January 9, 1998
Players International, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Executive Vice President-Finance
Ladies and Gentlemen:
Reference is made to that certain Xxxxxxx and Restated
Credit Agreement dated as of December 16, 1996, as amended by the
First Amendment thereto dated as of February 14, 1997 and the
Second Amendment thereto dated as of March 15, 1997 (said Credit
Agreement, as so amended, being the "Credit Agreement") by and
among PLAYERS INTERNATIONAL, INC., a Nevada corporation, as the
borrower ("Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES THEREOF (each individually referred to herein as
a "Lender" and collectively as "Lenders"), XXXXX FARGO BANK,
N.A., as Administrative Agent, a Managing Agent and a Co-Arranger
("Administrative Agent"), BANKERS TRUST COMPANY, as a Managing
Agent, and BT SECURITIES CORPORATION, as a Co-Arranger.
Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Credit Agreement.
Commitment Reductions and Interest Rate Increases
Section 2.4A of the Credit Agreement provides for the
reduction of the Tranche A Commitments by $7,500,000 on December
31, 1997 and by $7,500,000 on March 31, 1998. The Company has
requested the Lenders to waive $5,000,000 of the reduction in
Tranche A Commitments scheduled for December 31, 1997, and waive
the entire $7,500,000 reduction in Tranche A Commitments
scheduled for March 31, 1998. Lenders and Administrative Agent
shall hereby waive $5,000,000 of the reduction in Tranche A
Commitments scheduled for December 31, 1997, so that the Tranche
A Commitments shall be reduced by $2,500,000 on December 31,
1997, unless the Holiday Inn Purchase Agreement (as defined
below) shall have been terminated on or before December 31, 1997.
In addition, if the Holiday Inn Acquisition occurs on or before
January 10, 1998, Lenders and Administrative Agent shall hereby
waive (such waiver to be effective upon the occurrence of the
Holiday Inn Acquisition) the entire $7,500,000 reduction in
Tranche A Commitments scheduled for March 31, 1998.
The Applicable Base Rate Margin for Tranche A Loans is
a percentage per annum equal to the sum of 2.50% plus the
Mesquite Sale Margin Increase. The Company has requested the
Lenders to waive the portion of the interest accruing on the
Loans to the extent that such interest is attributable to the
Mesquite Sale Margin Increase. Lenders and Administrative Agent
hereby waive the portion of the interest accruing on the Loans
attributable to the Mesquite Sale Margin Increase, such waiver to
be retroactive to September 30, 1997. As a result of such
waiver, the Applicable Base Rate Margin for Tranche A Loans shall
be a percentage per annum equal to 2.50%.
Holiday Inn Acquisition
The Company and Lakeshore Hotels, Ltd. have entered
into the Holiday Inn Purchase Agreement (as defined below)
pursuant to which PLC shall acquire the Holiday Inn Facilities
(as defined below).
Subsection 6.10C of the Credit Agreement provides that
Company and its Subsidiaries shall execute such documents as
Administrative Agent may reasonably request to perfect
Administrative Agent's lien on real or personal property located
at any of the Facilities acquired after the Effective Date.
Xxxxxxx, Administrative Agent, and Company desire to set forth
herein the documents that Company and PLC will deliver to
Administrative Agent pursuant to subsection 6.10C of the Credit
Agreement in connection with the Holiday Inn Acquisition.
The Company hereby agrees to deliver or cause to be
delivered the following documents and to satisfy the following
conditions on or before the Holiday Inn Acquisition Date, in
satisfaction of the requirements under subsection 6.10C of the
Credit Agreement. The Company agrees not to consummate the
Holiday Acquisition until the delivery of such documents and
satisfaction of such conditions, and acknowledges that the
Lenders will not be obligated to fund Loans the proceeds of which
will be used to fund the Holiday Inn Acquisition unless such
documents are delivered and conditions satisfied:
A. Holiday Inn Purchase Agreement. On or before the
Holiday Inn Acquisition Date, Company will deliver to
Administrative Agent an Officers' Certificate from the Company
attaching a true and correct copy of the Holiday Inn Purchase
Agreement and all amendments or waivers thereto and modifications
thereof, and stating that (i) the Holiday Inn Purchase Agreement,
as so amended, is in full force and effect and no term or
condition thereof has been amended, modified or waived, and (ii)
all conditions precedent to the consummation of the Holiday Inn
Acquisition have been satisfied or waived with the consent of
Administrative Agent. The Holiday Inn Purchase Agreement, as so
amended, shall be in form substance satisfactory to
Administrative Agent.
