EXHIBIT 10.27
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FORM OF PARTICIPATION AGREEMENT
dated as of March 31, 2000
among
HOLLYWOOD CASINO SHREVEPORT,
as Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Lessor and Trustee,
THE PERSONS LISTED ON SCHEDULE II,
as Lenders,
FIRST SECURITY TRUST COMPANY OF NEVADA,
as Administrative Agent
and
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Arranger and Documentation Agent
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Acquisition Financing for Equipment Associated with
Hollywood Casino and Hotel in Shreveport, Louisiana
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS
IN SECTION 7.1 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES
THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR
PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF ANY INDEMNIFIED
PERSONS IDENTIFIED HEREIN.
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS........................................................................1
ARTICLE II EFFECTIVENESS; ACQUISITION AND LEASE; GENERAL
PROVISIONS.........................................................................2
SECTION 2.1 Effectiveness of Agreement.........................................................2
SECTION 2.2 Advances...........................................................................4
SECTION 2.3 Notes..............................................................................4
SECTION 2.4 Procedures for Advance; Use of Proceeds............................................4
SECTION 2.5 Postponement of Advance............................................................5
SECTION 2.6 Obligations Several................................................................6
SECTION 2.7 Timing of Loans to Lessor and Payments to the Lenders..............................6
SECTION 2.8 Lenders' Instructions to Administrative Agent......................................7
SECTION 2.9 Computations.......................................................................7
SECTION 2.10 Commitment Fee.....................................................................7
SECTION 2.11 Records............................................................................7
SECTION 2.12 Legal and Tax Representation.......................................................8
SECTION 2.13 Amortization, Schedule.............................................................8
SECTION 2.14 Replacement of Equipment...........................................................8
ARTICLE III CONDITIONS TO ADVANCES.............................................................8
SECTION 3.1 Conditions Precedent to Each Advance Date..........................................8
SECTION 3.2 Conditions Precedent to Initial Advance Date......................................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................................13
SECTION 4.1 Representations and Warranties of Lessee..........................................13
SECTION 4.2 Representations and Warranties of Each Lender.....................................17
SECTION 4.3 Representations and Warranties of Bank............................................19
SECTION 4.4 Representations and Warranties of Administrative Agent............................20
ARTICLE V COVENANTS OF LESSEE...............................................................21
SECTION 5.1 Further Assurances................................................................21
SECTION 5.2 Consolidation, Merger, Sale, etc..................................................22
SECTION 5.3 Existence.........................................................................23
SECTION 5.4 Liens.............................................................................24
SECTION 5.5 Compliance Certificate............................................................24
SECTION 5.6 Investigation by Governmental Authorities.........................................24
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SECTION 5.7 Books and Records.................................................................24
SECTION 5.8 Payment of Taxes, etc.............................................................24
SECTION 5.9 Inspection........................................................................25
SECTION 5.10 Compliance with Laws......................................................25
SECTION 5.11 Maintenance of Insurance..................................................25
SECTION 5.12 Change of Name or Principal Place of Business.............................25
SECTION 5.13 Financial and Other Information...........................................26
SECTION 5.14 Securities................................................................27
SECTION 5.15 Gaming Equipment Costs....................................................27
SECTION 5.16 Stay, Extension and Usury Laws............................................28
SECTION 5.17 Restricted Payments.......................................................28
SECTION 5.18 Dividend and Other Payment Restrictions
Affecting Subsidiaries....................................................28
SECTION 5.19 Incurrence of Indebtedness and Issuance of Preferred Equity...............28
SECTION 5.20 Asset Sales...............................................................29
SECTION 5.21 Transactions with Affiliates..............................................29
SECTION 5.22 Line of Business..........................................................29
SECTION 5.23 Sale and Leaseback Transactions...........................................30
SECTION 5.24 Limitation on Issuances and Sales of Equity Interests in
Subsidiaries..............................................................30
SECTION 5.25 Restriction on Payment of Management Fees.................................30
SECTION 5.26 Landlord Waiver and Consent...............................................30
SECTION 5.27 Final Appraisal...........................................................30
ARTICLE VI COVENANTS OF LESSOR, TRUSTEE, ADMINISTRATIVE
AGENT AND LENDERS.................................................................31
SECTION 6.1 Covenants of Lessor, Trustee, Administrative Agent and the Lenders................31
SECTION 6.2 Restrictions On and Effect of Transfer............................................33
SECTION 6.3 Participations....................................................................35
SECTION 6.4 Required Transfers................................................................36
SECTION 6.5 Distribution and Receipt of Payments..............................................36
ARTICLE VII GENERAL INDEMNITY..........................................................................37
SECTION 7.1 General Indemnification...........................................................37
ARTICLE VIII GENERAL TAX INDEMNITY......................................................................39
SECTION 8.1 General Tax Indemnity.............................................................39
SECTION 8.2 Exclusions from General Tax Indemnity.............................................40
SECTION 8.3 Contests..........................................................................41
SECTION 8.4 Payments..........................................................................42
SECTION 8.5 Reports...........................................................................42
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SECTION 8.6 Withholding Tax Exemption.........................................................43
ARTICLE IX MISCELLANEOUS.....................................................................43
SECTION 9.1 Survival of Agreements............................................................43
SECTION 9.2 No Broker, etc....................................................................43
SECTION 9.3 Amendments........................................................................43
SECTION 9.4 Cumulative Remedies; No Waiver....................................................44
SECTION 9.5 Nature of Lenders' Obligations....................................................44
SECTION 9.6 Notices...........................................................................45
SECTION 9.7 Execution of Operative Documents..................................................45
SECTION 9.8 No Third Parties Benefitted.......................................................45
SECTION 9.9 Confidentiality...................................................................46
SECTION 9.10 Integration.................................................................46
SECTION 9.11 Severability of Provisions..................................................46
SECTION 9.12 Headings....................................................................47
SECTION 9.13 Time of the Essence.........................................................47
SECTION 9.14 Gaming Authorities..........................................................47
SECTION 9.15 Release of Lien.............................................................47
SECTION 9.16 Transaction Costs...........................................................47
SECTION 9.17 Successors and Assigns......................................................48
SECTION 9.18 Final Agreement.............................................................48
SECTION 9.19 Reproduction of Documents...................................................48
SECTION 9.20 Governing Law...............................................................48
SECTION 9.21 Compliance with Law.........................................................49
SECTION 9.22 Waiver of Right to Trial by Jury............................................49
SECTION 9.23 Nonrecourse to Paddlewheels.................................................50
SECTION 9.24 Payments Set Aside..........................................................50
SECTION 9.25 No Marshaling/Other Loans and Set-Off.......................................50
SECTION 9.26 Trust Agreement.............................................................50
SECTION 9.27 Purported Oral Amendments...................................................50
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Schedule I -- Categories of Equipment
Schedule II -- Lender Commitments
Schedule III -- Notice Information, Funding Offices and Wire Instructions
Schedule IV -- Recordings, Filings and Registrations
Schedule V -- Required Licenses
Schedule VI -- Amortization Schedule
Schedule VII -- Disclosure Schedule
Appendix 1 -- Definitions
Exhibit A -- Form of Lease
Exhibit B -- Form of Loan Agreement
Exhibit C -- Form of Trust Agreement
Exhibit D -- Form of Security Agreement
Exhibit E -- Form of Advance Request
Exhibit F -- Form of Xxxx of Sale
Exhibit G -- Form of Certificate of Acceptance
Exhibit H -- Form of Investor's Letter
Exhibit I -- Form of Purchase Order Assignment
Exhibit J-1 -- Form of Opinion of Counsel for Lessee
Exhibit J-2 -- Form of Opinion of Louisiana Counsel to Lessee
Exhibit J-3 -- Form of Opinion of Special Louisiana Counsel to Lenders
Exhibit J-4 -- Form of Opinion of Special Counsel to Trustee
Exhibit K -- Form of Manager Subordination Agreement
Exhibit L -- Form of Construction Progress Report
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PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT (this "Agreement"), dated as of March 31,
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2000, is entered into by and among HOLLYWOOD CASINO SHREVEPORT, a Louisiana
general partnership, as Lessee; FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity, except as
expressly stated herein, but solely in its capacities as Lessor and Trustee; the
persons listed on Schedule II hereto, as Lenders; FIRST SECURITY TRUST COMPANY
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OF NEVADA, a Nevada banking corporation, as Administrative Agent; and BANK OF
AMERICA, NATIONAL ASSOCIATION, a national banking association, in its capacities
as Arranger and Documentation Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Lease, Lessor will lease to
Lessee, and Lessee will lease from Lessor, the Equipment on a "lease intended as
security" basis; and
WHEREAS, Lessor will apply Advances it receives from the Lenders in
its capacity as Borrower under the Loan Agreement to finance the acquisition of
the Equipment subject to the terms of the Lease; and
WHEREAS, the Lenders are willing, on the terms and conditions
hereinafter set forth (including Article III), to provide financing to Lessor in
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an aggregate principal amount not to exceed the Aggregate Commitment Amount to
fund payment of Equipment Costs; and
WHEREAS, to secure such financing by the Lenders, Administrative
Agent, on behalf of the Lenders, will have the benefit of a Lien from Lessor on
all of Lessor's right, title and interest in and to the Equipment and other
Collateral and an assignment of Lessor's rights in the Operative Documents; and
NOW, THEREFORE, in consideration of the mutual terms and conditions
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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Unless the context shall otherwise require, capitalized terms used but
not defined herein (including those used in the foregoing recitals) shall have
the meanings specified in Appendix 1 hereto for all purposes hereof; and the
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rules of interpretation set forth in Appendix 1 hereto shall apply to this
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Agreement.
ARTICLE II
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EFFECTIVENESS; ACQUISITION AND LEASE; GENERAL PROVISIONS
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SECTION 1.1 Effectiveness of Agreement. This Agreement shall become
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effective on the date on which all of the following conditions shall have been
satisfied or waived in writing by the applicable parties (the "Closing Date"):
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(1) Authorization, Execution and Delivery of Certain of the
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Operative Documents. This Agreement and the Lease, Trust Agreement, Loan
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Agreement, Notes and Security Agreement shall have been duly authorized,
executed and delivered by each of the parties thereto, and each thereof
shall be in full force and effect.
(2) Organizational and Authorization Documents and Certificates
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of Good Standing. Administrative Agent shall have received from each of
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Lessee , HCS I and HCS II, as applicable:
(1) certificates of existence and good standing issued by
the Secretary of State of the State of Louisiana with respect to HCS I
and HCS II, each dated within thirty Business Days of the Closing
Date;
(2) a copy of the articles of incorporation and by-laws and
all modifications thereto, certified to be true and complete by a
Responsible Official of HCS I;
(3) a certificate of a Responsible Official of HCS I
certifying as to (A) resolutions of its Board of Directors duly
authorizing the execution, delivery and performance by HCS I, in its
capacity as managing general partner of Lessee, of each of the
Operative Documents to which Lessee is a party, (B) the incumbency and
signature of Persons authorized to execute and deliver documents and
agreements on behalf of HCS I, and (C) the accuracy of all
representations and warranties made by Lessee and the absence of
defaults under the Operative Documents;
(4) a copy of Lessee's partnership agreement as filed with
the Louisiana Secretary of State, and as recorded in the official
mortgage records of each of Caddo Parish, Louisiana, and Bossier
Parish, Louisiana, and all modifications to any of the foregoing, all
certified to be true and complete by HCS I, as managing general
partner of Lessee;
(3) Representations and Warranties. Each of the representations
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and warranties made by or on behalf of Lessee, Bank in its individual
capacity and in its capacities as Trustee, Lessor and Borrower,
Administrative Agent in its individual capacity and in its capacity as
Administrative Agent, and each Lender under the Operative Documents shall
be true in all material respects as of the Closing Date and no Default or
Event of Default shall exist under any Operative Document (either before or
after giving
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effect to the transactions contemplated by the Operative
Documents).
(4) No Material Adverse Effect. Since December 31, 1999, there
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shall not have occurred any Material Adverse Effect.
(5) Opinions of Counsel. Administrative Agent, Trustee and each
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Lender shall have received the legal opinions set forth below, each dated
as of Closing Date and addressed to Administrative Agent, Trustee and each
Lender:
(1) from Weil, Gotshal & Xxxxxx LLP, counsel to Lessee, as
to the matters set forth in the form of Exhibit X-x;
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(2) from Jones, Walker, Waechter, Poitevent, Carrere &
Xxxxxxx, L.L.P., special Louisiana counsel to Lessee, as to the
matters set forth in the form of Exhibit J-2;
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(3) from XxXxxxxxxx Xxxxxxxx, special Louisiana counsel the
Lenders, as to matters set forth in the form of Exhibit J-3; and
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(4) from Ray, Xxxxxxx & Xxxxxxx, special counsel to
Trustee, as to the matters set forth in the form of Exhibit J-4.
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(6) Projections. A certificate of a Responsible Official of
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Lessee that attached thereto is a true and correct copy of the Projections
and affirming, to the best of Lessee's knowledge, that the representation
set forth in Section 4.1(f) is true.
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(7) Indenture, etc. Administrative Agent shall have received
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(with copies for Trustee and each Lender) true and correct copies of (i)
the Indenture, (ii) the Ground Lease, (iii) the Management Agreement and
(iv) all mortgages, pledge agreements, security agreements and other
collateral documents executed and delivered by Lessee and its Affiliates in
connection with the Indenture, together with all exhibits and schedules and
all amendments and modifications to each of the foregoing documents; all of
the foregoing to be certified as true and complete by a Responsible
Official of Lessee.
(8) Bank's Certificate. Lessee, Administrative Agent and each
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Lender shall have received a certificate of an authorized officer of Bank
certifying as to (i) the due authorization of the execution, delivery and
performance by Bank, in its capacities as Trustee and Lessor, of each
Operative Document to which Bank, in its capacities as Trustee or Lessor,
is or will be a party, (ii) its articles of association, certified as of a
recent date by an appropriate officer of Bank, (iii) its by-laws and (iv)
the incumbency and signature of persons authorized to execute and deliver
on its behalf, as Trustee and as Lessor, the Operative Documents to which
Bank is a party as Trustee or Lessor.
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(9) Proceedings Satisfactory, etc. All proceedings taken in
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connection with the Closing Date and all documents relating thereto shall
be reasonably satisfactory to Lessee, Bank, in its capacities as Lessor
and/or Trustee, Administrative Agent, Arranger, the Required Lenders, and
their respective counsel, and each such Person shall have received copies
of such documents as they may reasonably request in connection therewith,
all in form and substance reasonably satisfactory to each such Person.
(10) Transaction Costs. Lessee shall have paid all Transaction
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Costs to the extent invoiced to it at least three (3) Business Days prior
to the Closing Date to the parties to whom such Transaction Costs are
payable. Such payment shall be made by wire transfer of immediately
available funds. In addition, Lessee shall have paid to (a) the Arranger,
the arrangement fee specified in the Arranger Fee Letter, (b)
Administrative Agent, the agency fee provided in the Agent Fee Letter and
(c) Trustee, the initial acceptance fee and annual administration fee as
specified in the Trustee Fee Letter.
SECTION II.2 Advances.
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(11) Subject to the terms and conditions hereinafter set forth,
and in reliance on the representations and warranties contained herein or
made pursuant hereto, upon receipt of an Advance Request, on the applicable
Advance Date, each Lender shall finance a portion of the applicable Advance
by making a Loan to Lessor (in accordance with Lessor's payment
instructions set forth on Schedule III) in an amount in immediately
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available funds equal to such Lender's Commitment Percentage of the
aggregate amount of the requested Advance. Notwithstanding any other
provision hereof, no Lender shall be permitted or required to fund any Loan
to the extent that, after giving effect thereto, the aggregate amount
advanced would exceed such Lender's Commitment, and the aggregate original
principal amount of all Loans made since the Closing Date would exceed the
Aggregate Commitment Amount. No amounts paid or prepaid with respect to
the Loans may be readvanced.
(12) Funding. Lessor shall give prompt notice to the Lenders,
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Lessee and Administrative Agent in the event any Lender does not fund the
full amount to be funded by such Lender on any Advance Date as described in
Section 2.2(a).
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SECTION 1.2 Notes. Each amount made available by a Lender pursuant to
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Section 2.2(a) shall be evidenced by one or more Notes issued by Lessor payable
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to the order of such Lender in a maximum principal amount equal to such Lender's
Commitment and shall be repayable in accordance with the terms of the Loan
Agreement.
SECTION 1.3 Procedures for Advance; Use of Proceeds.
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(1) Request. With respect to the funding of each Advance, Lessee
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shall deliver to Lessor and Administrative Agent, not later than 10:00
a.m., San Francisco, California time, three (3) Business Days prior to the
proposed Advance Date, an
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irrevocable written notice substantially in the form of Exhibit E (an
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"Advance Request"), specifying (i) the proposed Advance Date, (ii) a
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description (including model, make and serial number, if available) of each
item of Equipment to be transferred to Lessor and leased to Lessee on such
Advance Date, (iii) the Equipment Cost for each such item of Equipment, and
(iv) wire instructions for the disbursement of the proceeds of such
Advance. Concurrently with such Advance Request, Lessee shall deliver to
Administrative Agent true and correct copies of the vendors' invoices for
each item of Equipment to be delivered on such Advance Date. All Equipment
identified in an Advance Request shall be items of personal property
described in one or more of the Categories of Equipment specified in
Schedule I hereto.
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(2) Funding. On each scheduled Advance Date, upon (i) receipt by
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Lessor of all amounts to be paid by the Lenders pursuant to Section 2.2(a)
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and (ii) satisfaction or waiver of each of the conditions set forth in
Section 3.1 (and, in the case of the initial Advance, Section 3.2), as
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evidenced by a certificate of Lessee, (A) Lessor shall purchase the
Equipment described in the related Advance Request, and Lessee shall
deliver a Purchase Order Assignment to Lessor, or Lessee shall deliver or
cause to be delivered to Lessor a Xxxx of Sale conveying to Lessor, all of
such Person's right, title and interest in such Equipment, (B) Lessee shall
lease such Equipment from the Lessor pursuant to the Lease, and (C) Lessor
shall pay to Lessee (or such Person as Lessee may direct), from funds made
available by the Lenders pursuant to Section 2.2(a) and the Loan Agreement,
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the amount specified in such Advance Request in immediately available funds
remitted by wire transfer in accordance with such Advance Request.
(3) Number, Amount and Dates of Advances. There shall not be
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more than (i) two (2) Advances in any calendar month or (ii) ten (10)
Advances in the aggregate. Each Advance shall be in an amount not less
than $1,000,000 or the remaining available Commitments, if less. No
Advance shall be made on or after the expiration of the Commitment Period,
or such earlier date as the Commitments are terminated, and no Advance may
occur when the Commitments are suspended.
(4) Use of Proceeds. Proceeds from all Advances shall be used
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solely for the purpose of funding Equipment Costs.
(5) Interest Rate. Each determination of an Interest Rate
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pursuant to any provision of the Loan Agreement shall be conclusive and
binding on Trustee, Lessor, Lessee and the Lenders in the absence of
manifest error.
SECTION 1.4 Postponement of Advance. If the Lenders make a Loan
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requested pursuant to an Advance Request and the conditions precedent to such
Advance have not been satisfied or otherwise waived in writing on the date
specified in such Advance Request, Lessee shall pay to Lessor, for the benefit
of each Lender, interest on the amount funded by each Lender at a rate equal to
the sum of the Alternate Base Rate plus two percent (2.00%) (determined as of
the date of such funding) for the period from the date of each such Loan to the
date the proceeds of such
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Loan are returned to such Lender or such Advance Date
shall have occurred, less any interest earned by Lessor on behalf of the Lenders
by investing such funded amounts. Lessor (or its assignee) shall not be
required to invest such funds in interest-bearing investments, but Lessor (or
its assignee) shall upon direction of Lessee (or, if an Event of Default exists,
the Required Lenders), invest such funds in Cash Equivalents to the extent it is
practicably able to do so. Such interest shall be due and payable by Lessee
upon the occurrence of such Advance Date or upon return of such Loan proceeds to
the Lenders. Such payment of interest shall be an additional condition
precedent to such requested Advance. If any Advance Date shall not have
occurred by the third Business Day following the original requested date
therefor and the conditions precedent to such Advance have not been satisfied
due to an action or omission of Lessee or any other Person other than the
Participants, then all such interest shall be due and payable on such third
Business Day following the requested Advance Date, and Lessor shall refund to
each Lender all amounts funded by such Lender and all accrued interest allocable
to such Lender. No additional Advance Request shall be required if an Advance
Date is postponed and thereafter consummated.
SECTION 1.5 Obligations Several. The obligations of the Lenders hereto
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or elsewhere in the Operative Documents shall be several and not joint; and no
party shall be liable or responsible for the acts or defaults of any other party
hereunder or under any other Operative Document.
SECTION 1.6 Timing of Loans to Lessor and Payments to the Lenders.
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(1) Timing of Loans to Lessor. Subject to timely delivery of an
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Advance Request pursuant to Section 2.4(a) and the other terms and
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conditions of the Operative Documents, each Lender shall make its
Commitment Percentage of the requested Advance (by way of a Loan pursuant
hereto and the Loan Agreement) available to Lessor by 11:00 a.m. San
Francisco time, on the requested Advance Date, and Lessor will forward any
such amounts so received to Lessee (or its designee(s) as set forth in such
Advance Request), not later than 1:00 p.m. San Francisco time, on such
Advance Date.
(2) Payments to Lenders. So long as there are obligations
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outstanding under the Operative Documents, Lessor has assigned all payments
of Rent to Trustee, which in turn has assigned all such payments of Rent to
Administrative Agent, on behalf of the Lenders, pursuant to Section 2.1 of
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the Security Agreement, and each of the Lenders and Administrative Agent
has appointed Bank, as Trustee and Lessor, as its agent to receive such
payments of Rent under Section 7.1 of the Loan Agreement. Any payments
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received by Administrative Agent (or Trustee/Lessor) from or on behalf of
Lessee not later than 11:00 a.m., San Francisco time, shall be paid by
Administrative Agent (or Trustee/Lessor) to the Lenders in immediately
available funds no later than 1:00 p.m. San Francisco time, on the same
day, and any payments received by Administrative Agent (or Trustee/Lessor)
from or on behalf of Lessee after 11:00 a.m., San Francisco time, shall be
paid by Administrative Agent or Trustee/Lessor to the Lenders as soon after
receipt as practicable, but not later than 11:00 a.m., San Francisco
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time, on the next succeeding Business Day. Rent and all other payments due
to Lessor, Trustee, Administrative Agent or any Lender under the Operative
Documents shall be paid in immediately available funds, at any such
Person's respective office specified in Schedule III or at such other
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office as such Person may from time to time specify to Lessor, Trustee,
Administrative Agent and Lessee in a notice pursuant hereto. All such
payments shall be received by Trustee/Lessor (in its individual or trust
capacity), Administrative Agent or such Lender, as applicable, not later
than 11:00 a.m., San Francisco time, on the date due. Funds received after
such time shall for all purposes of the Operative Documents be deemed to
have been received on the next succeeding Business Day.
(3) Agency. So long as the Notes remain outstanding, Rent shall
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be paid to Administrative Agent, through Trustee as its agent, as Lessor's
assignee under the Operative Documents.
SECTION 1.7 Lenders' Instructions to Administrative Agent. By making
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its Loan pursuant to Section 2.2(a) and the Loan Agreement, each Lender agrees
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that such act shall constitute, without further act, (i) evidence that the
applicable conditions precedent set forth in Article III have been satisfied or
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waived; provided that any Lender's failure to raise the issue of noncompliance
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with respect to any such condition as to any third party shall not be deemed to
be a waiver of such condition unless such Lender shall have acknowledged such
waiver in writing, and (ii) authorization and direction by such Lender to Lessor
to make an Advance to or for the benefit of Lessee pursuant to Section 2.2(a)
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and the Loan Agreement in reliance upon Lessee's certificate delivered pursuant
to Section 3.1(h).
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SECTION 1.8 Computations.
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(1) Determination of Interest. All computations of accrued
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amounts pursuant to the Operative Documents shall be made on the basis of
actual number of days elapsed in a 360-day year, unless otherwise
specifically stated to the contrary in any such Operative Document.
(2) Dollars. All payments required to be made by Lessee, Lessor,
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Trustee, or Administrative Agent, including any Advance or any payment of
Rent, shall be made only in Dollars in immediately available funds.
SECTION 1.9 Commitment Fee. Lessee agrees to pay to Administrative
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Agent for the account of each Lender, for the period (including any portion
thereof when its Commitment is suspended by reason of Lessee's inability to
satisfy any condition of Article III) commencing on the Closing Date and
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continuing through the last day of the Commitment Period, a commitment fee at a
per annum rate equal to one-half percent (0.50%) of the average daily unused
portion of each such Lender's Commitment. The commitment fee shall be payable
by Lessee in arrears on the last Business Day of each calendar quarter during
the Commitment Period, and on the last day of the Commitment Period.
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SECTION 1.10 Records. Each Lender is hereby authorized to record the
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date and amount of each Loan advanced by it, each continuation thereof, and the
date and amount of each payment or prepayment thereof, on the schedule annexed
to and constituting a part of its Note, and any such recordation shall
constitute prima facie evidence, absent manifest error, of the accuracy of the
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information so recorded, provided that the failure to make any such recordation
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or any error in such recordation shall not affect Lessor's or Lessee's
obligations under the Operative Documents or under such Note.
SECTION 1.11 Legal and Tax Representation. Lessee acknowledges and
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agrees that none of Administrative Agent, Documentation Agent, Arranger,
Trustee, Lessor or any Lender has made any representation or warranty concerning
the tax, accounting or legal characteristics of the Lease or any of the other
Operative Documents, and that Lessee has obtained and relied on such tax,
accounting and legal advice regarding the Lease and the other Operative
Documents as it deems appropriate. Each of Trustee, Lessor and each Lender
acknowledges and agrees that it has obtained and relied on the Operative
Documents and the various items delivered in connection therewith, and on such
tax, accounting and legal advice regarding the Lease and the other Operative
Documents as it deems appropriate without reliance on Trustee, Lessor, Arranger,
Administrative Agent or any other Lender. Without in any way limiting the
foregoing or Section 3.8 of the Lease, each of the parties hereto acknowledges
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and agrees that Lessee shall be the owner of the Equipment for Federal income
tax purposes.
SECTION 1.12 Amortization, Schedule. Schedule VI sets forth the
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mandatory principal amortization schedule for the Loans (the "Amortization
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Schedule"). Lenders will receive principal payments on each Payment Date during
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the Base Period so as to cause all of the Loans to amortize in an amount on each
Payment Date equal to the product of (w) the percentage set forth opposite each
Payment Date on the Amortization Schedule and (x) Lessor's Cost. Each Note or
the Notes will reflect mandatory principal amortization equal to the product of
(y) such Lender's Commitment Percentage and (z) the aggregate amount payable to
the Lenders on such Payment Date pursuant to the preceding sentence.
SECTION 1.13 Replacement of Equipment. Trustee, Lessor and
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Administrative Agent shall release from the lien of the Security Agreement and
the Lease items of Equipment which Lessee has elected to replace under Section
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7.3 or 9.1 of the Lease, upon satisfaction by Lessee of the conditions contained
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in Section 9.1(b) of the Lease.
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ARTICLE III
CONDITIONS TO ADVANCES
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SECTION 1.14 Conditions Precedent to Each Advance Date. The obligation
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of Lessor, Trustee and each Lender to perform their respective obligations on
each Advance Date shall be subject to the fulfillment to the satisfaction of, or
the waiver in writing by, Trustee and each Lender of the conditions precedent
set forth in this Section 3.1 on or before each such
-----------
-8-
Advance Date (except that the obligation of any party hereto shall not be
subject to such party's own performance or compliance).
(1) Advance Request. With respect to any Advance, Administrative
---------------
Agent and Lessor shall have received and promptly distributed to each
Lender, at least three (3) Business Days before each Advance Date, an
Advance Request duly executed by Lessee, in accordance with Section 2.4(a).
--------------
Each of the delivery of the Advance Request and the acceptance by Lessee of
the proceeds of such Advance shall constitute a representation and warranty
by Lessee that on the date of such Advance (both immediately before and
after giving effect to such Advance and the application of the proceeds
thereof) the statements made in Section 3.1(c) and in such Advance Request,
-------------
are true and correct.
(2) Funding. Each Lender shall have funded the full amount to be
-------
funded by such Lender on such Advance Date as described in Article II.
----------
(3) Accuracy of Representations and Warranties, No Default, etc.
------------------------------------------------------------
On each Advance Date, the following statements shall be true and correct:
(1) All of the representations and warranties of the parties
hereto contained herein and in each of the other Operative Documents
are true and correct on and as of such Advance Date in all material
respects as though made on and as of that date, except to the extent
that such representations and warranties relate solely to an earlier,
date, in which case such representations and warranties shall have
been true and correct in all material respects on and as of such
earlier date;
(2) Except as set forth in the Disclosure Schedule, no
labor controversy, litigation, arbitration or governmental
investigation or proceeding shall be pending or, to the knowledge of
Lessee, threatened against Lessee, the Manager, HCS I and/or HCS II
which would reasonably be expected to have a Material Adverse Effect
or which would reasonably be expected to enjoin, prohibit, limit or
restrain the making of the requested Advance; and
(3) No Default or Event of Default exists.
(4) Xxxx of Sale or Purchase Order Assignment. Lessee shall have
-----------------------------------------
delivered or caused to be delivered to Lessor (either concurrently or in
connection with a prior Advance Date) a fully executed Xxxx of Sale or
Purchase Order Assignment (as applicable) with respect to the items of
Equipment identified in such Advance Request.
(5) Certificates of Acceptance. Lessee shall have delivered to
--------------------------
Lessor a fully-executed Certificate of Acceptance substantially in the form
of Exhibit G with respect to each item of Equipment identified in such
---------
Advance Request.
-9-
(6) Financing Statements; Supplemental Searches; Consents and
---------------------------------------------------------
Waivers. Lessor shall have received (i) from Lessee to the extent not
-------
theretofore delivered pursuant to Section 3.2(d) or this Section, duly
--------------
executed UCC Financing Statements (or amendments to financing statements,
as applicable) covering all Equipment to be transferred to Lessor and
leased to Lessee on such Advance Date, identifying Lessee as debtor,
Trustee, as Lessor, as secured party and Administrative Agent, on behalf of
the Lenders, as assignee of secured party, and such financing statements
(or amendments) shall have been filed in each applicable jurisdiction, (ii)
if required by Trustee/Lessor (acting at the direction of the Required
Lenders), such Searches acceptable to the Required Lenders and their
counsel as to Lessee, HCS I and HCS II and the applicable Equipment (to the
extent then obtained by any such party) from each appropriate state and
county or parish filing or recording office, each dated as close to the
applicable Advance Date as practicable, which Searches shall evidence
Lessee's ownership of any of the applicable Equipment free and clear of all
Liens other than Permitted Liens, and (iii) such releases of liens,
----- ----
termination statements, and mortgagee consents as may be necessary to
ensure (A) a first priority security interest in the Equipment which may be
deemed "fixtures" and thereby subject to prior Liens and (B) subject to
applicable Gaming Laws, the ability of Trustee/Lessor and the other
Participants to obtain access to the Resort and remove the Equipment
therefrom in connection with exercising their rights and remedies under the
Operative Documents. All fees and Taxes with respect to the recording or
filing of any of the foregoing shall have been paid in full, and
satisfactory evidence thereof shall have been delivered to Trustee/Lessor
and Administrative Agent, or arrangements for payment shall have been made
to the satisfaction of Trustee/Lessor and Administrative Agent.
(7) No Casualty. No Casualty shall have occurred with respect to
-----------
any item of Equipment being delivered and accepted on such Advance Date.
(8) Officer's Certificates. Administrative Agent shall have
----------------------
received (with copies for Trustee/Lessor and each Lender) certificates of a
Responsible Official of Lessee stating that (i) all of the representations
and warranties of Lessee contained herein and in each of the other
Operative Documents are true and correct on and as of such Advance Date in
all material respects as though made on and as of that date, except to the
extent that such representations and warranties relate solely to an earlier
date, in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier date,
(ii) that insurance complying with Article IX of the Lease is in full
----------
force and effect and (iii) all applicable conditions precedent to the
relevant Advance have been satisfied, or waived in writing by each Lender,
Lessor, Trustee and Administrative Agent, on or prior to such Advance Date.
(9) Taxes. All Taxes other than Charges due and payable by
-----
Lessee on or prior to such Advance Date in connection with the execution,
delivery, recording and filing of any of the Operative Documents, in
connection with the filing of any of the
-10-
financing statements or as otherwise required to be paid by Lessee pursuant to
the terms of the Operative Documents shall have been paid in full.
(10) [Reserved].
(11) Construction Certificate. Administrative Agent shall have
------------------------
received (with copies for Trustee/Lessor and each Lender), at least three
(3) Business Days prior to the applicable Advance Date, the most recent
Construction Progress Report issued by CCM Consulting Group.
(l2) Third Party Approvals. All material third party approvals
---------------------
necessary for the operation and use of the Equipment and for Lessee to
perform its obligations with respect to the Lease shall have been obtained.
(13) Litigation. No law or regulation shall prohibit, and no
----------
order, judgment or decree of any Governmental Authority shall, and no
action or proceeding shall be pending or threatened which would reasonably
be expected to, enjoin, prohibit, limit or restrain the making of such
Advance.
(14) No Material Adverse Effect. Since December 31, 1999, there
--------------------------
shall not have occurred any Material Adverse Effect.
(15) Further Assurances, etc. Administrative Agent shall have
------------------------
received such other and further instruments, duly executed, acknowledged
(if appropriate) and delivered, as Administrative Agent (acting at the
direction of the Required Lenders) reasonably shall have requested in
connection with such Advance and this Agreement.
(16) Transaction Costs. Lessee shall have paid all Transaction
-----------------
Costs to the extent invoiced three (3) Business Days prior to such Advance
Date to the parties to whom such Transaction Costs are payable (or shall
have requested payment thereof or reimbursement therefor pursuant to the
Advance Request). Such payment shall be made by wire transfer of
immediately available funds.
(17) Trustee/Lessor's and Administrative Agent's Certificate.
-------------------------------------------------------
Each Lender shall have received a certificate from an officer of
Trustee/Lessor and an officer of Administrative Agent confirming its
receipt of (or requesting a waiver of the receipt of) the documents
specified in Sections 3.1(a), (d), (e), (h), (j) and (k).
--------------- --- --- --- --- ---
SECTION 1.15 Conditions Precedent to Initial Advance Date. In addition
--------------------------------------------
to the conditions precedent set forth in Section 3.1, the obligation of
-----------
Trustee/Lessor and each Lender to perform their respective obligations on the
Initial Advance Date shall be subject to the fulfillment to the satisfaction of,
or the waiver in writing by, each Lender of the conditions precedent set forth
in this Section 3.2 on or before the Initial Advance Date (except that the
-----------
obligation of any party hereto shall not be subject to such party's own
performance or
-11-
compliance).
(1) Preliminary Appraisal Report. Administrative Agent shall
----------------------------
have received (with copies for Trustee/Lessor and each Lender), and the
Lenders shall have approved, a preliminary appraisal report with respect to
the Equipment intended to be financed hereunder, prepared by a qualified
appraiser satisfactory to the Lenders, establishing (on the basis of a
review of invoices, purchase contracts, equipment lists and the like) an
aggregate fair market value of such Equipment as of the Initial Advance
Date (assuming such Equipment will be delivered on the Initial Advance
Date) and as of the Maturity Date. Such preliminary appraisal shall be
prepared at the cost and expense of Lessee.
(2) Construction Plans. If required by the Required Lenders,
------------------
Administrative Agent shall have received a copy of the Construction Plans
for the Resort.
(3) Searches. Not later than three (3) days prior to the Closing
--------
Date, Administrative Agent shall have received (with copies for
Trustee/Lessor and each Lender) reports (each, a "Search") acceptable to
------
the Lenders and their counsel, of judgment liens, revenue liens, tax liens,
Uniform Commercial Code filings and other encumbrances of record with
respect to Lessee, HCS I and HCS II with the applicable filing offices in
the States of Louisiana and Texas (as applicable), and such reports shall
show no Liens other than Permitted Liens on or affecting the Equipment.
(4) Filings and Recordings. All filings, registrations and
----------------------
recordings set forth on Schedule IV (or as otherwise reasonably required by
-----------
the Required Lenders) shall have been made, or shall have been arranged to
be made promptly thereafter, in the appropriate places or offices and all
fees and taxes with respect to any recordings, filings or registrations
made pursuant to this Section 3.2(d) shall have been paid in full, and
--------------
satisfactory evidence thereof shall have been delivered to Administrative
Agent, or arrangements for such payment shall have been made to the
satisfaction of Administrative Agent.
(5) Insurance. Trustee/Lessor and Administrative Agent shall
---------
have received (with copies for each Lender) evidence of each of the
insurance policies required to be maintained pursuant to the Lease, setting
forth the respective coverages, limits of liability, carrier, policy number
and period of coverage, accompanied by affidavits, certificates, paid bills
or other documents evidencing that all premium payments are current.
(6) Consents and Approvals. All material necessary consents,
----------------------
approvals and authorizations of, and declarations, registrations and
filings with, Governmental Authorities and any other applicable Persons
required to consummate the transactions contemplated by this Agreement
shall have been obtained or made by Lessee and shall be in full force and
effect.
-12-
(7) Further Assurances, etc. Administrative Agent shall have
------------------------
received (with copies for Trustee/Lessor and each Lender) such other and
further instruments, duly executed, acknowledged (if appropriate) and
delivered, as it (acting at the direction of the Required Lenders)
reasonably shall have requested in connection with the Initial Advance Date
and the applicable Operative Documents.
(8) Manager Subordination Agreement. The Manager Subordination
-------------------------------
Agreement shall have been (or shall concurrently be) executed and delivered
by each of the parties thereto.
(9) Gaming Authority Approval. Each of Lessee and each
-------------------------
Participant shall have received such approvals as it deems appropriate that
the relevant Gaming Authorities have approved the transactions contemplated
by this Agreement and the other Operative Documents (including the
financing of Lessee's acquisition of Gaming Equipment contemplated
hereunder and thereunder) to the extent that any such approval is required
by applicable Gaming Laws.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 1.16 Representations and Warranties of Lessee. Lessee represents
----------------------------------------
and warrants to each of the other parties hereto as follows:
(1) Due Organization, etc.
----------------------
(1) Lessee is a general partnership duly organized and
validly existing under the laws of the State of Louisiana, and is duly
qualified or licensed and in good standing and authorized to do
business in all jurisdictions where failure to so qualify could
reasonably be expected to have a Material Adverse Effect, and has the
requisite power and authority to execute, deliver and perform its
obligations under each of the Operative Documents to which it is a
party and each other agreement, instrument and document executed and
delivered by it on any Advance Date in connection with or as
contemplated by each such Operative Document. The "principal place of
business" and "chief executive office" (as such terms are used in
Section 9-103(3) of the UCC) of Lessee is located at Two Galleria
Tower, Suite 2200, 00000 Xxxx Xxxx, XX 00, Xxxxxx, Xxxxx 00000, and
after the Resort is Operating, the principal place of business will be
located at 000 Xxxxx Xxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000. Upon
acceptance thereof for lease under the Lease, the Equipment will be
located at 000 Xxxxx Xxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000.
(1) Each of HCS I and HCS II is a corporation duly
organized,
-13-
validly existing and in good standing under the laws of the State of
Louisiana, and is duly qualified or licensed and in good standing as a
foreign corporation authorized to do business in all jurisdictions
where failure to so qualify could reasonably be expected to have a
Material Adverse Effect, and HCS I, as managing general partner of
Lessee, has the requisite corporate power and authority to execute and
deliver, on behalf of Lessee, each of the Operative Documents to which
Lessee is a party and each other agreement, instrument and document
executed and delivered by Lessee on any Advance Date in connection
with or as contemplated by each such Operative Document. The
"principal place of business" and "chief executive office" (as such
terms are used in Section 9-103(3) of the UCC) of each of HCS I and
HCS II is located at Two Galleria Tower, Suite 2200, 00000 Xxxx Xxxx,
XX 00, Xxxxxx, Xxxxx 00000, and after the Resort is Operating, the
principal place of business will be located at 000 Xxxxx Xxxx Xxxxxxx,
Xxxxxxxxxx, Xxxxxxxxx 00000.
(2) Authorization; No Conflict; No Approvals, etc. The execution
----------------------------------------------
and delivery by Lessee of each of the Operative Documents to which it is a
party, and the performance by Lessee of its Obligations under such
Operative Documents, have been duly authorized by all necessary partnership
action (including any necessary partner action) on its part, and do not and
will not: (i) contravene any Applicable Laws currently in effect
applicable to or binding on it or the Equipment; (ii) violate any provision
of its partnership agreement or the articles of incorporation or by-laws of
HCS I or HCS II; (iii) result in a breach of or constitute a default under
(with or without the giving of notice or lapse of time or both) any
indenture, mortgage, deed of trust, lease, loan or credit agreement, or any
other agreement or instrument to which Lessee, HCS I or HCS II is a party
or by which Lessee, HCS I or HCS II or any of their respective properties
may be bound or affected, except for such breaches or defaults which,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect; or (iv) require any Governmental Approval by any
Governmental Authority, except for (A) the filings and recordings listed on
Schedule IV to perfect the rights of the Participants intended to be
-----------
created by the Operative Documents and (B) the required licenses and
approvals listed on Schedule V and none of Lessee, HCS I or HCS II is in
----------
default under or in violation of its respective partnership agreement,
charter or by-laws, as applicable.
(3) Enforceability. Each Operative Document to which Lessee is a
--------------
party constitutes the legal, valid and binding obligation of Lessee,
enforceable against Lessee in accordance with the terms thereof, except as
such enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(4) Litigation. Except as set forth in the Disclosure Schedule,
----------
there is no action, suit or proceeding, or any governmental investigation
or any arbitration, in each
-14-
case pending or, to the knowledge of Lessee, threatened against Lessee, HCS
I or HCS II or the Equipment or before any Governmental Authority (i) which
challenges the validity of the Operative Documents to which Lessee is a
party or any action taken or to be taken pursuant to the Operative
Documents to which Lessee is a party, or (ii) which if adversely determined
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(5) Managing General Partner. HCS I is the managing general
------------------------
partner of Lessee. Except as set forth in the Disclosure Schedule, there
are no outstanding subscriptions, options, warrants, calls, rights
(including preemptive rights) or other arrangements or commitments of any
nature relating to any Equity Interest in Lessee.
(6) Projections. As of the Closing Date, to the knowledge of
-----------
Lessee, the assumptions set forth in the Projections are reasonable and
consistent with each other and with all facts known to Lessee, and the
Projections were reasonably based on such assumptions at the time such
Projections were prepared. Nothing in this Section 4.1(f) shall be
--------------
construed as a representation or covenant that the Projections, in fact,
will be achieved.
(7) No Other Agreements. None of Lessee, HCS I or HCS II is a
-------------------
party to any agreement to sell any interest in the Equipment or any portion
thereof (except as otherwise contemplated in the Operative Documents).
(8) Compliance With Law. With respect to the Equipment and the
-------------------
operation of the Resort, Lessee, HCS I and HCS II have at all times
complied and are in compliance with all Applicable Laws, except for any
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
(9) Investment Company Act. Lessee is not an "investment
----------------------
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
(10) Public Utility Holding Company. Lessee is not subject to
------------------------------
regulation as a "holding company," an "affiliate" of a "holding company,"
or a "subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(11) Subjection to Government Regulation. Except in the case of
-----------------------------------
the ownership of, or the holding of an interest in, the Equipment following
the exercise of remedies under the Lease, no Participant will become
subject to ongoing regulation of its operations by a Governmental Authority
(excluding foreign Governmental Authorities) solely by reason of entering
into the Operative Documents or the consummation of the transactions
contemplated thereby; provided, however, that the Louisiana Gaming Control
-------- -------
Board may at any time require Trustee, Lessor or any Lender to file an
application with
-15-
it for a finding of suitability to be affiliated with Lessee as set forth
in the Operative Documents. The exercise of remedies by any Participant
under any of the Operative Documents with respect to the Collateral will
not require the approval of or filing with any Gaming Authority except as
otherwise disclosed on Schedule V hereto.
--------
(l2) Securities Laws. Neither Lessee nor anyone authorized to act
---------------
on its behalf has, directly or indirectly, offered or sold any interest in
the Notes, the Equipment, the Lease or any of the Operative Documents in
violation of Section 5 of the Securities Act or any state securities laws.
(13) Federal Reserve Regulations. Lessee is not engaged
---------------------------
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulation U of the Board of Governors). No part of
any Advance will be used directly or indirectly for the purpose of
purchasing or carrying any such margin stock, to extend credit to others
for the purpose of purchasing or carrying any such margin stock or for any
other purpose violative of or inconsistent with any of the provisions of
Regulation T, U or X of the Board of Governors.
(14) Taxes. Lessee, HCS I and HCS II have filed all tax returns
-----
and reports required by law to have been filed by each of them and have
paid all material taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on their books.
(15) Accuracy of Information. All material factual information
-----------------------
heretofore or contemporaneously furnished by or on behalf of Lessee in
writing to the Participants and the Arranger for purposes of or in
connection with this Agreement or any transaction contemplated hereby is,
and all other such factual information hereafter furnished by or on behalf
of Lessee to the Participants and the Arranger will be, true and accurate
in every material respect on the date as of which such information is dated
or certified and (except as to factual information hereafter furnished) as
of the date of execution and delivery of this Agreement by the Participants
and the Arranger, and such information is not, or shall not be, as the case
may be, incomplete by omitting to state any material fact necessary to make
such information not misleading.
(16) Licenses, Registrations and Permits. As of any date on which
-----------------------------------
this representation is made, all licenses, registrations and permits
required of Lessee as of such date by any Governmental Authority having
jurisdiction over Lessee shall have been obtained for (i) the use and
occupancy of the Resort if on or at any time prior to such date the Resort
is or was Operating, and (ii) the installation and operation of the
Equipment on the Resort, except where the failure to obtain the same would
not reasonably be expected to have, individually or the aggregate, a
Material Adverse Effect.
-16-
(17) Gaming Licenses. All Gaming Licenses required to be held by
---------------
Lessee, its Restricted Subsidiaries, HCS I and HCS II for the conduct of
their respective businesses on or with respect to the Resort, as then
conducted as of each date this representation is made, are current and
valid, except where the failure to obtain or maintain the same would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Upon Opening of the Resort, Lessee, its
Restricted Subsidiaries, HCS I and HCS II will hold all Gaming Licenses
necessary for the operation of the Casino.
(18) Title to Property. Lessee has good and indefeasible
-----------------
leasehold title to the land and buildings constituting the Resort, subject
to "Permitted Encumbrances" (as such term is defined in the Ground Lease).
(19) Insurance. From and after the Initial Advance Date, Lessee
---------
has obtained or caused to be obtained insurance coverage covering the
Equipment which meets in all respects the requirements of the Lease, and
such coverage is in full force and effect.
(20) Defaults. No event has occurred and is continuing that is a
--------
Default or Event of Default, nor is Lessee in default under any instrument
evidencing any Indebtedness, or under any material agreement relating
thereto or under any indenture, mortgage, deed of trust, security
agreement, lease, franchise or other agreement or other instrument to which
Lessee is a party or by which Lessee or any of its material assets is
subject or bound, including the Indenture, which would reasonably be
expected to result in a Material Adverse Effect.
(21) Perfection of Security Interests. Upon the filing of
--------------------------------
appropriate UCC Financing Statements with the Secretary of State of Texas
and the Clerks of Court of each of Bossier Parish and Caddo Parish,
Louisiana, Trustee/Lessor, for the benefit of the Lenders, will have an
enforceable, perfected first priority Lien of record in the Priority
Collateral (and a perfected Lien, which may or may not be a first priority
Lien, in the balance of the Lessee Collateral) granted pursuant to the
Lease as against all Persons, including Lessee and its creditors, subject
to Permitted Liens.
(22) No Change in Name or Entity. As of the date hereof, Lessee
---------------------------
has not, prior to the date of this Agreement, changed its name or been the
surviving entity of a merger or consolidation.
(23) Purchase Price. The fair market value of the items of
--------------
Equipment accepted on each Advance Date is approximately equal to the sum
of the invoice cost for the items of Equipment identified in the applicable
Advance Request plus any Charges properly attributable thereto.
-17-
(24) Purchase Contracts. Each purchase order with respect to
------------------
which a Purchase Order Assignment applies is assignable by Lessee (or an
affiliate thereof) in the manner required by this Agreement.
(25) No Transfer Taxes. No sales, use, exercise, transfer or
-----------------
other tax, fee or imposition shall result from the sale, transfer or
purchase of any item of Equipment or any Loan pursuant to Article II,
----------
except such taxes, fees or impositions that have been paid or will be paid
in full on or prior to the applicable Advance Date.
SECTION 1.17 Representations and Warranties of Each Lender. Each Lender
---------------------------------------------
represents and warrants, severally and only as to itself, to each of the other
parties hereto as follows:
(1) Due Organization, etc. It is duly organized and validly
----------------------
existing under the laws of the jurisdiction of its organization and has the
requisite power and authority to enter into and perform its obligations as
a Lender under each Operative Document to which it is or will be a party
and each other agreement, instrument and document to be executed and
delivered by it in connection herewith or therewith.
(2) Authorization; No Conflict. The execution and delivery by it
--------------------------
of, the consummation by it of the transactions provided for in, and the
compliance by it with each of the provisions applicable to it of, each
Operative Document to which it is or is to be a party, as Lender, have been
duly authorized by all necessary action on its part; and neither the
execution and delivery thereof, nor the consummation of the transactions
contemplated thereby, nor compliance by it, as Lender, with any of the
terms and provisions thereof (i) requires any approval of its stockholders,
partners or members, as the case may be, or approval or consent of any
trustee or holders of any of its indebtedness or obligations, (ii)
contravenes or will contravene any Applicable Laws currently in effect
applicable to or binding on it (except no representation or warranty is
made as to any Applicable Laws to which it or the Equipment, directly or
indirectly, may be subject because of the lines of business or other
activities of Lessee) or (iii) results in any breach of, or constitutes any
default under, any indenture, mortgage, chattel mortgage, deed of trust,
lease, conditional sales contract, loan or credit arrangement, other
material agreement or instrument, corporate charter, by-laws, partnership
agreement, operating agreement or other agreement or instrument to which it
is a party or by which it or its properties may be bound or affected.
(3) ERISA. It is purchasing its interest in its Note with assets
-----
that are either (i) not assets of any Plan, Multiemployer Plan or Benefit
Arrangement (or its related trust) which is subject to Title I of ERISA or
Section 4975 of the Code, or (ii) assets of any Plan, Multiemployer Plan or
Benefit Arrangement (or its related trust) which is subject to Title I of
ERISA or Section 4975 of the Code, but for which there is available an
exemption from the prohibited transaction rules under Section 406(a) of
ERISA and Section 4975 of the Code and such exemption is immediately
applicable to
-18-
each transaction contemplated by the Operative Documents to the extent that
any other party to such transaction is a "party in interest" as defined in
Section 3(14) of ERISA, or a "disqualified person" as defined in Section
4975(e)(2) of the Code, with respect to such plan assets.
(4) Investment in Notes. It is acquiring its Note for its own
-------------------
account for investment and not with a view to any distribution (as such
term is used in Section 2(11) of the Securities Act) thereof, and if in the
future it should decide to dispose of all or any portion of its interest in
its Note or other Operative Documents, it understands that it may do so
only in compliance with the Securities Act, and the rules and regulations
of the Commission thereunder, and any applicable state securities laws.
Neither it nor anyone authorized to act on its behalf has taken or will
take any action which would subject the issuance or sale of any Note, the
Trust Estate (including the Equipment constituting a part thereof), the
Collateral or the Lease to the registration requirements of Section 5 of
the Securities Act. Subject to the foregoing, it is understood among the
parties that the disposition of each Lender's property shall be at all
times within its control.
(5) Lessor Liens. The Equipment is free and clear of all Lessor
------------
Liens attributable to it.
SECTION 1.18 Representations and Warranties of Bank. First Security
--------------------------------------
Bank, National Association, in its individual capacity ("Bank"), represents and
----
warrants to each of the other parties hereto as follows:
(1) Chief Executive Office. Bank's "chief executive office" and
----------------------
"principal place of business" as such terms are used in Section 9-103(3) of
the UCC and the place where the documents, accounts and records relating to
the transactions contemplated by the Operative Documents are kept is
located at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000.
