Document:

Exhibit 10.1

 

Execution Version

 

 

 

 

 

 

$375,000,000

 

 

CREDIT AGREEMENT

 

dated as of July 1, 2016

 

 

among

 

 

AFFINITY GAMING,

 

 

as Borrower,

 

the Several Lenders and the Issuing Lenders from Time to Time Parties Hereto,

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
 as Administrative Agent and Collateral Agent,

 

FIFTH THIRD BANK,
 as Syndication Agent,

 

and

 

CREDIT SUISSE SECURITIES (USA) LLC,

 

MACQUARIE CAPITAL (USA), INC.,

 

and

 

FIFTH THIRD BANK,
 as Joint Bookrunners and Joint Lead Arrangers

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
SECTION 1
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Defined   Terms
    	
1
    
	
1.2
    	
Terms   Generally
    	
57
    
	
1.3
    	
Accounting   Terms; GAAP
    	
57
    
	
1.4
    	
Reserved
    	
58
    
	
1.5
    	
Cashless   Rollovers
    	
58
    
	
1.6
    	
Certain   Calculations and Tests
    	
58
    
	
1.7
    	
Effectuation   of Transactions
    	
60
    
	
1.8
    	
Timing   of Payment of Performance
    	
60
    
	
1.9
    	
Times   of Day
    	
60
    
	
 
    	
 
    	
 
    
	
SECTION 2
    	
AMOUNT AND TERMS OF COMMITMENTS
    	
60
    
	
 
    	
 
    	
 
    
	
2.1
    	
Term   Commitments
    	
60
    
	
2.2
    	
Procedure   for Term Loan Borrowing
    	
60
    
	
2.3
    	
Repayment   of Term Loans
    	
60
    
	
2.4
    	
Revolving   Commitments
    	
61
    
	
2.5
    	
Procedure   for Revolving Loan Borrowing
    	
61
    
	
2.6
    	
[Reserved.]
    	
61
    
	
2.7
    	
[Reserved.]
    	
61
    
	
2.8
    	
Repayment   of Loans
    	
61
    
	
2.9
    	
Commitment   Fees, etc.
    	
62
    
	
2.10
    	
Termination   or Reduction of Revolving Commitments
    	
63
    
	
2.11
    	
Optional   Prepayments
    	
63
    
	
2.12
    	
Mandatory   Prepayments
    	
64
    
	
2.13
    	
Conversion   and Continuation Options
    	
66
    
	
2.14
    	
Minimum   Amounts and Maximum Number of Eurodollar Tranches
    	
67
    
	
2.15
    	
Interest   Rates and Payment Dates
    	
67
    
	
2.16
    	
Computations   of Interest and Fees
    	
68
    
	
2.17
    	
Inability   to Determine Interest Rate
    	
68
    
	
2.18
    	
Pro   Rata Treatment and Payments
    	
69
    
	
2.19
    	
Increased   Costs
    	
71
    
	
2.20
    	
Taxes
    	
73
    
	
2.21
    	
Indemnity
    	
76
    
	
2.22
    	
Illegality
    	
76
    
	
2.23
    	
Mitigation   of Costs; Change of Lending Office
    	
77
    
	
2.24
    	
Replacement   of Lenders
    	
77
    
	
2.25
    	
Incremental   Loans
    	
77
    
	
2.26
    	
Defaulting   Lenders
    	
82
    
	
2.27
    	
Cash   Collateral
    	
84
    
	
2.28
    	
Extensions   of Term Loans and Revolving Commitments
    	
85
    
	
 
    	
 
    	
 
    
	
SECTION 3
    	
LETTERS OF CREDIT
    	
89
    
	
 
    	
 
    	
 
    
	
3.1
    	
L/C   Commitment
    	
89
    
	
3.2
    	
Procedure   for Issuance of Letter of Credit
    	
90
    
	
3.3
    	
Fees   and Other Charges
    	
91
    
	
3.4
    	
L/C   Participations
    	
91
    
					

 

i

 

TABLE OF CONTENTS
 (continued)

 

	
3.5
    	
Reimbursement   Obligation of the Borrower
    	
92
    
	
3.6
    	
Obligations   Absolute
    	
92
    
	
3.7
    	
Letter   of Credit Payments
    	
93
    
	
3.8
    	
Applicability   of ISP98 and UCP; Reporting; Applications
    	
94
    
	
 
    	
 
    	
 
    
	
SECTION 4
    	
REPRESENTATIONS AND WARRANTIES
    	
94
    
	
 
    	
 
    	
 
    
	
4.1
    	
Financial   Condition
    	
94
    
	
4.2
    	
No   Change
    	
95
    
	
4.3
    	
Existence;   Compliance with Law
    	
95
    
	
4.4
    	
Organizational   Power; Authorization; Enforceable Obligations
    	
95
    
	
4.5
    	
No   Legal Bar
    	
96
    
	
4.6
    	
No   Material Litigation
    	
96
    
	
4.7
    	
Use   of Proceeds.
    	
96
    
	
4.8
    	
Ownership   of Property; Liens
    	
96
    
	
4.9
    	
Intellectual   Property
    	
96
    
	
4.10
    	
Taxes
    	
97
    
	
4.11
    	
Federal   Reserve Regulations
    	
97
    
	
4.12
    	
ERISA
    	
97
    
	
4.13
    	
Investment   Company Act
    	
98
    
	
4.14
    	
Subsidiaries
    	
98
    
	
4.15
    	
Environmental   Matters
    	
98
    
	
4.16
    	
Accuracy   of Information, Etc.
    	
99
    
	
4.17
    	
Security   Documents
    	
99
    
	
4.18
    	
Solvency
    	
99
    
	
4.19
    	
Labor   Matters
    	
100
    
	
4.20
    	
PATRIOT   Act; OFAC; FCPA; Sanctions
    	
100
    
	
4.21
    	
Gaming   Matters
    	
100
    
	
4.22
    	
Insurance
    	
100
    
	
 
    	
 
    	
 
    
	
SECTION 5
    	
CONDITIONS PRECEDENT
    	
101
    
	
 
    	
 
    	
 
    
	
5.1
    	
Conditions   to Initial Extension of Credit
    	
101
    
	
5.2
    	
Conditions   to Each Extension of Credit
    	
103
    
	
 
    	
 
    	
 
    
	
SECTION 6
    	
AFFIRMATIVE COVENANTS
    	
103
    
	
 
    	
 
    	
 
    
	
6.1
    	
Financial   Statements
    	
104
    
	
6.2
    	
Certificates;   Other Information
    	
105
    
	
6.3
    	
Payment   of Taxes
    	
106
    
	
6.4
    	
Conduct   of Business and Maintenance of Existence, etc.; Compliance with Laws
    	
106
    
	
6.5
    	
Maintenance   of Property; Insurance
    	
107
    
	
6.6
    	
Books   and Records; Inspection of Property; Discussions
    	
107
    
	
6.7
    	
Notices
    	
108
    
	
6.8
    	
Additional   Collateral, Etc
    	
108
    
	
6.9
    	
Further   Assurances
    	
111
    
	
6.10
    	
Use   of Proceeds
    	
111
    
	
6.11
    	
Nature   of Business
    	
111
    
	
6.12
    	
End   of Fiscal Year
    	
111
    
	
6.13
    	
Lender   Calls
    	
112
    
	
6.14
    	
Maintenance   of Ratings
    	
112
    
				

 

ii

 

TABLE OF CONTENTS
 (continued)

 

	
6.15
    	
Holding   Company Election
    	
112
    
	
6.16
    	
Unrestricted   Subsidiaries
    	
112
    
	
 
    	
 
    	
 
    
	
SECTION 7
    	
NEGATIVE COVENANTS
    	
113
    
	
 
    	
 
    	
 
    
	
7.1
    	
Financial   Covenant
    	
113
    
	
7.2
    	
Indebtedness
    	
115
    
	
7.3
    	
Liens
    	
118
    
	
7.4
    	
Fundamental   Changes
    	
121
    
	
7.5
    	
Dispositions   of Property
    	
122
    
	
7.6
    	
Restricted   Payments
    	
126
    
	
7.7
    	
Investments
    	
128
    
	
7.8
    	
Optional   Payments of Certain Indebtedness; Modifications of Certain Agreements and   Instruments
    	
132
    
	
7.9
    	
Transactions   with Affiliates
    	
133
    
	
7.10
    	
Restrictive   Agreements
    	
134
    
	
7.11
    	
Limitation   on Activities of Holdings
    	
135
    
	
 
    	
 
    	
 
    
	
SECTION 8
    	
EVENTS OF DEFAULT
    	
137
    
	
 
    	
 
    	
 
    
	
8.1
    	
Events   of Default
    	
137
    
	
 
    	
 
    	
 
    
	
SECTION 9
    	
THE AGENTS
    	
140
    
	
 
    	
 
    	
 
    
	
9.1
    	
Appointment
    	
140
    
	
9.2
    	
Delegation   of Duties
    	
140
    
	
9.3
    	
Exculpatory   Provisions
    	
140
    
	
9.4
    	
Reliance   by the Agents
    	
141
    
	
9.5
    	
Non-Reliance   on Agents and Other Lenders
    	
141
    
	
9.6
    	
Indemnification
    	
142
    
	
9.7
    	
Agent   in Its Individual Capacity
    	
143
    
	
9.8
    	
Successor   Agents
    	
143
    
	
9.9
    	
Authorization   to Execute other Loan Documents; Collateral
    	
144
    
	
9.10
    	
Lead   Arrangers
    	
145
    
	
9.11
    	
Administrative   Agent May File Proofs of Claim; Credit Bidding
    	
145
    
	
9.12
    	
Cash   Management Agreements and Secured Hedge Agreements
    	
146
    
	
9.13
    	
Acknowledgement   and Consent to Bail-In of EEA Financial Institutions
    	
146
    
	
 
    	
 
    	
 
    
	
SECTION 10
    	
MISCELLANEOUS
    	
147
    
	
 
    	
 
    	
 
    
	
10.1
    	
Amendments   and Waivers
    	
147
    
	
10.2
    	
Notices
    	
149
    
	
10.3
    	
No   Waiver; Cumulative Remedies
    	
150
    
	
10.4
    	
Survival   of Representations and Warranties
    	
150
    
	
10.5
    	
Payment   of Expenses; Indemnification
    	
151
    
	
10.6
    	
Successors   and Assigns; Participations and Assignments
    	
153
    
	
10.7
    	
Adjustments;   Set-off
    	
163
    
	
10.8
    	
Counterparts
    	
163
    
	
10.9
    	
Severability
    	
163
    
	
10.10
    	
Integration;   Survival
    	
164
    
	
10.11
    	
GOVERNING   LAW
    	
164
    
				

 

iii

 

TABLE OF CONTENTS
 (continued)

 

	
10.12
    	
Submission   to Jurisdiction; Waivers
    	
164
    
	
10.13
    	
Acknowledgments
    	
165
    
	
10.14
    	
Confidentiality
    	
165
    
	
10.15
    	
Release   of Collateral and Guarantee Obligations; Subordination of Liens
    	
166
    
	
10.16
    	
Waivers   of Jury Trial
    	
167
    
	
10.17
    	
USA   PATRIOT ACT
    	
167
    
	
10.18
    	
Lender   Action
    	
167
    
	
10.19
    	
Marshalling;   Payments Set Aside
    	
167
    
	
10.20
    	
Interest   Rate Limitation
    	
167
    
	
10.21
    	
Application   of Gaming Regulations
    	
168
    
	
10.22
    	
No   Advisory or Fiduciary Relationship
    	
168
    
	
10.23
    	
Conflicts
    	
169
    
	
10.24
    	
Post-Closing   Covenants
    	
169
    

 

iv

 

APPENDICES:

 

A-1                        Initial Revolving Commitments

A-2                        Initial Term Commitments

A-3                        Closing Date L/C Commitments

 

SCHEDULES:

 

4.1(a)           Historical Annual Financial Statement Disclosures

4.1(b)          Historical Quarterly Financial Statement Disclosures

4.4                            Consents, Authorizations, Filings and Notices

4.8                            Excepted Property; Owned or Leased Property

4.14                    Subsidiaries

4.17(a)   UCC Filing Jurisdictions

7.2(c)           Existing Indebtedness

7.3(f)            Existing Liens

7.5(f)            Certain Dispositions

7.7                            Existing Investments

7.9                            Existing Transactions with Affiliates

7.10                    Existing Negative Pledge Clauses

10.24            Post-Closing Matters

 

EXHIBITS:

 

A-1                        Form of Notice of Borrowing

A-2                        Form of Conversion/Continuation Notice

B                                      Form of Guarantee and Collateral Agreement

C                                      Form of Compliance Certificate

D-1                        Form of Closing Certificate

D-2                        Form of Officer’s Certificate

E                                       Form of Assignment and Assumption

F                                        Form of Exemption Certificate

G                                     Form of Solvency Certificate

H                                     Form of Prepayment Notice

I                                           Form of Promissory Note

J                                          Form of Joinder Agreement

K                                     Form of Intercreditor Agreement

L                                       [Reserved]

M                                   Form of Affiliated Lender Assignment Agreement

N                                     Form of Intercompany Subordination Agreement

 

v

 

CREDIT AGREEMENT, dated as of July 1, 2016 (this “Agreement”), among AFFINITY GAMING, a Nevada corporation, the several banks and other financial institutions or Persons from time to time parties to this Agreement as lenders (collectively, the “Lenders”), Credit Suisse AG, Cayman Islands Branch (“CS”), as administrative agent (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”) and collateral agent (in such capacity, together with its successors and permitted assigns, the “Collateral Agent”), Fifth Third Bank, as syndication agent (in such capacity, the “Syndication Agent”), and Credit Suisse Securities (USA) LLC (“Credit Suisse”), Macquarie Capital (USA), Inc. and Fifth Third Bank, as joint bookrunners (in such capacities, the “Joint Bookrunners”) and as joint lead arrangers (in such capacities, the “Lead Arrangers”).

