms and conditions set forth herein,
each Issuing Bank hereby agrees that it will, at any time and from time to time
on and after the Initial Borrowing Date and prior to the Revolving Loan Maturity
Date, following its receipt of the respective Letter of Credit Request, issue
for the account of the Borrower, one or more Letters of Credit in support of
such L/C Supportable Obligations of the Borrower or any of its Subsidiaries as
are permitted to remain outstanding without giving rise to a Default or an Event
of Default, provided that such Issuing Bank shall be under no obligation to
issue any Letter of Credit of the types described above if at the time of such
issuance:
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(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the issuance of let ters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuing Bank
with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Bank is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable or in effect with respect to such
Issuing Bank as of the date hereof and which such Issuing Bank reasonably
and in good faith deems material to it; or
(ii) such Issuing Bank shall have received notice from the Required
Banks prior to the issuance of such Letter of Credit of the type described
in the second sentence of Section 2.03(b).
2.022 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $2,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans then outstanding, an amount equal to the
Total Available Revolving Loan Commit ment at such time and (ii) each Letter of
Credit shall by its terms terminate on or before the earlier of (x) the date
which occurs 12 months after the date of the issuance thereof (although any such
Letter of Credit may be extendable for successive periods of up to 12 months,
but not beyond the third Business Day prior to the Revolving Loan Maturity Date,
on terms acceptable to the respective Issuing Bank) and (y) three Business Days
prior to the Revolving Loan Maturity Date.
2.023 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever
the Borrower desires that a Letter of Credit be issued for its account, the
Borrower shall give the Agent and the respective Issuing Bank at least five
Business Days' (or such shorter period as is acceptable to such Issuing Bank)
written notice thereof. Each notice shall be in the form of Exhibit C (each a
"Letter of Credit Request"). The Agent shall promptly transmit copies of each
Letter of Credit Request to each Bank with a Revolving Loan Commitment.
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that such Letter of Credit may
be issued in accordance with, and will not violate the requirements of, Section
2.02. Unless the respective Issuing Bank has received notice from the Required
Banks before it issues a Letter of Credit that one or more of the conditions
specified in Section 5 or 7 are not then satisfied, or that the issuance of such
Letter of Credit would violate Section 2.02, then such Issuing Bank shall,
subject to the terms and conditions of this Agreement, issue the requested
Letter of Credit for the account of the Borrower in accordance with such Issuing
Bank's
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usual and customary practices. Upon its issuance of or amendment or modification
to any Letter of Credit, such Issuing Bank shall promptly notify the Borrower,
each Participant and the Agent of such issuance, amendment or modification and
such notification shall be accompanied by a copy of the issued Letter of Credit
or amendment or modification. Notwithstanding anything to the contrary contained
in this Agreement, in the event that a Bank Default exists, an Issuing Bank
shall not be required to issue any Letter of Credit unless such Issuing Bank has
entered into an arrangement satisfactory to it and the Borrower to eliminate
such Issuing Bank's risk with respect the participation in Letters of Credit by
the Defaulting Bank or Banks, including by cash collateralizing such Defaulting
Bank's or Banks' RL Percentage of the Letter of Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall not be
less than $50,000 or such lesser amount as is acceptable to the respective
Issuing Bank.
2.024 Letter of Credit Participations. (a) Immediately upon the
issuance by any Issuing Bank of any Letter of Credit, such Issuing Bank shall be
deemed to have sold and transferred to each Bank with a Revolving Loan
Commitment, other than such Issuing Bank (each such Bank, in its capacity under
this Section 2.04, a "Participant"), and each such Participant shall be deemed
irrevo cably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's RL Percentage, in such Letter
of Credit, each drawing or payment made thereunder and the obligations of the
Borrower under this Agreement with respect thereto, and any security therefor or
guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments
or RL Percentages of the Banks pursuant to Section 1.13 or 14.04, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new RL Percentages of the assignor and
assignee Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit, no
Issuing Bank shall have an obligation relative to the other Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Issuing Bank under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Issuing Bank any resulting liability to
the Borrower, any other Credit Party, any Bank or any other Person.
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to Section 2.05(a), such Issuing Bank shall
promptly notify the Agent, which shall promptly notify each Partici pant of such
failure, and each Participant shall promptly and unconditionally pay to such
Issuing Bank the amount of such Participant's RL Percentage of such unreimbursed
payment in Dollars and in same day funds. If the Agent so notifies, prior to
11:00 A.M. (New York time) on any Business Day, any Participant required to fund
a payment under a Letter of Credit, such Participant shall make available to
such Issuing Bank in Dollars such Participant's RL Percentage of the amount of
such payment on
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such Business Day in same day funds. If and to the extent such Participant shall
not have so made its RL Percentage of the amount of such payment available to
the Issuing Bank, such Participant agrees to pay to such Issuing Bank, forthwith
on demand such amount, together with interest thereon, for each day from such
date until the date such amount is paid to such Issuing Bank at the overnight
Federal Funds Rate for the first three days and at the interest rate applicable
to Revolving Loans maintained as Base Rate Loans for each day thereafter. The
failure of any Participant to make available to such Issuing Bank its RL
Percentage of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to such Issuing Bank
its RL Percentage of any Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to such Issuing Bank such other Participant's RL
Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Bank shall pay to each Participant
which has paid its RL Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participant's share (based upon the proportionate aggregate
amount originally funded by such Participant to the aggregate amount funded by
all Participants) of the princi pal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, each Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to each
Issuing Bank with respect to Letters of Credit issued by it shall be irrevocable
and not subject to any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, any Participant, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between the Borrower or any Subsidiary of the Borrower and the beneficiary
named in any such Letter of Credit);
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(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.025 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Agent in immediately available funds at the Payment Office, for any payment or
disbursement made by such Issuing Bank under any Letter of Credit issued by it
(each such amount, so paid until reimbursed, an "Unpaid Drawing"), not later
than two Business Days following receipt by the Borrower of notice of such
payment or disbursement (provided that no such notice shall be required to be
given if a Default or an Event of Default under Section 11.05 shall have
occurred and be continuing, in which case the Unpaid Drawing shall be due and
payable immediately without presentment, demand, protest or notice of any kind
(all of which are hereby waived by the Borrower)), with interest on the amount
so paid or dis bursed by such Issuing Bank, to the extent not reimbursed prior
to 12:00 Noon (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but exclud ing the date such Issuing
Bank was reimbursed by the Borrower therefor at a rate per annum which shall be
the Base Rate in effect from time to time plus the Applicable Margin for
Revolving Loans maintained as Base Rate Loans; provided, however, to the extent
such amounts are not reimbursed prior to 12:00 Noon (New York time) on the third
Business Day following the receipt by the Borrower of notice of such payment or
disbursement or following the occurrence of a Default or an Event of Default
under Section 11.05, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Bank (and until reimbursed by the Borrower) at a rate
per annum which shall be the Base Rate in effect from time to time plus the
Applicable Margin for Revolving Loans maintained as Base Rate Loans plus 2%, in
each such case, with interest to be payable on demand. The respective Issuing
Bank shall give the Borrower prompt written notice of each Drawing under any
Letter of Credit, provided that the failure to give any such notice shall in no
way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the respective Issuing Bank with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against any Bank
(including in its capacity as issuer of the Letter of Credit or as Participant),
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit (each a "Drawing") to conform to the terms of the
Letter of Credit or any nonapplication or misapplication by the beneficiary of
the proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse such Issuing Bank for any wrongful payment made by such
Issuing Bank under a Letter of Credit as a result
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of acts or omissions constituting willful misconduct or gross negligence on the
part of such Issuing Bank.
2.026 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpre tation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Issuing Bank or
any Participant with any request or directive by any such authority (whether or
not having the force of law), shall either (i) impose, modify or make applicable
any reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by any Issuing Bank or participated in by any Participant, or (ii)
impose on any Issuing Bank or any Participant any other conditions relating,
directly or indirectly, to this Agreement; and the result of any of the
foregoing is to increase the cost to any Issuing Bank or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by any Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit (except for changes in the rate of tax on, or determined by reference to,
the net income or profits of such Issuing Bank or such Participant pursuant to
the laws of the jurisdiction in which it is organized or in which its principal
office or applicable lending office is located or any subdivision thereof or
therein), then, upon the delivery of the certificate referred to below to the
Borrower by such Issuing Bank or any Participant (a copy of which certificate
shall be sent by the Issuing Bank or such Participant to the Agent), the
Borrower shall pay to such Issuing Bank or such Participant such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. Any Issuing Bank or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.06, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by such Issuing Bank or such Participant
(a copy of which certificate shall be sent by such Issuing Bank or such
Participant to the Agent), setting forth in reasonable detail the basis for the
calculation of such additional amount or amounts necessary to com pensate such
Issuing Bank or such Participant. The certificate required to be delivered
pursuant to this Section 2.06 shall, absent manifest error, be final and
conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.031 Fees. (a) The Borrower agrees to pay to the Agent for
distribution to each Non-Defaulting Bank with a Term Loan Commitment, a
commitment commission (the "Term Loan Commitment Commission") for the period
from and including the Effective Date to but excluding the date on which the
Total Term Loan Commitment shall have been terminated, computed at a rate for
each day equal to the Applicable Commitment Commission Percentage on the daily
average Term Loan Commitment of such Bank. Accrued Term Loan Commitment
Commission shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the date on which the Total Term Loan Commitment shall have
been terminated.
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(b) The Borrower agrees to pay to the Agent for distribution to each
Non-Defaulting Bank with a Revolving Loan Commitment a commitment commission
(the "Revolving Loan Commitment Commission") for the period from and including
the Effective Date to but excluding the Revolving Loan Maturity Date (or such
earlier date as the Total Revolving Loan Commitment shall have been terminated),
computed at a rate for each day equal to the Applicable Commitment Commission
Percentage on the daily average Unutilized Revolving Loan Commitment of such
Non-Defaulting Bank. Accrued Revolving Loan Commitment Commission shall be due
and payable quarterly in arrears on each Quarterly Payment Date and on the
Revolving Loan Maturity Date or such earlier date upon which the Total Revolving
Loan Commitment is terminated.
(c) The Borrower agrees to pay to the Agent for distribution to each
Non-Defaulting Bank with a Revolving Loan Commitment (based on each such
Non-Defaulting Bank's respective RL Percentage) a fee in respect of each Letter
of Credit issued hereunder (the "Letter of Credit Fee") for the period from and
including the date of issuance of such Letter of Credit to and including the
date of termination or expiration of such Letter of Credit, computed at a rate
per annum equal to the Eurodollar Spread on the daily Stated Amount of such
Letter of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the first day after
the termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(d) The Borrower agrees to pay to the respective Issuing Bank, for
its own account, a facing fee in respect of each Letter of Credit issued by such
Issuing Bank (the "Facing Fee"), for the period from and including the date of
issuance of such Letter of Credit to and including the date of the termination
of such Letter of Credit, computed at a rate equal to 1/8 of 1% per annum of the
daily Stated Amount of such Letter of Credit, provided that in any event the
minimum amount of the Facing Fee payable in any 12 month period for each Letter
of Credit shall be $500; it being agreed that, on the date of issuance of any
Letter of Credit and on each anniversary thereof prior to the termination of
such Letter of Credit, if $500 will exceed the amount of Facing Fees that will
accrue with respect to such Letter of Credit for the immediately succeeding 12
month period, the full $500 shall be payable on the date of issuance of such
Letter of Credit and on each such anniversary thereof. Except as otherwise
provided in the proviso to the immediately preceding sentence, accrued Facing
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and upon the first day after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(e) The Borrower agrees to pay to the respective Issuing Bank, upon
each payment under, issuance of, or amendment to, any Letter of Credit, such
amount as shall at the time of such event be the administrative charge and the
reasonable expenses which such Issuing Bank is generally imposing in connection
with such occurrence with respect to letters of credit.
(f) The Borrower agrees to pay to the Agent, for their own account,
such other fees as have been agreed to in writing by the Borrower and the Agent.
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3.032 Voluntary Termination of Unutilized Commitments. (a) Upon at
least one Business Day's prior written notice to the Agent at its Notice Office
(which notice the Agent shall promptly transmit to each of the Banks), the
Borrower shall have the right, at any time or from time to time, without premium
or penalty, (i) to terminate the Total Unutilized Revolving Loan Commitment, in
whole or in part, pursuant to this Section 3.02(a), in an integral multiple of
$250,000, in the case of partial reductions to the Total Unutilized Revolving
Loan Commitment, provided that each such reduction shall apply proportionately
to permanently reduce the Revolving Loan Commitment of each Bank with such a
Commitment and (ii) to terminate or reduce the Total Tranche B Term Loan
Commitment pursuant to this Section 3.02(a), in an integral multiple of
$500,000, in the case of partial reductions to the Total Tranche B Term Loan
Commitment, provided that (x) the Borrower shall only be entitled to terminate
the Total Tranche B Term Loan Commitment pursuant to this Section 3.02(a) in the
event that the Borrower has notified the Agent that it no longer is pursuing the
Charles Town Acquisition (in which case neither the Borrower nor any of its
Subsidiaries shall be permitted to consummate the Charles Town Acquisition), (i)
partial reductions to the Total Tranche B Term Loan Commitment pursuant to this
Section 3.02(a) may only be made after the consummation of the Charles Town
Acquisition and (z) each such termination or reduction shall apply to terminate
or proportionately and permanently reduce the Tranche B Term Loan Commitment of
each Bank with such a Commitment.
(b) In the event of a refusal by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 14.12(b), the Borrower may, subject to its compliance with
the requirements of Section 14.12(b), upon five Business Days' prior written
notice to the Agent at its Notice Office (which notice the Agent shall promptly
transmit to each of the Banks) terminate all of the Commitments of such Bank, so
long as all Loans, together with accrued and unpaid interest, Fees and all other
amounts, owing to such Bank are repaid concurrently with the effectiveness of
such termination pursuant to Section 4.01(b) (at which time Schedule I shall be
deemed modified to reflect such changed amounts), and at such time, such Bank
shall no longer constitute a "Bank" for purposes of this Agreement, except with
respect to indemnifications under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.06, 4.04, 13.06 and 14.01), which shall survive as to
such repaid Bank.
3.033 Mandatory Reduction of Commitments. (a) The Total Commitments
shall term inate in their entirety on December 15, 1996 unless the Initial
Borrowing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche A Term Loan Commitment (and the
Tranche A Term Loan Commitment of each Bank) shall (i) terminate in its entirety
on the Initial Borrowing Date (after giving effect to the incurrence of the
Tranche A Term Loans on such date) and (ii) prior to the termination of the
Total Tranche A Term Loan Commitment, be reduced from time to time to the extent
required by Section 4.02.
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(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Tranche B Term Loan Commitment (and the
Tranche B Term Loan Commitment of each Bank) shall (i) be reduced on each
Tranche B Term Loan Borrowing Date (after giving effect to the making of Tranche
B Term Loan on such date), in an amount equal to the aggregate principal amount
of Tranche B Term Loans incurred on such date, (ii) terminate in its entirety
(to the extent not theretofore mentioned) at 5:00 P.M. (New York time) on the
Tranche B Term Loan Commitment Termination Date, whether or not any Tranche B
Term Loans are incurred on such date and (iii) prior to the termination of the
Total Tranche B Term Loan Commitment, be reduced from time to time to the extent
required by Section 4.02.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, (i) in the event that the Borrower does not
consummate the Charles Town Acquisition on or prior to the Tranche B Term Loan
Commitment Termination Date or the Borrower has notified the Agent that it is no
longer pursuing the Charles Town Acquisition, the Total Revolving Loan
Commitment shall be permanently reduced on the Tranche B Term Loan Commitment
Termination Date (or such earlier date on which the Borrower has so notified the
Agent) in an amount equal to $2,000,000 and (ii) the Total Revolving Loan
Commitment (and the Revolving Loan Commitment of each Bank) shall terminate in
its entirety on the Revolving Loan Maturity Date.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Effective Date upon which
a mandatory repayment of Term Loans and/or a mandatory reduction to the Total
Term Loan Commitment pursuant to any of Sections 4.02(c) through (g), inclusive,
is required (and exceeds in amount the aggregate principal amount of Term Loans
then outstanding plus the Total Term Loan Commitment then in effect) or would be
required if Term Loans were then outstanding and/or the Total Term Loan
Commitment was then in effect, the Total Revolving Loan Commitment shall be
permanently reduced by the amount, if any, by which the amount required to be
applied pursuant to said Sections (determined as if an unlimited amount of Term
Loans were actually outstanding) exceeds the aggregate principal amount of Term
Loans then outstanding and the Total Term Loan Commitment then in effect.
(f) Each reduction to the Total Tranche A Term Loan Commitment, the
Total Tranche B Term Loan Commitment and the Total Revolving Loan Commitment
pursuant to this Section 3.03 (or pursuant to Section 4.02) shall be applied
proportionately to permanently reduce the Tranche A Term Loan Commitment, the
Tranche B Term Loan Commitment or the Revolving Loan Commitment, as the case may
be, of each Bank with such a Commitment.
SECTION 4. Prepayments; Payments; Taxes.
4.041 Voluntary Prepayments. (a) The Borrower shall have the
right to prepay the Loans, without premium or penalty, in whole or in part at
any time and from time to time on the following terms and conditions:
(i) the Borrower shall give the Agent prior to 12:00 Noon (New York
-19-
time) at its Notice Office (x) at least one Business Day's prior written notice
(or telephonic notice promptly confirmed in writing) of its intent to prepay
Base Rate Loans and (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
Eurodollar Loans, whether Tranche A Term Loans, Tranche B Term Loans or
Revolving Loans shall be prepaid, the amount of such prepayment and the Types of
Loans to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing
or Borrowings pursuant to which made, which notice the Agent shall promptly
transmit to each of the Banks; (ii) each prepayment shall be in an aggregate
principal amount of at least $500,000 (or $250,000 in the case of Revolving
Loans) and, if greater, in an integral multiple of $100,000, provided that if
any partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall
reduce the outstanding principal amount of Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar
Loans and any elec tion of an Interest Period with respect thereto given by the
Borrower shall have no force or effect; (iii) prepayments of Eurodollar Loans
made pursuant to this Section 4.01(a) may only be made on the last day of an
Interest Period applicable thereto; (iv) each prepayment in respect of any Loans
made pursuant to a Borrowing shall be applied pro rata among such Loans,
provided that at the Borrower's election in connection with any prepayment of
Revolving Loans pursuant to the Section 4.01(a), such prepayment shall not be
applied to any Revolving Loan of a Defaulting Bank; and (v) each voluntary
prepayment of Term Loans pursuant to this Section 4.01(a) shall be applied pro
rata to each Tranche of Term Loans (with each Tranche of Term Loans to be
allocated that percentage (the "Tranche A Term Loan Percentage" in the case of
Tranche A Term Loans and "Tranche B Term Loan Percentage" in the case of Tranche
B Term Loans) of the amount to be applied as is equal to a fraction (expressed
as a percentage) (x) the numerator of which is the sum of the then outstanding
principal amount of such Tranche of Term Loans and, in the case of Tranche B
Term Loans, the Total Tranche B Term Loan Commitment then in effect and (y) the
denominator of which is equal to the sum of the then outstanding principal
amount of all Term Loans and the Total Tranche B Term Loan Commitment then in
effect, and (a) in the case of repayments of Tranche A Term Loans, such
repayments shall be applied to reduce the then remaining amount of each Tranche
A Term Loan Scheduled Repayment pro rata based upon the then remaining amount of
each Tranche A Term Loan Scheduled Repayment after giving effect to all prior
reductions thereto, and (b) in the case of repayments of Tranche B Term Loans,
such repayments shall be applied to reduce the then remaining Tranche B
Scheduled Term Loan Scheduled Repayments pro rata based upon the then remaining
amount of each Tranche B Term Loan Scheduled Repayment after giving effect to
all prior reductions thereto.
(b) At any time after termination of the Total Term Loan Commitment
and in the event of a refusal by a Bank to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which have
been approved by the Required Banks as (and to the extent) provided in Section
14.12(b), the Borrower may, upon five Business Days' prior written notice to the
Agent at its Notice Office (which notice the Agent shall promptly transmit to
each of the Banks) repay all Loans, together with accrued and unpaid interest,
Fees, and other amounts owing to such Bank in accordance with, and subject to
the requirements of, said Section 14.12(b) so long as (A) in the case of the
repayment of Revolving Loans of any Bank pursuant to this Section 4.01(b) the
Revolving Loan
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Commitment of such Bank is terminated concurrently with such repayment pursuant
to Section 3.02(b) (at which time Schedule I shall be deemed modified to reflect
the changed Revolving Loan Commit ments) and (B) the consents, if any, required
by Section 14.12(b) in connection with the repayment pursuant to this clause (b)
have been obtained.
4.042 Mandatory Repayments and Commitment Reductions. (a) On any day
on which the sum of the aggregate outstanding principal amount of the Revolving
Loans plus the Letter of Credit Outstandings exceeds the Total Available
Revolving Loan Commitment as then in effect, the Borrower shall prepay on such
day the principal of Revolving Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Revolving Loans, the
aggregate amount of the Letter of Credit Outstandings exceeds the Total
Available Revolving Loan Commitment as then in effect, the Borrower shall pay to
the Agent at the Payment Office on such day an amount of cash or Cash
Equivalents equal to the amount of such excess (up to a maximum amount equal to
the Letter of Credit Outstandings at such time), such cash or Cash Equivalents
to be held as security for all obligations of the Borrower to the Issuing Banks
and the Banks hereunder in a cash collateral account to be estab lished by the
Agent.