(2) Due Organization, etc. Bank is a national banking
----------------------
association duly organized and validly existing in good standing under the
laws of the United States of America and has full power and authority to
execute, deliver and perform its obligations (i) in its individual capacity
under the Trust Agreement and, to the extent it is a party hereto in its
individual capacity, this Agreement, and (ii) as Trustee and Lessor under
the Trust Agreement, under this Agreement and each other Operative Document
to which it is or will be a party as Trustee or Lessor.
(3) Due Authorization; Enforceability. The Operative Documents
---------------------------------
to which Bank individually or in its capacities as Trustee or Lessor is or
will be a party have been or will be, on the date required to be delivered
hereby, duly authorized, executed and delivered by or on behalf of Bank (in
its individual capacity or in its capacities as Lessor or Trustee, as
applicable) and are, or upon execution and delivery by Bank will be, legal,
-19-
valid and binding obligations of Bank (in its individual capacity or in its
capacities as Lessor or Trustee, as applicable), enforceable against it in
such capacities in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, or similar
laws affecting creditors' rights generally and by general equitable
principles.
(4) No Conflict. The execution and delivery by (i) Bank, in its
-----------
individual capacity, of the Trust Agreement and, to the extent it is a
party hereto in its individual capacity, this Agreement, and (ii) Bank, in
its capacity as Trustee or Lessor, as applicable, of each Operative
Document to which Bank, in its capacities as Lessor or Trustee, is or will
be a party, are not and will not be, and the performance by Bank, in its
individual capacity or as Trustee or Lessor, as the case may be, of its
obligations under each are not and will not be inconsistent with the
articles of association or by-laws of Bank, do not and will not contravene
any Applicable Laws of the United States of America or the State of Utah
relating to the banking or trust powers of Bank, and do not and will not
result in a breach of or constitute a default under (with or without the
giving of notice or lapse of time or both) any indenture, mortgage, deed of
trust, lease, loan or credit agreement or any other agreement or instrument
to which Bank is a party or by which it or its properties may be bound or
affected.
(5) No Approvals, etc. Neither the execution and delivery by
------------------
Bank in its individual capacity or as Trustee or Lessor, as the case may
be, of any of the Operative Documents to which it is a party requires any
Governmental Approval by any Governmental Authority under any Applicable
Laws of the United States of America or the State of Utah relating to the
banking or trust powers of Bank.
(6) Litigation. There is no action, proceeding or investigation
----------
pending or threatened against Bank (in its individual capacity or as
Trustee or Lessor) which questions the validity of the Operative Documents
or which is reasonably likely to result, individually or in the aggregate,
in any material adverse effect on the ability of Bank (in its individual
capacity or as Trustee or Lessor) to perform its obligations (in any such
capacity) under the Operative Documents to which it is a party.
(7) Lessor Liens. The Equipment is free and clear of all Lessor
------------
Liens attributable to Bank (in its individual capacity).
(8) Securities Act. Neither Bank (in its individual capacity or
--------------
as Trustee or Lessor) nor anyone authorized to act on its behalf has,
directly or indirectly, in violation of Section 5 of the Securities Act or
any state securities laws, offered or sold any interest in the Notes, the
Equipment or the Lease, or in any security or lease the offering of which,
for purposes of the Securities Act or any state securities laws, would be
deemed to be part of the same offering as the offering of the
aforementioned securities or leases, or solicited any offer to acquire any
of the aforementioned securities or leases.
-20-
SECTION 1.19 Representations and Warranties of Administrative Agent.
------------------------------------------------------
First Security Trust Company of Nevada, in its individual capacity, hereby
represents and warrants to each of the other parties hereto as follows:
(1) Due Organization, etc. Administrative Agent is duly
----------------------
organized and validly existing under the laws of the jurisdiction of its
organization and has the requisite power and authority to execute, deliver
and perform its obligations under the Operative Documents to which it is or
will be a party.
(2) Due Authorization; Enforceability. The Operative Documents
---------------------------------
to which Administrative Agent is or will be a party have been or will be,
on the date required to be delivered hereby, duly authorized, executed and
delivered by Administrative Agent, and are, or, upon execution and delivery
will be, legal, valid and binding obligations of Administrative Agent,
enforceable against it in accordance with their respective terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by general equitable
principles.
(3) No Conflict. Neither the execution and delivery by
-----------
Administrative Agent of the Operative Documents to which it is or will be a
party, either in its individual capacity or as Administrative Agent, or
both, nor performance of its obligations thereunder in either such
capacity, results or will result in a breach of, or constitutes or will
constitute a default under (with or without the giving of notice or lapse
of time or both), or violates or will violate the terms, conditions or
provisions of: (i) the articles of incorporation of Administrative Agent;
(ii) any agreement to which Administrative Agent, either in its individual
capacity or as Administrative Agent, or both, is now a party or by which it
or any of its properties, either in its individual capacity or as
Administrative Agent, or both, is bound or affected, where such breach,
default or violation would be reasonably likely to materially and adversely
affect the ability of Administrative Agent, either in its individual
capacity or as Administrative Agent, or both, to perform its obligations
under any Operative Document to which it is or will be a party, either in
its individual capacity or as Administrative Agent, or both; or (iii) any
Applicable Laws of the United States of America or the State of Nevada
relating to the banking or trust powers of Administrative Agent, where such
conflict, breach, default or violation would be reasonably likely to
materially and adversely affect the ability of Administrative Agent, either
in its individual capacity or as Administrative Agent, or both, to perform
its obligations under any Operative Document to which it is or will be a
party in any such capacity.
(4) No Approvals, etc. No Governmental Approval by any
------------------
Governmental Authority under any Applicable Laws of the United States of
America or the State of Nevada relating to the banking or trust powers of
Administrative Agent is or will be required in connection with the
execution and delivery by Administrative Agent, in its individual capacity
or as Administrative Agent, or both, of the Operative Documents to which it
is party or the performance by Administrative Agent, in its individual
capacity
-21-
or as Administrative Agent, or both, of its obligations under such
Operative Documents.
ARTICLE V
COVENANTS OF LESSEE
-------------------
SECTION 1.20 Further Assurances. Lessee, at its own cost and expense,
------------------
will cause to be promptly and duly taken, executed, acknowledged and delivered
all such further acts, documents and assurances as the Required Lenders
reasonably may request from time to time in order to carry out more effectively
the intent and purposes of this Agreement and the other Operative Documents to
which Lessee is a party and the transactions contemplated thereby. Lessee, at
its own cost and expense, will cause all financing statements, fixture filings
and other documents, to be recorded or filed at such places and times and in
such manner, and will take all such other actions or cause such actions to be
taken, as may be necessary or as may be reasonably requested by the Required
Lenders in order to establish, preserve, protect and perfect the title of Lessor
to the Equipment and Lessor's and Trustee's rights under this Agreement and the
other Operative Documents and to perfect, preserve and protect the first and
prior Lien of the Security Agreement on the Trust Estate in favor of
Administrative Agent for the benefit of the Lenders.
SECTION 1.21 Consolidation, Merger, Sale, etc.
---------------------------------
(1) Consolidation, Merger or Sale of Assets. Lessee may not,
---------------------------------------
directly or indirectly, (a) consolidate or merge with or into another
Person (whether or not Lessee is the surviving entity) or (b) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of its
and its Restricted Subsidiaries' properties or assets, taken as a whole, in
one or more related transactions, to another Person; unless:
(1) either (A) Lessee is the surviving entity or (B) the
Person formed by or surviving any such consolidation or merger (if
other than Lessee) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any State
thereof or the District of Columbia;
(2) the Person formed by or surviving any such
consolidation or merger (if other than Lessee), or the Person to which
such sale, assignment, transfer, conveyance or other disposition shall
have been made, assumes all the obligations of Lessee under this
Agreement and all other applicable Operative Documents, pursuant to
agreements reasonably satisfactory to the Required Lenders;
(3) immediately after such transaction no Default or Event
of Default exists;
(4) such transaction would not result in the loss or
suspension
-22-
or material impairment of any of Lessee's or any of its Restricted
Subsidiaries' Gaming Licenses unless a comparable replacement Gaming
License is effective prior to or simultaneously with such loss,
suspension or material impairment;
(5) Lessee or the Person formed by or surviving any such
consolidation or merger (if other than Lessee), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made, will, on the date of such transaction, after giving pro forma
effect to such transaction and any related financing transactions as
if the same had occurred at the beginning of the applicable four-
quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to Section 5.19(b); and
---------------
(6) such transaction would not require any Participant to
obtain a Gaming License or be qualified or found suitable under the
law of any applicable gaming jurisdiction; provided, however, that
-------- -------
such Participant would not have been required to obtain a Gaming
License or be qualified or found suitable under the laws of any
applicable gaming jurisdiction in the absence of such transaction.
In addition, Lessee may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person.
Notwithstanding the foregoing, Lessee may reorganize as a
corporation or other business entity in accordance with the procedures
established in Section 5.2(b), provided that Lessee has delivered to
-------------- --------
Administrative Agent (with original counterparts for Trustee/Lessor and
each Lender) an opinion of counsel in the United States reasonably
acceptable to the Required Lenders confirming that the reorganization is
not adverse to the Participants (it being recognized that the
reorganization will not be deemed adverse to the Participants solely
because (x) of the accrual of deferred tax liabilities resulting from the
reorganization or (y) the successor or surviving corporation (1) is subject
to income tax as a corporate entity or (2) is considered to be an
"includible corporation" of an affiliated group of corporations within the
meaning of the Code, or any similar state or local law).
(2) Successor Corporation Substituted. Upon any consolidation or
---------------------------------
merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of Lessee in
accordance with Section 5.2(a), the successor corporation formed by such
--------------
consolidation or into or with which Lessee is merged, or to which such
sale, assignment, transfer, lease, conveyance or other disposition is made,
shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Agreement and the other Operative
Documents referring to the "Lessee" shall refer instead to the successor
corporation and not to Lessee), and may exercise every right and power of,
Lessee under this Agreement and the other Operative Documents with the same
-23-
effect as if such successor Person had been named as Lessee herein;
provided, however, that (i) the surviving entity or acquiring corporation
-------- -------
shall (A) assume all of the Obligations of Lessee incurred under this
Agreement and the other Operative Documents, (B) acquire and own and
operate, directly or through Subsidiaries, all or substantially all of the
properties and assets then constituting the assets of Lessee or any of its
Restricted Subsidiaries, as the case may be, (C) have been issued Gaming
Licenses to operate the acquired casino operations and entities
substantially in the manner and scope operated prior to such transaction,
which Gaming Licenses are in full force and effect and (D) be in compliance
fully with Section 5.2(a) and (ii) Lessee shall deliver to Administrative
--------------
Agent (with copies for Trustee/Lessor and each Lender) a certificate signed
by a Responsible Official of Lessee and an opinion of counsel acceptable to
the Required Lenders, subject to customary assumptions and exclusions,
stating that the proposed transaction complies with this Section 5.2;
-----------
provided, further, however, that Lessee shall not be relieved from the
-------- -------
obligation to pay its Obligations (including Rent) under this Agreement,
the Lease and the other Operative Documents except in the case of a sale of
all of one or Lessee's assets that meets the requirements of Section
-------
5.2(a).
SECTION 1.22 Existence. Subject to Section 5.2, Lessee shall do or cause
--------- -----------
to be done all things necessary to preserve and keep in full force and effect
(a) its partnership existence and the corporate, partnership or other existence
of each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of Lessee or any such
Subsidiary and (b) the rights (charter and statutory), licenses and franchises
of Lessee and its Subsidiaries; provided, however, that Lessee shall not be
-------- -------
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if Lessee's Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Lessee and its Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the
Participants.
SECTION 1.23 Liens. Lessee shall not incur or suffer or permit to exist
-----
any Lien on any of the Equipment or the other Collateral other than Permitted
Liens.
SECTION 1.24 Compliance Certificate. Within 120 days after the close of
----------------------
each fiscal year of Lessee, Lessee shall deliver to each Participant a
certificate (a "Compliance Certificate"), in form reasonably acceptable to the
----------------------
Required Lenders, signed by a Responsible Official of Lessee, to the effect that
the signer is familiar with or has reviewed the relevant terms of this
Agreement, the Lease and each other Operative Document to which Lessee is a
party and has made, or caused to be made, under his or her supervision, a review
of the transactions contemplated hereby and thereby, as well as the condition of
the Equipment, during the preceding fiscal year, and that such review has not
disclosed the existence during such fiscal year of any condition or event which
constitutes a Lease Event of Default or Casualty (except as described therein),
nor does the signer have knowledge, after due inquiry, of the existence, as of
the date of such certificate, of any condition or event which constitutes a
Lease Default, a Lease Event of Default or Casualty or, if any such condition or
event existed or exists, specifying the nature and period of existence thereof
and what action Lessee has taken, is taking or proposes to take with
-24-
respect thereto.
SECTION 1.25 Investigation by Governmental Authorities. Lessee shall
-----------------------------------------
deliver to Administrative Agent promptly upon Lessee's receiving written notice
of the intent by a Governmental Authority to (a) revoke or suspend any Gaming
License necessary for the ownership or operation of the Casino or gaming
operations in respect thereof, (b) restrict or modify any such Gaming License if
the effect of any such restriction or modification would reasonably be expected
to have, individually or in the aggregate with other restrictions or
modifications, a Material Adverse Effect, (c) take an action which would
constitute a requisition of title to any of the Equipment, (d) investigate the
Equipment for a material violation of any Applicable Laws with respect to the
Equipment, including any Environmental Law, under which liability may be imposed
upon any Participant or Lessee, or (e) investigate the Equipment (other than
routine fire, life-safety and similar inspections) for any violation of
Applicable Laws under which criminal liability may be imposed upon any
Participant or Lessee.
SECTION 1.26 Books and Records. Lessee will, at all times, maintain
-----------------
books and records separate from those of any other Person in accordance with
GAAP.
SECTION 1.27 Payment of Taxes, etc. Lessee shall pay, and shall cause
----------------------
each of its Subsidiaries to pay, prior to delinquency, (a) all sales, use,
excise and other taxes, assessments and governmental charges or levies imposed
upon the Lessee Collateral except such as are contested in good faith and by
------
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Participants, and (b) all lawful claims
that, if unpaid, might by law become a Lien upon the Lessee Collateral, other
than those arising from Permitted Liens.
SECTION 1.28 Inspection. Lessee shall permit the Participants, or any
----------
agents or representatives of any thereof, upon reasonable prior notice, at any
time during regular business hours of Lessee and as often as reasonably
requested (but not so as to materially interfere with the business of Lessee),
to examine and make copies of, and abstracts from, the records and books of
account of Lessee and its Restricted Subsidiaries and to discuss the affairs,
finances and accounts of Lessee and its Restricted Subsidiaries with any of
Lessee's or any of HCS I's or HCS II's officers, managers, key employees or
accountants, provided that Lessee shall be afforded reasonable prior notice of,
--------
and an opportunity to participate in, any such discussions with Lessee's
accountants. Lessee shall, upon reasonable prior notice from any Participant
(except that no notice shall be required if a Lease Event of Default has
occurred and is continuing), permit the Participants and their respective
authorized representatives to inspect the Equipment during normal business hours
of Lessee, provided that such inspections shall not unreasonably interfere with
--------
Lessee's business operations at the Resort. Without in any way limiting any of
the foregoing rights of the Participants to conduct inspections from time to
time, Lessee agrees to reimburse Administrative Agent for the reasonable costs
and expenses of conducting one such inspection per calendar year (should
Administrative Agent (at the direction of the Required Lenders) elect to conduct
such inspection); provided, however, that all inspections by the Participants
-------- -------
conducted after the occurrence and during the continuance of a Lease Event of
Default shall be at the sole
-25-
cost and expense of Lessee.
SECTION 1.29 Compliance with Laws. Lessee shall comply, and shall cause
--------------------
each of its Restricted Subsidiaries to comply, within the time period, if any,
given for such compliance by the relevant Governmental Authority or Authorities
with enforcement authority, with all Applicable Laws noncompliance with which
would reasonably be expected to have a Material Adverse Effect, except that
------
Lessee and its Related Subsidiaries need not comply with any Applicable Law then
being contested by any of them in good faith by appropriate proceedings.
SECTION 1.30 Maintenance of Insurance. Lessee shall maintain insurance
------------------------
coverage covering the Equipment which meets in all respects the requirements of
Article IX of the Lease, and such coverage shall remain in full force and effect
----------
so long as any Loan remains outstanding.
SECTION 1.31 Change of Name or Principal Place of Business. Lessee shall
---------------------------------------------
furnish to Administrative Agent notice, on or before the thirtieth (30th) day
before effecting same, of any relocation of its chief executive office,
principal place of business or the office where it keeps its records concerning
its accounts or contract rights relating to the Equipment or the Equipment or
Lessee changes its name, identity, organizational structure or taxpayer
identification number provided that no such prior notice shall be required in
--------
connection with Lessee's relocation of its chief executive office and principal
place of business to 000 Xxxxx Xxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 upon
the opening of the Resort.
SECTION 1.32 Financial and Other Information. Lessee shall deliver to
-------------------------------
Administrative Agent the following financial and other information (with copies
for Trustee/Lessor and each Lender):
(1) Financial Reports. Whether or not required by the
-----------------
Commission, so long as any Obligations are outstanding, Lessee will furnish
to the Participants, within 15 days following the time periods specified in
the Commission's rules and regulations: (i) all consolidated quarterly and
annual financial information that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if Lessee were required
to file such Forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to the
annual information only, a report on the annual financial statements by
Lessee's certified independent accountants; and (ii) all current reports
that would be required to be filed with the Commission on Form 8-K if
Lessee were required to file such reports. In addition, within 15 days
after filing such documents with the Commission, Lessee shall furnish to
the Participants the items in (i) and (ii) of this paragraph with respect
to HCS I, HCS II, any Restricted Subsidiary of Lessee, and HWCC-Louisiana.
(2) Unrestricted Subsidiaries. If Lessee has designated any of
-------------------------
its Subsidiaries as Unrestricted Subsidiaries, then the consolidated
quarterly and annual financial information required by the preceding
paragraph will include a reasonably
-26-
detailed presentation, either on the face of the financial statements or in
the footnotes thereto, and in Management's Discussion and Analysis of
Financial Condition and Results of Operations, of the financial condition
and results of operations of Lessee and its Restricted Subsidiaries
separate from the financial condition and results of operations of Lessee's
Unrestricted Subsidiaries as required by the rules and regulations of the
Commission.
(3) Operating Report. From and after the Resort becomes
----------------
Operating, within 30 days after the end of each calendar month, a summary
unaudited statement of operations of Lessee for such month, in a form
reasonably acceptable to the Required Lenders, together with a written
report as to current operating data and a narrative statement discussing
any significant trends reflected therein.
(4) Default. As soon as possible and in any event within seven
-------
(7) Business Days after the occurrence of each Default or Event of Default
under any Operative Document a statement of a Responsible Official of
Lessee setting forth the details of such Default or Event of Default and
the action that Lessee (or any other applicable party) proposes to take
with respect thereto.
(5) Condition. Promptly after becoming aware thereof, written
---------
notice of any Material Adverse Effect.
(6) Proceedings. Promptly after becoming aware thereof, written
-----------
notice of the commencement or existence of any proceeding against Lessee,
its Restricted Subsidiaries, HCS I, HCS II or Manager by or before any
Governmental Authority that might, in the reasonable judgment of Lessee,
reasonably be expected to result in a Material Adverse Effect.
(7) Environmental. Promptly after the occurrence of any
-------------
Environmental Violation or written notice alleging Environmental Violation,
a statement of a Responsible Official of Lessee setting forth the details
of such violation or alleged violation and the action that Lessee proposes
to take with respect thereto.
(8) Annual Projections. As soon as possible and in any event no
------------------
later than the required delivery date specified for delivery of Lessee's
annual reports described in subsection (a) above, financial projections of
--------------
Lessee and its Subsidiaries for the fiscal year immediately following the
fiscal year covered by such annual financial statements, setting forth, in
reasonable detail, a statement, on a monthly basis, of the projected
consolidated expenses and cash flows of Lessee and its Subsidiaries.
(9) Public Information. To the extent applicable, promptly after
------------------
the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of HCS
I or HCS II, as the case may be, and copies of all annual, regular,
periodic and special reports and registration statements
-27-
which Lessee, HCS I or HCS II may file or be required to file with the
Commission under Section 13 or 15(d) of the Exchange Act and not otherwise
required to be delivered to the Participants pursuant to other provisions
of this Section 5.13
------------
(10) Amendments, Modifications, etc. Promptly after the effective
-------------------------------
date thereof, copies of any and all material amendments, modifications and
waivers pertaining in any manner to the Indenture or any of the documents
relating thereto.
(11) Other Information. Promptly upon written request therefor,
-----------------
any other information in respect of Lessee, its Restricted Subsidiaries,
HCS I, HCS II or the Manager (to the extent readily available to Lessee at
no or nominal cost), reasonably requested by any Participant.
SECTION 1.33 Securities. Neither Lessee nor anyone authorized to act on
----------
behalf of Lessee will take any action which would subject the issuance or sale
of the Notes, the Equipment or the Lease, or in any security or lease the
offering of which, for purposes of the Securities Act or any state securities
laws, would be deemed to be part of the same offering as the offering of the
aforementioned securities or leases, to the registration requirements of Section
5 of the Securities Act or any state securities laws.
SECTION 1.34 Gaming Equipment Costs. As of the date of the last Advance,
----------------------
Lessee shall have caused the aggregate amount disbursed hereunder with respect
to Equipment Costs for Gaming Equipment to be not less than one-quarter of the
total amount disbursed to or for the benefit of Lessee hereunder.
SECTION 1.35 Stay, Extension and Usury Laws. Lessee covenants (to the
------------------------------
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Agreement and
the other Operative Documents; and Lessee (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein or therein granted to any Participant, but
shall suffer and permit the execution of every such power as though no such law
has been enacted.
SECTION 1.36 Restricted Payments. Lessee shall not, and shall not permit
-------------------
any of its Restricted Subsidiaries to, directly or indirectly: (a) declare or
pay any dividend or make any other payment or distribution on account of
Lessee's or any of its Restricted Subsidiaries' Equity Interests (including any
payment in connection with any merger or consolidation involving Lessee or any
of its Restricted Subsidiaries) or to the direct or indirect holders of Lessee's
or any of its Restricted Subsidiaries' Equity Interests in any capacity (other
than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of Lessee or dividends or distributions payable to Lessee or
a Restricted Subsidiary of Lessee); (b) purchase, redeem or otherwise acquire or
retire for value (including without limitation in connection with any merger
-28-
or consolidation involving Lessee) any Equity Interests of Lessee or any direct
or indirect parent of Lessee; (c) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is pari passu with or subordinated to the obligations of
Lessee hereunder and under the Lease, except (i) a payment of interest or
principal at the stated maturity thereof and (ii) a payment at any time of
interest or principal on Indebtedness permitted by clauses (h) or (j) of the
second paragraph of Section 4.09 of the Indenture as in effect as of the Closing
Date; or (d) make any Restricted Investment (all such payments and other actions
set forth in clauses (a) through (d) above being collectively referred to as
----------- ---
"Restricted Payments"), unless such Restricted Payment is permitted under
--------------------
Section 4.07 of the Indenture as in effect on the Closing Date.
SECTION 1.37 Dividend and Other Payment Restrictions Affecting
-------------------------------------------------
Subsidiaries. Lessee shall not, and shall not permit any of its Restricted
------------
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to: (a) pay dividends or make any other distributions on
its Capital Stock to Lessee or any of its Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed to Lessee or any of its Restricted Subsidiaries;
(b) make loans or advances to Lessee or any of its Restricted Subsidiaries; or
(c) transfer any of its properties or assets to Lessee or any of its Restricted
Subsidiaries other than as may be permitted under Section 4.08 of the Indenture
as in effect on the Closing Date.
SECTION 1.38 Incurrence of Indebtedness and Issuance of Preferred Equity.
-----------------------------------------------------------
(1) Lessee shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently
or otherwise, with respect to (collectively, "incur") any Indebtedness
-----
(including Acquired Debt), and Lessee shall not issue any Disqualified
Stock and shall not permit any of its Subsidiaries to issue any shares of
preferred equity; provided, however, that Lessee may incur Indebtedness
-------- -------
(including Acquired Debt) or issue Disqualified Stock, if (a) the Resort is
Operating; and (b) the Fixed Charge Coverage Ratio for Lessee's most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred or the preferred equity or
Disqualified Stock had been issued, as the case may be, at the beginning of
such four-quarter period; provided, however, that the foregoing shall not
-------- -------
prohibit the incurrence of any Permitted Debt so long as no Lease Default
or Lease Event of Default shall have occurred and be continuing.
(2) Lessee will not incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of Lessee unless such Indebtedness is also contractually
subordinated in right of payment to its
-29-
Obligations (including payment of Rent) to the Participants under the
Operative Documents on substantially identical terms; provided, however,
-------- -------
that no Indebtedness of Lessee shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of Lessee solely
by virtue of being unsecured.
SECTION 1.39 Asset Sales. Lessee shall not, and shall not permit any of
-----------
its Restricted Subsidiaries to, consummate an Asset Sale unless permitted to do
so under the provision of Section 4.10 of the Indenture as in effect on the
Closing Date.
SECTION 1.40 Transactions with Affiliates. Lessee shall not, and shall
----------------------------
not permit any of its Restricted Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"),
---------------------
unless: (a) such Affiliate Transaction is on terms that are no less favorable
to Lessee or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by Lessee or such Restricted Subsidiary
with an unrelated Person; or (b) is otherwise permitted (or not prohibited, as
the case may be) by the provisions of Section 4.12 of the Indenture as in effect
on the Closing Date.
SECTION 1.41 Line of Business. Lessee shall not, and shall not permit
----------------
any Subsidiary to, engage in any business or investment activities other than a
Permitted Business. Neither Lessee nor any of its Subsidiaries may conduct a
Permitted Business in any gaming jurisdiction in which Lessee or such Subsidiary
is not licensed as of the Closing Date if any of the Participants shall be
required to be licensed as a result thereof ; provided, however, that the
-------- -------
provisions described in this sentence shall not prohibit Lessee or any of its
Subsidiaries from conducting a Permitted Business in any jurisdiction that does
not require the licensing or qualification of all the Participants, but reserves
the discretionary right to require the licensing or qualification of any of the
Participants. Lessee shall not, and shall not permit any of its Subsidiaries
to, engage in any business, development or investment activity other than at or
in conjunction with the Resort until the Resort is Operating.
SECTION 1.42 Sale and Leaseback Transactions. Lessee will not, and will
-------------------------------
not permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction in violation of Section 4.20 of the Indenture as in effect
on the Closing Date.
SECTION 1.43 Limitation on Issuances and Sales of Equity Interests in
--------------------------------------------------------
Subsidiaries. All of Lessee's Restricted Subsidiaries, other than Shreveport
------------
Capital, shall be wholly owned by Lessee, by one or more of its Restricted
Subsidiaries or by Lessee and one or more of its Restricted Subsidiaries.
Lessee will not, and will not permit any of its Restricted Subsidiaries to,
transfer, convey, sell, lease or otherwise dispose of any Equity Interests in
any Restricted Subsidiary of Lessee to any Person (other than Lessee or a
Restricted Subsidiary of Lessee), unless (a) such transfer, conveyance, sale,
lease or other disposition is of all the Equity Interests in such Restricted
Subsidiary and (b) the cash net proceeds from such transfer,
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conveyance, sale, lease or other disposition are applied in accordance with the
Indenture as in effect on the Closing Date. In addition, Lessee shall not permit
any of its Restricted Subsidiaries to issue any of its Equity Interests to any
Person other than to Lessee or one or more of its Restricted Subsidiaries.
SECTION 1.44 Restriction on Payment of Management Fees. Lessee shall
-----------------------------------------
not, directly or indirectly, pay to the Manager or any of its Affiliates any
Management Fees, except pursuant to the Management Agreement (as the same is in
effect on the Closing Date) in accordance with (a) Section 4.30 of the Indenture
as in effect on the Closing Date and (b) the Manager Subordination Agreement.
SECTION 1.45 Landlord Waiver and Consent. Lessee shall use commercially
---------------------------
reasonably efforts to obtain, within forty-five (45) days after the Closing
Date, an executed landlord consent and waiver from the City of Shreveport,
Louisiana (which landlord consent and waiver shall be in the form contemplated
by, and comply with the requirements of, Section 4.09 of the Ground Lease).
SECTION 1.46 Final Appraisal. Lessee shall provide, at its sole cost, to
---------------
Administrative Agent (with copies for Trustee/Lessor and each Lender) (a)
concurrently with the Advance Request pertaining to the Final Advance Date or
(b), if Lessee fails to designate a Final Advance Date, not later than ten (10)
days following the last day of the Commitment Period a final appraisal report
with respect to the Equipment, prepared by the appraiser that provided the
preliminary appraisal report described in Section 3.2(a), establishing (a) that
--------------
the fair market value of all of the Equipment on an installed, "in use" basis is
at least equal to the Purchase Price for such Equipment and (b) the estimated
value of such Equipment as of the last day of the Commitment Period, which final
appraisal report shall be otherwise reasonably satisfactory to the Required
Lenders.
ARTICLE VI
COVENANTS OF LESSOR, TRUSTEE, ADMINISTRATIVE AGENT AND LENDERS
--------------------------------------------------------------
SECTION 1.47 Covenants of Lessor, Trustee, Administrative Agent and the
----------------------------------------------------------
Lenders.
-------
(1) Discharge of Liens. Each of the Lenders, Administrative
------------------
Agent, Lessor and Trustee covenants as to itself, and not jointly with any
other Person, that it will not, directly or indirectly, create, incur,
assume or permit to exist at any time, and will, at its own cost and
expense, take such action as may be necessary to promptly discharge, or to
cause to be discharged, any Lessor Liens attributable to it, and will
indemnify the Trust Estate in the amount of any diminution of the value
thereof and any costs and expenses associated therewith as a result of its
failure to comply with its obligations under this Section 6.1(a).
--------------
Notwithstanding the foregoing, none of the Lenders, Administrative Agent,
Lessor or Trustee, as the case may be, shall be required to so discharge
any such
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Lessor Lien while the same is being contested in good faith by appropriate
proceedings diligently prosecuted so long as such proceedings shall not
involve any risk of invalidity or the loss of priority of the Lien of the
Lease or any risk of the sale, forfeiture, foreclosure or loss of, and
shall not interfere with the use or disposition of, any part of the
Equipment, the Lease or the Trust Estate or title thereto or any interest
therein or the payment of Rent; provided, however, that each Lender, Lessor
--------- -------
and Trustee each shall discharge any such Lessor Lien, whether or not
subject to contest as provided above, upon the purchase of the Equipment by
Lessee pursuant to the Lease.
(2) Quiet Enjoyment. Subject to the provisions of Section 3.5 of
--------------- -----------
the Lease, the rights of Lessor contained in Article X of the Lease and the
---------
other terms of the Operative Documents to which Lessee is a party, Lessee
shall peaceably and quietly have, hold and enjoy the Equipment free of any
claim or other action by Lessor or anyone claiming by, through or under
Lessor (other than Lessee) with respect to any matters arising from and
after the date any such Equipment becomes subject to the Lease. Such right
of quiet enjoyment is independent of, and shall not affect Lessor's (or any
other applicable Participant's) rights otherwise to initiate legal action
to enforce the obligations of Lessee under the Lease or any of the other
Operative Documents.
(3) Trust Agreement. Without prejudice to any right under the
---------------
Trust Agreement of Trustee to resign, or the Lenders' right under the Trust
Agreement to remove Trustee, Lessor and Trustee hereby agree with Lessee,
the Lenders and Administrative Agent (i) not to terminate or revoke the
trust created by the Trust Agreement except as permitted by Article IV of
----------
the Trust Agreement prior to the later of the Lease Termination Date or the
payment in full of the Obligations under the Notes, (ii) not to amend,
supplement or otherwise modify or consent to any amendment, supplement or
modification of any provision of the Trust Agreement prior to the Lease
Termination Date in any manner which would have a Material Adverse Effect
on the rights of any party thereto, and (iii) to comply with all of the
terms of the Trust Agreement applicable to it except for such
nonperformance that would not adversely affect any such party.
(4) Successor Trustee. Trustee or any successor may resign or be
-----------------
removed by the Lenders and a successor Trustee may be appointed, and a
Person may become Trustee under the Trust Agreement, only in accordance
with the provisions of Article III of the Trust Agreement. Notwithstanding
-----------
anything to the contrary contained in this Agreement or the Trust
Agreement, so long as no Lease Event of Default shall be continuing, the
appointment of a successor Trustee shall be subject to the consent of
Lessee (such consent not to be unreasonably withheld or delayed). In
addition, so long as there exists no Lease Event of Default, Lessee may
request Administrative Agent to remove Trustee in accordance with Section
-------
3.10 of the Trust Agreement. Upon receipt of such request, Administrative
----
Agent shall survey the Lenders to determine whether to proceed to remove
Trustee. If Required Lenders consent to such removal, Trustee shall be
removed in accordance with Section 3.10 of the Trust Agreement.
------------
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(5) Indebtedness; Other Business. Trustee on behalf of the Trust
----------------------------
shall not contract for, create, incur or assume any indebtedness, or enter
into any business or other activity, other than pursuant to or under the
Operative Documents and, for the benefit of Lessor, Lessee, Administrative
Agent and the Lenders, agrees to be bound by Section 1.2(b) of the Trust
--------------
Agreement.
(6) Change of Principal Place of Business. Trustee shall give
-------------------------------------
prompt notice to Lenders, Lessor, Lessee and Administrative Agent if
Trustee's principal place of business or chief executive office, or the
office where the records concerning the accounts or contract rights
relating to the Equipment or the transactions contemplated by the Operative
Documents are kept, shall cease to be located at 00 Xxxxx Xxxx Xxxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000, or if it shall change its name, identity or
corporate structure.
(7) Loan Agreement. Trustee, Administrative Agent, Lessor,
--------------
Lessee, and each Lender hereby agree that, so long as the Lease is in
effect, Trustee shall not consent to or permit any amendment of the terms
and provisions of the Loan Agreement or any Note, whether or not any Lease
Event of Default shall have occurred and be continuing, if any such
amendment or action would have the effect of increasing the obligations of
Lessee or decreasing the rights of Lessee, in each case without the prior
written consent of Lessee, except that without such consent, Trustee may
waive performance by Administrative Agent of obligations to Trustee the
non-performance of which do not adversely affect Lessee. Each Lender
agrees to comply with Section 7.7 of the Loan Agreement.
-----------
(8) Distribution. Administrative Agent agrees to distribute any
------------
amount stated to be distributable by Administrative Agent to Lessee in the
Lease or any other Operative Document in accordance with the terms of such
document.
(9) Lease Financing Party Removal. Notwithstanding any other
-----------------------------
provision of this Agreement or any other Operative Document to the
contrary, if any Gaming Authority requires any of Lessor, Trustee, the
Lenders or the Arranger (or any successors thereto) (each, a "Lease
-----
Financing Party") to be licensed, qualified or found suitable under any
---------------
applicable Gaming Law, the Lease Financing Party shall apply for a license,
qualification or a finding of suitability within the time period required
by the Gaming Authority. If the Lease Financing Party fails to apply for
such license, qualification or finding of suitability within the required
time period, such Lease Financing Party shall be required to dispose of its
Notes within the time specified by the Gaming Authority and Lessee shall
have the right to cause the redemption of the Notes of such Lease Financing
Party, subject to approval of any applicable Gaming Authority, pursuant to
which redemption Lessee shall pay to such Lease Financing Party, in cash,
all outstanding principal amounts, accrued interest, fees and other amounts
payable to it under its Notes and the other Operative Documents.
Immediately upon the imposition of a requirement to dispose of Notes by a
Gaming Authority, such Lease Financing Party
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shall, to the extent required by applicable law, have no further right (x)
to exercise, directly or indirectly, through any trustee or nominee or any
other Person or entity, any right conferred by the Notes or (y) to receive
any interest, dividends, economic interests or any other distributions or
payments with respect to the Notes or any remuneration in any form with
respect to the Notes from Lessee, Lessor or Trustee. Any Lease Financing
Party that is required to apply for a license, qualification or finding of
suitability must pay all fees and costs of any investigation by the
applicable Gaming Authorities. Lessee is not required to pay or reimburse
any Lease Financing Party who is required to apply for such license,
qualification or finding of suitability for the costs of the licensure or
investigation for such qualification or finding of suitability.
Administrative Agent shall notify the Lease Financing Parties in writing of
any such redemption as soon as practicable, provided, however, that until
-------- -------
such time as Administrative Agent receives notice from Lessee of such
redemption, Administrative Agent shall be entitled to treat the subject
Lease Financing Party as having all of its rights under the Operative
Documents. Administrative Agent shall report the names of the record Lease
Financing Parties to any Gaming Authority when required by law.
SECTION 1.48 Restrictions On and Effect of Transfer. No Lender shall
--------------------------------------
assign or delegate all or any portion of its right, title or interest in, to or
under any of the Operative Documents, its Commitment, the Loans or any Note,
except that (x) any Lender may pledge, assign or grant a security interest in
its interest to the Federal Reserve Board or any other central bank authority
with respect to such Lender, (y) upon satisfaction of the conditions set forth
in clauses (a) through (c) and (f) of this Section 6.2, any Lender may transfer
---------- --- --- -----------
all or any ratable portion of its interest to an Affiliate or to any other
existing Lender or any Affiliate of such Lender and, upon compliance with any
applicable provisions of Section 6.3(a), may sell, assign or otherwise transfer
--------------
a participation in its interest in any of the foregoing; provided, that no
--------
Participating Entity (as hereinafter defined) shall become, by means of such
transfer, a Lender under the Operative Documents, and Lessee shall be entitled
to continue to deal for all purposes under the Operative Documents exclusively
with the Lender who has transferred such participation, and (z) any Lender may
assign and delegate any ratable portion or all of such right, title and interest
upon the satisfaction of each of the following conditions (which conditions will
not be applicable to a transfer pursuant to clause (x) or (y) of this Section
---------- --- -------
6.2, unless otherwise provided above):
---
(1) Assumption of Obligations. Any transferee pursuant to this
-------------------------
Section 6.2 shall have executed and delivered to Administrative Agent,
-----------
Lessor and Trustee a letter in substantially the form of the Investor's
Letter attached hereto as Exhibit H, and thereupon the obligations of the
---------
transferring Lender under the Operative Documents shall be proportionately
released and reduced to the extent of such transfer. Upon any such transfer
as herein provided, (i) the transferring Lender shall still be entitled to
the benefit of Article VII, and (ii) the transferee shall be deemed to be
-----------
bound by all obligations (whether or not yet accrued) under, and to have
become a party to, all Operative Documents to which its transferor was a
party, shall be deemed the pertinent "Lender" for all purposes of the
Operative Documents and shall be deemed to have made
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that portion of the payments pursuant to this Agreement and the other
Operative Documents previously made or deemed to have been made by the
transferor represented by the interest being conveyed; and each reference
herein and in the other Operative Documents to the pertinent "Lender" shall
thereafter be deemed a reference to the transferee, to the extent of such
transfer, for all purposes. Upon any such transfer, Administrative Agent
shall promptly provide to Lessee, Lessor, Trustee and each Lender revised
Schedules I, II, and III to this Agreement, as applicable, to reflect the
----------- -- ---
relevant information for such new Lender and the Commitment of such new
Lender (and the revised Commitment of the transferor Lender if it shall not
have transferred its entire interest).
(2) Employee Benefit Plans. No Lender may make any such
----------------------
assignment, conveyance or transfer to, or in connection with, any
arrangement or understanding in any way involving any Plan, Multiemployer
Plan or Benefit Arrangement (or its related trust), as defined in Section
3(3) of ERISA, or with the assets of any such Plan, Multiemployer Plan or
Benefit Arrangement (or its related trust), within the meaning of Section
4975(e)(1) of the Code (other than a governmental plan, as defined in
Section 3(32) of ERISA), with respect to which Lessee or such Lender or any
of their Affiliates is a party in interest within the meaning of ERISA
Section 3(14) or a "disqualified person" within the meaning of Section
4975(e)(2) of the Code.
(3) Amounts. Any transfer of Notes shall be in a principal
-------
amount which is equal to or greater than $2,000,000, or, if less, the full
amount of such Lender's Loans or Commitment.
(4) Financial Condition of Transferee. So long as the
---------------------------------
Commitments are outstanding, no transfer by a Lender shall be effective
unless the transferee is (A) a bank or other financial institution with a
combined capital, surplus and undivided profits of at least $100,000,000,
or (B) a Subsidiary of such a bank or financial institution, provided that
-- --------
such bank or financial institution furnishes a guaranty with respect to the
Subsidiary transferee's obligations as a Lender, (C) any other Person,
provided the transferee's obligations as a Lender are guarantied by the
--------
transferor Lender.
(5) Effect. From and after any transfer of its Notes, the
------
transferring Lender shall be released, but only to the extent assumed by
the transferee in writing, from its liabilities and obligations hereunder
and under the other Operative Documents to which such transferor is a party
in respect of obligations to be performed on or after the date of such
transfer. Upon any transfer by a Lender as above provided, any such
transferee shall be deemed a "Lender" for all purposes of such documents
and each reference herein to a Lender shall thereafter be deemed a
reference to such transferee for all purposes, except as the context may
otherwise require.
(6) Confirmation Notice; Costs. Any Lender having effected a
--------------------------
transfer of its interest under this Section 6.2 shall give written notice
-----------
thereof to Lessee,
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Lessor, Administrative Agent and Trustee within fifteen (15) Business Days
following such transfer, setting forth the name of the transferee, the
percentage of interest retained by such Lender, if any, and the date on
which such transfer became effective. All reasonable out-of- pocket costs
incurred by Lessor, Trustee or Administrative Agent in connection with any
such disposition by a Lender under this Section 6.2 shall be borne by such
-----------
Lender. In the event of a transfer under this Section 6.2(a), any expenses
--------------
incurred by the transferee in connection with its review of the Operative
Documents and its investigation of the transactions contemplated thereby
shall be borne by such transferee or the relevant Lender, as they may
determine, but shall not be considered costs and expenses which Lessee is
obligated to pay or reimburse under Section 9.16.
------------
(7) Lessee Consent. Any transferee of an interest transferred
--------------
pursuant to this Section 6.2 shall have obtained the prior written consent
-----------
of Lessee to such transfer, which consent shall not be unreasonably
withheld or delayed, provided that Lessee shall have no such consent right
--------
during the continuance of a Default or Event of Default and provided
--------
further that no such consent shall be required for any transfer made
-------
pursuant to clauses (x) and (y) above.
----------- ---
Notwithstanding any transfer pursuant to this Section 6.2, the transferor shall
-----------
continue to be entitled to all benefits accrued and all rights vested prior to
such transfer, including rights to indemnification under this Agreement or any
other Operative Document.
SECTION 1.49 Participations.
--------------
(1) Participations. Each Lender covenants and agrees that it
--------------
will not grant participations in its Notes and other Operative Documents to
any Person (a "Participating Entity") unless such Person (i) is a bank or
---------------------
other financial institution and (ii) represents and warrants, in writing,
to such Lender for the benefit of the Lenders, Lessor, Trustee,
Administrative Agent and Lessee that no part of the funds used by it to
acquire an interest in the Notes and other Operative Documents constitutes
assets of any Plan, Multiemployer Plan or Benefit Arrangement (or its
related trust). Any such transferor Lender shall require any transferee of
its interest in the Notes and the other Operative Documents to make the
representations and warranties set forth in the preceding sentence, in
writing, to such transferor Lender for its benefit and the benefit of the
Lenders, Lessor, Trustee, Administrative Agent and Lessee. In the event of
any such sale by a Lender of a participating interest to a Participating
Entity such Lender's obligations under this Agreement and under the other
Operative Documents shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of its Notes for all purposes under this Agreement and under the
other Operative Documents, and Lessor, Trustee, Administrative Agent and,
except as set forth in Section 6.3(b), Lessee shall continue to deal solely
--------------
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and under the other Operative Documents,
and, as between such Lender and such Participating Entity, such Lender
shall retain the sole right to enforce the obligations of
-36-
Lessee under the Operative Documents and to approve any amendment,
modification or waiver of any provision of any Operative Document.
(2) Transferee Indemnities. Each Participating Entity shall be
----------------------
entitled to the benefits of Sections 2.9, 2.10, 2.11 and 2.12 of the Loan
------------ ---- ---- ----
Agreement and Articles VII and VIII with respect to its participation in
------------ ----
its transferor's Notes and the other Operative Documents, and Loans and
Advances outstanding from time to time; provided, that no Participating
--------
Entity in respect of its participation shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
in the Notes and other Operative Documents transferred by such transferor
Lender to such Participating Entity had no such transfer of a participation
occurred.
SECTION 1.50 Required Transfers. If, at any time during the Lease Term,
------------------
any Lender shall request from Lessor, Trustee or Lessee reimbursement for any
costs pursuant to Section 2.9, 2.10 or 2.11 of the Loan Agreement (which cost
----------- ---- ----
Lessee is obligated to pay as Supplemental Rent under Section 3.2 of the Lease),
-----------
such Lender shall, upon request of Lessee or Administrative Agent, attempt in
good faith to promptly sell to a Person who would qualify under Section 6.3(a)
-------------
of this Agreement, the Notes and interests in the other Operative Documents held
by such Lender, the Commitment of such Lender and any other interests of such
Lender hereunder and under the other Operative Documents, in accordance with
this Section 6.4, in exchange for an amount equal to the outstanding principal
-----------
amount of such Lender's Notes, together with all interest accrued thereon and
unpaid to the date of such purchase and all other amounts then due and payable
hereunder or under the other Operative Documents to such Lender (including any
requested reimbursement amounts).
SECTION 1.51 Distribution and Receipt of Payments. Bank, in its
------------------------------------
capacities as Trustee and Lessor, hereby appoints Administrative Agent (for the
benefit of the Lenders) agent for purposes of receiving proceeds of Advances,
payments under the Lease and the other Operative Documents and making
distributions to the Lenders, Lessee and other Persons under this Agreement and
the other Operative Documents. Bank, as Trustee and/or Lessor, may at any time
by notice in writing terminate Administrative Agent's appointment hereby as
agent of collection and payment of the payments under the Operative Documents,
in which event Lessee and the Lenders, as the case may be, upon receipt of a
copy of such notice, shall pay any and all payments payable to Bank, as Trustee
and/or Lessor, hereunder and under the other Operative Documents directly to
Bank, as Trustee and/or Lessor, at the account set forth in Schedule III.
------------
ARTICLE VII
GENERAL INDEMNITY
-----------------
SECTION 1.52 General Indemnification. Lessee agrees to assume liability
-----------------------
for, and to indemnify, protect, defend, save and keep harmless each Indemnitee,
on an After-Tax Basis, from and against any and all Claims that may be imposed
on, incurred by or asserted against such
-37-
Indemnitee (whether because of action or omission by such Indemnitee or
otherwise), whether or not such Indemnitee shall also be indemnified as to any
such Claim by any other Person and whether or not such Claim arises or accrues
prior to the Closing Date or after the Lease Termination Date, in any way
relating to or arising out of (a) any of the Operative Documents or any of the
transactions contemplated thereby or any investigation, litigation or proceeding
in connection therewith, and any amendment, modification or waiver in respect
thereof; or (b) the Resort or any part thereof or interest therein; or (c) the
acquisition, mortgaging, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, purchase, ownership,
possession, rental, lease, sublease, repossession, maintenance, repair,
alteration, modification, addition or substitution, storage, transfer of title,
redelivery, use, financing, refinancing, operation, condition, sale (including
any transfer pursuant to Section 5.2 of the Lease or any sale pursuant to
-----------
Section 5.1 of the Lease), return or other disposition of all or any part of any
-----------
interest in the Equipment or the imposition of any Lien (or incurring of any
liability to refund or pay over any amount as a result of any Lien) thereon
(other than Lessor's Liens), including: (i) Claims or penalties arising from any
violation of law or in tort (strict liability or otherwise), (ii) latent or
other defects, whether or not discoverable, and (iii) any Claim for patent,
trademark or copyright infringement (other than, with respect to any Indemnitee,
any Claim for patent, trademark or copyright infringement that arises as a
result of the actions of such Indemnitee); or (d) any activity, occurrence or
condition that violates or results in non-compliance with any Environmental Law
or Environmental Permit arising out of or in any way relating to the Resort or
any part thereof or interest therein, including Claims for investigation costs,
cleanup costs, response costs, remediation and removal costs, costs of
corrective action, costs of financial assurance, and all other damages, costs,
fees, and expenses, fines and penalties, including natural resource damages, and
any mitigative action required by or under Environmental Laws; (e) subject to
Article VI, the offer, issuance, sale or delivery of the Notes; (f) the breach
----------
or alleged breach by Lessee of any representation or warranty made by it or
deemed made by it in any Operative Document; (g) subject to Article VI, the
----------
transactions contemplated hereby or by any other Operative Document, in respect
of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any
prohibited transaction described in Section 4975(c) of the Code to any Plan; or
(h) any other agreement entered into or assumed by Lessee in connection with the
Equipment; provided, however, that Lessee shall not be required to indemnify
-------- -------
under this Section 7.1 for any of the following: (1) as to an Indemnitee, any
-----------
Claim to the extent resulting from the willful misconduct or gross negligence of
such Indemnitee and, if such Indemnitee is Bank, ordinary negligence for the
handling of funds (other than willful misconduct or gross negligence imputed to
such Indemnitee by reason of its participation in the transactions contemplated
hereby) or the breach by such Indemnitee of any representation, warranty or
covenant of such Indemnitee set forth in any Operative Document, (2) as to an
Indemnitee, any Claim resulting from a transfer by such Indemnitee of all or any
part of its interest in the Notes, the Lease, the other Operative Documents or
the Equipment, other than any such transfer either required by the Lease
(including a transfer as a result of a Casualty or a transfer pursuant to
Section 5.1 or 5.2 of the Lease) or any other Operative Document or while a
----------- ---
Lease Event of Default shall have occurred and be continuing, (3) any Claims in
respect of Taxes (such Claims to be subject to Article VIII), other than a
------------
payment necessary to make payments under this Section 7.1 on an After-Tax Basis,
-----------
provided, that this exclusion does not apply to any taxes or penalties included
--------
in Claims against
-38-
which the Indemnitee is provided an indemnification under subsection (f) of this
Section 7.1, (4) as to an Indemnitee, any Claim resulting from Lessor Liens
which such Indemnitee is responsible for discharging under the Operative
Documents and (5) except as may be otherwise provided herein or in any other
Operative Document, as to any Indemnitee, any claim to the extent resulting from
its required compliance with Applicable Laws (including Gaming Laws). Lessee
shall be entitled to credit against any payments due under this Section 7.1 any
insurance recoveries received by an Indemnitee in respect of the related Claim
under or from insurance paid for by Lessee or assigned to Lessor or Trustee by
Lessee.