 

PRELIMINARY STATEMENTS

 

1.                                    The Borrower (as defined herein) has requested that the Lenders extend credit to (i) the Borrower in the form of Initial Term Loans in an initial aggregate principal amount equal to $300,000,000, available in Dollars, and (ii) to the Borrower in the form of Initial Revolving Commitments in an initial aggregate principal amount of $75,000,000 available in Dollars.

 

2.                                    The proceeds of the Initial Term Loans and the initial Revolving Borrowing, together with cash on hand, will be used to finance the Transaction Expenses and to consummate the Refinancing.

 

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:

 

SECTION 1                     DEFINITIONS

 

1.1                            Defined Terms.  As used in this Agreement, the terms listed in this Section shall have the respective meanings set forth in this Section.

 

“ABR” means, for any day, a fluctuating rate per annum equal to the greatest of (i) the Prime Rate for Dollars, (ii) the Federal Funds Effective Rate plus 1⁄2 of 1.00%, (iii) the one-month reserve adjusted Eurodollar Base Rate determined on such day plus 1.00% and (iv) with respect to the Initial Term Loans only, 2.00%. Notwithstanding the foregoing, ABR will be deemed to be 0% per annum if the ABR calculated pursuant to the foregoing provisions would otherwise be less than 0% per annum.

 

“ABR Loans” means Loans the rate of interest applicable to which is based upon the ABR.

 

“Acceptable Intercreditor Agreement” means an intercreditor agreement in substantially the form of Exhibit K hereto or in such other form as is reasonably satisfactory to the Administrative Agent.

 

“Additional Debt Requirements” means the following requirements:

 

(i)                                  such Indebtedness shall not be the obligation of, or subject to any guarantee by, any Person who is not also a Loan Party (or who becomes a Loan Party concurrently with the incurrence or issuance of such Indebtedness);

 

(ii)                              the obligations of the applicable Loan Party in respect of such Indebtedness shall not be secured by (x) any Lien on any Property in which the Collateral Agent does not have a Lien (or Property in which the Collateral Agent is not granted a Lien concurrently with the grant of a Lien securing such Indebtedness) or (y) any perfected Lien on any Property in which the Collateral Agent does not have a perfected Lien (or Property in which a Lien in favor of the Collateral Agent is not perfected concurrently with the perfection of a Lien securing such Indebtedness);

 

1

 

(iii)                          such Indebtedness shall not (x) provide for any final maturity date prior to the Latest Term Loan Maturity Date (other than revolving Indebtedness and customary bridge loans with a maturity date of not longer than one year; provided that any loans, notes, securities or other Indebtedness (other than revolving Indebtedness) which are exchanged for or otherwise replace such bridge loans shall be subject to the requirement of this clause (iii)(x)) or the Latest Revolving Maturity Date (in the case of revolving Indebtedness), in each case, as of the date of the issuance or incurrence, as applicable, thereof, (y) have a shorter Weighted Average Life to Maturity than the then-existing Term Loans (other than revolving Indebtedness and customary bridge loans with a maturity date of not longer than one year; provided that any loans, notes, securities or other Indebtedness (other than revolving Indebtedness) which are exchanged for or otherwise replace such bridge loans shall be subject to the requirement of this clause (iii)(y)) or require scheduled amortization or mandatory commitment reduction (in the case of revolving Indebtedness) prior to the Latest Revolving Maturity Date as of the date of the issuance or incurrence thereof, as applicable, and (z) in the case of Indebtedness that is unsecured or is secured by Liens that are junior in priority to the Liens securing the Initial Facilities, provide for any mandatory repayment, redemption or sinking fund prior to the date that is 91 days after the Latest Term Loan Maturity Date as of the date of issuance or incurrence, as applicable, thereof, other than mandatory repayments or redemptions from asset sales, casualty or condemnation events or excess cash flow to the extent that prepayments are made first to the Initial Term Loans and to other Indebtedness secured by Liens that are pari passu with the Lien securing the Initial Facilities (to the extent required by the Loan Documents or the terms of such other Indebtedness) or such prepayments are declined by any holder of such Term Loans or such other Indebtedness;

 

(iv)                       in the case of any such Indebtedness in the form of term loans that are pari passu with the Initial Term Loans in right of payment and with respect to security (other than customary bridge loans, mezzanine debt, notes or other securities), the Effective Yield applicable thereto shall not be more than 0.50% per annum higher than the Effective Yield in respect of the Initial Term Loans unless the Effective Yield with respect to the Initial Term Loans is adjusted to be equal to the Effective Yield applicable to such Indebtedness, minus 0.50% per annum; and

 

(v)                              the other material covenants, terms and conditions (excluding (1) pricing, interest rate margins, rate floors, discounts, premiums, fees, and prepayment or redemption terms and premiums and (2) covenants or other provisions applicable only to periods after the Latest Term Loan Maturity Date (in the case of term loans or notes) or the Latest Revolving Maturity Date (in the case of revolving Indebtedness), in each case, at the time of incurrence or issuance of such Indebtedness) applicable to such Indebtedness shall not be materially more restrictive (when taken as a whole) than the terms and conditions of the Loan Documents (when taken as a whole), as reasonably determined by the Borrower, unless such terms and conditions constitute then-current market terms for the applicable type of Indebtedness; provided that such terms shall not be deemed to be more restrictive solely as a result of the inclusion in the documentation governing such Indebtedness of any Previously Absent Financial Maintenance Covenant so long as the Administrative Agent shall have been given prompt written notice thereof and this Agreement is amended to include such Previously Absent Financial Maintenance Covenant for the benefit of each Facility to the extent applicable in the documentation governing such Indebtedness (but if the applicable Previously Absent Financial Maintenance Covenant is a “springing” financial maintenance covenant applicable only to revolving Indebtedness, the Previously Absent Financial Maintenance Covenant shall be automatically included in this agreement only for the benefit of each Revolving Facility and not for the benefit of any Facility in respect of Term Loans hereunder); provided, further, that any Indebtedness in the form of (A) term loans that are pari passu with the Initial Term Loans in right of payment and with respect to security may provide for the ability of the holders thereof to decline to participate in any voluntary prepayments of such term loans and/or to receive on a pro rata or less than pro rata basis any mandatory prepayments of such term loans or (B) revolving loans that are pari passu with the Initial Revolving Loans in right of payment and with respect to security may provide for the lenders thereof to elect lesser payments or commitment reductions in respect of such revolving loans; and

 

2

 

(vi)                          in the case of any Specified Junior Debt described in clause (i) of the definition thereof, any Specified Second Lien Incremental Debt or any Indebtedness incurred under clauses (h)(i)(2), (i)(i) or (r) (with respect to Incremental Equivalent Debt described in clause (i) of the definition thereof) of Section 7.2, except as otherwise agreed by the providers of such Indebtedness in connection with an acquisition or other Investment permitted hereunder, after giving effect thereto on a Pro Forma Basis, no Event of Default has occurred or is continuing or would result therefrom.

 

“Additional Lender” has the meaning specified in Section 2.25(d).

 

“Additional/Replacement Revolving Commitments” has the meaning specified in Section 2.25.

 

“Additional/Replacement Revolving Facility” means each Class of Additional/Replacement Revolving Commitments established pursuant to Section 2.25.

 

“Additional/Replacement Revolving Loans” means any revolving loans made under an Additional/Replacement Revolving Facility.

 

“Administrative Agent” has the meaning specified in the preamble hereto.

 

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of a Person means the power, directly or indirectly to direct or cause the direction of the management and policies of such Person, in either case whether by contract or otherwise.  No Person shall be an “Affiliate” of Holdings or any Subsidiary thereof solely because it is an unrelated portfolio company of any Investor and none of the Administrative Agent, the Lead Arrangers, any Lender (other than any Investor Affiliated Lender or Debt Fund Affiliate) or any of their respective Affiliates shall be considered an Affiliate of Holdings or any Subsidiary thereof.

 

“Affiliated Lender” has the meaning specified in Section 10.6(c)(i).

 

“Affiliated Lender Assignment Agreement” has the meaning specified in Section 10.6(c)(i)(B).

 

“Agent-Related Persons” means each Agent, together with its Related Parties.

 

“Agent Fee Letter” means the Agent Fee Letter dated as of May 25, 2016, among the Borrower, the Administrative Agent and Credit Suisse.

 

“Agents” means the collective reference to the Collateral Agent and the Administrative Agent.

 

“Agreement” has the meaning specified in the preamble hereto.

 

3

 

“ALTA” means the American Land Title Association.

 

“Applicable Commitment Fee Rate” means, for any day, 0.50%; provided that, for any period ending on and after the financial statements and Compliance Certificate are delivered with respect to the fiscal quarter ending  September 30, 2016, the Applicable Commitment Fee Rate shall be reduced to 0.375% per annum if the First Lien Leverage Ratio for the Test Period ending the last day of the applicable fiscal quarter shall be less than or equal to 3.50:1.00, such decrease shall become effective as of the second Business Day immediately following the date on which financial statements to be delivered pursuant to Section 6.1(a) or (b), as applicable, and the Compliance Certificate with respect to such period are delivered; provided, further, that, if the Borrower shall fail to deliver financial statements within any of the time periods specified in Section 6.1(a) or (b), as applicable, and the Compliance Certificate with respect thereto, the Applicable Commitment Fee Rate from such date they were due, to but not including the second Business Day following the date the Borrower delivers to the Administrative Agent such financial statements and Compliance Certificate, shall conclusively equal 0.50%.

 

“Applicable Indebtedness” has the meaning specified in the definition of the term “Weighted Average Life to Maturity”.

 

“Applicable Margin” means, for any day, (a) with respect to the Initial Term Loans that are (i) ABR Loans, 3.00% and (ii) Eurodollar Loans, 4.00% and (b) with respect to the Revolving Loans  that are (i) ABR Loans, 3.00% and (ii) Eurodollar Loans, 4.00%; provided that for any period ending on and after the financial statements and Compliance Certificate are delivered with respect to the fiscal quarter ending September 30, 2016, the Applicable Margin with respect to the Initial Revolving Loans shall be the rate set forth below opposite the applicable First Lien Leverage Ratio as of the last day of such period:

 

	
First Lien Leverage
   Ratio
    	
 

Initial Revolving Loans

 
    
	
 

ABR   Loans

 
    	
 

Eurodollar Loans

 
    
	
> 3.50:1.00

 
    	
3.00%
    	
4.00%
    
	
< 3.50:1.00 but > 3.00:1.00

 
    	
2.75%
    	
3.75%
    
	
< 3.00:1.00

 
    	
2.50%
    	
3.50%
    

 

Changes in the Applicable Margin resulting from a change in the First Lien Leverage Ratio shall become effective on the second Business Day after delivery to the Administrative Agent of financial statements pursuant to Section 6.1(a) or (b), as applicable, and the Compliance Certificate with respect thereto.  Notwithstanding anything to the contrary set forth in this Agreement (including the determination of the Applicable Margin based on the above grid), if the Borrower shall fail to deliver financial statements within any of the time periods specified in Section 6.1(a) or (b), as applicable, and the Compliance Certificate with respect thereto, the Applicable Margin from such date they were due, to but not including the second Business Day following the date the Borrower delivers to the Administrative Agent such financial statements and Compliance Certificate shall conclusively equal the highest possible Applicable Margin set forth in the grid above for such Type of Loans.

 

4

 

“Application” means an application, in such form as the relevant Issuing Lender may specify from time to time, requesting such Issuing Lender to open a Letter of Credit.

 

“Approved Fund” has the meaning specified in Section 10.6(b).

 

“Asset Sale” means any Disposition (or series of related Dispositions) of Property by any Group Member in reliance on clause (e), (f), (s), (y) or (bb) of Section 7.5.

 

“Asset Sale/Recovery Event Prepayment Percentage” means 100%.

 

“Assignee” has the meaning specified in Section 10.6(b).

 

“Assignment and Assumption” means an Assignment and Assumption, substantially in the form of Exhibit E, or such other form approved by the Administrative Agent and the Borrower.