(b) (i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Tranche A Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01(a) and
4.02(i), a "Tranche A Term Loan Scheduled Repayment," and each such date, a
"Tranche A Term Loan Scheduled Repayment Date"):
Tranche A Term Loan
Scheduled Repayment Date Amount
December 31, 1997
$1,342,857
March 31, 1998
$1,342,857
June 30, 1998 $1,342,857
September 30, 1998
$1,342,857
December 31, 1998
$1,342,857
March 31, 1999
$3,357,143
June 30, 1999 $3,357,143
September 30, 1999 $3,357,143
December 31, 1999 $3,357,143
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March 31, 2000 $3,357,143
June 30, 2000 $3,357,143
September 30, 2000 $3,357,143
December 31, 2000 $3,357,143
March 31, 2001 $3,357,143
June 30, 2001 $3,357,143
September 30, 2001 $3,357,143
Tranche A Term Loan
Maturity Date $3,357,142
(ii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Tranche B Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01(a) and
4.02(i), a "Tranche B Term Loan Scheduled Repayment," and each such date, a
"Tranche B Term Loan Scheduled Repayment Date," and the Tranche A Term Loan
Scheduled Repayments and the Tranche B Term Loan Scheduled Repayments are
collectively referred to as the "Scheduled Repayments"):
Tranche B Term Loan
Scheduled Repayment Date Amount
December 31, 1997 $657,143
March 31, 1998 $657,143
June 30, 1998 $657,143
September 30, 1998 $657,143
December 31, 1998 $657,143
March 31, 1999 $1,642,857
June 30, 1999 $1,642,857
September 30, 1999 $1,642,857
December 31, 1999 $1,642,857
March 31, 2000 $1,642,857
June 30, 2000 $1,642,857
September 30, 2000 $1,642,857
December 31, 2000 $1,642,857
March 31, 2001 $1,642,857
June 30, 2001 $1,642,857
September 30, 2001 $1,642,857
Tranche B Term Loan
Maturity Date $1,642,858
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(iii) If at the time of the termination of the Total Term Loan
Commitment (and after giving effect to the incurrence of any Term Loans at such
time) the Borrower has not theretofore incurred at least $70,000,000 of Term
Loans, then (i) the aggregate amount of Tranche A Term Loan Scheduled Repayments
and Tranche B Term Loan Scheduled Repayments shall be reduced on a pro rata
basis (based on the relative outstanding principal amount of Tranche A Term
Loans and Tranche B Term Loans at such time) and (ii) each of the Tranche A Term
Loan Scheduled Repayments and Tranche B Term Loan Scheduled Repayments set forth
in the respective tables above shall be reduced on a pro rata basis (based on
the relative proportion that the amount of each such Scheduled Repayment of the
respective Tranche of Term Loan as set forth in the applicable table above bears
to the aggregate amount of all such Scheduled Repayments of such Tranche of Term
Loans as set forth in the applicable table above).
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date upon which the Borrower or any of its Subsidiaries receives any cash
proceeds from any capital contribution or any sale or any sale or issuance of
its equity (other than cash proceeds received from (i) the exercise of any
options or warrants issued by the Borrower and outstanding on the Initial
Borrowing Date and (ii) capital contributions to, or equity investments in, any
Subsidiary of the Borrower to the extent made by the Borrower or another
Subsidiary of the Borrower and, in the case of the Charles Town Joint Venture,
to the extent made by Bryant Development), an amount equal to the Applicable
Equity Issuance Percentage of the Net Equity Proceeds of such capital
contribution or sale or issuance shall be applied as a mandatory repayment of
principal of outstanding Term Loans (and/or, if the Total Term Loan Commitment
has not yet been terminated, as a mandatory reduction to the Total Term Loan
Commit ment) in accordance with the requirements of Sections 4.02(h) and (i).
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date upon which the Borrower or any of its Subsidiaries receives any cash
proceeds from any incurrence by the Borrower or any of its Subsidi aries of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 10.04 as such Section is in effect
on the Effective Date), an amount equal to 100% of the Net Debt Proceeds of the
respective incurrence of Indebtedness shall be applied as a mandatory repayment
of principal of outstanding Term Loans (and/or, if the Total Term Loan
Commitment has not yet been terminated, as a mandatory reduction to the Total
Term Loan Commitment) in accordance with the requirements of Sections 4.02(h)
and (i).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date upon which the Borrower or any of its Subsidiaries receives cash proceeds
from any Asset Sale, an amount equal to 75% of the Net Sale Proceeds therefrom
shall be applied as a mandatory repayment of principal of outstanding Term Loans
(and/or, if the Total Term Loan Commitment has not yet been terminated, as a
mandatory reduction to the Total Term Loan Commitment) in accordance with the
requirements of Sections 4.02(h) and (i); provided that with respect to no more
than $3,000,000 in the aggregate of cash proceeds from Asset Sales in any fiscal
year of the Borrower, 75% of the Net Sale Proceeds therefrom shall not be
required to be so applied on such date so long as no Default or Event of Default
then exists and the Borrower delivers a certificate to the Agent on or prior to
such date stating that such Net Sale Proceeds shall be
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used to purchase replacement assets within 180 days following the date of such
Asset Sale (which certificate shall set forth the estimates of the proceeds to
be so expended), and provided further, that if all or any portion of such Net
Sale Proceeds not required to be applied to the repayment of outstanding Term
Loans (and/or if the Total Term Loan Commitment has not yet been terminated, as
a mandatory reduction to the Total Term Loan Commitment) are not so reinvested
in replacement assets within such 180 day period, such remaining portion shall
be applied on the last day of such period as a mandatory repayment of principal
of outstanding Term Loans (and/or if the Total Term Loan Commitment has not yet
been terminated, as a mandatory reduction to the Total Term Loan Commitment) as
provided above in this Section 4.02(e) without regard to this proviso.
(f) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to 75% of the
Excess Cash Flow for the relevant Excess Cash Payment Period shall be applied as
a mandatory repayment of principal of outstanding Term Loans in accordance with
the requirements of Sections 4.02(h) and (i).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date on
or after the Effective Date upon which the Borrower or any of its Subsidiaries
receives any cash proceeds from any Recovery Event, an amount equal to 100% of
the Net Insurance Proceeds of such Recovery Event shall be applied as a
mandatory repayment of principal of outstanding Term Loans (and/or, if the Total
Term Loan Commitment has not yet been terminated, as a mandatory reduction to
the Total Term Loan Commitment) in accordance with the requirements of Sections
4.02(h) and (i), provided that so long as no Default or Event of Default then
exists and such proceeds do not exceed $1,000,000, such proceeds shall not be
required to be so applied on such date to the extent that the Borrower has
delivered a certificate to the Agent on or prior to such date stating that such
proceeds shall be used to replace or restore any properties or assets in respect
of which such proceeds were paid within 180 days following the date of the
receipt of such proceeds (which certificate shall set forth the estimates of the
proceeds to be so expended), and provided further, that (i) if the amount of
such proceeds exceeds $1,000,000, then the entire amount and not just the
portion in excess of $1,000,000 shall be applied as a mandatory repayment of
Term Loans (and/or as a reduction to the Total Term Loan Commitment) as provided
above in this Section 4.02(g) and (ii) if all or any portion of such proceeds
not required to be applied to the repayment of outstanding Term Loans (and/or as
a reduction to the Total Term Loan Commitment) pursuant to the preceding proviso
are not so used within 180 days after the date of the receipt of such proceeds,
such remaining portion shall be applied on the last day of such period as a
mandatory repayment of principal of outstanding Term Loans and/or if the Total
Term Loan Commitment has not yet been terminated, as a mandatory reduction to
the Total Term Loan Commitment as provided above in this Section 4.02(g) without
regard to the preceding proviso.
(h) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which made,
provided that: (i) repayments of Eurodollar Loans pursuant to this Section 4.02
may
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only be made on the last day of an Interest Period applicable thereto unless all
Eurodollar Loans of the respective Tranche with Interest Periods ending on such
date of required repayment and all Base Rate Loans of the respective Tranche
have been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Eurodollar Loans made
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto, such Borrowing shall be converted at the end of the then
current Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans. In the absence of a designation by the Borrower as described
in the preceding sentence, the Agent shall, subject to the above, make such
designation in its sole discretion.
(i) Each amount required to be applied to Term Loans (and/or to the
Total Term Loan Commitment) pursuant to Sections 4.02(c), (d), (e), (f) and (g)
shall be applied pro rata to each Tranche of Term Loans (in an amount equal to
the Tranche A Term Loan Percentage and/or the Tranche B Term Loan Percentage, as
the case may be, of such prepayment or reduction). Any amount required to be
applied to either Tranche of Term Loans pursuant to Sections 4.02(c), (d), (e),
(f) and (g) shall be applied (i) first, to repay the outstanding principal
amount of Term Loans of the respective Tranche and (ii) second, to the extent in
excess thereof, to reduce the Total Tranche A Term Loan Commitment or the
Tranche B Term Loan Commitment, as the case may be. The amount of each principal
repayment of Term Loans (and the amount of each reduction to the Term Loan
Commitments) made as required by said Sections 4.02(c), (d), (e), (f) and (g)
shall be applied to reduce the then remaining Scheduled Repayments of the
respective Tranche of Term Loans pro rata based upon the then remaining amount
of each Scheduled Repayment of the respective Tranche after giving effect to all
prior reductions thereto.
(j) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, all then outstanding Loans of any
Tranche shall be repaid in full on the respective Maturity Date for such Tranche
of Loans.
4.043 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be
made to the Agent for the account of the Bank or Banks entitled thereto not
later than 12:00 Noon (New York time) on the date when due and shall be made in
Dollars in immediately available funds at the Payment Office of the Agent.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
4.044 Net Payments. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority
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thereof or therein with respect to such payments (but excluding, except as
provided in the second succeeding sentence, any tax imposed on or measured by
the net income or profits of a Bank pursuant to the laws of the jurisdiction in
which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Bank is located or any subdivision thereof or
therein) and all interest, penalties or similar liabilities with respect to such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
(all such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every payment of all amounts
due under this Agreement or under any Note, after withholding or deduction for
or on account of any Taxes, will not be less than the amount provided for herein
or in such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income or
profits of such Bank pursuant to the laws of the jurisdiction in which such Bank
is organized or in which the principal office or applicable lending office of
such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Bank is organized or in which
the principal office or applicable lending office of such Bank is located and
for any withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank, in respect of such amounts so paid to or on behalf of
such Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. The Borrower will
furnish to the Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower agrees to indemnify and hold harmless each
Bank, and reimburse such Bank upon its written request, for the amount of any
Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Agent on or prior to the Effective
Date, or in the case of a Bank that is an assignee or transferee of an interest
under this Agreement pursuant to Section 1.13 or 14.04 (unless the respective
Bank was already a Bank hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Bank, (i) two
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Bank's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if the Bank is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver
either Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above,
(x) a certificate substantially in the form of Exhibit D (any such certificate,
a "Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, such Bank will deliver to the Borrower and the Agent
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two new accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or such Bank shall immediately notify the Borrower and
the Agent of its inability to deliver any such Form or Certificate, in which
case such Bank shall not be required to deliver any such Form or Certificate
pursuant to this Section 4.04(b). Notwithstanding anything to the contrary
contained in Section 4.04(a), but subject to Section 14.04(b) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, Fees or other amounts payable
hereunder for the account of any Bank which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income
tax purposes to the extent that such Bank has not provided to the Borrower U.S.
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated pursuant to
Section 4.04(a) hereof to gross-up payments to be made to a Bank in respect of
income or similar taxes imposed by the United States if (I) such Bank has not
provided to the Borrower the Internal Revenue Service Forms required to be
provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case of
a payment, other than interest, to a Bank described in clause (ii) above, to the
extent that such Forms do not establish a complete exemption from withholding of
such taxes. Notwithstanding anything to the contrary con tained in the preceding
sentence or elsewhere in this Section 4.04 and except as set forth in Section
14.04(b), the Borrower agrees to pay any additional amounts and to indemnify
each Bank in the manner set forth in Section 4.04(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect
of any Taxes deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deducting or withholding of such
Taxes.
SECTION 5. Conditions Precedent to Credit Events on the Initial
Borrowing Date. The obligation of each Bank to make Loans, and the obligation of
each Issuing Bank to issue Letters of Credit, on the Initial Borrowing Date, is
subject at the time of the making of such Loans or the issuance of such Letters
of Credit to the satisfaction of the following conditions:
4.051 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent for the account of each of the Banks the
appropriate Tranche A Term Note, Tranche B Term Note and/or Revolving Note
executed by the Borrower, in each case, in the amount, maturity and as otherwise
provided herein.
4.052 Officer's Certificate. On the Initial Borrowing Date, the
Agent shall have received a certificate, dated the Initial Borrowing Date and
signed on behalf of the Borrower by the
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Chairman of the Board, the President or any Vice President of the Borrower,
stating that all of the conditions in Sections 5.06, 5.07, 5.08, 5.09, 5.17 and
7.01 have been satisfied on such date.
4.053 Opinions of Counsel. On the Initial Borrowing Date, the Agent
shall have received from (i) Morgan, Lewis & Bockius, counsel to the Credit
Parties, an opinion addressed to the Agent, the Co-Agent, the Collateral Agent
and each of the Banks and dated the Initial Borrowing Date, covering the matters
set forth in Exhibit E-1 and such other matters incident to the transactions
contemplated herein as the Agent or the Co-Agent may reasonably request, (ii)
Mesirov Gelman Jaffe Cramer & Jamieson, counsel to the Credit Parties, an
opinion addressed to the Agent, the Co-Agent, the Collateral Agent and the
Banks, and dated the Initial Borrowing Date, covering the matters set forth in
Exhibit E-2 and such other matters incident to the transactions contemplated
herein as the Agent or the Co-Agent may reasonably request, and (iii) counsel
rendering any opinions pursuant to the Plains Company Acquisition Documents,
reliance letters addressed to the Agent, the Co-Agent and each of the Banks and
dated the Initial Borrowing Date permitting the Agent, the Co-Agent and the
Banks to rely on such opinions as if such opinions were addressed to the Agent,
the Co-Agent and the Banks.
4.054 Corporate Documents; Proceedings; etc. (a) On the Initial
Borrowing Date, the Agent shall have received a certificate from each Credit
Party, dated the Initial Borrowing Date, signed by the Chairman of the Board,
the President or any Vice President of such Credit Party, and attested to by the
Secretary or any Assistant Secretary of such Credit Party, in the form of
Exhibit F with appropriate insertions, together with copies of the certificate
of incorporation (or equivalent organizational document) and by-laws of such
Credit Party and the resolutions of such Credit Party referred to in such
certificate, and the foregoing resolutions shall be in form and substance
reasonably acceptable to the Agent and the Co-Agent.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be satisfactory in form and substance to the
Agent, the Co-Agent and the Required Banks, and the Agent shall have received
all information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams or facsimiles, if any, which the Agent or the Co-Agent
reasonably may have requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.
(c) On the Initial Borrowing Date, the corporate, ownership and
capital structure (including, without limitation, the terms of any capital
stock, options, warrants or other securities issued by the Borrower or any of
its Subsidiaries) of the Borrower and its Subsidiaries shall be in form and
substance reasonably satisfactory to the Agent, the Co-Agent and the Required
Banks.
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4.055 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Non-Compete Agreements; Collective Bargaining
Agreements; Tax Sharing Agreements; Existing Indebtedness Agreements; Joint
Venture Agreements. On or prior to the Initial Borrowing Date, there shall have
been delivered to (or there shall have been made available for review by) the
Agent true and correct copies of the following documents:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information), and for each Plan
that is a "single-employer plan," as defined in Section 4001(a)(15) of
ERISA, the most recently prepared actuarial valuation therefor) and any
other "employee benefit plans," as defined in Section 3(3) of ERISA, and
any other material agreements, plans or arrangements, with or for the
benefit of current or former employees of the Borrower or any of its
Subsidiaries or any ERISA Affiliate (provided that the foregoing shall
apply in the case of any multiemployer plan, as defined in 4001(a)(3) of
ERISA, only to the extent that any document described therein is in the
possession of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate or reasonably available thereto from the sponsor or trustee of
any such plan)(collectively, the "Employee Benefit Plans");
(ii) all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of its capital stock
and any agreements entered into by share holders relating to any such
entity with respect to its capital stock (collectively, the "Share
holders' Agreements");
(iii) all material agreements with members of, or with respect to, the
senior management and management of the Borrower or any of its
Subsidiaries (collectively, the "Management Agreements");
(iv) all material employment agreements entered into by the
Borrower or any of its Subsidiaries (collectively, the "Employment
Agreements")
(v) any non-compete agreement entered into by the Borrower or
any of its Subsidiaries (collectively, the "Non-Compete Agreements");
(vi) all collective bargaining agreements applying or relating to
any employee of the Borrower or any of its Subsidiaries (collectively,
the "Collective Bargaining Agreements");
(vii) all tax sharing, tax allocation and other similar agreements
entered into by the Borrower or any of its Subsidiaries (collectively, the
"Tax Sharing Agreements");
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(viii) all material contracts and licenses (including, without
limitation, gaming, horse racing and alcohol licenses) of the Borrower or
any of its Subsidiaries (collectively, the "Material Contracts");
(ix) all agreements evidencing or relating to Indebtedness of the
Borrower or any of its Subsidiaries which is to remain outstanding after
giving effect to the incurrence of Loans on the Initial Borrowing Date
(collectively, the "Existing Indebtedness Agreements"); and
(x) all joint venture agreements, partnership agreements or other
similar agreements (including, without limitation, the Charles Town Joint
Venture Agreement) entered into by the Borrower or any of its Subsidiaries
(collectively, the "Joint Venture Agreements");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Non-Compete Agreements, Collective Bargaining
Agreements, Existing Indebtedness Agreements, Joint Venture Agreements and Tax
Sharing Agreements shall be in form and substance satisfactory to the Agent, the
Co-Agent and the Required Banks and shall be in full force and effect on the
Initial Borrowing Date.
4.056 Consummation of Plains Company Acquisition. (a) On the Initial
Borrowing Date (and concurrently with the incurrence of Tranche A Term Loans on
such date), (i) the Plains Company Acquisition shall be consummated in
accordance with the terms and conditions of the Plains Company Acquisition
Documents and all applicable laws and (ii) each of the conditions precedent set
forth in the Plains Company Acquisition Documents shall be satisfied and not
waived except with the consent of the Agent, the Co-Agent and the Required
Banks, to the satisfaction of the Agent, the Co-Agent and the Required Banks. On
or prior to the Initial Borrowing Date, the Agent, the Co-Agent and the Banks
shall have received true and complete copies of all of the Plains Company
Acquisition Documents, and all of the Plains Company Acquisition Documents shall
be in form and substance reasonably satisfactory to the Agent and the Required
Banks.
(b) On the Initial Borrowing Date and concurrently with the
consummation of the Plains Company Acquisition and the incurrence of Tranche A
Term Loans on such date, all Indebtedness to be Refinanced shall be repaid in
full on such date and all commitments in respect thereof shall be terminated and
all Liens and guaranties in connection therewith shall be terminated (and all
appropriate releases, termination statements or other instruments of assignment
with respect thereto shall have been obtained) to the reasonable satisfaction of
the Agent and the Co-Agent. The Agent and the Co-Agent shall have received
evidence, in form and substance reasonably satisfactory to them, that the
matters set forth in the immediately preceding sentence have been satisfied as
of the Initial Borrowing Date.
4.057 Licenses. On or prior to the Initial Borrowing Date, the
Borrower shall have delivered to the Agent true and correct copies of (i) the
Penn National Licenses, the Plains Company Licenses and all approvals given by
the Pennsylvania Horse Racing Commission and the Pennsylvania
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Harness Racing Commission to the holders of the Penn National Licenses and the
Plains Company Licenses to conduct off-track wagering at their Non-Primary
Locations in each case as currently in effect, (ii) all affidavits of any
shareholders of the Borrower or any of its Subsidiaries delivered to the
Pennsylvania Horse Racing Commission and the Pennsylvania Harness Racing
Commission within the last five years with respect to any such shareholder and
(iii) all correspondence and other written communications sent within the last
five years by or on behalf of the Pennsylvania Horse Racing Commission and the
Pennsylvania Harness Racing Commission to the Borrower or any of its
Subsidiaries or sent within the last five years by or on behalf of the Borrower
or any of its Subsidiaries to the Pennsylvania Horse Racing Commission and the
Pennsylvania Harness Racing Commission other than correspondence relating to
routine operating matters in the ordinary course of business.
4.058 Adverse Change, etc. (a) Since September 30, 1996, nothing
shall have occurred (and neither the Agent, the Co-Agent nor the Banks shall
have become aware of any facts or conditions not previously known, whether as a
result of their due diligence investigations or otherwise) which the Agent, the
Co-Agent or the Required Banks shall determine (a) has had, or could reasonably
be expected to have, a material adverse effect on the rights or remedies of the
Banks or the Agent, or on the ability of any Credit Party to perform its
obligations to them hereunder or under any other Credit Document or (b) has had,
or could reasonably be expected to have, a material adverse effect on the Plains
Company Acquisition or on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower,
the Plains Company or any of their respective Subsidiaries.