If Lessee shall obtain actual knowledge of any Claim indemnified
against under this Section 7.1, Lessee shall give prompt notice thereof to the
-----------
appropriate Indemnitee or Indemnitees, and if any Indemnitee shall obtain actual
knowledge of any Claim indemnified under this Section 7.1, such Indemnitee shall
-----------
give prompt notice thereof to Lessee, provided that failure to so notify Lessee
--------
shall release Lessee from its obligations to indemnify hereunder only if and to
the extent that such failure results in a forfeiture by Lessee of substantive
rights and defenses. With respect to any amount that Lessee is requested by an
Indemnitee to pay by reason of this Section 7.1, such Indemnitee shall, if so
-----------
requested by Lessee and prior to any payment, submit such additional information
to Lessee as Lessee may reasonably request and which is reasonably available to
such Indemnitee to substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee for which the Indemnitee is indemnified under this Section 7.1, such
-----------
Indemnitee shall notify Lessee of the commencement thereof, and Lessee shall be
entitled, at its expense, acting through its counsel, to participate in, and, to
the extent that Lessee desires to, assume and control the defense thereof;
provided, however, that Lessee shall have acknowledged in writing its obligation
-------- -------
to fully indemnify such Indemnitee in respect of such action, suit or proceeding
to the extent required under this Section 7.1; and provided, further, that
----------- --------- -------
Lessee shall not be entitled to assume and control the defense of any such
action, suit or proceeding if and to the extent that, (A) in the reasonable
opinion of such Indemnitee, (x)(i) such action, suit or proceeding involves any
risk of imposition of criminal liability or (ii) such action, suit or proceeding
involves any material risk of material civil liability on such Indemnitee or
will involve a material risk of the sale, forfeiture or loss of, or the creation
of any Lien (other than a Permitted Lien) on, the Equipment, or the Trust Estate
or any part thereof, unless, in the case of this clause (x)(ii), Lessee shall
--------------
have posted a bond or other security satisfactory to the relevant Indemnitee in
respect to such risk, (y) the control of such action, suit or proceeding would
involve a bona fide conflict of interest or (z) Lessee's choice of counsel for
such action, suit or proceeding is not acceptable to such Indemnitee, (B) such
proceeding involves Claims not fully indemnified by Lessee which Lessee and the
Indemnitee have been unable to sever from the indemnified Claim(s), (C) a Lease
Default or a Lease Event of Default has occurred and is continuing or (D) such
action, suit or proceeding involves matters which extend beyond or are unrelated
to the transactions contemplated by the Operative Documents and if determined
adversely could be materially detrimental to the interests of such Indemnitee
notwithstanding indemnification by Lessee. Indemnitee, on the one hand, and
Lessee, on the other hand, each may participate in a reasonable manner at its
own expense and with its own counsel in any proceeding conducted by the other in
accordance with the foregoing.
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Each Indemnitee shall, at Lessee's expense, supply Lessee with such
information and documents reasonably requested by Lessee as are necessary or
advisable for Lessee to participate in any action, suit or proceeding to the
extent permitted by this Section 7.1. Unless a Lease Event of Default shall
-----------
have occurred and be continuing, no Indemnitee shall enter into any settlement
or other compromise with respect to any Claim which is entitled to be
indemnified under this Section 7.1 without the prior written consent of Lessee,
-----------
which consent shall not be unreasonably withheld or delayed, unless such
Indemnitee waives its right to be indemnified under this Section 7.1 with
-----------
respect to such Claim.
Any amount payable to an Indemnitee pursuant to this Section 7.1 shall
-----------
be paid to such Indemnitee promptly upon receipt of a written demand therefor
from such Indemnitee, accompanied by a written statement describing the basis
for such indemnity and the computation of the amount so payable and, if
requested by Lessee, such determination shall be verified by a nationally
recognized independent accounting firm mutually acceptable to Lessee and the
Indemnitee, at Lessee's expense.
ARTICLE VII
GENERAL TAX INDEMNITY
---------------------
SECTION 1.53 General Tax Indemnity. Except as otherwise provided in this
---------------------
Section 8.1, Lessee shall pay, on an After-Tax Basis, and, on written demand,
-----------
shall indemnify and hold each Indemnitee harmless from and against, any and all
fees (including documentation, recording, license and registration fees), taxes
(including income (whether net, gross or adjusted gross, whether domestic or
foreign), gross receipts, sales, rental, use, turnover, value-added, property,
excise and stamp taxes), levies, imposts, duties, charges, assessments or
withholdings of any nature whatsoever, together with any penalties, fines or
interest thereon or additions thereto (any of the foregoing being referred to
herein as "Taxes" and individually as a "Tax") imposed on or with respect to any
----- ---
Indemnitee, the Equipment or any portion thereof, any Operative Document or
Lessee or any sublessee or user of the Equipment, by any foreign authority, the
United States or by any state or local government or other taxing authority in
the United States in connection with or in any way relating to (i) the
acquisition, mortgaging, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, purchase, ownership,
possession, rental, lease, sublease, repossession, maintenance, repair,
alteration, modification, addition or substitution, storage, transfer of title,
redelivery, use, financing, refinancing, operation, condition, sale, return or
other application or disposition of all or any part of the Equipment or the
imposition of any Lien (or incurrence of any liability to refund or pay over any
amount as a result of any Lien) thereon, (ii) Rent or the receipts or earnings
arising from or received with respect to the Equipment or any part thereof, or
any interest therein or any applications or dispositions thereof, (iii) any
other amount paid or payable pursuant to the Notes or any other Operative
Documents or the property, or the income or other proceeds with respect to the
property, held in the Trust Estate, (iv) the Equipment or any part thereof or
any interest therein, (v) all or any of the Operative Documents, any other
documents
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contemplated thereby and any amendments and supplements thereto, and (vi)
otherwise with respect to or in connection with the transactions contemplated by
the Operative Documents; provided, that Lessee's indemnification obligation
--------
hereunder in respect of any Tax shall be net of any foreign, federal, state or
local income tax benefits which are recognized by the relevant Tax Indemnitee as
a result of the imposition of such Tax).
SECTION 1.54 Exclusions from General Tax Indemnity. Section 8.1 shall
------------------------------------- -----------
not apply to:
(1) Taxes on, based on, or measured by or with respect to the net
income of an Indemnitee (including minimum Taxes, capital gains Taxes,
Taxes on or measured by items of tax preference or alternative minimum
Taxes) other than (A) any such Taxes that are, or are in the nature of,
sales, use, rental (other than Taxes imposed on net rental income) or
property Taxes, (B) withholding Taxes imposed by the United States or the
State of Louisiana (I) on payments with respect to the Notes, or (II) on
Rent, to the extent the net payment of Rent after deduction of such
withholding Taxes would be less than amounts currently payable with respect
to the Notes and (C) any such Taxes imposed on such Indemnitee by any state
(other than the State of Louisiana) or local taxing authority in such state
to the extent such Taxes are imposed as a result of Lessee moving the
Equipment or any part thereof to such state;
(2) Taxes that are based on, measured by or imposed with respect
to the fees or other compensation received by a Person acting as Lessor,
Trustee or Administrative Agent (in their respective individual capacities)
or any Affiliate of any thereof for acting as trustees or agents under the
Trust Agreement or the Loan Agreement, respectively;
(3) Taxes that result from any act, event or omission, or which
are attributable to any period of time, that occurs after the earliest of
(A) the expiration of the Lease Term with respect to the Equipment and, if
the Equipment is required to be returned to Lessor in accordance with the
Lease, such return and (B) the discharge in full of Lessee's obligations to
pay the Lease Balance, or any amount determined by reference thereto, with
respect to the Equipment and all other amounts due under the Lease and
other Operative Documents, unless such Taxes (and interest, penalties and
late charges related thereto) relate to acts, events or matters occurring
prior to the earliest of such times or are imposed on or with respect to
any payments due under the Operative Documents after such expiration or
discharge;
(4) Taxes imposed on an Indemnitee that result from any voluntary
sale, assignment, transfer or other disposition by such Indemnitee or any
related Indemnitee of any interest in the Equipment or any part thereof, or
any interest therein or any interest or obligation arising under the
Operative Documents or any Notes, or from any sale, assignment, transfer or
other disposition of any interest in such Indemnitee or any related
Indemnitee, it being understood that each of the following shall not be
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considered a voluntary sale: (A) any substitution, replacement or removal
of any of the Equipment by Lessee shall not be treated as a voluntary
action of any Tax Indemnitee, (B) any sale or transfer resulting from the
exercise by Lessee of any early termination option, (C) any transfer under
Section 5.2 of the Lease and (D) any sale or transfer while a Lease Event
-----------
of Default shall have occurred and be continuing under the Lease; or
(5) Taxes imposed on a Lender which is not organized under the
Laws of the United States of America or any State thereof to the extent
such Lender's compliance with Section 8.6 of this Agreement at the time
-----------
such Lender becomes a party to this Agreement fails to establish a complete
exemption from such withholding or to the extent such failure to establish
a complete exemption from such withholding thereafter is attributable to
the actions of such Lender.
SECTION 1.55 Contests. If any Claim shall be made against any Indemnitee
--------
or if any proceeding shall be commenced against any Indemnitee (including a
written notice of such proceeding) for any Taxes as to which Lessee may have an
indemnity obligation pursuant to Section 8.1, or if any Indemnitee shall
-----------
determine that any Taxes as to which Lessee may have an indemnity obligation
pursuant to Section 8.1 may be payable, such Indemnitee shall promptly notify
-----------
Lessee in writing. Lessee shall be entitled, at its expense, acting through
counsel reasonably acceptable to such Indemnitee, to participate in, and, to the
extent that Lessee desires to, assume and control the defense thereof; provided,
---------
however, that Lessee shall have acknowledged in writing its obligation to
-------
indemnify fully such Indemnitee in respect of such action, suit or proceeding to
the extent required under this Article VIII; and, provided, further, that Lessee
------------ -----------------
shall not be entitled to assume and control the defense of any such action, suit
or proceeding if and to the extent that (A) Lessee is not able to provide such
Indemnitee with a legal opinion of counsel reasonably acceptable to such
Indemnitee that such action, suit or proceeding does not involve (x) a risk of
imposition of criminal liability or (y) any material risk of material civil
liability on such Indemnitee and will not involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien)
on the Equipment, or the Trust Estate or any part thereof, unless, in the case
of this clause (y), Lessee contemporaneously with such opinion shall have posted
----------
a bond or other security satisfactory to the relevant Indemnitee in respect to
such risk, (B) the control of such action, suit or proceeding would involve a
bona fide conflict of interest, (C) such proceeding involves Claims not fully
indemnified by Lessee which Lessee and the Indemnitee have been unable to sever
from the indemnified claim(s), (D) a Lease Default or Lease Event of Default has
occurred and is continuing or (E) such action, suit or proceeding involves
matters which extend beyond or are unrelated to the transactions contemplated by
the Operative Documents and if determined adversely could be materially
detrimental to the interests of such Indemnitee notwithstanding indemnification
by Lessee. Indemnitee, on the one hand, and Lessee, on the other hand, may
participate in a reasonable manner, each at its own expense and with its own
counsel in any proceeding conducted by the other in accordance with the
foregoing.
Each Indemnitee shall, at Lessee's expense, supply Lessee with such
information and documents reasonably requested by Lessee as are necessary or
advisable for Lessee to
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participate in any action, suit or proceeding to the extent permitted by this
Section 8.3. Unless a Lease Default or Lease Event of Default shall have
-----------
occurred and be continuing, no Indemnitee shall enter into any settlement or
other compromise with respect to any Claim which is entitled to be indemnified
under this Section 8.3 without the prior written consent of Lessee, which
-----------
consent shall not be unreasonably withheld or delayed, unless such Indemnitee
waives its right to be indemnified under this Section 8.3 with respect to such
-----------
Claim.
Notwithstanding anything contained herein to the contrary, an
Indemnitee will not be required to contest (and Lessee shall not be permitted to
contest) (a) a Claim with respect to the imposition of any Tax if such
Indemnitee shall waive its right to indemnification under this Section 8.3 with
-----------
respect to such Claim (and any related claim with respect to other taxable years
the contest of which is precluded or otherwise adversely affected as a result of
such waiver) and (b) any Claim if the subject matter thereof shall be of a
continuing nature and shall have previously been decided adversely. Each
Indemnitee and Lessee shall consult in good faith with each other concerning
each step and decision regarding the conduct of such contest controlled by
either, including the forum in which the Claim is most likely to be favorably
resolved.
SECTION 1.56 Payments. Any Tax indemnifiable under this Article VIII
-------- ------------
shall be paid directly when due to the applicable taxing authority if direct
payment is practicable and permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to an
Indemnitee pursuant to Section 8.1 shall be paid within thirty (30) days after
-----------
receipt of a written demand therefor from such Indemnitee accompanied by a
written statement describing in reasonable detail the amount so payable, but not
before the date that the relevant Taxes are due. Any payments made pursuant to
Section 8.3 directly to the Indemnitee entitled thereto or Lessee, as the case
-----------
may be, shall be made in immediately available funds at such bank or to such
account as specified by the payee in written directions to the payor, or, if no
such direction shall have been given, by check of the payor payable to the order
of the payee by certified mail, postage prepaid at its address as set forth in
this Agreement. Upon the request of any Indemnitee with respect to a Tax that
Lessee is required to pay, Lessee shall furnish to such Indemnitee the original
or a certified copy of a receipt for Lessee's payment of such Tax or such other
evidence of payment as is reasonably acceptable to such Indemnitee.
SECTION 1.57 Reports. If any report, return or statement is required to
-------
be filed with respect to any Taxes that are subject to indemnification under
this Article VIII, Lessee shall, if Lessee is permitted by Applicable Laws,
------------
timely prepare and file such report, return or statement; provided, however,
--------- -------
that if Lessee is not permitted by Applicable Laws to file any such report,
Lessee will promptly so notify the appropriate Indemnitee, in which case such
Indemnitee will file any such report after preparation thereof by Lessee.
SECTION 1.58 Withholding Tax Exemption. At least ten (10) Business Days
-------------------------
prior to the first date on which any payment is due under any Note for the
account of any Lender which is a "foreign corporation, partnership or trust"
within the meaning of the Code, and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Section 1441 or 1442 of the Code, such
Lender agrees that it will have delivered to each of Lessee, Lessor, Trustee and
-43-
Administrative Agent two (2) duly completed copies of United States Internal
Revenue Service form W-8BEN or W-8EC1, in either case with completed and
accurate taxpayer identifying numbers, certifying in either case that such
Lender is entitled to receive payments under the Operative Documents without
deduction or withholding of any United States federal income taxes in accordance
with Section 7.10 of the Loan Agreement.
------------
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 1.59 Survival of Agreements. The representations, warranties,
----------------------
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Agreement and any of the other Operative Documents, the transfer of the
Equipment to or by Lessor or Trustee as provided herein or in any other
Operative Documents, any disposition of any interest of Lessor or Trustee in the
Equipment, and the purchase and sale of the Notes, payment therefor and any
disposition thereof, and shall be and continue in effect notwithstanding any
investigation made by any party hereto or to any of the other Operative
Documents or the fact that any such party may waive compliance with any of the
other terms, provisions or conditions of any of the Operative Documents.
SECTION 1.60 No Broker, etc. Except for Lessee's engagement of Bank of
---------------
America as Arranger in connection with the transactions contemplated hereby,
none of the parties has authorized, retained or employed any broker, finder or
financial advisor to act on its behalf in connection with this Agreement, nor
authorized any broker, finder or financial advisor retained or employed by any
other Person so to act, nor incurred any fees or commissions to which Trustee or
any Lender might be subjected by virtue of its entering into the transactions
contemplated by this Agreement. Bank of America's sole compensation for acting
hereunder, other than as a Lender, is the receipt of the amounts provided for in
the Operative Documents and in the Arranger Fee Letter. Any party who is in
breach of this representation shall indemnify and hold the other parties
harmless from and against all liabilities arising out of such breach of this
representation.
SECTION 1.61 Amendments. Neither this Agreement nor any of the other
----------
Operative Documents, nor any of the terms hereof or thereof, may be terminated,
amended, supplemented, waived or modified orally, but only by an instrument in
writing signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification shall be sought and consented to
by the Required Lenders; and no such termination, amendment, supplement, waiver
or modification shall be effective unless a signed copy thereof shall have been
delivered to Trustee, Lessor, Lessee, Administrative Agent and the Lenders.
Trustee, Lessor and Lessee shall not be permitted to amend, modify or supplement
the Lease or any other Operative Document without the written consent of the
Required Lenders; provided, that without the prior written consent of each
--------
Lender, Trustee shall not:
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(1) modify any of the provisions of this Section 9.3, change the
-----------
definition of "Required Lenders", or modify or waive any provision of any
Operative Document requiring action by any of the foregoing, or release any
Collateral (except as otherwise specifically provided in any Operative
Document);
(2) reduce the amount or change the time of payment of (or waive
a default in any payment of) any amount of principal owing or payable under
any Note or interest owing or payable on any Note, reduce the amount or
change the time of payment of (or waive a default in any payment of) any
fee, or modify any of the provisions of Section 2.2 of the Trust Agreement;
-----------
(3) modify, amend, waive or supplement any of the provisions of
Sections 3.1, 3.2, 3.4, 4.1, 5.1 and 5.2 of the Lease;
------------ --- --- --- --- ---
(4) reduce, modify, amend or waive any indemnities in favor of
any Lender;
(5) reduce the amount or change the time of payment of Rent or
the Lease Balance;
(6) consent to any assignment of the Lease releasing Lessee from
its obligations to pay Rent or the Lease Balance or changing the absolute
and unconditional character of such obligations, except as permitted by
this Agreement;
(7) permit the creation of any Lien on the Trust Estate or any
part thereof except as contemplated by the Operative Documents, or deprive
any Lender of the benefit of the security interest and Lien secured by the
Trust Estate.
SECTION 1.62 Cumulative Remedies; No Waiver. The rights, powers,
------------------------------
privileges and remedies of the Participants provided herein or in any Note or
other Operative Document are cumulative and not exclusive of any right, power,
privilege or remedy provided by law or equity. No failure or delay on the part
of any Participant in exercising any right, power, privilege or remedy may be,
or may be deemed to be, a waiver thereof; nor may any single or partial exercise
of any right, power, privilege or remedy preclude any other or further exercise
of the same or any other right, power, privilege or remedy. The terms and
conditions of Section 2.1 and Article III hereof are inserted for the sole
----------- -----------
benefit of the Participants; the same may be waived in whole or in part, with or
without terms or conditions, in respect of any Advance without prejudicing any
Participant's rights to assert them in whole or in part in respect of any other
Advance.
SECTION 1.63 Nature of Lenders' Obligations. The obligations of the
------------------------------
Lenders hereunder are several and not joint or joint and several. Nothing
contained in this Agreement or any other Operative Document and no action taken
by the Participants or any of them pursuant hereto or thereto may, or may be
deemed to, make the Lenders a partnership, an association, a joint venture or
other entity, either among themselves or with Lessee or any Affiliate of Lessee.
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Each Lender's obligation to make any Loan pursuant hereto or the Loan Agreement
is several and not joint or joint and several, and in the case of the initial
Loans only is conditioned upon the performance by all other Lenders of their
obligations to make initial Loans. A default by any Lender will not increase
the Commitment Percentage of any other Lender. Any Lender not in default may,
if it desires, assume in such proportion as the nondefaulting Lenders agree the
obligations of any Lender in default, but no Lender is obligated to do so.
SECTION 1.64 Notices. Except as otherwise expressly provided in the
------- ------
Operative Documents, all notices, requests, demands, directions and other
communications provided for hereunder or under any other Operative Document must
be in writing and must be mailed, telegraphed, telecopied, dispatched by
commercial courier or delivered to the appropriate party at the address set
forth in Schedule III or, as to any party to any Operative Document, at any
------------
other address as may be designated by it in a written notice sent to all other
parties to such Operative Document in accordance with this Section. Except as
------
otherwise expressly provided in any Operative Document, if any notice, request,
demand, direction or other communication required or permitted by any Operative
Document is given by mail, it will be effective on the earlier of receipt or the
fourth Business Day after deposit in the United States mail with first class or
airmail postage prepaid; if given by telegraph or cable, when delivered to the
telegraph company with charges prepaid; if given by telecopier, when receipt is
confirmed (whether electronically or otherwise) by the notifying party; if
dispatched by commercial courier, on the scheduled delivery date; or if given by
personal delivery, when delivered.
SECTION 1.65 Execution of Operative Documents. Unless Trustee otherwise
--------------------------------
specifies with respect to any Operative Document, (a) this Agreement and any
other Operative Document may be executed in any number of counterparts and any
party hereto or thereto may execute any counterpart, each of which when executed
and delivered will be deemed to be an original (except to the extent set forth
in Section 15.3 of the Lease), and all of which counterparts of this Agreement
------------
or any other Operative Document, as the case may be, when taken together will be
deemed to be but one and the same instrument, and (b) execution of any such
counterpart may be evidenced by a telecopier transmission of the signature of
such party. The execution of this Agreement or any other Operative Document by
any party hereto or thereto will not become effective until counterparts hereof
or thereof, as the case may be, have been executed by all the parties hereto or
thereto.
SECTION 1.66 No Third Parties Benefitted. This Agreement is made for the
---------------------------
purpose of defining and setting forth certain obligations, rights and duties of
Lessee, Lessor, Trustee, Administrative Agent and the Lenders in connection with
the Advances and Loans, as the case may be, and is made for the sole benefit of
Lessee, Lessor, Trustee, Administrative Agent and the Lenders, and Trustee's,
Lessor's, Lessee's, Administrative Agent's and the Lenders' permitted successors
and assigns. Except as provided in Sections 6.2 and 6.3, no other Person shall
------ ------------ ---
have any rights of any nature hereunder or by reason hereof.
SECTION 1.67 Confidentiality. Each Participant agrees to hold all
---------------
confidential information that it may receive from Lessee pursuant to this
Agreement or other Operative
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Documents in confidence, except for disclosure: (a) to other Participants; (b)
------
to legal counsel and accountants for Lessee or any Participant; (c) to other
professional advisors to Lessee or any Participant, provided that the recipient
--------
has accepted such information subject to a confidentiality agreement
substantially similar to this Section; (d) to regulatory officials having
jurisdiction over that Participant; (e) to any Gaming Authority having
regulatory jurisdiction over Hollywood Casino, Lessee, HCS I, HCS II, or any of
their respective Subsidiaries, provided that each Lender agrees to notify Lessee
--------
of any such disclosure unless prohibited by Applicable Laws; (f) as required by
Applicable Laws or legal process, provided that such Lender agrees to notify
Lessee of any such disclosures unless prohibited by Applicable Laws or in
connection with any legal proceeding to which that Lender and Lessee are adverse
parties; and (g) to another financial institution in connection with a
disposition or proposed disposition to that financial institution of all or part
of that Lender's interests hereunder or a participation interest in its Notes,
provided that the recipient has accepted such information subject to a
--------
confidentiality agreement substantially similar to this Section. For purposes of
the foregoing, "confidential information" shall mean any information respecting
Lessee, HCS I or HCS II, or their respective Subsidiaries, reasonably considered
by Lessee to be confidential, other than (i) information previously filed with
any Governmental Authority and available to the public, (ii) information
previously published in any public medium from a source other than, directly or
indirectly, that Lender, and (iii) information previously disclosed by Hollywood
Casino, Lessee, HCS I, HCS II, or any of their respective Subsidiaries to any
Person not associated with such Person without a confidentiality agreement or
obligation substantially similar to this Section. Nothing in this Section shall
be construed to create or give rise to any fiduciary duty on the part of Trustee
or the Lenders to Lessee or any of its Affiliates.
SECTION 1.68 Integration. This Agreement, together with the other
-----------
Operative Documents to which Lessor, Lessee, Trustee, Administrative Agent, the
Lenders or any of them are party, the Arranger Fee Letter, the Administrative
Agent Fee Letter and the Trustee Fee Letter, constitute the complete and
integrated agreement of the parties on the subject matter hereof and supersedes
all prior agreements, written or oral, on the subject matter hereof. In the
event of any conflict between the provisions of this Agreement and those of any
other Operative Document, the provisions of this Agreement shall control and
govern; provided that the inclusion of supplemental rights or remedies in favor
--------
of Lessor, Trustee, Administrative Agent or the Lenders in any other Operative
Document shall not be deemed a conflict with this Agreement. Each Operative
Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.
SECTION 1.69 Severability of Provisions. Any provision in any Operative
--------------------------
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining
provisions, or the operation, enforceability or validity of that provision as to
any other party or in any other jurisdiction, and to this end the provisions of
all Operative Documents are declared to be severable.
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SECTION 1.70 Headings. Article and Section headings in this Agreement
--------
and the other Operative Documents are included for convenience of reference only
and are not part of this Agreement or the other Operative Documents for any
other purpose.
SECTION 1.71 Time of the Essence. Time is of the essence of the
-------------------
Operative Documents.
SECTION 1.72 Gaming Authorities. Arranger, Trustee, Lessor,
------------------
Administrative Agent and each of the Lenders agree to cooperate with all Gaming
Authorities in connection with the administration of their regulatory
jurisdiction over Lessee, its Restricted Subsidiaries, HCS I and HCS II
including the provision of such documents or other information as may be
requested by any such Gaming Authorities relating to Lessee, any of its
Restricted Subsidiaries, HCS I or HCS II, or to the Operative Documents.
SECTION 1.73 Release of Lien. Each Lender hereby instructs each of
---------------
Trustee and Lessor to release the Lien created by the Lease against the
Equipment at the expense of Lessee promptly upon Lessee's payment in full, in
immediately available funds, of the Lease Balance and of all other amounts then
due and owing under the Operative Documents or in the event such Equipment is
released from the Trust Estate in accordance with the Operative Documents.
Each Lender, at the expense of Lessee, will promptly and duly execute
and deliver all documents and take such further action as may be necessary or
advisable to release, in accordance with the preceding paragraph, the applicable
Liens, including, if requested by Lessee, the recording or filing of any
document evidencing the release of such Liens in accordance with the Applicable
Laws of the appropriate jurisdictions.
SECTION 1.74 Transaction Costs. Lessee shall pay all Transaction Costs
-----------------
whether or not the transactions contemplated hereby are consummated. In
addition, Lessee agrees to pay or reimburse, on demand, (a) Administrative Agent
and Lessor for all their reasonable out-of-pocket costs and expenses, including
reasonable attorneys' fees, incurred in connection with (i) entering into, or
the giving or withholding of, any future amendments, supplements, waivers or
consents with respect to the Operative Documents; and (ii) any Casualty or
termination of the Lease or any other Operative Documents; and (b)
Administrative Agent, Lessor, Trustee and each Lender for all their reasonable
out-of-pocket costs and expenses, including reasonable attorneys' fees, incurred
in connection with (i) the negotiation and documentation of any restructuring or
"workout," whether or not consummated, of any Operative Document; (ii) the
enforcement or attempted enforcement, or preservation of any rights or remedies
under the Operative Documents; and (iii) any transfer by an Indemnitee of any
interest in the Loan or the Notes during the continuance of an Event of Default.
The foregoing costs and expenses shall include filing fees, recording fees,
appraisal fees, search fees, other out-of-pocket expenses, and the reasonable
fees and out-of-pocket expenses of any legal counsel (including reasonably
allocated costs of legal counsel employed by any Participant), independent
public accountants and other outside experts retained by any Participant,
whether or not such costs and expenses are incurred or suffered by any
Participant in connection with or during the course of any bankruptcy or
insolvency
-48-
proceedings of Lessee, any of its Restricted Subsidiaries, HCS I or HCS II,
provided, however, that in the case of costs and expenses to be paid pursuant to
-------- -------
clause (a), Lessee shall only be obligated to pay the reasonable costs and
----------
expenses of a single counsel to Administrative Agent, Trustee and Lessor. Such
costs and expenses shall also include, in the case of any amendment or waiver of
any Operative Document requested by Lessee, the reasonable administrative costs
of Trustee reasonably attributable thereto. Lessee shall pay any and all
documentary and other taxes pursuant to Article 8. Any amount payable to any
---------
Participant under this Section shall bear interest from the second Business Day
following the date of demand for payment at the Overdue Rate.
SECTION 1.75 Successors and Assigns. This Agreement shall be binding
----------------------
upon the parties hereto and their respective successors and assigns, and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
SECTION 1.76 Final Agreement. THIS AGREEMENT, TOGETHER WITH THE
---------------
OPERATIVE DOCUMENTS AND THE FEE LETTERS, REPRESENT THE ENTIRE FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND THE
OTHER OPERATIVE DOCUMENTS. THIS AGREEMENT CANNOT BE MODIFIED, SUPPLEMENTED,
AMENDED, RESCINDED OR CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES, EXCEPT BY AN INSTRUMENT IN WRITING
SIGNED BY TEE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
SECTION 1.77 Reproduction of Documents. This Agreement, all documents
-------------------------
constituting Schedules or Exhibits hereto, and all documents relating hereto
received by a party hereto, including: (a) consents, waivers and modifications
that may hereafter be executed; (b) documents received by Lessor or Trustee in
connection with Lessor's receipt and/or acquisition of the Equipment; and (c)
financial statements, certificates, and other information previously or
hereafter furnished to Lessor or Trustee may be reproduced by Lessor or Trustee
by any photographic, photostatic, microfilm, micro-card, miniature photographic
or other similar process. Each of the Lenders agrees and stipulates that, to
the extent permitted by law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by Lessor or Trustee in the regular course of business)
and that, to the extent permitted by law, any enlargement, facsimile, or further
reproduction of such reproduction shall likewise be admissible in evidence;
provided, however, that no such reproduction shall be presented or accepted in
-------- -------
lieu of the original of such reproduction for purposes of Article 9 of the UCC
or any other applicable laws regarding chattel paper.
SECTION 1.78 Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN, AND
-------------
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
OF SUCH STATE, EXCEPT TO
-49-
THE EXTENT THAT THE EXERCISE OF CERTAIN DEFAULT RIGHTS OR REMEDIES HEREUNDER OR
UNDER THE OTHER OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH LAWS (INCLUDING
WITHOUT LIMITATION THE GAMING LAWS) OF THE STATE OF LOUISIANA.
SECTION 1.79 Compliance with Law. It is the intent of Lessee and the
-------------------
Participants to conform to and contract in strict compliance with applicable
usury law from time to time in effect. All agreements among any of the
Participants and Lessee (of any other party liable with respect to any of the
Obligations under the Operative Documents) are hereby limited by the provisions
of this paragraph which shall override and control all such agreements, whether
now existing or hereafter arising and whether written or oral. In no way, nor
in any event or contingency (including but not limited to prepayment, default,
demand for payment, or acceleration of the maturity of any obligation), shall
the interest taken, reserved, contracted for, charged or received under this
Agreement or otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any document, interest
would otherwise be payable in excess of the maximum nonusurious amount, any such
construction shall be subject to the provisions of this Section and such
document shall be automatically reformed and the interest payable shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest under applicable law and which would apart from this
provision be in excess of the maximum lawful nonusurious amount, an amount equal
to the amount which would have been excessive interest shall, without penalty,
be applied to the reduction of the principal amount owing on the Obligations
evidenced hereby in the inverse order of their maturity and not to the payment
of interest, or refunded to Lessee or the other payor thereof if and to the
extent such amount which would have been excessive exceeds such unpaid
principal. The right to accelerate maturity of the Obligations pursuant to any
Operative Document does not include the right to accelerate any interest which
has not otherwise accrued on the date of such acceleration, and the Lenders do
not intend to charge or receive any unearned interest in the event of
acceleration. All interest paid or agreed to be paid to the Lenders shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full stated term (including any renewal or extension) of
such Obligations so that the amount of interest on account of such Obligations
does not exceed the maximum nonusurious amount permitted by applicable law. As
used in this paragraph, the term "applicable law" shall mean such laws as they
now exist or may be changed or amended or come into effect in the future.
SECTION 1.80 Waiver of Right to Trial by Jury. EACH PARTY TO THIS
--------------------------------
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY OPERATIVE DOCUMENT OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY OPERATIVE DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
-50-
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 1.81 Nonrecourse to Paddlewheels. Notwithstanding anything to the
contrary contained in this Agreement or any other Operative Document,
Paddlewheels shall have no liability for the payment of Rent by Lessee under the
Lease or performance of any covenant, representation, warranty or obligation of
Lessee under any Operative Document.
SECTION 1.82 Payments Set Aside. To the extent that Lessee makes a payment
to Trustee, Lessor, Administrative Agent or the Lenders, or Lessor, Trustee,
Administrative Agent or the Lenders exercise their right of set-off, and such
payment or the proceeds of such set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any discretion) to be repaid to a trustee, receiver or
any other party, in connection with any insolvency of Lessee, HCS I, HCS II or
any Subsidiary of Lessee, then (a) to the extent of such recovery the obligation
or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
set-off had not occurred, and (b) each Lender severally agrees to pay to
Administrative Agent upon demand its pro rata share of any amount so recovered
for distribution by Administrative Agent in accordance with the Loan Agreement.
SECTION 1.83 No Marshaling/Other Loans and Set-Off. Notwithstanding any
provisions in documents related to other credit facilities or other agreements
between any Lender and Lessee, no Lender hereunder may be compelled to marshal
any collateral or other assets it may hold from or for the benefit of Lessee.
Any Lender may make other extensions of credit, or renew or extend any existing
extensions of credit to Lessee or have other relationships with Lessee. No
Lender shall have any right or interest in any property taken as collateral for
such other extensions of credit or in any property or deposit in the possession
or control of any other Lender that may be or become collateral for or otherwise
available for payment of the obligations hereunder by reason of the inclusion of
any "cross-reference" provisions in the documentation associated with such other
extensions of credit, provided, however, if any Lender with such rights elects
to exercise any right of set-off, banker's lien or counterclaim, all Lenders
shall be entitled to a pro rata share of the proceeds realized as a result of
such exercise. Lessee expressly consents to the foregoing.
SECTION 1.84 Trust Agreement. The provisions of Section 5.1 of the Trust
Agreement limiting the reimbursement and indemnification obligations of the
Lenders are incorporated by reference into this Agreement.
SECTION 1.85 Purported Oral Amendments. LESSEE EXPRESSLY ACKNOWLEDGES THAT
THIS AGREEMENT AND THE OTHER OPERATIVE
-51-
DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF
WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION
9.3. LESSEE AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF
PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF TRUSTEE,
LESSOR, ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY WITH SECTION 9.3
TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR
THE OTHER OPERATIVE DOCUMENTS.
[Signature pages follow]
-52-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
HOLLYWOOD CASINO SHREVEPORT,
a Louisiana general partnership, as Lessee
By: HCS I, Inc., a Louisiana corporation,
its managing general partner
By _________________________________
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
S-1
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity except
as expressly stated herein, but solely
as Lessor and Trustee
By _________________________________
---------------------------------
[Printed Name and Title]
S-2
FIRST SECURITY TRUST COMPANY OF NEVADA,
not in its individual capacity except as
expressly stated herein, but solely as
Administrative Agent
By _________________________________
---------------------------------
[Printed Name and Title]
S-3
BANK OF AMERICA, NATIONAL ASSOCIATION,
not in its individual capacity except as
expressly stated herein, but solely as
Arranger and Documentation Agent
By _________________________________
---------------------------------
[Printed Name and Title]
S-4
BANC OF AMERICA LEASING & CAPITAL, LLC,
as a Lender
By _________________________________
---------------------------------
[Printed Name and Title]
S-5
BANK OF AMERICA, NATIONAL ASSOCIATION,
as a Lender
By _________________________________
---------------------------------
[Printed Name and Title]
S-6
HIBERNIA NATIONAL BANK,
as a Lender
By _________________________________
---------------------------------
[Printed Name and Title]
S-7
TEXAS CAPITAL BANK N.A.,
as a Lender
By _________________________________
---------------------------------
[Printed Name and Title]
S-8
SCHEDULE I TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
HOLLYWOOD CASINO SHREVEPORT
CATEGORIES OF EQUIPMENT
-----------------------
Gaming Equipment:
Slot Machines
Table Games
Cage Equipment
Operating Equipment:
Kitchen Equipment
Distributed Audio System
CCTV Equipment
Telephone System
Computers and Peripherals
Switchgear and Generators
Fire Pumps
HVAC Equipment
Elevators
Escalators
Exterior Signage
Interior Signage
Furniture and Furnishings:
Guestrooms
Casino
Food & Beverage
Public Areas
Back of House
SCHEDULE II TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
HOLLYWOOD CASINO SHREVEPORT
LENDER COMMITMENTS
------------------
---------------------------------------------------------------------------
Lender Commitment
------ ----------
---------------------------------------------------------------------------
Banc of America Leasing & Capital $13,000,000
---------------------------------------------------------------------------
Bank of America $ 5,000,000
---------------------------------------------------------------------------
Hibernia National Bank $10,000,000
---------------------------------------------------------------------------
Texas Capital Bank $ 2,000,000
---------------------------------------------------------------------------
Total Commitments $30,000,000
---------------------------------------------------------------------------
SCHEDULE III TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
HOLLYWOOD CASINO SHREVEPORT
NOTICE INFORMATION, FUNDING
---------------------------
OFFICES AND WIRE INSTRUCTIONS
-----------------------------
LESSEE
------
HOLLYWOOD CASINO SHREVEPORT
Address for all communications (except wire transfers)
Hollywood Casino Shreveport
Two Xxxxxxxx Xxxxx, Xxxxx 0000
00000 Xxxx Xxxx, XX 48
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxx
Phone: (000) 000-0000
Facsimile: ______________________
E-mail: _______________________________
Address for wire transfers:
Bank: ______________________________
ABA Routing #: ______________________________
Account #: ______________________________
Account Name: ______________________________
Attn: ______________________________
Reference: ______________________________
TRUSTEE/LESSOR
--------------
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity, but
solely as Trustee and/or Lessor
Address for all communications (except wire transfers)
First Security Bank, National Association, as Trustee and Lessor
00 Xxxxx Xxxx Xxxxxx, Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Corporate Trust Services
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: Xxxxxxx@xxxxxx.xxx
Address for wire transfers:
Bank: First Security Bank, National Association
ABA Routing #: 000-0000-00
Account #: 051-0000000
Account Name: Corporate Trust Services
Attn: Corporate Trust/XxXxx Xxxxxx (000) 000-0000
Reference: Hollywood Casino Shreveport Acct. No. 36317
AGENT
-----
FIRST SECURITY TRUST COMPANY OF NEVADA,
as Administrative Agent
Address for all communications (except wire transfers):
First Security Bank Trust Company of Nevada, as Administrative Agent
c/o First Security Bank, N.A.
00 Xxxxx Xxxx Xxxxxx, Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Corporate Trust Services
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: Xxxxxxx@xxxxxx.xxx
Address for wire transfers:
Bank: First Security Bank, National Association
ABA Routing #: 000-0000-00
Account #: 051-0000000
Account Name: Corporate Trust Services
Attn: Corporate Trust/XxXxx Xxxxxx (000) 000-0000
Reference: Hollywood Casino Shreveport Acct. No. 36318
LENDERS
-------
1. BANC OF AMERICA LEASING & CAPITAL, LLC
Address for all communications (except wire transfers):
Banc of America Leasing & Capital, LLC
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
XX0-000-00-00
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Credit Contact:
Attn: Xxxxxx Xxxxx, Principal
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: Xxxxxx.Xxxxx@xxxxxxxxxxxxx.xxx
Operations Contact:
Attn: Xxxxx Xxxxxxxxxx, Manager Lease Administration
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: Xxxxx.X.Xxxxxxxxxx@xxxxxxxxxxxxx.xxx
Address for wire transfers:
Bank: Bank of America, N.A.
Address: San Francisco Main Branch #656
ABA Routing #: 121 000 358
Account #: 125 780 3258
Account Name: BALLC
Attn: Xxxx Xxxxxx (000) 000-0000
Reference: Hollywood Casino Shreveport
2. BANK OF AMERICA, NATIONAL ASSOCIATION
Credit Contact:
Attn: Xxxxx Xxxxx, Managing Director
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: Xxxxx.xxxxx@xxxxxxxxxxxxx.xxx
Address for Credit:
Bank of America, National Association
000 Xxxxx Xxxxxx Xxxxxx, 11th Floor
CA9-706-11-01
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Operations Contact:
Attn: Xxxxxx Xxxxx, Xx. Customer Services Specialist
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: Xxxxxx.xxxxx@xxxxxxxxxxxxx.xxx
Address for Operations:
Bank of America, National Association
0000 Xxxxxxx Xxxx.
XX0-000-00-00
Xxxxxxx, Xxxxxxxxxx 00000
Address for wire transfers:
Bank: Bank of America, N.A.
Address: ____________________________
ABA Routing #: 000-000-000
Account #: 37508-36479 Credit Services West
Account Name: Hollywood Casino Shreveport
Attn: Xxxxxx Xxxxx
Reference: _______________________
3. HIBERNIA NATIONAL BANK
Address for all communications (except wire transfers):
Hibernia National Bank
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Credit Contact:
Attn: Xxxxx X. Xxxxxx, Vice President
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxx.xxx
Operations Contact:
Attn: Xxxxx Xxxxxxxx, Administrative Assistant
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxxxxxxxx.xxx
Address for wire transfers:
Bank: Hibernia National Bank
Address: New Orleans, Louisiana
ABA Routing #: 000000000
Account #: 6250-36615
Account Name: Wire Suspense
Attn: Call Xxxxx at Ext 4-3877
Reference: Hollywood Casino Shreveport
4. TEXAS CAPITAL BANK N.A.
Credit Contact:
Attn: Xxxx X. Xxxxxxxxx, Vice President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: xxxx.xxxxxxxxx@xxxxxxxxxxxxxxxx.xxx
Attn: Xxx Xxxxxx, Senior Vice President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: xxx.xxxxxx@xxxxxxxxxxxxxxxx.xxx
Address for Credit:
Texas Capital Bank N.A.
0000 XxXxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Operations Contact
Attn: Xxxxx Xxxxx, Asst. Vice President Business
Banking Services
Phone: (000) 000-0000
Facsimile: (000) 000-0000
E-mail: xxxxx.xxxxx@xxxxxxxxxxxxxxxx.xxx
Address for Operations:
Texas Capital Bank N.A.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Address for wire transfers:
Bank: Texas Capital Bank
Address: 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000
ABA Routing #: 000000000
Account #: _______________________
Account Name: Hollywood Casino Shreveport
Attn: Xxxxx Xxxxx, Leasing Division
Reference: _________________________
SCHEDULE IV TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
HOLLYWOOD CASINO SHREVEPORT
RECORDINGS, FILINGS AND REGISTRATIONS
-------------------------------------
Hollywood Casino Shreveport
---------------------------
UCC filings with Secretary of State of the State of Texas
UCC filings with the Clerk of Court of either Caddo or Bossier parishes
Trustee/Lessor
--------------
UCC filings with the Clerk of Court of either Caddo or Bossier parishes
UCC filings with the Secretary of State of the State of Utah
SCHEDULE V TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
HOLLYWOOD CASINO SHREVEPORT
REQUIRED LICENSES
-----------------
Pursuant to Gaming Laws in Louisiana, the transactions
evidenced by the Operative Documents require the approval of the Louisiana
Gaming Control Board ("LGCB"), which approval has been obtained.
The exercise of remedies by any Participant under any of the
Operative Documents with respect to the Collateral will be limited by Gaming
Laws in Louisiana, which generally require that persons who own or operate a
riverboat casino, receive payments under a casino management agreement or
purchase, possess or sell gaming equipment, hold a valid riverboat gaming
license. No person may hold a riverboat gaming license in Louisiana unless the
person is found qualified or suitable by the LGCB. In order for a Participant to
be found qualified or suitable, the LGCB would have discretionary authority to
require such Participant to file applications and be investigated and found
qualified or suitable as an owner or operator of gaming establishments or
supplier of gaming equipment. If such a Participant is unable or chooses not to
qualify, be found suitable or be licensed to own, operate or sell the
Collateral, it will have to retain an entity licensed to own, operate or sell
the Collateral, which will also be subject to approval by the LGCB. In addition,
in any foreclosure sale or subsequent resale by a Participant, licensing
requirements under Gaming Laws in Louisiana may limit the number of potential
bidders and may delay any sale, which could have an adverse effect on the sale
price of the Collateral.
SCHEDULE VI TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
HOLLYWOOD CASINO SHREVEPORT
AMORTIZATION SCHEDULE
---------------------
----------------------------------------------------------------------------------------------------------------
Lessor's Cost: $30,000,000/1/
----------------------------------------------------------------------------------------------------------------
Payment Payment Amount Payment % of Lessor's Cost Lease Balance/2/
----------------------------------------------------------------------------------------------------------------
0 30,000,000
----------------------------------------------------------------------------------------------------------------
1 2,500,000 8.3333333% 27,500,000
----------------------------------------------------------------------------------------------------------------
2 2,500,000 8.3333333% 25,000,000
----------------------------------------------------------------------------------------------------------------
3 2,500,000 8.3333333% 22,500,000
----------------------------------------------------------------------------------------------------------------
4 2,500,000 8.3333333% 20,000,000
----------------------------------------------------------------------------------------------------------------
5 2,500,000 8.3333333% 17,500,000
----------------------------------------------------------------------------------------------------------------
6 2,500,000 8.3333333% 15,000,000
----------------------------------------------------------------------------------------------------------------
7 2,500,000 8.3333333% 12,500,000
----------------------------------------------------------------------------------------------------------------
8 2,500,000 8.3333333% 10,000,000
----------------------------------------------------------------------------------------------------------------
9 2,500,000 8.3333333% 7,500,000
----------------------------------------------------------------------------------------------------------------
10 2,500,000 8.3333333% 5,000,000
----------------------------------------------------------------------------------------------------------------
11 2,500,000 8.3333333% 2,500,000
----------------------------------------------------------------------------------------------------------------
12 2,500,000 8.3333333% -
----------------------------------------------------------------------------------------------------------------
--------------------
/1/ Or as much as may be advanced under the Loan Agreement.
/2/ Assumes $30,000,000 principal amount advanced under Loan Agreement.
SCHEDULE VII TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
HOLLYWOOD CASINO SHREVEPORT
DISCLOSURE SCHEDULE
-------------------
Pursuant to the terms of the Third Amended and Restated Joint
Venture Agreement of Hollywood Casino Shreveport (Formerly known as the "Queen
of New Orleans at the Hilton Joint Venture" and "QNOV") dated July 21, 1999,
among Shreveport Paddlewheels, L.L.C. ("Shreveport Paddlewheels"), HCS I and HCS
II, as amended by the August 1999 Amendment to the Third Amended and Restated
Joint Venture Agreement of Hollywood Casino Shreveport (Formerly known as the
"Queen of New Orleans at the Hilton Joint Venture" and "QNOV") dated August 2,
1999, among Shreveport Paddlewheels, HCS I and HCS II, including, without
limitation, Section 10.5 thereof, upon the occurrence of certain sales of
Lessee, Shreveport Paddlewheels is entitled to payment of (a) 10% of the net
proceeds of such sale, after payment of outstanding debt and return of
contributed capital and (b) the appraised value of future fees under a Marine
Services Agreement dated September 22, 1999, between Shreveport Paddlewheels and
Lessee.
In The Committee on Equity in Gaming and Tourism and Xxxxx
Xxxxxxx v. Mayor Xxxxx Xxxxxxxxx, No. 447273-B, First Judicial District Court,
Caddo Parish, Louisiana, the plaintiffs have sought, among other things, a writ
of mandamus directing Shreveport Mayor Xxxxx Xxxxxxxxx to find Lessee in
non-monetary default of that certain Ground Lease dated May 19, 1999 between the
City of Shreveport and Lessee (the "Ground Lease") as a result of Lessee's
alleged failure to satisfy certain minority and women owned business procurement
goals set forth in the Ground Lease. Plaintiffs recently sought and obtained
approval to dismiss their mandamus claims and seek declaratory judgment relief.
APPENDIX 1
to
Participation Agreement
-----------------------
DEFINITIONS AND INTERPRETATION
1. Interpretation. In each Operative Document, unless a clear contrary
intention appears:
(1) the singular number includes the plural number and vice versa;
(2) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by the Operative Documents, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(3) reference to any gender includes each other gender;
(4) except as specified in clause (v) below, reference to any
agreement (including any Operative Document), document or instrument means
such agreement, document or instrument as amended, restated, modified or
supplemented and in effect from time to time in accordance with the terms
thereof and, if applicable, the terms of the other Operative Documents, and
reference to any promissory note includes any promissory note which is an
extension or renewal thereof or a substitute or replacement therefor;
(5) any reference to the Indenture or the Management Agreement that
includes the modifier "as in effect on the Closing Date" (or words to a
similar effect) shall mean and refer to the Indenture or the Management
Agreement, as the case may be, as it exists on the Closing Date, without
giving effect to any subsequent amendment, modification (including any
waiver of any applicable term or condition) or termination thereof unless
the Required Lenders have independently consented to any such amendment,
modification (including any waiver of any applicable term) or termination
in writing, in which case such reference to the Indenture shall mean the
Indenture as so amended, modified (including any waiver of any applicable
term) or terminated;
(6) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part,
which is in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision of
any Applicable Law means that section or other provision of such Applicable
Law from time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section
-1-
or other provision;
(7) reference in any Operative Document to any Article, Section,
Appendix, Schedule or Exhibit means such Article or Section thereof or
Appendix, Schedule or Exhibit thereto;
(8) "hereunder", "hereof", "hereto" and words of similar import shall
be deemed references to an Operative Document as a whole and not to any
particular Article, Section or other provision thereof;
(9) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term, and, for purposes of each Operative Document, the rule of ejusdem
generis shall not be applicable to limit a general statement, which is
followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned; and
(10) relative to the determination of any period of time, "from" means
"from and including" and "to" means "to but excluding".
2. Accounting and Financial Determinations. Unless otherwise specified, all
accounting terms used in each Operative Document shall be interpreted, all
accounting determinations and computations thereunder shall be made, and all
financial statements required to be delivered thereunder shall be prepared, in
accordance with GAAP.
3. Legal Representation of the Parties. The Operative Documents were
negotiated by the parties thereto with the benefit of legal representation and
any rule of construction or interpretation otherwise requiring the Operative
Documents to be construed or interpreted against any party shall not apply to
any construction or interpretation hereof or thereof.
A. Defined Terms.
(1) The following terms (together with any component defined terms and
any cross-referenced terms used therein), when used in the Operative
Documents, shall have the meanings specified for such terms (and the same
shall be true for any such component and cross-referenced defined terms) in
the Indenture as in effect on the Closing Date:
-2-
"Acquired Debt" "Affiliate"
"Asset Sale" "Attributable Debt"
"Bankruptcy Law" "Cash Equivalents"
"Disqualified Stock" "Fixed Charge Coverage Ratio"
"GAAP" "Membership Interest Purchase
"Permitted Business" Agreement"
"Operating"
"Permitted Debt" "Restricted Investment"
"Restricted Subsidiary"
"Unrestricted Subsidiary"
(2) Unless a clear contrary intention appears, terms defined herein shall
have the respective meanings indicated below when used in each Operative
Document:
"Additional Costs" means the amounts payable pursuant to Sections 2.9,
2.10, 2.11 and 2.12 of the Loan Agreement and the other amounts due and payable
by the Borrower under any Loan Document other than principal and interest on the
Notes.
"Administrative Agent" means First Security Trust Company of Nevada, or
each other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 7.9 of the Loan Agreement.
"Administrative Agent Fee Letter" means the letter agreement, dated as
of March 31, 2000, between Lessee and Administrative Agent.
"Administrative Agent-Related Persons" means First Security Trust
Company of Nevada, and any successor agent arising under Section 7.9 of the Loan
Agreement, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Advance" means, as the context may require, the advance of funds by
the Lenders to Lessor, and the advance by Lessor to, or for the benefit of,
Lessee pursuant to Articles II and III of the Participation Agreement to finance
the acquisition of the Equipment.
"Advance Date" means the actual date on which an Advance is made
pursuant to the Participation Agreement.
"Advance Request" is defined in Section 2.4(a) of the Participation
Agreement.
"Affiliate Transaction" is defined in Section 5.21 of the Participation
Agreement.
"After-Tax Basis" means, with respect to any payment to be received
(taking into account any tax savings or reductions in the amount of any Tax not
indemnifiable hereunder as a result of circumstances giving rise to a Tax for
which an indemnity payment has been made), the
-3-
amount of such payment increased so that, after deduction of the amount of all
taxes required to be paid by the recipient with respect to the receipt by the
recipient of such amounts, such increased payment (as so reduced) is equal to
the payment otherwise required to be made. In making a determination of the
increased payment, it shall be assumed that the Indemnitee was subject to
taxation at the highest marginal Federal rates and applicable state and local
income tax rates applicable to widely-held corporations for the year in which
such income is taxed.
"Aggregate Commitment Amount" means $30,000,000.
"Alteration" means a Permitted Alteration or a Required Alteration.
"Alternate Base Rate" means, for any day, an interest rate per annum
(rounded upwards, if necessary, to the highest 1/8 of 1%) equal to the higher of
(A) the rate of interest in effect for such day as publicly announced by Bank of
America in San Francisco, California from time to time as its reference rate for
calculating interest on certain loans (the "Reference Rate"), which need not be
the lowest interest rate charged by Bank of America and (B) Federal Funds
Effective Rate most recently determined by Administrative Agent plus 1/2 of 1%
per annum. "Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the weighted
average of the rate on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
succeeding 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 the day of such transactions received by Administrative Agent
from three federal funds brokers of recognized standing selected by it. For
purposes of this Agreement, any change in the Alternate Base Rate due to a
change in the Federal Funds Effective Rate or the Reference Rate shall be
effective on the effective date of such change.