 

“Available Amount” means, at any time (the “Available Amount Reference Time”), an amount equal at such time to (a) the sum (which shall not be less than zero) of, without duplication:

 

(i)                                  $10,000,000;

 

(ii)                              Retained Excess Cash Flow;

 

(iii)                          the net cash proceeds of any Investment made by a Group Member using the Available Amount received by a Group Member in connection with the Disposition of such Investment to any Person (other than a Group Member) during the period from and including the Business Day immediately following the Closing Date through and including the Available Amount Reference Time;

 

(iv)                          (x) the amount of any Investment by a Group Member that was made using the Available Amount in any Unrestricted Subsidiary that has been re-designated as a Restricted Subsidiary or that has been merged, amalgamated or consolidated with or into a Group Member and (y) the Fair Market Value of the assets of any Unrestricted Subsidiary that has been transferred, conveyed or otherwise distributed to a Group Member, in each case of clauses (x) and (y), during the period from and including the Business Day immediately following the Closing Date and at or prior to the Available Amount Reference Time, such amount not to exceed the amount of the Investment that was made using the Available Amount by the Group Members in such Unrestricted Subsidiary;

 

(v)                              to the extent not applied to prepay Specified Junior Debt in accordance with the terms thereof, the aggregate amount of any Retained Declined Proceeds during the period from and including the Business Day immediately following the Closing Date through and including the Available Amount Reference Time; and

 

(vi)                          the aggregate principal amount of any Indebtedness or Disqualified Capital Stock of a Group Member issued after the Closing Date (other than to any other Group Member or an employee stock ownership plan or trust established by a Group Member), which has been converted into or exchanged for Qualified Capital Stock of any Parent Company, together with the Fair Market Value of any Cash Equivalents, marketable securities or other property received by a Group Member upon such exchange or conversion, during the period from and including the Business Day immediately following the Closing Date through and including the Available Amount Reference Time; and

 

minus (b) the sum of, without duplication, the aggregate amount of any Investments, Restricted Payments and Restricted Debt Payments made by the Group Members using the Available Amount pursuant to clause (d)(ii) of the definition of Permitted Acquisition or Section 7.6(g)(iii), 7.6(g)(iv), 7.7(cc)(i), 7.8(a)(iv)(C) or 7.8(a)(iv)(D) after the Closing Date and prior to the Available Amount Reference Time.

 

5

 

“Available Amount Reference Time” has the meaning specified in the definition of the term “Available Amount”.

 

“Available Equity Amount” means, at any time (the “Available Equity Amount Reference Time”), an amount equal to, without duplication, (a) the aggregate amount of cash, together with the Fair Market Value of any Cash Equivalents, marketable securities or other property received by a Group Member (other than amounts received from any other Group Member) from contributions in respect of, or issuance of, Qualified Capital Stock of the Borrower or any Parent Company, in each case during the period from and including the Business Day immediately following the Closing Date through and including the Available Equity Amount Reference Time and excluding (i) any Cure Amount and (ii) the Available Excluded Contribution Amount, minus (b) the aggregate amount of any Investments, Restricted Payments or Restricted Debt Payments made by the Group Members in reliance on the Available Equity Amount pursuant to clause (d)(ii) of the definition of Permitted Acquisition, Section 7.6(g)(ii), 7.7(cc)(ii) or 7.8(a)(iv)(B) after the Closing Date and prior to the Available Equity Amount Reference Time.

 

“Available Equity Amount Reference Time” has the meaning specified in the definition of the term “Available Equity Amount”.

 

“Available Excluded Contribution Amount” means, at any time (the “Available Excluded Contribution Reference Time”), an amount equal to, without duplication, (a) the aggregate amount of cash, together with the Fair Market Value of any Cash Equivalents, marketable securities or other property received by a Group Member (other than amounts received from any other Group Member) from contributions in respect of, or issuance of, Qualified Capital Stock of the Borrower or any Parent Company, in each case during the period from and including the Business Day immediately following the Closing Date through and including the Available Excluded Contribution Reference Time and excluding (i) any Cure Amount and (ii) the Available Equity Amount, minus (b) the aggregate amount of any Investments, Restricted Payments or Restricted Debt Payments made by the Group Members in reliance on the Available Excluded Contribution Amount pursuant to clause (d)(ii) of the definition of Permitted Acquisition, Section 7.6(g)(i), 7.7(cc)(iii) or 7.8(a)(iv)(A) after the Closing Date and prior to the Available Excluded Contribution Reference Time.

 

“Available Excluded Contribution Reference Time” has the meaning specified in the definition of the term “Available Excluded Contribution Amount”.

 

“Available Revolving Commitment” means, as to any Revolving Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment then in effect over (b) such Lender’s Revolving Extensions of Credit then outstanding.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

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“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.) and the regulations issued from time to time thereunder.

 

“Bankruptcy Proceedings” has the meaning specified in Section 10.6(e).

 

“Benefited Lender” has the meaning specified in Section 10.7(a).

 

“Board” means the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

“Bona Fide Debt Fund” means with respect to any Company Competitor, any debt fund, investment vehicle, regulated bank entity or unregulated lending entity that is (a) primarily engaged in, or advises funds or other investment vehicles that are primarily engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of business and (b) managed, sponsored or advised by any person that is controlling, controlled by or under common control with the relevant Company Competitor or affiliate thereof, but only to the extent that no personnel involved with the investment in the relevant Company Competitor (i) makes (or has the right to make or participate with others in making) investment decisions on behalf of, or otherwise cause the direction of the investment policies of, such debt fund, investment vehicle, regulated bank entity or unregulated entity or (ii) has access to any information (other than information that is publicly available) relating to Holdings, the Borrower and/or any entity that forms part of any of their respective businesses (including any of their respective subsidiaries); it being understood and agreed that the term “Bona Fide Debt Fund” shall not include any Disqualified Institution that qualifies under clauses (b) or (c) of the definition thereof (with respect to the Persons described in clause (b) of the definition thereof).

 

“Borrower” means, Affinity Gaming, a Nevada corporation, together with any Successor Borrower.

 

“Borrower Materials” has the meaning specified in Section 6.2.

 

“Borrowing” means Loans of the same Class and Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

 

“Borrowing Date” means any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder satisfying the applicable notice requirements set forth in Section 2.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close; provided that when used in connection with a Eurodollar Loan denominated in Dollars, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

“Capital Expenditures” means, for any period, the aggregate of, without duplication, (a) all expenditures by the Group Members during such period that, in conformity with GAAP, are or are required to be included as additions during such period to property, plant or equipment reflected in the consolidated balance sheet of the Group Members and (b) all fixed asset additions financed through Capital Lease Obligations incurred by the Group Members and recorded on the balance sheet in accordance with GAAP during such period.

 

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“Capital Lease Obligations” means, as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, to the extent such obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP; provided that, notwithstanding the foregoing, in no event will any lease that would have been categorized as an operating lease as determined in accordance with GAAP prior to giving effect to the Financial Accounting Standards Board Accounting Standard Update 2016-02, Leases (Topic 842), issued in February 2016, or any other changes in GAAP subsequent to the Closing Date be considered a capital lease for purposes of this definition.

 

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, and any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the applicable Agent, for the benefit of the Agents, any Issuing Lender and the Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect thereof (as the context may require), cash or deposit account balances or, if the applicable Agent and each applicable Issuing Lender benefiting from such collateral agrees in its sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the applicable Agent and applicable Issuing Lender (which documents are hereby consented to by the Lenders).  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” means (a) direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year from the date of acquisition; (d) fully collateralized repurchase obligations of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than thirty days with respect to securities issued or fully guaranteed or insured by the United States government; (e) marketable securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory, the securities of which state, commonwealth, territory, political subdivision or taxing authority (as the case may be) are rated at least A-1 by S&P or P-1 by Moody’s; (f) securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of any of clauses (a) through (f) of this definition; and (h) other short-term investments utilized by Foreign Subsidiaries in accordance with the normal investment practices for cash management in investments of a type analogous to the foregoing.

 

“Cash Management Document” means any certificate, agreement or other document executed by any Group Member or Holdings in respect of the Cash Management Obligations.

 

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“Cash Management Obligation” means any direct or indirect liability, contingent or otherwise, of any Group Member or Holdings in respect of cash management services (including treasury services, depository, overdraft, credit or debit card, automated clearing house services, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting, trade finance services, funds transfer and other cash management arrangements) provided by any Agent, any Lead Arranger, any Lender or any Affiliate of any of them (whether or not such Person subsequently ceases to be an Agent, Lead Arranger, Lender or any Affiliate thereof), including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith; provided that, in the case that such Cash Management Obligations are provided by a Person that is not the Administrative Agent or any of its Affiliates, such Person shall have designated such cash management services as “Cash Management Obligations” in writing to the Administrative Agent.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption of any Law, (b) any change in any Law or (c) the making or issuance of any new request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued, but solely to the extent they would have been included if they had been imposed under applicable increased cost provisions.

 

“Change of Control” means:

 

(a)                               any Person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person, entity or “group” and their respective Subsidiaries and any Person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than the Permitted Holders, (i) is or becomes the beneficial owner (within the meaning SEC Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more than 50% of the total then-outstanding Capital Stock of the Borrower entitled to vote for members of the board of directors (or equivalent governing body) of the Borrower or (ii) shall have obtained the power to elect a majority of the Borrower’s board of directors (or equivalent governing body); and/or

 

(b)                              if a Holding Company Election has been made, Holdings (or if Holdings has merged or consolidated with or into another Person as permitted by Section 7.4 and 7.11, the Person surviving such merger or consolidation) shall cease to own, directly or indirectly, 100% of the Capital Stock of the Borrower.

 

“Charge” means any fee, loss, charge, expense, cost, accrual or reserve of any kind.

 

“Chattel Paper” has the meaning specified in the Guarantee and Collateral Agreement.

 

“Claims” has the meaning specified in the definition of the term “Environmental Claims”.

 

“Class” means, when used in reference to any Loan or Borrowing, whether such Loan, or the Loans comprising such Borrowing, are Initial Revolving Loans, Initial Term Loans or Other Loans (of a Class), and, when used in reference to any Commitment, refers to whether such Commitment is an Initial Term Commitment, Initial Revolving Commitment or Other Commitment (of a Class) and, when used in reference to any Lender, refers to whether such Lender has a Loan or Commitment of such Class.

 

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“Closing Date” means the date on which the conditions precedent set forth in Section 5.1 shall have been satisfied or waived and the initial Loans hereunder shall have been funded, which date is July 1, 2016.

 

“Code” means the Internal Revenue Code of 1986 and any regulations promulgated thereunder.

 

“Collateral” means any and all Property of any Loan Party subject to (or purported to be subject to) a Lien under any Security Document and any and all other Property of any Loan Party now existing or hereafter acquired that is or becomes subject (or purported to be subject) to a Lien pursuant to any Security Document to secure the Secured Obligations.

 

“Collateral Agent” has the meaning specified in the preamble hereto.

 

“Commercial Tort Claims” has the meaning specified in the Guarantee and Collateral Agreement.

 

“Commitment” means with respect to each Lender (to the extent applicable), such Lender’s Initial Term Commitment, Initial Revolving Commitment, Other Commitment and/or any combination thereof, as the context requires.

 

“Committed Reinvestment Amount” has the meaning specified in the definition of the term “Reinvestment Prepayment Amount”.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

 

“Commonly Controlled Entity” means any trade or business, whether or not incorporated, that together with a Group Member is under common control or treated as a single employer within the meaning of Section 414 of the Code or Section 4001 of ERISA.

 

“Commonly Controlled Plan” has the meaning specified in Section 4.12(b).

 

“Company Competitor” means any competitor of the Borrower and/or any of its Subsidiaries.

 

“Compliance Certificate” means a certificate duly executed by a Responsible Officer substantially in the form of Exhibit C.

 

“Consolidated Current Assets” means, at any date, all amounts (other than cash and Cash Equivalents, prepaid income taxes, income taxes receivable, current deferred income taxes and the current portion of deferred financing fees) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Group Members at such date.

 

“Consolidated Current Liabilities” means, at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Group Members at such date, but excluding (a) the current portion of any Indebtedness of the Group Members, (b) the current portion of all income taxes payable and current deferred income taxes, (c) the current portion of deferred revenue and (d) without duplication, all Indebtedness consisting of revolving loans, to the extent otherwise included therein.