(b) All necessary governmental (domestic and foreign) and third
party approvals and/or consents (including, without limitation, any approvals
and/or consents of the Pennsylvania Horse Racing Commission and the Pennsylvania
Harness Racing Commission necessary, or in the reasonable opinion of the Agent
or the Co-Agent desirable, to operate the businesses of the Borrower or any of
its Subsidiaries permitted under Section 10.15 or in connection with the
effectiveness of the Plains Company Acquisition) in connection with the Plains
Company Acquisition and the other transactions contemplated by the Documents and
otherwise referred to herein or therein shall have been obtained and remain in
effect, and all applicable waiting periods with respect thereto shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon, the
consummation of the Plains Company Acquisition or the other transactions
contemplated by the Documents or otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seek ing injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Plains Company Acquisition or the other transactions
contemplated by the Docu ments or otherwise required to herein or therein.
(c) The Borrower and its Subsidiaries (including the Plains Company
and its Subsidiaries) shall have all licenses, including, without limitation,
gaming, racing and alcohol licenses, necessary for the operation of its
businesses.
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4.059 Litigation. On the Initial Borrowing Date, there shall be no
actions, suits or proceedings pending or threatened (i) with respect to the
Plains Company Acquisition, this Agreement or any other Document or (ii) which
the Agent, the Co-Agent or the Required Banks shall determine could reasonably
be expected to have a material adverse effect on (a) the Plains Company
Acquisition or on the business, operations, property, assets, condition
(financial or otherwise) or the prospects of the Borrower, the Plains Company or
any of their respective Subsidiaries, (b) the rights or remedies of the Banks or
the Agent hereunder or under any other Credit Document or (c) the ability of any
Credit Party to perform its respective obligations to the Banks or the Agent
hereunder or under any other Credit Document.
5.10 Pledge Agreement. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered the Pledge Agreement in
the form of Exhibit G (as amended, modified or supplemented from time to time,
the "Pledge Agreement") and shall have delivered to the Collateral Agent, as
Pledgee thereunder, all of the Pledged Securities, if any, referred to therein
then owned by such Credit Party, (x) endorsed in blank in the case of promissory
notes constituting Pledged Securities and (y) together with executed and undated
stock powers in the case of capital stock constituting Pledged Securities.
5.11 Security Agreement. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered the Security Agreement
in the form of Exhibit H (as modified, supplemented or amended from time to
time, the "Security Agreement") covering all of such Credit Party's present and
future Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party or any of its Subsidiaries as debtor and that
are filed in the jurisdictions referred to in clause (i) above, together
with copies of such other financing statements that name any Credit Party
or any of its Subsidiaries as debtor (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or in respect
of which the Collateral Agent shall have received termination statements
(Form UCC-3) or such other termination statements as shall be required by
local law fully executed for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable to perfect the
security interests intended to be created by the Security Agree ment; and
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(iv) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Security Agreement have
been taken.
5.12 Subsidiaries Guaranty. On the Initial Borrowing Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit I (as amended, modified or
supplemented from time to time, the "Subsidiaries Guaranty").
5.13 Mortgages; Title Insurance; Survey; etc. On the Initial
Borrowing Date, the Collateral Agent shall have received:
(i) fully executed counterparts of Mortgages, in form and substance
satisfactory to the Agent and the Co-Agent, which Mortgages shall cover
the Mortgaged Properties owned or leased by the Credit Parties on the
Initial Borrowing Date as designated on Schedule IV, together with
evidence that counterparts of such Mortgages have been delivered to the
title insurance company insuring the Lien of such Mortgages for recording
in all places to the extent necessary or, in the reasonable opinion of the
Collateral Agent, desirable, to effectively create a valid and enforceable
first priority mortgage lien on each such Mortgaged Property in favor of
the Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Secured Creditors;
(ii) a mortgagee title insurance policy on each such Mortgaged
Property issued by a title insurer satisfactory to the Agent (the
"Mortgage Policies") in amounts satisfactory to the Agent and the Co-Agent
assuring the Collateral Agent that the Mortgages on such Mortgaged
Properties are valid and enforceable first priority mortgage liens on the
respective Mortgaged Properties, free and clear of all defects and
encumbrances except Permitted Encumbrances and such Mortgage Policies
shall otherwise be in form and substance reasonably satisfactory to the
Agent and the Co-Agent and shall include, as appropriate, an endorsement
for future advances under this Agreement and the Notes and for any other
matter that Agent in its discretion may request, shall not include an
exception for mechanics' liens, and shall provide for affirmative
insurance and such reinsurance as the Agent or the Co-Agent in its
discretion may reasonably request;
(iii) a survey, in form and substance reasonably satisfactory to the
Agent and the Co-Agent, of each owned Mortgaged Property acquired as part
of the Plains Company Acquisition, certified by a licensed professional
surveyor reasonably satisfactory to the Agent and the Co-Agent; and
(iv) such landlord waivers and/or estoppel certificates as the Agent
or the Co-Agent may have reasonably requested, which landlord waivers
and/or estoppel certificates shall be in form and substance reasonably
satisfactory to the Agent and the Co-Agent.
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5.14 Projections; Pro Forma Balance Sheet; Financial Review. On or
prior to the Initial Borrowing Date, the Agent shall have received copies of (i)
the financial statements (including the pro forma financial statements) and
Projections referred to in Sections 8.05(a) and (d), (ii) a financial review
prepared by BDO Seidman, LLP, which financial review shall be in form, scope and
substance satisfactory to the Agent, the Co-Agent and the Required Banks and
shall verify the absence of assets (other than the capital stock of
Subsidiaries) and liabilities (including tax and ERISA and contingent or
otherwise) of the Plains Company and (iii) a review of the audit procedures,
work papers and other matters relating to the audit by Robert Rossi & Co. of the
audited financial statements of the operating Subsidiaries of the Plains Company
for the fiscal years ended December 31, 1994 and December 31, 1995, and the
foregoing audit procedures, work papers and other matters shall be in form and
substance satisfactory to the Agent, the Co-Agent and the Required Banks.
5.15 Solvency Certificate; Environmental Analyses; Insurance
Certificates. On the Initial Borrowing Date, the Borrower shall have delivered
to the Agent:
(i) a certificate in the form of Exhibit J executed by the
Chief Financial Officer of the Borrower;
(ii) environmental and hazardous substance assessments and analyses
in scope, and in form and substance, satisfactory to the Agent, the
Co-Agent and the Required Banks; and
(iii) certificates of insurance complying with the requirements of
Section 9.03 for the business and properties of the Borrower and its
Subsidiaries, in form and substance, satisfactory to the Agent, the
Co-Agent and the Required Banks and naming the Collateral Agent as an
additional insured and as loss payee, and stating that such insurance
shall not be cancelled without at least 30 days prior written notice by
the insurer to the Collateral Agent (or such shorter period of time as a
particular insurance company generally provides).
5.16 Fees, etc. On the Initial Borrowing Date, the Borrower shall
have paid to the Agent, the Co-Agent and each Bank all costs, fees and expenses
(including, without limitation, legal fees and expenses) payable to the Agent,
the Co-Agent and such Bank to the extent then due.
5.17 Other Indebtedness. On the Initial Borrowing Date, the
Borrower, the Plains Company and their respective subsidiaries shall have no
Indebtedness except for the Obligations and Existing Indebtedness.
SECTION 6. Conditions Precedent to the Initial Borrowing of Tranche
B Term Loans. The obligation of each Bank to make the initial Tranche B Term
Loans is subject at the time of the making of such Tranche B Term Loans to the
satisfaction of the following conditions:
6.061 Initial Borrowing Date. The Initial Borrowing Date shall
have occurred.
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6.062 Officer's Certificate. (a) On the Initial Tranche B Term Loan
Borrowing Date, the Agent shall receive a certificate, dated the Initial Tranche
B Term Loan Borrowing Date and signed on behalf of the Borrower by the Chairman
of the Board, the President or any Vice President of the Borrower, stating that
all of the conditions in Sections 6.05, 6.06, 6.07, 6.08 and 7.01 have been
satisfied on such date.
(b) On the Initial Tranche B Term Loan Borrowing Date, the Agent
shall have received a certificate from the Charles Town Joint Venture, dated the
Initial Tranche B Term Loan Borrowing Date, signed by the Chairman of the Board,
the President or any Vice President of the Charles Town Joint Venture or by the
managing member of the Charles Town Joint Venture, and attested to by another
officer of the Charles Town Joint Venture or of the managing member thereof, in
the form of Exhibit F with appropriate insertions, together with copies of the
organizational documents of the Charles Town Joint Venture and the resolutions
of the Charles Town Joint Venture referred to in such certificate, and the
foregoing resolutions shall be in form and substance reasonably acceptable to
the Agent and the Co-Agent.
6.063 Opinions of Counsel. On the Initial Tranche B Term Loan
Borrowing Date, the Agent shall have received from counsel to the Credit
Parties, one or more opinions addressed to the Agent, the Co-Agent, the
Collateral Agent and each of the Banks and dated the Initial Tranche B Term Loan
Borrowing Date, covering such of the matters incident to the Charles Town
Acquisition and the other transactions contemplated herein as the Agent or the
Co-Agent may reasonably request, including, without limitation, the perfection
of the security interest granted pursuant to the Security Documents in respect
of the assets acquired pursuant to the Charles Town Acquisition, and such
opinions shall be in form and substance, and from counsel, satisfactory to the
Agent, the Co-Agent and the Required Banks.
6.064 Proceedings. All corporate and legal proceedings and all
instruments and agree ments in connection with the transactions contemplated by
the Charles Town Acquisition Documents shall be satisfactory in form and
substance to the Agent, the Co-Agent and the Required Banks, and the Agent shall
have received all information and copies of all documents and papers, including
records of corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams or facsimiles, if any, which the Agent or
the Co-Agent reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
govern mental authorities.
6.065 Consummation of the Charles Town Acquisition. On the Initial
Tranche B Term Loan Borrowing Date (and concurrently with the incurrence of
Tranche B Term Loans on such date), (a) (i) the Charles Town Acquisition shall
be consummated in accordance with the terms and conditions of the Charles Town
Acquisition Documents and all applicable laws, (ii) the Charles Town Joint
Venture shall have purchased the Charles Town Race Track free and clear of all
Liens and (iii) each of the conditions precedent set forth in the Charles Town
Acquisition Documents shall be satisfied and not waived except with the consent
of the Agent, the Co-Agent and the Required Banks, to the
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satisfaction of the Agent, the Co-Agent and the Required Banks and (b) the Agent
shall have received all consents as may be necessary, or in the opinion of the
Agent desirable, to enable the Charles Town Venture and the managing member
thereof to take all actions as are required to be taken by such Credit Parties
pursuant to the terms of this Agreement and the other Credit Documents. The
aggregate consideration paid by the Charles Town Joint Venture for the Charles
Town Race Track shall not exceed $16,500,000, of which at least $3,300,000 shall
have been provided by an equity contribution from Bryant Development to the
Charles Town Joint Venture. On or prior to the Initial Tranche B Term Loan
Borrowing Date, the Agent shall have received true and complete copies of all
the Charles Town Acquisition Documents, and all of the Charles Town Acquisition
Documents shall be in form and substance satisfactory to the Agent, the Co-Agent
and the Required Banks.
6.066 Licenses. On or prior to the Initial Tranche B Term Loan
Borrowing Date, the Charles Town Joint Venture shall have obtained all of the
Charles Town Licenses and other licenses necessary to operate the Charles Town
Race Track and all Charles Town Licenses and other licenses shall be in full
force and effect. On or prior to the Initial Tranche B Term Loan Borrowing Date,
the Borrower shall have delivered to the Agent true and correct copies of (i)
the Charles Town Licenses as currently in effect, (ii) all affidavits of any
shareholders of the Borrower or any of its Subsidiaries delivered to the West
Virginia Racing Commission or the West Virginia Lottery Commission in order to
obtain the Charles Town Licenses and (iii) all correspondence and other written
communications sent by or on behalf of the West Virginia Racing Commission or
the West Virginia Lottery Commission to the Borrower or any of its Subsidiaries
or sent by or on behalf of the Borrower or any of its Subsidiaries to the West
Virginia Racing Commission or the West Virginia Lottery Commission in order to
obtain the Charles Town Licenses.
6.067 Adverse Change, etc. (a) Since September 30, 1996, nothing
shall have occurred (and neither the Agent, the Co-Agent nor the Banks shall
have become aware of any facts or conditions not previously known, whether as a
result of their due diligence investigations or otherwise) which the Agent, the
Co-Agent or the Required Banks shall determine (a) has had, or could reasonably
be expected to have, a material adverse effect on the rights or remedies of the
Banks, the Co-Agent or the Agent, or on the ability of any Credit Party to
perform its obligations to them hereunder or under any other Credit Document or
(b) has had, or could reasonably be expected to have, a material adverse effect
on the Charles Town Acquisition or on the business, operations, property,
assets, liabil ities, condition (financial or otherwise) or prospects of the
Borrower, any of its Subsidiaries or the Charles Town Race Track other than the
closing of the Charles Town Race Track on November 10, 1996.
(b) All necessary governmental (domestic and foreign) and third
party approvals and/or consents (including, without limitation, any approvals
and/or consents of the West Virginia Racing Commission and the West Virginia
Lottery Commission necessary or, in the reasonable opinion of the Agent or the
Co-Agent desirable, to operate the businesses of the Borrower or any of its
Subsidiaries permitted under Section 10.15 or in connection with the
effectiveness of the Charles Town Acquisition) in connection with the Charles
Town Acquisition shall have been obtained and remain in effect, and
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all applicable waiting periods with respect thereto shall have expired without
any action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon, the consummation of the Charles Town
Acquisition. Additionally, there shall not exist any judgment, order, injunction
or other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Charles Town Acquisition.
6.068 Litigation. On the Initial Tranche B Term Loan Borrowing Date,
there shall be no actions, suits or proceedings pending or threatened (i) with
respect to the Charles Town Acquisition, this Agreement or any other Document or
(ii) which the Agent, the Co-Agent or the Required Banks shall determine could
reasonably be expected to have a material adverse effect on (a) the Charles Town
Acquisition or on the business, operations, property, assets, condition
(financial or otherwise) or the prospects of the Borrower, any of its
Subsidiaries or the Charles Town Race Track, (b) the rights or remedies of the
Banks or the Agent hereunder or under any other Credit Document or (c) the
ability of any Credit Party to perform its respective obligations to the Banks
or the Agent hereunder or under any other Credit Document.
6.069 Security Documents; etc. On the Initial Tranche B Term Loan
Borrowing Date, the Borrower shall have taken, or shall have caused one or more
of its Subsidiaries (including the Charles Town Joint Venture) to take, all such
actions as may be required pursuant to Section 9.12 in connection with the
Charles Town Acquisition, and the Agent shall have received evidence, in form
and scope satisfactory to it, that such matters have been taken.
6.10 Environmental Analyses. On or prior to the Initial Tranche B
Term Loan Borrowing Date, the Borrower shall have delivered to the Agent
environmental and hazardous substance assessments and analyses in scope, and in
form and substance, satisfactory to the Agent, the Co-Agent and the Required
Banks in connection with the Charles Town Acquisition.
6.11 Solvency Certificate. On the Initial Tranche B Term Loan
Borrowing Date, the Borrower shall have delivered to the Agent a certificate in
the form of Exhibit J executed by the Chief Financial Officer of the Borrower.
6.12 Due Diligence. The Agent, the Co-Agent and the Required Banks
shall have completed, and shall be satisfied with the results of, their due
diligence analysis and review of the Charles Town Acquisition, the assets and
liabilities being acquired in connection therewith and the ability of Bryant
Development to provide (i) $3,300,000 to the Charles Town Joint Venture to fund
a like amount of the purchase price for the Charles Town Acquisition and (ii) up
to $3,200,000 to the Charles Town Joint Venture to fund the Capital Expenditures
permitted under Section 10.08(d), and the Agent, the Co-Agent and the Required
Banks shall have received all information reasonably requested by them in
connection with the Charles Town Acquisition (including, but not limited to,
financial statements).
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SECTION 7. Conditions Precedent to All Credit Events. The obligation
of each Bank to make Loans (including Loans made on the Initial Borrowing Date
and on the Initial Tranche B Term Loan Borrowing Date), and the obligation of
each Issuing Bank to issue Letters of Credit, is subject, at the time of each
such Credit Event (except as hereinafter indicated), to the satisfaction of the
following conditions:
7.071 No Default; Representations and Warranties. At the time of
each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
7.072 Notice of Borrowing; Letter of Credit Request. (a) Prior
to the making of each Loan, the Agent shall have received a Notice of Borrowing
meeting the requirements of Section 1.03(a).
(b) Prior to the issuance of each Letter of Credit, the Agent and
the respective Issuing Bank shall have received a Letter of Credit Request
meeting the requirements of Section 2.03.
The acceptance of the proceeds of each Loan and the making of each
Letter of Credit Request shall constitute a representation and warranty by the
Borrower to the Agent and each of the Banks that all the conditions specified in
Section 5 (with respect to Credit Events on the Initial Borrowing Date), in
Section 6 (with respect to Credit Events on the Initial Tranche B Term Loan
Borrowing Date) and in this Section 7 (with respect to Credit Events on or after
the Initial Borrowing Date) and applicable to such Credit Event exist as of that
time. All of the Notes, certificates, legal opinions and other documents and
papers referred to in Sections 5, 6 and in this Section 7, unless otherwise
specified, shall be delivered to the Agent at the Notice Office for the account
of each of the Banks and, except for the Notes, in sufficient counterparts or
copies for each of the Banks and shall be in form and substance satisfactory to
the Agent and the Required Banks.
SECTION 8. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, the Borrower makes
the following representations, warranties and agree ments, in each case after
giving effect to the Plains Company Acquisition, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans and issuance of the Letters of Credit, with the occurrence of each Credit
Event on or after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 8 are
true and correct on and as of the Initial Borrowing Date and on the date of each
such Credit Event (it
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being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct
only as of such specified date).
7.081 Corporate and Other Status. Each Credit Party and each of its
Subsidiaries (i) is a duly organized and validly existing corporation, limited
liability company or partnership, as the case may be, in good standing under the
laws of the jurisdiction of its organization, (ii) has the corpor ate, limited
liability company or partnership power and authority, as the case may be, to own
its property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of its property or the conduct of its business requires
such qualifications except for failures to be so qualified which, individually
or in the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
7.082 Corporate and Other Power and Authority. Each Credit Party has
the corporate, limited liability company or partnership power and authority, as
the case may be, to execute, deliver and perform the terms and provisions of
each of the Documents to which it is party and has taken all necessary
corporate, limited liability company or partnership action, as the case may be,
to authorize the execution, delivery and performance by it of each of such
Documents. Each Credit Party has duly executed and delivered each of the
Documents to which it is party, and each of such Documents constitutes its
legal, valid and binding obligation enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
7.083 No Violation. Neither the execution, delivery or performance
by any Credit Party of the Documents to which it is a party, nor compliance by
it with the terms and provisions thereof, (i) will contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or decree of
any court or governmental instrumentality, (ii) will conflict with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the certificate of incorporation, by-laws
or partnership agreement (or equivalent organizational documents) of the
Borrower or any of its Subsidiaries.
7.084 Approvals. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with (except for those
that have otherwise been obtained or made on or prior to (x) the Initial
Borrowing Date (in the case of the transactions contemplated by the Plains
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Company Acquisition Documents and the entering into and performance of the
Credit Documents) and which remain in full force and effect on the Initial
Borrowing Date and (y) the Initial Tranche B Term Loan Borrowing Date (in the
case of the transactions contemplated by the Charles Town Acquisition Documents)
and which remain in full force and effect on the Initial Tranche B Term Loan
Borrowing Date), or exemption by, any governmental or public body or authority,
or any subdivision thereof, is required to authorize, or is required in
connection with, (i) the execution, delivery and performance of any Document or
(ii) the legality, validity, binding effect or enforceability of any such
Document.