"Alternate Base Rate Loan" means a Loan bearing interest by reference
to the Alternate Base Rate.
"Amortization Schedule" is defined in Section 2.13 of the Participation
Agreement.
"Applicable Law" means all existing and future applicable laws, rules,
regulations (including Environmental Laws) statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and interpretations
by, any Governmental Authority, and applicable judgments, decrees, injunctions,
writs, orders or like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction
(including those pertaining to health, safety or the environment (including
wetlands) and those pertaining to the construction or operation of facilities).
"Arrangement Fee" means the arrangement fee payable to the Arranger in
the amount set forth in the Arranger Fee Letter.
"Arranger" means Bank of America.
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"Arranger Fee Letter" means the letter agreement, dated as of July 16,
1999, between the Arranger and Lessee.
"Assigned Agreements" means each of the Participation Agreement, the
Lease, the Security Documents, the Bills of Sale, the Purchase Order
Assignments, the Certificates of Acceptance, and each other document assigned to
Administrative Agent (on behalf of the Lenders) as Collateral pursuant to the
Security Agreement.
"Bank" is defined in Section 4.3 of the Participation Agreement.
"Bank of America" means Bank of America, National Association, a
national banking association.
"Base Period" means the period commencing on and including the last day
of the Interim Period and ending on the Maturity Date, unless earlier
terminated.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of an ERISA
Group.
"Xxxx of Sale" means a xxxx of sale, substantially in the form of
Exhibit F to the Participation Agreement, to be delivered to Trustee pursuant to
the provisions of the Participation Agreement.
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Board of Directors" means: (a) with respect to a corporation, the
Board of Directors of the corporation; (b) with respect to a partnership, the
Board of Directors of the managing general partner of the partnership; and (c)
with respect to any other Person, the board or committee of such Person serving
a similar function.
"Borrower" means Trustee, not in its individual capacity, but solely in
its trust capacity under the Trust Agreement, as the borrower under the Loan
Agreement, and as Lessor under the Lease.
"Business Day" means any day other than a Saturday or Sunday or other
day on which commercial banks in Shreveport, Louisiana are closed, and, as
applicable, any day on which commercial banks in Dallas, Texas, Salt Lake City,
Utah, San Francisco, California, New York, New York, and solely with respect to
the definition of LIBO Rate, London, England, are authorized or required by law
to close.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central
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bank or other Governmental Authority, or any other law, rule or regulation,
whether or not having the force of law, in each case, regarding capital adequacy
of any bank or of any Person controlling a bank.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real (immovable), personal (movable), or mixed) by that Person
as lessee which, in conformity with GAAP, is, or is required to be, accounted
for as a capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" means all obligations under Capital
Leases of any Person, in each case taken at the amount thereof accounted for as
liabilities in accordance with GAAP.
"Capital Stock" means: (a) in the case of a corporation, corporate
stock; (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Casino" means any area, room or rooms wherein gaming is conducted at
the Resort and includes any bar, cocktail lounge or other facilities housed
therein, as well as the area occupied by the games.
"Casualty" means as to an item of Equipment, an event or occurrence in
which an item of Equipment is lost, stolen, totally destroyed, irreparably
damaged from any cause whatsoever, damaged beyond economic repair, or rendered
permanently unfit for normal use for any reason whatsoever (other than
obsolescence) or damaged so as to result in an insurance settlement on the basis
of a total loss or a constructive or compromised total loss, or taken or
requisitioned by Condemnation.
"Casualty Item Amount" means the product of the Lease Balance on the
date of determination times a fraction the numerator of which is the Equipment
Cost of such item of Equipment suffering the Casualty and the denominator of
which is Lessor's Cost for all Equipment then subject to the Lease.
"Casualty Recoveries" means the proceeds of any recovery in respect of
any Casualty from insurance, a Governmental Authority or otherwise.
"Category of Equipment" means, individually, each of the categories of
Equipment set forth in Schedule I to the Participation Agreement.
"Certificate of Acceptance" means each Certificate of Acceptance, fully
executed by Lessee, accepting Equipment under the Lease, substantially in the
form of Exhibit G to the Participation Agreement.
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"Change of Control" means the occurrence of the following:
(3) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of Hollywood Casino and
its Subsidiaries taken as a whole;
(4) the liquidation or dissolution of, or the adoption of a plan relating
to the liquidation or dissolution of, either of Lessee or Hollywood Casino or
any successor thereto;
(5) Hollywood Casino becoming aware of (by way of a report or any other
filing pursuant to Section 13(d) of the Exchange Act, proxy vote, written notice
or otherwise) the acquisition by any Person or related group (within the meaning
of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor
provision to either of the foregoing, including any "group" acting for the
purpose of acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act), other than any of the Principals, in a
single transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision) of 30% or more of the total voting power entitled to vote in the
election of the Board of Directors of Hollywood Casino or such other Person
surviving the transaction and, at such time, the Principals collectively shall
fail to beneficially own, directly or indirectly, securities representing
greater than the combined voting power of Hollywood Casino's or such other
Person's voting stock as is beneficially owned by such Person or group;
(6) during any period of two consecutive years, individuals who at the
beginning of such period constituted Hollywood Casino's Board of Directors
(together with any new directors whose election or appointment by such board or
whose nomination for election by the stockholders of Hollywood Casino was
approved by a vote of a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) ceasing for any reason to constitute a
majority of Hollywood Casino's Board of Directors then in office;
(7) Hollywood Casino consolidates with, or merges with or into, any Person,
or any Person consolidates with, or merges with or into, Hollywood Casino, in
any such event pursuant to a transaction in which any of the outstanding voting
stock of Hollywood Casino is converted into or exchange for cash, securities or
other property, other than any such transaction where the voting stock of
Hollywood Casino outstanding immediately prior to such transaction is converted
into or exchanged for voting stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the
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outstanding shares of such voting stock of such surviving or transferee
Person immediately after giving effect to such issuance;
(8) the first day on which Hollywood Casino ceases to beneficially own
all of the outstanding Equity Interests of Lessee (other than the Equity
Interests of Lessee owned by Paddlewheels as of the Closing Date);
(9) the termination or repudiation by the Manager of the Management
Agreement; or
(10) any event or circumstance constituting a "change in control" or
other similar occurrence under documentation evidencing or governing any
Indebtedness of Lessee, HCS I or HCS II of $5,000,000 or more which results
in an obligation of Lessee, HCS I or HCS II to prepay, purchase, offer to
purchase, redeem or defease such Indebtedness.
"Charges" means freight, installation and applicable sales or use taxes
(or similar taxes, subject to the approval of the Required Lenders) imposed upon
an item of Equipment.
"Claims" means liabilities, obligations, damages, losses, demands,
penalties, fines, claims, actions, suits, administrative and judicial
proceedings (including informal proceedings), judgments, orders, enforcement
actions of any kind and settlements, and any costs, fees, expenses and
disbursements (including legal fees and expenses and costs of investigation
which, in the case of counsel or investigators retained by an Indemnitee, shall
be reasonable) of any kind and nature whatsoever related to any of the foregoing
imposed on, incurred by or asserted against an Indemnitee.
"Closing Date" is defined in Section 2.1 of the Participation
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended or replaced
and in effect from time to time.
"Collateral" means, as used in all Operative Documents other than the
Security Agreement (which contains an independent definition of "Collateral"),
all of the Trust Estate now owned or hereafter acquired by Trustee, upon which a
Lien is purported to be created by the Security Documents.
"Commission" means the Securities and Exchange Commission and any
Person succeeding to the functions thereof.
"Commitment" means (i) with respect to each Lender, the obligation of
the Lender to make Loans to Lessor at the request of Lessee in an aggregate
principal amount not to exceed the amount set forth opposite the Lender's name
on Schedule II to the Participation Agreement, and (ii) with respect to Lessor,
the obligation of Lessor to make Advances (to the extent Lessor
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receives Loans from the Lenders) to or for the benefit of Lessee.
"Commitment Percentage" means, as to any Lender at a particular time
when the Commitments are then in effect, the percentage set forth opposite such
Lender's name under the heading "Commitment Percentage" on Schedule II to the
Participation Agreement or, if the Commitments are not then in effect, the
percentage of the aggregate Loans represented by such Lender's Loans to Lessor.
"Commitment Period" means the period commencing on (and including) the
Closing Date and ending on (and excluding) the earliest of (a) December 31,
2000, (b) the Final Advance Date and (c) the date on which the Commitments shall
have been fully utilized.
"Compliance Certificate" is defined in Section 5.5 of the Participation
Agreement.
"Condemnation" means any condemnation, expropriation, requisition,
confiscation, seizure or other taking or sale of the use, access, occupancy,
servitude, or easement rights or title to the Equipment or any part thereof,
wholly or partially (temporarily or permanently), by or on account of any actual
or threatened expropriation or eminent domain proceeding or other taking of
action by any Person having the power of expropriation or eminent domain or
otherwise, or any transfer made in lieu of any such proceeding or action. A
"Condemnation" shall be deemed to have occurred on the earliest of the dates
that use, occupancy or title vests in the condemning authority.
"Construction Plans" means all drawings, plans and specifications
relating to the Resort prepared by or for Lessee in connection with the
construction financing provided pursuant to the Indenture and related documents,
as the same may be amended or supplemented from time to time.
"Construction Progress Report" means a report substantially in the form
of Exhibit M to the Participation Agreement, to be appropriately completed and
delivered to Administrative Agent from time to time pursuant to Section 3.1(k)
of the Participation Agreement.
"Corporate Trust Department" means the principal corporate trust office
of Trustee, located at 00 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx, Xxxx Xxxx Xxxx, Xxxx
00000, Attention: Corporate Trust Department, or such other office at which the
corporate trust business of Trustee is administered and which Trustee specifies
by notice in writing to Lessor, Lessee, Administrative Agent and each Lender.
"Default" means any event or condition which, with the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule VII, as the same may be updated from time to time in connection with an
Advance Request; provided, however, that for purposes of any requested Advance,
no such update shall be deemed to have
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cured any breach of warranty or representation resulting from the inaccuracy or
incompleteness of the Disclosure Schedule, unless and until the Required Lenders
shall have accepted in writing such update to the Disclosure Schedule.
"Documentation Agent" means Bank of America, in its capacity as
documentation agent. The Documentation Agent shall have no rights, duties or
obligations under this Agreement or the other Operative Documents.
"Dollars" and "$" mean dollars in lawful currency of the United States
of America.
"Environmental Laws" means any and all laws, ordinances, rules,
regulations, judicial decisions, administrative orders and other requirements of
any applicable Governmental Authority relating to environmental matters,
pollution, or hazardous substances, including: the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 X.X.X.xx.xx. 9601-9657; the
Resource Conservation and Recovery Act of 1976, 42 X.X.X.xx.xx. 6901 et seq.;
the Hazardous Materials Transportation Act (49 U.S.C. xx.xx. 1801 et seq.); the
Louisiana Environmental Quality Act, La. R.S. 30:2001-2376; the Louisiana Air
Control Law, La. R.S. 30:2051-2063, the Louisiana Water Control Law, La. R.S.
30: 2071-2088; the Louisiana Hazardous Waste Control Law, La. R.S. 30:2171-2207;
the Louisiana Inactive and Abandoned Hazardous Waste Site Law, La. R.S.
30:2221-2226; the Liability for Hazardous Substance Remedial Action, La. R.S.
30:2271-2290; any other laws that may form the basis of any claim, action,
demand, suit, proceeding, hearing, or notice of violation that is based on or
related to the generation, manufacture, processing, distribution, use,
existence, treatment, storage, disposal, transport, or handling, or the
emission, discharge, release, or threatened release into the environment, of any
hazardous substance, or other threat to the environment.
"Environmental Permits" means all applicable authorizations, consents,
licenses, approvals and permits required under Environmental Laws in connection
with the construction, operation and occupancy of the Resort.
"Environmental Violation" means any activity, occurrence or condition
that violates or results in non-compliance with any Environmental Law in which
damages and penalties in excess of $2,500,000 are reasonably expected to be
imposed in Lessee's judgment.
"Equipment" means, individually, each item of equipment set forth in a
Certificate of Acceptance and in each case as generally described on Schedule I
to the Participation Agreement, and, collectively, each of the foregoing,
together with all substitutions therefor, replacements thereof and additions
thereto from time to time pursuant to the Operative Documents.
"Equipment Cost" means the invoice cost of each item of Equipment, plus
up to an additional twenty percent (20%) thereof for Charges.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for,
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Xxxxxxx Xxxxx).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any applicable regulations issued pursuant thereto, as amended or
replaced and as in effect from time to time.
"ERISA Affiliate" means, with respect to any Person, each Person
(whether or not incorporated) which is required to be aggregated with such
Person pursuant to the requirements of Section 414(b) or (c) of the Code.
"ERISA Group" means, with respect to any Person, such Person and its
ERISA Affiliates.
"Event of Default" means a Lease Event of Default or a Loan Event of
Default.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Commission thereunder.
"Excluded Amounts" means
(11) all indemnity payments and expenses to which Trustee,
Lessor, Bank, Administrative Agent or any Lender (or the respective
successors, assigns, agents, officers, directors or employees of any
such Person) is entitled pursuant to the Operative Documents;
(12) any amounts payable under any Operative Documents to
reimburse Trustee, Lessor, Bank, Administrative Agent or any Lender
(including the reasonable expenses of Trustee, Lessor, Bank,
Administrative Agent and any Lender incurred in connection with any
such payment) for performing any of the obligations of Lessee under and
as permitted by any Operative Document;
(13) any insurance proceeds under policies maintained by
Trustee, Lessor, Bank, Administrative Agent or any Lender and not
required to be maintained by Lessee under the Lease;
(14) any insurance proceeds (or corresponding amounts with
respect to risks that are self-insured by Lessee and the amounts of any
policy deductibles) under liability policies payable to Trustee in its
individual capacity, Administrative Agent or any Lender (or the
respective successors, assigns, agents, officers, directors or
employees of Bank, Administrative Agent or of any Lender);
(15) any amount payable in respect of Transaction Costs; and
(16) any payments of interest on payments referred to in
clauses (a) through (e) above.
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"Fee Letters" means, collectively, the Administrative Agent Fee Letter,
the Arranger Fee Letter and the Trustee Fee Letter.
"Final Advance Date" means the Advance Date specified by Lessee in
writing to be the final Advance Date under the Lease.
"Gaming Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States federal government, any foreign government, any State,
province or city or other political subdivision or otherwise, whether now or
hereafter in existence, or any officer or official thereof (including without
limitation the Louisiana Gaming Control Board and the Louisiana Department of
Public Safety and Corrections, Office of State Police, Riverboat Gaming
Division), with authority to regulate any gaming operation (or proposed gaming
operation) owned, managed or operated by any of Lessee, Hollywood Casino, the
Manager or any of the their respective Subsidiaries, provided, however, that for
purposes hereof, the City of Shreveport, Louisiana, in its capacity as the
ground lessor under the Ground Lease, shall not be considered a "Gaming
Authority."
"Gaming Equipment" means (a) slot machines and other devices which
constitute gaming devices (as defined in applicable Gaming Laws), and (b)
related equipment and apparatus, all as more fully described in the preliminary
appraisal delivered pursuant to Section 3.2(a) of the Participation Agreement,
together with all substitutions therefor, replacements thereof and additions
thereto from time to time pursuant to the Operative Documents.
"Gaming Laws" means the gaming laws of any jurisdiction or
jurisdictions to which Lessee or any of its Subsidiaries is, or may at any time
after the Closing Date, be subject, including without limitation the Louisiana
Riverboat Economic Development and Gaming Control Act, La. R.S. xx.xx. 27:41 et
seq., and the regulations promulgated thereunder, together with any local rules,
regulations or ordinances applicable to the conduct of games of chance at the
Resort.
"Gaming License" means any license, permit, franchise or other
authorization from any Gaming Authority necessary on the Closing Date or at any
time thereafter to own, lease, operate or otherwise conduct the business of
Lessee, the Manager or any of the Restricted Subsidiaries.
"Governmental Authority" means any foreign, Federal, State, county,
parish or local government, any political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Ground Lease" means that certain Ground Lease dated as of May 19, 1999
by and between the City of Shreveport, as landlord, and Lessee (formerly known
as QNOV), as tenant, as the same may be amended, restated, modified or
supplemented from time to time.
"Hazardous Materials" means hazardous wastes, hazardous substances,
hazardous constituents, toxic substances or related materials, whether solids,
liquids or gases, including but
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not limited to substances defined as "hazardous wastes," "hazardous substances,"
"toxic substances," "pollutants," "contaminants," chemicals known to cause
cancer or reproductive toxicity, "radioactive materials," or other similar
designations in, or otherwise subject to regulation under any Environmental Laws
now or hereafter in effect.
"HCS I means HCS I, Inc., a Louisiana corporation, the managing general
partner of Lessee, and its permitted successors and assigns.
"HCS II" means HCS II, Inc., a Louisiana corporation, and its permitted
successors and assigns.
"Hollywood Casino" means Hollywood Casino Corporation, a Delaware
corporation.
"HWCC-Louisiana" means HWCC-Louisiana, Inc., a Louisiana corporation.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of
(a) borrowed money;
(b) obligations evidenced by bonds, notes, debentures or
similar instruments or letters of credit (or reimbursement agreements
in respect thereof);
(c) banker's acceptances;
(d) Capitalized Lease Obligations;
(e) the balance deferred and unpaid of the purchase price of
any property, except any such balance that constitutes an accrued
expense or trade payable;
(f) the obligations of such Person under (i) interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and (ii) other agreements or arrangements designed to
protect such Person against fluctuations in interest rates;
(g) all Indebtedness of others secured by a Lien on any asset
of the specified Person (whether or not such Indebtedness is assumed by
the specified Person); provided, however, that the amount of such
Indebtedness shall be limited to the lesser of the fair market value of
the assets or property to which such Lien attaches and the amount of
the Indebtedness so incurred; and
(h) to the extent not otherwise included, the direct or
indirect guarantee by the specified Person of any Indebtedness of any
other Person;
and any and all deferrals, renewals, extensions, refinancings and
refundings (whether
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direct or indirect) thereof and any amendments, modifications or
supplements thereto, if and to the extent any of the preceding items
(other than letters of credit and hedging obligations described in
clause (f)) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP.
The amount of any Indebtedness outstanding as of any date
shall be:
(1) the accreted value thereof, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indemnified Liabilities" means all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges, expenses and
disbursements (including all reasonable fees and expenses of legal counsel) of
any kind or nature whatsoever which may at any time be imposed on, incurred by
or asserted against any Administrative Agent-Related Person in any way relating
to or arising out of any Operative Document or any document contemplated by or
referred to in any Operative Document, or the transactions contemplated by any
Operative Document, or any action taken or omitted by any Administrative
Agent-Related Person under or in connection with any of the foregoing.
"Indemnitee" means Trustee, in its individual and in its trust
capacity, Lessor, in its individual capacity and in its capacities as Borrower
and Lessor, each Lender, Administrative Agent, any additional separate or
co-trustee appointed in accordance with the terms of the Trust Agreement and the
respective successors, assigns, directors, shareholders, partners, officers,
employees and agents of each of the foregoing.
"Indenture" means the Indenture dated as of August 10, 1999, executed
by and among Lessee and Shreveport Capital, as Issuers, HWCC-Louisiana, HCS I
and HCS II, as Guarantors, and the Indenture Trustee, as the same may be
amended, restated, modified or supplemented from time to time.
"Indenture Security Documents" means the "Collateral Documents" as such
term is used and defined in the Indenture.
"Indenture Trustee" means State Street Bank and Trust Company, as
trustee for the benefit of the noteholders under the Indenture, including any
successor or replacement trustee permitted under the Indenture.
"Insurance Requirements" means all terms and conditions of any
insurance policy required by the Lease to be maintained by Lessee and all
requirements of the issuer of any such policy.
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"Instructing Party" is defined in Section 2.1 of the Trust Agreement.
"Interest Period" means (a) for the Interim Period, each period
beginning on (and including) the date of the relevant Advance and ending on (but
excluding) the last Business Day of the calendar month in which the relevant
Advance is made and each consecutive one-month period thereafter during the
Interim Period, with each such period ending on the last Business Day of the
applicable calendar month, and (b) for the Base Period, the period beginning on
(and including) the last Business Day of the Interim Period and ending on (but
excluding) the last Business Day of the third calendar month thereafter and each
consecutive three-month period thereafter, with each such period ending on the
last Business Day of a calendar month; provided, however, that notwithstanding
the foregoing, (i) no Interest Period during the Interim Period may end later
than the last day of the Interim Period and (ii) no Interest Period may end
later than the Maturity Date.
"Interest Rate" means with respect to any day in any Interest Period
the rate per annum at which interest accrues
(a) on a Loan maintained from time to time during such
Interest Period as an Alternate Base Rate Loan, at a rate equal to the
Alternate Base Rate then in effect plus two percent (2.00%); or
(b) on a Loan maintained as a LIBO Rate Loan, during such
Interest Period applicable thereto, at a rate equal to the LIBO Rate
then in effect plus four percent (4.00%).
"Interim Period" means the period commencing on (and including) the
Initial Advance Date and ending on (and excluding) the earlier of (a) the date
upon which the Resort begins Operating and (b) December 31, 2000.
"Initial Advance Date" means the date of the initial Advance with
respect to any Equipment.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.
"Investor's Letter" means the Investor's Letter, dated as of the
Closing Date, in substantially the form of Exhibit H to the Participation
Agreement.
"Lease" means the Lease Intended as Security, dated as of the Closing
Date, between Lessor and Lessee, substantially in the form of Exhibit A to the
Participation Agreement, as the same may be amended, restated, modified or
supplemented from time to time.
"Lease Balance" means, as of any date of determination, the sum of the
aggregate outstanding principal amount of the Notes.
-15-
"Lease Default" means any event, condition or failure which, with the
lapse of time or the giving of notice, or both, would constitute a Lease Event
of Default.
"Lease Event of Default" means any event, condition or failure
designated as a "Lease Event of Default" in Article X of the Lease.
"Lease Financing Party" is defined in Section 6.1(i) of the
Participation Agreement.
"Lease Term" is defined in Section 2.3 of the Lease.
"Lease Termination Date" means the last day of the Lease Term, or any
other date on which the Lease is terminated, including pursuant to Article V or
X of the Lease.
"Lender" means a holder of a Note.
"Lending Office" means, as to any Lender, the office or offices of such
Lender specified as its "Lending Office" on Schedule III of the Participation
Agreement, or such other office as such Lender may from time to time notify the
Borrower and Administrative Agent.
"Lessee" means Hollywood Casino Shreveport, a Louisiana general
partnership, as lessee and debtor under the Lease.
"Lessee Collateral" is defined in Section 14.1 of the Lease.
"Lessor" means the lessor or secured party under the Lease, which
initially shall be Trustee.
"Lessor Lien" means any Lien on or against any or all of the Equipment,
the Lease, the Trust Estate or any payment of Rent which results from (a) any
act of, or any Claim against, Trustee, in its individual capacity, Lessor, in
its capacity as Lessor, any Lender or Administrative Agent, in its individual
capacity, in any case unrelated to the transactions contemplated by the
Operative Documents, (b) any Tax owed by any such Person, except for any Tax
required to be paid by Lessee under the Operative Documents, including any Tax
for which Lessee is obligated to indemnify such Person, or (c) any act or
omission of such Person which is prohibited by the Operative Documents.
"Lessor's Cost" means the aggregate Equipment Cost paid with proceeds
of any Advance.
"LIBO Rate" shall mean with respect to any Interest Period at any time,
the applicable London interbank offered rate for deposits in U.S. dollars
appearing on Telerate Page 3750 as of 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period, and having a maturity
approximately equal to such Interest Period; or if no London interbank offered
rate of such maturity then appears on Telerate Page 3750, then the rate equal to
the London interbank offered rate for deposits in U.S. dollars maturing
immediately before or immediately
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after such maturity, whichever is higher, as determined by Administrative Agent
from Telerate Page 3750; or if Telerate Page 3750 is not available, the
applicable LIBO Rate for the relevant Interest Period shall be the rate
determined by Administrative Agent to be the arithmetic average of the rates at
which Bank of America offers to place deposits in U.S. dollars with first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period, in the
approximate amount of Bank of America's and/or its Affiliate's relevant portion
of the aggregate outstanding principal amount of the Notes and having a maturity
approximately equal to such Interest Period.
"LIBO Rate Loans" means Loans bearing interest by reference to the LIBO
Rate.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such in Schedule III to the Participation Agreement, or such other
office of a Lender designated from time to time by notice from such Lender to
Trustee, Lessor and Administrative Agent, whether or not outside the United
States.
"License Revocation" means (a) the revocation, failure to renew or
suspension of any casino, gambling or gaming license issued by any Gaming
Authority with respect to the Casino, (b) the appointment by any Gaming
Authority of a receiver, supervisor or similar official with respect to the
Casino or (c) the involuntary closure of the Casino pursuant to an order of any
Gaming Authority.
"Lien" means, with respect to any asset, any mortgage, deed of trust,
pledge, charge, deposit arrangement, security interest, encumbrance, privilege,
lien (statutory or otherwise), easement, servitude or charge of any kind in
respect of such asset, including any irrevocable license, conditional sale or
other title retention agreement, any lease in the nature thereof, or any other
right of or arrangement with any creditor to have its claim satisfied out of any
specified property or asset with the proceeds therefrom prior to the
satisfaction of the claims of the general creditors of the owner thereof,
whether or not filed, recorded or otherwise perfected under applicable law, or
the filing of, or agreement to execute as "debtor", any financing or
continuation statement under the Uniform Commercial Code of any jurisdiction or
any federal, state or local lien imposed pursuant to any Environmental Law.
"Loan" is defined in Section 2.1 of the Loan Agreement.
"Loan Agreement" means the Loan Agreement, dated as of the Closing
Date, among Lessor, as the Borrower, and the Lenders, substantially in the form
of Exhibit B to the Participation Agreement, as the same may be amended,
restated, modified or supplemented from time to time.
"Loan Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute a Loan Event of Default.
"Loan Documents" means the Loan Agreement, the Notes, the Security
Documents and
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all other documents and instruments executed and delivered in connection with
each of the foregoing.
"Loan Event of Default" is defined in Article VI of the Loan Agreement.
"Management Agreement" means the Management Services Agreement dated as
of September 22, 1998, between Lessee and the Manager relating to the management
of the Resort, as amended by that certain Amendment to Management Services
Agreement dated as of August 2, 1999, between Lessee and the Manager, as the
same may be amended, restated, modified or supplemented from time to time.
"Management Fees" means any fees payable to the Manager pursuant to the
Management Agreement.
"Manager" means HWCC-Shreveport, Inc., a Louisiana corporation.
"Manager Subordination Agreement" means a subordination agreement among
the Manager, Lessee and Lessor, dated as of the Closing Date, substantially in
the form of Exhibit K to the Participation Agreement, as the same may be
amended, restated, modified or supplemented from time to time.
"Material Adverse Effect" means, with respect to Lessee, any change or
changes, effect or effects or condition or conditions that individually or in
the aggregate are or are likely to be materially adverse to (i) the assets,
business, operations or financial condition of Lessee and its Subsidiaries on a
consolidated basis, (ii) the ability of Lessee to perform its Obligations under
the Operative Documents to which it is a party, (iii) the validity or
enforceability of any of the Operative Documents or any rights or remedies under
any thereof or (iv) the value of the Collateral, taken as a whole, or worth of
the Collateral as collateral security, taken as a whole.
"Maturity Date" means the third anniversary of the first day of the
Base Period.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of an
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of such ERISA Group during such
five year period.
"Non-Casualty Loss" is defined in Section 9.2(a) of the Lease.
"Non-Casualty Recoveries" means the proceeds of any recovery in respect
of any Non-Casualty Loss from insurance, a Governmental Authority or otherwise.
"Note" is defined in Section 2.2(a) of the Loan Agreement.
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"Obligations" means all obligations (monetary or otherwise) of Lessee
under the Operative Documents.
"Operating Deadline" means April 30, 2001.
"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Notes;
(c) the Lease;
(d) the Trust Agreement;
(e) the Loan Agreement;
(f) the Security Agreement; and
(g) the Manager Subordination Agreement.
"Other Taxes" means any present or future stamp or documentary taxes,
or any other excise or property taxes, charges or similar levies, which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, any Operative Document.
"Overdue Rate" means the lesser of (i) the highest interest rate
permitted by Applicable Law and (ii) an interest rate per annum equal to the
Interest Rate plus three percent (3.00%) per annum.
"Paddlewheels" means Shreveport Paddlewheels, L.L.C., a Louisiana
limited liability company.
"Participants" means, collectively, Trustee, Lessor, Administrative
Agent, each Lender and, where the context requires, any one or more of them.
"Participating Entity" is defined in Section 6.3(a) of the
Participation Agreement.
"Participation Agreement" means the Participation Agreement, dated as
of the Closing Date, among Lessee, Lessor, Trustee, Lenders, Documentation Agent
and Administrative Agent, as the same may be amended, restated, modified or
supplemented from time to time.
"Payment Date" means the last Business Day of each Interest Period.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERSA.
"Pension Plan" means, with respect to any Person, a "pension plan" as
such term is defined in section 3(2) of ERISA which is subject to Title IV of
ERISA and to which such Person may have any liability or contingent liability,
including, but not limited to, liability by reason of
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having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason or being deemed to be
a contributing sponsor under section 4069 of ERISA.
"Periodic Rent" means (a) with respect to each Interest Period during
the Interim Period, an amount equal to the aggregate of interest due for such
Interest Period on each Loan at the applicable Interest Rate in effect for such
Loan, and (b) during the Base Period, an installment of rent consisting of the
interest determined pursuant to clause (a) above plus the amortization amount,
if any, payable on the Notes pursuant to the Amortization Schedule by Lessor to
the Lenders on the applicable Payment Date for any such Interest Period.
"Permitted Alteration" is defined in Section 7.2(b) of the Lease.
"Permitted Contest" means actions taken by a Person to contest in good
faith, by appropriate proceedings initiated timely and diligently prosecuted,
the legality, validity or applicability to the Equipment or any location whereon
or wherein the Equipment or any portion thereof are located or to be located, or
any interest therein of any Person of (a) any law, regulation, rule, judgment,
order, or other legal provision or judicial or administrative requirements, (b)
any term or condition of, or any revocation or amendment of, or other proceeding
relating to, any authorization or other consent, approval or other action by any
Governmental Authority or (c) any Lien or Tax, if the initiation and prosecution
of such contest would not: (i) result in, or materially increase the risk of,
the imposition of any criminal liability on any Indemnitee; (ii) materially and
adversely affect the security interests created by the Operative Documents or
the rights and interests of Lessor in or to any of the Equipment or the right of
Lessor, Trustee, Administrative Agent or any Lender to receive payment of all or
any portion of the principal of or interest on any Note, any Rent, the Lease
Balance or any other amount payable under the Operative Documents; (iii) permit,
or pose a material risk of, the sale or forfeiture of, or foreclosure on, any of
the Equipment or (iv) materially and adversely affect the fair market value,
utility or remaining useful life of the Equipment or any interest therein or the
continued economic operation thereof; provided, further, that in any event
adequate reserves in accordance with GAAP are maintained by such Person against
any adverse determination of such contest.
"Permitted Liens" means (i) the respective rights and interests of
Lessee, the Lenders and Trustee, as provided in any of the Operative Documents;
(ii) materialmen's, mechanics', workers', artisan's, repairmen's, employees' or
other like Liens securing payment of the price of goods or services rendered in
the ordinary course of business for amounts the payment of which is not overdue
for more than 60 days or is being contested pursuant to a Permitted Contest;
(iii) Lessor Liens; (iv) Liens for current Taxes which are not delinquent for
more than 60 days or the validity of which is being contested pursuant to a
Permitted Contest; (v) the rights of any sublessee or assignee under a sublease
or an assignment permitted by the terms of the Lease; (vi) Liens arising out of
judgments or awards not constituting an Event of Default (other than judgment
Liens paid or fully covered by insurance that are not outstanding for more than
60 days) with respect to which appeals or other proceedings for review are being
prosecuted pursuant to a Permitted
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Contest; (vii) easements, servitudes, rights of way and other encumbrances on
title to real (immovable) property not interfering in any material respect with
the rights of Lessor under the Lease; (viii) Liens securing indebtedness of
Lessee to vendors under any purchase contract until such time as the full amount
owed by Lessee under such purchase contract has been paid in full or, in the
event of a dispute with respect to any amount owed by Lessee under such purchase
contract, so long as the disputed amount is being contested pursuant to a
Permitted Contest; (ix) Liens granted by Lessee in favor of the Indenture
Trustee pursuant to the Indenture and the Indenture Security Documents as in
effect on the Closing Date with respect to any of the Lessee Collateral that is
not part of the Priority Collateral; and (x) the lessor's lien (if any) of the
City of Shreveport, as lessor, under the Ground Lease.
"Person" means any individual, corporation, partnership, limited
liability company, limited liability partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental authority
or any other legal entity.
"Plan" means, with respect to any Person, an employee benefit or other
plan (other than a Multiemployer Plan) established or maintained by such Person
or any member of such Person's ERISA Group and which is covered by Title IV of
ERISA.
"Principals" means:
(1) Xxxx Xxxxx, Xxxxxx X. Xxxxx, Xx., Xxxxxxx X. Xxxxx,
Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx and Xxxxxx X. Xxxxx III, their
respective estates and members of the immediate family (including
adopted children) of any of them who acquire voting stock of Hollywood
Casino from any such estates;
(2) C.A. Xxxxx Partners, Ltd., a Texas limited partnership;
provided, however, that, in each case, the majority of the voting
equity interest of the partnership is beneficially owned by a Person
named in clause (1); and
(3) The WDP, Jr. Family Trust; provided, however, that a
Person named in clause (1) is:
(a) the beneficial owner of a majority of voting
stock of Hollywood Casino held by such trust, or
(b) if the trust is irrevocable, the trustee of the
irrevocable trust is a Person named in clause (1).
"Priority Collateral" means any and all Equipment and all proceeds (as
such term is used and defined in the UCC) thereof or arising therefrom.
"Projections" means the pro forma financial information provided by
Lessee and its Affiliates as contained in the "Information Materials" (i.e., the
"bank book") delivered to the
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Lenders.
"Purchase Order Assignment" means a Purchase Order Assignment between
Lessee and Lessor, substantially in the form of Exhibit I to the Participation
Agreement.
"Rent" means Periodic Rent and Supplemental Rent.
"Required Alteration" is defined in Section 7.2(a) of the Lease.
"Required Lenders" means, as of the date of the determination, Lenders
having aggregate investments in the transactions contemplated by the Operative
Documents (as measured by the outstanding principal amount of the Loans then
outstanding) in excess of 50% of all such investments.
"Requirements of Law" means, as to any Person, any current or
hereinafter enacted law (statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Resort" means the establishment featuring a riverboat casino, hotel
and related amenities in Shreveport, Louisiana being developed by Lessee.
"Responsible Official" means (a) when used with reference to a Person
other than Lessee or an individual, any officer or manager of such Person,
general partner of such Person, officer of a corporate or limited liability
company general partner of such Person, officer of a corporate or limited
liability company general partner of a partnership that is a general partner of
such Person, or any other responsible official thereof duly acting on behalf
thereof, (b) when used with reference to Lessee, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice President, in each case of HCS I, or any successor
managing general partner of Lessee, and (c) when used with reference to a Person
who is an individual, such Person. Trustee, Lessor, Administrative Agent, and
the Lenders shall be entitled to conclusively rely upon any document or
certificate that is signed or executed by a Responsible Official of Lessee or
any of its Subsidiaries as having been authorized by all necessary corporate,
limited liability company, partnership and/or other action on the part of Lessee
or such Subsidiary.
"Restricted Payment" is defined in Section 5.17 of the Participation
Agreement.
"Search" is defined in Section 3.2(c) of the Participation Agreement.
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"Security Agreement" means the Security Agreement and Assignment of
Lease, dated as
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of the Closing Date, between Lessor, as Borrower, and Administrative Agent,
substantially in the form of Exhibit D to the Participation Agreement, as the
same may be amended, restated, modified or supplemented from time to time.
"Security Documents" means the collective reference to the Security
Agreement and all other security documents hereafter delivered to Administrative
Agent granting a Lien on any asset or assets of any Person to secure the
obligations and liabilities of Lessor under the Loan Agreement and/or under any
of the other Loan Documents, as the same may be amended, restated, modified or
supplemented from time to time.
"Shreveport Capital" means Shreveport Capital Corporation, a Louisiana
corporation.
"Sublease" has the meaning set forth in Article IV of the Lease.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which more than 50% of the
outstanding ownership interests, at the time any determination is being made, is
directly or indirectly owned by such Person, by such Person and one or more of
its Subsidiaries or by one or more of such Person's Subsidiaries.
"Supplemental Rent" means, any and all amounts, liabilities and
obligations (i) which Lessor assumes or agrees or is otherwise obligated or
designated to pay under the Loan Agreement or any other Operative Document
(whether or not designated as Supplemental Rent) to Trustee, Administrative
Agent, the Lenders or any other Person, including Additional Costs and damages
for breach of any representations, warranties or agreements or (ii) which Lessee
agrees or is otherwise obligated or designated to pay (other than Periodic Rent)
under the Lease or any other Operative Document (whether or not designed as
Supplemental Rent) to Lessor or Trustee as Lessor's designee.
"Taxes" and "Tax" are defined in Section 8.1 of the Participation
Agreement.
"Transaction Costs" means reasonable legal and other fees, costs and
expenses incurred by the Arranger, Trustee, Lessor, Administrative Agent and the
Lenders in connection with the consummation and closing of the transactions
contemplated by the Operative Documents, and the preparation, negotiation,
execution and delivery of the Operative Documents, including (i) fees of Trustee
and Trustee's legal counsel; (ii) allocated time charges and expenses of the
Bank of America Legal Department and reasonable fees and expenses of Sheppard,
Mullin, Xxxxxxx & Xxxxxxx LLP and XxXxxxxxxx Xxxxxxxx, APPLC, special counsel to
Administrative Agent; (iii) all reasonable filing and recording fees, and other
search costs required by the Operative Documents; and (iv) without duplication
of any of the foregoing, fees owing to the Arranger pursuant to the Arranger Fee
Letter.
"Trust" is defined in Section 1.1 of the Trust Agreement.
"Trust Agreement" means the Trust Agreement dated as of the Closing
Date, between
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Lessee and Bank, in its capacities as Lessor and Trustee, substantially in the
form of Exhibit C to the Participation Agreement, as the same may be amended,
restated, modified or supplemented from time to time.
"Trust Estate" means all estate, right, title and interest of Lessor
in, to and under the Equipment, the Trust Agreement, the Lease and all of the
other Operative Documents, including (i) all amounts (other than Excluded
Amounts) of Rent and other payments due or to become due of any kind for or with
respect to the Equipment or payable under any of the foregoing, (ii) any or all
payments or proceeds received by Lessor after the termination of the Lease with
respect to the Equipment as the result of the sale, lease or other disposition
thereof, and (iii) proceeds of the Loans, together with any other moneys,
proceeds or property at any time received by Lessor under or in connection with
the Operative Documents.
"Trustee" means First Security Bank, National Association, a national
banking association, not in its individual capacity, but solely as Trustee under
the Trust Agreement, and any successor or replacement Trustee expressly
permitted under the Operative Documents.
"Trustee Fee Letter" means the letter agreement, dated as of March 31,
2000, between Lessee and Trustee.
"UCC Financing Statements" means, collectively, the financing
statements executed and delivered by Lessor, as debtor, in favor of
Administrative Agent, as secured party, for the benefit of the Lenders, and the
financing statements executed and delivered by Lessee, as debtor, in favor of
Lessor, as secured party, and assigned by Lessor to Administrative Agent, as
assignee, for the benefit of the Lenders.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code
as in effect in any applicable jurisdiction (in Louisiana, Chapter 9 of the
Louisiana Commercial Laws, La. X.X.xx.xx. 10:9-101 et seq.).
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
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================================================================================
LEASE INTENDED AS SECURITY
dated as of March 31, 2000
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity
except as expressly stated herein,
but solely as Trustee and Lessor,
and
HOLLYWOOD CASINO SHREVEPORT,
as Lessee.
================================================================================
ALL RIGHT, TITLE AND INTEREST OF TRUSTEE AND LESSOR UNDER THIS LEASE AND THE
PROPERTY RIGHTS SUBJECT HERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A LIEN
AND SECURITY INTEREST IN FAVOR OF FIRST SECURITY TRUST COMPANY OF NEVADA, AS
ADMINISTRATIVE AGENT ("ADMINISTRATIVE AGENT"), UNDER THAT CERTAIN SECURITY
AGREEMENT AND ASSIGNMENT OF LEASE DATED AS OF MARCH 31, 2000, FOR THE BENEFIT OF
THE ADMINISTRATIVE AGENT AND THE LENDERS REFERRED TO IN SUCH SECURITY AGREEMENT
AND ASSIGNMENT OF LEASE. THIS LEASE HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS.
TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM
IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE
TRANSFER OR POSSESSION OF ANY COUNTERPART HEREOF OTHER THAN THE "ORIGINAL
EXECUTED COUNTERPART NO. 1", WHICH SHALL BE IDENTIFIED AS THE COUNTERPART
CONTAINING THE RECEIPT THEREFOR EXECUTED BY ADMINISTRATIVE AGENT ON OR FOLLOWING
THE SIGNATURE PAGE THEREOF.
THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART NO. ___.
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS; LESSEE LIABILITY......................................................1
ARTICLE II LEASE OF EQUIPMENT; LEASE TERM.....................................................1
SECTION 2.1 Acceptance and Lease of Equipment......................................................1
SECTION 2.2 Acceptance Procedure...................................................................1
SECTION 2.3 Lease Term.............................................................................2
ARTICLE III RENT; QUIET ENJOYMENT; NET LEASE...................................................2
SECTION 3.1 Periodic Rent..........................................................................2
SECTION 3.2 Supplemental Rent......................................................................2
SECTION 3.3 Place and Manner of Payment............................................................2
SECTION 3.4 Late Payment...........................................................................2
SECTION 3.5 Quiet Enjoyment; Discharge of Liens....................................................2
SECTION 3.6 Net Lease; No Setoff, Etc..............................................................3
SECTION 3.7 No Bar.................................................................................4
SECTION 3.8 Intent of the Parties..................................................................4
ARTICLE IV POSSESSION AND SUBLEASING..........................................................5
SECTION 4.1 Possession and Subleasing..............................................................5
ARTICLE V LEASE TERMINATION..................................................................5
SECTION 5.1 Early Termination......................................................................5
SECTION 5.2 Termination and Transfer...............................................................6
ARTICLE VI DISCLAIMER AND ASSIGNMENT OF WARRANTIES............................................6
SECTION 6.1 Disclaimer of Warranties...............................................................6
SECTION 6.2 Assignment of Warranties...............................................................7
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ARTICLE VII MAINTENANCE AND REPAIR;ALTERATIONS AND ADDITIONS............................................7
SECTION 7.1 Maintenance and Repair; Compliance With Law............................................7
SECTION 7.2 Alterations............................................................................8
SECTION 7.3 Replacement and Substitution...........................................................8
SECTION 7.4 Removal................................................................................8
SECTION 7.5 Maintenance and Repair Reports.........................................................8
ARTICLE VIII USE.........................................................................................9
SECTION 8.1 Use....................................................................................9
ARTICLE IX CASUALTY; REPLACEMENT; INSURANCE...................................................9
SECTION 9.1 Casualty...............................................................................9
SECTION 9.2 Non-Casualty Losses...................................................................11
SECTION 9.3 Required Coverages....................................................................11
SECTION 9.4 Delivery of Insurance Certificates....................................................12
ARTICLE X LEASE EVENTS OF DEFAULT...........................................................13
SECTION 10.1 Lease Events of Default...............................................................13
SECTION 10.2 Remedies..............................................................................15
SECTION 10.3 Waiver of Certain Rights..............................................................16
SECTION 10.4 Power of Attorney.....................................................................16
SECTION 10.5 Remedies Cumulative; No Waiver; Consents..............................................17
ARTICLE XI ADDITIONAL LOUISIANA PROVISIONS...................................................17
SECTION 11.1 Additional Louisiana Provisions.......................................................17
ARTICLE XII LESSOR'S RIGHT TO CURE.....................................................................19
SECTION 12.1 Lessor's Right to Cure Lessee's Lease Defaults........................................19
ARTICLE XIII LESSOR ASSIGNMENTS.........................................................................20
SECTION 13.1 Lessor Assignments....................................................................20
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ARTICLE XIV GRANT OF SECURITY INTEREST.................................................................20
SECTION 14.1 Grant of Security Interest............................................................20
SECTION 14.2 Retention of Title or Proceeds in the Case of Default.................................20
ARTICLE XV WARRANTY OF TITLE..........................................................................21
SECTION 15.1 Warranty of Title.....................................................................21
ARTICLE XVI MISCELLANEOUS..............................................................................21
SECTION 16.1 Governing Law.........................................................................21
SECTION 16.2 Notices...............................................................................21
SECTION 16.3 Counterparts..........................................................................21
SECTION 16.4 Severability..........................................................................22
SECTION 16.5 Successors and Assigns................................................................22
SECTION 16.6 Parties in Interest...................................................................22
SECTION 16.7 Limitation of Liability...............................................................22
SECTION 16.8 Nonrecourse to Paddlewheels...........................................................22
SECTION 16.9 Captions; Table of Contents...........................................................23
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LEASE INTENDED AS SECURITY
--------------------------
This LEASE INTENDED AS SECURITY (as amended, restated, supplemented, or
otherwise modified from time to time, this "Lease"), dated as of March 31, 2000,
is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly stated herein, but solely as Trustee and Lessor
under the Trust Agreement and this Lease ("Lessor"), and HOLLYWOOD CASINO
SHREVEPORT, a Louisiana general partnership, as Lessee ("Lessee").
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, hereby
agree as follows:
ARTICLE I
DEFINITIONS; LESSEE LIABILITY
For all purposes hereof, capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in Appendix 1 to that
certain Participation Agreement, dated as of March 31, 2000 (as amended,
restated, supplemented, or otherwise modified from time to time, the
"Participation Agreement"), among Lessee; Lessor, as Trustee and Lessor; the
Lenders identified therein; First Security Trust Company of Nevada, as
Administrative Agent; and Bank of America, National Association, as Arranger and
Documentation Agent. Except as set forth in Section 16.8 below, all obligations
imposed on the "Lessee" in this Lease shall be the full recourse liability of
Lessee.
ARTICLE II
LEASE OF EQUIPMENT; LEASE TERM
SECTION 1.1 Acceptance and Lease of Equipment. With respect to each
Advance under Section 2.4(b) of the Participation Agreement, on the Advance Date
for that Advance, subject to satisfaction or waiver of the conditions precedent
set forth in Article III of the Participation Agreement, Lessor shall lease to
Lessee hereunder, and Lessee shall lease from Lessor hereunder, the Equipment
accepted on that Advance Date by Lessee under a Certificate of Acceptance
pursuant to the Participation Agreement for the Lease Term.
SECTION 1.2 Acceptance Procedure. Lessee hereby agrees that the
execution and delivery by Lessee on any Advance Date of a Certificate of
Acceptance pursuant to Section 3.1(e) of the Participation Agreement
(appropriately completed) shall, without further act, irrevocably constitute
acceptance by Lessee on behalf of itself and Lessor of the Equipment which is
the
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subject thereof for all purposes of this Lease and the other Operative
Documents.
SECTION 1.3 Lease Term. The term of this Lease (the "Lease Term") shall
consist of the Interim Period and the Base Period, subject to Article V and
Article X.
ARTICLE III
RENT; QUIET ENJOYMENT; NET LEASE
SECTION 1.4 Periodic Rent. During the Lease Term, Lessee shall pay to
Lessor Periodic Rent on each Payment Date in the amount determined in accordance
with the definition of "Periodic Rent".
SECTION 1.5 Supplemental Rent. During the Lease Term, Lessee shall pay
to Lessor, or to whomever shall be entitled to payment thereof as expressly
provided herein or in any other Operative Document (and Lessor hereby directs
Lessee, on behalf of Lessor, so to pay any such other Person) any and all
Supplemental Rent promptly as the same shall become due and payable, and, in the
event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor
shall have all rights, powers and remedies provided for herein or by law or in
equity or otherwise in the case of nonpayment of Periodic Rent. Lessee hereby
reaffirms its obligation to pay as Supplemental Rent (i) an amount equal to
Additional Costs as the same become due and payable and (ii) all amounts
determined to be due and payable pursuant to Section 5.1 of the Trust Agreement
in accordance with its terms.
SECTION 1.6 Place and Manner of Payment. Rent and all other sums due to
Lessor, Administrative Agent or any Lender hereunder shall be paid in accordance
with Section 2.7 of the Participation Agreement.
SECTION 1.7 Late Payment. If any Periodic Rent shall not be paid when
due, Lessee shall pay to Lessor, or if any Supplemental Rent payable to or on
behalf or for the account of Lessor (as Lessor or Trustee), any Lender,
Administrative Agent or any other Indemnitee is not paid when due, Lessee shall
pay to whomever shall be entitled thereto, in each case as Supplemental Rent,
interest at the Overdue Rate on such overdue amount from and including the due
date (not taking into account any grace period) thereof to but excluding the
Business Day of payment thereof.
SECTION 1.8 Quiet Enjoyment; Discharge of Liens. Subject to the rights
of Lessor contained in Article X and the other terms of the Operative Documents
to which Lessee is a party, Lessee shall peaceably and quietly have, hold and
enjoy the Equipment for the Lease Term, free of any claim or other action by
Lessor or anyone claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the Initial Advance Date. Such
right of quiet enjoyment shall be independent of, and shall not affect Lessor's
rights otherwise to initiate legal action to enforce, the obligations of Lessee
under this Lease. Lessor shall at all
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times comply with Section 6.1 of the Participation Agreement regarding the
discharge of Lessor Liens attributable to it.
SECTION 1.9 Net Lease; No Setoff, Etc. THIS LEASE SHALL CONSTITUTE A
NET LEASE AND, NOTWITHSTANDING ANY OTHER PROVISION OF THIS LEASE TO THE
CONTRARY, IT IS INTENDED THAT PERIODIC RENT AND SUPPLEMENTAL RENT SHALL BE PAID
WITHOUT COUNTERCLAIM, SETOFF, DEDUCTION OR DEFENSE OF ANY KIND AND WITHOUT
ABATEMENT, SUSPENSION, DEFERMENT, DIMINUTION OR REDUCTION OF ANY KIND, AND
LESSEE'S OBLIGATION TO PAY ALL SUCH AMOUNTS, THROUGHOUT THE LEASE TERM IS
ABSOLUTE AND UNCONDITIONAL. The obligations and liabilities of Lessee hereunder
shall in no way be released, discharged or otherwise affected for any reason,
including, without limitation, to the maximum extent permitted by law: (a) any
defect in the condition, merchantability, design, construction, quality or
fitness for use of any item of Equipment, or any failure of any item of
Equipment to comply with all Applicable Laws, including any inability to use any
item of Equipment by reason of such noncompliance; (b) any damage to,
abandonment, loss, destruction, requisition, taking or contamination of or
release of Hazardous Materials from any item of Equipment other than Lessor's
Liens; (c) any restriction, prevention or curtailment of or any interference
with the construction or any use of any item of Equipment; (d) the attachment of
any Lien of any third party to any item of Equipment other than Lessor's Liens;
(e) any prohibition or restriction of or interference with Lessee's use of any
or all of the Equipment by any Person; (f) any change, waiver, extension,
indulgence or other action or omission or breach in respect of any obligation or
liability of or by Lessor as Trustee or Lessor, Administrative Agent or any
Lender; (g) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceedings relating to Lessee, Lessor as
Trustee or Lessor, Administrative Agent, any Lender or any other Person, or any
action taken with respect to this Lease by any trustee, receiver or keeper of
Lessee, Lessor as Trustee or Lessor, Administrative Agent, any Lender or any
other Person, or by any court, in any such proceeding; (h) any claim that Lessee
has or might have against any Person, including, without limitation, Lessor as
Trustee or Lessor, Administrative Agent or any Lender; (i) other than Lessor's
obligations under Section 3.5 of this Lease and Section 6.1(b) of the
Participation Agreement, any failure on the part of Lessor as Trustee or Lessor,
to perform or comply with any of the terms of this Lease, any other Operative
Document or of any other agreement whether or not related to the transactions
contemplated by the Operative Documents; (j) any invalidity or unenforceability
or disaffirmance against or by Lessee of this Lease or any provision hereof or
any of the other Operative Documents or any provision of any thereof; (k) the
impossibility of performance by Lessee or Lessor, or both; (l) any action by any
court, administrative agency or other Governmental Authority; or (m) any other
cause, whether similar or dissimilar to the foregoing, whether or not Lessee
shall have notice or knowledge of any of the foregoing. Except as specifically
set forth in Articles V or X of this Lease, this Lease shall be noncancellable
by Lessee for any reason whatsoever, and Lessee, to the extent permitted by
Applicable Laws and Gaming Laws, waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate or surrender this Lease, or to any
diminution, abatement or reduction of Rent payable by Lessee hereunder. If for
any reason whatsoever this Lease shall be terminated in whole or in
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part by operation of law or otherwise, except as expressly provided in
Articles V or X of this Lease, Lessee shall, unless prohibited by Applicable
Laws, nonetheless pay to Lessor (or, in the case of Supplemental Rent, to
whomever shall be entitled thereto) an amount equal to each Rent payment at the
time and in the manner that such payment would have become due and payable under
the terms of this Lease if it had not been terminated in whole or in part, and
in such case, so long as such payments are made and no Lease Event of Default
shall have occurred and be continuing, Lessor will deem this Lease to have
remained in effect. Each payment of Rent made by Lessee hereunder shall be final
and, absent manifest error in the determination of the amount thereof, Lessee
shall not seek or have any right to recover all or any part of such payment from
Lessor, Administrative Agent or any party to any agreements related thereto for
any reason whatsoever. Lessee assumes the sole responsibility for the condition,
use, operation, maintenance and management of the Equipment, and Lessor shall
have no responsibility in respect thereof and shall have no liability for damage
to the property of Lessee or any sublessee of Lessee on any account or for any
reason whatsoever other than by reason of Lessor's willful misconduct or gross
negligence or breach of any of its obligations under any Operative Document.