B. Consummation of Holiday Inn Purchase.
1. All conditions to the consummation of the Holiday
Inn Acquisition set forth in the Holiday Inn Purchase
Agreement shall have been satisfied or the fulfillment of
any such conditions shall have been waived with the consent
of Administrative Agent;
2. The aggregate consideration to be paid by the
Company and its Subsidiaries under the Holiday Inn Purchase
Agreement will not exceed $20,000,000 and the aggregate
amount of Loans to be borrowed for the purpose of funding
the Holiday Inn Acquisition will not exceed $20,000,000;
3. All Loans to be made for the purpose of funding
the Holiday Inn Acquisition shall be remitted by the
Administrative Agent to the Title Company (as defined in
Paragraph D below) to be held in escrow pursuant to
instructions in form and substance satisfactory to the
Administrative Agent. Such instructions shall provide,
among other things that the escrowed funds shall not be
delivered to the seller under the Holiday Inn Purchase
Agreement unless (i) the Title Company has committed to
issue to the Lenders the Title Policy defined in Paragraph D
below and (ii) substantially simultaneously with the release
of such escrowed funds, PLC shall consummate the Holiday Inn
Acquisition;
4. Administrative Agent will have received an
Officers' Certificate of Company to the effects set forth in
clauses (1)-(3) above.
C. Perfection of Security Interests. Loan Parties will
have taken or caused to be taken such actions in such a manner so
that Administrative Agent, on behalf of Lenders, will have, prior
to the release of any funds from the escrow account described in
Paragraph B(3), a valid and perfected first priority security
interest (subject only to Liens permitted under subsection 7.2 of
the Credit Agreement) in the Holiday Inn Facilities. Such
actions will include, without limitation:
1. the delivery to Administrative Agent of Uniform
Commercial Code financing statements and fixture filings,
executed by PLC as to the Holiday Inn Facilities for all
jurisdictions as may be necessary or desirable to perfect
Administrative Agent's security interest in such Collateral;
2. evidence that duly executed counterparts of the
Holiday Inn Mortgage will be timely recorded in all
locations to the extent necessary or desirable, in the
reasonable judgment of Administrative Agent, to effectively
create a valid and enforceable first priority Lien (subject
only to Permitted Encumbrances) on the Holiday Inn
Facilities (including the Improvements constructed thereon)
in favor of Administrative Agent for the benefit of Lenders;
and
3. evidence reasonably satisfactory to Administrative
Agent that all other filings, recordings and other actions
Administrative Agent deems necessary or advisable to
establish, preserve and perfect the first priority Liens
(subject only to Permitted Encumbrances) granted to
Administrative Agent in the Holiday Inn Facilities shall
have been made.
D. Title Policy. Administrative Agent will have received,
prior to the release of any funds from the escrow account
described in Paragraph B(3), an American Land Title Association
Extended Coverage Loan Policy (1990, without modification,
revision or amendment) (the "Title Policy") (with proof of the
payment of the premiums thereon) or commitment therefor in form
and substance acceptable to Administrative Agent issued by a
title company approved by Administrative Agent (the "Title
Company"), together with coinsurance and reinsurance from title
insurance companies approved by Administrative Agent, showing PLC
as the owner in fee simple of the Holiday Inn Premises, and
insuring the lien of the Holiday Inn Mortgage to be a first lien
against the Holiday Inn Premises, free and clear of all defects,
encumbrances and exceptions, except the Permitted Encumbrances,
together with such affirmative insurance as Administrative Agent
may reasonably require. The Title Policy shall contain, among
other things:
1. Full coverage against mechanic's liens (filed and
inchoate);
2. A reference to the survey but no survey exceptions
except those theretofore approved in writing by
Administrative Agent and its counsel;
3. A variable interest rate endorsement;
4. A "revolving credit line" endorsement"; and
5. A "pending disbursements" clause in substantially
the following form:
"Pending disbursement of the full proceeds of the loan
secured by the deed of trust set forth under Schedule A
thereof, this policy insures only to the extent of the
amount actually disbursed but increases as each disbursement
is made in good faith and without knowledge of any defects
in, or objections to, the title up to the face amount of the
policy.