7.085 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The consolidated balance sheet of the
Borrower and its Subsidiaries at December 31, 1994, December 31, 1995 and
September 30, 1996 and the related consolidated statements of income, cash flows
and shareholders' equity of the Borrower and its Subsidiaries for the fiscal
years and nine-month period ended on such dates, as the case may be, copies of
which have been furnished to the Banks prior to the Initial Borrowing Date,
present fairly the financial position of the Borrower and its Subsidiaries at
the date of such balance sheets and the results of the operations of the
Borrower and its Subsidiaries for the periods covered thereby. The consolidated
balance sheet of the Borrower and its Subsidiaries at October 31, 1996 and the
related consolidated statements of income, cash flows and shareholders' equity
of the Borrower and its Subsidiaries for the one-month period ended on such
date, copies of which have been furnished to the Banks prior to the Initial
Borrowing Date, present fairly the financial position of the Borrower and its
Subsidiaries at the date of such balance sheet and the results of operations of
the Borrower and its Subsidiaries for the period covered thereby. The balance
sheets of each of the operating Subsidiaries of the Plains Company for the
fiscal years ended December 31, 1994 and 1995, and the related statements of
operations and cash flows of such Subsidiaries for the fiscal years ended as of
said dates, copies of which have heretofore been furnished to the Banks prior to
the Initial Borrowing Date, present fairly the financial position of such
Subsidiaries at the date of such balance sheets and the results operation of
such Subsidiaries for the periods covered thereby. The consolidated balance
sheet of the Plains Company and its Subsidiaries at September 30, 1996 and the
related consolidated statements of income, cash flows and shareholders' equity
of the Plains Company and its Subsidiaries for the nine-month period ended on
such date, copies of which have been furnished to the Banks prior to the Initial
Borrowing Date, present fairly the financial position of the Plains Company and
its Subsidiaries at the date of such balance sheet and the results of the
operations of the Plains Company and its such Subsidiaries for the period
covered thereby. The consolidated balance sheet of the Plains Company and its
Subsidiaries at October 31, 1996 and the related consolidated statements of
income, cash flows and shareholders' equity of the Plains Company and its
Subsidiaries for the one-month period ended on such date, copies of which have
been furnished to the Banks prior to the Initial Borrowing Date, present fairly
the financial position of the Plains Company and its Subsidiaries at the date of
such balance sheet and the results of operations of the Plains Company and its
Subsidiaries for the period covered thereby. The balance sheets of each of the
operating Subsidiaries of the Plains Company for each quarterly period from July
1, 1995 through June 30, 1996, and the related statements of operations and cash
flows of such Subsidiaries for such each period, present fairly the financial
position of such Subsidiaries at the date of such balance sheets and the results
of operations of such Subsidiaries for the periods covered thereby. The pro
forma consolidated
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balance sheet of the Borrower and its Subsidiaries as of the Initial Borrowing
Date and after giving effect to the Plains Company Acquisition and the financing
therefore, a copy of which has been furnished to the Banks prior to the Initial
Borrowing Date, present fairly the pro forma financial position of the Borrower
and its Subsidiaries as of the Initial Borrowing Date. All of the foregoing
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied, subject to normal year-end audit
adjustments in the case of the nine-month and other interim financial statements
referred to above. After giving effect to the Plains Company Acquisition (but
for this purpose assuming that the Plains Company Acquisition and the related
financing had occurred prior to September 30, 1996), since September 30, 1996,
there has been no material adverse change in the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
(b) On and as of the Initial Borrowing Date and after giving effect
to the Plains Company Acquisition and to all Indebtedness (including the Loans)
being incurred or assumed and Liens created by the Credit Parties in connection
therewith, and as of the Initial Tranche B Term Loan Borrowing Date and after
giving affect to the Charles Town Acquisition and to all Indebtedness (including
the Loans) being incurred or assumed and Liens created by the Credit Parties in
connection therewith, (a) the sum of the assets, at a fair valuation, of each of
the Borrower on a stand-alone basis and of the Borrower and its Subsidiaries
taken as a whole will exceed its debts; (b) each of the Borrower on a
stand-alone basis and the Borrower and its Subsidiaries taken as a whole has not
in curred and does not intend to incur, and does not believe that they will
incur, debts beyond their ability to pay such debts as such debts mature; and
(c) each of the Borrower on a stand alone basis and the Borrower and its
Subsidiaries taken as a whole will have sufficient capital with which to conduct
its business. For purposes of this Section 8.05(b), "debt" means any liability
on a claim, and "claim" means (i) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliqui dated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 8.05(a), there were as of the Initial Borrowing Date no
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
could reasonably be expected to be material to the Borrower and its Subsidiaries
taken as a whole. As of the Initial Borrowing Date, the Borrower does not know
of any basis for the assertion against it or any of its Subsidiaries of any
liability or obligation of any nature whatsoever that is not fully disclosed in
the financial statements delivered pursuant to Section 8.05(a) which, either
individually or in the aggregate, could reasonably be expected to be material to
the Borrower and its Subsidiaries taken as a whole.
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(d) On and as of the Initial Borrowing Date, the Projections
delivered to the Agent and the Banks prior to the Initial Borrowing Date have
been prepared in good faith and are based on reasonable assumptions, and there
are no statements or conclusions in the Projections which are based upon or
include information known to the Borrower to be misleading in any material
respect or which fail to take into account material information known to the
Borrower regarding the matters reported therein. On the Initial Borrowing Date,
the Borrower believes that the Projections are reasonable and attainable.
7.086 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of the Borrower, threatened (i) with respect to any
Document, (ii) with respect to any material Indebtedness of the Borrower or any
of its Subsidiaries or (iii) that are reasonably likely to materially and
adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
7.087 True and Complete Disclosure. All factual information (taken
as a whole) furnished by any Credit Party in writing to the Agent or any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement, the other Credit Documents or
any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any Credit
Party in writing to the Agent or any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information was provided.
7.088 Use of Proceeds; Margin Regulations. (a) All proceeds of the
Tranche A Term Loans will be used by the Borrower (i) to effect the Plains
Company Acquisition and (ii) to pay fees and expenses related to the Plains
Company Acquisition and the related financing transactions.
(b) All proceeds of the Tranche B Term Loans will be used by the
Borrower (i) to effect the Charles Town Acquisition, (ii) to make improvements
to the Charles Town Race Track and (iii) to pay fees and expenses related to the
Charles Town Acquisition.
(c) All proceeds of the Revolving Loans shall be used for the
working capital and general corporate purposes of the Borrower and its
Subsidiaries.
(d) No part of any Credit Event (or the proceeds thereof) will be
used to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof nor the occurrence of any other Credit Event
will violate or be inconsistent with the provisions of Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
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7.089 Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal and state income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all taxes and assessments payable by it which have become due, except for
those contested in good faith and adequately disclosed and fully provided for on
the financial statements of the Borrower and its Subsidiaries in accordance with
generally accepted accounting principles. The Borrower and each of its
Subsidiaries have at all times paid, or have provided adequate reserves (in the
good faith judgment of the management of the Borrower) for the payment of, all
federal, state, local and foreign income taxes applicable for all prior fiscal
years and for the current fiscal year to date. There is no material action,
suit, proceeding, investigation, audit, or claim now pending or, to the
knowledge of the Borrower threatened, by any authority regarding any taxes
relating to the Borrower or any of its Subsidiaries. As of the Initial Borrowing
Date, neither the Borrower nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of the Borrower or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of the
Borrower or any of its Subsidiaries not to be subject to the normally applicable
statute of limitations.
8.10 Compliance with ERISA. (i) Each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws, including, without limitation, ERISA and the Code; each
Plan (and each related trust, if any) which is intended to be qualified under
Section 401(a) of the Code has received a determination letter from the Internal
Revenue Service to the effect that it meets the requirements of Sections 401(a)
and 501(a) of the Code; no Reportable Event has occurred; no Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or
in reorganization; no Plan has an Unfunded Current Liability; no Plan which is
subject to Section 412 of the Code or Section 302 of ERISA has an accumulated
funding deficiency, within the meaning of such sections of the Code or ERISA, or
has applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; all contributions required to be made with
respect to a Plan have been timely made; neither the Borrower nor any Subsidiary
of the Borrower nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such material liability under any of the foregoing sections
with respect to any Plan; no condition exists which presents a material risk to
the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of
incurring a material liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no proceedings have been insti tuted
to terminate or appoint a trustee to administer any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, expected or
threatened; using actuarial assumptions and computation methods consistent with
Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of the
Borrower and its Subsidiaries and its ERISA Affiliates to all Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in
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the event of a complete withdrawal therefrom, as of the close of the most recent
fiscal year of each such Plan ended prior to the date of the most recent Credit
Event, would not exceed $500,000; each group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered
employees or former employees of the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate has at all times been operated in compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code; no lien imposed under the Code or ERISA on the assets of the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and the Borrower and its Subsidiaries may cease
contributions to or terminate any employee benefit plan maintained by any of
them without incurring any material liability.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither the Borrower nor any of its Subsidiaries has incurred
any obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan, determined as of the
end of the Borrower's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
8.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties party thereto in
the Security Agreement Collateral described therein, and the Collateral Agent,
for the benefit of the Secured Creditors, has a fully perfected first lien on,
and security interest in, all right, title and interest in all of the Security
Agreement Collateral described therein, subject to no other Liens other than Per
mitted Liens. The recordation of the Assignment of Security Interest in U.S.
Patents and Trademarks in the form attached to the Security Agreement in the
United States Patent and Trademark Office together with filings on Form UCC-1
made pursuant to the Security Agreement will create, as may be perfected by such
filing and recordation, a perfected security interest granted to the Collateral
Agent in the United States trademarks and patents covered by the Security
Agreement and the recordation of the Assignment of Security Interest in U.S.
Copyrights in the form attached to the Security Agreement with the United States
Copyright Office together with filings on Form UCC-1 made pursuant to the
Security Agreement will create, as may be perfected by such filing and
recordation, a perfected security interest granted to the Collateral Agent in
the United States copyrights covered by the Security Agreement.
(b) The security interests created in favor of the Collateral Agent,
as Pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement
constitute first priority perfected security interests in the Pledged Securities
described in the Pledge Agreement, subject to no security interests
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of any other Person. No filings or recordings are required in order to perfect
(or maintain the perfection or priority of) the security interests created in
the Pledged Securities under the Pledge Agreement.
(c) The Mortgages create, for the obligations purported to be
secured thereby, a valid and enforceable perfected security interest in and
mortgage lien on all of the Mortgaged Properties in favor of the Collateral
Agent (or such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors, superior to and prior to the rights of all
third persons (except that the security interest and mortgage lien created in
the Mortgaged Properties may be subject to the Per mitted Encumbrances related
thereto) and subject to no other Liens (other than Liens permitted under Section
10.01). Schedule IV contains a true and complete list of each parcel of Real
Property owned or leased by the Borrower and its Subsidiaries on the Initial
Borrowing Date, and the type of interest therein held by the Borrower or such
Subsidiary. The Borrower and each of its Subsidiaries have good and marketable
title to all fee-owned Real Property and valid leasehold title to all
Leaseholds, in each case free and clear of all Liens except those described in
the first sentence of this subsection (c).
8.12 Representations and Warranties in the Documents. All
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were (or are) made (or deemed made).
8.13 Properties. The Borrower and each of its Subsidiaries have good
and marketable title to all material properties owned by them, including all
property reflected in the balance sheets referred to in Section 8.05(a) and all
property acquired pursuant to each Acquisition (except as sold or otherwise
disposed of since the date of such balance sheet in the ordinary course of
business or a permitted by the terms of this Agreement), free and clear of all
Liens, other than Permitted Liens.
8.14 Capitalization. On the Initial Borrowing Date, the authorized
capital stock of the Borrower shall consist of (i) 20,000,000 shares of common
stock, $.01 par value per share and (ii) 1,000,000 shares of preferred stock,
$.01 par value per value, of which no shares of such preferred stock are issued
or outstanding. All outstanding shares of capital stock of the Borrower have
been duly and validly issued, are fully paid and nonassessable. The Borrower
does not have outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock, except for options or warrants to
purchase shares of its common stock.
8.15 Subsidiaries. As of the Initial Borrowing Date, the Borrower
has no Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule
V correctly sets forth, as of the Initial Borrowing Date, the percentage
ownership (direct or indirect) of the Borrower in each class of capital stock or
other equity of each of its Subsidiaries and also identifies the direct owner
thereof.
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8.16 Compliance with Statutes, etc. Each of the Borrower and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
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), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Sub sidiaries taken as a whole.
8.17 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
8.18 Public Utility Holding Company Act. Neither the Borrower 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.
8.19 Environmental Matters. (a) The Borrower and each of its
Subsidiaries have complied with, and on the date of each Credit Event are in
compliance with, all applicable Environ mental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or threatened
Environmental Claims against the Borrower or any of its Subsidiaries (in cluding
any such claim arising out of the ownership or operation by the Borrower or any
of its Subsidiaries of any Real Property no longer owned or operated by the
Borrower or any of its Sub sidiaries) or any Real Property owned or operated by
the Borrower or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences with respect to any Real Property owned or operated by
the Borrower or any of its Subsidiaries (including any Real Property formerly
owned or operated by the Borrower or any of its Subsidiaries but no longer owned
or operated by the Borrower or any of its Subsidiaries) or any property
adjoining or adjacent to any such Real Property that could be expected (i) to
form the basis of an Environmental Claim against the Borrower or any of its
Subsidi aries or any Real Property owned or operated by the Borrower or any of
its Subsidiaries or (ii) to cause any Real Property owned or operated by the
Borrower or any of its Subsidiaries to be subject to any restrictions on the
ownership, occupancy or transferability of such Real Property by the Borrower or
any of its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by the Borrower or any of its Subsidiaries where such generation, use,
treatment or storage has violated or could be expected to violate any
Environmental Law. Hazardous Materials have not at any time been Released on or
from any Real Property owned or operated by the Borrower or any of its
Subsidiaries where such Release has violated or could be expected to violate any
applicable Environmental Law.
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(c) Notwithstanding anything to the contrary in this Section 8.19,
the representations made in this Section 8.19 shall not be untrue unless the
aggregate effect of all violations, claims, restrictions, failures and
noncompliances of the types described above could reasonably be expected to have
a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
8.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on the Borrower or on the Borrower
and its Subsidiaries taken as a whole. There is (i) no unfair labor practice
complaint pending against the Borrower or any of its Subsidiaries or threatened
against any of them, before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against the Borrower or any of its Subsidiaries or threatened
against the Borrower or any of its Subsidiaries and (iii) no union
representation question exists with respect to the employees of the Borrower or
any of its Subsidiaries, except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either individually or in the aggregate) such as could
not reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
8.21 Patents, Licenses, Franchises and Formulas. Each of the
Borrower and each of its Subsidiaries owns all the patents, trademarks, permits,
service marks, trade names, copyrights, licenses (including, but not limited to,
gaming and alcohol licenses), franchises, proprietary information (including but
not limited to rights in computer programs and databases) and formulas, or
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 effect on the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
8.22 Licenses. (a) The Penn National Licenses and the Plains Company
Licenses are in full force and effect, have not been subject to any suspension
at any time within the last five years and there are no grounds to suspend or
revoke any of such Licenses, nor has any notice been received with respect to
such Licenses at any time within the last five years from the Pennsylvania Horse
Racing Commission or the Pennsylvania Harness Racing Commission that the
Pennsylvania Horse Racing Commission or the Pennsylvania Harness Racing
Commission believes there are grounds for suspending or revoking any of such
Licenses or indicating that any inquiry is or may be conducted with respect to
any such suspension or revocation or the fitness of any shareholder of the
Borrower or any of its Subsidiaries to hold any capital stock therein.
(b) At any time after the consummation of the Charles Town
Acquisition, the Charles Town Licenses are in full force and effect, have not
been subject to any suspension at any time and
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there are no grounds to suspend or revoke any of such Licenses, nor has any
notice been received with respect to such Licenses from the West Virginia Racing
Commission or the West Virginia Lottery Commission that the West Virginia Racing
Commission or the West Virginia Lottery Commission believes there are grounds
for suspending or revoking any of such Licenses or indicating that any inquiry
is or may be conducted with respect to any such suspension or revocation or the
fitness of any shareholder of the Borrower or any of its Subsidiaries to hold
any capital stock or other equity interest therein.
8.23 Indebtedness. Schedule VI sets forth a true and complete list
of all Indebtedness (including Contingent Obligations) of the Borrower and its
Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding
after giving effect to the Plains Company Acquisition (excluding the Loans and
the Letters of Credit, the "Existing Indebtedness"), in each case showing the
aggregate principal amount hereof and the name of the respective borrower and
any Credit Party or any of its Subsidiaries which directly or indirectly
guarantees such debt.
8.24 Plains Company Acquisition. At the time of consummation
thereof, the Plains Company Acquisition shall have been consummated in
accordance with the terms of the respective Plains Company Acquisition Documents
and all applicable laws. At the time of consummation thereof, all consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Plains Company Acquisition to the extent then
required have been obtained, given, filed or taken and are or will be in full
force and effect (or effective judicial relief with respect thereto has been
obtained). All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Plains Company Acquisition.
Additionally, there does not exist any judgment, order or injunction prohibiting
or imposing material adverse condi tions upon the Plains Company Acquisition, or
the occurrence of any Credit Event or the performance by any Credit Party of its
obligations under the Documents to which it is party. All actions taken by each
Credit Party pursuant to or in furtherance of the Plains Company Acquisition
have been taken in compliance with the respective Documents and all applicable
laws.
8.25 Charles Town Acquisition. At the time of consummation thereof,
the Charles Town Acquisition shall have been consummated in accordance with the
terms of the respective Documents and all applicable laws. At the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to make or
consummate the Charles Town Acquisition to the extent then required have been
obtained, given, filed or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained). All
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Charles Town Acquisition. Additionally, there does
not exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon the Charles
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Town Acquisition, or the occurrence of any Credit Event or the performance by
any Credit Party of its obligations under the Documents to which it is party.
All actions taken by each Credit Party pursuant to or in furtherance of the
Charles Town Acquisition have been taken in compliance with the respective
Documents and all applicable laws.
SECTION 9. Affirmative Covenants. The Borrower hereby covenants and
agrees that on and after the Effective Date and until the Total Commitments and
all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obli gations incurred hereunder and
thereunder, are paid in full:
9.091 Information Covenants. The Borrower will furnish to each Bank:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month of the Borrower, the consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal month and the related
consolidated statements of income and retained earnings and statement of
cash flows for such fiscal month and for the elapsed portion of the fiscal
year ended with the last day of such fiscal month, in each case setting
forth comparative figures for the corresponding fiscal month in the prior
fiscal year and comparable budgeted figures for such fiscal month.
(b) Quarterly Financial Statements. Within 45 days after the close
of the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as at the end of such quarterly accounting
period and the related consolidated and consolidating statements of income
and re tained earnings and statement of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly accounting period, in each case
setting forth comparative figures for the related periods in the prior
fiscal year, all of which shall be certified by the Chief Financial
Officer of the Borrower, subject to normal year-end audit adjustments and
(ii) management's discussion and analysis of the important operational and
financial developments during the quarterly and year-to-date periods.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Borrower, (i) the consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at the end of such
fiscal year and the related consolidated and consolidating statements of
income and retained earnings and of cash flows for such fiscal year
setting forth comparative figures for the preceding fiscal year and
certified (x) in the case of the consolidated financial statements, by BDO
Seidman, LLP or such other independent certified public accountants of
recognized national standing reasonably acceptable to the Agent, together
with a report of such accounting firm stating that in the course of its
regular audit of the financial statements of the Borrower and its
Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, such accounting firm obtained no
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knowledge of any Default or an Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the
nature thereof and (y) in the case of the consolidating financial
statements, by the Chief Financial Officer of the Borrower and (ii)
management's discussion and analysis of the important operational and
financial developments during the respective fiscal year.
(d) Management Letters. Promptly after the Borrower's or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received
from its certified public accountants and management's response thereto.
(e) Budgets and Projections. No later than thirty days following the
first day of each fiscal year of the Borrower, a budget in form
satisfactory to the Agent (including budgeted statements of income and
sources and uses of cash and balance sheets) prepared by the Borrower for
each of the months of such fiscal year prepared in detail.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 9.01(b) and (c), a
certificate of the Chief Financial Officer of the Borrower to the effect
that, to the best of such officer's knowledge, no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and extent
thereof, which certificate shall (x) set forth in reasonable detail the
calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the provisions of Sections 4.02(e),
4.02(f) (to the extent delivered with the financial statements required by
Section 9.01(c)), 4.02(g), 10.04, 10.05 and 10.07 through 10.12,
inclusive, at the end of such fiscal quarter or year, as the case may be,
and (y) if delivered with the financial statements required by Section
9.01(c), set forth in reasonable detail the amount of (and the
calculations required to establish the amount of) Excess Cash Flow for the
respective Excess Cash Payment Period.
(g) Notice of Default or Litigation. Promptly upon, and in any event
within three Business Days after, an officer of any Credit Party obtains
knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an Event of Default and (ii) any liti gation or
governmental investigation or proceeding pending (x) against the Borrower
or any of its Subsidiaries which could reasonably be expected to
materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole, (y) with respect to
any material Indebt edness of the Borrower or any of its Subsidiaries or
(z) with respect to the either Acquisition or any Document.
(h) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports,
if any, which the Borrower or any of its Subsidiaries shall publicly file
with the Securities and Exchange Commission or any successor
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thereto (the "SEC") or deliver to holders of its Indebtedness pursuant to
the terms of the documentation governing such Indebtedness (or any
trustee, agent or other representative therefor).
(i) Environmental Matters. Promptly after an officer of any Credit
Party obtains knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters could not,
individually or when aggregated with all other such environmental matters,
be reasonably expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole:
(i) any pending or threatened Environmental Claim against
the Borrower or any of its Subsidiaries or any Real Property owned
or operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by the Borrower or any of its
Subsidiaries that (a) results in noncompliance by the Borrower or
any of its Subsidiaries with any applicable Environ mental Law or
(b) could be expected to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real
Property;
(iii)any condition or occurrence on any Real Property owned
or operated by the Borrower or any of its Subsidiaries that could
be expected to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transfer ability
by the Borrower or any of its Subsidiaries of such Real Property
under any Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any
Real Property owned or oper ated by the Borrower or any of its
Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency; provided, that in any
event the Borrower shall deliver to each Bank all notices received
by the Borrower or any of its Subsidiaries from any government or
governmental agency under, or pursuant to, CERCLA which identify
the Borrower or any of its Subsidiaries as potentially responsible
parties for remediation costs or which otherwise notify the
Borrower or any of its Subsidiaries of potential liability under
CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response thereto.
(j) Annual Meetings with Banks. At a date to be mutually agreed
upon between the Agent and the Borrower occurring on or prior to the 120th day
after the close of each fiscal year of
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the Borrower, the Borrower shall hold a meeting with all of the Banks at which
meeting shall be re viewed the financial results of the previous fiscal year and
the financial condition of the Borrower and its Subsidiaries and the budgets
presented for the current fiscal year of the Borrower.