SECTION 1.10 No Bar. Notwithstanding the foregoing, nothing set forth
herein shall bar, limit, preclude, prevent, stay or otherwise adversely affect
Lessee's right or ability to bring and pursue any action for monetary damages
against Lessor, as Lessor and/or Trustee, or any other Person for any breach or
alleged breach of its obligations hereunder or under any other Operative
Document.
SECTION 1.11 Intent of the Parties. Lessor and Lessee further intend
and agree that this Lease is a financing transaction and that, for the purpose
of securing Lessee's obligations for the repayment of the Advances from Lessor
to Lessee and from the Lenders to Lessor for the benefit of Lessee, (i) this
Lease shall also be deemed to be a security agreement and financing statement
within the meaning of Article 9 of the UCC; (ii) the conveyance provided for
hereby shall be deemed to be a grant by Lessee to Lessor, for the benefit of the
Lenders, of a security interest in all of Lessee's present and future right,
title and interest in the Equipment, including but not limited to Lessee's
leasehold estate therein and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, investments, securities or other
property, whether in the form of cash, investments, securities or other property
to secure such Advances, effective on the date hereof, to have and to hold such
interests in the Equipment unto Lessor, for the benefit of the Lenders and their
respective successors and assigns, forever, provided always that these presents
are upon the express condition that, if all amounts due under this Lease and the
other Operative Documents shall have been paid and satisfied in full, then this
instrument and the estate hereby granted shall cease and become void without
further action by any party and Lessor shall, for the consideration set forth in
Section 5.2 plus the payment of reimbursable costs and expenses, convey the
Equipment to Lessee as herein set forth; (iii) the possession by Lessor or its
assigns of notes and such other items of property of Lessee as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the UCC; and (iv) notifications to Persons
holding such property, and acknowledgments, receipts or confirmations from
financial intermediaries, bankers or agents (as applicable) of Lessee shall be
deemed to have been given
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for the purpose of perfecting such security interest under Applicable Law.
Lessor and Lessee shall, to the extent consistent with this Lease, take such
actions, and execute, deliver, file and record such other documents and
financing statements, as may be necessary to ensure that the security interest
in the Equipment created in accordance with this Lease will be deemed to be a
perfected security interest with priority over all Liens, other than Permitted
Liens, under Applicable Law and will be maintained as such throughout the Lease
Term.
ARTICLE IV
POSSESSION AND SUBLEASING
SECTION 1.12 Possession and Subleasing. LESSEE SHALL NOT, WITHOUT THE
PRIOR WRITTEN CONSENT OF LESSOR, SUBLEASE ANY OR ALL OF THE EQUIPMENT OR ASSIGN,
TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER, AND ANY
ATTEMPTED SUBLEASE, ASSIGNMENT, TRANSFER OR ENCUMBERING BY LESSEE SHALL BE NULL
AND VOID, except as provided hereinafter in this Article IV or pursuant to a
transaction permitted under Section 5.2 of the Participation Agreement. Lessee
may, with Lessor's and the Required Lenders' prior written consent, sublease the
Equipment as an integrated whole, if such sublease permitted by this Article IV
(a "Sublease") (a) is expressly subject and subordinate to all of the provisions
of this Lease and the rights and interests of Lessor, Administrative Agent and
the Lenders hereunder in respect of the Equipment covered by such Sublease upon
the occurrence of an Event of Default thereunder or hereunder, (b) expressly
requires the Equipment subject thereto to be returned as directed by Lessor or
the Required Lenders upon notice to such sublessee that an Event of Default has
occurred and is continuing and (c) expressly prohibits any further sublease or
assignment of the Equipment subject thereto. Lessee shall remain primarily
liable for its obligations under this Lease notwithstanding the existence of any
such Sublease. All of Lessee's right, title and interest in, to and under such
Sublease shall be pledged by Lessee to Lessor, as collateral for Lessee's
obligations under this Lease, and Lessee shall, at its expense, do any further
act, and execute, acknowledge, deliver, file, register and record any further
documents, which Lessor or any Lender may reasonably request in order to create,
perfect, preserve and protect Lessor's security interest in such Sublease. If so
requested by Lessor, Administrative Agent or any Lender, Lessee shall, within 15
days after the execution of any such Sublease, deliver a conformed copy thereof
to Lessor, Administrative Agent or such Lender as applicable.
ARTICLE V
LEASE TERMINATION
SECTION 1.13 Early Termination. On any date after the commencement of
the Base Period, Lessee may, at its option, upon at least 30 days advance
written notice to Lessor, purchase all (but not less than all) of the Equipment
for an amount equal to the sum of (i) accrued and
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unpaid Rent payable on or before such date, (ii) the Lease Balance (after giving
effect to any payments pursuant to clause (i)) and (iii) all other fees and
expenses and other amounts (including all Supplemental Rent) then due and
payable pursuant to this Lease and the other Operative Documents.
SECTION 1.14 Termination and Transfer. Upon payment in full in cash of
(a) all amounts then due and owing hereunder on the Lease Termination Date and
(b) $1.00, Lessor shall release the Equipment then subject to this Lease on the
Lease Termination Date from the Lien created by this Lease and transfer all of
Lessor's right, title and interest thereto to Lessee ("AS IS" and without any
representations or warranties and with the disclaimers set forth in Section 6.1,
except that such Equipment is free and clear of Lessor Liens), all at Lessee's
sole cost and expense.
ARTICLE VI
DISCLAIMER AND ASSIGNMENT OF WARRANTIES
SECTION 1.15 Disclaimer of Warranties. The Equipment, upon delivery
thereof to Lessee and execution by Lessee of a Certificate of Acceptance
therefor, is leased by Lessor to Lessee "AS IS" in its present or then
condition, as the case may be, subject to (a) any rights of any parties in
possession thereof, (b) the state of the title thereto existing at the time
Lessor acquired its interest in the Equipment, (c) any state of facts which a
physical inspection might show, (d) all Applicable Laws, and (e) any violations
of Applicable Laws which may exist at the time any such Equipment is accepted by
Lessee for lease hereunder. Lessee's execution and delivery to Lessor of a
Certificate of Acceptance for any Equipment shall be deemed to mean that Lessee
has examined such Equipment (insofar as Lessor is concerned) and has found the
same to be satisfactory. NEITHER LESSOR (AS TRUSTEE OR LESSOR), ADMINISTRATIVE
AGENT NOR ANY LENDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO HAVE ANY LIABILITY
WHATSOEVER, AS TO THE TITLE TO THE EQUIPMENT OR TO THE VALUE, MERCHANTABILITY,
HABITABILITY, CONDITION, QUALITY, DESCRIPTION, OR FITNESS FOR ANY PARTICULAR USE
OF THE SAME, OR ANY PART THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT OR ANY PART
THEREOF, AND NEITHER LESSOR (AS TRUSTEE OR LESSOR), ADMINISTRATIVE AGENT NOR ANY
LENDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT AND/OR
REDHIBITORY DEFECTS THEREIN OR THE FAILURE OF THE EQUIPMENT, OR ANY PART
THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS, except that Lessor hereby
represents and warrants that the Equipment is and shall be free of Lessor Liens
(such Lessor representation and warranty being made by (x) the Bank individually
with respect to any Lessor Liens attributable to the Bank, and (y) Bank, as
Trustee and as Lessor, with respect to any Lessor Liens attributable to
Trustee). Lessee acknowledges and agrees that (i) the Equipment is of a size,
design, capacity and manufacture selected by
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Lessee, (ii) Lessee is satisfied that the same is suitable for its purposes, and
(iii) neither Lessor (as Trustee or Lessor), Administrative Agent nor any Lender
is a manufacturer thereof or a dealer in the property of such kind. Lessee has
been afforded full opportunity to inspect the Equipment, is satisfied with the
results of its inspections and is entering into this Lease solely on the basis
of the results of its own inspections, and all risks incident to the matters
discussed in the preceding sentence, as between Lessor (as Trustee or Lessor),
Administrative Agent and the Lenders, on the one hand, and Lessee, on the other,
are to be borne by Lessee. The provisions of this Article VI have been
negotiated, and, except to the extent otherwise expressly stated, the foregoing
provisions are intended to be a complete exclusion and negation of any
representations or warranties by any of Lessor (as Trustee or Lessor),
Administrative Agent or the Lenders, express or implied, with respect to the
Equipment (or any interest therein), that may arise pursuant to any law now or
hereafter in effect, or otherwise.
SECTION 1.16 Assignment of Warranties. Lessor hereby assigns to Lessee,
to the extent assignable, all of its present and future interest, if any, in any
warranties, covenants and representations of any manufacturer or vendor of any
item of Equipment; provided that such assignment shall be effective only when no
Event of Default has occurred and is continuing; and provided, further, that any
action taken by Lessee by reason thereof shall be at the expense of Lessee and
shall be consistent with Lessee's obligations pursuant to this Lease. So long as
no Lease Event of Default shall have occurred and be continuing, upon Lessee's
reasonable request and at Lessee's sole expense, Lessor shall enforce any
non-assignable warranties, covenants and representations of any manufacturer or
vendor of any item of Equipment, provided Lessee, at all times relevant to any
such enforcement, shall cooperate with Lessor in any manner reasonably requested
by Lessor.
ARTICLE VII
MAINTENANCE AND REPAIR;
ALTERATIONS AND ADDITIONS
SECTION 1.17 Maintenance and Repair; Compliance With Law.
(1) Without limiting Lessee's obligations under Section 5.11
of the Participation Agreement, Lessee, at its own expense, shall at
all times maintain the Equipment in good and safe order, operating
condition and repair (ordinary wear and tear excepted), substantially
in conformance with the maintenance and repair standards and procedures
as are set forth in the manufacturer's manuals pertaining to the
Equipment (and in any event to at least as high a standard of
maintenance and repair as Lessee and/or its Affiliates observe with
respect to similar equipment owned or leased by Lessee or any such
Affiliate) and as otherwise required to enforce claims against each
vendor or manufacturer of each item of Equipment and in compliance in
all material respects with Applicable Laws and the standards imposed by
insurance policies required to be maintained hereunder with respect to
the Equipment.
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(2) In addition, Lessee shall make all necessary or
appropriate repairs, replacements, substitutions and modifications in
respect of the Equipment (or any component thereof) which may be
required to keep the Equipment in the condition required above.
SECTION 1.18 Alterations.
(1) If any item of Equipment or individual component thereof
is required to be altered, added to, replaced, improved or modified in
order to comply with Applicable Laws (a "Required Alteration"), Lessee
shall notify Lessor and diligently proceed to make such Required
Alteration at its own expense.
(2) Lessee, at its own expense, may make any alteration,
addition, replacement, improvement or modification to any item of
Equipment (a "Permitted Alteration"), or remove any part that becomes
worn out, broken or obsolete, if Lessee continues to be in compliance
with Section 7.1 and such action, when completed, will be of such
character as not to materially adversely affect (i) the current fair
market value of the item of Equipment, (ii) the originally anticipated
use or function thereof, as applicable, and (iii) the originally
anticipated residual value of the item of Equipment.
(3) All Alterations shall be completed in a commercially
reasonable manner and shall not, when completed, violate the terms of
any restriction, easement, servitude, condition, covenant or other
matter affecting the Equipment.
(4) Neither Lessor (as Trustee and/or Lessor) nor
Administrative Agent need inquire into or confirm that Alterations were
made in conformity with the requirements of this Section 7.2.
SECTION 1.19 Replacement and Substitution. Lessee may replace an item
of Equipment subject to this Lease with a replacement item of equipment that
meets the suitability standards set forth in Section 9.1(b). Lessee may request
the replacement of an item of Equipment by delivery of a replacement notice to
Lessor at least 10 days prior to the date of the proposed substitution. Upon a
permitted substitution of Equipment pursuant to this Section 7.3, Lessor, as
Lessor and Trustee, shall execute and deliver to Lessee a xxxx of sale (without
representations or warranties, except that the substituted item is free and
clear of all Lessor Liens) and such other documents as may be required to
release the substituted item from the terms of this Lease and the other
Operative Documents and transfer title to same to Lessee, all at Lessee's
expense. Leased items of Equipment that have been substituted or replaced
pursuant to this Section 7.3 shall become the property of Lessee, and title
thereto shall automatically vest in Lessee upon such permitted substitution or
replacement.
SECTION 1.20 Removal. No Required Alteration may be removed or severed
from the item of Equipment to which it is attached (unless no longer required by
Applicable Laws so
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long as clauses (i) and (iii) below are satisfied). A Permitted Alteration (or
component thereof) may be removed by Lessee at its expense if (i) it is readily
removable without causing material damage to the item of Equipment to which it
is attached, (ii) the removal does not violate Applicable Laws and (iii) no
Default or Event of Default is continuing.
SECTION 1.21 Maintenance and Repair Reports. Lessee shall keep
maintenance and repair reports in sufficient detail, and as customary for owners
or operators of casinos, to indicate the nature and date of major work done.
Such reports shall be kept on file by Lessee at its offices during the Lease
Term, and shall be made available to Lessor, as Lessor and Trustee, upon
reasonable request. Lessee shall give notice to Lessor and Administrative Agent
of any Condemnation or Casualty the cost to repair which is reasonably expected
by Lessee to exceed $500,000 promptly after Lessee has knowledge thereof.
ARTICLE VIII
USE
SECTION 1.22 Use. Lessee shall use and operate the Equipment in
material compliance with any and all Applicable Laws. Lessee shall procure and
maintain in effect all material licenses, registrations, certificates, permits,
approvals and consents required of it by Applicable Laws or any Governmental
Authority in connection with the ownership, delivery, installation, use and
operation of the Equipment. The Equipment will at all times be and remain in the
possession and control of Lessee, subject, however, to Articles IV and X. The
Equipment shall in no event be located outside of (i) the Resort except to the
extent necessary to effect maintenance, repair or servicing thereof and provided
Lessee shall have given Lessor prior written notice of any such relocation, (ii)
the State of Louisiana, without prior written notice to Lessor and the taking
(before such relocation) of all actions necessary to maintain the perfection of
the security interest of Lessor, as Lessor and Trustee, and Administrative Agent
therein, and (iii) the continental United States.
ARTICLE IX
CASUALTY; REPLACEMENT; INSURANCE
SECTION 1.23 Casualty.
(1) If a Casualty occurs with respect to an item or items of
Equipment, Lessee shall (i) give prompt written notice of such
occurrence and the date thereof to Lessor and (ii) if such Casualty
causes damage in an aggregate amount in excess of $500,000, either (A)
replace such item or items of Equipment with respect to which the
Casualty has occurred pursuant to the following provisions of Section
9.1(b) or (B) purchase such item or items of Equipment from Lessor, no
later than the next
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Payment Date occurring at least 120 days after such Casualty (but in no
event later than the Lease Termination Date), at a purchase price equal
to the Casualty Item Amount.
(2) If any item of Equipment is to be replaced, no later than
the earlier of (i) 120 days after the occurrence of a Casualty or (ii)
the Lease Termination Date, Lessee will substitute equipment meeting
the suitability standards set forth in this Section 9.1(b) for the item
of Equipment suffering the Casualty. To be suitable as a replacement,
such replacement item of equipment must be of the same general type,
year of construction (or a later year of construction), function,
utility, state of repair and operating condition as the item of
Equipment suffering the Casualty, must have a fair market value of not
less than the fair market value (immediately preceding the Casualty
assuming that such item of Equipment had been maintained in accordance
with Article VII) of the item of Equipment suffering the Casualty, and
be free and clear of all Liens other than Permitted Liens. Lessee shall
cause a Xxxx of Sale and a Certificate of Acceptance to be executed and
delivered to Lessor in order to subject such replacement item of
Equipment to this Lease, and upon such execution and delivery and the
receipt by Lessor, as Trustee or Lessor, Administrative Agent and the
Lenders of (i) a certificate of insurance in accordance with Section
9.4 evidencing Lessee's compliance with the insurance provisions of
Section 9.3 with respect to such replacement item of Equipment, and
(ii) evidence to the effect that properly prepared financing statements
have been filed and recorded in all public offices where necessary to
perfect the security interest of Lessor in the replacement item of
equipment, and that no other filing or recording or giving of notice
with or to any other Governmental Authority is necessary to perfect the
security interest of Lessor, as Lessor and Trustee, in such replacement
item of equipment. Such replacement item of equipment shall be deemed
an item of Equipment for all purposes hereof.
(3) If no Lease Event of Default has occurred and is
continuing and Lessee elects to replace any item of Equipment suffering
a Casualty, Lessee shall be entitled to receive from Lessor the
Casualty Recoveries with respect thereto, to be used to reimburse
Lessee for the cost of replacement of such item of Equipment after
Lessee fully applies the Casualty Recoveries properly received by it in
replacement of such item of Equipment pursuant to Section 9.1(d).
Lessor, subject to the rights of any insurer insuring such item of
Equipment as provided herein, promptly shall execute and deliver to
Lessee, or to its assignee or nominee, a quitclaim xxxx of sale
(without representations or warranties except that such item of
Equipment is free and clear of Lessor Liens) for such item of
Equipment, and such other documents as may be required to release such
item of Equipment from the terms of this Lease and the other Operative
Documents, in such form as may reasonably be requested by Lessee. All
fees, costs and expenses relating to a substitution as described herein
shall be borne by Lessee.
(4) All Casualty Recoveries in excess of $500,000 in respect
of a Casualty to any item or items of Equipment shall be paid directly
to Lessor to be held as cash collateral for the Obligations, subject to
the release of proceeds provisions contained
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herein, or if paid to Lessee, such excess funds shall be immediately
paid by Lessee to Lessor. If a Lease Event of Default has occurred and
is continuing (whether prior to or after delivery of any such Casualty
Recoveries to Lessor), Lessor may retain all Casualty Recoveries as
cash collateral or, if no Lease Event of Default has occurred and is
continuing, Lessee shall be entitled to apply all Casualty Recoveries
in accordance with Section 9.1(c), and any balance remaining after
compliance with Section 9.1(c) shall be retained by or returned to
Lessee. Lessee shall not be entitled to any Casualty Recoveries in
excess of $500,000 until it applies all amounts received in relation to
such Casualty Recovery of less than or equal to such amount in repair
or replacement of the affected item of Equipment. If Lessor receives
Casualty Recoveries in an amount that is less than $500,000, so long as
no Lease Event of Default has occurred and is continuing, Lessor shall
promptly remit such funds to Lessee. Notwithstanding any Casualty, all
of Lessee's Obligations under this Lease (including its obligation to
make all payments of Rent as they become due) shall continue unabated
and in full force and effect as provided in this Lease.
SECTION 1.24 Non-Casualty Losses.
(1) If any item of Equipment suffers any condemnation, loss,
physical harm or damage not constituting a Casualty (a "Non-Casualty
Loss"), Lessee shall repair such item of Equipment.
(2) All Non-Casualty Recoveries in excess of $500,000 in
respect of any Non-Casualty Loss to an item or items of Equipment
(including any component thereof) shall be paid directly to Lessor to
be held as cash collateral for the Obligations, subject to the release
of proceeds provisions contained herein. Non-Casualty Recoveries held
by Lessor shall be disbursed by Lessor to Lessee from time to time (but
no more frequently than once per calendar month) to pay Lessee for the
costs of repairing and rebuilding the affected portions of the
Equipment as required under Section 9.2(a), subject to such reasonable
disbursement conditions as Lessor may impose, including presentation of
invoices and other supporting documentation reflecting such costs and
delivery of Lien waivers; provided, however, Lessor shall have no
obligation to disburse any Non-Casualty Recoveries at any time that
Lessor shall reasonably determine (i) that such Non-Casualty Recoveries
are not sufficient to repair and rebuild the affected portions of the
Equipment as required by Section 9.2(a) (unless additional funds which
are, in the sole discretion of Lessor, sufficient to so repair and
rebuild the affected portions of the Equipment have been deposited with
Lessor) or (ii) that Lessee is not diligently performing its
obligations under Section 9.2(a). Notwithstanding the foregoing
provisions of this Section 9.2(b), and provided no Lease Event of
Default has occurred and is continuing, if the aggregate amount of
Non-Casualty Recoveries attributable to any Non-Casualty Loss is
$500,000 or less, Lessee may receive such Non-Casualty Recoveries
directly, without delivery to Lessor, provided such Non-Casualty
Recoveries are applied in accordance with the requirements of Section
9.2(a). If Lessor receives Non-Casualty Recoveries in an amount that is
less than $500,000, so long as no Lease
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Event of Default has occurred and is continuing, Lessor shall promptly
remit such funds to Lessee. Notwithstanding any Non-Casualty Loss, all
of Lessee's obligations under this Lease (including its obligation to
make all payments of Rent as they become due) shall continue unabated
and in full force and effect as provided in this Lease.
SECTION 1.25 Required Coverages. Lessee will keep the Equipment insured
by financially sound and reputable insurers against loss or damage of the kinds
and in the amounts customarily insured against by similar Persons engaged in
similar operations and carry such other insurance as is usually carried by such
Persons, provided that in any event Lessee shall maintain:
(1) Casualty Insurance. Insurance against all risks of loss or
damage covering the Equipment and each part thereof with deductibles
and in such minimum amounts as are consistent with industry standards;
provided, however, that at no time shall the amount of coverage, on a
replacement cost basis, be less than one hundred ten percent of the
then outstanding Lease Balance.
(2) Comprehensive General Liability Insurance. Combined single
limit insurance against claims for bodily injury, death or third-party
property damage occurring on, in or about the Equipment in an amount at
least equal to $75,000,000 per occurrence with such deductibles as are
carried by similarly situated Persons involved in operating similar
facilities and equipment.
(3) Other Insurance. Such other insurance including workmen's
compensation and business interruption insurance, in each case as
generally carried by owners of similar equipment in the State of
Louisiana, in such amounts and against such risks as are then customary
for equipment similar in use.
Such insurance shall be written by reputable insurance companies that are
financially sound and solvent and otherwise reasonably appropriate considering
the amount and type of insurance being provided by such companies. In the case
of liability insurance maintained by Lessee, each policy shall name Bank,
individually and as Trustee and Lessor, Administrative Agent and the Lenders, as
additional insureds. In the case of casualty and property insurance maintained
by Lessee, each policy shall name Bank, as Trustee and Lessor, Administrative
Agent and the Lenders as sole loss payees. Each policy referred to in this
Section 9.3 shall provide that: (i) it will not be canceled or its limits
reduced, or allowed to lapse without renewal, except after not less than thirty
(30) days prior written notice to each additional insured; (ii) the interests of
Bank, individually and as Trustee and Lessor, Administrative Agent and all
Lenders shall not be invalidated by any act or negligence of Lessee or any
Person having an interest in the Resort or any item of Equipment; (iii) such
insurance is primary with respect to any other insurance carried by or available
to Bank, individually and as Trustee and Lessor, Administrative Agent and all
Lenders; (iv) the insurer shall waive any right of subrogation, setoff,
counterclaim, or other deduction, whether by attachment or otherwise, against
Administrative Agent or Lessor individually and as Trustee and Lessor; and (v)
such policy shall contain a severability of interest clause providing for
coverage of Bank, individually and as Trustee and Lessor, Administrative Agent
and each
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Lender as if separate policies had been issued to each of them, with the
understanding that the inclusion of more than one insured will not operate to
increase the limit of liability of such policy beyond the amount set forth in
Section 9.3(b). Lessee will notify Lessor and Administrative Agent promptly of
any policy cancellation, reduction in policy limits, modification or amendment.
Unless a Lease Event of Default shall have occurred and be continuing, no
Participant shall enter into any settlement or other compromise with respect to
any insured loss without the prior written consent of Lessee, which consent
shall not be unreasonably withheld or delayed.
SECTION 1.26 Delivery of Insurance Certificates. On or before the
Closing Date and thereafter not less than thirty (30) days prior to the
expiration date of the expiring policies which are required to be maintained
pursuant to Section 9.3 and upon written request of Lessor after a Lease Event
of Default, Lessee shall deliver to Lessor and Administrative Agent certificates
of insurance reasonably satisfactory to Lessor and Administrative Agent
evidencing the existence of all insurance required to be maintained hereunder
and setting forth the respective coverages, limits of liability, carrier, policy
number and period of coverage.
ARTICLE X
LEASE EVENTS OF DEFAULT
SECTION 1.27 Lease Events of Default. The occurrence of any one or more
of the following events, whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body, shall constitute a
"Lease Event of Default":
(1) Any payment (i) of Periodic Rent shall not be paid when
due and such failure shall continue unremedied for a period of five (5)
Business Days or (ii) of Supplemental Rent or any other amount (other
than Periodic Rent) payable by Lessee hereunder or under any other
Operative Document shall not be paid within thirty (30) days of written
demand therefor;
(2) Lessee shall default in the performance of its obligations
under Section 5.13(d) of the Participation Agreement;
(3) Failure by Lessee for thirty (30) days after notice
thereof to comply with any of the other agreements in any Operative
Document not set forth in clauses (a) and (b) above;
(4) Default under any agreement, mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by Lessee or
any of its Restricted Subsidiaries (or the
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payment of which is guaranteed by Lessee or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the Closing Date, if that default:
(1) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period (if any) provided in such agreement, security agreement,
mortgage, indenture or instrument governing such Indebtedness on the
date of such default (a "Payment Default"); or
(2) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated (or otherwise has occurred),
aggregates $5,000,000 or more;
(5) Failure by Lessee or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $5,000,000, which judgments are not
paid, discharged or stayed for a period of sixty (60) days;
(6) (i) breach by Lessee in any material respect of any representation
or warranty or agreement or covenant in any of the Operative Documents or in any
certificate, letter, or other writing or instrument furnished or delivered in
connection therewith, (ii) the repudiation by Lessee of any of its Obligations
under any of the Operative Documents, (iii) the unenforceability of any of the
Operative Documents against Lessee for any reason which continues for thirty
(30) days after written notice from Lessor, as Lessor and/or Trustee, or
Administrative Agent or (iv) Lessee, HCS I or HCS II of any Affiliate or any of
them shall, directly or indirectly, contest in any manner the effectiveness,
validity, binding nature or enforceability of any Lien granted under any
Operative Document; or any of the Liens securing the obligations of Lessee or
Lessor, as Trustee and/or Lessor, under the Operative Documents shall, in whole
or in part, cease to be a perfected Lien (and, in the case of the Priority
Collateral and Liens granted by Lessor, as Trustee and Lessor, pursuant to the
Security Documents, a perfected first priority Lien), subject only to Permitted
Liens;
(7) Lessee, any of its Restricted Subsidiaries, HCS I or HCS II: (i)
commences a voluntary case or proceeding or files any petition under any
bankruptcy, insolvency or similar law or seeks dissolution, liquidation or
reorganization or the appointment of a receiver, keeper, trustee, custodian or
liquidator for itself or a substantial portion of its property, assets or
business or to effect a plan or other arrangement with its creditors; (ii)
consents to the entry of an order for relief against it in an involuntary case
or proceeding under any bankruptcy, insolvency or similar law; (iii) consents to
the appointment of a custodian of it or for all or substantially all of its
property, assets or business; (iv) makes a general assignment for the benefit of
its creditors; or (v) generally
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is not paying its debts as they become due;
(8) A court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against Lessee, any of its Restricted
Subsidiaries, HCS I or HCS II in any involuntary case or proceeding; (ii)
appoints a custodian of Lessee, any of its Restricted Subsidiaries, HCS I or HCS
II for all or substantially all of the property, assets or business of Lessee,
any such Restricted Subsidiary, HCS I or HCS II; or (iii) orders the liquidation
of Lessee, any of its Restricted Subsidiaries, HCS I or HCS II; and the order or
decree remains unstayed and in effect for sixty (60) consecutive days;
(9) Default by Hollywood Casino in the performance of its obligations
set forth in, or repudiation of its obligations under, the "Completion Capital
Agreement" (as defined in the Indenture); (1)
(10) If HWCC-Louisiana, HCS I, HCS II or Lessee ever fail to own
collectively 100% of the issued and outstanding Equity Interests of Shreveport
Capital;
(11) The failure of the Resort to be Operating by the Operating
Deadline;
(12) There has occurred (i) any License Revocation which results in the
cessation or suspension of gaming business at the Casino for a period of more
than five (5) consecutive days or (ii) any other event which results in the
cessation or suspension of business at the Resort for a period of more than (a)
twenty (20) consecutive days if Lessee is not diligently and continuously
proceeding to cure or remedy the event giving rise to such cessation or
suspension of business; or (b) forty-five (45) consecutive days; provided,
however, that there shall not be a Lease Event of Default under this clause (ii)
if the suspension of business results from a Casualty and Lessee is complying
with Article IX;
(13) Any Pension Plan maintained by Lessee or any of its ERISA
Affiliates is determined to have a material "accumulated funding deficiency" as
that term is defined in Section 302 of ERISA and such event would reasonably be
expected to result in a Material Adverse Effect or if Lessee or any of its ERISA
Affiliates fails to otherwise comply with ERISA so that grounds exist to permit
the appointment of a trustee under ERISA to administer its Pension Plans or to
allow the PBGC to institute proceedings to appoint a trustee to administer its
Pension Plans;
(14) To the extent not covered elsewhere in this Section 10.1, any
Event of Default under, and as defined in, the Indenture (or under any
documentation evidencing a refinancing or replacement of the indebtedness
created thereunder) has occurred and is continuing; or
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(15) There shall have occurred a Change of Control.
SECTION 1.28 Remedies. If any Lease Event of Default exists and is
continuing, Lessor shall have the rights, options and remedies of a secured
party at law and in equity and, without limiting the foregoing, Lessor, so long
as such Lease Event of Default is continuing, may exercise in any order one or
more or all of the following remedies, to the extent permitted by Applicable
Laws (it being understood that no remedy herein conferred is intended to be
exclusive of any other remedy or remedies, but each and every remedy shall be
cumulative and shall be in addition to every other remedy given herein or now or
hereafter existing at law or in equity or by statute), as Lessor, in its sole
discretion, shall determine, without limiting any other right or remedy Lessor,
as Lessor and/or Trustee, may have on account of such Lease Event of Default:
(1) Lessor may proceed by appropriate court action or actions,
either at law or in equity, to enforce performance by Lessee of the
applicable covenants of this Lease or to recover damages for the breach
thereof; or (1)
(2) Lessor may by notice in writing to Lessee terminate this
Lease, but Lessee shall remain liable as hereinafter provided; and
Lessor may, at its option, do any one or more of the following: (i)
declare the Lease Balance, all accrued but unpaid Rent (to the extent
of the accrued unpaid interest on the Notes), and all other amounts
then payable by Lessee under this Lease and the other Operative
Documents to be immediately due and payable, and recover any other
damages and expenses (including, without limitation, the costs and
expenses described in Sections 7.1 and 9.16 of the Participation
Agreement) in addition thereto which Lessor shall have sustained by
reason of such Lease Event of Default; (ii) enforce the Lien given
hereunder pursuant to the UCC or any other applicable law; and (iii)
enter upon the premises where any item of Equipment may be and either
remove such Equipment (or any portion thereof), with any damage to the
improvements upon which the Equipment may be attached to be borne by
Lessee, or take possession of the Equipment; or
(3) Lessor may require Lessee immediately to purchase the
Equipment (or the remaining portion thereof) in accordance with the
provisions of Section 5.1.
If a Lease Event of Default is continuing, amounts received by Lessor from the
deposit of Casualty Recoveries and Non-Casualty Recoveries with Lessor pursuant
to Article IX will be applied against Lessee's liabilities hereunder. If, as a
consequence of the exercise by Lessor of its remedies pursuant to this Section
10.2, the Lease Balance and all other amounts due and owing from Lessee under
this Lease and the other Operative Documents have been paid in full, then Lessor
shall remit to Lessee any excess amounts received by Lessor.
If any Lease Event of Default with respect to Lessee described in
Section 10.1(f) or 10.1(g) shall have occurred and be continuing, then the
entire outstanding Lease Balance, and all accrued Rent and other amounts payable
under the Operative Documents, shall automatically and immediately become due
and payable, without presentment, demand, notice, declaration, protest
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or requirements of any kind, all of which are hereby expressly waived.
SECTION 1.29 Waiver of Certain Rights. If this Lease shall be
terminated pursuant to Section 10.2, Lessee waives, to the fullest extent
permitted by law, (a) any notice of the institution of legal proceedings to
obtain possession; (b) any right of redemption or repossession; (c) the benefit
of any laws now or hereafter in force exempting property from liability for rent
or for debt or limiting Lessor with respect to the election of remedies; and (d)
any other rights which might otherwise limit or modify any of Lessor's rights or
remedies under this Article X.
SECTION 1.30 Power of Attorney. Lessee unconditionally and irrevocably
appoints Lessor, as Lessor and Trustee, as its true and lawful attorney-in-fact,
with full power of substitution, to the extent permitted by Applicable Laws, in
its name and stead and on its behalf, for the purpose of effectuating any sale,
assignment, transfer or delivery hereunder, if a Lease Event of Default occurs
and is continuing, whether pursuant to foreclosure or power of sale or
otherwise, and in connection therewith to execute and deliver all such deeds,
bills of sale, assignments, releases (including releases of this Lease on the
records of any Governmental Authority) and other proper instruments as Lessor
may reasonably consider necessary or appropriate. Lessee ratifies and confirms
all that such attorney or any substitute shall lawfully do by virtue hereof. If
requested by Lessor or any purchaser, Lessee shall ratify and confirm any such
lawful sale, assignment, transfer or delivery by executing and delivering to
Lessor or such purchaser, all deeds, bills of sale, assignments, releases and
other proper instruments to effect such ratification and confirmation as may be
designated in any such request.
SECTION 1.31 Remedies Cumulative; No Waiver; Consents. To the extent
permitted by, and subject to the mandatory requirements of, Applicable Laws,
each and every right, power and remedy herein specifically given to Lessor or
otherwise in this Lease shall be cumulative and shall be in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
Lessor, and the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same time
or thereafter any right, power or remedy. No delay or omission by Lessor in the
exercise of any right, power or remedy or in the pursuit of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of Lessee or to be an acquiescence therein. Lessor's consent
to any request made by Lessee shall not be deemed to constitute or preclude the
necessity for obtaining Lessor's consent, in the future, to all similar
requests. No express or implied waiver by Lessor of any Lease Event of Default
shall in any way be, or be construed to be, a waiver of any future or subsequent
Lease Event of Default. To the extent permitted by Applicable Laws, Lessee
hereby waives any right now or hereafter conferred by statute or otherwise that
may require Lessor to sell, lease or otherwise use the Equipment in mitigation
of Lessor's damages upon the occurrence and during the continuance of a Lease
Event of Default or that may otherwise limit or modify any of Lessor's rights or
remedies under this Article X.
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ARTICLE XI
ADDITIONAL LOUISIANA PROVISIONS
SECTION 1.32 Additional Louisiana Provisions.
(1) The term "Louisiana Collateral" as used herein shall refer
to all portions of the Lessee Collateral and the proceeds thereof that
are from time to time located in the State of Louisiana or are
otherwise subject to Louisiana law at all times during which such
portions or proceeds thereof are located in Louisiana or are otherwise
mandatorily subject to the application of Louisiana law under the
Applicable Laws of other states. This Article XI shall apply to all
Louisiana Collateral and all proceeds thereof at all times during which
such Louisiana Collateral or the proceeds thereof are located in
Louisiana or are otherwise subject to the application of Louisiana law
in any respect.
(2) Contemporaneously with the execution of this Lease, Lessee
has completed and signed one or more appropriate Louisiana UCC-1
Financing Statements with regard to the Lessee Collateral and the
proceeds thereof. Lessee hereby authorizes Lessor, as Trustee and
Lessor, at Lessee's expense, to file multiple originals, or
photocopies, carbon copies or facsimile copies of such Louisiana UCC-1
Financing Statements with the appropriate filing officer or officers in
the State of Louisiana, pursuant to the provisions of Chapter 9 of the
Louisiana Commercial Laws.
(3) Lessee shall give Lessor thirty (30) days written notice
prior to any change in Lessee's employer identification number by
Lessee and shall give Lessor written notice of any change in Lessee's
employer identification number that is not made by Lessee within thirty
(30) days after such change. In the event of any change whatsoever in
Lessee's employer identification number, Lessee will execute and file
any new financing statements or other documents that are necessary or
desirable, as determined by Lessor, in its sole discretion, to preserve
and continue Lessor's security interests under this Lease within thirty
(30) days after such change.
(4) During the continuance of any Lease Event of Default,
Lessor shall have the following rights and remedies with respect to the
Louisiana Collateral, which rights and remedies are in addition to and
are not in lieu or limitation of any other rights and remedies that may
be provided in this Lease or any of the other Operative Documents,
under Chapter 9 of the Louisiana Commercial Laws (La. R.S. xx.xx.
10:9-101 et seq.), the Louisiana Lease of Movables Act (La. X.X.xx.xx.
------
9:3301 et seq.), under the Uniform Commercial Code of any State other
------
than Louisiana, or at law or equity generally:
(1) Lessor may cause the Louisiana Collateral, or any
part or parts thereof, to be immediately seized wherever
found, and sold, whether in term
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of court or in vacation, under ordinary or executory process,
in accordance with applicable Louisiana law, to the highest
bidder for cash, with or without appraisement, without the
necessity of making additional demand, or of notifying Lessee,
or placing Lessee in default.
(2) For purposes of foreclosure under Louisiana
executory process procedures, Lessee confesses judgment and
acknowledges to be indebted unto and in favor of Lessor up to
the full amount of the Obligations of Lessee under this Lease
and all other Operative Document, in principal, interest,
costs, expenses, reasonable attorneys' fees and other fees and
charges. To the extent permitted under applicable Louisiana
law, Lessee waives: (a) the benefit of appraisal as provided
in Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of
Civil Procedure and all other laws with regard to appraisal
upon judicial sale; (b) the demand and three (3) days' delay
as provided under Articles 2639 and 2721 of the Louisiana Code
of Civil Procedure; (c) the notice of seizure as provided
under Articles 2293 and 2721 of the Louisiana Code of Civil
Procedure; (d) the three (3) days' delay provided under
Articles 2331 and 2722 of the Louisiana Code of Civil
Procedure; and (e) all other benefits provided under Articles
2331, 2722 and 2723 of the Louisiana Code of Civil Procedure
and all other similar provisions of the Louisiana Code of
Civil Procedure not specifically listed hereinabove.
(3) Should any of the Louisiana Collateral be seized
as an incident to an action for the recognition or enforcement
of the Obligations of Lessee under this Lease or any other
Operative Document, by executory process, sequestration,
attachment, writ of fieri facias or otherwise, Lessee
------------
agrees that the court issuing any such order shall, if
requested by Lessor, appoint Lessor or any Person named by
Lessor at the time such seizure is requested, or at any time
thereafter, as keeper of the Louisiana Collateral as provided
under La. X.X.xx.xx. 9:5136 et seq. Lessee agrees to pay the
------
reasonable fees of such keeper, which fees to the keeper shall
also be a part of the Obligations of Lessee under this Lease.
(4) Should it become necessary for Lessor to
foreclose against the Louisiana Collateral, all declarations
of fact that are made in an authentic act passed before a
Notary Public in the presence of two witnesses, by a person
declaring such facts to lie within his or her knowledge, shall
constitute authentic evidence for purposes of executory
process and also for purposes of La. X.X.xx. 9:3509.1, La.
X.X.xx. 9:3504(D)(6) and La. X.X.xx. 10:9-508, as applicable.
(5) Anything to the contrary contained in this Lease
notwithstanding, the perfection of the security interests in the
Louisiana Collateral granted in this Lease and the Lessor's remedies in
the courts sitting in and for the State of Louisiana with respect to
the Louisiana Collateral shall be governed by Louisiana law, with
California law
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governing the remaining provisions of this Lease, its application to
the Lessee Collateral and the proceeds thereof, and all rights and
obligations of the parties hereunder in all other respects.
ARTICLE XII
LESSOR'S RIGHT TO CURE
SECTION 1.33 Lessor's Right to Cure Lessee's Lease Defaults. Lessor,
upon five (5) Business Days prior notice (except that in any circumstance in
which there is a risk of imminent harm to any Person or property or any
possibility of criminal liability to any Lender, no notice shall be required),
without waiving or releasing any Obligation of Lessee or any Lease Event of
Default, may (but shall be under no obligation to) remedy any Lease Event of
Default for the account and at the sole cost and expense of Lessee, including
the failure by Lessee to maintain the insurance required by Article IX, and may,
to the fullest extent permitted by law, and notwithstanding any right of quiet
enjoyment in favor of Lessee, possess the Equipment for such purpose and take
all such action thereon as may be reasonably necessary or appropriate therefor.
No such entry shall be deemed an eviction of Lessee. All reasonable
out-of-pocket costs and expenses so incurred (including reasonable fees and
expenses of counsel, including allocated time charges of internal counsel),
together with interest thereon at the Overdue Rate from the date on which such
sums or expenses are paid by Lessor, shall be paid by Lessee to Lessor on
demand.
ARTICLE XIII
LESSOR ASSIGNMENTS
SECTION 1.34 Lessor Assignments. All of the right, title or interest
and obligations of Lessor, as Lessor and Trustee, in and to this Lease, and the
rights, benefits, advantages and obligations of Lessor hereunder, including the
rights to receive payment of Rent and all other payments hereunder, and the
rights, titles and interests of Lessor, as Lessor and Trustee, in and to the
Equipment, will be assigned or transferred by Lessor, as Lessor and/or Trustee,
only in accordance with the provisions set forth in the Trust Agreement.
ARTICLE XIV
GRANT OF SECURITY INTEREST
SECTION 1.35 Grant of Security Interest. Title to the Equipment is held
by Lessor, as Lessor and Trustee, as collateral security for the Obligations of
Lessee hereunder and under the other Operative Documents to which it is a party
until such time as Lessee has fulfilled all of its Obligations hereunder and
under such other Operative Documents. Lessee hereby assigns,
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grants and pledges to Lessor, as Lessor and Trustee, and the Lenders, a security
interest and Lien in all of its right, title and interest in, to and under,
whether now or hereafter existing or acquired, (a) the Equipment, whether or not
fixtures of the property subject to the Ground Lease, (b) each of the items,
accounts, and agreements listed in Section 2.1 of the Security Agreement, and
(c) all products, accessions, rents, issues, profits, returns, income and
proceeds of and from any and all of the foregoing (including proceeds which
constitute property of the types described in the foregoing clauses (a) and (b),
and, to the extent not otherwise included, all payments under insurance (whether
or not Lessor in any capacity is the loss payee thereof), or any indemnity,
warranty or guaranty payable by reason of loss or damage to or otherwise with
respect to any of the foregoing) (collectively, the "Lessee Collateral"), to
secure the payment of all sums due hereunder and under the Operative Documents
to which it is a party and the performance of all obligations hereunder and the
other Operative Documents to which it is a party.
SECTION 1.36 Retention of Title or Proceeds in the Case of Default. If
Lessee would be entitled to any amount (including any Casualty Recoveries or
Non-Casualty Recoveries) or title to any item of Equipment hereunder but for the
continuance of any Lease Event of Default or event which with the giving of
notice and/or passage of time could become a Lease Event of Default, Lessor, as
Lessor and Trustee, shall hold such amount, or portion of the item of Equipment,
as part of the Lessee Collateral and shall be entitled to apply such amounts
against any amounts due hereunder; provided that Lessor shall distribute such
amount, or transfer the Equipment, to Lessee in accordance with the other terms
of this Lease if and when no Lease Event of Default or event which with the
giving of notice and/or passage of time could become a Lease Event of Default is
continuing.
ARTICLE XV
WARRANTY OF TITLE
SECTION 1.37 Warranty of Title. Nothing contained in this Lease shall
be construed as constituting the consent or request of Lessor, as Trustee and/or
Lessor, expressed or implied, to or for the performance by any contractor,
mechanic, laborer, materialman, supplier or vendor of any labor or services or
for the furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to the Resort, the Equipment, or any part thereof.
NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR, AS TRUSTEE AND/OR LESSOR,
ADMINISTRATIVE AGENT NOR ANY LENDER IS OR SHALL BE LIABLE FOR ANY LABOR,
SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE
HOLDING THE EQUIPMENT OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND THAT NO
MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFECT THE INTEREST OF LESSOR, AS TRUSTEE AND/OR LESSOR, ADMINISTRATIVE
AGENT OR ANY LENDER IN AND TO THE EQUIPMENT.
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ARTICLE XVI
MISCELLANEOUS
SECTION 1.38 Governing Law. THIS LEASE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF CALIFORNIA OTHER THAN CHOICE OF LAWS AND CONFLICTS
RULES OF SUCH STATE, EXCEPT AS TO MATTERS RELATING TO PERFECTION AND THE EFFECT
OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST AND LIENS CREATED
HEREUNDER OR REMEDIES PROVIDED WITH RESPECT TO THE EQUIPMENT, WHICH SHALL BE
GOVERNED BY THE LAWS OF THE STATE WHERE THE EQUIPMENT IS LOCATED AND TO THE
EXTENT THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER OR UNDER THE
OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH LAWS (INCLUDING, WITHOUT
LIMITATION, THE GAMING LAWS) OF THE STATE OF LOUISIANA.
SECTION 1.39 Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be in writing and shall be delivered and shall be deemed to have
been given in accordance with Section 9.6 of the Participation Agreement.
SECTION 1.40 Counterparts. This Lease has been executed in several
counterparts. One counterpart has been prominently marked "Lessor's Copy" and
the other counterparts have been prominently marked "Lessee 's Copy" or "Copy."
Only the counterpart marked "Lessor's Copy" shall evidence a monetary obligation
of Lessee or shall be deemed to be an original or to be chattel paper for
purposes of the UCC, and such copy shall be held by Lessor, as Lessor and
Trustee, as part of the Trust Estate.
SECTION 1.41 Severability. Whenever possible, each provision of this
Lease shall be interpreted in such manner as to be effective and valid under
Applicable Laws; but if any provision of this Lease shall be prohibited by or
invalid under Applicable Laws, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease.
SECTION 1.42 Successors and Assigns. This Lease shall be binding upon
the parties hereto and their respective successors and assigns and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
SECTION 1.43 Parties in Interest. Except as expressly provided herein,
none of the provisions of this Lease is intended for the benefit of any Person
except the parties hereto, their successors and permitted assigns; provided that
each of Lessor, as Trustee and Lessor, and Lessee agrees that Administrative
Agent and the Lenders shall benefit from all of the provisions of this
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Lease applicable to them.
SECTION 1.44 Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Lease is executed and delivered by
Bank, not individually or personally but solely as Trustee of the Trust and as
Lessor, in the exercise of the power and authority conferred and vested in it
under the Trust Agreement, as Trustee and Lessor; (b) each of the
representations, undertakings and agreements herein made on the part of Lessor
is made and intended not as a personal representation, undertaking and agreement
by but is made and intended for the purpose for binding only Lessor, as Trustee
and Lessor; (c) nothing herein contained shall be construed as creating any
liability on Bank, individually or personally, to perform any covenant,
expressed or implied, contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any other Person claiming by,
through or under this Lease; and (d) under no circumstances shall Bank be
personally liable for the payment of any indebtedness or expenses of Lessor, as
Lessor and/or Trustee, or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by Lessor, as Lessor and
Trustee, under this Lease or any of the other Operative Documents; provided that
Bank shall be liable in its individual capacity for its own willful misconduct
or gross negligence (or negligence in the handling of funds), for any Taxes
based on or measured by any fees, commission or compensation received by it for
acting as Trustee, for any breach by it of Section 3.5 and for any failure to
discharge Lessor's Liens attributable to it as required by Section 6.1 of the
Participation Agreement. SECTION 1.1
SECTION 1.45 Nonrecourse to Paddlewheels. Notwithstanding anything to
the contrary contained in this Lease, Paddlewheels shall have no liability for
the payment of Rent by, or performance of any other covenant, representation,
warranty or obligation of, Lessee hereunder.
SECTION 1.46 Captions; Table of Contents. Section captions and the
table of contents used in this Lease (including the Schedules, Exhibits and
Annexes hereto) are for convenience of reference only and shall not affect the
construction of this Lease.
(Signature pages follow)
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its
individual capacity, except as
expressly stated herein, but
solely as Trustee and Lessor
By:_________________________
Name Printed:
Title:
S-1
HOLLYWOOD CASINO SHREVEPORT, a Louisiana general partnership,
as Lessee
By: HCS I, Inc., a Louisiana corporation, its managing
general partner
By:________________________________
Xxxx X. Xxxxx,
Executive Vice President and
Chief Financial Officer
S-2
Execution Copy
================================================================================
LOAN AGREEMENT
dated as of March 31, 2000
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee and Lessor under the Trust Agreement
for the Lenders named therein, as Borrower,
FIRST SECURITY TRUST COMPANY OF NEVADA,
as Administrative Agent
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Arranger and Documentation Agent
and
THE PERSONS NAMED ON SCHEDULE I,
as Lenders
================================================================================
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION
PROVISIONS IN SECTION 7.7 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES,
DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED
FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY
NEGLIGENCE OF ANY INDEMNIFIED PERSONS IDENTIFIED HEREIN.