 

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“Consolidated EBITDA” means, with respect to any Person for any period, the sum (without duplication) of:

 

(a)                               Consolidated Net Income for such period; plus

 

(b)                              without duplication and to the extent already deducted (and not added back) in arriving at Consolidated Net Income, the sum of:

 

(i)                                  taxes based on income or profits or capital, including federal, foreign, state, franchise, excise and similar taxes and foreign withholding taxes and foreign unreimbursed value added taxes of such Person and excise and sales tax expense payable or accrued (but excluding amounts paid or accrued in a prior period) during such period (including in respect of repatriated funds and any penalties and interest related to such taxes or arising from any tax examinations and including pursuant to any tax sharing arrangement or as a result of any tax distribution),

 

(ii)                              total interest expense and, to the extent not reflected in total interest expense, amortization of debt discount and debt issuance costs, and commissions, discounts and other fees and charges associated with Indebtedness or other financing activities, any cash dividends paid or payable in respect of Disqualified Capital Stock (other than to such Person or any Loan Party) and losses on hedge agreements and other derivative instruments,

 

(iii)                          depreciation and amortization expense (excluding amortization of prepaid cash expenses that were paid in a prior period),

 

(iv)                          Non-Cash Charges,

 

(v)                              (i) management, monitoring, transaction and advisory fees to the Investors paid in cash to the extent permitted under Section 7.9(d) to be paid hereunder or accrued (it being understood that an item may not be added back both as an accrual and a cash payment) during such period (but excluding fees that were paid in cash or accrued in another period), (ii) consulting and/or operational consulting fees to the Investors paid in cash to the extent permitted under Section 7.9(d) to be paid hereunder or accrued (it being understood that an item may not be added back both as an accrual and a cash payment) during such period (but excluding fees that were paid in cash or accrued in another period) in an aggregate amount for each period not to exceed the greater of $4,000,000 and 5.0% of Consolidated EBITDA for such period and (iii) expenses (including legal expenses) and indemnities related to the services provided in respect of such fees in clauses (v)(i) and (v)(ii) hereof to the Investors paid in cash to the extent permitted under Section 7.9(d) to be paid hereunder or accrued during such period (but excluding expenses or indemnities that were paid in cash or accrued in another period);

 

(vi)                          (x) Transaction Expenses and (y) any transaction fees, costs and expenses incurred in connection with the consummation of any transaction (or any transaction proposed and not consummated), whether or not permitted under this Agreement, including any issuance or offering of Capital Stock, any Investment, any Disposition, any recapitalization, any acquisition, merger, consolidation or amalgamation or any incurrence, repayment, refinancing, amendment or modification of Indebtedness (including any amortization or write-off of debt issuance or deferred financing costs, premiums and prepayment penalties) or any similar transaction,

 

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(vii)                      any Charge that is actually reimbursed or reimbursable by one or more third parties pursuant to indemnification or reimbursement provisions or similar agreements or insurance; provided that the relevant Person in good faith expects to receive reimbursement for such fee, cost, expense or reserve within the next four fiscal quarters (it being understood that to the extent any reimbursement amount is not actually received within such fiscal quarters, such reimbursement amount shall be deducted in calculating Consolidated EBITDA for such fiscal quarters),

 

(viii)                  (x) any Charge incurred as a result of, in connection with or pursuant to any management equity plan, profits interest or stock option plan or any other management or employee benefit plan or agreement (including any 401K plan), any pension plan (including any post-employment benefit scheme to which the relevant pension trustee has agreed), any stock subscription or shareholder agreement, any employee benefit trust, any employee benefit scheme or any similar equity plan or agreement (including any deferred compensation arrangement) and (y) any Charge incurred in connection with the rollover, acceleration or payout of Capital Stock held by management of such Person (or any Parent Company), in each case under this clause (y), to the extent that any cash Charge is funded with a capital contribution or the Net Cash Proceeds of a sale or issuance of Qualified Capital Stock of such Person (or any Parent Company) contributed to such Person,

 

(ix)                          [Reserved],

 

(x)                              any Charge attributable to the undertaking and/or implementation of cost savings initiatives, operating expense reductions, transition, opening and/or pre-opening expenses, business optimization and other restructuring (including tax restructuring) and integration Charges (including any Charge attributable to inventory optimization programs, software development costs, any Charge attributable to the closure or consolidation of any facility and/or discontinued operations, Charge relating to entry into a new market, consulting fees, signing costs, retention or completion bonus, relocation expenses, severance payments, Charge associated with any modification to any pension and post-retirement employee benefit plan, Charge associated with new systems design, implementation costs and project startup costs) in an aggregate amount for such period not to exceed, in the aggregate with amounts added back pursuant to clause (e) below for such period, 25% of Consolidated EBITDA for such period (calculated before giving effect to such add-back),

 

(xi)                       any earn-out obligation expense incurred in connection with the Transactions, any acquisition and/or other Investment permitted under Section 7.7 and/or any acquisition or other Investment completed prior to the Closing Date, in each case, which is paid or accrued during such period,

 

(xii)                      the amount of any expense or deduction associated with any Restricted Subsidiary that is attributable to any non-controlling interest and/or minority interest of any third party, and

 

12

 

(xiii)                  all expenses of the Borrower and its Subsidiaries related to the environmental remediation of contamination originating at Clark County Assessor’s Parcel No. 237-08-301-002 in Primm, Nevada in an aggregate amount for all periods during the term of this Agreement not to exceed $5,000,000; plus

 

(c)                               to the extent not otherwise included in the determination of Consolidated Net Income for such period, the amount of any proceeds of any business interruption insurance policy received during such period in an amount representing the earnings for the applicable period that such proceeds are intended to replace whether or not then received; provided the relevant Person in good faith expects to receive such amount within the next four fiscal quarters (it being understood that, to the extent any such amount is not actually received within such fiscal quarters, such amount shall be deducted in calculating Consolidated EBITDA for such fiscal quarters); plus

 

(d)                              to the extent not included in Consolidated Net Income for such period, cash actually received (or any netting arrangement resulting in reduced cash expenditures) during such period, so long as the non-cash gain relating to the relevant cash receipt or netting arrangement was deducted in the calculation of Consolidated EBITDA pursuant to clause (g) below for any previous period and not added back; plus

 

(e)                               without duplication of amounts added back pursuant to other clauses in this definition, the amount of any expected “run-rate” cost savings, operating expense reductions, other operating improvements and synergies (collectively, “Expected Cost Savings”) (net of actual amounts realized) that are reasonably identifiable and factually supportable (in the good faith determination of such Person) related to any permitted Investment, Disposition, operating improvement, restructuring, cost savings initiative, any similar initiative and/or specified transaction (any such operating improvement, restructuring, cost savings initiative or similar initiative or specified transaction, a “Cost Saving Initiative”); provided that, (x) such Expected Cost Savings are reasonably expected to be realized within 18 months of the consummation of the event giving rise thereto and shall not exceed, in the aggregate with amounts added back pursuant to clause (b)(x) above, 25% of Consolidated EBITDA for such period (calculated before giving effect to any such Expected Cost Savings to be added back pursuant to this clause (e)); plus

 

(f)                                without duplication of amounts added back pursuant to other clauses in this definition, other amounts and adjustments reflected in the Projections; minus

 

(g)                               any amount which, in the determination of Consolidated Net Income for such period, has been included for any non cash income or non cash gain, all as determined in accordance with GAAP (provided that if any non-cash income or non-cash gain represents an accrual or deferred income in respect of potential cash items in any future period, such Person may determine not to deduct the relevant non-cash gain or income in the then-current period); minus

 

(h)                              the amount of any cash payment made during such period in respect of any Non-Cash Charge that is accounted for in a prior period which was added to Consolidated Net Income to determine Consolidated EBITDA for such prior period and which does not otherwise reduce Consolidated Net Income for the current period.

 

“Consolidated First Lien Debt” means, as to any Person as of any date of determination, Consolidated Total Debt outstanding on such date that is secured by a Lien which is on at least an equal priority basis (but without regard to the control of remedies) with the Liens securing the Initial Facilities.

 

13

 

“Consolidated Net Income” means, with respect to any Person (the “Subject Person”) for any period, the net income (or loss) of such Subject Person, determined on a consolidated basis in accordance with GAAP excluding, without duplication:

 

(a)        any impairment charge (including any Charge relating to the impairment of goodwill and other assets) and asset write-off and/or write-down and the amortization of intangibles (including software and goodwill),

 

(b)        any gain or loss from any extraordinary, unusual or nonrecurring items for such period (including any costs associated with and/or payment of any actual or prospective legal settlement, fine, judgment or order),

 

(c)        any net gain or loss attributable to any asset disposition (including asset retirement costs) or of returned or surplus assets outside the ordinary course of business,

 

(d)        any realized or unrealized net gain or loss in respect of (x) any obligation under any Hedge Agreement as determined in accordance with GAAP and/or (y) any other derivative instrument pursuant to, in the case of this clause (y), Financial Accounting Standards Board’s Accounting Standards Codification No. 815-Derivatives and Hedging,

 

(e)        any realized or unrealized foreign currency exchange net gain or loss (including any currency re-measurement of Indebtedness, any net gain or loss resulting from Hedge Agreements for currency exchange risk associated with the foregoing or any other currency related risk and any gain or loss resulting from intercompany Indebtedness),

 

(f)        the cumulative effect of a change in accounting principles during such period, to the extent included in such net income (loss),

 

(g)        the after-tax effect of any net income (or loss) for such period attributable to the early extinguishment of Indebtedness (or any cancellation of Indebtedness),

 

(h)        solely for purposes of calculating Excess Cash Flow, the income (or deficit) of any Person accrued prior to the date it becomes a Restricted Subsidiary of such Subject Person or is merged into or consolidated with such Subject Person (or a Restricted Subsidiary thereof),

 

(i)         (i) the income of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject Person or any of its Restricted Subsidiaries) has a joint interest, except to the extent of the amount of dividends or distributions or other payments (including any ordinary course dividend, distribution or other payment) paid in cash (or to the extent converted into cash) to the Subject Person or any of its Restricted Subsidiaries by such Person during such period or (ii) the loss of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject Person or any of its Restricted Subsidiaries) has a joint interest, and

 

(j)         the effects of adjustments (including the effects of such adjustments pushed down to such Subject Person and its Restricted Subsidiaries) in component amounts required or permitted by GAAP and related authoritative pronouncements (including to property and equipment, lease, software, goodwill, in-process research and development, other intangible assets, deferred revenue and debt line items) resulting from the application of purchase or recapitalization accounting, as the case may be, in relation to any consummated acquisition or similar Investment or the amortization or write-off of any amounts thereof and, for the avoidance of doubt, the impact of GAAP-required purchase accounting treatment of deferred revenue from software licenses and other contracts acquired in the Transactions or any other consummated acquisitions.

 

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Notwithstanding the foregoing, for purposes of calculating the Available Amount, to the extent the same would otherwise be included in Consolidated Net Income, there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Capital Stock, any repurchases and redemptions of Capital Stock, any capital contributions with respect to Capital Stock or any sale of the Capital Stock of an Unrestricted Subsidiary, in each case, to the extent such amounts increase the Available Equity Amount, Available Excluded Contribution Amount or represent a Cure Amount.

 

“Consolidated Total Assets” means, as of any date of determination, the total amount of all assets of the Group Members, determined on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet delivered pursuant to Section 6.1(a) or (b), as applicable.

 

“Consolidated Total Debt” means, as to any Person at any date of determination, the aggregate principal amount of Indebtedness of such Person outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase or recapitalization accounting in connection with any acquisition or similar Investment)), consisting of (i) Indebtedness for borrowed money (including Reimbursement Obligations that have not been reimbursed within three Business Days and the outstanding principal balance of all Indebtedness of such Person represented by notes, bonds and similar instruments), (ii) Capital Lease Obligations, (iii) purchase money Indebtedness and (iv) Guarantee Obligations of such Person in respect of Indebtedness described in the foregoing clauses (i) through (iii), but without duplication of any such amounts to the extent already included in Consolidated Total Debt of the Group Members; provided that “Consolidated Total Debt” shall be calculated to exclude any Indebtedness of such Person if, upon or prior to the maturity thereof, such Person has irrevocably deposited with the proper Person in trust or escrow the necessary funds (or evidences of indebtedness) for the payment, redemption or satisfaction of such Indebtedness.

 

“Consolidated Working Capital” means, at any date, (a) Consolidated Current Assets on such date less (b) Consolidated Current Liabilities on such date.

 

“Contract Consideration” has the meaning specified in the definition of the term “Excess Cash Flow”.

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

 

“Corrective Extension Agreement” has the meaning specified in Section 2.28(e).

 

“Cost Saving Initiative” has the meaning specified in the definition of the term “Consolidated EBITDA”.

 

“Credit Agreement Refinancing Commitments” means the Credit Agreement Refinancing Term Commitments and/or the Credit Agreement Refinancing Revolving Commitments, as the context requires.

 

“Credit Agreement Refinancing Debt” has the meaning specified in Section 7.2(a)(ii).

 

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“Credit Agreement Refinancing Revolving Commitments” means revolving commitments established in reliance on Section 7.2(a)(ii) that are evidenced by the Loan Documents.

 

“Credit Agreement Refinancing Revolving Facility” means each Class of Credit Agreement Refinancing Revolving Commitments.

 

“Credit Agreement Refinancing Revolving Loans” means the revolving loans made pursuant to the Credit Agreement Refinancing Revolving Commitments.

 

“Credit Agreement Refinancing Term Commitments” means commitments to make term loans established in reliance on Section 7.2(a)(ii) that are evidenced by the Loan Documents.

 

“Credit Agreement Refinancing Term Facility” means each Class of Credit Agreement Refinancing Term Loans.

 

“Credit Agreement Refinancing Term Loans” means the term loans made pursuant to the Credit Agreement Refinancing Term Commitments.

 

“Credit Suisse” has the meaning specified in the introductory paragraph.

 

“CS” has the meaning specified in the introductory paragraph.

 

“Curable Period” has the meaning specified in Section 7.1(b).

 

“Cure Amount” has the meaning specified in Section 7.1(b).

 

“Cure Right” has the meaning specified in Section 7.1(b).