(k) Regulatory Matters. Promptly after (i) the Borrower or any of
its Subsidiaries receives any correspondence or other written communication from
any Commission (other than correspondence relating to routine operating matters
of the Borrower or any of its Subsidiaries in the ordinary course of business)
or (ii) the Borrower or any of its Subsidiaries delivers any correspondence or
other written communication to any Commission (other than correspondence
relating to routine operating matters of the Borrower or any of its
Subsidiaries) the Borrower shall deliver copies of any such correspondence or
other written communication to each of the Banks.
(l) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Agent or any Bank may reasonably request.
9.092 Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts in
which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities. The Borrower will,
and will cause each of its Subsidiaries to, permit officers and designated
representatives of the Agent or any Bank to visit and inspect, under guidance of
officers of the Borrower or such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of account of the Borrower
or such Sub sidiary and discuss the affairs, finances and accounts of the
Borrower or such Subsidiary with, and be advised as to the same by, its and
their officers and independent accountants, all at such reasonable times and
intervals and to such reasonable extent as the Agent or such Bank may reasonably
request.
9.093 Maintenance of Property; Insurance. (a) Schedule VII sets
forth a true and complete listing of all insurance maintained by the Borrower
and its Subsidiaries as of the Initial Borrowing Date. The Borrower will, and
will cause each of its Subsidiaries to, (i) keep all property necessary to the
business of the Borrower and its Subsidiaries in reasonably good working order
and condition, ordinary wear and tear excepted, (ii) maintain insurance on all
such property in at least such amounts and against at least such risks as is
consistent and in accordance with industry practice for companies similarly
situated owning similar properties in the same general areas in which the
Borrower or any of its Subsidiaries operates, and (iii) furnish to the Agent or
any Bank, upon written request, full information as to the insurance carried. At
any time that insurance at levels described on Schedule VII is not being
maintained by the Borrower or any Subsidiary of the Borrower, the Borrower will,
or will cause one of its Subsidiaries to, promptly notify the Agent in writing
and, if thereafter notified by the Agent or the Required Banks to do so, the
Borrower or any such Subsidiary, as the case may be, shall obtain such insurance
at such levels and coverage which are at least as great as to the extent such
insurance is reasonably available.
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(b) The Borrower will, and will cause each of the other Credit
Parties to, at all times keep its property insured in favor of the Collateral
Agent, and all policies (including Mortgage Policies) or certificates (or
certified copies thereof) with respect to such insurance (and any other
insurance maintained by the Borrower and/or such other Credit Parties) (i) shall
be endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as loss payee and/or additional insured), (ii) shall state that such insurance
policies shall not be cancelled without at least 30 days' prior written notice
thereof by the respective insurer to the Collateral Agent (or such shorter
period of time as a particular insurance company policy generally provides),
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the Secured
Creditors, (iv) shall contain the standard non-contributing mortgage clause
endorsement in favor of the Collateral Agent with respect to hazard liability
insurance, (v) shall, except in the case of public liability insurance, provide
that any losses shall be payable notwithstanding (A) any act or neglect of the
Borrower or any such other Credit Party, (B) the occupation or use of the
properties for purposes more hazardous than those permitted by the terms of the
respective policy if such coverage is obtainable at commercially reasonable
rates and is of the kind from time to time customarily insured against by
Persons owning or using similar property and in such amounts as are customary,
(C) any foreclosure or other proceeding relating to the insured properties or
(D) any change in the title to or ownership or possession of the insured
properties and (vi) shall be deposited with the Collateral Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to insure
its property in accor dance with this Section 9.03, or if the Borrower or any of
its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Collateral Agent shall have the right
(but shall be under no obligation) to procure such insurance and the Borrower
agrees to reimburse the Collateral Agent for all costs and expenses of procuring
such insurance.
9.094 Corporate Franchises. The Borrower will, and will cause each
of its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, licenses and patents; provided, however, that nothing in this
Section 9.04 shall prevent (i) sales of assets and other transactions by the
Borrower or any of its Subsidiaries in accordance with Section 10.02 or (ii) the
withdrawal by the Borrower or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
9.095 Compliance with Statutes, etc. The Borrower 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 bodies, 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), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the busi
ness, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
9.096 Compliance with Environmental Laws. (a) The Borrower will
com-ply, and will cause each of its Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to the ownership or use of its
Real Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws. Neither the Borrower nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of Hazardous Materials on any Real
Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property, except for Hazardous Materials generated,
used, treated, stored, released or disposed of at any such Real Properties in
com pliance in all material respects with all applicable Environmental Laws and
reasonably required in connection with the operation, use and maintenance of the
business or operations of the Borrower or any of its Subsidiaries.
(b) At the written request of the Agent or the Required Banks and
based upon a reasonable concern as to the continued veracity and completeness of
any of the representations and warranties set forth in Section 8.19, compliance
with Section 9.06(a) or upon receipt of any notice given under Section 9.01(i),
which request shall specify in reasonable detail the basis therefor, at any time
and from time to time, the Borrower will provide, at the sole expense of the
Borrower, an environmental site assessment report concerning any Real Property
owned or operated by the Borrower or any of its Subsidiaries, prepared by an
environmental consulting firm reasonably approved by the Agent, indicating the
presence or absence of Hazardous Materials and the potential cost of any removal
or remedial action in connection with such Hazardous Materials on such Real
Property. If the Borrower fails to provide the same within ninety days after
such request was made, the Agent may order the same, the cost of which shall be
borne by the Borrower, and the Borrower shall grant and hereby grants to the
Agent and the Banks and their agents access to such Real Property and
specifically grants the Agent and the Banks an irrevocable non-exclusive
license, subject to the rights of tenants, to undertake such an assessment at
any reasonable time upon reasonable notice to the Borrower, all at the sole and
reasonable expense of the Borrower.
9.097 ERISA. As soon as possible and, in any event, within ten (10)
days after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, the
Borrower will deliver to each of the Banks a certificate of the Chief Financial
Officer of the Borrower setting forth the full details as to such occurrence and
the action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate
is required or proposes to take, together with any notices required or proposed
to be given to or filed with or by the Borrower, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency, within
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the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current
Liability; that proceedings may be or have been instituted to terminate or
appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate will or may incur any liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of
ERISA or with respect to a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
that the Borrower or any Subsidiary of the Borrower may incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any Plan or any
Foreign Pension Plan. The Borrower will deliver to each of the Banks a complete
copy of the annual report (on Internal Revenue Service Form 5500-series) of each
Plan (including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, copies of annual reports and any material
notices received by the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate with respect to any Plan or Foreign Pension Plan shall be delivered to
the Banks no later than ten (10) days after the date such report has been filed
with the Internal Revenue Service or such notice has been received by the
Borrower, the Subsidiary or the ERISA Affiliate, as applicable.
9.098 End of Fiscal Years; Fiscal Quarters. The Borrower will cause
(i) each of its, and each of its Subsidiaries', fiscal years to end on December
31, and (ii) each of its, and each of its Subsidiaries', fiscal quarters to end
on March 31, June 30, September 30 and December 31.
9.099 Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement, loan agreement or credit agreement
and each other material agreement, contract or instrument by which it is bound,
except such non-performances as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, prop erty, assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower and its Subsid iaries taken as a whole.
9.10 Payment of Taxes. The Borrower will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies
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imposed upon it or upon its income or profits, or upon any properties belonging
to it, prior to the date on which penalties attach thereto, and all lawful
claims for sums that have become due and payable which, if unpaid, might become
a Lien not otherwise permitted under Section 10.01(i); provided, that neither
the Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has main tained adequate reserves with respect thereto
in accordance with generally accepted accounting principles.
9.11 Interest Rate Protection. No later than 60 days following the
Initial Tranche B Term Loan Borrowing Date, the Borrower will enter into
Interest Rate Protection Agreements acceptable to the Agent and the Co-Agent
establishing a fixed or maximum interest rate acceptable to the Agent and the
Co-Agent for an aggregate amount equal to at least 25% of the aggregate
principal amount of all Term Loans then outstanding (it being understood and
agreed, however, that if the Initial Tranche B Term Loan Borrowing Date does not
occur, the Borrower shall have no obligations under this Section 9.11).
9.12 Additional Security; Further Assurances. (a) The Borrower will,
and will cause each of the Subsidiary Guarantors to, grant to the Collateral
Agent security interests and mortgages in such assets and properties of the
Borrower and such Subsidiary Guarantors as are not covered by the original
Security Documents, and as may be requested from time to time by the Agent or
the Required Banks (collectively, the "Additional Security Documents"). All such
security interests and mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Agent and shall constitute
valid and enforceable perfected security interests and mortgages superior to and
prior to the rights of all third Persons and subject to no other Liens except
for Permitted Liens. The Additional Security Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall have been paid in full.
(b) The Borrower will, and will cause each of the Subsidiary
Guarantors to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, the
Borrower will cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be reasonably
requested by the Agent to assure itself that this Section 9.12 has been complied
with.
(c) The Borrower agrees that each action required above by this
Section 9.12 shall be completed as soon as possible, but in no event later than
90 days after such action is either requested
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to be taken by the Agent or the Required Banks or required to be taken by the
Borrower and the Subsidiary Guarantors pursuant to the terms of this Section
9.12; provided that (i) in connection with the Charles Town Acquisition, such
actions shall be taken at the time of consummation thereof and (ii) except in
connection with the Charles Town Acquisition, in no event will the Borrower be
required to take any action, other than using its best efforts, to obtain
consents from third parties with respect to its compliance with this Section
9.12.
SECTION 10. Negative Covenants. The Borrower hereby covenants and
agrees that on and after the Effective Date and until the Total Commitments and
all Letters of Credit have termi nated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full:
10.101 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contin gent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any simi lar recording or notice statute; provided that the provisions of this
Section 10.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as
"Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
(ii) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Borrower's
or such Subsidiary's property or assets or materially impair the use
thereof in the operation of the business of the Borrower or such
Subsidiary or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule VIII, but
only to the respective date, if any, set forth in such Schedule VIII for
the removal, replacement and termination of any such Liens,
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plus renewals, replacements and extensions of such Liens to the extent set
forth on Schedule VIII, provided that (x) the aggregate principal amount
of the Indebtedness, if any, secured by such Liens does not increase from
that amount outstanding at the time of any such renewal, replacement or
extension and (y) any such renewal, replacement or extension does not
encumber any additional assets or properties of the Borrower or any of its
Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Borrower or any of
its Subsidiaries;
(vii) Liens upon assets of the Borrower or any of its Subsidiaries
subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 10.04(iv), provided that (x)
such Liens only serve to secure the payment of Indebt edness arising under
such Capitalized Lease Obligation and (y) the Lien encumbering the asset
giving rise to the Capitalized Lease Obligation does not encumber any
other asset of the Borrower or any Subsidiary of the Borrower;
(viii) Liens placed upon equipment or machinery used in the ordinary
course of business of the Borrower or any of its Subsidiaries at the time
of the acquisition thereof by the Borrower or any such Subsidiary or
within 90 days thereafter to secure Indebtedness incurred to pay all or a
portion of the purchase price thereof or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of any such equipment
or machinery or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that (x) the aggregate
outstanding principal amount of all Indebtedness secured by Liens
permitted by this clause (viii) shall not at any time exceed $250,000 and
(y) in all events, the Lien encumbering the equipment or machinery so
acquired does not encumber any other asset of the Borrower or such
Subsidiary;
(ix) on or after the consummation of the Charles Town Acquisition,
Liens placed upon video lottery terminals used at the Charles Town Race
Track (the "Charles Town Video Lottery Terminals") at the time of the
acquisition of such video lottery terminals by the Borrower or any of its
Subsidiaries or within 90 days thereafter to secure Indebtedness incurred
to pay all or at least 85% of the purchase price thereof or to secure
Indebtedness incurred solely for the purpose of financing the acquisition
of any such video lottery terminals or extensions, renewals or
replacements of any of the such video lottery terminals for the same or a
lesser amount, provided that (x) the aggregate outstanding principal
amount of all Indebtedness secured by Liens permitted by this clause (ix)
shall not at any time exceed $11,000,000 and (y) in all events, the Lien
encumbering the video lottery terminals so acquired does not encumber any
other asset of the Borrower or such Subsidiary;
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(x) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each
case not securing Indebtedness and not materially interfering with the
conduct of the business of the Borrower or any of its Subsidiaries;
(xi) Liens arising from precautionary UCC financing statement filings
regarding operating leases permitted under Section 10.07;
(xii) Liens arising out of the existence of judgments or awards in
respect of which the Borrower or any of its Subsidiaries shall in good
faith be prosecuting an appeal or proceedings for review in respect of
which there shall have been secured a subsisting stay of execution pending
such appeal or proceedings, provided that the aggregate amount of any cash
and the fair market value of any property subject to such Liens do not
exceed $100,000 at any time outstanding;
(xiii) statutory and common law landlords' liens under leases to
which the Borrower or any of its Subsidiaries is a party; and
(xiv) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation
claims, unemployment insurance and social security benefits and Liens
securing the performance of bids, tenders, leases and contracts in the
ordinary course of business, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money), provided that the aggregate outstanding
amount of obligations secured by Liens permitted by this clause (xiv) (and
the value of all cash and property encumbered by Liens permitted pursuant
to this clause (xiv)) shall not at any time exceed $250,000.
In connection with the granting of Liens of the type described in clauses (vii),
(viii) and (ix) of this Section 10.01 by the Borrower or any of its
Subsidiaries, the Agent and the Collateral Agent shall be authorized to take any
actions deemed appropriate by it in connection therewith (including, without
limitation, by executing appropriate lien releases or lien subordination
agreements in favor of the holder or holders of such Liens, in either case
solely with respect to the item or items of equipment or other assets subject to
such Liens.
10.102 Consolidation, Merger, Purchase or Sale of Assets, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
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(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Section 10.08;
(ii) each of the Borrower and its Subsidiaries may sell assets (other
than the capital stock of any Subsidiary Guarantor or any Mortgaged
Property), so long as (x) no Default or Event of Default then exists or
would result therefrom, (y) each such sale is in an arm's-length
transaction and the Borrower or the respective Subsidiary receives at
least fair market value (as determined in good faith by the Borrower or
such Subsidiary, as the case may be), (iii) at least 85% of the total
consideration received by the Borrower or such Subsidiary is cash and is
paid at the time of the closing of such sale, (iv) the Net Sale Proceeds
therefrom are applied as (and to the extent) required by Section 4.02(e)
and (v) the aggregate amount of the proceeds received from all assets sold
pursuant to this clause (ii) shall not exceed $3,000,000 in any fiscal
year of the Borrower;
(iii) Investments may be made to the extent permitted by Section 10.05
(iv) each of the Borrower and its Subsidiaries may lease (as lessee)
real or personal property (so long as any such lease does not create a
Capitalized Lease Obligation except to the extent permitted by Section
10.04(iv));
(v) each of the Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(vi) each of the Borrower and its Subsidiaries may sell obsolete
or worn-out equipment or materials in the ordinary course of business;
(vii) each of the Acquisitions shall be permitted in accordance
with the terms and provisions of this Agreement;
(viii) each of the Borrower and its Subsidiaries may grant leases or
subleases to other Persons not materially interfering with the conduct of
the business of the Borrower or any of its Subsidiaries;
(ix) each of the Borrower and its Subsidiaries may, in the ordinary
course of business, license, as licensor or licensee, patents, trademarks,
copyrights and know-how to third Persons and to one another so long as any
such license by the Borrower or any other Credit Party in its capacity as
licensor is permitted to be assigned pursuant to the Security Agreement
(to the extent that the security interest in such patents, trademarks,
copyrights and know-how is granted thereunder) and does not otherwise
prohibit the granting of a Lien by the Borrower or any other Credit Party
pursuant to the Security Agreement in the intellectual property covered by
such license; and
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(x) so long as no Default or Event of Default then exists, any
Wholly-Owned Subsidiary of the Borrower may merge with and into any other
Wholly-Owned Subsidiary of the Borrower, so long as in the case of any
merger involving a Subsidiary Guarantor, the Subsidiary Guarantor shall be
the surviving corporation of such merger.
To the extent the Required Banks waive the provisions of this Section 10.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 10.02 (other than to the Borrower or a Subsidiary thereof), such
Collateral shall be sold free and clear of the Liens created by the Security
Documents, and the Agent and the Collateral Agent shall be authorized to take
any actions deemed appropriate in order to effect the foregoing.
10.103 Dividends. The Borrower will not, and will not permit any of
its Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay cash Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower;
(ii) so long as no Default or Event of Default then exists or would
result therefrom, any non-Wholly-Owned Subsidiary of the Borrower may pay
cash Dividends to its shareholders or partners generally so long as the
Borrower or its respective Subsidiary which owns the equity interest or
interests in the Subsidiary paying such Dividends receives at least its
proportionate share thereof (based upon its relative holdings of equity
interests in the Subsidiary paying such Dividends and taking into account
the relative preferences, if any, of the various classes of equity
interests in such Subsidiary); and
(iii) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), the Borrower
may repurchase outstanding shares of its common stock (or options to
purchase such common stock) following the death, disability or termination
of employment of employees of the Borrower or any of its Subsidiaries,
provided that the aggregate amount of Dividends paid by the Borrower
pursuant to this clause (iii) shall not exceed $50,000 in any fiscal year
of the Borrower.
10.104 Indebtedness. The Borrower will not, and will not permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Schedule VI, without giving effect to any subsequent
extension, renewal or refinancing thereof except to the extent set forth
on Schedule VI, provided that the aggregate principal amount of
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the Indebtedness to be extended, renewed or refinanced does not increase
from that amount outstanding at the time of any such extension, renewal or
refinancing;
(iii) Indebtedness under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Section 10.04
so long as all of the terms and conditions of such Interest Rate
Protection Agreements are satisfactory to the Agent;
(iv) Indebtedness of the Borrower and its Subsidiaries evidenced by
Capitalized Lease Obligations to the extent permitted pursuant to Section
10.08, provided that in no event shall the aggregate principal amount of
Capitalized Lease Obligations permitted by this clause (iv) exceed
$100,000 at any time outstanding;
(v) Indebtedness subject to Liens permitted under Sections 10.01
(viii) and (ix);
(vi) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Section 10.05(vii);
(vii) additional unsecured Indebtedness of the Borrower and its
Subsidiaries not to exceed $100,000 in aggregate principal amount at any
time outstanding.
10.105 Advances, Investments and Loans. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms of the Borrower or such Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold cash
and Cash Equivalents;
(iii) the Borrower and its Subsidiaries may hold the Investments held
by them on the Initial Borrowing Date and described on Schedule IX,
provided that any additional Investments made with respect thereto shall
be permitted only if independently justified under the other provisions of
this Section 10.05;
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(iv) the Borrower and its Subsidiaries may receive non-cash
consideration in connection with any asset sale permitted by Section
10.02(ii) but only to the extent set forth in such Section 10.02(ii);
(v) the Borrower and its Subsidiaries may make loans and advances in
the ordinary course of business to their respective employees so long as
the aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and
advances) shall not exceed $100,000;
(vi) the Borrower may enter into Interest Protection Agreements
to the extent permitted by Section 10.04(iii);
(vii) the Borrower and the Subsidiary Guarantors may make intercompany
loans and advances between or among one another (collectively,
"Intercompany Loans"), so long as each Intercompany Loan shall be
evidenced by an Intercompany Note that is pledged to the Collateral Agent
pursuant to the Pledge Agreement;
(viii) the Borrower and its Subsidiaries may make cash equity
contributions to the Charles Town Joint Venture (i) in an amount not to
exceed $13,200,000 to fund a like amount of the purchase price for the
Charles Town Race Track and (ii) in an amount not to exceed $12,800,000 to
fund the Capital Expenditures permitted by Section 10.08(d) so long as at
the time of any contribution pursuant to this clause (ii) Bryant
Development contemporaneously makes an equity contribution to the Charles
Town Joint Venture to fund its proportionate share of such Capital
Expenditures; and
(ix) on the Initial Borrowing Date, the Borrower and its Subsidiaries
may make cash equity contributions to their respective Subsidiaries in an
aggregate amount not to exceed $27,000,000 to effect the Plains Company
Acquisition.
10.106 Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any of its Subsidiaries, other than in the
ordinary course of business and on terms and conditions substantially as
favorable to the Borrower or such Subsidiary as would reasonably be obtained by
the Borrower or such Subsidiary at that time in a comparable arm's-length
transaction with a Person other than an Affiliate, except that the following in
any event shall be permitted:
(i) Dividends may be paid to the extent provided in Section
10.03;
(ii) loans may be made and other transactions may be entered into by
the Borrower and its Subsidiaries to the extent permitted by Sections
10.02, 10.04 and 10.05;
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(iii) customary fees may be paid to non-officer directors of the
Borrower and its Subsidiaries; and
(iv) Subsidiaries of the Borrower may pay management fees to the
Borrower.