At the time of each disbursement of the proceeds of the
loan, the title must be continued down to such time for
possible liens or objections intervening between the date
hereof and the date of such disbursement."
E. UCC and Judgment Searches; Release of Existing Liens.
Prior to the release of any funds from the escrow account
described in Paragraph B(3), Administrative Agent will have
received (i) current searches of the UCC filing offices and
judgment searches with the Offices of the Secretary of State of
Louisiana and the local recorders office in the county or parish
in which the Holiday Inn Premises are located and (ii) duly
executed UCC termination statements and releases terminating any
Liens (other than Liens permitted by Section 7.2 of the Credit
Agreement) on or judgments affecting the Holiday Inn Facilities.
F. Flood Insurance. Administrative Agent will have been
provided with satisfactory evidence, which may be in the form of
a letter from an insurance broker, municipal engineer, or other
knowledgeable source unaffiliated with Company, as to whether
(a) any of the Holiday Inn Premises are located in an area
designated by the Department of Housing and Urban Development as
having special flood or mudslide hazards, and (b) any of the
communities in which any of the Holiday Inn Facilities are
located is participating in the National Flood Insurance Program.
If both of the aforesaid conditions exist, Administrative Agent
shall receive satisfactory policies of flood insurance covering
the applicable Improvements as required by the Flood Act.
G. Property Insurance. Prior to the release of any funds
from the escrow account described in Paragraph B(3),
Administrative Agent will have received original binders
evidencing Company or one or more of its Subsidiaries as named
insured and original certificates or policies of insurance,
together with loss payable and mortgagee endorsements
specifically including Administrative Agent and Lenders as
mortgagees, loss payees and additional insureds as required by
the applicable insurance provisions set forth in Section 6 of the
Holiday Inn Mortgage, accompanied by affidavits, certificates,
paid bills or other documents evidencing that all premium
payments are current.
H. Environmental Assessment. Administrative Agent will,
not less than five Business Days before the Holiday Inn
Acquisition Date have received written environmental assessment
reports and other information in form, scope and substance
satisfactory to Administrative Agent, independently prepared by
an environmental consultant acceptable to Administrative Agent,
evidencing the results of an environmental assessment performed
for the purpose of assessing current environmental liabilities of
Company and its Subsidiaries (including, without limitation, the
environmental condition of the Holiday Inn Premises). If such
environmental assessment recommends any action be taken with
respect to the Holiday Inn Premises, Administrative Agent shall
have received evidence satisfactory to Administrative Agent that
such action has been taken.
I. Environmental Indemnity. Company will have executed
and delivered to Administrative Agent an Environmental Indemnity
dated as of the Holiday Inn Acquisition Date in form and
substance satisfactory to Administrative Agent.
J. Survey. Administrative Agent shall have received and
approved a current boundary and location survey for the Holiday
Inn Premises which must (i) be certified to Administrative Agent
and the Title Company and (ii) meet the Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys established by ALTA
and ACSM in 1992.
K. Opinions of Company's Counsel. Lenders and their
respective counsel shall have received (i) originally executed
copies of the favorable written opinion of counsel for Company,
in form and substance reasonably satisfactory to Administrative
Agent and its counsel, dated as of the Holiday Inn Acquisition
Date and setting forth substantially the matters in the opinions
designated in Exhibit I annexed hereto and as to such other
matters as Administrative Agent acting on behalf of Lenders may
reasonably request and (ii) opinions from special counsel to
Company with respect to such matters governed by the laws of the
state of Illinois, Kentucky, Louisiana, Missouri, Nevada and New
Jersey, as Administrative Agent acting on behalf of Xxxxxxx may
reasonably request.
L. Necessary Consents. On or before the Holiday Inn
Acquisition Date, each Loan Party will have obtained all consents
that are required for the operation of the Holiday Inn Facilities
and the transactions contemplated under this Agreement and the
other Loan Documents of (i) Governmental Authorities and (ii) any
Person required under any Contractual Obligation of any Loan
Party, all of the foregoing in form and substance reasonably
satisfactory to Administrative Agent.
M. Governmental Authorizations. Administrative Agent will
have received reasonably satisfactory evidence that Company and
its Subsidiaries have obtained all Governmental Authorizations
(including, without limitation, all zoning approvals, special or
conditional use permits, variances, permits, licenses, liquor
licenses, certificates of occupancy and franchises) necessary to
permit the use, occupancy and operation of the Holiday Inn
Facilities.