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS...............................................................................1
SECTION 1.1. Defined Terms......................................................................1
ARTICLE II AMOUNT AND TERMS OF COMMITMENTS;REPAYMENT AND PREPAYMENT OF LOANS.........................1
SECTION 2.1. Commitment; Term...................................................................1
SECTION 2.2. Notes2
SECTION 2.3. Procedure for Borrowing............................................................2
SECTION 2.4. Prepayments; Lease Termination Payments............................................2
SECTION 2.5. Interest Rates.....................................................................3
SECTION 2.6. Determination of Interest Rate.....................................................3
SECTION 2.7. Pro Rata Treatment Among Loans.....................................................3
SECTION 2.8. Payment from Trust Estate Only.....................................................4
SECTION 2.9. Taxes4
SECTION 2.10. Illegality.........................................................................5
SECTION 2.11. Increased Costs and Reduction of Return............................................6
SECTION 2.12. Funding Losses.....................................................................6
SECTION 2.13. Inability to Determine Rates.......................................................7
SECTION 2.14. Lender Certificate.................................................................7
SECTION 2.15. Notice of Certain Costs............................................................7
SECTION 2.16. Survival...........................................................................7
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATIONOF INCOME FROM THE TRUST ESTATE......................8
SECTION 3.1. Rent Distribution..................................................................8
SECTION 3.2. Distribution of Mandatory Prepayments..............................................8
SECTION 3.3. Distribution of Payments After Loan Event of Default...............................9
SECTION 3.4. Other Payments....................................................................10
SECTION 3.5. Distribution of Excluded Amounts..................................................10
ARTICLE IV CONDITIONS PRECEDENT.....................................................................10
ARTICLE V AFFIRMATIVE COVENANTS OF THE BORROWER....................................................10
SECTION 5.1. Performance by the Borrower.......................................................10
ARTICLE VI LOAN EVENTS OF DEFAULT; REMEDIES.........................................................11
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SECTION 6.1. Loan Events of Default............................................................11
SECTION 6.2. Remedies..........................................................................12
ARTICLE VII ADMINISTRATIVE AGENT.....................................................................13
SECTION 7.1. Appointment and Authorization.....................................................13
SECTION 7.2. Delegation of Duties..............................................................13
SECTION 7.3. Liability of Administrative Agent.................................................13
SECTION 7.4. Reliance by Administrative Agent..................................................14
SECTION 7.5. Notice of Default.................................................................14
SECTION 7.6. Credit Decision...................................................................15
SECTION 7.7. Indemnification of Administrative Agent...........................................15
SECTION 7.8. Administrative Agent in Individual Capacity.......................................16
SECTION 7.9. Successor Agent...................................................................16
SECTION 7.10. Withholding Tax...................................................................16
SECTION 7.11. Concerning the Trust Estate.......................................................18
SECTION 7.12. Documentation Agent...............................................................19
ARTICLE VIII MISCELLANEOUS............................................................................19
SECTION 8.1. Amendments and Waivers............................................................19
SECTION 8.2. Notices...........................................................................19
SECTION 8.3. Successors and Assigns: Transfers and Participations. 19
SECTION 8.4. Counterparts......................................................................20
SECTION 8.5. GOVERNING LAW.....................................................................20
SECTION 8.6. Compliance with Law...............................................................20
SECTION 8.7. Survival and Termination of Agreement.............................................21
SECTION 8.8. Entire Agreement..................................................................21
SECTION 8.9. Severability......................................................................21
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LOAN AGREEMENT
--------------
THIS LOAN AGREEMENT (as amended, restated, modified and supplemented
from time to time, this "Loan Agreement"), dated as of March 31, 2000, is
entered into by and among FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its
individual capacity, except as specifically provided herein, but solely as
Trustee and Lessor under the Trust Agreement of even date herewith (the
"Borrower"); FIRST SECURITY TRUST COMPANY OF NEVADA, as Administrative Agent;
BANK OF AMERICA, NATIONAL ASSOCIATION, as Arranger and Documentation Agent; and
the Persons named on Schedule I hereto, as Lenders.
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower desires to pay costs associated with the
acquisition of Equipment and to pay certain costs and expenses related thereto,
all as more particularly described in the Participation Agreement of even date
herewith and in each of the other Operative Documents; and
WHEREAS, the Borrower desires to borrow from the Lenders certain costs
associated with the acquisition of the Equipment;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION1~1 Defined Terms. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in Appendix 1 to the
Participation Agreement dated as of the date hereof among Hollywood Casino
Shreveport, a Louisiana general partnership, as Lessee; the Borrower, as Trustee
and Lessor; Administrative Agent; the Arranger, Documentation Agent and the
Lenders identified therein (as amended, supplemented or otherwise modified from
time to time, the "Participation Agreement") for all purposes hereof.
ARTICLE II
AMOUNT AND TERMS OF COMMITMENTS;
REPAYMENT AND PREPAYMENT OF LOANS
SECTION 1 1 Commitment; Term. Subject to the terms and conditions hereof
and of the Participation Agreement, each Lender severally, but not jointly,
agrees to make loans to the
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Borrower ("Loans") from time to time through the Commitment Period for the
purpose of enabling Borrower, as Trustee and Lessor, to pay for Equipment Costs,
in an aggregate principal amount at any one time outstanding not to exceed the
amount of such Lender's Commitment.
SECTION 1 1 Notes.
(1) The Loans made by each Lender shall be evidenced by a promissory note
of the Borrower, substantially in the form of Exhibit A hereto (as amended,
modified, supplemented, extended or renewed from time to time, a "Note"), with
appropriate insertions as to payee and principal amount, duly executed by the
Borrower and payable to the order of such Lender and in a maximum principal
amount equal to such Lender's Commitment. Each Note shall be dated the Closing
Date and delivered to the related Lender in accordance with Section 2.3 of the
Participation Agreement. Each Note shall (i) be stated to mature on the Maturity
Date and (ii) bear interest on the unpaid principal amount thereof from time to
time outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, Section 2.6.
(2) Upon the consummation of each Advance, each Lender shall, and is hereby
authorized by the Borrower and Lessee to, record in its records the amount of
the Loan advanced by such Lender on such Advance Date, the date and amount of
each continuation or conversion of such Loan, the length of each Interest Period
with respect thereto and the date and amount of each payment of principal and/or
interest relating thereto; provided, that the failure to make any such
recordation shall not affect the obligation of the Borrower under the Notes or
the corresponding obligation of Lessee to pay Rent. In all events, prior to any
transfer of its Note, a Lender shall indicate in writing to its transferee the
date, amount and maturity of each Loan made by it which is still outstanding and
the amounts of accrued but unpaid interest thereon.
SECTION 1 1 Procedure for Borrowing.
(1) Subject to the terms and conditions of the Participation Agreement and
this Loan Agreement, the Borrower shall borrow under the Commitments on each
Advance Date upon receipt by Administrative Agent from Lessee of the Advance
Request in accordance with Section 2.4(a) of the Participation Agreement.
(2) Any Advance Request shall be delivered to the Trustee (as Trustee,
Lessor and Borrower), Administrative Agent and the Lenders in accordance with
Section 2.4 of the Participation Agreement. Each Lender will fund its pro rata
share of the Advance in accordance with Section 2.2 of the Participation
Agreement.
SECTION II.1. Prepayments; Lease Termination Payments.
(3) Borrower shall repay in full the unpaid principal amount of each Loan
(including any Additional Costs) upon the Maturity Date.
(4) On each Payment Date during the Base Period, the Borrower shall make a
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mandatory repayment of a portion of the outstanding principal amount of each
Note in an amount determined pursuant to Section 2.13 of the Participation
Agreement.
(5) No other principal amortization of the Loans will be required prior to
the Maturity Date thereof, except that upon the occurrence of (i) a Casualty
that results in a purchase by Lessee of the Equipment suffering the Casualty,
(ii) Lessee exercising the early termination option to purchase all of the
Equipment pursuant to Section 5.1 of the Lease or (iii) a Lease Event of Default
that results in Borrower, as Lessor and Trustee, exercising its right to have
Lessee purchase all of the Equipment, the Borrower shall prepay the aggregate
outstanding principal amount of the Loans or in the event of a Casualty, an
amount equal to the Casualty Item Amount, together with interest accrued to the
date of such prepayment on the principal amount so prepaid, plus, Additional
Costs, if any.
SECTION 1 1 Interest Rates. The Loans shall accrue interest at the
applicable Interest Rate from time to time in effect. The Interest Period for
which a LIBO Rate applies shall be three months unless the duration is shortened
as required by the definition of "Interest Period". Interest accrued on each
Loan shall be payable in arrears on each Payment Date.
If all or a portion of the principal amount of or interest on the Notes
shall not be paid when due (whether at the Maturity Date thereof, by
acceleration or otherwise), such overdue amount shall, without limiting the
rights of any Lender under Section 6.2, bear interest at the Overdue Rate, in
each case from the date first due until paid in full (as well after as before
judgment) payable on demand.
SECTION 1 1 Determination of Interest Rate.
(1) During such time as a LIBO Rate applies to any of the Notes, interest
in respect of such Notes shall be calculated on the basis of a 360 day year and
the actual number of days elapsed. During such time as the Alternate Base Rate
applies to any of the Notes, interest in respect of such Notes shall be
calculated on the basis of a 365 (or 366, as applicable) day year and the actual
number of days elapsed. Administrative Agent shall, as soon as practicable, but
in no event later than 11:00 a.m., San Francisco time, one Business Day prior to
the first day of each Interest Period, notify the Borrower, who shall notify
Administrative Agent, Lessee and the Lenders of the LIBO Rate. Any change in the
Interest Rate on the Loans resulting from a change in the Alternate Base Rate
shall become effective as of the opening of business on the day on which such
Alternate Base Rate changes as provided herein.
(2) Except as provided in Section 2.10 or Section 2.13, all Loans shall be
LIBO Rate Loans. LIBO Rate Loans shall be made by each Lender at its LIBOR
Office. At the end of each Interest Period, all LIBO Rate Loans shall
automatically be continued.
SECTION 1 1 Pro Rata Treatment Among Loans. Except as otherwise expressly
set forth in Article III, each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Loans shall be made pro
rata among the Loans. Administrative Agent will apply any prepayments in
reduction of Loans so that the Borrower's funding losses under
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Section 2.12 are minimized. All payments (including prepayments) to be made by
the Borrower hereunder and under the Notes shall be made without set-off or
counterclaim and shall be made to Administrative Agent, for the account of the
Lenders, at Administrative Agent's office referred to in Schedule III of the
Participation Agreement, in lawful money of the United States of America and in
immediately available funds. Administrative Agent shall distribute such payments
to each Lender at its Lending Office, promptly upon receipt in like funds as
received.
SECTION 1 1 Payment from Trust Estate Only. All payments to be made by the
Borrower in respect of the Loans and this Loan Agreement shall be made only from
the income and the proceeds from the Trust Estate and only to the extent that
the Borrower shall have received sufficient income or proceeds from the Trust
Estate to make such payments in accordance with the terms of Article III. Each
Lender agrees that it will look solely to the income and proceeds from the Trust
Estate to the extent available for distribution to such Lender as herein
provided and that neither the Borrower nor Administrative Agent is or shall be
personally liable to any Lender for any amount payable hereunder or under any
Note except as specifically provided for in the Trust Agreement or the
Participation Agreement. The provisions of this Section 2.8 shall apply whether
or not a Loan Event of Default shall have occurred and be continuing.
SECTION 1 1 Taxes.
(1) Subject to subsection (b) below, any and all payments by the Borrower
to each Lender or Administrative Agent under this Loan Agreement and any other
Operative Document shall be made free and clear of, and without deduction or
withholding for any Taxes. In addition, the Borrower shall pay all Other Taxes.
(2) The Borrower agrees to indemnify and hold harmless each Lender and
Administrative Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by any Lender or Administrative Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted, other than Taxes or Other Taxes described in Section 8.2 of
the Participation Agreement. Payment under this indemnification shall be made
within 30 days after the date any applicable Lender or Administrative Agent
makes written demand therefor.
(3) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or Administrative Agent, then:
(1) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Lender or Administrative Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions or
withholdings been made; (1)
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(2) the Borrower shall make such deductions and withholdings;
(3) the Borrower shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with Applicable
Law; and
(4) the Borrower shall also pay to Administrative Agent for the
account of each Lender, at the time interest is paid, all additional
amounts which the respective Lender specifies as necessary to preserve the
after-tax yield the Lender would have received if such Taxes or Other Taxes
had not been imposed.
(4) Within 30 days after the date of any payment by the Borrower of Taxes
or Other Taxes, the Borrower shall furnish Administrative Agent the original or
a certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to Administrative Agent.
(5) If the Borrower is required to pay additional amounts to any Lender or
Administrative Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
SECTION 1 1 Illegality.
(1) If any Lender determines that the introduction of any Requirements of
Law, or any change in any Requirements of Law, or in the interpretation or
administration of any Requirements of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make LIBO Rate Loans, then,
on notice thereof by such Lender to the Borrower through Administrative Agent,
any obligation of that Lender to make LIBO Rate Loans shall be suspended until
that Lender notifies Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(2) If a Lender determines that it is unlawful to maintain any LIBO Rate
Loan in accordance with clause (a) above, the Borrower shall, upon its receipt
of notice of such fact and demand from such Lender (with a copy to
Administrative Agent), prepay in full such LIBO Rate Loans of that Lender then
outstanding, together with interest accrued thereon, either on the last day of
the Interest Period thereof, if the Lender may lawfully continue to maintain
such LIBO Rate Loans to such day, or immediately, if the Lender may not lawfully
continue to maintain such LIBO Rate Loans; provided that before making any such
demand, such Lender agrees to use reasonable efforts to designate a different
Lending Office if such designation would make it lawful for such Lender to make
or maintain LIBO Rate Loans. If the Borrower is required to so prepay any LIBO
Rate Loan, then concurrently with such prepayment, the Borrower shall borrow
from the affected Lender, in the amount of such repayment, an Alternate Base
Rate Loan. (1)
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SECTION II.2. Increased Costs and Reduction of Return.
(3) If any Lender determines that, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make, or making,
funding or maintaining, any LIBO Rate Loans by an amount which such Lender deems
material, then the Borrower shall be liable for, and shall from time to time,
upon notice and demand (with a copy of such notice and demand to be sent to
Administrative Agent), pay to Administrative Agent for the account of such
Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs; provided that before making any such demand, such Lender agrees
to use reasonable efforts to designate a different Lending Office if such
designation would allow such Lender to continue to make or maintain LIBO Rate
Loans or materially reduce the amount of such cost.
(4) If any Lender shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by such Lender (or
its Lending Office) or any Person controlling such Lender with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender and (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitments, Loans, credits or obligations under this Loan
Agreement, then, upon notice and demand of such Lender to the Borrower through
Administrative Agent, the Borrower shall pay to such Lender, from time to time
as specified by such Lender, additional amounts sufficient to compensate such
Lender for such increase; provided that before making any such demand, such
Lender agrees to use reasonable efforts to designate a different Lending Office
if such designation would allow such Lender to continue to make or maintain LIBO
Rate Loans or materially reduce the amount of such cost.
SECTION 1 1 Funding Losses. The Borrower shall reimburse each Lender and
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:
(1) the failure of the Borrower to make on a timely basis any payment of
principal of any LIBO Rate Loan;
(2) the failure of the Borrower to borrow or convert a Loan after the
Borrower has given (or is deemed to have given) an Advance Request;
(3) the failure of the Borrower to make any required prepayment;
(4) the prepayment or other payment (including after acceleration thereof)
of a LIBO
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Rate Loan on a day that is not the last day of the
relevant Interest Period; or
(5) the automatic conversion of any LIBO Rate Loan to an Alternate Base
Rate Loan on a day that is not the last day of the relevant Interest Period;
including any such loss or expense arising by reason of the liquidation or
re-employment of deposits or other funds obtained by it to make, continue or
maintain its LIBO Rate Loans or from fees payable to terminate the deposits from
which such funds were obtained; provided, however, that such Lender shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest error.
SECTION 1 1 Inability to Determine Rates. If Administrative Agent
determines that for any reason adequate and reasonable means do not exist for
determining the LIBO Rate for any requested Interest Period with respect to a
proposed LIBO Rate Loan, or that the LIBO Rate applicable for any requested
Interest Period with respect to a proposed LIBO Rate Loan does not adequately
and fairly reflect the cost to the Lenders of funding such Loan, Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain LIBO Rate Loans hereunder shall be
suspended until Administrative Agent revokes such notice in writing. The Lenders
shall make, convert or continue the Loans, as proposed by the Borrower, in the
amount specified in the applicable notice submitted by the Borrower, but such
Loans shall be made, converted or continued as Alternate Base Rate Loans instead
of LIBO Rate Loans.
SECTION 1 1 Lender Certificate. A certificate as to any additional amounts
payable pursuant to Section 2.10 or 2.11, showing in reasonable detail the
calculation thereof, submitted by any Lender through Administrative Agent shall
be conclusive in the absence of manifest error, provided that the determination
of such amounts shall be made in good faith and in a manner generally consistent
with such Lender's standard practices.
SECTION 1 1 Notice of Certain Costs. Notwithstanding anything to the
contrary contained in this Agreement, to the extent any notice required by
Section 2.9 through Section 2.12 is given by any Lender more than ninety (90)
days after such Lender has knowledge (or should have had knowledge) of the
occurrence of the event giving rise to the additional cost, reduction in
amounts, loss, tax or other additional amounts described in such Sections, such
Lender shall not be entitled to compensation under such Sections for any such
amounts incurred or accruing prior to the giving of such notice to the Borrower.
SECTION 1 1 Survival. The agreements and obligations of the Borrower in
this Article II shall survive the payment of all other Obligations for a period
of nine (9) months thereafter.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE TRUST ESTATE
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SECTION 1 1 Rent Distribution. Except as otherwise provided in Section 3.3
and subject to Section 3.5, each payment of Rent, as well as any payment of
interest on overdue installments of Rent under the Lease, and any other monies
paid over by Lessee or the Borrower (as Borrower, Trustee and/or Lessor) to
Administrative Agent for such purpose, shall be distributed as promptly as
possible (it being understood that any payments of Rent received by or on behalf
of Administrative Agent under the Lease on a timely basis and in accordance with
the provisions of the Lease shall be distributed on the date received in the
funds so received) in the following order of priority:
first, an amount equal to the aggregate amount of the payment
of interest, as well as any interest on (to the extent permitted by
Applicable Laws) overdue interest, then due and payable on the Notes
shall be distributed and paid to the Lenders; and
second, an amount equal to the aggregate amount of the payment
of principal on the Notes then due and payable shall be distributed and
paid to the Lenders.
SECTION III.3. Distribution of Mandatory Prepayments.
-------------------------------------
(1) Except as otherwise provided in Section 3.2(b) and Section 3.3, the
amount of any prepayment received pursuant to Section 2.4 shall in each case be
distributed and paid in the following order of priority:
first, an amount equal to the aggregate amount of accrued
interest, as well as any interest on (to the extent permitted by
Applicable Laws) overdue interest then due and payable on the Notes,
plus Additional Costs, if any, shall be distributed and paid to the
Lenders; and
second, an amount equal to the aggregate amount of the payment
of principal on the Notes then due and payable shall be distributed and
paid to the Lenders.
(2) Any Casualty Recovery or Non-Casualty Recovery that is not required to
be paid to Lessee pursuant to the Lease, solely because a Lease Event of Default
has occurred and is continuing, shall be held by Borrower, as Trustee, as
security for the obligations of Lessee under the Lease and the other Operative
Documents and invested in Cash Equivalents and at such time as there shall not
be continuing any such Lease Event of Default, such portion shall be paid to
Lessee, unless Administrative Agent (as assignee of the Borrower) shall have
theretofore declared the Lease to be terminated pursuant to Section 10.2
thereof, in which event such portion shall be distributed forthwith upon such
declaration in accordance with the provisions of Section 3.3 hereof.
SECTION 1 1 Distribution of Payments After Loan Event of Default.
(1) Except as otherwise provided in Section 3.4(b), all payments received
and amounts (other than Excluded Amounts) realized by Administrative Agent after
a Loan Event of
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Default shall have occurred and be continuing, as well as all payments or
amounts then held or thereafter received by Administrative Agent as part of the
Trust Estate while such Loan Event of Default shall be continuing, shall be
distributed forthwith by Administrative Agent in the following order of
priority:
first, so much of such payments or amounts as shall be
required to reimburse Administrative Agent or the Trustee for any tax,
expense or other loss incurred by Administrative Agent or the Trustee
(to the extent not previously reimbursed and to the extent incurred in
connection with its duties as Administrative Agent or the Trustee,
respectively) and any, unpaid ongoing fees of Administrative Agent or
the Trustee shall be distributed to Administrative Agent or the
Trustee, as the case may be;
second, so much of such payments or amounts as shall be
required to reimburse the then existing or prior Lenders (so long as
the Loan Events of Default that have occurred and are continuing arise
solely from a Lease Event of Default) for payments made by them to
Administrative Agent or Borrower, as Lessor, Trustee or Borrower
pursuant to Section 7.7 (to the extent not previously reimbursed), and
to pay such then existing or prior Lenders (so long as the Loan Event
of Default that has occurred and is continuing arises solely from a
Lease Event of Default) the amounts payable to them pursuant to any
expense reimbursement or indemnification provisions of the
Participation Agreement, the Lease or this Loan Agreement, shall be
distributed to each such Person, without priority of one over the
other, in accordance with the amount of such payment or payments
payable to each such Person;
third, so much of such amount as shall be required to pay in
full the aggregate unpaid principal amount of the Notes, together with
any Additional Costs and the accrued but unpaid interest on the Notes
to the date of distribution, shall be distributed to the Lenders
holding Notes, and in case the amount so to be distributed shall be
insufficient to pay in full the Notes as aforesaid, then, pro rata
among such Lenders, without priority of one such Lender over the other,
in the proportion that the unpaid principal amount of the Notes held by
each Lender bears to the aggregate unpaid principal amount of the
Notes; and
fourth, the balance, if any, of such payments or amounts
remaining thereafter shall be promptly distributed to, or as directed
by, the Borrower.
(2) During the occurrence and continuance of any Loan Event of Default, all
amounts (other than Excluded Amounts) received or realized by Administrative
Agent and otherwise distributable pursuant to Section 3.1 or 3.2 shall be
distributed as provided in Section 3.3(a).
SECTION III.4. Other Payments.
(3) Any payments received by Administrative Agent for which no provision as
to the application thereof is made in the Operative Documents or elsewhere in
this Article III shall be distributed forthwith by Administrative Agent in the
order of priority set forth in Section 3.1.
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(4) All payments received and amounts realized by Administrative Agent
under the Lease or otherwise with respect to the Equipment, to the extent
received or realized at any time after payment in full of the principal of and
interest on all Loans, as well as any other amounts remaining as part of the
Trust Estate after payment in full of the principal of and interest on (and any
Additional Costs in respect of) all Loans issued hereunder, shall be distributed
forthwith by Administrative Agent in the order of priority set forth in Section
3.3(a) omitting clause "third" of such Section 3.3(a).
(5) Except after a Loan Event of Default has occurred and is continuing,
any payment received by Administrative Agent for which provision as to the
application thereof is made in an Operative Document but not elsewhere in this
Article III shall be distributed forthwith by Administrative Agent to the Person
for the purpose for which such payment was made in accordance with the terms of
such Operative Document.
SECTION 1 1 Distribution of Excluded Amounts. All amounts constituting
Excluded Amounts received by Administrative Agent shall be distributed to the
Person or Persons entitled thereto.
ARTICLE IV
CONDITIONS PRECEDENT
The agreement of each Lender to make the Loan requested to be made by
it on any Advance Date is subject to the satisfaction on such Advance Date of
the applicable conditions precedent set forth in Article III of the
Participation Agreement.
ARTICLE V
AFFIRMATIVE COVENANTS OF THE BORROWER
SECTION 1 1 Performance by the Borrower. Subject to Section 2.8, so long as
any Note remains outstanding and unpaid or any other amount is owing to any
Lender hereunder, the Borrower will promptly pay all amounts payable by it under
this Loan Agreement and the Notes in accordance with the terms hereof and
thereof and shall duly perform each of its obligations under this Loan Agreement
and the Notes.
ARTICLE VI
LOAN EVENTS OF DEFAULT; REMEDIES
SECTION 1 1 Loan Events of Default. Each of the following events shall
constitute a
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"Loan Event of Default" (whether any such event shall be voluntary
or involuntary or come about or be effected by operation of law or pursuant to
or in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any Governmental Authority) and each such Loan Event of
Default shall continue so long as, but only as long as, it shall not have been
remedied:
(1) the Borrower shall fail to pay any principal of or interest on any
Note, or any other amount due hereunder or under any Note, when due and such
failure shall continue for a period of five (5) Business Days;
(2) the failure by the Borrower in any material respect to timely perform
any other covenant or condition herein or in any other Operative Document to
which the Borrower is a party and such failure shall continue for a period of
thirty (30) days after written notice thereof to the Borrower and Lessee from
Administrative Agent; or
(3) [Reserved];
(4) the filing by the Borrower of any petition for dissolution or
liquidation of the Borrower; or the commencement by the Borrower of a voluntary
case under any applicable bankruptcy, insolvency or other similar law for the
relief of debtors, foreign or domestic, now or hereafter in effect; or the
Borrower shall have consented to the entry of an order for relief in an
involuntary case under any such law; or the failure of the Borrower generally to
pay, or the admission by the Borrower in writing that it is unable to pay, its
debts as such debts become due (within the meaning of Bankruptcy Law); or the
failure by the Borrower promptly to satisfy or discharge any execution,
garnishment or attachment of such consequence as will impair its ability to
carry out its obligations under the Operative Documents; or the appointment of
or taking possession by a receiver, keeper, custodian or trustee (or other
similar official) for the Borrower or any substantial part of its property; or a
general assignment by the Borrower for the benefit of creditors; or the entry by
the Borrower into an agreement of composition with its creditors; or the
Borrower shall have taken any action in furtherance of any of the foregoing; or
the filing against the Borrower of an involuntary petition in bankruptcy which
results in an order for relief being entered or, notwithstanding that an order
for relief has not been entered, the petition is not dismissed within 60 days of
the date of the filing of the petition; or the filing under any law relating to
bankruptcy, insolvency or relief of debtors of any petition against the Borrower
which either (i) results in a finding or adjudication of insolvency of the
Borrower or (ii) is not dismissed within 60 days of the date of the filing of
such petition; or
(5) a Lease Event of Default shall occur and be continuing.
SECTION 1 1 Remedies.
(1) Upon the occurrence of a Loan Event of Default hereunder, (i) if such
event is a Loan Event of Default specified in clause (d) of Section 6.1 or
clauses (f) or (g) of Section 10.1 of the Lease, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of the Loans hereunder (with accrued interest thereon) and all
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other amounts owing under this Loan Agreement and the Notes shall immediately
become due and payable, and (ii) if such event is any other Loan Event of
Default, upon the written instructions of the Required Lenders, Administrative
Agent shall, by notice of default to the Borrower, terminate the Commitments (if
not theretofore terminated), and declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Loan Agreement and the
Notes to be due and payable forthwith, whereupon the same shall immediately
become due and payable; provided that the sole remedies of Administrative Agent
upon the occurrence of a Loan Event of Default specified in clause (b), (c) (but
only to the extent the representation was made in the Borrower's individual
capacity) or (d) of Section 6.1 that does not also constitute a Lease Event of
Default shall be to cause the Lenders to remove and replace the Borrower as the
Trustee and as the Lessor and to bring suit against Borrower for damages. Except
as expressly provided above in this Article VI, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
(2) Upon the occurrence of any Loan Event of Default and at any time
thereafter so long as any Loan Event of Default shall be continuing,
Administrative Agent may, and upon the written instructions of the Required
Lenders shall, exercise any or all of the rights and powers and pursue any and
all of the remedies available to it hereunder and (subject to the terms thereof)
under the other Operative Documents and the Lease and shall have and may
exercise any and all rights and remedies available under the Uniform Commercial
Code or any provision of applicable law.
(3) Upon the occurrence of any Loan Event of Default and at any time
thereafter so long as any Loan Event of Default shall be continuing,
Administrative Agent may proceed to protect and enforce this Loan Agreement, the
Notes, the other Operative Documents and the Lease by suit or suits or
proceedings in equity, at law or in bankruptcy, and whether for the specific
performance of any covenant or agreement herein contained or in execution or aid
of any power herein granted, or for foreclosure hereunder, or for the
appointment of a receiver or receivers or keeper or keepers for the Equipment,
or for the recovery of judgment for the indebtedness secured thereby or for the
enforcement of any other proper, legal or equitable remedy available under
Applicable Laws.
(4) Borrower shall be liable for any and all accrued and unpaid amounts due
hereunder before, after or during the exercise of any of the foregoing remedies,
including all reasonable legal fees and other reasonable costs and expenses
incurred by Administrative Agent or any Lender by reason of the occurrence of
any Loan Event of Default or the exercise of remedies with respect thereto.
(5) Except as expressly provided above, no remedy under this Section 6.2 is
intended to be exclusive, but each shall be cumulative and in addition to any
other remedy provided under this Section 6.2 or under the other Operative
Documents or otherwise available at law or in equity. The exercise by
Administrative Agent or any Lender of any one or more of such remedies shall not
preclude the simultaneous or later exercise of any other remedy or remedies. No
express or implied waiver by Administrative Agent or any Lender of any Loan
Event of Default shall in any way be, or be construed to be, a waiver of any
future or subsequent Loan Event of Default.
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The failure or delay of Administrative Agent or any Lender in exercising any
rights granted it hereunder upon any occurrence of any of the contingencies set
forth herein shall not constitute a waiver of any such right upon the
continuation or recurrence of any such contingencies or similar contingencies
and any single or partial exercise of any particular right by Administrative
Agent or any Lender shall not exhaust the same or constitute a waiver of any
other right provided herein.
(6) No failure to exercise and no delay in exercising, on the part of
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
ARTICLE VII
ADMINISTRATIVE AGENT
SECTION 1 1 Appointment and Authorization. Each Lender hereby irrevocably
(subject to Section 7.9) appoints, designates and authorizes Administrative
Agent to take such action on its behalf under the provisions of this Loan
Agreement and the Notes and to exercise such powers and perform such duties as
are expressly delegated to Administrative Agent by the terms of this Loan
Agreement and the other Operative Documents, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Loan Agreement or in any other Operative Document,
Administrative Agent shall not have any duties or responsibilities except those
expressly set forth herein or in any other Operative Document, nor shall
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Loan Agreement or any other
Operative Document or shall otherwise exist against Administrative Agent.
SECTION 1 1 Delegation of Duties. Administrative Agent may execute any of
its duties under this Loan Agreement or any other Operative Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
SECTION 1 1 Liability of Administrative Agent. None of Administrative
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Loan Agreement or any
other Operative Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct or as otherwise provided in the
Security Agreement), or (ii) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by the Borrower or
any Subsidiary or Affiliate of the Borrower, or any officer of any thereof,
contained in this Loan Agreement or in any other Operative Document, or in any
certificate, report, statement or other document referred
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to or provided for in, or received by, Administrative Agent under, or in
connection with, this Loan Agreement or any other Operative Document, or for the
value of or title to any Collateral, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Loan Agreement or any other
Operative Document, or for any failure of the Borrower or any other party to any
Operative Document to perform its obligations hereunder or thereunder. No
Administrative Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Loan Agreement or any other
Operative Document, or to inspect the properties, books or records of the
Borrower or any of the Borrower's Subsidiaries or Affiliates.
SECTION VII.5. Reliance by Administrative Agent.
(1) Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by Administrative
Agent. Administrative Agent shall be fully justified in failing or refusing to
take any action under this Loan Agreement or any other Operative Document unless
it shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Loan Agreement or any other Operative
Document in accordance with a request of the Required Lenders and any action
taken upon consent of the Required Lenders and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Lenders.
(2) Each Lender that has executed this Loan Agreement shall be deemed to
have consented to, approved or accepted, or to be satisfied with, each document
or other matter either sent by Administrative Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by, or acceptable or satisfactory to, such Lender.
SECTION 1 1 Notice of Default. Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Loan Default or Loan Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to Administrative Agent directly for the account of
the Lenders, unless Administrative Agent shall have received written notice from
a Lender, Borrower (as Trustee and/or Lessor) or Lessee referring to this Loan
Agreement, describing such Loan Default or Loan Event of Default and stating
that such notice is a "notice of default". Administrative Agent will notify the
Lenders of its receipt of any such notice. Administrative Agent shall take such
action with respect to such Loan Default or Loan Event of Default as may be
requested by the Required Lenders; provided, however, that unless and until
Administrative Agent has received any such request, Administrative Agent may
(but shall not be obligated to) take such action regarding such Loan
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Default or Loan Event of Default as it shall deem advisable or in the best
interest of the Lenders.
SECTION 1 1 Credit Decision. Each Lender acknowledges that none of the
Administrative Agent-Related Persons has made any representation or warranty to
it, and that no act by Administrative Agent hereafter taken, including any
review of the affairs of Lessee, its Subsidiaries, HCS I or HCS II, shall be
deemed to constitute any representation or warranty by any Administrative
Agent-Related Person to any Lender. Each Lender represents to Administrative
Agent that it has, independently and without reliance upon any Administrative
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of any investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Lessee, its Subsidiaries, HCS I and HCS II, the value of and
title to any Collateral, and all applicable bank regulatory laws relating to the
transactions contemplated hereby and by the other Operative Documents, and made
its own decision to enter into this Loan Agreement and to extend credit to the
Borrower hereunder and otherwise to Lessee under the other Operative Documents.
Each Lender also represents that it will independently and without reliance upon
any Administrative Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Loan Agreement and the other Operative Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Lessee. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by Administrative Agent herein
or in any other Operative Documents, Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Lessee which may come into the
possession of any of the Administrative Agent-Related Persons.
SECTION 1 1 Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify,
upon demand, any Administrative Agent-Related Person (to the extent not
reimbursed by or on behalf of Lessee and without limiting the obligation of
Lessee to do so), pro rata, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to any Administrative Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
Administrative Agent, upon demand, for its ratable share of any costs or
out-of-pocket expenses (including reasonable attorney costs) incurred by
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Loan Agreement, any other Operative
Document, or any document contemplated by or referred to herein or therein, to
the extent that Administrative Agent is not reimbursed for such expenses by or
on behalf of the Borrower or Lessee. The undertaking in this Section shall
survive the payment of all obligations hereunder and the resignation or
replacement of Administrative Agent.
SECTION 1 1 Administrative Agent in Individual Capacity. First Security
Trust
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Company of Nevada and its Affiliates may make loans to, issue letters of credit
for the account of, accept deposits from, and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with Lessee
and its Affiliates as though First Security Trust Company of Nevada were not
Administrative Agent hereunder and without notice to or consent of the Lenders.
The Lenders acknowledge that, pursuant to such activities, First Security Trust
Company of Nevada or its Affiliates may receive information regarding Lessee or
its Affiliates (including information that may be subject to confidentiality
obligations in favor of Lessee or such Affiliate) and acknowledge that
Administrative Agent shall be under no obligation to provide such information to
them.
SECTION 1 1 Successor Agent. Administrative Agent may, and at the request
of the Required Lenders shall, resign as Administrative Agent upon thirty (30)
days notice to the Lenders, Borrower and Lessee. If Administrative Agent resigns
under this Agreement, Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders. If no successor agent is appointed prior to the
effective date of the resignation of Administrative Agent, Administrative Agent
may appoint, after consulting with the Lenders, the Borrower and Lessee, a
successor agent from among the Lenders. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall thereupon be terminated. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Article
VII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Loan Agreement. If no successor
agent has accepted appointment as Administrative Agent by the date which is
thirty (30) days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Required Lenders shall perform all of the
duties of Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
SECTION VII.16. Withholding Tax.
(1) If any Lender is a "foreign corporation, partnership or trust" within
the meaning of the Code and such Lender claims exemption from, or a reduction
of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Lender
agrees with and in favor of Administrative Agent, to deliver to Administrative
Agent:
(1) two (2) properly completed and executed copies of United States
Internal Revenue Service form W-8BEN or W-8ECI, in either case with
taxpayer identifying numbers, certifying in either case that such Lender is
entitled to receive payments of interest and a return of principal on its
Loans, as applicable, under the Operative Documents without deduction or
withholding of any United States federal income taxes; and
(2) such other form or forms as may be required under the Code or
other laws
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of the United States as a condition to exemption from, or reduction of,
United States withholding tax.
Each Lender which so delivers form W-8BEN or W-8ECI shall further deliver to
each of Lessee, Borrower and Administrative Agent two (2) additional copies of
such form (or a successor form) on or before the date that such form expires
(currently, three successive calendar years for form W-8ECI) or becomes obsolete
or within thirty (30) days after the occurrence of any event requiring a change
in the most recent forms so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by Lessee,
Borrower or the Administrative Agent, in each case certifying that such Lender
is entitled to receive payments under the Operative Documents without deduction
or withholding of any United States federal income taxes, unless an event
(including any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises Lessee,
Borrower and Administrative Agent that it is not capable of receiving payments
without any withholding of United States federal income tax. Such Lender agrees
to promptly notify Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
(2) If any such Lender claims exemption from, or reduction of, withholding
tax and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the obligations of the Borrower to such Lender, such
Lender agrees to notify Administrative Agent of the percentage amount in which
it is no longer the beneficial owner of obligations of the Borrower to such
Lender. To the extent of such percentage amount, Administrative Agent will treat
such Lender's form W-8BEN or W-8ECI, as applicable, as no longer valid.
(3) If any Lender is entitled to a reduction in the withholding tax
applicable to it, Administrative Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to Administrative Agent, then
Administrative Agent may withhold from any interest payment to such Lender not
providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
(4) If the IRS or any other Governmental Authority of the United States or
any other jurisdiction asserts a claim that Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Administrative Agent of a change in
circumstances which rendered the exemption from, or deduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify
Administrative Agent fully for all amounts paid, directly or indirectly, by
Administrative Agent, including any taxes imposed by any jurisdiction on the
amounts payable to Administrative Agent under this Section, together with all
costs and expenses (including reasonable attorney costs and the allocated
reasonable cost of internal legal counsel services and all reasonable
disbursements of internal counsel). The obligation of the Lenders under this
subsection shall survive the payment of all obligations and
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the resignation or replacement of Administrative Agent.
SECTION VII.7. Concerning the Trust Estate.
(5) Administrative Agent accepts the agency applicable to it and agrees to
cause the Bank (or its successor), as Borrower, Lessor and Trustee, to receive
all payments and proceeds pursuant to the Operative Documents and disburse such
payments or proceeds in accordance with the Operative Documents.
(6) Upon discharge of the indebtedness secured by the Security Documents or
security interest or Lien provided therein, Administrative Agent shall execute
and deliver, and shall cause Borrower, as Trustee, Lessor and Borrower, to
execute and deliver, at Lessee's cost and expense, such satisfactions and
terminations of said Liens as may be required. Upon satisfaction of the Lien or
security interest provided for in any such instrument, such instrument shall be
deemed withdrawn from the Collateral.
(7) In the event that the Required Lenders shall notify Administrative
Agent that an event of default under a Security Document has occurred,
Administrative Agent shall take such action with respect thereto as the Required
Lenders may require by written instructions, but Administrative Agent shall not
be required to take any action not expressly set forth in such written
instructions.
(8) Administrative Agent shall not have any duty or obligation to manage,
operate, control, use, sell, dispose of or otherwise deal with the Equipment or
any other part of the Collateral or to otherwise take or refrain from taking any
action under, or in connection with, the Security Documents, except as expressly
provided by the terms of this Loan Agreement or other Operative Documents or as
expressly provided in written instructions from the Required Lenders received
pursuant to the terms of Section 7.11(c) hereof.
(9) Except in accordance with written instruction furnished pursuant to
Section 7.11(c) hereof, and without limiting the generality of Section 7.11(d)
hereof, Administrative Agent shall have no duty (i) to see to any recording,
filing or depositing of any security instrument or amendment thereof, (ii) to
see to any insurance on the Equipment or to effect or maintain any such
insurance, (iii) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Estate or
Collateral, (iv) to confirm or verify any notices or reports of Lessee other
than to furnish (to the extent not otherwise furnished) the Lenders with a copy
of each notice or report furnished to Administrative Agent by Lessee pursuant to
a security instrument or (v) to inspect the Equipment at any time or ascertain
or inquire as to the performance or observance of Lessee's covenants under any
security instrument.
(10) In accepting the agency hereby created, Administrative Agent acts
solely as Administrative Agent hereunder and not in its individual capacity, and
all Persons, other than the Lenders, having any claim against Administrative
Agent by reason of the transactions
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contemplated hereby shall look only to the Trust Estate for payment or
satisfaction thereof.
(11) The agency created hereby shall be terminated by notice given by
Administrative Agent to the Lenders at any time upon the final disposition or
release of all Collateral and the final distribution by Administrative Agent of
all monies or other property or proceeds received pursuant to the Operative
Documents in accordance with their terms.
SECTION 1 1 Documentation Agent. The "Documentation Agent" shall not have
any right, power, obligation, liability, responsibility or duty under this Loan
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, none of the Lenders so identified as "Documentation Agent" shall
have or be deemed to have any fiduciary relationship with any other Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any Lender so
identified in deciding to enter into this Loan Agreement or in taking or not
taking action hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 1 1 Amendments and Waivers. Neither this Loan Agreement, any Note
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of the Participation Agreement.
SECTION 1 1 Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be delivered in accordance with, and shall be deemed to have been
given as provided in, Section 9.6 of the Participation Agreement; provided, that
any notice, request, demand or other communication to or upon Administrative
Agent or the Lenders pursuant to Section 2.3 shall not be effective until
received.
SECTION VIII.8. Successors and Assigns: Transfers and Participations.
(1) This Loan Agreement shall be binding upon and inure to the benefit of
the Borrower, as Trustee, Lessor and Borrower, the Lenders, Administrative
Agent, all future holders of the Notes and their respective successors and
assigns.
(2) Any transfer by a Lender of its Note or any sale by a Lender of any
participating interest in the Loans evidenced by its Note shall comply with
Sections 6.2, 6.3 and 6.4 of the Participation Agreement. Any Lender
transferring its Note shall pay, or cause the transferee to pay, the costs and
expenses (including reasonable counsel fees) incurred by Administrative Agent in
connection with such transfer.
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SECTION 1 1 Counterparts. This Loan Agreement may be executed by one or
more of the parties to this Loan Agreement on any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Loan
Agreement signed by all the parties hereto shall be lodged with the Borrower and
Administrative Agent.
SECTION 1 1 GOVERNING LAW. THIS LOAN AGREEMENT AND THE NOTES HAVE BEEN
DELIVERED IN, AND THIS LOAN AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS LOAN AGREEMENT AND THE NOTES SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF CALIFORNIA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE,
EXCEPT AS TO MATTERS RELATING TO PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF THE SECURITY INTEREST CREATED BY THE SECURITY DOCUMENTS, WHICH
SHALL BE GOVERNED BY THE LAWS OF THE STATE WHERE THE COLLATERAL IS LOCATED, AND
TO THE EXTENT THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER OR UNDER
THE OTHER OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH GAMING LAWS.
SECTION 1 1 Compliance with Law. It is the intent of the Borrower, each
Lender and all other Participants to conform to and contract in strict
compliance with applicable usury law from time to time in effect. All agreements
between the Lenders or any other holder of any Note and the Borrower (of any
other party liable with respect to any Obligations under the Operative
Documents) are hereby limited by the provisions of this paragraph which shall
override and control all such agreements, whether now existing or hereafter
arising and whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment, default, demand for payment, or
acceleration of the maturity of any obligation), shall the interest taken,
reserved, contracted for, charged or received under this Loan Agreement or
otherwise, exceed the maximum nonusurious amount permissible under applicable
law. If, from any possible construction of any document, interest would
otherwise be payable in excess of the maximum nonusurious amount, any such
construction shall be subject to the provisions of this paragraph and such
document shall be automatically reformed and the interest payable shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest under applicable law and which would apart from this
provision be in excess of the maximum lawful nonusurious amount, an amount equal
to the amount which would have been excessive interest shall, without penalty,
be applied to the reduction of the principal amount owing on the indebtedness
evidenced hereby or by the Notes in the inverse order of their maturity and not
to the payment of interest, or refunded to the Borrower or the other payor
thereof if and to the extent such amount which would have been excessive exceeds
such unpaid principal. The right to accelerate maturity of the Loans and the
indebtedness owing hereunder or pursuant to any other Operative Document does
not include the right to accelerate any interest which has not otherwise accrued
on the date of such acceleration, and the holders of the Notes do not intend to
charge or receive any unearned interest in the event of acceleration. All
interest paid or agreed to be paid to the holders of the Notes shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term (including any renewal or extension) of such
indebtedness so that the amount of
-20-
interest on account of such indebtedness does not exceed the maximum nonusurious
amount permitted by applicable law. As used in this paragraph, the term
"applicable law" shall mean such laws as they now exist or may be changed or
amended or come into effect in the future.
SECTION 1 1 Survival and Termination of Agreement. All covenants,
agreements, representations and warranties made herein or in any certificate,
document or statement delivered pursuant hereto or in connection herewith, shall
survive the execution and delivery of this Loan Agreement and the Notes and
shall continue in full force and effect so long as any Note or any amount
payable to any Lender under or in connection with this Loan Agreement or the
Notes is unpaid, at which time this Loan Agreement shall terminate, it being
expressly understood that the obligations of the Borrower, as the case may be,
to Administrative Agent and each Lender under Article II and the obligations of
the Lenders to Administrative Agent under Section 7.7 shall survive the payment
in full of the Notes.
SECTION 1 1 Entire Agreement. This Loan Agreement and the other Operative
Document sets forth the entire agreement of the parties hereto with respect to
its subject matter, and supersedes all previous understandings, written or oral,
with respect thereto.
SECTION 1 1 Severability. Any provision of this Loan Agreement or of the
Notes which is prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or thereof or affecting the validity, enforceability
or legality of any such provision in any other jurisdiction.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its
individual capacity, except as
specifically provided herein,
but solely as Lessor, as
Trustee and as Borrower
By:__________________________
Name:
Title:
S-1
FIRST SECURITY TRUST COMPANY OF
NEVADA, as Administrative Agent
By:______________________________
Name:
Title:
S-2
BANC OF AMERICA LEASING & CAPITAL, LLC, as a Lender
By:______________________________
Name:
Title:
S-3
BANK OF AMERICA, NATIONAL ASSOCIATION,
as a Lender
By:_____________________________
Name:
Title:
S-4
HIBERNIA NATIONAL BANK,
as a Lender
By:___________________________
Name:
Title:
X-0
XXXXX XXXXXXX XXXX, X.X.,
as a Lender
By:______________________________
Name:
Title:
S-6
EXHIBIT A
TO LOAN AGREEMENT
FORM OF NOTE
NOTE NO. ___
U.S. $_______________
Dated as of ________________, ____
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity but solely as Trustee under the
Trust Agreement for the Lenders named therein (the "Borrower"), promises to pay
--------
to the order of [NAME OF LENDER] (the "Lender"), the principal sum of
------
__________________________ United States Dollars ($___________) or, if less, the
aggregate unpaid principal amount of all Loans made by the Lender to, or for the
benefit of, the Borrower, or purchased by the Lender, as recorded either on the
grid attached to this Note or in the records of the Lender; provided, however,
that the failure to make any such recordation or any error in such recordation
shall not in any way affect the Borrower's obligation to repay this Note. The
principal amount of each Loan evidenced hereby shall be payable on or prior to
the Maturity Date as provided in that certain Loan Agreement, dated as of March
__, 2000, among the Borrower, First Security Trust Company of Nevada, as
administrative agent (the "Administrative Agent"), and the various lenders named
--------------------
therein (as amended, restated, modified or supplemented from time to time, the
"Loan Agreement").
---------------
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding at the rates per annum, on the dates
specified in, and in accordance with the terms of the Loan Agreement.
Payments of both principal and interest are to be made in lawful money of
the United States of America in same day or immediately available funds to the
account designated by the Lender pursuant to the Loan Agreement.
This Note is one of the Notes referred to in, and evidences indebtedness
incurred under, the Loan Agreement, to which reference is made for a statement
of the terms and conditions on which the Borrower is required to make
prepayments and repayments of principal of the indebtedness evidenced by this
Note and on which such indebtedness may be declared to be immediately due and
payable. Capitalized terms used herein without definition shall have the
meanings provided in the Loan Agreement (or in any applicable document
incorporated into the Loan Agreement by reference). This Note is secured
pursuant to the Security Documents made
A-1
by the Borrower in favor of the Administrative Agent referred to in the Loan
Agreement and reference is hereby made to the Loan Agreement and such Security
Documents for a statement of the terms and provisions of such security.
Anything to the contrary herein notwithstanding, the Borrower's liability
for any sums due hereunder shall be limited in accordance with Section 2.8 of
-----------
the Loan Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest, and notice of dishonor, notice
of the existence, creation or nonpayment of all or any of the Loans and all
other notices whatsoever.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
(signature page follows)
A-2
IN WITNESS WHEREOF, the Trustee has caused this Note to be executed in its
corporate name by its duly authorized officer as of the date hereof.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in
its individual capacity but solely as Trustee, as
Borrower
By: ________________________________
Name:
Title:
A-3
GRID ATTACHED TO NOTE
DATED AS OF ______________, _____ OF
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS TRUSTEE
PAYABLE TO THE ORDER OF [INSERT LENDER'S NAME]
Loans made by the Lender to the Trustee, as Borrower, and payments of principal
of such Loans.
======= ================================ =============================== ======================= ============== =================
Principal Principal Amount Interest
Amount Interest Bearing Paid
Period Principal Notation
Date -------- (If Applicable) ------------------------------------------------------- Amount Total Made By
Advances Base Rate LIBO Rate Base LIBO Rate
Rate
------- -------------------------------- ----------------- ------------- ----------- ----------- -------------- -----------------
------- -------------------------------- ------------------------------- ----------------------- -------------- -----------------
======= ================================ =============================== ======================= ============== =================
------- -------------------------------- ------------------------------- ----------------------- -------------- -----------------
======= ================================ =============================== ======================= ============== =================
------- -------------------------------- ------------------------------- ----------------------- -------------- -----------------
======= ================================ =============================== ======================= ============== =================
------- -------------------------------- ------------------------------- ----------------------- -------------- -----------------
======= ================================ =============================== ======================= ============== =================
------- -------------------------------- ------------------------------- ----------------------- -------------- -----------------
======= ================================ =============================== ======================= ============== =================
A-4
AMORTIZATION SCHEDULE ATTACHED TO NOTE
DATED ________________, ____ OF
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS TRUSTEE
PAYABLE TO THE ORDER OF [INSERT LENDER'S NAME]
Principal
Date Repayment Amount
---- ----------------
A-5
================================================================================
TRUST AGREEMENT
dated as of March 31, 2000
between
HOLLYWOOD CASINO SHREVEPORT,
as Grantor,
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Trustee and Lessor
================================================================================
TABLE OF CONTENTS
-----------------
Page
ARTICLE I THE TRUST ESTATE ............................................................ 1
SECTION 1.1. Appointment, Authorization and Direction to Trustee ................... 1
SECTION 1.2. Declaration and Purpose ............................................... 1
ARTICLE II COLLECTIONS AND DISTRIBUTIONS .............................................. 2
SECTION 2.1. Collections and Remittances by the Trustee ........................... 2
SECTION 2.2. Distribution of Payments ............................................. 3
SECTION 2.3. Effect of Sales by the Bank, as Trustee and Lessor ................... 3
ARTICLE III CERTAIN PROVISIONS RESPECTING THE BANK, AS TRUSTEE ....................... 3
SECTION 3.1. Acceptance of Trusts and Duties ...................................... 3
SECTION 3.2. Limitation of Power .................................................. 3
SECTION 3.3. Notice of Event of Default ........................................... 4
SECTION 3.4. Action Upon Instructions ............................................. 4
SECTION 3.5. Certain Duties and Responsibilities of the Bank, as Trustee and Lessor 5
SECTION 3.6. Certain Rights of Bank, as Trustee and/or Lessor ..................... 6
SECTION 3.7. NO REPRESENTATIONS OR WARRANTIES AS TO THE EQUIPMENT OR DOCUMENTS .... 8
SECTION 3.8. Status of Moneys Received ............................................ 8
SECTION 3.9. Permitted Activities ................................................. 8
SECTION 3.10. Resignation or Removal of the Bank, as Trustee and Lessor ............ 8
SECTION 3.11. Estate and Rights of Successor Trustee and Lessor .................... 9
SECTION 3.12. Merger or Consolidation of Trustee and Lessor ........................ 9
SECTION 3.13. Co-Trustees .......................................................... 9
SECTION 3.14. Doing Business in Other Jurisdictions ................................ 10
SECTION 3.15. Books and Records .................................................... 10
ARTICLE IV TERMINATION OF AND AMENDMENTS TO TRUST .................................... 10
SECTION 4.1. Termination ........................................................... 10
SECTION 4.2. Distribution of Trust Estate Upon Termination ......................... 11
SECTION 4.3. Amendments ............................................................ 11
ARTICLE V MISCE11ANEOUS ............................................................... 11
SECTION 5.1. Compensation and Indemnification ..................................... 11
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SECTION 5.2. Notices .............................................................. 12
SECTION 5.3. GOVERNING LAW ........................................................ 12
SECTION 5.4. Tax Reports; Information Reporting; Withholding Taxes ................ 12
SECTION 5.5. Headings ............................................................. 13
SECTION 5.6. Successors and Assigns ............................................... 13
SECTION 5.7. Severability ......................................................... 13
SECTION 5.8. Only Written Waivers ................................................. 13
SECTION 5.9. Counterparts ......................................................... 13
SECTION 5.10. Rights in Trust Agreement ............................................ 13
SECTION 5.11. Payment of Fees, Costs and Expenses .................................. 13
SECTION 5.12. Identification of Trust .............................................. 14
-ii-
TRUST AGREEMENT
---------------
THIS TRUST AGREEMENT (as amended, restated, modified and supplemented
from time to time, this "Trust Agreement") dated as of March 31, 2000, is
entered into by and between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association (in its individual capacity, the "Bank"; the Bank,
not in its individual capacity, but as Trustee, and any institution that shall
act as a successor trustee in accordance with the terms of Section 3.10, the
"Trustee", and in its capacity as Lessor under the Lease, the "Lessor"); and
Hollywood Casino Shreveport, as Lessee under the Lease and grantor (the
"Grantor"). For purposes hereof, capitalized terms used in this Trust Agreement
without specific definition herein shall have the meanings assigned thereto in
Appendix 1 to the Participation Agreement, dated as of March 31, 2000, among the
Trustee; the Lessor; the Lenders and Administrative Agent; the Grantor as
Lessee; and Bank of America, National Association, as Arranger and Documentation
Agent.