10.107 Leases. (a) Prior to the consummation of the Charles Town
Acquisition, the Borrower will not permit the aggregate payments (including,
without limitation, any property taxes paid as additional rent or lease
payments) made by the Borrower and its Subsidiaries on a consolidated basis
under any agreement to rent or lease any real or personal property (or any
extension or renewal thereof) (excluding Capitalized Lease Obligations) to
exceed for any fiscal year set forth below the amount set forth opposite such
fiscal year below:
Fiscal Year Ending Amount
December 31, 1997 $1,300,000
December 31, 1998 $1,400,000
December 31, 1999 $1,400,000
December 31, 2000 $1,400,000
December 31, 2001 $1,400,000
(b) On or after the consummation of the Charles Town Acquisition,
the Borrower will not permit the aggregate payments (including, without
limitation, any property taxes paid as additional rent or lease payments) made
by the Borrower and its Subsidiaries on a consolidated basis under any agreement
to rent or lease any real or personal property (or any extension or renewal
thereof) (excluding Capitalized Lease Obligations) to exceed for any fiscal year
set forth below the amount set forth opposite such fiscal year below:
Fiscal Year Ending Amount
December 31, 1997 $3,700,000
December 31, 1998 $3,700,000
December 31, 1999 $3,900,000
December 31, 2000 $4,000,000
December 31, 2001 $4,100,000
10.108 Capital Expenditures. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
(x) during the period from October 1, 1996 through and including December 31,
1997, the Borrower and its Subsidiaries may make Capital Expenditures in an
aggregate amount not to exceed $12,000,000 (it being understood and agreed that
no part of such $12,000,000 may be used to make Capital Expenditures to
refurbish the Charles Town Race Track) and (y) during any fiscal year of the
Borrower set forth below (taken as one accounting
-63-
period), the Borrower and its Subsidiaries may make Capital Expenditures so long
as the aggregate amount of all such Capital Expenditures does not exceed in any
fiscal year of the Borrower set forth below the amount set forth opposite such
fiscal year below:
Fiscal Year Ending Amount
December 31, 1998 $4,000,000
December 31, 1999 $2,000,000
and each fiscal year
thereafter
(b) In addition to the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above during the period from October 1, 1996 through and
including December 31, 1997 is greater than the amount of such Capital
Expenditures actually made by the Borrower and its Subsidiaries during such
period pursuant to clause (a) above, such unutilized amount may be carried
forward and utilized to make Capital Expenditures in the immediately succeeding
fiscal year 1998, provided that no amounts once carried forward to the
Borrower's 1998 fiscal year may be carried forward to fiscal years thereafter.
(c) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures with the amount of Net Insurance Proceeds received
by the Borrower or any of its Subsidiaries from any Recovery Event so long as
such Net Insurance Proceeds are used to replace or restore any properties or
assets in respect of which such Net Insurance Proceeds were paid within 180 days
following the date of receipt of such Net Insurance Proceeds from such Recovery
Event to the extent such Net Insurance Proceeds are not required to be applied
pursuant to Section 4.02(g) (or Section 3.03(e), as the case may be).
(d) In addition to the foregoing, on or after the consummation of
the Charles Town Acquisition, the Charles Town Joint Venture may make up to
$16,000,000 of Capital Expenditures in fiscal year 1997 to refurbish the Charles
Town Race Track, provided that at least 20% of all such Capital Expenditures
actually made are funded with equity contributions provided by Bryant
Development.
(e) In addition to the foregoing, on or after the consummation of
the Charles Town Acquisition and to the extent that the Charles Town Video
Lottery Terminals are not leased by the Borrower or any of its Subsidiaries, the
Borrower and its Subsidiaries may make Capital Expenditures to purchase the
Charles Town Video Lottery Terminals so long as at least 85% of the purchase
price for such Charles Town Video Lottery Terminals are financed under Section
10.01(ix).
(f) In addition to the foregoing, the Borrower and its
Subsidiaries may consummate the Acquisitions.
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10.109 Minimum Consolidated Net Worth. The Borrower will not permit
Consolidated Net Worth at any time to be less than the Minimum Consolidated Net
Worth at such time.
10.10 Consolidated Cash Interest Coverage Ratio. (a) Prior to the
consummation of the Charles Town Acquisition, the Borrower will not permit the
Consolidated Cash Interest Coverage Ratio for any Test Period ending on the last
day of a fiscal quarter set forth below to be less than the ratio set forth
opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio
December 31, 1997 2.50:1.00
March 31, 1998 3.00:1.00
June 30, 1998 4.00:1.00
September 30, 1998 4.00:1.00
December 31, 1998 and the 5.00:1.00
last day of each fiscal
quarter thereafter
(b) On or after the consummation of the Charles Town Acquisition,
the Borrower will not permit the Consolidated Cash Interest Coverage Ratio for
any Test Period ending on the last day of a fiscal quarter set forth below to be
less than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio
December 31, 1997 3.00:1.00
March 31, 1998 3.00:1.00
June 30, 1998 4.00:1.00
September 30, 1998 4.00:1.00
December 31, 1998 5.00:1.00
and the last day of
each fiscal quarter
thereafter
10.11 Maximum Leverage Ratio. (a) Prior to the consummation of the
Charles Town Acquisition, the Borrower will not permit the Leverage Ratio at any
time during a period set forth below to be greater than the ratio set forth
opposite such period below:
Period Ratio
December 31, 1997 through
and including March 30, 1998 4.25:1.00
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March 31, 1998 through and
and including June 29, 1998 3.50:1.00
June 30, 1998 through and
including September 29, 1998
2.50:1.00
September 30, 1998 through and
including December 30, 1998 2.25:1.00
December 31, 1998 through and
including June 29, 1999 2.00:1.00
June 30, 1999 and thereafter 1.50:1.00
(b) On or after the consummation of the Charles Town Acquisition is
consummated, the Borrower will not permit the Leverage Ratio at any time during
a period set forth below to be greater than the ratio set forth opposite such
period below:
Period Ratio
December 31, 1997 through
and including March 30, 1998 3.50:1.00
March 31, 1998 through and
including June 29, 1998 2.75:1.00
June 30, 1998 through and
including September 29, 1998 2.50:1.00
September 30, 1998 through and
including June 29, 1999 2.00:1.00
June 30, 1999 and thereafter 1.50:1.00
10.12 Minimum Consolidated EBITDA. (a) Prior to the consummation of
the Charles Town Acquisition, the Borrower will not permit Consolidated EBITDA
for any Test Period ending on the last day of a fiscal quarter set forth below
to be less than the amount set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Amount
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March 31, 1997 $ 3,600,000
June 30, 1997 $ 8,000,000
September 30, 1997 $13,000,000
(b) On or after the consummation of the Charles Town Acquisition,
the Borrower will not permit Consolidated EBITDA for any Test Period ending on
the last day of a fiscal quarter set forth below to be less than the amount set
forth opposite such fiscal quarter below:
Fiscal Quarter Ending Amount
March 31, 1997 $ 3,000,000
June 30, 1997 $ 9,000,000
September 30, 1997 $17,000,000
10.13 Limitation on Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. The Borrower will not, and will not
permit any of its Subsidiaries to, (i) amend, modify or change its certificate
of incorporation (including, without limitation, by the filing or modification
of any certificate of designation) or by-laws (or the equivalent organizational
documents) or any agreement entered into by it with respect to its capital stock
(including any Share holders' Agreement), or enter into any new agreement with
respect to its capital stock, unless such amendment, modification, change or
other action contemplated by this clause (i) could not reasonably be expected to
be adverse to the interests of the Banks in any material respect, (ii) amend,
modify or change any Joint Venture Agreement, unless such amendment,
modification or change could not rea sonably be expected to be adverse to the
interests of the Banks in any material respect (it being understood and agreed,
however, that in any event the Borrower or a Wholly-Owned Subsidiary thereof
shall at all times be the managing member of the Charles Town Joint Venture and
shall own at least 80% of the equity interest therein) or (iii) amend, modify or
change any provision of any Tax Sharing Agreement or enter into any new tax
sharing agreement, tax allocation agreement or similar agreements unless such
amendment, modification, change or other action contemplated by this clause
(iii) could not reasonably be expected to adversely effect the interests of the
Banks in any material respect.
10.14 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
the Borrower, or pay any Indebtedness owed to the Borrower or any Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (c) transfer any of its properties or assets to the Borrower or
any Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or any
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Subsidiary of the Borrower, (iv) customary provisions restricting assignment of
any licensing agreement entered into by the Borrower or any Subsidiary of the
Borrower in the ordinary course of business and (v) restrictions on the transfer
of any asset subject to a Lien permitted by this Agreement.
10.15 Limitation on Issuance of Capital Stock. (a) The Borrower will
not, and will not permit any of its Subsidiaries to, issue (i) any preferred
stock or (ii) any redeemable common stock (other than common stock that is
redeemable at the sole option of the Borrower).
(b) The Borrower will not permit any of its Subsidiaries to issue
any capital stock (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital stock,
(ii) for stock splits, stock dividends and issuances which do not decrease the
percentage ownership of the Borrower or any of its Subsidiaries in any class of
the capital stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law or (iv) for issuances by newly created or acquired
Subsidiaries in accordance with the terms of this Agreement.
10.16 Business. The Borrower will not, and will not permit any of
its Subsidiaries to, engage (directly or indirectly) in any business other than
the businesses in which the Borrower and its Subsidiaries are engaged on the
Initial Borrowing Date and reasonable extensions thereof (including the
operation of video lottery terminals), it being understood and agreed that,
except as provided below, in no event shall the Borrower or any of its
Subsidiaries engage in any business or enter into any agreement which requires
the Borrower or any of its Subsidiaries to make any payments under Section 4 of
the Plains Company Acquisition Agreement; provided, however, the Borrower and
its Subsidiaries may operate slot machines at the Penn National Race Track, the
Pocono Downs Race Track and at any Non-Primary Location operated by the Borrower
and its Subsidiaries and may make the required payments pursuant to Section 4 of
the Plains Company Acquisition Agreement in connection therewith.
10.17 Limitation on Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Initial Borrowing Date any Subsidiary, provided that the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish or create Wholly-Owned
Subsidiaries so long as (i) the capital stock of such new Wholly-Owned
Subsidiary is pledged pursuant to, and to the extent required by, the Pledge
Agreement and the certificates representing such stock, together with stock
powers duly executed in blank, are delivered to the Collateral Agent for the
benefit of the Secured Creditors, (ii) the partnership interests of such new
Wholly-Owned Subsidiary (to the extent that same is a partnership) are pledged
and assigned pursuant to, and to the extent required by, the Pledge Agreement,
(iii) such new Wholly-Owned Subsidiary executes a counterpart of the Sub
sidiaries Guaranty, the Pledge Agreement and the Security Agreement, and (iv)
such new Wholly-Owned Subsidiary, to the extent requested by the Agent or the
Required Banks, takes all actions required pursuant to Section 9.12. In
addition, each new Wholly-Owned Subsidiary shall execute and deliver, or cause
to be executed and delivered, all other relevant documentation of the type
described
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in Section 5 as such new Wholly-Owned Subsidiary would have had to deliver if
such new Wholly-Owned Subsidiary were a Credit Party on the Initial Borrowing
Date.
SECTION 11. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
11.111 Payments. The Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any interest on any Loan or Note, any Unpaid Drawing or any Fees or any
other amounts owing hereunder or thereunder; or
11.112 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered to the Agent or any Bank pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or
11.113 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 9.01(g)(i) or 9.08 or Section 10 or (ii) default in the due performance
or observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth in Sections
11.01 and 11.02) and such default shall continue unremedied for a period of 30
days after written notice thereof to the defaulting party by the Agent or the
Required Banks; or
11.114 Default Under Other Agreements. (i) The Borrower or any of
its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Notes) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity, or (ii) any Indebtedness (other than the Notes) of the
Borrower or any of its Subsidiaries shall be declared to be (or shall become)
due and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof, provided that it
shall not be a Default or an Event of Default under this Section 11.04 unless
the aggregate principal amount of all Indebtedness as described in preceding
clauses (i) and (ii) is at least $500,000; or
11.115 Bankruptcy, etc. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is com menced
against the Borrower or any of its Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries, or the Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries, or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days, or the Borrower or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or the Borrower or
any of its Subsidiaries suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or the Borrower or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by the Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or
11.116 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any Plan
which is subject to Title IV of ERISA shall have had or is likely to have a
trustee appointed to administer such Plan, any Plan which is subject to Title IV
of ERISA is, shall have been or is likely to be terminated or to be the subject
of termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more em ployee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans or Foreign Pension Plans; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole; or
11.117 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of
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the Collateral, in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons (except as permitted by Section 10.01), and subject
to no other Liens (except as permitted by Section 10.01); or
11.118 Subsidiaries Guaranty. At any time after the execution and
delivery thereof, the Subsidiaries Guaranty or any provision thereof shall cease
to be in full force or effect as to any Subsidiary Guarantor, or any Subsidiary
Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under the
Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty; or
11.119 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any Subsidiary of the Borrower involving in the
aggregate for the Borrower and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments exceeds $500,000; or
11.10 Change of Control. A Change of Control shall occur; or
11.11 Licenses. The termination, suspension or revocation of any
License, or the existence of any circumstance, event, matter or condition which
under any Act would permit any Commission to terminate, revoke or suspend any
such License, or any Commission shall require the Borrower or any of its
Subsidiaries to divest any License or its equity interest in any Subsidiary
owning or holding any License; or
11.12 Applications. If in any year the Borrower does not, or does
not cause one of its Subsidiaries to, submit all appropriate applications to the
Pennsylvania Horse Racing Commission and the Pennsylvania Harness Racing
Commission to conduct live horse racing at the Penn National Race Track and the
Pocono Downs Race Track, or to conduct full card simulcasting at any such Track,
in each case in the immediately following calendar year; or if in any year the
Borrower does not, or does not cause one of its Subsidiaries to, submit all
appropriate applications to the West Virginia Racing Commission to conduct live
horse racing at the Charles Town Race Track in the immediately following
calendar year; or if in any year the Borrower does not, or does not cause one of
its Subsidiaries to, submit all appropriate applications to the West Virginia
Lottery Commission for a license to operate at least 400 video lottery terminals
in the immediately following fiscal year of the license (or such higher number
of video lottery terminals as the Borrower or such Subsidiary may have
previously been granted a license to operate); or
11.13 Legality. At any time the conduct of live thoroughbred
racing, live harness racing or full card simulcasting in Pennsylvania cannot
legally be conducted at the Pocono Downs Race
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Track or the Penn National Race Track or off-track wagering cannot legally be
conducted at the Non-Primary Locations operated by the holders of the Penn
National Licenses or the Plains Company Licenses, in each case under applicable
Pennsylvania or federal law; or, at any time after the consummation of the
Charles Town Acquisition, the conduct of live horse racing, televised racing or
operation of video lottery terminals in West Virginia cannot legally be
conducted at the Charles Town Race Track under applicable West Virginia or
federal law;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continu ing, the Agent, upon the written request of the Required
Banks, shall by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of any Agent, any Bank or the holder of
any Note to enforce its claims against any Credit Party (provided, that, if an
Event of Default specified in Section 11.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitments
terminated, whereupon all Commitments of each Bank shall forthwith terminate
immediately and any Commitment Commission shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and any
accrued interest in respect of all Loans and the Notes and all Obligations owing
hereunder and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Credit Party; (iii) terminate any Letter
of Credit which may be terminated in accordance with its terms; (iv) direct the
Borrower to pay (and the Borrower agrees that upon receipt of such notice, or
upon the occurrence of an Event of Default specified in Section 11.05 with
respect to the Borrower, it will pay) to the Collateral Agent at the Payment
Office such additional amount of cash or Cash Equivalents, to be held as
security by the Collateral Agent, as is equal to the aggregate Stated Amount of
all Letters of Credit issued for the account of the Borrower and then
outstanding; (v) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents; and (vi) apply any cash
collateral held by the Agent pursuant to Section 4.02 to the repayment of the
Obligations.
SECTION 12. Definitions and Accounting Terms.
12.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquisition Documents" shall mean the Plains Company Acquisition
Documents and the Charles Town Acquisition Documents.
"Acquisitions" shall mean each of the Plains Company Acquisition and
the Charles Town Acquisition.
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"Act" shall mean (i) the Pennsylvania Horse Race Industry Reform
Act, as amended, (ii) the West Virginia Racetrack Video Lottery Act, as amended,
or (iii) the West Virginia Code ss.ss. 19-23-1 et. seq., as amended, as
applicable and including, in each case, any successor thereto.
"Additional Security Documents" shall have the meaning provided in
Section 9.12.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (2) the then daily net annual assessment rate as
estimated by the Agent for determining the current annual assessment payable by
the Agent to the Federal Deposit Insurance Corporation for insuring three-month
certificates of deposit.
"Adjusted Consolidated EBITDA" shall mean, for any period,
Consolidated EBITDA for such period less the amount of all Capital Expenditures
made during such period (other than Capital Expenditures made pursuant to
Sections 10.08(c), (d) and (e) (but, in the case of clause (e), only to the
extent financed under Section 10.01(ix)).
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense, non-cash interest expense) and
net non-cash losses which were included in arriving at Consolidated Net Income
for such period, less the amount of all net non-cash gains which were included
in arriving at Consolidated Net Income for such period.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or in directly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power (i) to vote
5% or more of the securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
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"Agent" shall mean Bankers Trust Company, in its capacity as Agent
for the Banks hereunder, and shall include any successor to the Agent appointed
pursuant to Section 13.09.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Applicable Commitment Commission Percentage" shall mean, at any
time, a percentage per annum equal to 1/2 of 1%, provided that so long as no
Default or Event of Default shall exist, from and after any Start Date to and
including the corresponding End Date, the Applicable Commitment Commission
Percentage shall be 3/8 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test Date shall
be less than 2.00:1.00.
"Applicable Equity Issuance Percentage" shall mean 100%, provided
that (i) the Applicable Equity Issuance Percentage shall be 50% at such time as
(and for so long as) both (A) the sum of the aggregate outstanding principal
amount of Term Loans plus the Total Revolving Loan Commitment is $50,000,000 or
less and (B) clause (ii) of this proviso is not applicable and (ii) the
Applicable Equity Issuance Percentage shall be 0% at such time as (and for so
long as) both (A) the sum of the aggregate outstanding principal amount of Term
Loans plus the Total Revolving Loan Commitment is $25,000,000 or less and (B)
the Leverage Ratio at such time is equal to or less than 2.00:1.00.
Notwithstanding the foregoing proviso, the Applicable Equity Issuance Percentage
shall be 100% at any time that a Default or an Event of Default shall exist.
"Applicable Margin" shall mean a percentage per annum equal to (i)
in the case of Base Rate Loans, 2% less the then applicable Interest Reduction
Discount, if any, and (ii) in the case of Eurodollar Loans, 3% less the then
applicable Interest Reduction Discount, if any.
"Asset Sale" shall mean any sale, transfer or other disposition by
the Borrower or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to the Borrower or a Wholly-Owned
Subsidiary of the Borrower of any asset (including, without limitation, any
capital stock or other securities of, or equity interests in, another Person)
other than sales of assets pursuant to Sections 10.02 (v), (vi), (viii) and
(ix).
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Available Revolving Loan Commitment" shall mean, at any time and
for any Bank, the Revolving Loan Commitment of such Bank as then in effect less
such Bank's RL Percentage of the amount of the Blocked Commitment, if any, at
such time.
"Bank" shall mean each financial institution listed on Schedule I,
as well as any Person which becomes a "Bank" hereunder pursuant to Section 1.13
or 14.04(b).
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"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing or to fund its portion of any unreimbursed payment under Section
2.04(c) or (ii) a Bank having notified in writing the Borrower and/or the Agent
that such Bank does not intend to comply with its obligations under Section
1.01(a), 1.01(b), 1.01(c) or 2, in the case of either clause (i) or (ii) as a
result of any takeover or control (including, without limitation, as a result of
the occurrence of any event of the type described in Section 11.05 with respect
to such Bank) of such Bank by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 11.05.
"Base Rate" shall mean, at any time, the highest of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate, (ii) the Prime Lending Rate
and (iii) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean each Loan designated or deemed
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Blocked Commitment" shall mean (i) for the period from and
including the Initial Borrowing Date through but not including the earlier of
(x) the consummation of the Charles Town Acquisition and (y) the date on which
the Total Tranche B Term Loan Commitment is terminated, $2,000,000 and (ii) for
the period thereafter, $0.
"Borrower" shall have the meaning provided in the first paragraph
of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments of the respective Tranche on a
given date (or resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period, provided that Base
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"Bryant Development" shall mean Bryant Development Company, a
Virginia corporation which holds a 20% equity interest in the Charles Town Joint
Venture.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City, New York, a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day
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described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to any
Person, all rental obligations of such Person which, under generally accepted
accounting principles, are or will be required to be capitalized on the books of
such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) Dollar denominated time
deposits and certificates of deposit of any commercial bank having, or which is
the principal banking subsidiary of a bank holding company having, a long-term
unsecured debt rating of at least "A" or the equivalent thereof from Standard &
Poor's Ratings Services or "A2" or the equivalent thereof from Moody's Investors
Service, Inc. with maturities of not more than six months from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by Standard & Poor's
Ratings Services or at least P-1 or the equivalent thereof by Moody's Investors
Service, Inc. and in each case maturing not more than six months after the date
of acquisition by such Person and (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean (i) any Person or "group" (within the
meaning of Rules 13d-3 or 13d-5 under the Securities Exchange Act (as in effect
on the Effective Date)), other than the Permitted Holders, shall (A) have
acquired beneficial ownership of 25% or more on a fully diluted basis of the
voting and/or economic interest in the Borrower's capital stock or (B) have
obtained the power (whether or not exercised) to elect a majority of the
Borrowers' directors, (ii) the Board of Directors of the Borrower shall cease to
consist of a majority of Continuing Directors or (iii) the Permitted Holders
shall cease to collectively own at least 25% on a fully diluted basis of the
voting and/or economic interest in the Borrower's capital stock.