 

“Debt Fund Affiliate” means any Affiliate of an Investor (other than a natural person) that is a bona fide debt fund or investment vehicle that is either primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course, but only to the extent that no personnel involved with the investment in any equity fund which has a direct or indirect equity investment in Holdings or any Group Member makes (or has the right to make or participate with others in making) investment decisions on such Affiliate’s behalf.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Declined Proceeds” has the meaning specified in Section 2.12(e).

 

“Default” means any of the events specified in Section 8.1, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

“Default Rate” means an interest rate per annum equal to (a) in the case of overdue principal or interest of any Loan, 2.00% per annum plus the rate otherwise applicable to such Loan as provided in Section 2.15(a) or (b), as applicable, and (b) in the case of fees, 2.00% plus the rate applicable to Revolving Loans that are ABR Loans as provided in Section 2.15(b), in each case, to the fullest extent permitted by applicable Laws.

 

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“Defaulting Lender” means, subject to Section 2.26(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder, or (ii) pay to the Administrative Agent, any Issuing Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any Issuing Lender in writing that it does not intend to comply with such Lender’s funding obligations hereunder, or has made a public statement to that effect, (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other Federal or state regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in such Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender; provided, further, that the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator with respect to a Lender or its affiliate under the Dutch Financial Supervision Act 2007 (as amended from time to time and including any successor legislation) shall not be deemed an event described in clause (d) above or (e) a Lender has, or has a direct or indirect parent company that has, become the subject of a Bail-In Action.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (e) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.26(b)) upon delivery of written notice of such determination to the Borrower, each Issuing Lender and each Lender.

 

“Designated Non-Cash Consideration” means the Fair Market Value of non-cash consideration received by any Group Member in connection with a Disposition pursuant to Section 7.5(e) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent, setting forth the basis of such valuation (which amount will be reduced by (i) the Fair Market Value of the portion of the non-cash consideration converted to cash within 180 days following the consummation of the applicable Disposition and (ii) the amount of Cash Equivalents received by the Group Members in connection with a subsequent sale of such Designated Non-Cash Consideration, which Cash Equivalents are received within one year following the consummation of the applicable Disposition).

 

“Disposition” means, with respect to any Property, any sale, license, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof (including any sale, assignment, transfer or other disposal, with or without recourse of any notes or accounts receivable or any rights and claims associated therewith); provided that “Disposition” shall not be deemed to include any issuance by any Parent Company of any of its Capital Stock or, prior to the Holding Company Election, by the Borrower, to another Person.  The terms “Dispose” and “Disposed of” shall have correlative meanings.

 

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“Disqualified Capital Stock” means Capital Stock that, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition, (a) requires the payment of any dividends (other than dividends payable solely in shares of Qualified Capital Stock) prior to the date that is 91 days after the Latest Term Loan Maturity Date or, if later, the latest scheduled maturity date of any Specified Junior Debt as of the date of issuance, (b) matures or is mandatorily redeemable or subject to mandatory repurchase or redemption or repurchase or redemption at the option of the holders thereof (other than solely for Qualified Capital Stock), in each case in whole or in part and whether upon the occurrence of any event, pursuant to a sinking fund obligation on a fixed date or otherwise (including as the result of a failure to maintain or achieve any financial performance standards), prior to the date that is 91 days after the Latest Term Loan Maturity Date or, if later, the latest scheduled maturity date of any Specified Junior Debt as of the date of issuance (other than (i) upon payment in full of the Obligations (other than indemnification and other contingent obligations not yet due and owing) or (ii) upon a “change in control”, asset sale or casualty, condemnation or similar event; provided that any payment required upon the occurrence of any event described in this clause (ii) is subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent) or (c) are convertible or exchangeable, automatically or at the option of any holder thereof, into any Indebtedness, Capital Stock or other assets other than Qualified Capital Stock; provided that, in each case, if such Capital Stock is issued to any plan for the benefit of any Employee of a Group Member (or Parent Company) or by any such plan to such Employee, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by a Group Member in order to satisfy applicable statutory or regulatory obligations so long as such repurchase is permitted by the terms of Section 7.6; provided, further, that any Capital Stock held by any present or former Employees (or any affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any Employee) of a Group Member (or Parent Company) upon the death, disability, engaging in competitive activity or termination of employment of such Employee or pursuant to any equity subscription, shareholder, employment or other agreement shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by a Group Member so long as such repurchase is permitted by the terms of Section 7.6.

 

“Disqualified Institution” means (a) any Person that is or becomes a Company Competitor and is identified in writing to the Lead Arrangers or, after the Closing Date, to the Administrative Agent, (b) any other Person identified in writing to the Lead Arrangers on or prior to June 16, 2016, and (c) any Affiliate of any of the Persons described in clauses (a) and (b) (other than a Bona Fide Debt Fund of a Person described in clause (a)) identified in writing to the Administrative Agent as such not less than three (3) Business Days prior to such date or that is reasonably identifiable solely on the basis of its name as an Affiliate of any such Person; provided that “Disqualified Institutions” shall exclude any Person that the Borrower has designated as no longer being a “Disqualified Institution” by written notice delivered to the Administrative Agent from time to time.

 

“Dollars” and “$” means dollars in lawful currency of the United States.

 

“Domestic Subsidiary” means any direct or indirect Subsidiary of the Borrower incorporated or organized under the laws of the US, any state thereof or the District of Columbia.

 

“DQ List” has the meaning specified in Section 10.6(j)(iv).

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

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“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Effective Yield” means, as to any Indebtedness, the effective yield on such Indebtedness in the reasonable determination of the Administrative Agent in consultation with the Borrower and consistent with generally accepted financial practices, taking into account the applicable interest rate margins, any interest rate floors (the effect of which floors shall be determined in a manner set forth in the proviso below) or similar devices, any amendment to the relevant interest rate margins and interest rate floors prior to the applicable date of determination and all upfront or similar fees or original issue discount (converted to yield assuming the shorter of (i) the weighted average life of the applicable Indebtedness at the time such Indebtedness was incurred and (ii) a four-year life and, in each case, without any present value discount) generally paid or payable to the providers of such Indebtedness, but excluding any arrangement, commitment, amendment, structuring and underwriting fees paid or payable to the arrangers (or their Affiliates) of such Indebtedness in their capacities as such (regardless of whether any such fees are paid to or shared in whole or part with any lender) and any other fee (including, if applicable, ticking fees) not generally paid to all lenders ratably; provided that with respect to any Indebtedness that includes a “LIBOR floor” that is higher than the “LIBOR floor” then applicable to the Initial Term Loan, (1) to the extent that the Reference Rate on the date that the Effective Yield is being calculated is less than such higher floor, the amount of the difference between the two floors shall be deemed added to the interest rate margin for such Indebtedness for the purpose of calculating the Effective Yield and (2) to the extent that the Reference Rate on the date that the Effective Yield is being calculated is greater than such higher floor, then the floor shall be disregarded in calculating the Effective Yield.

 

“Employee” means, with respect to any Person, any director, officer, employee, member of management, manager or consultant of such Person.

 

“Engagement Letter” means the Engagement Letter dated as of May 25, 2016, among the Borrower and the Lead Arrangers.

 

“Environmental Claims” means any and all actions, suits, orders, decrees, demands, demand letters, claims, liens, notices of noncompliance, violation or potential responsibility or investigation (other than internal reports prepared by the Borrower or any of its Subsidiaries (a) in the ordinary course of such Person’s business or (b) as required in connection with a financing transaction or an acquisition or disposition of real estate) or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereinafter, “Claims”), including (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive or other equitable relief relating to the presence, release or threatened release of Hazardous Materials or arising from alleged injury or threat of injury to human health or safety to the extent relating to human exposure to Hazardous Materials or arising from alleged injury or threat of injury to the environment including ambient air, surface water, groundwater, land surface, subsurface strata, and natural resources, and (iii) any and all Claims by any third party regarding environmental liabilities or obligations assumed or assigned by contract or operation of law.

 

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“Environmental Laws” means any applicable Federal, state, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, relating to the protection of the environment, including ambient air, surface water, groundwater, land surface, subsurface strata, and natural resources, or of human health or safety to the extent relating to human exposure to Hazardous Materials.

 

“ERISA” means the Employee Retirement Income Security Act of 1974 and any regulations promulgated thereunder.

 

“ERISA Event” means any (a) Reportable Event, (b) the withdrawal or partial withdrawal from a Single Employer Plan subject to Section 4063 of ERISA or Multiemployer Plan during a plan year in which a Group Member was a substantial employer, as defined in Section 4001(a)(2) of ERISA or a substantial cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, (c) the failure by a Group Member or any Commonly Controlled Entity to make when due required contributions to a Multiemployer Plan or Single Employer Plan or the filing pursuant to Section 412 of the Code or Section 302 of ERISA of an application for a waiver of the minimum funding standard, (d) any liability with respect to the withdrawal or partial withdrawal (as such terms are defined in Part I of Subtitle E of Title IV of ERISA) from any Multiemployer Plan, (e) the incurrence by a Group Member of any liability under Title IV of ERISA with respect to the termination of any Single Employer Plan or Multiemployer Plan; (f) the institution of proceedings to terminate a Single Employer Plan or a Multiemployer Plan by the PBGC or the imposition of any Lien in favor of the PBGC on a Single Employer Plan has arisen; (g) the receipt of any notice concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, “insolvent” (within the meaning of Section 4245 of ERISA) or in “at risk” (within the meaning of Section 430 of the Code or Section 303 of ERISA), “critical” or “endangered” status (within the meaning of Section 432 of the Code or Section 305 of ERISA); or (h) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which results in material liability to any Group Member.

 

“E-System” means any electronic system, including Intralinks®, ClearPar® and SyndTrak® and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent, any of its Affiliates or agents or any other Person, providing for access to data protected by passcodes or other security system.

 

“Eurocurrency Reserve Requirements” means, with respect to any Interest Period and for any Eurodollar Loan, a rate per annum equal to the aggregate, without duplication, of the maximum rates (expressed as a decimal number) (rounded up, if necessary, to the nearest 1/100 of 1%) of reserve requirements (including basic, supplemental, marginal and emergency reserves) in effect on any day to which any Lender is subject to any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “eurocurrency liabilities” in Regulation D of the Board) maintained by a member bank of the United States Federal Reserve System.  Eurodollar Loans shall be deemed to constitute Eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemption or offsets that may be available from time to time to any Lender under Regulation D. The Eurocurrency Reserve Requirement shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Eurodollar Base Rate” means, for any Interest Period with respect to a Eurodollar Loan or any ABR Loan based upon the ABR determined pursuant to clause (iii) of the definition thereof, (x) the rate determined by the Administrative Agent to be the offered rate appearing on the page of the Reuters Screen LIBOR01 (or any successor thereto), which displays the London interbank offered rate

 

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administered by ICE Benchmark Administration Limited (or any other Person that takes over the administration of that rate) (the “LIBO Rate”) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or, if the rate mentioned in sub-clause (x) does not appear on such page or service or if such page or service is not available, then (y) the rate per annum determined by the Administrative Agent to be the offered rate on such other page or other service which displays the LIBO Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or, if the rates in clauses (x) and (y) are not available, then (z) the Interpolated Rate, in each case, by 11:00 A.M. (London, England time) two Business Days prior to the first day of such Interest Period; provided that, in no event shall the Eurodollar Base Rate be less than 0%.

 

“Eurodollar Loan” means Loans (other than ABR Loans) the rate of interest applicable to which is based upon the Eurodollar Rate.  Eurodollar Loans shall be denominated in Dollars.