ARTICLE I
THE TRUST ESTATE
SECTION 1.1. Appointment, Authorization and Direction to Trustee. Grantor hereby
requests that the Bank act as Trustee of the trust created hereunder (the
"Trust") and as Lessor under the Lease and the Bank hereby accepts its
appointment as trustee of the Trust and Lessor under the Lease, effective as of
the date hereof. The Grantor authorizes and directs the Bank, as Trustee and as
Lessor, as applicable, subject to confirmation by the Lenders of the
satisfaction or waiver of all appropriate conditions set forth in the
Participation Agreement, to enter into, execute and deliver:
(1) on the Closing Date and from time to time thereafter (including on
each Advance Date), the Operative Documents to which the Trust or the Bank
as the Trustee or the Lessor is to become a party on each such date;
(2) as Lessor and Borrower, from time to time, the Notes in the manner
and subject to the terms and conditions provided in the Participation
Agreement and the Loan Agreement; and
(3) all other documents, and to do all such things and take all such
actions, as may be necessary or convenient to consummate the transactions
contemplated by the Operative Documents and to perform the terms and
conditions of this Trust Agreement, all as contemplated herein or in the
Operative Documents.
SECTION I.1. Declaration and Purpose.
(4) Bank, as Trustee and Lessor, hereby declares, undertakes and
agrees that it will and does receive, take and hold all estate, right,
title and interest of the Bank, as
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Trustee and Lessor, in and to the Trust Estate in trust for the use and
benefit of the Grantor.
(5) The purpose of the Trust is to acquire and hold through bank, as
Trustee and Lessor, title to the Equipment and the remainder of the Trust
Estate as collateral security for the obligations of the Bank, as Trustee,
Lessor and Borrower under the Loan Agreement, to discharge such obligations
in accordance with the provisions of the Loan Agreement and the other
Operative Documents and to engage in activities ancillary and incidental
thereto as set forth in the Operative Documents. Except in connection with
the foregoing, the Bank in its capacities as Trustee and Lessor shall not
(i) engage in any business or activity, (ii) have any property, rights or
interest, whether real or personal, tangible or intangible, (iii) incur any
legal liability or obligation, whether fixed or contingent, matured or
unmatured, other than in the normal course of the administration of the
Trust or (iv) subject any of the Trust Estate to any mortgage, lien,
security interest or other claim or encumbrance, other than in favor of
Administrative Agent and the Lenders pursuant to the provisions of the
Operative Documents. THE TRUST IS NOT A BUSINESS TRUST. THE SOLE PURPOSE OF
THE TRUST IS TO ACQUIRE AND HOLD TITLE TO THE TRUST ESTATE AND TO COLLECT
AND CONSERVE THE VALUE THEREOF, SUBJECT TO THE RIGHTS OF ADMINISTRATIVE
AGENT, THE TRUSTEE AND LESSOR AND THE GRANTOR, FOR THE BENEFIT OF THE
LENDERS. THE BANK, AS TRUSTEE AND LESSOR, MAY NOT TRANSACT BUSINESS OF ANY
KIND WITH RESPECT TO THE TRUST ESTATE NOR SHALL THIS TRUST AGREEMENT BE
DEEMED TO BE, OR CREATE OR EVIDENCE THE EXISTENCE OF A CORPORATION DE FACTO
OR DE JURE, OR A MASSACHUSETTS TRUST, OR ANY OTHER TYPE OF BUSINESS TRUST,
ASSOCIATION OR JOINT VENTURE BETWEEN THE BANK, AS TRUSTEE AND LESSOR,
ADMINISTRATIVE AGENT AND THE LENDERS.
ARTICLE II
COLLECTIONS AND DISTRIBUTIONS
SECTION 1.2. Collections and Remittances by the Trustee. Bank, as Trustee
and as Lessor, agrees that, subject to the provisions of the Trust Agreement, it
will, during the term of the Trust, administer the Trust Estate and, at the
direction of the Grantor, or if the Loan Agreement has not been fully
discharged, Administrative Agent (acting upon the instructions of the Lenders or
the Required Lenders, as the case may be, in such capacity being hereinafter
called the "Instructing Party") take steps to collect all sums payable to the
Bank, as Trustee or Lessor, by the Grantor or any other Person under the Lease
and the other Operative Documents. The Bank, as Trustee and Lessor, agrees to
distribute all proceeds received from the Trust Estate in accordance with the
Loan Agreement and Sections 2.2 and 2.3. The Bank, as Trustee and Lessor, shall
make such distribution promptly upon receipt of such proceeds (if such proceeds
are available for distribution) by the Bank, as Trustee and/or Lessor, it being
understood and agreed that the Bank, as Trustee and Lessor, shall not be
obligated to make such distribution until the
-2-
funds for such distribution have been received by the Bank, as Trustee and
Lessor, in cash or its equivalent reasonably acceptable to the Bank, as Trustee
and Lessor. All distributions to a Lender shall be made by the Bank, as Trustee
and Lessor, to the order of such Lender in the manner and at its address
referred to in Section 9.6 of the Participation Agreement.
SECTION II.2. Distribution of Payments.
(1) Payments to the Bank, as Trustee and Lessor, for the benefit of
the Lenders and Administrative Agent. Until the Loan Agreement shall have
been fully discharged pursuant to its terms, all Rent, insurance proceeds
and requisition or other payments of any kind included in the Trust Estate
(other than Excluded Amounts) payable to and received by the Bank, as
Trustee and Lessor, shall be held by Bank, as Trustee and Lessor, for the
benefit of the Lenders and Administrative Agent for distribution in
accordance with the provisions of Article III of the Loan Agreement;
provided, however, that any payments received by the Bank, as Trustee and
Lessor, from the Grantor with respect to the Trustee's fees and
disbursements, or pursuant to Section 5.1, shall be retained by the Bank,
as Trustee, and applied toward the purpose for which such payments were
made.
(2) Excluded Amounts. Any Excluded Amounts received by the Bank, as
Trustee and Lessor, at any time shall be promptly paid by the Bank, as
Trustee and Lessor, to the Person to whom such Excluded Amounts are payable
under the provisions of the Participation Agreement or any other Operative
Document.
SECTION 1.3. Effect of Sales by the Bank, as Trustee and Lessor. Any sale
of all or any part of the Trust Estate by the Bank, as Trustee and Lessor,
permitted hereunder shall bind the Lenders and shall be effective for the
benefit of the purchasers thereof and their respective successors and assigns to
divest and transfer all right, title and interest vested in the Bank, as Trustee
and Lessor, or the Lenders hereunder in the property so sold, and no purchaser
shall be required to inquire as to compliance by the Bank, as Trustee and
Lessor, with any of the terms hereof or to see to the application of any
consideration paid for such property.
ARTICLE III
CERTAIN PROVISIONS RESPECTING THE BANK, AS TRUSTEE AND LESSOR
SECTION 1.4. Acceptance of Trusts and Duties. The Bank accepts the trusts
hereby created and agrees to perform the same as herein expressed and agrees to
receive and disburse all moneys constituting part of the Trust Estate, as
Trustee and Lessor, in accordance with the terms hereof.
SECTION 1.5. Limitation of Power. The Bank, as Trustee and Lessor, shall
have no power, right, duty or authority to manage, control, possess, use, sell,
lease, dispose of or otherwise deal with the Equipment or any other property at
any time constituting a part of the
-3-
Trust Estate, or otherwise to take or refrain from taking any action under or in
connection with the Operative Documents, except (a) to execute and deliver the
Operative Documents to which the Bank, as Trustee and/or Lessor, is to be a
party, (b) to exercise and carry out or cause to be exercised and carried out
the rights, duties and obligations of the Bank, as Trustee and Lessor,
hereunder, (c) to exercise and carry out or cause to be exercised and carried
out the rights, duties and obligations of the Bank, as Trustee and/or Lessor,
under the Operative Documents, (d) to receive, collect and distribute and deal
with the sums due under the Lease and the other Operative Documents and the
proceeds thereof as provided in the Lease, the Participation Agreement, the Loan
Agreement and in this Trust Agreement, and (e) as expressly provided in written
instructions from the Instructing Party given pursuant to Section 3.3 or 3.4.
Other than as expressly provided in this Trust Agreement, the Bank, as Trustee
and Lessor, shall not have the authority to make management decisions relating
to the Trust Estate and may take only ministerial actions without the consent of
the Required Lenders (or, if required by the terms of the Operative Documents,
all of the Lenders). For purposes of this Trust Agreement, the Grantor shall not
have the right to direct the Bank, as Trustee and Lessor, to exercise and carry
out or cause to be exercised and carried out the rights, duties and obligations
of the Bank, as Trustee and Lessor, hereunder and under the Operative Documents
until the Loan Agreement and Notes have been paid and discharged in full.
SECTION 1.6. Notice of Event of Default. If a Responsible Official of the
Bank, as Trustee and Lessor, has actual knowledge of a Lease Event of Default or
Loan Event of Default, the Bank, as Trustee and Lessor, shall give prompt
written notice of such event to the Lenders, the Grantor and Administrative
Agent in the manner specified in Section 5.2. Subject to Section 3.4, the Bank,
as Trustee and Lessor, shall take such action with respect to any such event as
shall be specified in written instructions from the Instructing Party. For all
purposes of this Trust Agreement and the Lease, in the absence of such actual
knowledge, the Bank, as Trustee and Lessor, shall not be deemed to have
knowledge of a Lease Event of Default or a Loan Event of Default unless any of
its Responsible Officials is notified in writing by a Lender or Administrative
Agent. Bank, as Trustee and Lessor, shall have no obligation and shall not take
any action in the event it receives no direction from the Required Lenders (or,
if required by the terms of the Operative Documents, all of the Lenders), or
Administrative Agent, as the case may be.
SECTION 1.7. Action Upon Instructions. Subject to Sections 3.5, 3.6 and 5.1
and the Loan Agreement, upon the written instructions at any time and from time
to time of the Instructing Party, the Bank, as Trustee and Lessor, shall take
such of the following actions as may be specified in such instructions:
(1) give such notice or direction or exercise such right or power
under the Lease or any other Operative Document as shall be specified in
such instructions;
(2) approve as satisfactory to it all matters required by the terms of
any Operative Document to be satisfactory to the Bank, as Trustee and/or
Lessor;
-4-
(3) upon expiration of the Lease Term and discharge in full of the
Loan Agreement and the Notes pursuant to its terms, convey all of the
right, title and interest of Bank, as Trustee and Lessor, in and to the
Trust Estate (including the Equipment) to the Grantor; and
(4) any other action as specified by the Instructing Party. (1)
SECTION III.3. Certain Duties and Responsibilities of the Bank, as Trustee
and Lessor.
(5) Except during the continuance of a Lease Event of Default or a
Loan Event of Default:
(1) the Bank, as Trustee and Lessor, undertakes to perform such duties
and only such duties as are specifically set forth herein and in the other
Operative Documents, and no implied covenants or obligations shall be read
into this Trust Agreement against the Bank, as Trustee and Lessor, and the
Bank, as Trustee and Lessor, agrees that it shall not, nor shall it have a
duty to, manage, control, use, sell, maintain, insure, register, lease,
operate, modify, dispose of or otherwise deal with the Equipment or any
other part of the Trust Estate in any manner whatsoever, except as required
by the Operative Documents and as otherwise provided herein; and
(2) in the absence of bad faith or gross negligence on its part, the
Bank, as Trustee and Lessor, may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Bank, as Trustee and Lessor, and
conforming to the requirements of this Trust Agreement.
(6) No provision of this Agreement or any other Operative Document,
including, without limitation, Articles VII and VIII of the Participation
Agreement, shall be construed to relieve the Bank in its individual capacity or
the Bank, as Trustee and/or Lessor, of liability for its gross negligence or
willful misconduct or its negligence in the handling of funds, it being
understood that, without limiting the foregoing:
(1) the Bank, as Trustee and/or Lessor, shall not be liable for any
error of judgment made in good faith by an Responsible Official of the
Bank, as Trustee and/or Lessor, unless it shall be proved that the Bank, as
Trustee and/or Lessor, was grossly negligent;
(2) the Bank, as Trustee and/or Lessor, shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Instructing Party pursuant to the
express provisions hereof; it being understood that the Bank, as Trustee
and/or Lessor, shall be liable if it takes any action pursuant to
instructions from the Grantor prior to receiving notice from
-5-
Administrative Agent that the Loan Agreement has been discharged in full
pursuant to its terms;
(3) no provision hereof shall require the Bank in its individual
capacity to expend or risk its own funds in the performance of any of its
duties hereunder or under any of the other Operative Documents, or in the
exercise of any of its rights or powers; and
(4) the Bank shall be liable for (A) any taxes on, with respect to or
measured by any amounts paid to it as compensation for services as the
Trustee or Lessor hereunder or otherwise under the Operative Documents, (B)
acts or omissions not related to the transactions contemplated by the
Operative Documents, (C) the inaccuracy of representations and warranties
made by the Bank in its individual capacity, or in its capacity as Trustee
and/or Lessor, in the Participation Agreement or any certificate or
document delivered pursuant thereto, and (D) its negligence in the handling
of funds.
(7) the Bank, as Trustee and/or Lessor, shall not be required to take any
action hereunder or under the other Operative Documents, nor shall any other
provision of this Trust Agreement or any other Operative Document be deemed to
impose a duty on the Bank, as Trustee and/or Lessor, to take any action, if the
Bank, as Trustee and/or Lessor, determines, or is advised by external counsel,
that such action is likely to result in personal liability or is contrary to
Applicable Law or the Operative Documents.
(8) Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Bank, as Trustee and/or Lessor, shall be subject to
the provisions of this Section 3.5.
SECTION III.4. Certain Rights of Bank, as Trustee and/or Lessor. Except as
otherwise provided in Section 3.5:
(9) the Bank, as Trustee or Lessor, may rely and shall be protected in
acting or refraining from acting upon any signature, resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order or other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(10) any request, direction or authorization by any party hereto or to any
other Operative Document shall be sufficiently evidenced by a request, direction
or authorization in writing, delivered to the Bank, as Trustee or Lessor, and
signed in the name of such party by the president, any vice president, the
treasurer, the secretary or any authorized officer of such party, as the case
may be, and any resolution of the board of directors or committee thereof of
such party shall be sufficiently evidenced by a copy of such resolution
certified by the secretary or an assistant secretary of such party, as the
-6-
case may be, to have been duly adopted and to be in full force and effect on the
date of such certification, and delivered to the Bank, as Trustee or Lessor;
(11) whenever in the administration of this Trust Agreement the Bank, as
Trustee and Lessor, deems it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Bank, as Trustee
and Lessor, may in good faith rely upon a certificate in writing, delivered to
the Bank, as Trustee and/or Lessor, and signed by the president, any vice
president, any assistant vice president, the treasurer, any assistant treasurer,
the secretary, any assistant secretary or any authorized officer of a Lender;
(12) the Bank, as Trustee and Lessor, may exercise its powers and perform
its duties by or through such attorneys, agents and representatives as it may
appoint, and it shall not be liable for the conduct or misconduct of such
attorneys, agents and representatives, provided, that the Bank, as Trustee and
Lessor, shall use due care in the appointment of such attorneys, agents and
representatives; and it shall be entitled to the advice of counsel and shall be
protected by the advice of such counsel in anything done or omitted to be done
in accordance with such advice, if such advice pertains to such matters as the
Bank, as Trustee and Lessor, may reasonably presume to be within the scope of
such counsel's area of expertise and provided such counsel is not in-house
counsel to the Bank, as Trustee and Lessor;
(13) the Bank, as Trustee and Lessor, shall not be under any obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of the Instructing Party, unless the Instructing Party
offers to the Bank, as Trustee and Lessor, reasonable security or indemnity
against the costs, expenses (including reasonable fees and expenses of its legal
counsel) and liabilities which may be incurred by it in compliance with such
request or direction;
(14) provided no Responsible Official of the Bank, as Trustee and Lessor,
has actual knowledge of the inaccuracy thereof, the Bank, as Trustee and Lessor,
shall not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent or other paper or document, but the Bank, as Trustee
and Lessor, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Bank, as Trustee and
Lessor, determines to make such further inquiry or investigation, it shall be
entitled to examine the books and records of the Grantor related to the
Equipment to reasonably determine whether the Grantor is in compliance with the
terms and conditions of the Lease and to examine the Equipment, by agent or
attorney, all upon the terms and conditions contained in the Lease; and
(15) without limiting the generality of Section 3.5, the Bank, as Trustee
and Lessor, shall not have any duty (i) to see to any recording or filing of the
Operative Documents or any Uniform Commercial Code financing statements or to
see to the maintenance of any such recording or filing, (ii) to see to any
insurance on the Equipment
-7-
or to effect or maintain any such insurance, whether or not the Grantor is
in default with respect thereto, other than to forward promptly to the
Lenders copies of all certificates, reports and other written information
it receives from the Grantor pursuant to the Lease (unless the Lenders are
to receive such certificates, reports and other written information
directly from the Grantor), (iii) to see to the payment or discharge of any
tax, assessment or other government charge or any Lien owing with respect
to, assessed or levied against any part of the Trust Estate, other than
Lessor Liens attributable to it, (iv) to confirm or verify any financial
statements of the Grantor or any other Person, or (v) to inspect the
Equipment at any time or ascertain or inquire as to the performance or
observance of any of the Grantor's or any other Person's (other than its or
the Bank's, individually, or as Trustee, Lessor or Borrower) covenants
under the Operative Documents with respect to the Equipment.
SECTION 1.8. NO REPRESENTATIONS OR WARRANTIES AS TO THE EQUIPMENT OR
DOCUMENTS. THE BANK, AS TRUSTEE AND LESSOR, IS NOT A BUILDER, DEVELOPER OR
MANUFACTURER OF THE EQUIPMENT OR A DEALER IN OR VENDOR OF SIMILAR EQUIPMENT AND
HAS NOT INSPECTED THE EQUIPMENT BEFORE DELIVERY TO AND ACCEPTANCE BY THE
GRANTOR. THE BANK, AS TRUSTEE AND LESSOR, HAS NOT MADE NOR DOES IT MAKE (A) ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO ANY ENVIRONMENTAL MATTER
OR CONDITION, VALUE, DESIGN, OPERATION, CONDITION, QUALITY, DURABILITY,
SUITABILITY, MERCHANTABILITY OR FITNESS FOR USE OR FITNESS FOR A PARTICULAR
PURPOSE, ABSENCE OF LATENT OR OTHER DEFECTS WHETHER OR NOT DISCOVERABLE, ABSENCE
OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, OR ANY OTHER WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT, OR (B) ANY
REPRESENTATION OR WARRANTY AS TO THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THE
OPERATIVE DOCUMENTS (OTHER THAN AS TO THIS TRUST AGREEMENT AGAINST THE BANK, AS
TRUSTEE AND LESSOR), OR AS TO THE CORRECTNESS OF ANY STATEMENT CONTAINED IN ANY
THEREOF, EXCEPT AS SET FORTH IN SECTION 4.3 OF THE PARTICIPATION AGREEMENT.
SECTION 1.9. Status of Moneys Received. All moneys received by the Bank, as
Trustee and/or Lessor, or the Bank individually under or pursuant to this Trust
Agreement or any other Operative Document (other than Excluded Amounts to be
paid to the Bank in any capacity) shall constitute trust funds for the purpose
for which they were paid or are held, but need not be segregated in any manner
from any other moneys and may be deposited by the Bank, as Trustee and/or
Lessor, under such conditions as may be prescribed or permitted by Applicable
Law for trust funds, or, at the direction of the Instructing Party may be
invested in Cash Equivalents.
SECTION 1.10. Permitted Activities. The Bank or any corporation in or with
which the Bank may be interested or affiliated or any officer or director of any
such corporation may have commercial relations and otherwise deal with the
Grantor or any other Person or with any other corporation having relations with
the Grantor to the full extent permitted by Applicable Law.
-8-
SECTION 1.11. Resignation or Removal of the Bank, as Trustee and Lessor.
The Bank, as Trustee and Lessor, or any successor thereto as Trustee and Lessor,
may resign as Trustee and Lessor at any time without cause by giving at least 60
days' prior written notice to each Lender, Administrative Agent and the Grantor,
and the Required Lenders may at any time remove the Bank, as Trustee and Lessor,
without cause, by an instrument in writing delivered to the Bank, as Trustee and
Lessor, Administrative Agent and the Grantor, such resignation or removal to be
effective on the later of the date specified in such notice or written
instrument or the date on which a successor trustee is appointed hereunder. With
the written consent of Administrative Agent and, so long as a Lease Event of
Default shall not have occurred and be continuing, the Grantor, the Required
Lenders may, at any time upon 30 days' prior written notice to Administrative
Agent and the Grantor by an instrument in writing, appoint a successor trustee
and lessor; provided, however, that any successor trustee and lessor shall be a
bank or trust company organized under the laws of the United States of America
or any state thereof that has a combined capital and surplus of at least
$100,000,000, subject to any applicable Gaming Laws. If the Required Lenders do
not appoint a successor trustee and lessor within 30 days after the giving of
notice of such resignation or removal, Administrative Agent or the Bank, as
Trustee and Lessor, may apply to any court of competent jurisdiction to appoint
a successor trustee and lessor to act until a successor or successors is
appointed by the Required Lenders as above provided. Any successor trustee and
lessor so appointed by such court shall immediately and without further act be
superseded by a successor trustee and lessor appointed by the Required Lenders
within one year from the date of the appointment by such court.
SECTION 1.12. Estate and Rights of Successor Trustee and Lessor. Any
successor trustee and lessor, whether appointed by the Required Lenders or a
court, shall execute and deliver to the predecessor Trustee and Lessor an
instrument accepting such appointment, and thereupon each successor trustee and
lessor, without further act, shall become vested with all the estates,
properties, rights, powers, duties and trusts of the predecessor Trustee and
Lessor in the trusts hereunder with like effect as if originally named Trustee
and Lessor herein, but nevertheless upon the written request of such successor
trustee and lessor, such predecessor Trustee and Lessor shall execute and
deliver an instrument transferring to such successor Trustee and Lessor, upon
the trusts herein expressed, all the estates, properties, rights, powers and
trusts of such predecessor Trustee and Lessor, and such predecessor Trustee and
Lessor shall duly assign, transfer, deliver and pay over to such successor
trustee and lessor any property or moneys then held by such predecessor Trustee
and Lessor upon the trusts herein expressed.
SECTION 1.13. Merger or Consolidation of Trustee and Lessor. Any Person
into which the Bank serving as Trustee and Lessor may be merged or with which it
may be consolidated, or any Person resulting from any merger or consolidation to
which the Bank serving as Trustee and Lessor is a party, or any Person to which
substantially all of the corporate trust business of the Bank may be
transferred, shall be a successor trustee and lessor under this Trust Agreement
without further act.
SECTION 1.14. Co-Trustees. At any time, for the purpose of meeting any
legal requirements of any jurisdiction in which any part of the Trust Estate may
at the time be located,
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the Required Lenders and the Bank, as Trustee and Lessor, jointly shall have the
power, and shall execute and deliver all instruments, to appoint one or more
Persons approved by the Required Lenders and the Bank, as Trustee and Lessor, to
act as co-trustee, or co-trustees, jointly with the Bank, as Trustee and Lessor,
or separate trustee/lessor or separate trustees/lessors, of all or any part of
the Trust Estate, and to vest in such Person or Persons, in such capacity, such
title to the Trust Estate or any part thereof, and such rights, powers, duties,
trusts or obligations as the Required Lenders and the Bank, as Trustee and
Lessor, may consider necessary or desirable. If the Required Lenders have not
joined in such appointment within 15 days after the receipt by the last of them
of a request to do so, the Bank, as Trustee and Lessor, alone shall have power
to make such appointment. The Bank, as Trustee and/or Lessor, shall not be
liable for any act or omission of any co-trustee/lessor or separate
trustee/lessor appointed under this Section 3.13.
SECTION 1.15. Doing Business in Other Jurisdictions. Notwithstanding
anything contained herein to the contrary, the Bank shall not be required to
take any action in any jurisdiction, other than in the jurisdiction of its
organization, and other than in any other jurisdiction in which Bank is
authorized to do business, if solely as a result of such action, (i) the taking
of such action would require the consent or approval or authorization or order
of or the giving of notice to, or the registration with or the taking of any
other action in respect of, any Governmental Authority of any jurisdiction,
other than the state of Bank's organization or any other jurisdiction in which
the Bank is authorized to do business; (ii) the Bank would incur any fee, tax or
other governmental charge under the laws of any jurisdiction or any political
subdivision thereof in existence on the date hereof, other than the state of the
Bank's organization or any other jurisdiction in which the Bank is authorized to
do business; or (iii) the Bank would become subject to personal jurisdiction in
any jurisdiction, other than the state of the Bank's organization or any other
jurisdiction in which the Bank is authorized to do business, for causes of
action arising from acts unrelated to the consummation of the transactions
described in the Operative Documents by the Bank; provided, that if pursuant to
the foregoing paragraph the Bank shall not be required to take an action, the
Bank shall promptly appoint an additional trustee/lessor pursuant to Section
3.10 to proceed with such action.
SECTION 1.16. Books and Records. The Bank, as Trustee and Lessor, shall be
responsible for keeping the customary books and records relating to the receipt
and disbursement of all moneys actually received and disbursed by it.
ARTICLE IV
TERMINATION OF AND AMENDMENTS TO TRUST
SECTION 1.17. Termination. The Trust created and provided for hereby shall
cease and be terminated in any one of the following events, whichever shall
first occur:
(1) If Administrative Agent, acting upon the instructions of the
Required Lenders, shall by notice in writing to the Bank, as Trustee and
Lessor, the Lenders and the Grantor, revoke and terminate the Trust on and
as of a date stated in such notice,
-10-
which date shall not be less than ten (10) nor more than thirty (30) days
from the date of mailing such notice, then on the date specified in such
notice the Trust created and provided for hereby shall cease and terminate,
provided, however, that the Trust shall not be subject to revocation or
termination by the Lenders prior to the payment in full and discharge of
the Loans and all other indebtedness secured by the Operative Documents and
the termination of the Operative Documents and the release of the Liens
granted thereby; or
(2) the sale or other final disposition by the Bank, as Trustee and
Lessor, of all property constituting the Trust Estate and the final
disposition by the Bank, as Trustee and Lessor, of all moneys or other
property or proceeds constituting part of the Trust Estate in accordance
with the terms hereof; provided, however, that the Trust Estate shall not
be subject to sale or other final disposition by the Bank, as Trustee and
Lessor, prior to the payment in full and discharge of the Loans and all
other indebtedness secured by the Operative Documents and the release of
the Operative Documents and the Liens granted thereby and the payment in
full of the Loans; or
(3) 110 years after the date hereof.
SECTION 1.18. Distribution of Trust Estate Upon Termination. Upon any
termination of this Trust pursuant to Section 4.1, the Bank, as Trustee and
Lessor, shall convey the Trust Estate to such purchaser or purchasers thereof or
other Persons entitled thereto and for such amount and on such terms as are
specified in written instructions from Administrative Agent, acting upon the
instructions of the Required Lenders, delivered to the Bank, as Trustee and
Lessor, before the date of termination; provided that (a) if at the time of any
termination the Lease remains in force and effect, then the Trust Estate shall
be conveyed as a unit subject to the Lease and not in parcels, and (b) if such
written instructions are not delivered to the Bank, as Trustee and Lessor, on or
before the date of termination, the Bank, as Trustee and Lessor, shall transfer
title to the Trust Estate to the Lenders. Upon making such transfer or sale the
Bank, as Trustee and Lessor, shall be entitled to immediate receipt of any sums
due and owing to the Bank, as Trustee and/or Lessor, including, without
limitation, any expenses (including reasonable attorneys' fees and expenses)
incurred pursuant hereto or as compensation for services rendered hereunder and
not theretofore paid and the Bank, as Trustee and/or Lessor, shall be discharged
and free of any further liability hereunder subject to Section 3.5.
SECTION 1.19. Amendments. Subject to Section 5.8 hereof and Section 9.3 of
the Participation Agreement, at any time and from time to time, upon the written
request of the Required Lenders, (a) the Bank, as Trustee and Lessor, shall
execute a supplement hereto for the purpose of adding provisions to, or changing
or eliminating provisions of, this Trust Agreement as specified in such request,
and (b) the Bank, as Trustee and Lessor, shall enter into or consent to such
written amendment of or supplement to the other Operative Documents as the
Grantor or Administrative Agent, as the case may be, may agree to and as may be
specified in such request, or execute and deliver such written waiver or
modification of the terms of the Operative Documents as may be specified in such
request; provided, however, if in the reasonable opinion of the Bank, as Trustee
and Lessor, any document required to be executed by it pursuant to this
-11-
Section 4.3 affects any right or duty of, or immunity or indemnity in favor of,
the Bank, as Trustee and/or Lessor, under this Trust Agreement or the other
Operative Documents, the Bank, as Trustee and Lessor, may in its reasonable
discretion decline to execute such document.
ARTICLE V
MISCELLANEOUS
SECTION 1.20. Compensation and Indemnification. Bank, as Trustee and
Lessor, shall receive reasonable compensation for its services hereunder from
the Grantor and shall be reimbursed by the Grantor for the its reasonable fees
and expenses (including the reasonable disbursements and fees of counsel). If a
Lease Event of Default or a Loan Event of Default shall have occurred and be
continuing and the Bank, as Trustee and Lessor, is required pursuant to this
Trust Agreement to take any action in connection therewith, it shall be
reimbursed by the Grantor for any expenses it may incur in relation to taking
any such action. Grantor shall reimburse and indemnify and save the Bank, as
Trustee and/or Lessor, harmless from and against any and all losses, damages,
liabilities, claims, actions, suits, obligations, penalties, demands,
disbursements and expenses, including taxes, reasonable counsel fees, and
including tort claims for which the Bank, as Trustee and/or Lessor, is strictly
liable, which may be asserted against or incurred by reason of the Bank being
the Bank, as Trustee and/or Lessor, or acting as the Trustee or Lessor hereunder
or under the other Operative Documents or the performance or enforcement of any
of the terms hereof, or arising out of or relating to this Trust Agreement or
the other Operative Documents or the Equipment, the Trust Estate or the Rent and
other sums payable therefor, or the building, manufacture, purchase,
installation, acceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Equipment or
in any way relating to or arising out of the Trust Estate or the action or the
inaction of the Bank, as Trustee and/or Lessor, hereunder or by reason of any
occurrence while so acting. In no event shall Grantor be so obligated in respect
of any such losses, damages, liabilities, claims, actions, suits, obligations,
penalties, demands, disbursements and expenses, including taxes and reasonable
counsel fees pursuant to this Section 5.1, arising from or as a result of (a)
the willful misconduct or gross negligence of the Bank or the negligence of the
Bank in handling of funds, (b) any taxes on, with respect to or measured by any
amounts paid to the Bank as compensation for services as Trustee and/or Lessor
hereunder or otherwise under the Operative Documents, or (c) the inaccuracy of
representations and warranties made by the Bank in its individual capacity, or
in its capacity as Trustee and/or Lessor, in the Participation Agreement or in
any certificate or documents delivered pursuant thereto. The provisions of this
Section 5.1 (other than the requirements for compensation of the Bank, as
Trustee and Lessor, after its resignation, which shall terminate upon the
resignation or removal of the Bank, as Trustee and Lessor) shall continue in
force and effect notwithstanding the termination of this Trust, the resignation
or removal of the Bank, as Trustee and Lessor, or the obligation of any other
party to any other Operative Document to make any payment to the Bank, as
Trustee and/or Lessor, which Grantor is required to make pursuant to this
Section 5.1.
-12-
SECTION 1.21. Notices. All notices and communications provided for herein
shall be in writing and shall be deemed to have been given in accordance with
Section 9.6 of the Participation Agreement. Bank, as Trustee and Lessor, shall
deliver to each Lender promptly after receipt copies of all notices,
certificates and reports delivered to it pursuant to any Operative Document.
SECTION 1.22. GOVERNING LAW. THIS TRUST IS BEING CREATED IN THE STATE OF
CALIFORNIA AND THE VALIDITY, CONSTRUCTION AND ALL RIGHTS UNDER THIS TRUST SHALL
BE GOVERNED BY THE LAWS OF THAT STATE, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES OF SUCH STATE, EXCEPT TO THE EXTENT THAT GAMING LAWS SHALL
NECESSARILY GOVERN. IF ANY PROVISION OF THIS TRUST SHALL BE INVALID OR
UNENFORCEABLE, THE REMAINING PROVISIONS HEREOF SHALL CONTINUE TO BE FULLY
EFFECTIVE, PROVIDED THAT SUCH REMAINING PROVISIONS DO NOT INCREASE THE
OBLIGATIONS OR LIABILITIES OF THE TRUSTEE.
SECTION 1.23. Tax Reports; Information Reporting; Withholding Taxes. If any
tax report or tax return is required to be made by the Bank, as Trustee and/or
Lessor, with respect to the Trust Estate and the Grantor is not required to
prepare and file the same pursuant to the Lease, each Lender will prepare such
tax report or return in respect of its interest in the Trust and deliver a copy
thereof to the Bank, as Trustee and Lessor. The Bank, as Trustee and Lessor,
agrees to promptly forward to each Lender any communications with respect to
taxes pertaining to the Trust Estate received by the Bank, as Trustee and/or
Lessor, from tax authorities or from the Grantor.
SECTION 1.24. Headings. The headings of the various Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 1.25. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns. Grantor may not assign,
transfer or otherwise dispose of its interest in the Trust, except as expressly
contemplated in the Operative Documents.
SECTION 1.26. Severability. Any provision of this Trust Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition on unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.
SECTION 1.27. Only Written Waivers. No term or provision of this Trust
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party or other Person against whom
enforcement of the change, waiver, discharge or termination is sought; and any
waiver of the terms hereof shall be effective only in the specific instance and
for the specific purpose given.
-13-
SECTION 1.28. Counterparts. This instrument may be simultaneously executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original, and such counterparts together shall constitute and be one and
the same instrument.
SECTION 1.29. Rights in Trust Agreement. Except as expressly provided to
the contrary in the Operative Documents, nothing in this Trust Agreement,
whether express or implied, shall be construed to give any Person other than the
Bank, as Trustee and Lessor, the Administrative Agent, the Grantor, and each
Lender and their respective successors and assigns, any legal or equitable
right, remedy or claim under or in respect of this Trust Agreement.
SECTION 1.30. Payment of Fees, Costs and Expenses. Grantor shall pay to the
Bank, as Trustee and Lessor, for its services hereunder such fees and expenses
as heretofore have been agreed upon by Bank and Grantor and shall also pay to
Bank, as Trustee and Lessor, such fees and expenses as may be reasonably
incurred by the Bank, as Trustee and Lessor, as a result of taking any direction
of the Instructing Party. Bank, as Trustee and Lessor, agrees that it shall have
no right against the Lenders or Administrative Agent for any fee as compensation
for its services hereunder, except as hereafter expressly agreed upon by the
Lenders, Administrative Agent and the Bank, as Trustee and Lessor.
SECTION 1.31. Identification of Trust. The name of the trust created hereby
is the HOLLYWOOD CASINO SHREVEPORT TRUST 2000-A.
[Signature pages follow]
IN WITNESS WHEREOF, the Bank, individually and as Trustee and Lessor,
and the Grantor have caused this Trust Agreement to be duly executed all as of
the day and year first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Bank, as Trustee and as Lessor
By:__________________________________
Name:
Title:
S-1
HOLLYWOOD CASINO SHREVEPORT,
a Louisiana general partnership,
as Grantor
By: HCS I, Inc., a Louisiana corporation,
its managing general partner
By ______________________________________________
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
S-2
Execution Copy
================================================================================
SECURITY AGREEMENT AND ASSIGNMENT OF LEASE
dated as of March 31, 2000
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Lessor, Trustee and Borrower,
and
FIRST SECURITY TRUST COMPANY OF NEVADA,
as Administrative Agent
================================================================================
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION
PROVISIONS IN SECTION 6.2 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES,
DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED
FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY
NEGLIGENCE OF ANY INDEMNIFIED PERSONS IDENTIFIED HEREIN.
SECURITY AGREEMENT AND ASSIGNMENT OF LEASE
THIS SECURITY AGREEMENT AND ASSIGNMENT OF LEASE (this "Security
Agreement"), dated as of March 31, 2000, is made by FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual capacity but solely as Lessor and
Trustee ("Grantor") under that certain Trust Agreement dated as of March 31,
2000, between HOLLYWOOD CASINO SHREVEPORT, a Louisiana general partnership and
Grantor, and as Borrower under the Loan Agreement, in favor of FIRST SECURITY
TRUST COMPANY OF NEVADA, as Administrative Agent ("Administrative Agent") for
the Lenders.
W I T N E S S E T H:
-------------------
WHEREAS, Grantor, Administrative Agent, the Arranger, the Documentation
Agent, the Lenders, and Hollywood Casino Shreveport, a Louisiana general
partnership, as Lessee ("Lessee"), have entered into that certain Participation
Agreement, dated as of March 31, 2000 (as amended, restated, modified or
supplemented from time to time, the "Participation Agreement"); and
WHEREAS, concurrently herewith pursuant to the Participation Agreement,
(i) Grantor, as Lessor and Borrower, will obtain Loans from the Lenders pursuant
to the Loan Agreement, the proceeds of which will be used to provide funding for
the purchase of certain items of Equipment, and (ii) Grantor, as lessor, and
Lessee, as lessee, will enter into the Lease; and
WHEREAS, it is a condition precedent to the consummation by the Lenders
of the transactions to be consummated on each Advance Date that Grantor execute
and deliver this Security Agreement as security for Grantor's obligations under
the Loan Agreement; and
WHEREAS, it is in the best interests of Grantor that the
transactions contemplated by the Operative Documents occur; and
WHEREAS, Grantor has duly authorized the execution, delivery
and performance of this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to enter into the transactions contemplated by the Operative Documents, Grantor
agrees as follows:
ARTICLE I
DEFINITIONS
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SECTION 1 1 Certain Terms. The following terms (whether or not underscored)
when used in this Security Agreement, including its preamble and recitals, shall
have the following meanings (such definitions to be equally applicable to the
singular and plural forms thereof):
"Collateral" is defined in Section 2.1.
"Secured Obligations" is defined in Section 2.2.
SECTION 1 1 Participation Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in Appendix 1 to
the Participation Agreement.
SECTION 1 1 UCC Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the UCC in effect
in the State of California are used in this Security Agreement, including its
preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 1 1 Grant of Security. Grantor hereby assigns and pledges to
Administrative Agent, and hereby grants to Administrative Agent, for the benefit
of the Lenders, a security interest in and to all of the following, whether now
existing or hereafter arising or acquired (the "Collateral"):
(1) all of Grantor's right, title and interest in, to and under each
item of Equipment;
(2) all of Grantor's right, title and interest in, to and under each
Xxxx of Sale and each Certificate of Acceptance;
(3) all of Grantor's right, title and interest in, to and under the
Participation Agreement and the Lease, including the security interest
granted thereunder in favor of Grantor, as Trustee and Lessor thereunder,
and including all rights to receive payments thereunder (including Rent)
other than Excluded Amounts;
(4) all of Grantor's right, title and interest in, to and under the
Security Documents and the other Operative Documents; (1)
(5) all of Grantor's right, title and interest in, to and under any
and all contracts necessary to operate and maintain the Equipment, or any
portion thereof;
-2-
(6) all books, records, writings, databases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing;
(7) to the extent not included in the foregoing, all of Grantor's
right, title and interest in, to and under any and all accounts, general
intangibles and contract rights relating to or otherwise arising out of or
in connection with the Equipment and/or the Operative Documents; and
(8) all products, accessions, rents, issues, profits, returns, income
and proceeds of and from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in the foregoing
clauses of this Section 2.1, and, to the extent not otherwise included, all
payments under insurance (whether or not Administrative Agent is the loss
payee thereof), or any indemnity, warranty or guaranty payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral).
Grantor hereby assigns, transfers and conveys to Administrative Agent all
payments (except Excluded Amounts) payable by Lessee under the Lease.
SECTION 1 1 Security for Obligations. This Security Agreement secures the
payment of all obligations of Grantor, as Lessor, as Borrower and as Trustee,
now or hereafter existing under the Notes, the Loan Agreement and any other
Operative Document to which it is a party, either as Lessor or Trustee, or both,
or as Borrower, whether for principal, interest, costs, fees, expenses or
otherwise, and all other obligations of Grantor, as Borrower or as Lessor or
Trustee, or both, to the Lenders with respect to the Loans howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent or now
or hereinafter existing or due or to become due (all such obligations being the
"Secured Obligations").
SECTION 1 1 Continuing Security Interest: Transfer of Notes. This Security
Agreement shall create a continuing security interest in the Collateral and
shall
(1) remain in full force and effect until the payment in full of all
Secured Obligations and the termination of any other commitments of the
Lenders to or for the benefit of Grantor or Lessee, pursuant to the
Operative Documents;
(2) be binding upon Grantor, its successors, transferees and assigns;
and
(3) inure, together with the rights and remedies of Administrative
Agent hereunder, to the benefit of Administrative Agent and its successors,
transferees and assigns.
Without limiting the generality of the foregoing clause (c), each transferee of
a Note shall, upon such transfer, become vested with all the rights and benefits
in respect thereof granted under any
-3-
Operative Document (including this Security Agreement) or otherwise, subject,
however, to any contrary provisions in such assignment or transfer. Upon the
payment in full and performance of all Secured Obligations and the termination
of the Commitments, and any other commitments of the Lenders to Grantor, as
Lessor, Trustee and/or Borrower, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to Grantor, as Lessor
and Trustee. Upon any such termination, Administrative Agent will, on behalf of
the Lenders and at Grantor's sole expense, execute and deliver to Grantor such
documents as Grantor shall reasonably request to evidence such termination.
SECTION 1 1 Grantor Remains Liable. Anything herein to the contrary
notwithstanding
(1) Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and shall
perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not been
executed;
(2) the exercise by Administrative Agent of any of its rights
hereunder shall not release Grantor from any of its duties or obligations
under any such contracts or agreements included in the Collateral; and
(3) Administrative Agent shall not have any obligation or liability
under any such contracts or agreements included in the Collateral by reason
of this Security Agreement, nor shall Administrative Agent be obligated to
perform any of the obligations or duties of Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 1 1 Representations and Warranties. Grantor, as Lessor and Trustee,
and as Borrower, represents and warrants unto Administrative Agent and the
Lenders as set forth in this Article.
SECTION 1 1 1 Ownership, No Liens, etc. Grantor owns the Collateral
free and clear of any lien, security interest, charge or encumbrance except for
the security interest created by this Security Agreement, Permitted Liens (other
than Lessor's Liens) and Lessee's interest in the Equipment under the Lease.
SECTION 1 1 1 Validity, etc. The Assigned Agreements have been duly
authorized, executed and delivered by Grantor, have not been amended or
otherwise modified, and are binding upon and enforceable against Grantor thereto
in accordance with their terms, except as
-4-
such enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
SECTION 1 1 1 Authorization, Approval. etc. No authorization, approval
or other action by, and no notice to or filing with, any Governmental Authority
is required either
(1) for the grant by Grantor of the security interest
granted hereby or for the execution, delivery and performance of this
Security Agreement by Grantor; or
(2) for the perfection of or the exercise by Administrative
Agent of its rights and remedies hereunder, except for filings
specified in Schedule IV to the Participation Agreement.
SECTION 1 1 1 Compliance with Laws. Grantor is in compliance with all
Applicable Laws of every Governmental Authority, except for non-compliance which
would not reasonably be expected to have a Material Adverse Effect.
ARTICLE IV
COVENANTS
SECTION 1 1 Certain Covenants. Grantor covenants and agrees that, so long
as any portion of the Secured Obligations shall remain unpaid or the Lenders
shall have any outstanding commitments to Grantor under the Operative Documents,
Administrative Agent may exercise, in its sole and absolute discretion, any and
all rights and powers set forth in this Section.
SECTION 1 1 1 As to Collateral. If an Event of Default has occurred
and is continuing:
(1) Administrative Agent may, at the expense of Grantor,
endeavor to collect, as and when due, all amounts due with respect to
any of the Collateral. Administrative Agent, as assignee hereunder of
the Lease, may, at any time, enforce collection of any of the
Collateral by suit or otherwise and surrender, release, or exchange
all or any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby.
(2) Administrative Agent is authorized to endorse, in the
name of Grantor, as Lessor and/or Trustee, any item, howsoever
received by Administrative Agent, representing any payment on or other
proceeds of any of the Collateral.
-5-
(3) If a Lease Default shall have occurred and be continuing
with respect to which Grantor, as Lessor and/or Trustee, could, at its
option, declare a Lease Event of Default, then Administrative Agent,
as assignee hereunder of the Lease, may declare, in its sole and
absolute discretion, a Lease Event of Default and may, in its sole and
absolute discretion, exercise any or all of the rights and powers and
pursue any or all of the remedies of Grantor as Lessor and/or Trustee
under and pursuant to Article X of the Lease.
SECTION 1 1 1 Transfers and Other Liens. Except as may be permitted by
the terms of the Operative Documents, Grantor, as Trustee or Lessor, or as
Borrower, shall not:
(1) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral;
(2) cancel or terminate the Assigned Agreements or consent
to or accept any cancellation or termination thereof;
(3) amend or otherwise modify the Assigned Agreements or
give any consent, waiver or approval thereunder, except pursuant to
Section 9.3 of the Participation Agreement;
(4) waive any default under or breach of the Assigned
Agreements;
(5) create or suffer to exist any Lien (including, without
limitation, any Lessor's Liens) or other charge or encumbrance upon or
with respect to any of the Collateral to secure indebtedness of any
Person or entity, except for the security interest created by this
Security Agreement, Permitted Liens or Lessee's interest in the
Equipment under the Lease; or
(6) take any other action in connection with the Assigned
Agreements which would impair the value of the interest or rights of
Grantor thereunder or which would impair the interest or rights of
Administrative Agent.
SECTION 1 1 1 Further Assurances. etc. Grantor agrees that, from time
to time and at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that may be necessary or
desirable, or that Administrative Agent may reasonably request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Grantor, as Lessor and Trustee, will:
(1) execute and file or record such instruments or notices
as may be necessary or desirable, or as Administrative Agent may
reasonably request, in order to
-6-
perfect and preserve the security interests and other rights granted
or purported to be granted to Administrative Agent hereby; and
(2) furnish to Administrative Agent, from time to time at
Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as Administrative Agent may reasonably
request, all in reasonable detail.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 1 1 Administrative Agent Appointed Attorney-in-Fact. Grantor, as
Lessor and Trustee, and as Borrower, hereby irrevocably appoints Administrative
Agent as Grantor's attorney-in-fact, with full authority in the place and stead
of Grantor and in the name of Grantor, as Lessor and Trustee and/or as Borrower,
or otherwise, from time to time in Administrative Agent's discretion (acting
upon the instructions of the Required Lenders or, if required by the terms of
the Operative Documents, all of the Lenders), during the continuance of a Loan
Event of Default (subject to Section 6.2 of the Loan Agreement) to take any
action and to execute any instrument which Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including, without limitation:
(1) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(2) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) above;
(3) to file any claims or take any action or institute any
proceedings which Administrative Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
the rights of Administrative Agent with respect to any of the
Collateral; and
(4) to perform the affirmative obligations of Grantor
hereunder (including all obligations of Grantor pursuant to Section
4.1.3).
Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 1 1 Administrative Agent May Perform. If Grantor fails to
perform any agreement contained herein, Administrative Agent may itself perform,
or cause performance of, such
-7-
agreement, and the expenses of Administrative Agent incurred in connection
therewith shall be payable by Grantor pursuant to Section 6.2.
SECTION 1 1 Administrative Agent Has No Duty. In addition to, and not
in limitation of, Section 2.4, the powers conferred on Administrative Agent
hereunder are solely to protect Administrative Agent's interest (on behalf of
the Lenders) in the Collateral and shall not impose any duty on it to exercise
any such powers. Except for the reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Administrative Agent shall not have any duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.
SECTION 1 1 Reasonable Care. Administrative Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, that Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral if it takes such action for that purpose as Grantor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Loan Event of Default, but failure of Administrative Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 1 1 Certain Remedies. If any Loan Event of Default shall have
occurred and be continuing:
(1) Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies
to the affected Collateral) and under the laws of the State wherein
the Collateral, or any part thereof, is located, and also may exercise
any and all rights and remedies of Grantor, as Lessor and/or Trustee,
under or in connection with the Collateral, including, without
limitation, any and all rights of Grantor, as Lessor and/or Trustee,
to demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreements. Grantor
agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' prior notice to Grantor of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Administrative Agent shall
not be obligated to make any sale of Collateral regardless of whether
notice of sale has been given. Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
-8-
(2) All payments received by Grantor, as Lessor and/or
Trustee, under or in connection with the Assigned Agreements or
otherwise in respect of the Collateral shall be received in trust for
the benefit of Administrative Agent, shall be segregated from other
funds of Grantor, and shall be forthwith paid over to Administrative
Agent in the same form as so received (with any necessary
endorsement).
(3) All cash proceeds received by Administrative Agent in
respect of any sale of, collection from, or other realization upon all
or any part of the Collateral may, in the discretion of Administrative
Agent, be held by Administrative Agent as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts
payable to Administrative Agent pursuant to Section 6.2), in whole or
in part, by Administrative Agent against, all or any part of the
Secured Obligations in such order as Administrative Agent shall elect.
Any surplus of such cash or cash proceeds held by Administrative Agent
and remaining after payment in full of all the Secured Obligations
shall be paid over to Grantor or to whomsoever may be lawfully
entitled to receive such surplus.
SECTION 1 1 Indemnity and Expenses.
(1) Grantor agrees to, and does hereby, indemnify
Administrative Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Security Agreement
(including, without limitation, enforcement of this Security
Agreement), except claims, losses or liabilities resulting from
Administrative Agent's gross negligence or wilful misconduct.
(2) Grantor will, upon demand, pay to Administrative Agent
the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts
and agents, which Administrative Agent may incur in connection with
(1) the administration of this Security Agreement,
(2) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any of the
Collateral, (1)
(3) the exercise or enforcement of any of the rights of
Administrative Agent hereunder, or
(4) the failure by Grantor to perform or observe any of the
provisions hereof.
ARTICLE VII
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ADDITIONAL LOUISIANA PROVISIONS
SECTION 1 1 Additional Louisiana Provisions.
(1) The term "Louisiana Collateral" as used herein shall refer to all
portions of the Collateral and the proceeds thereof that are from time to time
located in the State of Louisiana or that are otherwise subject to Louisiana law
at all times during which such portions or proceeds thereof are located in
Louisiana or are otherwise mandatorily subject to the application of Louisiana
law under the Applicable Laws of other states. Article VII shall apply to all
Louisiana Collateral and all proceeds thereof at all times during which such
Louisiana Collateral or the proceeds thereof are located in Louisiana or are
otherwise subject to the application of Louisiana law in any respect.
(2) Contemporaneously with the execution of this Security Agreement,
Grantor, as Lessor and Trustee, and as Borrower, has completed and signed one or
more appropriate Louisiana UCC-1 financing statements with regard to the
Collateral and the proceeds thereof. Grantor, as Lessor and Trustee, and as
Borrower, authorizes Administrative Agent, at Grantor's expense, to file
multiple originals, or photocopies, carbon copies or facsimile copies of such
Louisiana UCC-1 financing statements with the appropriate filing officer or
officers in the State of Louisiana, pursuant to the provisions of Chapter 9 of
the Louisiana Commercial Laws.