"Charles Town Acquisition" shall mean the acquisition by the Charles
Town Joint Venture of the Charles Town Race Track.
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"Charles Town Acquisition Agreement" shall mean the Amended and
Restated Option Agreement dated as of February 17, 1995 between Charles Town
Racing Limited Partnership, Charles Town Races and the Charles Town Joint
Venture.
"Charles Town Acquisition Documents" shall mean the Charles Town
Acquisition Agreement and other agreements and documents related to the Charles
Town Acquisition.
"Charles Town Joint Venture" shall mean PNGI Charles Town Gaming
Limited Liability Company, a West Virginia limited liability company.
"Charles Town Joint Venture Agreement" shall mean the Operating
Agreement of the Charles Town Joint Venture dated February 27, 1996.
"Charles Town Licenses" shall mean the licenses to conduct horse
racing issued to the Borrower or one of its Subsidiaries by the West Virginia
Racing Commission and to conduct video lottery issued to the Borrower or one of
its Subsidiaries by the West Virginia Lottery Commission.
"Charles Town Races" shall mean Charles Town Races, Inc., a West
Virginia corporation.
"Charles Town Racing Limited Partnership" shall mean the Charles
Town Racing Limited Partnership, a West Virginia limited partnership.
"Charles Town Race Track" shall mean Charles Town Race Track located
in Jefferson County, West Virginia.
"Charles Town Video Lottery Terminals" shall have the meaning
provided in Section 10.01(ix).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, the Mortgaged
Properties and all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 11.
"Collateral Agent" shall mean the Agent acting as collateral agent
for the Secured Creditors pursuant to the Security Documents.
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"Collective Bargaining Agreements" shall have the meaning provided
in Section 5.05.
"Commission" shall mean each of the Pennsylvania Horse Racing
Commission, the Pennsylvania Harness Racing Commission, the West Virginia Racing
Commission and the West Virginia Lottery Commission.
"Commitment" shall mean any of the commitments of any Bank, i.e.,
whether the Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment
or the Revolving Loan Commitment.
"Commitment Commission" shall mean the Revolving Loan Commitment
Commission and the Term Loan Commitment Commission.
"Consolidated Cash Interest Coverage Ratio" shall mean, for any
period, the ratio of Adjusted Consolidated EBITDA to Consolidated Cash Interest
Expense for such period (other than any Consolidated Cash Interest Expense for
such period associated with the financing of the Charles Town Video Lottery
Terminals as permitted under Section 10.01(ix)).
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense for such period including net costs under any
Interest Rate Protection Agreements, provided that there shall be excluded any
non-cash interest expense for such period (other than any interest that has been
capitalized) to the extent that same would otherwise have been included therein.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income before Consolidated Interest Expense and provision for taxes for such
period and without giving effect (x) to any extraordinary gains or losses and
(y) to any gains or losses from sales of assets other than from sales of
inventory sold in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT
for such period, adjusted by (x) adding thereto the amount of all amortization
of intangibles and depreciation that were deducted in arriving at Consolidated
EBIT for such period, and (y) subtracting therefrom (i) the amount of any
payments made by the Borrower or any of its Subsidiaries pursuant to Section 4
of the Plains Company Acquisition Agreement for such period (but only to the
extent that such payments have not already reduced Consolidated Net Income for
such period), it being understood and agreed, however, that for purposes of this
clause (i), such payment will be treated as being paid in four equal consecutive
quarterly installments, with the first such installment being treated as being
paid in the fiscal quarter of the Borrower in which such payment is made, (ii)
80% (or such higher percentage as may equal the Borrower's direct or indirect
equity interest in the Charles Town Joint Venture) of the amount of Consolidated
Interest Expense for such period which is associated with the financing of the
Charles Town Video Lottery Terminals as permitted under Section 10.01(ix) and
(iii) 80% (or such higher percentage as may equal the Borrower's direct or
indirect equity interest in the Charles Town
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Joint Venture) of the amount of any principal payments made during such period
with respect to the financing of the Charles Town Video Lottery Terminals as
permitted under Section 10.01(ix).
"Consolidated Indebtedness" shall mean, at any time, the principal
amount of all Indebtedness of the Borrower and its Subsidiaries at such time
(other than (x) Indebtedness under Interest Rate Protection Agreements except to
the extent of a payment default thereunder and (y) any Indebtedness incurred to
finance the Charles Town Video Lottery Terminals as permitted under Section
10.01(ix)).
"Consolidated Interest Expense" shall mean, for any period, the
total consolidated interest expense of the Borrower and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease Obliga
tions of the Borrower and its Subsidiaries representing the interest factor for
such period; provided that the amortization of deferred financing costs with
respect to this Agreement or the Indebtedness incurred hereunder shall be
excluded from Consolidated Interest Expense to the extent same would otherwise
have been included therein.
"Consolidated Net Income" shall mean, for any Person and period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis (after any deduction for minority interests),
provided that (i) in determining Consolidated Net Income of the Borrower, the
net income of any other Person which is not a Subsidiary of the Borrower or is
accounted for by the Borrower by the equity method of accounting shall be
included only to the extent of the payment of dividends or distributions by such
other Person to the Borrower or a Subsidiary thereof during such period and (ii)
the net income (or loss) of any other Person acquired by such specified Person
or a Subsidiary of such Person in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded.
"Consolidated Net Worth" shall mean, on any date of determination
thereof, the consolidated net worth of the Borrower and its Subsidiaries
determined as of such date of determination.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) 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
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obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Continuing Directors" shall mean the directors of the Borrower on
the Initial Borrowing Date and each other director, if such other director's
nomination for election to the Board of Directors of the Borrower is recommended
by a majority of the then Continuing Directors or is recommended by a committee
of the Board of Directors a majority of which is composed of the then Continuing
Directors.
"CoreStates" shall mean CoreStates Bank, N.A., in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Subsidiaries Guaranty and each Security Document.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit, it being understood that any conversion of a Loan pursuant
to Section 1.06 shall not constitute a Credit Event.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividend" shall mean, with respect to any Person, that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock of such Person) or cash to its
stockholders or partners as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any class of
its capital stock or any partnership interests outstanding on or after the
Initial Borrowing Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any
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class of the capital stock or any partnership interests of such Person
outstanding on or after the Initial Borrowing Date (or any options or warrants
issued by such Person with respect to its capital stock). Without limiting the
foregoing, "Dividends" with respect to any Person shall also include all
payments made or required to be made by such Person with respect to any stock
appreciation rights, plans, equity incentive or achievement plans or any similar
plans or setting aside of any funds for the foregoing purposes.
"Documents" shall mean the Credit Documents and the Acquisition
Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 14.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act).
"Employment Agreements" shall have the meaning provided in Section
5.05.
"Employee Benefit Plans" shall have the meaning provided in Section
5.05.
"End Date" shall mean, for any Margin Reduction Period, the last day
of such Margin Reduction Period.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. ss.
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
-80-
ss. 2601 et seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. ss. 3803 et seq.; the Oil Pollution Act of 1990,
33 U.S.C. ss. 2701 et seq.; the Emergency Planning and the Community Right-to
- -Know Act of 1986, 42 U.S.C. ss. 11001 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C. ss. 1801 et seq. and the Occupational Safety and
Health Act, 29 U.S.C. ss. 651 et seq.; and any state and local or foreign
counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary
of the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of BTCo with maturities comparable to
the Interest Period applicable to such Eurodollar Loan commencing two Business
Days thereafter as of 11:00 A.M. (New York time) on the date which is two
Business Days prior to the com mencement of such Interest Period, divided (and
rounded upward to the nearest 1/16 of 1%) by (b) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Eurodollar Spread" shall mean a percentage per annum equal to 1/2
of the Applicable Margin as in effect from time to time for Eurodollar Loans,
provided that in no event shall the Eurodollar Spread be less than 1%.
"Event of Default" shall have the meaning provided in Section 11.
"Excess Cash Flow" shall mean, for any period, the remainder of (i)
Adjusted Consolidated Net Income for such period minus (ii) the sum of (a) the
amount of all Capital Expenditures made by the Borrower and its Subsidiaries
during such period to the extent permitted by Section 10.08 (other than (A)
Capital Expenditures made pursuant to Section 10.08(c) for such period,
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(B) Capital Expenditures made pursuant to Section 10.08(d) for such period to
the extent financed with equity contributions from Bryant Development or with
Tranche B Term Loans and (C) Capital Expenditures made pursuant to Section
10.08(e) for such period to the extent financed with Indebtedness (other than
with Revolving Loans) and (b) the aggregate principal amount of permanent
principal payments of Indebtedness for borrowed money of the Borrower and its
Subsidiaries (other than repayments of Loans, provided that repayments of Loans
shall be deducted in determining Excess Cash Flow if such repayments were (x)
required as a result of a Scheduled Repayment under Section 4.02(b)(i) or (ii)
or (y) made as a voluntary prepayment with internally generated funds (but in
the case of a voluntary prepayment of Revolving Loans, only to the extent
accompanied by a voluntary reduc tion to the Total Revolving Loan Commitment))
during such period.
"Excess Cash Payment Date" shall mean the date occurring 90 days
after the last day of each fiscal year of the Borrower (beginning with its
fiscal year ending December 31, 1997).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the Borrower.
"Existing Indebtedness" shall have the meaning provided in Section
8.23.
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 5.05.
"Existing Letters of Credit" shall have the meaning provided in
Section 2.01, provided that at the time of expiration of each Existing Letter of
Credit in accordance with its terms (without giving effect to any extension
thereof) such Existing Letter of Credit, to the extent that same is to be
replaced, shall be replaced by a new Letter of Credit issued by BTCo.
"Facing Fee" shall have the meaning provided in Section 3.01(d).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as pub lished for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred to
in Section 3.01.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any
one or more of its Subsidiaries primarily for the benefit of employees
of the Borrower or such Subsidiaries residing outside the United States of
America, which plan, fund or other similar program provides, or results in,
retirement income, a deferral of income in
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contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the Release of which is prohibited, limited or
regulated by any governmental authority.
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebt edness has
been assumed by such Person (provided, that, if the Person has not assumed or
otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be in an amount equal to the fair market value of the property to
which such Lien relates as determined in good faith by such Person), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vi) all Contin gent Obligations of such
Person and (vii) all obligations under any Interest Rate Protection Agreement,
any Other Hedging Agreement or under any similar type of agreement.
Notwithstanding the foregoing, Indebtedness shall not include trade payables and
accrued expenses incurred by any Person in accor dance with customary practices
and in the ordinary course of business of such Person.
"Indebtedness to be Refinanced" shall mean all Indebtedness set
forth on Schedule X which is to be repaid in full on the Initial Borrowing Date.
"Initial Borrowing Date" shall mean the date occurring on or after
the Effective Date on which the initial Borrowing of Term Loans occurs.
"Initial Tranche B Term Loan Borrowing Date" shall mean that date on
or after the Initial Borrowing Date and prior to the Tranche B Term Loan
Commitment Termination Date on which the Charles Town Acquisition is consummated
and each of the other conditions set forth in Section 6 are satisfied.
"Intercompany Loan" shall have the meaning provided in Section 10.05
(vii).
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"Intercompany Note" shall mean a promissory note, in the form of
Exhibit L, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Interest Reduction Discount" shall mean, initially zero, and from
and after any Start Date to and including the corresponding End Date:
(A) 1/4 of 1% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date shall
be less than or equal to 4.00:1.00 and none of the conditions set forth in
clauses (B), (C), (D) and (E) below are satisfied;
(B) 1/2 of 1% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date shall
be less than or equal to 3.00:1.00 and none of the conditions set forth in
clauses (C), (D), and (E) below are satisfied;
(C) 1% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less
than or equal to 2.50:1.00 and none of the conditions set forth in clauses
(D), (E) and (F) below are satisfied;
(D) 1-1/4% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
less than or equal to 2.00:1.00 and the condition set forth in clause (E)
below is not satisfied; or
(E) 1/1/2% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
less than or equal to 1.50:1.00.
Notwithstanding anything to the contrary above in this definition, the Interest
Reduction Discount shall be reduced to zero at all times when a Default or an
Event of Default shall exist.
"Investments" shall have the meaning provided in Section 10.05.
"Issuing Bank" shall mean BTCo and, in the case of the Existing
Letter of Credit only, CoreStates.
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"Joint Venture Agreements" shall have the meaning provided in Section
5.05.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower and its Subsidiaries incurred in the ordinary course of business to the
horsemen for racing purposes, (ii) obligations of the Borrower and its
Subsidiaries for pari-mutual taxes and (iii) such other obligations of the
Borrower as are reasonably acceptable to the Issuing Bank and otherwise
permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section 3.
01(c).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of (i)
Consolidated Indebtedness at such time to (ii) Adjusted Consolidated EBITDA for
the Test Period then most recently ended (in each case taken as one accounting
period), provided that for purposes of the definitions of Applicable Margin,
Applicable Equity Issuance Percentage, Applicable Commitment Commission
Percentage and Interest Reduction Discount only, Adjusted Consolidated EBITDA
shall be for any Test Period ending on or prior to September 30, 1997, (x) in
the case of the Test Period ending on March 31, 1997, Adjusted Consolidated
EBITDA for such Test Period multiplied by 4, (y) in the case of the Test Period
ending June 30, 1997, Adjusted Consolidated EBITDA for such Test Period
multiplied by 2, and (z) in the case of the Test Period ending on September 30,
1997, Adjusted Consolidated EBITDA for such Test Period multiplied by a fraction
the numerator of which is 4 and the denominator of which is 3 (in each case
taken as one accounting period); provided, further, that for purposes of
determining the Applicable Margin, the Interest Reduction Discount, the
Applicable Equity Issuance Percentage and the Applicable Commitment Commission
Percentage as of any Test Date, the term "Consolidated Indebtedness" as used in
the foregoing clause (i) of this definition shall be the sum of (I) Consolidated
Indebtedness (other than Revolving Outstandings) on such Test Date plus (II) the
average Revolving Outstandings for the quarterly period ending on such Test
Date.
"Licenses" shall mean each of the Penn National Licenses, the Plains
Company Licenses and the Charles Town Licenses, as the case may be.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or
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nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing or similar statement or notice filed
under the UCC or any other similar recording or notice statute, and any lease
having substantially the same effect as any of the foregoing).
"Loan" shall mean each Tranche A Term Loan, each Tranche B Term Loan
and each Revolving Loan.
"Management Agreements" shall have the meaning provided in Section
5.05.
"Margin Reduction Period" shall mean each period which shall commence
on a date on which the financial statements are delivered pursuant to Section
9.01(b) or (c), as the case may be, and which shall end on the earlier of (i)
the date of actual delivery of the next financial statements pursuant to Section
9.01(b) or (c), as the case may be, and (ii) the latest date on which the next
financial statements are required to be delivered to Section 9.01(b) or (c), as
the case may be, provided that the first Margin Reduction Period shall commence
no earlier than the date of delivery of the first set of financial statements
pursuant to Section 9.01(c) after the Initial Borrowing Date.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Contracts" shall have the meaning provided in Section 5.05.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the
Tranche A Term Loan Maturity Date, the Tranche B Term Loan Maturity Date or the
Revolving Loan Maturity Date, as the case may be.
"Minimum Borrowing Amount" shall mean (i) for Term Loans, $1,000,000
and (ii) for Revolving Loans, $250,000.
"Minimum Consolidated Net Worth" shall mean, at any time, the sum of
(i) $27,000,000 plus (ii) 50% of Consolidated Net Income of the Borrower, if
positive, for each fiscal quarter of the Borrower (commencing with the fiscal
quarter ending on March 31, 1997) ended prior to the date of determination plus
(iii) 75% of the Net Equity Proceeds received by the Borrower after the Initial
Borrowing Date, it being understood that any increase to the Minimum
Consolidated Net Worth shall be effective as of the last day of each fiscal
quarter of the Borrower.
"Mortgage" shall mean each mortgage, deed to secure debt or deed of
trust pursuant to which any Credit Party shall have granted to the Collateral
Agent a mortgage lien on such Credit Party's Mortgaged Property.
"Mortgage Policies" shall have the meaning provided in Section 5.13.
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"Mortgaged Property" shall mean each Real Property owned or leased by
any Credit Party and designated as a Mortgaged Property on Schedule IV or
pursuant to Section 5.13.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance or
sale of any equity by any Person or any capital contribution to such Person, the
cash proceeds (net of underwriting discounts and commissions and other
reasonable costs associated therewith) received by such Person from the
respective sale of issuance of its equity or from the respective capital
contribution.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including fees and commissions, payments of unassumed liabilities relating to
the assets sold and required payments of any Indebtedness (other than
Indebtedness secured pursuant to the Security Documents) which is secured by the
respective assets which were sold), and the incremental taxes paid or payable as
a result of such Asset Sale.
"Non-Compete Agreements" shall have the meaning provided in Section
5.05.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Non-Primary Location" shall have the meaning provided in the Act
referred to in clause (i) of the definition of "Act".
"Note" shall mean each Tranche A Term Note, each Tranche B Term Note
and each Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Agent located at One
Bankers Trust Plaza, New York, New York 10006, Attention: Patricia Rapisardi, or
such other office as the Agent may hereafter designate in writing as such to the
other parties hereto.
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"Obligations" shall mean all amounts owing to the Agent, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at One
Bankers Trust Plaza, New York, New York 10006, or such other office as the Agent
may hereafter designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Penn National Licenses" shall mean the licenses to conduct
thoroughbred racing issued to the Borrower or one of its Subsidiaries by the
Pennsylvania Horse Racing Commission.
"Penn National Race Track" shall mean Penn National Race Track
located in Dauphin County, Pennsylvania.
"Pennsylvania Harness Racing Commission" shall mean the
Pennsylvania State Harness Racing Commission (and any successor thereto).
"Pennsylvania Horse Racing Commission" shall mean the Pennsylvania
State Horse Racing Commission (and any successor thereto).
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be reasonably acceptable to the Agent in their reasonable
discretion.
"Permitted Holders" shall mean Peter D. Carlino, his progeny and his
or their spouses and any trusts over which any such Person has sole control
(voting or otherwise) and which name as beneficiaries only such Person or such
Person's spouse or children.
"Permitted Liens" shall have the meaning provided in Section 10.01.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
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"Plains Company" shall mean The Plains Company, a Pennsylvania
corporation.
"Plains Company Acquisition" shall mean the acquisition by the
Borrower of (i) all of the outstanding shares of capital stock of the Plains
Company, (ii) all of the limited partnership interests in Lehigh Off-Track
Wagering, L.P. and (iii) all of the limited partnership interests in Peach
Street Ltd. Partnership, in each case pursuant to, and in accordance with the
terms set forth in, the Plains Company Acquisition Agreement.
"Plains Company Acquisition Agreement" shall mean the Purchase
Agreement dated as of September 13, 1996, by and between the Estate of Joseph B.
Banks and the Borrower.
"Plains Company Acquisition Documents" shall mean the Plains Company
Acquisition Agreement and all other agreements and documents relating to the
Plains Company Acquisition.
"Plains Company License" shall mean the license to conduct harness
racing issued to the Borrower or one of its Subsidiaries by the Pennsylvania
Harness Racing Commission.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.10.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as defined
in the Pledge Agreement.
"Pocono Downs Race Track" shall mean Pocono Downs Race Track
located in Luzerne County, Pennsylvania.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
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"Projections" shall mean the projections attached hereto as Schedule
XI which were prepared by the Borrower for the five-year period after the
Initial Borrowing Date, presented with and without giving effect to the Charles
Town Acquisition.
"Quarterly Payment Date" shall mean each March 31, June 30,
September 30 and December 31 occurring after the Initial Borrowing Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
the same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of
its Subsidiaries of any cash insurance proceeds or condemnation awards payable
(i) by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of the Borrower or any of
its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 9.03.
"Register" shall have the meaning provided in Section 14.15.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring or migrating, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
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"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.13, .14, .16, .18, .19 or .20 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
outstanding Term Loans (and, if prior to the termination thereof, Term Loan
Commitments) and Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and RL Percentage of Letter of Credit Outstandings)
represent an amount greater than 50% of the sum of all outstanding Term Loans
(and, if prior to the termination thereof, the Term Loan Commitments) of
Non-Defaulting Banks and the Total Revolving Loan Commitment less the Revolving
Loan Commitments of all Defaulting Banks (or after the termination thereof, the
sum of the then total outstanding Revolving Loans of Non-Defaulting Banks and
the aggregate RL Percentages of all Non-Defaulting Banks of the total
outstanding Letter of Credit Outstandings at such time).
"Revolving Loan" shall have the meaning provided in Section 1.01(c).
"Revolving Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03 and/or 11 or (y) adjusted from time to time
as a result of assignments to or from such Bank pursuant to Section 1.13 or
14.04(b).
"Revolving Loan Commitment Commission" shall have the meaning
provided in Section 3.01(b).
"Revolving Loan Maturity Date" shall mean November 26, 2001.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Revolving Outstandings" shall mean, at any time, the sum of (I) the
aggregate principal amount of Revolving Loans then outstanding plus (II) the
aggregate amount of Letter of Credit Outstandings at such time.
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the RL Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
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"Scheduled Repayments" shall have the meaning provided in Section
4.02(b)(ii).
"SEC" shall have the meaning provided in Section 9.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided
in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section
5.11.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Document" shall mean and include each of the Security
Agreement, the Pledge Agreement and each Mortgage and, after the execution and
delivery thereof, each Additional Security Document.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.05.
"Start Date" shall mean, with respect to any Margin Reduction
Period, the first day of such Margin Reduction Period.