 

“Eurodollar Rate” means, for any Interest Period with respect to any Eurodollar Loan, the greater of (a) the rate per annum obtained by dividing (i) Eurodollar Base Rate for such Interest Period by (ii) a percentage equal to 100% minus the Eurodollar Reserve Requirements and (b) solely with respect to the Initial Term Loans, 1.00% per annum.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

 

“Event of Default” means any of the events specified in Section 8.1; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

“Excess Cash Flow” means, for any period, an amount equal to:

 

(a)        Consolidated Net Income for such period; plus

 

(b)        if there was a net decrease (other than any such decrease arising from (i) the acquisition or Disposition of any Person by any Group Member, (ii) the reclassification during such period of current assets to long term assets and current liabilities to long term liabilities, (iii) the application of purchase and/or recapitalization accounting and (iv) the effect of any fluctuation in the amount of accrued and contingent obligations under any Hedge Agreement) in Consolidated Working Capital during such period, the amount of such net decrease; plus

 

(c)        an amount equal to the amount of all Non-Cash Charges (including, without limitation, depreciation and amortization) to the extent deducted in arriving at such Consolidated Net Income; plus

 

(d)        cash payments received in respect of Hedging Agreements during such period to the extent not included in arriving at such Consolidated Net Income; plus

 

(e)        tax expense of the Group Members in respect of federal, foreign, state, franchise, excise and similar taxes on income, profits and capital and foreign withholding taxes and foreign unreimbursed value added taxes and excise and sales tax (including in respect of repatriated funds and any penalties and interest related to such taxes or arising from any tax examinations and including pursuant to any tax sharing arrangement or as a result of any tax distribution), to the extent deducted in arriving at such Consolidated Net Income; minus

 

(f)        the sum, without duplication, of:

 

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(i)         the aggregate principal amount of (1) all mandatory prepayments and scheduled repayments of any Indebtedness of the Group Members during such period (other than (x) any mandatory prepayment required pursuant to Section 2.12(a) due to the incurrence of Indebtedness, (y) any mandatory prepayment required pursuant to Section 2.12(b) due to an Asset Sale or Recovery Event (except to the extent the proceeds of such Asset Sale or Recovery Event increased Consolidated Net Income) and (z) any mandatory prepayment required pursuant to Section 2.12(c) due to the existence of Excess Cash Flow) and (2) all voluntary prepayments of Indebtedness of the Group Members during such period (other than (x) any voluntary prepayment deducted from the amount of any mandatory prepayment required pursuant to Section 2.12(c) pursuant to clause (ii) thereof and (y) any voluntary prepayment of revolving Indebtedness, except to the extent any related commitment is permanently reduced in connection with such prepayment), in each case of clauses (1) and (2), other than such prepayments or repayments funded with the proceeds of the incurrence of long-term Indebtedness (other than revolving Indebtedness) by the Group Members,

 

(ii)        without duplication of amounts deducted (whether pursuant to clause (viii) below or other clauses) in any other period, the amount of Capital Expenditures made in cash during such period by the Group Members and, at the election of the Borrower, after such period and prior to the date of the applicable Excess Cash Flow payment, in each case, other than Capital Expenditures financed with the incurrence of long term Indebtedness (other than revolving Indebtedness) by the Group Members,

 

(iii)       if there was a net increase (other than any such increase arising from (1) the acquisition or Disposition of any Person by any Group Member, (2) the reclassification during such period of current assets to long term assets and current liabilities to long term liabilities, (3) the application of purchase and/or recapitalization accounting and (4) the effect of any fluctuation in the amount of accrued and contingent obligations under any Hedge Agreement) in Consolidated Working Capital during such period, the amount of such net increase,

 

(iv)       cash payments by the Group Members during such period in respect of long-term liabilities or other obligations of the Group Members other than Indebtedness (other than cash payments in respect of claims offset by receivables from insurance companies) and in each case to the extent not deducted in determining Consolidated Net Income,

 

(v)        without duplication of amounts deducted (whether pursuant to clause (viii) below or other clauses) in any other period, the amount of Permitted Acquisitions and Investments made in cash during such period and, at the election of the Borrower, after such period and prior to the date of the applicable Excess Cash Flow payment, pursuant to Section 7.7, in each case, other than (A) Investments described in Section 7.7 (a), (b), (h), (i), (k), (s) and (t), (B) Investments among the Group Members and (C) the portion, if any, of Investments and Permitted Acquisitions funded with the proceeds of the incurrence of long term Indebtedness (other than revolving Indebtedness) by the Group Members,

 

(vi)       without duplication of amounts deducted in any other period, permitted Restricted Payments made in cash during such period and, at the election of the Borrower, after such period and prior to the date of the applicable Excess Cash Flow payment, pursuant to Section 7.6, in each case, to the extent not already deducted from Consolidated Net Income and other than (A) Restricted Payments described in Section 7.6(a)(iv), (e)(i), (g) or (i) and (B) Restricted Payments funded with the proceeds of the incurrence of long term Indebtedness (other than revolving Indebtedness) by the Group Members,

 

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(vii)      the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by the Group Members during such period that are required to be made in connection with any prepayment of Indebtedness, in each case, to the extent permitted to be paid hereunder and not already deducted from Consolidated Net Income,

 

(viii)     without duplication of amounts deducted from Excess Cash Flow in other periods, at the election of the Borrower, (A) the aggregate consideration required to be paid in cash by the Group Members pursuant to binding contracts (the “Contract Consideration”) entered into prior to or during such period and (B) any planned cash expenditures by the Group Members (the “Planned Expenditures”), in the case of each of clauses (A) or (B), relating to Permitted Acquisitions, Investments and/or Capital Expenditures to be consummated or made after such period and prior to the date of the applicable Excess Cash Flow payment; provided that to the extent the aggregate amount of cash (excluding any cash constituting proceeds of the incurrence of long term Indebtedness (other than revolving Indebtedness) by the Group Member) actually utilized to finance such Permitted Acquisitions, Investments and/or Capital Expenditures after such period and prior to the date of the applicable Excess Cash Flow payment is less than the Contract Consideration, the amount of such shortfall shall be added to the succeeding calculation of Excess Cash Flow,

 

(ix)       the amount of taxes based on income or profits or capital, including federal, foreign, state, franchise, excise and similar taxes and foreign withholding taxes and foreign unreimbursed value added taxes of the Group Members and excise and sales tax expense (including in respect of repatriated funds and any penalties and interest related to such taxes or arising from any tax examinations and including pursuant to any tax sharing arrangement or as a result of any tax distribution, but net of any refunds of any taxes described in this clause (f)(ix)) paid in cash during such period,

 

(x)        cash payments made in respect of Hedging Agreements during such period to the extent not deducted in arriving at such Consolidated Net Income, and

 

(xi)       without duplication to the extent already deducted in calculating Excess Cash Flow, the amount of all non-cash credits to the extent included in arriving at Consolidated Net Income and cash Charges paid to the extent attributable to Charges excluded in calculating Consolidated Net Income in the current or prior periods.

 

Notwithstanding anything to the contrary herein, for purposes of calculating Excess Cash Flow for the fiscal year ending December 31, 2016, the Excess Cash Flow period for such fiscal year shall commence on July 1, 2016 and end on December 31, 2016.

 

“Excess Cash Flow Percentage” means 50%; provided that the Excess Cash Flow Percentage for any fiscal year with respect to which Excess Cash Flow is measured shall be reduced to (a) 25%, if the First Lien Leverage Ratio as of the last day of such fiscal year is equal to or less than 3.50:1.00, and (b) 0%, if the First Lien Leverage Ratio as of the last day of such fiscal year is equal to or less than 3.00:1.00.

 

“Excluded Assets” means each of the following:

 

(a)        the Capital Stock of (i) any first-tier Foreign Subsidiary of a Loan Party and (ii) any first-tier FSHCO of a Loan Party, in each case, in excess of 65% of the issued and outstanding voting Capital Stock and 100% of the issued and outstanding non-voting Capital Stock of any such Person,

 

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(b)                              any owned or leasehold interest in real estate that is not Material Real Estate,

 

(c)                               any interest in any partnership, joint venture or non-Wholly-Owned Subsidiary which cannot be pledged without (i) the consent of one or more third parties other than Holdings or a Group Member (after giving effect to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) or any similar provisions of any relevant jurisdiction or any other applicable Law) or (ii) giving rise to a “right of first refusal”, a “right of first offer” or a similar right permitted or otherwise not prohibited by the terms of this Agreement that may be exercised by any third party other than Holdings or a Group Member in accordance with the Organizational Documents (and/or shareholders’ or similar agreement) of such partnership, joint venture or non-Wholly-Owned Subsidiary,

 

(d)                              the Capital Stock of (i) any Immaterial Subsidiary, (ii) any not-for-profit Subsidiary, (iii) any Subsidiary that is subject to regulation as an insurance company (and any Subsidiary thereof), (iv) any special purpose entity used for any permitted securitization or receivables facility or financing and (v) any Unrestricted Subsidiary,

 

(e)                               any Margin Stock,

 

(f)                                any Property, the grant of a security interest in which, would (i) require any governmental consent, approval, license or authorization that has not been obtained (including under any applicable Gaming Regulations), (ii) be prohibited by applicable Law (including under any applicable Gaming Regulations), except, in each case of clause (i) above and this clause (ii), to the extent such requirement or prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) or any similar provisions of any relevant jurisdiction or any other applicable Law; it being understood that the term “Excluded Asset” shall not include proceeds or receivables arising out of any asset described in clause (f)(i) or clause (f)(ii) unless such proceeds or receivables independently constitute “Excluded Assets” hereunder or (iii) result in material and adverse tax consequences to any Loan Party (as reasonably determined by the Borrower in consultation with the Administrative Agent),

 

(g)                               (i) any foreign Intellectual Property (and Intellectual Property relating only to Foreign Subsidiaries) and (ii) any intent-to-use Trademark application prior to the filing and acceptance of a “Statement of Use”, “Amendment to Allege Use” or similar notice and/or filing with respect thereto, only to the extent, if any, that, and solely during the period if any, in which, the grant of a security interest therein may impair the validity or enforceability of such intent-to-use Trademark application under applicable Law,

 

(h)                              any Commercial Tort Claims with a value (as reasonably estimated by the Borrower) of less than $5,000,000,

 

(i)                                  [Reserved],

 

(j)                                  any asset that may not be encumbered or pledged as collateral pursuant to applicable Gaming Regulations (including, to the extent prohibited by applicable Gaming Regulations, Gaming Permits and slot machines of the Guarantors operating in the State of Missouri (which on the Closing Date are HGI-St. Jo, LLC and HGI-Mark Twain, LLC)), except, in the case of this clause (j), to the extent such requirement or prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) or any similar provisions of any relevant jurisdiction or any other applicable Law; it being understood that the term “Excluded Asset” shall not include proceeds or receivables arising out of any asset described in clause (j) unless such proceeds or receivables independently constitute “Excluded Assets” hereunder,

 

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(k)                              any general intangibles or other rights arising under any Contractual Obligation as to which the grant of a security interest would (i) constitute a violation of a restriction in favor of a counterparty to such Contractual Obligation (other than Holdings or a Group Member) or result in the cancellation, abandonment, invalidation or unenforceability of any right of the relevant Loan Party, unless and until any required consents shall have been obtained, (ii) result in a breach, termination (or a right of termination) or default under such Contractual Obligation (including pursuant to any “change of control” or similar provision) or (iii) permit any third party (other than Holdings or a Group Member) to amend any rights, benefits and/or obligations of the relevant Loan Party in respect of the relevant asset or permit such third party to require any Loan Party or any Subsidiary of the Borrower to take any action materially adverse to the interests of such subsidiary or Loan Party; provided, however, that any such asset will only constitute an “Excluded Asset” under clause (i) or clause (ii) above to the extent such violation, cancellation, abandonment, invaldition, unenforceability, breach, termination (or right of termination) or default would not be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable Law; provided, further, that any such asset shall cease to constitute an “Excluded Asset” at such time as the condition causing such violation, cancellation, abandonment, invaldition, unenforceability, breach, termination (or right of termination) or default or right to amend or require other actions no longer exists and to the extent severable, the security interest granted under the applicable Security Document shall attach immediately to any portion of such general intangible or other right that does not result in any of the consequences specified in clauses (i) through (iii) above,

 

(l)                                  any cash or Cash Equivalents maintained in or credited to any deposit account or securities account that are comprised of (i) funds specifically and exclusively used or to be used for payroll and payroll taxes and other employee benefit payments to or for the benefit of any Loan Party’s employees, (ii) funds specifically and exclusively used or to be used to pay Taxes required to be collected, remitted or withheld (including withholding Taxes (including the employer’s share thereof)) and (iii) any other funds which any Loan Party is permitted or otherwise not prohibited by the terms of this Agreement to hold as an escrow or fiduciary for the benefit of another Person in the ordinary course of business, and

 

(m)                          any asset with respect to which the Administrative Agent and the Borrower have reasonably determined that the cost, burden, difficulty or consequence (including any effect on the ability of the relevant Loan Party to conduct its operations and business in the ordinary course of business) of obtaining or perfecting a security interest therein outweighs the benefit of a security interest to the relevant Secured Parties afforded thereby.

 

“Excluded Subsidiary” means:

 

(a)                               any Subsidiary that is not a Wholly-Owned Subsidiary on any date such Subsidiary would otherwise be required to become a Guarantor pursuant to the requirements of Section 6.8 (for so long as such Subsidiary is not a Wholly-Owned Subsidiary),

 

(b)                              any Subsidiary that is prohibited by (x) subject to clause (g) below, applicable Law or (y) Contractual Obligation from guaranteeing the Obligations (and for so long as such restriction is in effect); provided that, in the case of clause (y), such Contractual Obligation existed on the Closing Date or, with respect to any Subsidiary acquired by the Borrower or a Restricted Subsidiary after the Closing Date, on the date such Subsidiary is so acquired (and was not created in anticipation of such acquisition),

 

(c)                               (i) any direct or indirect Foreign Subsidiary or (ii) any Domestic Subsidiary that is (A) a FSHCO or (B) a direct or indirect Subsidiary of a Foreign Subsidiary or a FSHCO,

 

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(d)                              any Immaterial Subsidiary,

 

(e)                               any Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower (confirmed in writing by notice to the Borrower), the cost of providing a Guarantee outweighs the benefits to be obtained by the Lenders therefrom,

 

(f)                                any Unrestricted Subsidiary,

 

(g)                               any Subsidiary that would require any consent, approval, license or authorization from any Governmental Authority to provide a Guarantee (including any regulatory consent, approval, license or authorization and any consent, approval, license or authorization under any financial assistance, corporate benefit, thin capitalization, capital maintenance, liquidity maintenance or similar legal principle), unless such consent, approval, license or authorization has been received; provided that the Borrower shall, or shall cause the relevant Group Member, to use commercially reasonable efforts to obtain any such consent, approval, license or authorization relating to the Gaming Business, and

 

(h)                              any not-for-profit Subsidiary, any Subsidiary that is subject to regulation as an insurance company (and any Subsidiary thereof), and any special purpose entity used for any permitted securitization or receivables facility or financing.