In order to induce Xxxxxxx to enter into this Letter
Agreement, Company hereby represents and warrants that:
(a) as of the date hereof, there exists no Event of
Default or Potential Event of Default under the Credit
Agreement (other than the Missouri Defaults, if any);
(b) all representations and warranties contained in
the Credit Agreement and the other Loan Documents are true,
correct and complete in all material respects on and as of
the date hereof except to the extent such representations
and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all
material respects on and as of such earlier date, and except
to the extent that such representations and warranties
relate to the Missouri Defaults, if any; and
(c) as of the date hereof, Company has performed all
agreements to be performed on its part as set forth in the
Credit Agreement.
The following terms used in this Letter Agreement shall
have the following meanings:
"Holiday Inn Acquisition" means the acquisition by
PLC of the Holiday Inn Facilities pursuant to and in the
manner contemplated by the Holiday Inn Purchase Agreement.
"Holiday Inn Acquisition Date" means the date that
Holiday Acquisition occurs.
"Holiday Inn Facilities" means the Holiday Inn
Premises and the Improvements made thereon, along with all
other related personal and mixed property located thereon or
related thereto, including without limitation a 290-room
hotel building and other facilities and all FF&E and other
personal property located therein.
"Holiday Inn Mortgage" means an Act of Mortgage,
Fixture Filing and Security Agreement with Pledge and
Assignment of Leases and Rents, by and among PLC, as
mortgagor and owner, in favor of Administrative Agent, as
mortgagee, dated the Holiday Inn Acquisition Date, in form
and substance satisfactory to Administrative Agent.
"Holiday Inn Premises" means the real property to
be acquired in fee by PLC on the Holiday Inn Acquisition
Date, which property is commonly known as the Holiday Inn
motel located in Lake Charles, Louisiana, as more fully
described on Exhibit A to the Holiday Inn Mortgage.
"Holiday Inn Purchase Agreement" means that
certain Asset Purchase Agreement by and between Lakeshore
Hotels, Ltd. and the Company dated as of September 30, 1997,
as amended by an Amendment No.1, dated as of November 13,
1997, between the same parties in the form delivered to
Agent and Lenders prior to their execution of this Letter
Agreement.
Effective December 30, 1996, the Missouri Gaming
Commission adopted regulation 11 CSR 45-10.055. Under this
regulation, no Class A, Class B or Supplier Licensee may conduct
or negotiate a transaction effecting or designed to affect
ownership, custody, or use of any slot machine located or to be
located in the state of Missouri so that such ownership, custody
or use could be held or exercised in the state of Missouri by any
person or entity other than a licensed supplier or (in the case
of a supplier effecting such transaction) a Class A or Class B
Licensee. The passage of this regulation may mean that the
Company and its Subsidiaries no longer have requisite authority
under Missouri law for certain security interests granted to the
Collateral Agent for the benefit of the Lenders.
On November 25, 1997 the Supreme Court of Missouri
handed down a decision in Case No. 79594 (the "Missouri
Decision") that may affect the operations of the Company
Subsidiaries in the State of Missouri. The Company does not
believe that the Missouri Decision has resulted in a Material
Adverse Effect or other Event of Default. The Company
acknowledges that the Lenders may take a conflicting position
with respect to the effect of the Missouri Decision.
Except to the extent that the advancement of funds on
the Holiday Inn Acquisition Date constitutes a waiver of
subsections 4.4B(ii) and 4.4B(vii) of the Credit Agreement (which
the Lenders hereby grant) the Lenders have not waived any Events
of Default or Potential Events of Default arising from the
passage of Regulation 11 CSR 45-10.055 by the Missouri Gaming
Commission or arising from the Missouri Decision. Any such
Events of Default or Potential Events of Default are collectively
referred to herein as the "Missouri Defaults". Except as
expressly set forth herein, the terms, provisions and conditions
of the Credit Agreement and the other Loan Documents shall remain
in full force and effect and in all other respects are hereby
ratified and confirmed.
This Letter Agreement may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall
be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically
attached to the same document. This Letter Agreement shall
become effective as of the date hereof upon the execution of
counterparts hereof by Company, the Credit Support Parties and by
Lenders constituting Requisite Lenders and receipt by Company and
Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
Company is a party to various Collateral Documents and
Guarantors are party to certain Collateral Documents, the
Guaranty and the PHI Guaranty pursuant to which certain assets
are liened to secure performance of the Obligations or to
guaranty payment and performance of the Obligations. For
purposes hereof, Company and Guarantors are collectively referred
to herein as the "Credit Support Parties," and the Collateral
Documents and the Guaranty are collectively referred to herein as
the "Credit Support Documents."