(3) Grantor shall give Administrative Agent thirty (30) days written
notice prior to any change in Grantor's employer identification number by
Grantor and shall give Administrative Agent written notice of any change in
Grantor's employer identification number that is not made by Grantor within
thirty (30) days after such change. In the event of any change whatsoever in
Grantor's employer identification number, Grantor will execute and file any new
financing statements or any other documents that are necessary or desirable as
determined by Administrative Agent, in its sole discretion, to preserve and
continue Administrative Agent's security interests under this Security Agreement
within thirty (30) days after such change. (1)
(4) During the continuance of any Loan Event of Default,
Administrative Agent shall have the following rights and remedies with respect
to the Louisiana Collateral, which rights and remedies are in addition to and
are not in lieu or limitation of any other rights and remedies that may be
provided in this Security Agreement or any of the other Operative Documents,
under Chapter 9 of the Louisiana Commercial Laws (La. R.S. xx.xx. 10:9-101 et
seq.), under the Uniform Commercial Code of any state other than Louisiana, or
at law or equity generally:
(1) Administrative Agent may cause the Louisiana Collateral, or any
part or parts thereof, to be immediately seized wherever found, and sold,
whether in term of court
-10-
or in vacation, under ordinary or executory process, in accordance with
applicable Louisiana law, to the highest bidder for cash, with or without
appraisement, without the necessity of making additional demand, or of notifying
Grantor, or placing Grantor in default.
(2) For purposes of foreclosure under Louisiana executory process
procedures, Grantor confesses judgment and acknowledges to be indebted unto and
in favor of Administrative Agent up to the full amount of the Secured
Obligations, in principal, interest, costs, expenses, reasonable attorneys' fees
and other fees and charges. To the extent permitted under applicable Louisiana
law, Grantor additionally waives: (a) the benefit of appraisal as provided in
Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of Civil Procedure and
all other laws with regard to appraisal upon judicial sale; (b) the demand and
three (3) days' delay as provided under Articles 2639 and 2721 of the Louisiana
Code of Civil Procedure; (c) the notice of seizure as provided under Articles
2293 and 2721 of the Louisiana Code of Civil Procedure; (d) the three (3) days'
delay provided under Articles 2331 and 2722 of the Louisiana Code of Civil
Procedure; and (e) all other benefits provided under Articles 2331, 2722 and
2723 of the Louisiana Code of Civil Procedure and all other similar provisions
of the Louisiana Code of Civil Procedure not specifically listed hereinabove.
(3) Should any of the Louisiana Collateral be seized as an incident to
an action for the recognition or enforcement of the Secured Obligations or this
Security Agreement, or any other Operative Document, by executory process,
sequestration, attachment, writ of fieri facias or otherwise, Grantor agrees
that the court issuing any such order shall, if requested by Administrative
Agent, appoint Administrative Agent or any Person named by Administrative Agent
at the time such seizure is requested, or at any time thereafter, as keeper of
the Louisiana Collateral as provided under La. R.S. xx.xx. 9:5136 et seq.
Grantor agrees to pay the reasonable fees of such keeper, which compensation to
the keeper shall also be a part of the Secured Obligations under this Security
Agreement.
(4) Should it become necessary for Administrative Agent to foreclose
against the Louisiana Collateral, all declarations of fact that are made under
an authentic act before a Notary Public in the presence of two witnesses, by a
person declaring such facts to lie within his or her knowledge, shall constitute
authentic evidence for purposes of executory process and also for purposes of
La. X.X.xx. 9:3509.1, La. X.X.xx. 9:3504(D)(6) and La. X.X.xx. 10:9-508, as
applicable.
(5) Anything to the contrary contained in this Security Agreement
notwithstanding, the perfection of the security interests in the Louisiana
Collateral granted in this Security Agreement, and Administrative Agent's
remedies in the courts sitting in and for the State of Louisiana with respect to
the Louisiana Collateral, shall be governed by Louisiana law, with California
law governing the other provisions of this Security Agreement, its application
to the Collateral and the proceeds thereof, and all rights and obligations of
the parties thereunder in all other respects.
-11-
ARTICLE2
MISCELLANEOUS PROVISIONS
SECTION 1 2 Operative Document. This Security Agreement is an Operative
Document executed pursuant to the Participation Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 1 2 Amendments, etc. No amendment to or waiver of any provision of
this Security Agreement nor consent to any departure by Grantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by
Administrative Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 1 2 Addresses for Notices. Unless otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be delivered in accordance with, and shall be deemed to
have been given as provided in, Section 9.6 of the Participation Agreement.
SECTION 1 2 Section Captions. Section captions used in this Security
Agreement are for convenience of reference only, and shall not affect the
construction of this Security Agreement.
SECTION 1 2 Severability. Wherever possible, each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under Applicable Laws, but if any provision of this Security Agreement
shall be prohibited by or invalid under such laws, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.
SECTION 1 2 Counterparts. This Security Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 1 2 Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF, EXCEPT TO
THE EXTENT THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF CALIFORNIA AND TO THE EXTENT THAT GAMING
LAWS NECESSARILY CONTROL. THIS
-12-
SECURITY AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
[signature pages follow]
-13-
IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Lessor and Trustee
By:_______________________________
Name:_____________________________
Title:____________________________
S-1
FIRST SECURITY TRUST COMPANY OF NEVADA,
as Administrative Agent under the
Participation Agreement
By:_______________________________
Name:_____________________________
Title:____________________________
EXHIBIT E TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
(HOLLYWOOD CASINO SHREVEPORT)
ADVANCE REQUEST
---------------
dated as of ____________, 2000
TO: First Security Trust Company of Nevada, not in its individual capacity
but solely as administrative agent ("Administrative Agent") under the
--------------------
Participation Agreement dated as of March 31, 2000, among Hollywood
Casino Shreveport, as Lessee, First Security Bank, National
Association, as Lessor and Trustee, the Lenders, Arranger and
Documentation Agent identified therein and Administrative Agent (as
amended, restated, modified or supplemented from time to time, the
"Participation Agreement"). Unless the context otherwise requires,
------------------------
all capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in Appendix 1 to the Participation
Agreement.
First Security Bank, National Association, as Lessor and Trustee, and
The Lenders listed on Schedule II to the Participation Agreement.
FROM: Hollywood Casino Shreveport
RE: Advance Request
1. This irrevocable Advance Request is delivered pursuant to Section
2.4(a) of the Participation Agreement.
2. The proposed Advance Date is ____________, 2000.
3. Lessee hereby requests an Advance pursuant to the Participation
Agreement in the amount of $_____________, the amount of such
Advance represents the total Equipment Cost for the items being
acquired and funded on the proposed Advance Date.
4. Lessee requests that the disbursement be wire transferred to the
persons listed below in the amount set forth opposite its name:
Name Amount
---- ------
[_______________________] $__________________
[wire transfer instructions]
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5. The representations and warranties of Lessee contained in the
Participation Agreement are true and correct in all material
respects on and as of the date hereof with the same effect as if
such representations and warranties have been made on and as of
the date hereof, except to the extent such representations or
warranties relate solely to an earlier date, in which case such
representations and warranties were true and correct in all
material respects on and as of such earlier date.
6. There exists on the date hereof no Default or Event of Default,
and no such Default or Event of Default will exist after giving
effect to the Advance requested hereby.
HOLLYWOOD CASINO SHREVEPORT,
a Louisiana general partnership
By: HCS I, Inc., a Louisiana corporation,
its managing general partner
By: ___________________________________
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
-2-
EXHIBIT F TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
(HOLLYWOOD CASINO SHREVEPORT)
FORM OF XXXX OF SALE
--------------------
HOLLYWOOD CASINO SHREVEPORT, a Louisiana general partnership
("Seller"), is the owner of the items (together with all repairs, parts,
------
supplies, accessories, equipment and devices affixed thereto or installed
thereon, and all warranties, covenants and representations of any manufacturer
or vendor thereof) of personal property described on Annex A hereto (the
-------
"Equipment");
----------
Seller sells, grants, conveys, transfers and assigns title to the
Equipment to FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as lessor and trustee (as
such lessor and trustee, "Buyer") under that certain Lease Intended as Security,
-----
dated as of March 31, 2000 (the "Lease"), between Seller and Buyer; and
-----
Seller warrants to Buyer and its successors and assigns that there is
conveyed to Buyer good title to the Equipment, free and clear of all liens,
claims, rights or encumbrances of others (except the rights of Seller pursuant
------
to the Lease and Permitted Liens (as defined, by incorporation, in the Lease)),
and Seller will warrant and defend such title forever against all claims and
demands whatsoever.
This Xxxx of Sale shall be governed by the laws of the State of
California, without regard to conflict of law principles, except to the extent
certain rights or remedies may require compliance with Gaming Laws (as defined,
by incorporation, in the Lease).
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be executed
and delivered by one of its duly authorized officers this ____ day of _______,
2000.
HOLLYWOOD CASINO SHREVEPORT,
a Louisiana general partnership
By: HCS I, Inc., a Louisiana corporation,
its managing general partner
By: ________________________________
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
ANNEX A TO XXXX OF SALE
Description of Equipment
------------------------
1.
2.
3.
EXHIBIT G TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
(HOLLYWOOD CASINO SHREVEPORT)
FORM OF CERTIFICATE OF ACCEPTANCE OF LESSEE
-------------------------------------------
TO: First Security Bank, National Association, not in its individual capacity,
but solely as Lessor, pursuant to that certain Participation Agreement
dated as of March 31, 2000, among Hollywood Casino Shreveport, as Lessee,
Lessor, Trustee, and the Lenders, Arranger, Documentation Agent and
Administrative Agent identified therein (as amended, restated, modified or
supplemented from time to time, the "Participation Agreement"). Unless the
-----------------------
context otherwise requires, all capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in Appendix 1 to
the Participation Agreement.
Lessee hereby certifies to you, and for the benefit of the Lenders, as
follows:
1. (i) Lessee has inspected, received, approved and accepted
delivery of all of the items of Equipment described in Schedule I
----------
to that certain Xxxx of Sale to Lessor and Trustee, dated the
date hereof (the "Items of Equipment"), for all purposes of the
------------------
Lease and the other Operative Documents; and
(ii) such Items of Equipment are in good operating order, repair,
condition and appearance and without any defect therein with
respect to design, manufacture, condition (reasonable wear and
tear excepted), operation or fitness for use or in any other
respect whether or not discoverable by Lessee as of the date
hereof.
2. Lessee hereby confirms acceptance of delivery on ____________,
2000 of, and hereby leases from Lessor and Trustee under the
Lease, such Items of Equipment.
3. Lessee hereby represents and warrants that no event which would
constitute a Casualty or Non-Casualty Loss has occurred and no
notice of such Casualty or Non-Casualty Loss has been given to
Lessee or any of its Affiliates with respect to any such Item of
Equipment as of the date hereof. Lessee hereby reaffirms that
each of the representations and warranties set forth at Section
4.1 of the Participation Agreement is true and correct in all
material respects as if made on the date hereof, except to the
extent any such representation and warranty relates to an earlier
date, which representation was true and correct in all material
respects as
-1-
of such earlier date, including that such Items of Equipment are
free and clear of all Liens other than Permitted Liens.
IN WITNESS WHEREOF, Lessee has caused this Certificate of Acceptance to be
duly executed and delivered by one of its officers thereunto duly authorized
this ___ day of ________________, 2000.
HOLLYWOOD CASINO SHREVEPORT,
a Louisiana general partnership
By: HCS I, Inc., a Louisiana corporation,
its managing general partner
By: __________________________________
Name: Xxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
-2-
EXHIBIT H TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
(HOLLYWOOD CASINO SHREVEPORT)
FORM OF INVESTOR'S LETTER
-------------------------
INVESTOR'S LETTER
_______________________, 200__
First Security Bank, National Association,
not in its individual capacity
but solely as Trustee and Lessor
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
First Security Trust Company of Nevada,
not in its individual capacity
but solely as Administrative Agent
[Insert address -
may be same as Trustee/Lessor]
[Insert name and address of
transferring Lender]
Ladies and Gentlemen:
Unless the context otherwise requires, capitalized terms used in this
letter and not otherwise defined herein shall have the meanings assigned thereto
in Appendix 1 to that certain Participation Agreement (as amended, restated,
modified or supplemented from time to time, the "Participation Agreement"),
-----------------------
dated as of March 31, 2000, by and among Hollywood Casino Shreveport, as Lessee;
First Security Bank, National Association, in its capacity as Trustee under that
certain Trust Agreement dated as of March 31, 2000, and in its capacity as
Lessor under such Participation Agreement and the other Operative Documents; the
Lenders, Documentation Agent and Arranger identified therein, and First Security
Trust Company of Nevada, as Administrative Agent.
The undersigned has agreed to purchase from ___________________________,
effective as of ____________, 200__ (the "Effective Date"), that certain Note
--------------
numbered Note No. _______, dated as of _______________________, _____ and in an
original principal amount
First Security Bank, National Association, et al.
-- --
___________, 200_
Page 2
of ______________________________ Dollars ($____________) executed by First
Security Bank, National Association, as Borrower, payable to the order of
______________________ (the "Note"), and desires that the Borrower shall execute
and deliver to the undersigned a new Note in the principal amount of
$_____________________, payable to the order of the name of the undersigned.
The undersigned hereby represents and warrants, as of the date hereof, to
the addressees hereof as follows:
(1) The Note is being purchased by the undersigned with its general
assets, and not directly or indirectly with the assets of, or in connection with
any arrangement or understanding by it in any way involving, any Plan,
Multiemployer Plan or Benefit Arrangement (or its related trust), as defined in
Section 3(3) of ERISA, or with the assets of any such Plan, Multiemployer Plan
or Benefit Arrangement (or its related trust), as defined in Section 4975(e)(1)
of the Code (other than a governmental plan, as defined in Section 3(32) of
ERISA), with respect to which Lessee or such Lender or any of their Affiliates
is a party in interest within the meaning of ERISA or a "disqualified person"
within the meaning of the Code;
(2) The Note is being acquired by the undersigned for its own account
for investment and not with a view to any distribution (as such term is used in
Section 2(11) of the Securities Act) thereof, and if in the future it should
decide to dispose of its interest in the Note, it understands that it may do so
only in compliance with the Securities Act and the rules and regulations of the
Commission thereunder and any applicable state securities laws. Neither it nor
anyone authorized to act on its behalf has taken or will take any action which
would subject the issuance or sale of any Note, the Trust Estate (including the
Equipment constituting a part thereof), the Collateral or the Lease to the
registration requirements of Section 5 of the Securities Act. No representation
or warranty contained in this clause (b) shall include or cover any action or
----------
inaction of Lessee or any Affiliate thereof, whether or not purportedly on
behalf of any Lender, Administrative Agent, Lessor/Trustee/Borrower or any of
their respective Affiliates. Subject to the foregoing, it is understood by the
undersigned and each addressee of this letter that the disposition of each
Lender's property shall be at all times within its control.
(3) Neither the undersigned nor any Person authorized to act on its
behalf has, directly or indirectly, offered to sell any interests in the Trust
Estate, the Note or any security similar thereto, to, or otherwise approved or
negotiated with respect thereto with, anyone other than the Lenders, and neither
it nor any Person authorized to act on its behalf will so offer or sell in
violation of Section 5 of the Securities Act or any securities or blue sky laws
of any applicable jurisdiction.
(4) The representations and warranties set forth in Section 4.2 of the
Participation Agreement are accurate with respect to the undersigned and, as of
the date hereof, it is entitled to
First Security Bank, National Association, et al.
-- --
___________, 200_
Page 3
receive payments of the principal amount of the Loans under the Operative
Documents without deduction or withholding of any United States federal income
taxes.
(5) The undersigned agrees that it will, independently and without
reliance upon Lessor/Trustee/Borrower or any Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Operative
Documents.
The undersigned acknowledges that by execution of this letter it shall
be bound by all obligations (whether or not accrued) under, and shall have
become a party to, all Operative Documents to which its transferor was a party
to the same extent as its transferor is, or is intended to be, bound.
[To the extent legally entitled to do so, the undersigned attaches the
form(s) described in Section 8.6 of the Participation Agreement./1/]
The undersigned understands that the Note has not been and will not be
registered or qualified under the Securities Act or any securities or "blue sky"
laws of any jurisdiction and that no Lender has an obligation to effect such
registration or otherwise assist in the disposition of the Note.
The transfer hereunder shall be effective as of the Effective Date,
provided that this letter has been acknowledged by the transferring Lender and,
if required by the Participation Agreement, consented to by Lessee.
Very truly yours,
By: ________________________
Name: _______________________
Title: ______________________
ACKNOWLEDGED:
[Name of Transferring Lender]
By: ________________________
Name: _______________________
Title: ______________________
/1/ If the transferee investor is organized under the laws of a jurisdiction
outside of the United States of America.
First Security Bank, National Association, et al.
-- --
___________, 200_
Page 4
EXHIBIT I TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
(HOLLYWOOD CASINO SHREVEPORT)
FORM OF PURCHASE ORDER ASSIGNMENT
---------------------------------
THIS PURCHASE ORDER ASSIGNMENT (this "Assignment"), dated as of
----------
_____________, 2000, is entered into between HOLLYWOOD CASINO SHREVEPORT, a
Louisiana general partnership ("Lessee"), and FIRST SECURITY BANK, NATIONAL
------
ASSOCIATION, not in its individual capacity but solely as trustee under that
certain Trust Agreement dated as of March 31, 2000, and as lessor under the
Lease and the other Operative Documents (herein "Trustee" and "Lessor", as the
------- ------
context may require). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed thereto in Appendix 1 to the Participation
Agreement, dated as of March 31, 2000 (as amended, restated, modified or
supplemented from time to time, the "Participation Agreement"), by and among
-----------------------
Lessee, Trustee/Lessor, the Lenders, Documentation Agent and Arranger identified
therein, and First Security Trust Company of Nevada, as Administrative Agent.
PRELIMINARY STATEMENT
---------------------
1. Pursuant to the Participation Agreement, Lessee may agree to purchase
from certain vendors (each a "Seller"), certain Equipment (and/or related
------
construction and installation services) for installation at the Resort.
Lessee's purchase of any such Equipment shall be made pursuant to certain
purchase orders (the "Purchase Orders") issued from time to time pursuant to the
---------------
Purchase Contracts identified on Schedule 1 attached hereto.
----------
2. Lessee desires to lease the Equipment from the Lessor rather than
purchase the Equipment from Sellers. Lessor, in its capacity as Lessor/Trustee,
on behalf of the Lenders, is willing to acquire certain of Lessee's rights and
interests under the Purchase Orders, all on the terms and conditions hereinafter
set forth.
3. Upon purchase of the Equipment by the Lessor, Lessee shall lease the
Equipment from the Lessor under the Lease.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and in reliance on the above recitals, the Lessor and Lessee hereby
agree as follows:
SECTION 1. ASSIGNMENT
---------------------
Lessee does hereby assign and set over to Lessor, in its capacity as
Lessor/Trustee, on behalf of the Lenders, all of
-1-
Lessee's title, rights and interests in and to the Purchase Orders to the extent
they relate to the Equipment identified in any applicable Advance Request and
accompanying Certificate of Acceptance and all of Lessee's rights to purchase
such identified Equipment in any applicable Advance Request and accompanying
Certificate of Acceptance, except and to the extent reserved below, including
without limitation (a) the right to purchase the Equipment pursuant to the
Purchase Orders and the right to take title to the Equipment and to be named the
purchaser in the xxxx or bills of sale for the Equipment to be delivered
pursuant to the Purchase Orders, (b) all claims for damages in respect of the
Equipment (including related construction and installation services) arising as
a result of any default by the Sellers under the Purchase Orders, including,
without limitation, all warranty and indemnity provisions contained in the
Purchase Orders, and all claims arising thereunder in respect of the Equipment,
and (c) any and all rights of Lessee to compel performance of the terms of the
Purchase Orders, reserving to Lessee, however, so long and only so long as the
Equipment shall be subject to the Lease and Lessee shall be entitled to
possession of the Equipment thereunder: (i) the rights to demand, accept and
retain all rights in and to all property (other than the Equipment), data and
services which the Sellers are obligated to provide, or do provide, pursuant to
the Purchase Orders, (ii) all rights, if any, in respect to spare parts as
provided in the Purchase Orders, and (iii) the right, if any, to obtain
instructions and data pursuant to the Purchase Orders.
Notwithstanding the foregoing, so long and only so long as Lessor/Trustee
shall not have notified the Sellers in writing that an Event of Default has
occurred and is continuing, Lessor/Trustee authorizes Lessee, to the exclusion
of Lessor/Trustee, to exercise, in the name of Lessee, all rights and powers of
the purchaser under the Purchase Orders and to retain any recovery or benefit
resulting from the enforcement of any warranty or indemnity under the Purchase
Orders in respect of the Equipment (including related construction and
installation services); provided, however, that Lessee may not exercise any of
-------- -------
the rights to purchase such Equipment unless, prior to the exercise thereof by
Lessor/Trustee as to the Equipment, Lessor/Trustee shall have delivered to the
Sellers written notice that Lessor/Trustee has released such rights to purchase
such Equipment. All the provisions of this Section 1 shall, to the extent
---------
inconsistent with the Lease, be governed by the Lease.
SECTION 2. ASSUMPTION OF PURCHASE OBLIGATION BY LESSOR,
--------------------------------------------------------
CONTINUING LIABILITY OF LESSEE FOR EXCLUDED EQUIPMENT
-----------------------------------------------------
Except as provided to the contrary in this Section 2, and subject to
------ ---------
Lessee's satisfaction of each of the conditions and covenants described herein,
Lessee shall not be responsible for
-2-
any payment due to any applicable Seller as required in Section 4.
Notwithstanding the foregoing paragraph, none of Lessor/Trustee, the
Administrative Agent or the Lenders shall have any obligation hereunder to any
Seller (i) in respect of Equipment not delivered and accepted on or before the
last day of the Commitment Period, (ii) in respect of any Equipment with respect
to which payment therefor would cause the aggregate purchase price under all
Purchase Orders to exceed the Aggregate Commitment Amount, or (iii) in respect
of any Equipment for which sufficient funds have not been advanced to
Lessor/Trustee by the Lenders to pay the full purchase price thereof. Equipment
for which such obligations are so terminated shall be immediately excluded from
the terms and provisions of this Assignment and all other Operative Documents,
and in the event of such exclusion, Lessee agrees with Lessor/Trustee and
covenants, for the benefit of the Sellers, that Lessee will purchase from the
applicable Seller and will accept delivery of and pay for the Equipment so
excluded from this Assignment upon the same terms and conditions as those
contained in the applicable Purchase Orders. Lessee will indemnify
Lessor/Trustee, the Administrative Agent and the Lenders against any losses or
damages incurred by such parties as a result of any claims by the Sellers with
respect to the Equipment excluded from this Assignment.
Notwithstanding the foregoing or any other provision of this Assignment to
the contrary, the delivery to and acceptance by or on behalf of Lessor/Trustee
of the Equipment excluded from this Assignment pursuant to the second paragraph
of this Section 2 shall be ineffective, ab initio, to create in or transfer to
--------- -- ------
Lessor/Trustee any legal interest in such item of Equipment or to impose on
Lessor/Trustee any liability, obligation or responsibility with respect thereto.
Any right or interest in the Equipment created in or transferred to, or
purported to be created in or transferred to, Lessor/Trustee shall be held by
Lessor/Trustee solely as provided in the Operative Documents.
SECTION 3. POWER OF ATTORNEY
----------------------------
Lessee does hereby appoint Lessor/Trustee the true and lawful attorney of
Lessee, irrevocably, with full power (in the name of Lessee or otherwise) to
ask, require, demand, receive, compound and give acquittance for any and all
monies and claims for money due and to become due under, or arising out of, the
Purchase Orders to the extent that the same have been assigned by this
Assignment, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which to Lessor/Trustee may seem necessary or advisable with respect thereto;
provided; however that the exercise of the power of attorney conferred by
-------- -------
-3-
this Section 3 shall be limited so that such power shall be exercisable and
exercised only at such times when, pursuant to the terms of the Lease and this
Assignment, Lessor/Trustee is permitted to exercise such rights and remedies
under the Lease and the other Operative Documents.
SECTION 4. PURCHASE OF EQUIPMENT, LIMITATION OF
------------------------------------------------
LESSOR'S/TRUSTEE'S LIABILITY
----------------------------
On each Advance Date, Lessor/Trustee shall pay to the applicable Sellers
the unreimbursed portion of the purchase price of the Equipment to be purchased
under the Purchase Orders or, if applicable, reimburse Lessee for amounts
theretofore paid by or on behalf of Lessee under Purchase Orders for such
Equipment. All such amounts, if any, to be paid to the applicable Sellers shall
be payable in same day funds for credit to such accounts as designated in
writing by the applicable Sellers, as applicable, at least one business day
prior to the date such payment is to be made. Lessor/Trustee shall have no
obligation to make the aforesaid payments in its individual or general corporate
capacity, but such obligation shall be payable solely from funds advanced to
Lessor/Trustee by the Lenders pursuant to the Lease and the Loan Agreement.
SECTION 5. FURTHER ASSURANCES
------------------------------
At any time and from time to time, upon the written request of
Lessor/Trustee, Lessee shall promptly and duly execute and deliver any and all
such further instruments and documents and take such further action as
Lessor/Trustee may reasonably request in order to obtain the full benefits of
this Assignment and of the rights and powers herein granted.
SECTION 6. WARRANTIES AND INDEMNITEES OF LESSEE
------------------------------------------------
Lessee does hereby represent and warrant that it has not assigned or
pledged, and hereby covenants that it will not assign or pledge so long as this
Assignment shall remain in effect, the whole or any part of the rights hereby
assigned to anyone other than Lessor/Trustee.
SECTION 7. GOVERNING LAW
-------------------------
THIS ASSIGNMENT, AND ALL OF THE RIGHTS AND OBLIGATIONS HEREUNDER, INCLUDING
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
-4-
THEREOF.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of
the date first set forth above.
FIRST SECURITY BANK, NATIONAL HOLYWOOD CASINO SHREVEPORT,
ASSOCIATION, not in its individual a Louisiana general partnership
capacity but solely as Lessor and
Trustee
By: HCS I, Inc., a Louisiana
corporation,
By: ______________________________ its managing general partner
Printed Name: ____________________
By: ___________________________________
Title: ___________________________ Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
-5-
EXHIBIT K TO PARTICIPATION AGREEMENT
DATED AS OF MARCH 31, 2000
(HOLLYWOOD CASINO SHREVEPORT)
MANAGER SUBORDINATION AGREEMENT
-------------------------------
This MANAGER SUBORDINATION AGREEMENT (as amended, restated,
supplemented or otherwise modified from time to time, this "Agreement") is made
as of March 31, 2000, by and among FIRST SECURITY BANK, NATIONAL ASSOCIATION,
having an office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, as trustee
(in such capacity, together with its successors and assigns, the "Trustee")
under that certain Trust Agreement dated as of March 31, 2000, and as lessor
under the Participation Agreement described below (in such capacity, together
with its successors and assigns, the "Lessor"), for the benefit of itself and
the Lenders described below, HWCC-SHREVEPORT, INC., a Louisiana corporation (the
"Manager"), and HOLLYWOOD CASINO SHREVEPORT, a Louisiana general partnership
(f/k/a QNOV and Queen of New Orleans at the Hilton Joint Venture) (the
"Company").
RECITALS
1. Pursuant to (i) that certain Participation Agreement dated as of March
31, 2000 (as amended, restated, supplemented or otherwise modified from time to
time, the "Participation Agreement"), by and among the Company, as Lessee, the
Lessor /Trustee, the Lenders, Arranger and Documentation Agent identified
therein, and First Security Trust Company of Nevada, as Administrative Agent,
and the (ii) other Operative Documents executed and delivered in connection
therewith, the Company may from time to time be obligated to pay Rent to Lessor,
for the benefit of the Lenders. All terms used and not otherwise defined herein
shall have the meanings specified for such terms in Appendix 1 to the
Participation Agreement.
2. The Manager and the Company are parties to that certain Management
Services Agreement dated as of September 22, 1998 (as amended, restated,
supplemented or otherwise modified from time to time, the "Management
Agreement"), pursuant to which the Company has agreed to pay the Manager a
management fee in consideration of the Manager's services relating to the
management and operation of the Resort and reimburse the Manager for services
supplied to the Company in accordance with the terms thereof.
3. As a condition to the execution and delivery of the Operative
Documents, the parties have agreed to enter into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
provisions set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of
-1-
which are hereby acknowledged, the Lessor/Trustee, the Manager and the Company
agree as follows:
1. Subordination to Payment of Senior Debt. Notwithstanding any
---------------------------------------
other provision of the Management Agreement, all fees payable to the Manager
pursuant to the Management Agreement (other than expense reimbursement payable
to the Manager in accordance with the terms of the Management Agreement) (the
"Management Fees") are and shall be subordinate and junior in right of payment,
to the extent and in the manner hereinafter set forth, to the prior indefeasible
payment in full, satisfaction and discharge or defeasance in accordance with the
Operative Documents of all Senior Debt (as defined below).
"Senior Debt" means all Rent at any time due and owing by the Company
under the Operative Documents, including without limitation (a) with respect to
each Interest Period during the Interim Period, an amount equal to the aggregate
of interest due for such Interest Period on each Loan at the applicable Interest
Rate in effect for such Loan; (b) during the Base Period, each installment of
rent consisting of the interest determined pursuant to clause (a) above plus the
----
Amortization Amount, if any, payable on the Notes pursuant to the Amortization
Schedule by Lessor to the Lenders on the applicable Payment Date for any such
Interest Period; (c) any and all amounts, liabilities and obligations (i) which
the Company or Lessor/Trustee assumes or agrees or is otherwise obligated or
designated to pay under the Loan Agreement or any other Operative Document to
Administrative Agent, the Lenders or any other Person, including Additional
Costs and damages for breach of any representations, warranties or agreements or
(ii) which the Company agrees or is otherwise obligated or designated to pay
(other than amounts owing under clauses (a) and (b) above) under the Lease or
any other Operative Document to Lessor/Trustee; including without limitation, in
each case, the principal of, and interest on (including any interest accruing
after the commencement of any bankruptcy, insolvency or similar proceeding with
respect to the Company and any interest which would have accrued but for the
commencement of any such proceeding whether or not allowed as a claim in that
proceeding) each Loan, and all premiums, fees, charges, expenses and indemnities
arising under or in connection with the Operative Documents; and (d) any
modifications, amendments or extensions of any indebtedness or obligation
described in clauses (a), (b) or (c) above. Except as and to the extent
provided hereinafter, the Manager will not ask, demand, xxx for, take or receive
from the Company, by set-off or in any other manner, direct or indirect payment
(whether in cash or property), of the whole or any part of the Management Fees,
or any transfer of any property in payment of or as security therefor, so long
as there exists an Event of Default under the Participation Agreement.
2. Distributions in Liquidation and Bankruptcy. In the event of any
-------------------------------------------
distribution, division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the assets
of the Company or the proceeds thereof (including any assets now or hereafter
securing any Management Fees) for the benefit of creditors of the Company or to
satisfy any indebtedness of the Company, by reason of the liquidation,
dissolution or other winding-up, partial or complete, of the Company, or any
receivership, insolvency or bankruptcy proceeding, or assignment for the benefit
of creditors or marshalling of assets, or any proceeding by or against the
Company for any relief under any bankruptcy or
-2-
insolvency law or laws relating to the relief of debtors, readjustment of
indebtedness, arrangements, reorganizations, compositions or extensions (each of
the foregoing, a "Liquidation Event"), then and in any such event:
(1) Lessor/Trustee, on behalf of the Lenders, shall be entitled
to receive payment in full, in cash, of all Senior Debt before the Manager
shall be entitled to receive any payment or other distributions on, or with
respect to, the Management Fees;
(2) Subject to the provisions of the Indenture-Related
Subordination Agreement (as hereinafter defined), any payment or
distribution of any kind or character, whether in cash, securities or other
property, which but for these provisions would be payable or deliverable
upon or with respect to the Management Fees shall instead be paid or
delivered directly to the Lessor/Trustee for the benefit of the Lenders for
application to the Senior Debt of the Company, whether then due or not due,
until all Senior Debt shall have first been fully and indefeasibly paid in
cash, satisfied and discharged or otherwise defeased under the Operative
Documents;
(3) Subject to similar rights heretofore granted by Manager to
the Indenture Trustee (as hereinafter defined) pursuant to the Indenture-
Related Subordination Agreement, the Manager hereby irrevocably authorizes
and empowers Lessor/Trustee as its attorney-in-fact, to demand, xxx for,
collect and receive every such payment or distribution and give acquittance
therefor, and to file and vote claims (in bankruptcy proceedings or
otherwise) and take such other actions, in the Lessor/Trustee's own name or
otherwise, as the Lessor/Trustee may deem necessary or advisable for the
enforcement of these provisions. The Manager shall duly and promptly take
such action as may be reasonably requested by the Lessor/Trustee to assist
in the collection of the Management Fees for the account of the Indenture
Trustee or the Lessor/Trustee (for the benefit of the Lenders), whomever
shall then have priority, and to file appropriate proofs of claim with
respect to the Management Fees and to vote the same and to execute and
deliver to the Lessor/Trustee, on demand, such powers of attorney, proofs
of claim, assignments of claim or other instruments as may be reasonably
requested by the Lessor/Trustee to enable the Lessor/Trustee (for the
benefit of the Lenders) to enforce any and all claims upon or with respect
to the Management Fees and to collect and receive any and all payments or
distributions which may be payable or deliverable at any time upon or with
respect to the Management Fees, in each case, subject to similar rights
heretofore granted by Manager to the Indenture Trustee pursuant to the
Indenture-Related Subordination Agreement. In addition, the Manager shall
take no action (whether oral, written or otherwise) in contravention of any
action of the Lessor/Trustee duly taken and permitted hereunder. Such
appointment as attorney-in-fact pursuant to this Section 2(c) is
------------
irrevocable and coupled with an interest until payment in full and complete
performance of all Senior Debt. The Lessor/Trustee may appoint a
substitute attorney-in-fact. The Manager ratifies all actions reasonably
taken by the attorney-in-fact but, nevertheless, if the Lessor/Trustee
requests, the Manager will specifically ratify any action taken by the
-3-
attorney-in-fact by executing and delivering to the attorney-in-fact or to
any entity designated by the attorney-in-fact all documents necessary to
effect such ratification;
(4) Subject to the provisions of that certain Manager
Subordination Agreement made as of August 10, 1999, by and among State
Street Bank and Trust Company, a Massachusetts trust company (the
"Indenture Trustee"), for the benefit of itself and the holders of the
"Notes" issued under the Indenture, the Manager and the Company (as
amended, supplemented or otherwise modified from time to time, the
"Indenture-Related Subordination Agreement"), the Manager will forthwith
deliver any direct or indirect payment made to the Manager upon or with
respect to the Management Fees prior to the payment in full, satisfaction
and discharge or defeasance of the Senior Debt in accordance with the
Operative Documents and following any Liquidation Event or Default or Event
of Default to the Lessor/Trustee in precisely the form received (except for
the endorsement or assignment of the Manager where necessary) for
application to the Senior Debt, whether then due or not due. Until so
delivered, the payment or distribution shall be held in trust by the
Manager as property of the Lessor/Trustee, on behalf of the Lenders. In
the event of the failure of the Manager to make any such endorsement or
assignment, the Lessor/Trustee, or any of its officers or employees, are
hereby irrevocably authorized to make the same; and
(5) Each of the parties hereby agrees that it shall be bound by
the terms and provisions hereof, notwithstanding the confirmation of a plan
of reorganization of the Company under Section 1129(b) of the Bankruptcy
Code.
3. Permitted Payments. Subject to the provisions of Paragraphs 2
------------------ ------------
and 4 of this Agreement, the Company may pay to the Manager, and the Manager may
-
accept payment of, amounts due to Manager under the Management Agreement, a true
and correct copy of which is attached hereto as Exhibit A. Any amounts not
---------
permitted to be paid pursuant to the provisions of Paragraph 4 of this Agreement
-----------
shall be deferred and shall accrue and may be paid only at such time as such
amounts would otherwise be permitted to be paid pursuant to the provisions of
this Agreement. Except as otherwise expressly provided in the Participation
Agreement, the Company and the Manager shall not change, alter, amend, waive or
otherwise modify the Management Agreement without the Lessor/Trustee's prior
written consent, other than an amendment for the purpose of identifying the
existence and operation of this Agreement and the Indenture-Related
Subordination Agreement.
1. Default on Senior Debt; Other Subordinated Obligation Payment
-------------------------------------------------------------
Restrictions.
------------
(1) In the event that any Default or Event of Default shall occur
and be continuing, or if any payment of Management Fees would create a
Default or Event of Default, unless and until all Senior Debt shall have
been indefeasibly paid in full, in cash, satisfied and discharged or
otherwise defeased under the Operative Documents, the right of the Manager
to receive any payments or other distributions with respect to
-4-
Management Fees shall be deferred during the continuance of such Default or
Event of Default.
(2) Unless and until all Senior Debt shall have been indefeasibly
paid in full, in cash, satisfied and discharged or otherwise defeased under
the Operative Documents, the right of the Manager to receive any payments
or other distributions with respect to the Management Fees shall be
deferred if and to the extent that, as of the date which such Management
Fees are to be paid, the payment of such Management Fees would cause the
Company's Fixed Charge Coverage Ratio (as defined in the Indenture) for its
most recently ended four (4) full fiscal quarters for which internal
financial statements are available immediately preceding the date on which
such Management Fee is proposed to be paid to be less than 1.5 to 1
(calculated on a pro forma basis after adding back Management Fees that
were deducted in arriving at Consolidated Cash Flow during such period and
deducting, to arrive at Consolidated Cash Flow, Management Fees to be paid
pursuant to this Section 4(b)); provided, however, that with respect to
------------ -------- -------
periods following the date the Resort is first Operating and prior to the
time when internal financial statements are available for four (4) full
fiscal quarters following such date, such Fixed Charge Coverage Ratio shall
be calculated with respect to the actual number of full fiscal quarters
(but in no event less than one (1) full fiscal quarter) for which internal
financial statements are available following such date.
If, notwithstanding the foregoing provisions of this Paragraph 4,
-----------
the Manager shall receive any payment or distribution of any kind with
respect to the Management Fees (whether from any collateral securing the
Management Fees or otherwise) following any Event of Default until cured,
subject to the provisions of the Indenture-Related Subordination Agreement,
such payment or distribution shall be received in trust for, and shall be
delivered to, the Lessor/Trustee promptly, in precisely the form received
(except for the endorsement or assignment of the Manager where necessary)
for application to the Senior Debt, whether then due or not due. Until so
delivered, the payment or distribution shall be held in trust by the
Manager as property of the Lessor/Trustee on behalf of the Lenders, subject
to the provisions of the Indenture-Related Subordination Agreement.
(3) Manager agrees that any deferral pursuant hereto of payments
under the Management Agreement shall not constitute a default under the
Management Agreement.
(4) No amounts payable pursuant to the Management Agreement shall
be prepaid.
4. No Acceleration or Exercise of Remedies. So long as any Senior
---------------------------------------
Debt remains unpaid, the Manager will not (a) cause any portion of the
Management Fees to become due prior to the due date for such Management Fees as
set forth in the Management Agreement; (b) accept any payment, prepayment or
defeasance of any portion of the Management Fees prior
-5-
to the due date for such Management Fees as set forth in the Management
Agreement or in violation of this Agreement; (c) modify or alter in any way the
provisions of the Management Agreement if the effect of such modification or
alteration is to accelerate the payment of the Management Fees due thereon; or
(d) exercise any remedies with respect to the Management Fees, or any collateral
at any time securing payment or performance thereof, unless and until, in each
such case, all of the Senior Debt shall have indefeasibly paid in full, in cash,
satisfied and discharged or otherwise defeased under the Operative Documents, or
the Lessor/Trustee, acting at the direction of the Required Lenders, shall have
otherwise consented in writing.
5. Bankruptcy. Until the Senior Debt shall have been indefeasibly
----------
paid in full, in cash, satisfied and discharged or otherwise defeased under the
Operative Documents, the Manager will not, without the prior consent of the
Lessor/Trustee, acting at the direction of the Required Lenders, commence, or
join with any other person in commencing, any proceeding against any Person with
respect to the Management Fees under any bankruptcy, reorganization,
readjustment of debt, dissolution, receivership, liquidation or insolvency law
or statute now or hereafter in effect in any jurisdiction.
6. Continuing Subordination. The subordination effected by these
------------------------
provisions is a continuing subordination and may not be modified or terminated
by the Manager or any other holder of any Management Fees until all of the
Senior Debt shall have been indefeasibly paid in full, in cash, satisfied and
discharged or otherwise defeased under the Operative Documents. At any time and
from time to time, without the consent of, or notice to, the Manager or any
other holder of the Management Fees, and without impairing or affecting the
obligations of any of them hereunder:
(1) The time for the Company's performance of, or compliance
with, any of its agreements contained in the Participation Agreement or the
other Operative Documents, or any other agreement, instrument or document
relating to the Senior Debt, may be modified or extended or such
performance or compliance may be waived;
(2) The Lessor/Trustee, acting at the direction of the Required
Lenders, may exercise or refrain from exercising any rights under the
Participation Agreement or the other Operative Documents, or any other
agreement, instrument or document relating to the Senior Debt;
(3) The Participation Agreement or any of the other Operative
Documents, or any other agreement, instrument or document relating to the
Senior Debt, may be revised, amended or otherwise modified for the purpose
of adding or changing any provisions thereof (including, but not limited
to, an increase in the interest charges), or changing in any manner the
rights of the Lessor/Trustee or the Company;
(4) Payment of the Senior Debt or any portion thereof may be
extended or refunded or any instruments evidencing such Senior Debt may be
renewed in whole or in part;
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(5) The maturity of the Senior Debt may be accelerated, and any
collateral security therefor or any other rights of the Lessor/Trustee may
be exchanged, sold, surrendered, released or otherwise dealt with, in
accordance with the terms of any present or future agreement with the
Company and any other agreement of subordination (and the debt covered
thereby) may be surrendered, released or discharged, or the terms thereof
modified or otherwise dealt with in any manner;
(6) Any Person liable in any manner for payment of the Senior
Debt may be released by the Lenders; and
(7) Notwithstanding the occurrence of any of the foregoing, these
subordination provisions shall remain in full force and effect with respect
to the Senior Debt, as the same shall have been extended, renewed, modified
or refunded.
7. Waivers. The Manager hereby waives, and agrees not to assert (a)
-------
any right, now or hereafter existing, to require the Lessor/Trustee to proceed
against or exhaust any collateral at any time securing the payment of the Senior
Debt, or to marshal any assets in favor of the Manager or any other holder of
any Management Fees; or (b) any notice of the incurrence of Senior Debt, it
being understood advances may be made under the Operative Documents, or any
other agreement, document or instrument now or hereafter relating to the Senior
Debt, without notice to or authorization of the Manager in reliance upon these
subordination provisions.
It is not the intent of this Agreement to cause the Manager to become
a surety. However, in the event that this Agreement may cause the Manager to be
deemed a surety, the following provisions shall apply; provided, however, that
-------- -------
nothing contained herein shall be deemed to be a guarantee by the obligor of any
obligations for the payment of the Senior Debt. The Manager hereby waives and
relinquishes all rights and remedies accorded by applicable law to sureties or
guarantors and agrees not to assert or take advantage of any such rights or
remedies, including, without limitation, (a) any right to require the
Lessor/Trustee or any of the Lenders (each a "Benefitted Party") to proceed
against the Company or any other Person or to proceed against or exhaust any
security held by a Benefitted Party at any time or to pursue any other remedy in
the power of a Benefitted Party before proceeding against the Manager or any
other Person with respect to the Management Fees, (b) the defense of the statute
of limitations or prescriptive period in any action with respect to the
Management Fees hereunder or in any action for the collection or performance of
the obligations owing on account of the Senior Debt, (c) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of any
Person or the failure of a Benefitted Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of any
Person, (d) appraisal, valuation, stay, extension, marshalling of assets,
redemption, exemption, demand, presentment, protest and notice of any kind,
including, without limitation, notice of the existence, creation or incurring of
any new or additional Senior Debt or of any action or non-action on the part of
a Benefitted Party, the Company, any endorser, guarantor or creditor of the
Company or on the part of any Person under this or any other instrument or
document in connection with any obligation or evidence of
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indebtedness held by a Benefitted Party as collateral or in connection with the
Senior Debt, (e) any defense based upon an election of remedies by a Benefitted
Party, including, without limitation, an election to proceed by non-judicial
rather than judicial foreclosure, which destroys or otherwise impairs the
subrogation rights of the Manager, the right of the Manager to proceed against
the Company or any other Person for reimbursement, or both, (f) any defense
based upon any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in other respects more burdensome
than that of the principal, (g) any duty on the part of a Benefitted Party to
disclose to the Manager any facts a Benefitted Party may now or hereafter know
about the Company or any other Person, regardless of whether a Benefitted Party
has reason to believe that any such facts materially increase the risk beyond
that which the Manager intends to assume, or has reason to believe that such
facts are unknown to the Manager, or has a reasonable opportunity to communicate
such facts to the Manager, because the Manager acknowledges that the Manager is
fully responsible for being and keeping informed of the financial condition of
the Company and of all circumstances bearing on the risk of non-payment of any
Senior Debt, (h) any defense arising because of the election of a Benefitted
Party, in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code, (i) any
defense based upon any borrowing or grant of a security interest under Section
364 of the Federal Bankruptcy Code, (j) any claim or other right which a
Benefitted Party may now or hereafter acquire against the Company or any other
Person that arises from the existence of performance obligations under the
Operative Documents, including, without limitation, any right of subrogation,
reimbursement. No failure or delay on the Lessor/Trustee's part in exercising
any power, right or privilege under this Agreement shall impair or waive any
such power, right or privilege. The Manager acknowledges and agrees that any
nonrecourse or exculpation provided for in the Operative Documents, or any other
provision of any of the Operative Documents, limiting the Benefitted Parties'
recourse to specific collateral, or limiting the Benefitted Parties' right to
enforce a deficiency judgment against the Company, shall have absolutely no
application to the Manager's or the Company's liability under the Operative
Documents.
8. Lien Subordination. Any Lien, security interest, encumbrance,
------------------
charge or claim of the Manager on any assets or property of the Company, or any
proceeds or revenues therefrom, which the Manager may have at any time as
security for the Management Fees shall be, and hereby is, subordinated to all
Liens, security interests, or encumbrances now or hereafter granted to the
Lessor/Trustee by the Company or by law, notwithstanding the date or order of
attachment or perfection of any such Lien, security interest, encumbrance, claim
or charge or the provision of any applicable law. Until all of the Senior Debt
shall have been paid in full, in cash, or the Senior Debt is satisfied and
discharged or defeased under the Operative Documents, the Manager agrees that
the Manager will not assert or seek to enforce against the Company the
Management Fees or any interest of the Manager in any collateral for any portion
of the Management Fees and that the Lessor/Trustee may dispose of any or all of
the collateral for the Senior Debt free of any and all Liens, including, but not
limited to, Liens created in favor of the Manager, through judicial or non-
judicial proceedings, in accordance with applicable law, including taking title,
after five (5) days written notice to the Manager. The Manager hereby
acknowledges that such notice, if given five (5) days prior to such disposition
of any or all of the
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collateral for the Senior Debt, is sufficient and commercially reasonable. The
Manager hereby agrees that any such sale or other disposition of so much of the
collateral for the Senior Debt as is necessary to satisfy in full, in cash, all
of the Senior Debt shall be free and clear of any security interest granted to
the Manager; provided that the entire proceeds (after deducting reasonable
expenses of sale) are applied in reduction of the Senior Debt. Upon the
Lessor/Trustee's request, the Manager shall execute and deliver any releases or
other documents and agreements that Lessor/Trustee in its reasonable discretion
deems necessary to dispose of the collateral for the Senior Debt free of the
Manager's interest in same. The Manager shall retain all of its rights as a
junior secured creditor with respect to the surplus, if any, arising from any
such disposition of the collateral for the Senior Debt.
9. Default by Company Under Management Agreement. In the event of a
---------------------------------------------
default by the Company under the Management Agreement, Manager shall promptly
give written notice thereof to the Lessor/Trustee, and, subject to the
provisions of the Indenture-Related Subordination Agreement, the Lessor/Trustee
shall have the right (but not the obligation) to cure such default within the
cure periods provided to the Company under the Management Agreement. Manager
shall not take any action with respect to such default under the Management
Agreement, including, without limitation, any action to terminate the Management
Agreement, unless and until the Lessor/Trustee has received notice of such
default and failed to cure such default within the applicable cure periods
provided therefor.
10. Subrogation. The Manager hereby subordinates all rights of
-----------
subrogation to the rights of the Lessor/Trustee and the Lenders to receive
payments or distributions, and any rights of subrogation to any collateral for
the Lessor/Trustee and the Lenders, until all Senior Debt shall have been
indefeasibly paid in full, in cash, satisfied and discharged in accordance with
the Operative Documents. Upon such payment in full, the Manager shall be
subrogated to all rights of the Lessor/Trustee and the Lenders.
11. Subordination Not Impaired by the Company. No right of the
-----------------------------------------
Lessor/Trustee or any Lender to enforce the subordination of the Management Fees
shall be impaired by any act or failure to act by the Company or by the
Company's failure to comply with these provisions.
12. No Third Party Beneficiaries. This Agreement is not intended to
----------------------------
give or confer any rights to any Person other than the Lessor/Trustee, the
Administrative Agent and the Lenders. No other Person, including the Company,
is intended to be a third party beneficiary of this Agreement.
13. Legend on Note. If any portion of the Management Fees is
--------------
evidenced by a promissory note, stock certificate or other instrument, the
Manager agrees to promptly add a legend thereto stating that the rights of any
holder thereof are subject to this Agreement.
14. Representations and Warranties. The Manager hereby represents
------------------------------
and warrants that (a) the execution and delivery of this Agreement and the
performance by the
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Manager of its obligations hereunder have received all necessary approvals and
do not and will not contravene or conflict with any provision of law or of any
indenture, instrument or other agreement to which the Manager is a party or by
which it or its property may be bound or affected or result in or require the
creation or imposition of any mortgage, Lien, pledge, security interest, charge
or other encumbrance in, upon or of any of its properties or assets under any
such indenture, instrument or other agreement, (b) the Manager has full power,
authority and legal right to make and perform this Agreement, (c) the Manager
has not assigned or transferred any indebtedness owing by the Company or any of
the collateral for the Management Fees and that the Manager will not assign or
transfer same, (d) this Agreement is the legal, valid and binding obligation of
the Manager, enforceable against the Manager in accordance with its terms, and
(e) the Management Fees are not subject to any other subordination agreement,
other than the Indenture-Related Subordination Agreement.
15. No Waiver. No failure on the part of the Lessor/Trustee to
---------
exercise, no delay in exercising, and no course of dealing with respect to, any
right or remedy hereunder will operate as a waiver thereof; nor will any single
or partial exercise of any right or remedy preclude any other or further
exercise thereof or the exercise of any other right or remedy. This Agreement
may not be amended or modified except by written agreement of the
Lessor/Trustee, acting at the direction of the Required Lenders, the Manager,
and the Company, and no consent or waiver hereunder shall be valid unless in
writing by the Lessor/Trustee.
16. Successors and Assigns. This Agreement, and the terms, covenants
----------------------
and conditions hereof, shall be binding upon and inure to the benefit of the
parties hereto, and their successors and assigns.
17. GOVERNING LAW. THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE
-------------
WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REFERENCE TO CHOICE OF LAW PRINCIPLES.
18. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. Severability. The invalidity, illegality or unenforceability in
------------
any jurisdiction of any provision in or obligation under this Agreement shall
not affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Agreement or of such provision or
obligation in any other jurisdiction.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Manager Subordination Agreement has been duly
executed as of the day and year first above written.
MANAGER:
HWCC-SHREVEPORT, INC.,
a Louisiana corporation
By _________________________________
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
COMPANY:
HOLLYWOOD CASINO SHREVEPORT,
a Louisiana general partnership
By: HCS I, Inc., a Louisiana corporation,
its managing general partner
By _________________________________
Name: Xxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
LESSOR/TRUSTEE:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity,but solely as Lessor and Trustee
By _________________________________
Name:
Title:
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[Signature Page to Manager Subordination Agreement]
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