 

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder (determined after giving effect to Section 2.9 of the Guarantee and Collateral Agreement and any other “keepwell”, support or other agreement for the benefit of such Loan Party) at the time the guaranty of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation.  If any Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty or security interest is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender or Issuing Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Commitment or Letter of Credit pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Commitment or Letter of Credit (other than pursuant to an assignment request by the Borrower under Section 2.24) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.20, amounts with respect to such Taxes were payable either to such Recipient’s assignor immediately before such Recipient became a party hereto or to such Recipient immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.20(e) or Section 2.20(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

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“Existing Credit Agreement” means that certain Credit Agreement, dated May 9, 2012, among the Borrower, Deutsche Bank Trust Company Americas, as administrative agent and as collateral agent, the other agents party thereto and the lenders from time to time party thereto, as the same has been amended or supplemented prior to the Closing Date

 

“Existing Notes” means those certain 9% senior notes due 2018 and issued pursuant to that certain Indenture, dated May 9, 2012, by and among the Borrower, Affinity Gaming Finance Corp., the guarantors party thereto, U.S. Bank, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar, transfer agent and authenticating agent, as the same has been amended or supplemented prior to the Closing Date.

 

“Existing Revolving Commitments” has the meaning specified in Section 2.28(a)(ii).

 

“Existing Revolving Class” has the meaning specified in Section 2.28(a)(ii).

 

“Existing Revolving Loans” has the meaning specified in Section 2.28(a)(ii).

 

“Existing Term Loan Class” has the meaning specified in Section 2.28(a)(i).

 

“Expected Cost Savings” has the meaning specified in the definition of the term “Consolidated EBITDA”.

 

“Extended Loans/Commitments” means the Extended Term Loans, Extended Revolving Loans and/or Extended Revolving Commitments.

 

“Extended Revolving Commitments” has the meaning specified in Section 2.28(a)(ii).

 

“Extended Revolving Facility” means each Class of Extended Revolving Commitments established pursuant to Section 2.28(a)(ii).

 

“Extended Revolving Loans” has the meaning specified in Section 2.28(a)(ii).

 

“Extended Term Facility” means each Class of Extended Term Loans made pursuant to Section 2.28.

 

“Extended Term Loans” has the meaning specified in Section 2.28(a)(i).

 

“Extending Lender” has the meaning specified in Section 2.28(b).

 

“Extension Agreement” has the meaning specified in Section 2.28(c).

 

“Extension Date” has the meaning specified in Section 2.28(d).

 

“Extension Election” has the meaning specified in Section 2.28(b).

 

“Extension Request” means, collectively, Term Loan Extension Requests and Revolving Extension Requests.

 

“Extension Series” means all Extended Term Loans or Extended Revolving Commitments (as applicable) that are established pursuant to the same Extension Agreement (or any subsequent Extension Agreement to the extent such Extension Agreement expressly provides that the Extended Term Loans or Extended Revolving Commitments, as applicable provided for therein are intended to be a part of any previously established Extension Series) and that provide for the same interest margins, extension fees, if any, and amortization schedule (if any).

 

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“Facility” means any of the Initial Term Facility, the Initial Revolving Facility and/or any Other Facility, as the context requires.  “Facilities” shall mean all of the forgoing collectively then existing.

 

“Facility Termination Date” means the date as of which all of the following shall have occurred:  (a) the Commitments have terminated, (b) all Obligations have been paid in full (other than (i) contingent indemnification obligations as to which no claim has been asserted and (ii) other contingent liabilities as to which no claim has been asserted) and (c) all Letters of Credit have terminated or expired (other than Letters of Credit which have been Cash Collateralized).

 

“Fair Market Value” means, with respect to any asset or group of assets on any date of determination, the price in cash obtainable in a sale of such asset at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, as determined in good faith by the Borrower.

 

“FATCA” means Sections 1471 through 1474 of the Code (effective as of the date hereof) (or any amended or successor version that is substantively comparable) and any current or future regulations or official interpretations thereof and any intergovernmental agreements and agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day.

 

“Fee Letters” means the Agent Fee Letter and the Side Fee Letter.

 

“Fee Payment Date” means (a) the last Business Day of each of March, June, September and December, commencing with September 30, 2016, and (b) the last day of the Revolving Commitment Period.

 

“Financial Condition Covenant” has the meaning specified in Section 7.1(b).

 

“Financial Requirements” has the meaning specified in Section 6.1.

 

“First Lien Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated First Lien Debt as of the last day of the most recently ended Test Period to (b) Consolidated EBITDA for the most recently ended Test Period, in each case, of the Group Members on a consolidated basis.

 

“Fixed Amounts” has the meaning specified in Section 1.6(e).

 

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“Fixed Incremental Amount” means (a) $70,000,000 minus, to the extent previously or simultaneously incurred, (b)(i) the aggregate principal amount of all Incremental Facilities and/or Incremental Equivalent Debt incurred or issued in reliance on the Fixed Incremental Amount and (ii) the aggregate principal amount of Specified Second Lien Incremental Debt incurred or issued in reliance on clause (a) in the proviso of the definition of “Specified Second Lien Incremental Debt”.

 

“Foreign Disposition” has the meaning specified in Section 2.12(h).

 

“Foreign Pension Plan” means any plan, fund (including any super-annuation fund) or other similar program that is not subject to the law of the United States of America (including, without limitation, ERISA or the Code) and that is established or maintained outside of the United States of America by any Group Member primarily for the benefit of employees of such Group Member residing outside the United States of America, which plan, fund, or similar program provides or results in retirement income, a deferral of income in contemplation of retirement, or payments to be made upon termination of employment.

 

“Foreign Recovery Event” has the meaning specified in Section 2.12(h).

 

“Foreign Subsidiary” means any direct or indirect Subsidiary that is not a Domestic Subsidiary.

 

“Former Lender” shall have the meaning provided in Section 10.6(k).

 

“Fronting Exposure” means, at any time there is a Defaulting Lender with respect to any Issuing Lender, such Defaulting Lender’s Revolving Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Lenders or Cash Collateralized in accordance with the terms hereof.

 

“FSHCO” means any direct or indirect Domestic Subsidiary, (a) substantially all of the assets of which consist of Capital Stock and/or Indebtedness of one or more direct or indirect Foreign Subsidiaries or (b) that is treated as a disregarded entity for United States federal income tax purposes, that has no material assets other than Capital Stock and/or Indebtedness of one or more direct or indirect Foreign Subsidiaries.

 

“Funding Office” means the office specified from time to time by the Administrative Agent as its funding office by notice to the Borrower and the Lenders.

 

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

“Gaming Authorities” shall mean the Governmental Authorities charged with the administration and enforcement of the Gaming Regulations.

 

“Gaming Business” and “Gaming Businesses” shall mean the businesses and operations of the Borrower and its Subsidiaries with respect to, and the properties and assets of the Borrower and its Subsidiaries used in connection with, any casinos (including riverboat and hotel casinos and all gaming devices therein), or other gaming businesses and other lines of business incidental thereto, including, but not limited to, the manufacture, sale or distribution of liquor or alcoholic beverages related to the foregoing gaming businesses, now or in the future owned by the Borrower or any of its Subsidiaries or in which the Borrower or any of its Subsidiaries has an interest either through a joint venture or as a party to a management agreement.

 

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“Gaming Collateral” shall mean all “Collateral,” as defined in the Guarantee and Collateral Agreement, the creation of a Lien on which is subject to the approval of any Gaming Authority.

 

“Gaming Permits” shall mean, collectively, every license, permit, consent, approval, registration, finding of suitability, waiver, exemption or other authorization required to own, operate or otherwise conduct or own an interest in an entity or manage an entity which owns, operates or otherwise conducts, casino, gaming or liquor operations granted or issued by any Gaming Authority and any other applicable Governmental Authorities.

 

“Gaming Regulations” shall mean the laws, rules, regulations and orders applicable to the ownership or conduct of Gaming Businesses or casino and gaming activities of the Borrower or any of its Subsidiaries in any jurisdiction, as in effect from time to time, including the policies, interpretations and administration thereof by the Gaming Authorities, and applicable Liquor Laws.

 

“Governmental Authority” means any nation or government, any state, province or other political subdivision thereof and any agency, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government and, as to any Lender, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners) including any supra-national bodies such as the European Union or the European Central Bank.

 

“Group Member” means each of the Borrower and each Restricted Subsidiary.

 

“Guarantee and Collateral Agreement” means the Guarantee and Collateral Agreement to be executed and delivered by the Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit B.

 

“Guarantee Obligations” means, as to any Person, without duplication, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation or any other Person, whether or not such Indebtedness or other monetary obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee Obligations” shall not include endorsements for collection or deposit, in either case, in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition, Disposition or other transaction permitted under this Agreement (other than such obligations with respect to Indebtedness).  The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof (including by reference to the Fair Market Value of the property encumbered by a Lien securing any such amount, as applicable), in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.

 

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“Guarantors” means the collective reference to the Subsidiary Guarantors and any other Person who becomes a party to the Guarantee and Collateral Agreement (including, for the avoidance of doubt, upon the completion of a Holding Company Election, Holdings).

 

“Hazardous Materials” means (a) any petroleum or petroleum products, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, toxic mold, chlorofluorcarbons, lead-based paint, and radon gas; (b) any chemicals, wastes, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any Environmental Law; and (c) any other chemical, waste, material or substance which is prohibited, limited or regulated by or with respect to which liability is imposed under any Environmental Law.

 

“Hedge Agreements” means all agreements with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, in each case, entered into by a Group Member; provided that no phantom stock or similar plan providing for payments only on account of services provided by former Employees of the Group Members (or any Parent Company) shall constitute Hedge Agreements.

 

“Hedge Counterparty” means any Person that is a party to a Hedge Agreement that was any Agent, any Lead Arranger, any Lender or any Affiliate of any of them at the time any such Hedge Agreement was entered into, in each case in its capacity as party to a Hedge Agreement.

 

“Holding Company Election” means any election by the Borrower, made in writing and delivered to the Agents, to impose a direct parent holding company for the shares of the Borrower (which imposition may be effected via a newly-formed Subsidiary of the Borrower becoming such holding company via a share exchange or in any other manner).  In the event a Holding Company Election is made, the Borrower shall comply with Section 6.15 and Holdings shall execute and deliver the documentation required thereby.

 

“Holdings” means, any direct parent holding company of the Borrower that has become a Guarantor upon the completion of a Holding Company Election pursuant to Section 6.15 and any successor thereto pursuant to Section 7.11.

 

“Immaterial Subsidiary” means, at any date of determination, any Restricted Subsidiary (i) whose total assets (on a consolidated basis with its Subsidiaries) as of the last day of the Test Period most recently ended on or prior to the date of determination were less than 5% of the Consolidated Total Assets of the Group Members at such date (based upon the financial statements pursuant to Section 6.1(a) or (b) most recently delivered on or prior to such date) and (ii) whose gross revenues (on a consolidated basis with its Subsidiaries) for such Test Period were less than 5% of the consolidated gross revenues of the Group Members for such period, in each case determined in accordance with GAAP; provided that a Subsidiary shall not be permitted to be an Immaterial Subsidiary if (i) the aggregate amount of gross revenue for all Immaterial Subsidiaries exceeds 10% of the consolidated gross revenues of the Group Members as of the last day of the Test Period most recently ended on or prior to the date of determination or (ii) the aggregate amount of total assets for all Immaterial Subsidiaries exceeds 10% of the aggregate amount of Consolidated Total Assets of the Borrower and its Restricted Subsidiaries as of the last day of the Test Period most recently ended on or prior to the date of determination.

 

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“Impacted Loans” has the meaning specified in Section 2.17.

 

“Increased Revolving Commitment” has the meaning specified in Section 2.25(a).

 

“Increasing Revolving Commitment Lender” has the meaning specified in Section 2.25(e)(ii).

 

“Incremental Agreement” has the meaning specified in Section 2.25(e)(i).

 

“Incremental Commitments” means, collectively, the Incremental Term Commitments, the Increased Revolving Commitments and/or the Additional/Replacement Revolving Commitments, as the context requires.

 

“Incremental Equivalent Debt” means (i) Indebtedness in the form of notes or loans (or commitments in respect thereof) in lieu of loans (or commitments) under an Incremental Facility, which notes or loans may, at the election of the Borrower, be unsecured or secured by the Collateral on a pari passu or junior basis with Liens securing the Initial Facilities; provided that (w) the aggregate outstanding amount thereof does not exceed the Incremental Limit, (x) the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Incremental Equivalent Debt had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder), (y) for any Incremental Equivalent Debt incurred in lieu of Incremental Facilities pursuant to clause (e) of the Incremental Limit, (1) if such Incremental Equivalent Debt is secured by the Collateral on a pari passu basis with the then-existing Facilities, the First Lien Leverage Ratio would not exceed 4.20:1.00 and (2) if such Incremental Equivalent Debt is unsecured or secured by the Collateral on a junior basis to the then-existing Facilities, the Total Leverage Ratio would not exceed 5.25:1.00 (in each case under this clause (y), determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Incremental Equivalent Debt had been outstanding on the last day of such Test Period for testing compliance therewith and assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder) and (z) the Additional Debt Requirements are satisfied; and (ii) any Permitted Refinancing Debt in respect thereof.