Each Credit Support Party hereby acknowledges that it
has reviewed the terms and provisions of the Credit Agreement and
this Letter Agreement and consents to the limited waiver of
certain terms of the Credit Agreement effected pursuant to this
Letter Agreement. Each Credit Support Party hereby confirms that
each Credit Support Document to which it is a party or otherwise
bound and all Collateral encumbered thereby will continue to
guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all "Obligations,"
"Guarantied Obligations" and "Secured Obligations," as the case
may be (in each case as such terms are defined in the applicable
Credit Support Document), including without limitation the
payment and performance of all such "Obligations," "Guarantied
Obligations" or "Secured Obligations," as the case may be, in
respect of the Obligations of Company now or hereafter existing
under or in respect of the Credit Agreement and the Notes defined
therein.
Each Credit Support Party acknowledges and agrees that
any of the Credit Support Documents to which it is a party or
otherwise bound shall continue in full force and effect and that
all of its obligations thereunder shall be valid and enforceable
and shall not be impaired or limited by the execution or
effectiveness of this Letter Agreement. Each Credit Support
Party represents and warrants that all representations and
warranties contained in the Credit Agreement and the Credit
Support Documents to which it is a party or otherwise bound are
true, correct and complete in all material respects on and as of
the date of effectiveness hereof to the same extent as though
made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all
material respects on and as of such earlier date, and except to
the extent such representations and warranties relate to the
Gaming Defaults.
Each Credit Support Party acknowledges and agrees that
(i) notwithstanding the conditions to effectiveness set forth in
this Letter Agreement, such Credit Support Party is not required
by the terms of the Credit Agreement or any other Loan Document
to consent to this Letter Agreement and (ii) nothing in the
Credit Agreement, this Letter Agreement or any other Loan
Document shall be deemed to require the consent of such Credit
Support Party to any waivers of or amendments to the Credit
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Letter Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date
first written above.
ADMINISTRATIVE AGENT: XXXXX FARGO BANK, N.A., (as
successor to First Interstate
Bank of Nevada, N.A.),
Individually as Administrative
Agent, a Managing Agent and Co-
Arranger
By:
Title:
LENDERS: FIRST NATIONAL BANK OF COMMERCE,
as a Lender
By:
Title:
COMMUNITY NATIONAL BANK OF
METROPOLIS, as a Lender
By:
Title:
PROTECTIVE ASSET MANAGEMENT
COMPANY, as a Lender
By:
Title:
COMPANY: PLAYERS INTERNATIONAL, INC.
By:
Title:
CREDIT SUPPORT PARTIES:
PLAYERS LAKE XXXXXXX, LLC
By PLAYERS LAKE XXXXXXX
RIVERBOAT, INC., Managing
Member
By:
Title:
PLAYERS NEVADA, INC.
By:
Title:
PLAYERS LC, INC.
By:
Title:
SOUTHERN ILLINOIS RIVERBOAT/
CASINO CRUISES, INC.
By:
Title:
PLAYERS BLUEGRASS DOWNS, INC.
By:
Title:
PLAYERS RIVERBOAT MANAGEMENT,
INC.
By:
Title:
PLAYERS RIVERBOAT, INC.
By:
Title:
PLAYERS MESQUITE GOLF CLUB,
INC.
By:
Title:
PLAYERS RIVERBOAT, LLC
By PLAYERS RIVERBOAT
MANAGEMENT, INC., Managing
Member
By:
Title:
PLAYERS MESQUITE LAND, INC.
By:
Title:
PLAYERS MARYLAND HEIGHTS, INC.
By:
Title:
SHOWBOAT STAR PARTNERSHIP
By PLAYERS RIVERBOAT, LLC
General Partner
By PLAYERS RIVERBOAT
MANAGEMENT, INC., Managing
Member
By:
Title:
ADDITIONAL LENDER: PAMCO CAYMAN LTD.
By: Protective Asset Management
Company
as Collateral Manager
By:
Title:
EXHIBIT I
LEGAL OPINIONS
Enclosed herein under separate tabs.