"Stated Amount" of each Letter of Credit shall, at any time, mean
the maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met).
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contin gency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
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"Subsidiary Guarantor" shall mean each direct and indirect
Subsidiary of the Borrower, it being understood and agreed that the Charles Town
Joint Venture shall not be required to execute any Credit Document and the
equity interest in the Charles Town Joint Venture shall not be required to be
pledged pursuant to the Pledge Agreement, in either case, until the consummation
of the Charles Town Acquisition.
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.12.
"Supermajority Banks" shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement if
the percentage "50%" contained therein were changed to "66-2/3%."
"Syndication Date" shall have the meaning provided in Section
1.01(a).
"Tax Sharing Agreements" shall have the meaning provided in Section
5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall mean each Tranche A Term Loan and each Tranche B
Term Loan.
"Term Loan Commitment" shall mean each Tranche A Term Loan
Commitment and each Tranche B Term Loan Commitment, with the Term Loan
Commitment of any Bank at any time to equal the sum of its Tranche A Term Loan
Commitment and Tranche B Term Loan Commitment as then in effect.
"Term Loan Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Test Date" shall mean, with respect to any Start Date, the last day
of the most recent fiscal quarter or year, as the case may be, of the Borrower
ended immediately prior to such Start Date.
"Test Period" shall mean, (x) for any determination made on and
prior to September 30, 1997, the period from January 1, 1997 to the last day of
the fiscal quarter of the Borrower then last ended (in each case taken as one
accounting period) and (y) for any determination made thereafter, the four
consecutive fiscal quarters of the Borrower then last ended (in each case taken
as one accounting period).
"Total Available Revolving Loan Commitment" shall mean, at any time,
the Total Revolving Loan Commitment less the Blocked Commitment, if any, at such
time.
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Banks.
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"Total Revolving Loan Commitment" shall mean, at any time, the sum
of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Total Tranche A Term Loan Commitment and the Total Tranche B Term Loan
Commitment.
"Total Tranche A Term Loan Commitment" shall mean, at any time, the
sum of the Tranche A Term Loan Commitments of each of the Banks.
"Total Tranche B Term Loan Commitment" shall mean, at any time, the
sum of the Tranche B Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect less (y) the sum of the aggregate principal amount of
Revolving Loans then outstanding plus the then aggregate amount of Letter of
Credit Outstandings.
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being three separate Tranches,
i.e., Tranche A Term Loans, Tranche B Term Loans and Revolving Loans.
"Tranche A Term Loan" shall have the meaning provided in Section
1.01(a).
"Tranche A Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Tranche A Term Loan Commitment," as same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 11 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
1.13 or 14.04(b).
"Tranche A Term Loan Maturity Date" shall mean November 26, 2001.
"Tranche A Term Loan Percentage" shall have the meaning provided in
Section 4.01(a).
"Tranche A Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(b)(i).
"Tranche A Term Loan Scheduled Repayment Date" shall have the
meaning provided in Section 4.02(b)(i).
"Tranche A Term Note" shall have the meaning provided in Section
1.05(a).
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"Tranche B Term Loan" shall have the meaning provided in Section
1.01(b).
"Tranche B Term Loan Borrowing Date" shall mean each date on or
after the Initial Borrowing Date on which Tranche B Term Loans are incurred
hereunder.
"Tranche B Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Tranche B Term Loan Commitment," as same may be (x) reduced
from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 11 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 14.04(b).
"Tranche B Term Loan Commitment Termination Date" shall mean June
30, 1997.
"Tranche B Term Loan Maturity Date" shall mean November 26, 2001.
"Tranche B Term Loan Percentage" shall have the meaning provided in
Section 4.01(a).
"Tranche B Term Loan Scheduled Repayment" shall have the meaning
provided in Section 4.02(b)(ii).
"Tranche B Term Loan Scheduled Repayment Date" shall have the
meaning provided in Section 4.02(b)(ii).
"Tranche B Term Note" shall have the meaning provided in Section
1.05(a).
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
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"Unutilized Revolving Loan Commitment" shall mean, with respect to
any Bank at any time, such Bank's Revolving Loan Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of Revolving Loans
made by such Bank and (ii) such Bank's RL Percentage of the Letter of Credit
Outstandings.
"West Virginia Lottery Commission" shall mean the West Virginia
Lottery Commission (and any successor thereto).
"West Virginia Racing Commission" shall mean the West Virginia
Racing Commission (and any successor thereto).
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 13. The Agent.
12.131 Appointment. The Banks hereby irrevocably designate BTCo as
Agent (for purposes of this Section 13, the term "Agent" also shall include BTCo
in its capacity as Collateral Agent pursuant to the Security Documents) to act
as specified herein and in the other Credit Documents. The Banks hereby
irrevocably designate CoreStates as Co-Agent to act as specified herein and in
the other Credit Documents. Each Bank hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Agent and the Co-Agent to take such action on their behalf under
the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent and the Co-Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
and the Co-Agent may perform any of their respective duties hereunder by or
through their respective officers, directors, agents, employees or affiliates.
12.132 Nature of Duties. Neither the Agent nor the Co-Agent shall
have any duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Agent, the Co-Agent,
nor any of their respective officers, directors, agents, employees or affiliates
shall be liable for any action taken or omitted by them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the Agent and
the Co-Agent shall be mechanical and administrative in nature; neither the Agent
nor the Co-Agent shall have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Bank or the holder of any
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or
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shall be so construed as to impose upon the Agent or the Co-Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.
12.133 Lack of Reliance on the Agent and the Co-Agent. Independently
and without reliance upon the Agent or the Co-Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, neither the Agent nor the Co-Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. Neither the Agent nor the Co-Agent shall be
responsible to any Bank or the holder of any Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower or any of its Subsidiaries
or be required to make any inquiry concerning either the per formance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or the financial condition of the Borrower or any of
its Subsidiaries or the existence or possible existence of any Default or Event
of Default.
12.134 Certain Rights of the Agent and the Co-Agent. If either the
Agent or the Co-Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Agent or the Co-Agent, as the case
may be, shall be entitled to refrain from such act or taking such action unless
and until the Agent or the Co-Agent, as the case may be, shall have received
instructions from the Required Banks; and neither the Agent nor the Co-Agent, as
the case may be, shall incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Bank or the holder of any Note shall have any
right of action whatsoever against the Agent or the Co-Agent as a result of the
Agent or the Co-Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required Banks.
12.135 Reliance. The Agent and the Co-Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Agent or the Co-Agent, as the case
may be, believed to be the proper Person, and, with respect to all legal matters
pertaining to this Agreement and any other Credit Document and its duties
hereunder and thereunder, upon advice of counsel selected by the Agent or the
Co-Agent, as the case may be.
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12.136 Indemnification. To the extent the Agent or the Co-Agent is
not reimbursed and indemnified by the Borrower or any of its Subsidiaries, the
Banks will reimburse and indemnify the Agent or the Co-Agent, as the case may
be, in proportion to their respective "percentage" as used in determining the
Required Banks, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Agent or the Co-Agent as the case may be, in performing its
respective duties hereunder or under any other Credit Document, in any way
relating to or arising out of this Agreement or any other Credit Document;
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's or the Co-Agent's gross
negligence or willful misconduct.
12.137 The Agent and the Co-Agent in their Individual Capacities.
With respect to its obligation to make Loans, or issue or participate in Letters
of Credit, under this Agreement, the Agent and the Co-Agent shall have the
rights and powers specified herein for a "Bank" and may exercise the same rights
and powers as though it were not performing the duties specified herein; and the
term "Banks," "Required Banks," "Supermajority Banks," "holders of Notes" or any
similar terms shall, unless the context clearly otherwise indicates, include the
Agent and the Co-Agent in their respective individual capacities. The Agent and
the Co-Agent and their affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, investment banking, trust or other
business with, or provide debt financing, equity capital or other services
(including financial advisory services) to, any Credit Party or any Affiliate of
any Credit Party (or any Person engaged in a similar business with any Credit
Party or any Affiliate thereof) as if they were not performing the duties
specified herein, and may accept fees and other consideration from any Credit
Party or any Affiliate of any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.
12.138 Holders. The Agent may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until a written notice
of the assignment, transfer or endorsement thereof, as the case may be, shall
have been filed with the Agent. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
12.139 Resignation by the Agent or the Co-Agent. (a) The Agent may
resign from the performance of all their respective functions and duties
hereunder and/or under the other Credit Documents at any time by giving 15
Business Days' prior written notice to the Banks. Such resignation shall take
effect upon the appointment of a successor Agent pursuant to clauses (b) and (c)
below or as otherwise provided below. The Co-Agent may resign from the
performance of its functions and duties hereunder at any time by giving the
Agent notice thereof. Such resignation shall take effect upon the giving of such
notice.
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(b) Upon any such notice of resignation by the Agent, the Required
Banks shall appoint a successor Agent hereunder or thereunder who shall be a
commercial bank or trust company rea sonably acceptable to the Borrower (it
being understood and agreed that the Co-Agent is deemed to be acceptable to the
Borrower).
(c) If a successor Agent shall not have been so appointed within
such 15 Business Day period, the Agent with the consent of the Borrower (which
consent shall not be unreasonably withheld or delayed), shall then appoint a
successor Agent who shall serve as Agent hereunder or thereunder until such
time, if any, as the Required Banks appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b)
or (c) above by the 20th Business Day after the date such notice of resignation
was given by the Agent, the Agent's resignation shall become effective and the
Required Banks shall thereafter perform all the duties of the Agent hereunder
and/or under any other Credit Document until such time, if any, as the Required
Banks appoint a successor Agent as provided above.
SECTION 14. Miscellaneous.
12.141 Payment of Expenses, etc. The Borrower shall: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agent and the Co-Agent (including,
without limitation, the reasonable fees and disbursements of White & Case and of
the Agent's and the Co-Agent's local racing and other counsel and consultants)
in connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the Agent and the Co-Agent in connection with their syndication efforts with
respect to this Agreement and of the Agent and the Co-Agent and, after the
occurrence of an Event of Default, each of the Banks in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Agent and the Co-Agent
and, after the occurrence of an Event of Default, for each of the Banks); (ii)
pay and hold each of the Banks harmless from and against any and all present and
future stamp, excise and other similar documentary taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iii)
indemnify the Agent, the Co-Agent and each Bank, and each of their respective
officers, directors, employees, represen tatives and agents from and hold each
of them harmless against any and all liabilities, obligations (including removal
or remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
the Agent, the Co-Agent or any Bank is a party thereto and whether or not such
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investigation, litigation or other proceeding is brought by or on behalf of any
Credit Party) related to the entering into and/or performance of this Agreement
or any other Credit Document or the use of any Letter of Credit or the proceeds
of any Loans hereunder or the consummation of any Acquisition or any other
transactions contemplated herein or in any other Credit Document or the exercise
of any of their rights or remedies provided herein or in the other Credit
Documents, or (b) the actual or alleged presence of Hazardous Materials in the
air, surface water or groundwater or on the surface or subsurface of any Real
Property owned or at any time operated by the Borrower or any of its
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials at any location, whether or not owned or operated by the
Borrower or any of its Subsidiaries, the non-compliance of any Real Property
with foreign, federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any Real Property, or
any Environmental Claim asserted against the Borrower, any of its Subsidiaries
or any Real Property owned or at any time operated by the Borrower or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Agent, the Co-Agent or any Bank set forth in the preceding sentence
may be unenforceable because it is violative of any law or public policy, the
Borrower shall make the maximum contribution to the payment and satisfaction of
each of the indemnified liabilities which is permissible under applicable law.
12.142 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized (to the extent not prohibited by applicable law) at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of any Credit Party against and on
account of the Obligations and liabilities of the Credit Parties to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank pursuant
to Section 14.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
12.143 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to the Co-Agent or any Bank, at its address specified on
Schedule II; and if to the
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Agent, at its Notice Office; or, as to any Credit Party, the Co-Agent or the
Agent, at such other address as shall be designated by such party in a written
notice to the other parties hereto and, as to each Bank, at such other address
as shall be designated by such Bank in a written notice to the Borrower and the
Agent. All such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, be effective when
deposited in the mails, delivered to the telegraph company, cable company or
overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Agent shall not be effective until
received by the Agent.
12.144 Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the prior written consent of the Banks and,
provided further, that, although any Bank may transfer, assign or grant
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments hereunder except as provided in Sections 1.13 and 14.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder and, provided further, that no Bank shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment, shall not
consti tute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Commitments
and related outstanding Obligations hereunder to its parent company and/or any
affiliate of such Bank which is at least 50% owned by such Bank or its parent
company or to one or more Banks or (y) assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the assigning Bank or
assigning Banks, of such
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Commitments and related outstanding Obligations hereunder to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement,
provided that, (i) any assignment of Term Loan Commitments, Revolving Loans
and/or outstanding Term Loans shall be required to consist of a pro rata
assignment of such Tranches (i.e., an assignment of the same percentage of the
Term Loan Commitments, Revolving Loans and/or outstanding Term Loans), (ii) at
such time Schedule I shall be deemed modified to reflect the Commitments (and/or
outstanding Loans, as the case may be) of such new Bank and of the existing
Banks, (ii) upon the surrender of the relevant Notes by the assigning Bank (or,
upon such assigning Bank's indemnifying the Borrower for any lost Note pursuant
to a customary indemnification agreement) new Notes will be issued, at the
Borrower's expense, to such new Bank and to the assign ing Bank upon the request
of such new Bank or assigning Bank, such new Notes to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Commitments (and/or outstanding Loans, as the case
may be), (iii) the consent of the Agent shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) above, (iv) the
Agent shall receive at the time of each such assignment, from the assigning or
assignee Bank, the payment of a non-refundable assignment fee of $3,500 and (v)
no such transfer or assignment will be effective until recorded by the Agent on
the Register pursuant to Section 14.15. To the extent of any assignment pursuant
to this Section 14.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitments. At the time of
each assignment pursuant to this Section 14.04(b) to a Person which is not
already a Bank hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Bank shall, to the extent legally entitled to do so,
provide to the Borrower the appropriate Internal Revenue Service Forms (and, if
applicable, a Section 4.04(b) (ii) Certificate) described in Section 4.04(b). To
the extent that an assignment of all or any portion of a Bank's Commitments and
related outstanding Obligations pursuant to Section 1.13 or this Section
14.04(b) would, at the time of such assignment, result in increased costs under
Section 1.10, 2.06 or 4.04 from those being charged by the respective assigning
Bank prior to such assignment, then the Borrower shall not be obligated to pay
such increased costs (although the Borrower, in accordance with and pursuant to
the other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank.
12.145 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent the Co-Agent, the Collateral Agent or any Bank in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Borrower or any other Credit Party and the
Agent, the Collateral Agent or any Bank shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights, powers and remedies herein or in any other
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Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Agent, the Co-Agent, the Collateral Agent
or any Bank would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Agent, the Co-Agent, the Collateral Agent or any Bank to any other or further
action in any circumstances without notice or demand.
12.146 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Agent agrees that promptly after its receipt of each payment from
or on behalf of the Borrower in respect of any Obligations hereunder, it shall
distribute such payment to the Banks (other than any Bank that has consented in
writing to waive its pro rata share of any such payment) pro rata based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
the Banks in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 14.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
12.147 Calculations; Computations; Accounting Terms. (a) The
financial statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Banks); provided that, except as otherwise specifically provided
herein, all computations of Excess Cash Flow, Applicable Commitment Commission
Percentage, Applicable Equity Issuance Percentage and Interest Reduction
Discount, and all computations and all definitions used in determining com
pliance with Sections 10.08 through 10.12, inclusive, shall utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements of the Borrower delivered to the Banks referred to in
Section 8.05(a).
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(b) All computations of interest, Commitment Commission and other
Fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day; except that
in the case of Letter of Credit Fees, the last day shall be included) occurring
in the period for which such interest, Commitment Commission or Fees are
payable.
12.148 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT,
THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH
COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE AGENT, ANY BANK OR THE HOLDER OF ANY NOTE
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
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WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED
TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.149 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower, the Agent
and the Co-Agent.
14.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Borrower, the Agent and each of the
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at its Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written or telex notice (actually received) at such
office that the same has been signed and mailed to it. The Agent will give the
Borrower and each Bank prompt written notice of the occurrence of the Effective
Date.
14.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
14.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
expiration date of any Letter of Credit beyond the Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (except to the extent repaid in cash) (it
being understood that any amendment or modification to the financial definitions
in this Agreement or to Section 14.07(a) shall not constitute a reduction in the
rate of interest or any Fees for purposes of this clause (i)), (ii) release all
or
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substantially all of the Collateral (except as expressly provided in the Credit
Documents) under all the Security Documents, (iii) amend, modify or waive any
provision of this Section 14.12, (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the same
basis as the extensions of Term Loans and Revolving Loan Commitments are
included on the Effective Date) or (v) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement; provided
further, that no such change, waiver, discharge or termination shall (v)
increase the Commitments of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitments shall not constitute an
increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase of the
Commitment of such Bank), (w) without the consent of each Issuing Bank, amend,
modify or waive any provision of Section 2 or alter its rights or obligations
with respect to Letters of Credit, (x) without the consent of the Agent and the
Co-Agent, amend, modify or waive any provision of Section 13 or any other
provision as same relates to the rights or obligations of the Agent or the
Co-Agent, (y) without the consent of the Collateral Agent, amend, modify or
waive any provision relating to the rights or obligations of the Collateral
Agent or (z) without the consent of the Supermajority Banks, reduce the amount
of, or extend the date of, any Tranche A Term Loan Scheduled Repayment or
Tranche B Term Loan Scheduled Repayment, as the case may be, or amend the
definition of Supermajority Banks (it being understood that, with the consent of
the Required Banks, additional extensions of credit pursuant to this Agreement
may be included in the determination of the Supermajority Banks on substantially
the same basis as the extensions of Term Loans and Revolving Loan Commitments
are included on the Effective Date).
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 14.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such re
placement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termi nation or (B) terminate such non-consenting Bank's
Commitments and/or repay each Tranche of outstanding Loans of such Bank in
accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless the
Commitments that are terminated, and Loans repaid, pursuant to preceding clause
(B) are immediately replaced in full at such time through the addition of new
Banks or the increase of the Commitments and/or outstanding Loans of existing
Banks (who in each case must specifically consent thereto), then in the case of
any action pursuant to preceding clause (B) the Required Banks (determined after
giving effect to the proposed action) shall specifically consent thereto,
provided further, that in any event the Borrower shall not have the right to
replace a Bank, terminate its
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Commitments or repay its Loans solely as a result of the exercise of such Bank's
rights (and the withholding of any required consent by such Bank) pursuant to
the second proviso to Section 14.12(a).
(c) The Borrower and the Banks hereby acknowledge and agree that if
the Charles Town Acquisition is consummated after December 15, 1996, they will,
to the extent that the Borrower, the Agent and the Co-Agent believe that the
same is necessary, negotiate in good faith appropriate modifications to Sections
10.10, 10.11 and 10.12.
14.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.06 and 14.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
14.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 14.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
14.15 Register. The Borrower hereby designates the Agent to serve as
the Borrower's agent, solely for purposes of this Section 14.15, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of such Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitments
and Loans shall remain owing to the transferor. The registration of assignment
or transfer of all or part of any Commitments and Loans shall be recorded by the
Agent on the Register only upon the acceptance by the Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
14.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Agent for acceptance and regis tration of assignment or
transfer of all or part of a Loan, or as soon thereafter as practicable, the
assigning or transferor Bank shall surrender the Note evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Bank and/or the new Bank. The Borrower
agrees to indemnify the Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Agent in performing its duties under this Section
14.15.
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14.16 Confidentiality. (a) Subject to the provisions of clause (b)
of this Section 14.16, each Bank agrees that it will use its reasonable efforts
not to disclose without the prior consent of the Borrower (other than to its
employees, auditors, advisors or counsel or to another Bank if the Bank or such
Bank's holding or parent company in its sole discretion determines that any such
party should have access to such information, provided such Persons shall be
subject to the provisions of this Section 14.16 to the same extent as such Bank)
any information with respect to the Borrower or any of its Subsidiaries which is
now or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by the Borrower to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public other than by virtue of a breach of
this Section 14.16(a) by the respective Bank, (b) as may be required or
reasonably appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or reasonably
appropriate in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Bank, (e) to the Agent, the Co-Agent or the Collateral Agent
and (f) to any prospective or actual transferee or participant in connection
with any contemplated transfer or participation of any of the Notes or
Commitments or any interest therein by such Bank, provided that such prospective
transferee agrees to be bound by the confidentiality provisions contained in
this Section 14.16.
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(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its Subsidiaries,
provided such Persons shall be subject to the provisions of this Section 14.16
to the same extent as such Bank).
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
PENN NATIONAL GAMING, INC.
Wyomissing Professional Center
825 Berkshire Boulevard, Suite 203
Wyomissing, Pennsylvania 19610
Attention: Chief Financial Officer By /s/ William J. Bork
Telephone: (610) 373-2400 Title:President
Facsimile: (610) 376-2842
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ Timothy Morris
Title:Vice President
CORESTATES BANK, N.A.,
Individually and as Co-Agent
By /s/ Jeffrey Wasmuth
Title:Vice President
THE SUMITOMO BANK, LIMITED
By /s/ Micheal J. Fox
Title:Vice President& Manager
By /s/J. Wade Bell
Title: Vice President
SUMMIT BANK
By /s/ Donald S. McCarty
Title:Regional Vice President