 

“Incremental Facilities” has the meaning specified in Section 2.25(a).

 

“Incremental Facility Closing Date” has the meaning specified in Section 2.25(e)(i).

 

“Incremental Limit” means:

 

(a)                               the Fixed Incremental Amount, plus

 

(b)                              in the case of any Incremental Facility or Incremental Equivalent Debt that effectively replaces any Revolving Commitment terminated pursuant to Section 2.24 or any Term Loan repaid pursuant to clause (c) of Section 2.24, an amount equal to the relevant terminated Revolving Commitment or Term Loans so prepaid, plus

 

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(c)                               in the case of any Incremental Facility or Incremental Equivalent Debt that effectively extends the Maturity Date with respect to any Class of Loans and/or Commitments hereunder, an amount equal to the portion of the relevant Class of Loans or Commitments that will be replaced by such Incremental Facility or Incremental Equivalent Debt, plus

 

(d)                              (i) the amount of any optional prepayment of any Loan in accordance with Section 2.11 and/or the amount of any permanent reduction of any Commitment (other than any such Loan or Commitment incurred pursuant to clause (e) below) and (ii) the amount paid in cash in respect of any reduction in the outstanding amount of any Term Loan (other than any Term Loan incurred in reliance on clause (e) below) resulting from any assignment of such Term Loan to (and/or purchase of such Term Loan by) Holdings or any Group Member so long as the relevant prepayment or assignment and/or purchase was not funded with the proceeds of any long-term Indebtedness (other than revolving Indebtedness) incurred by the Group Members, plus

 

(e)                               an unlimited amount so long as, in the case of this clause (e), after giving effect to the relevant Incremental Facility or Incremental Equivalent Debt (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and subsequent funding of the term debt borrowed or issued thereunder) on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Incremental Facility had been outstanding on the last day of such Test Period for testing compliance therewith, the First Lien Leverage Ratio does not exceed 4.20:1.00 (it being understood that any incurrence of Incremental Equivalent Debt in reliance on this clause (e) shall instead be governed by the ratios set forth in clause (i)(y) of the definition of Incremental Equivalent Debt); plus

 

(f)                                solely for purposes of determining how much Indebtedness may be outstanding under this definition of “Incremental Limit,” but not for purposes of determining how much Indebtedness may then be incurred thereunder, amounts previously incurred in reliance on the “Incremental Limit” that otherwise reduced the Fixed Incremental Amount;

 

it being understood and agreed that unless the Borrower otherwise notifies the Administrative Agent, that (x) the Borrower shall be deemed to have used amounts under clauses (b) through (d) prior to utilization of amounts under clause (a) or (e), and (y) if all or any portion of the Incremental Facility and/or Incremental Equivalent Debt would be permitted under clause (e) of this definition on the applicable date of determination, such Incremental Facility and/or Incremental Equivalent Debt shall be deemed to have been incurred in reliance on clause (e) of this definition prior to the utilization of any amount available under clause (a).

 

“Incremental Loans” has the meaning specified in Section 2.25(a).

 

“Incremental Revolving Loans” has the meaning specified in Section 2.25(a).

 

“Incremental Term Commitment” has the meaning specified in Section 2.25(a).

 

“Incremental Term Facility” means each Class of Incremental Term Loans made pursuant to Section 2.25.

 

“Incremental Term Loans” has the meaning specified in Section 2.25(a).

 

“Incurrence-Based Amounts” has the meaning specified in Section 1.6(e).

 

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“Indebtedness” means, with respect to any Person at any date, without duplication:  (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of Property or services (other than (i) trade payables, accrued expenses, current accounts and similar obligations incurred in the ordinary course of such Person’s business (including on an inter-company basis), (ii) any earnout obligation until such obligation becomes a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP and has not been paid within thirty (30) days after becoming due and payable, (iii) any such obligations under ERISA, (iv) prepaid or deferred revenue arising in the ordinary course of business or (v) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warrants or other unperformed obligations of the seller of such asset) which purchase price is due more than six (6) months from the date of the incurrence of the obligation in respect thereof and evidenced by a note or similar written instrument, (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments to the extent the same would appear as a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person, (e) net obligations with respect to Hedge Agreements, (f) all Capital Lease Obligations of such Person, (f) the face amount of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings, (h) all obligations of such Person in respect of Disqualified Capital Stock, (i) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (h) above, and (j) the obligations of a third Person referred to in clauses (a) through (h) above secured by a Lien on any asset of such first Person, whether or not such Indebtedness is assumed by such first Person valued at the lesser of (x) the aggregate unpaid amount of such Indebtedness secured by such Lien and (y) the Fair Market Value of the property encumbered thereby.  For the avoidance of doubt, notwithstanding anything to the contrary set forth herein, (1) intercompany advances in the ordinary course of business in respect of operating costs (such as cash management obligations, royalty fees and transfer pricing) shall not constitute Indebtedness and (2) obligations which would otherwise constitute Indebtedness but which have been cash collateralized or amounts for the repayment thereof placed in escrow shall not constitute Indebtedness to the extent of such cash collateral or escrowed amounts.

 

“Indemnified Liabilities” has the meaning specified in Section 10.5(b).

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Indemnitee” has the meaning specified in Section 10.5(b).

 

“Initial Facilities” means the Initial Revolving Facility and the Initial Term Facility.

 

“Initial Revolving Commitments” means, as to any Lender, the obligation of such Lender, if any, to make Initial Revolving Loans and participate in Letters of Credit in an aggregate principal and/or face amount not to exceed the amount set forth opposite such Lender’s name on Appendix A-1 or, as the case may be, in the Assignment and Assumption (or Joinder Agreement, as the case may be) pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof.  The aggregate amount of the Initial Revolving Commitments on the Closing Date is $75,000,000.

 

“Initial Revolving Facility” means the Initial Revolving Commitments and the Initial Revolving Loans made thereunder.

 

“Initial Revolving Loans” has the meaning specified in Section 2.4.

 

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“Initial Term Facility” means the Initial Term Commitments and the Initial Term Loans made thereunder.

 

“Initial Term Lender” means each Lender that has an Initial Term Commitment or that holds an Initial Term Loan.

 

“Initial Term Loan” has the meaning specified in Section 2.1.

 

“Initial Term Commitment” means, as to any Lender, the obligation of such Lender, if any, to make an Initial Term Loan to the Borrower in a principal amount not to exceed the amount set forth opposite such Lender’s name on Appendix A-2 or, as the case may be, in the Assignment and Assumption (or Joinder Agreement, as the case may be) pursuant to which such Lender became a party hereto.  The aggregate amount of the Initial Term Commitments on the Closing Date is $300,000,000.

 

“Initial Term Maturity Date” means July 1, 2023.

 

“Insurance Policies” shall mean the insurance policies and coverages required to be maintained by each Group Member pursuant to Section 6.5 and all renewals and extensions thereof.

 

“Insurance Requirements” shall mean, collectively, all provisions of the Insurance Policies, all requirements of the issuer of any of the Insurance Policies and all orders, rules, regulations and any other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) binding upon each Group Member.

 

“Intellectual Property” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights and copyright applications, domain names, patents and patent applications, trademarks and trademark applications, trade names, technology, trade secrets, know-how and processes, including the right to receive all proceeds and damages therefrom.

 

“Intercompany Subordination Agreement” means an intercompany subordination agreement, in substantially the form of Exhibit N hereto, or otherwise in form and substance reasonably satisfactory to the Administrative Agent.

 

“Interest Charges” has the meaning specified in Section 10.20.

 

“Interest Payment Date” means (a) as to any ABR Loan, the last Business Day of each of March, June, September and December to occur while such Loan is outstanding, commencing with September 30, 2016, and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period and (c) as to any Eurodollar Loan having an Interest Period longer than three months, each date occurring at three month intervals and the last day of such Interest Period.

 

“Interest Period” means, as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, or (with the consent of each affected Lender under the relevant Facility) twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six or (with the consent of each affected Lender under the relevant Facility) twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not later than 11:00 A.M. on the date that is three (3) Business Days prior to the last day of the then current Interest Period with respect thereto; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

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(i)                                  if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii)                              no Interest Period may extend beyond the scheduled Revolving Termination Date or beyond the date final payment is due on the Term Loans; and

 

(iii)                          any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.

 

“Interpolated Rate” means, in relation to any Eurodollar Loan, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the applicable Eurodollar Base Rate for the longest period (for which the applicable Eurodollar Base Rate is available for the applicable currency) that is shorter than the Interest Period of that Eurodollar Loan and (b) the applicable Eurodollar Base Rate for the shortest period (for which such Eurodollar Base Rate is available for the applicable currency) that exceeds the Interest Period of that Eurodollar Loan, in each case, as of  11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.

 

“Investments” means, as to any Person, (a) the purchase or other acquisition of Capital Stock or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee Obligation with respect to any obligation of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person.  The amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, but giving effect to any Returns.  If a Group Member sells or otherwise disposes of any Capital Stock of any Restricted Subsidiary or any Restricted Subsidiary issues any Capital Stock, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Borrower, the Group Members shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Capital Stock and all other Investments in such Restricted Subsidiary retained.  For purposes of the definition of “Unrestricted Subsidiary” and Section 7.7, (i) “Investments” shall include the portion (proportionate to the Borrower’s direct or indirect equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon redesignation of such Subsidiary as a Restricted Subsidiary, the Group Members shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (x) the Borrower’s direct or indirect “Investment” in such Subsidiary at the time of such redesignation, less (y) the Fair Market Value of the net assets of such Subsidiary at the time of redesignation allocable to Borrower’s direct or indirect equity interest in such Subsidiary, and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer.

 

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“Investors” means any of Z Capital and/or Silver Point.

 

“Investor Affiliated Lender” means any Investor or any Affiliate of the Investors (excluding any Debt Fund Affiliate, any Loan Party and any of their respective Subsidiaries).

 

“Issuing Lenders” means (a) the Administrative Agent or any of its Affiliates, (b) Fifth Third Bank and (c) any other Revolving Lender (agreeing to be an Issuing Lender in its sole discretion) from time to time selected by the Borrower and reasonably acceptable to the Administrative Agent.  In the event that there is more than one Issuing Lender at any time, references herein and in the other Loan Documents to the Issuing Lender shall be deemed to refer to the Issuing Lender in respect of the applicable Letter of Credit or to all Issuing Lenders, as the context requires.

 

“Joinder Agreement” means an agreement substantially in the form of Exhibit J.

 

“Joint Bookrunners” has the meaning specified in the preamble hereto.

 

“Latest Maturity Date” means, at any date of determination, the latest date that is a maturity or expiration date applicable to any Loan or Commitment hereunder at such time, determined after giving effect to any extension of the maturity dates hereunder and assuming, in the case of any maturity or expiration date that is determined by reference to the satisfaction or non-satisfaction of any condition, that such maturity date is to occur on the latest of the dates specified therefor.

 

“Latest Revolving Maturity Date” means, as of any date of determination, the latest maturity or expiration date applicable to any Revolving Commitment or, in each case, any Revolving Loans pursuant thereto, determined after giving effect to any extension of the maturity dates hereunder and assuming, in the case of any maturity or expiration date that is determined by reference to the satisfaction or non-satisfaction of any condition, that such maturity date is to occur on the latest of the dates specified therefor.

 

“Latest Term Loan Maturity Date” means, as of any date of determination, the latest maturity or expiration date applicable to any Term Loan hereunder, determined after giving effect to any extension of the maturity dates hereunder and assuming, in the case of any maturity or expiration date that is determined by reference to the satisfaction or non-satisfaction of any condition, that such maturity date is to occur on the latest of the dates specified therefore.

 

“Laws” or “laws” means, collectively, all international, federal, state, local or foreign law, statute or ordinance, treaty, common law, or any rule, code and administrative or judicial authority, regulation, judgment, order, writ, injunction, decree, arbitration award, agency requirement, license or permit of, or agreement with, any Governmental Authority, including any Gaming Regulations.

 

“L/C Commitment” means with respect to each Issuing Lender, the commitment of such Issuing Lender to issue Letters of Credit pursuant to Section 3.1.  The amount of each Issuing Lender’s L/C Commitment as of the Closing Date is set forth on Appendix A-3 under the caption “L/C Commitment.”  The L/C Commitments are part of, and not in addition to, the Revolving Commitments.  On the Closing Date the aggregate L/C Commitments of all of the Issuing Lenders is $10,000,000.

 

“L/C Obligations” means, at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired Dollar amount of the then outstanding Letters of Credit and (b) the aggregate Dollar amount of drawings under Letters of Credit that have not then been reimbursed.  The amount of such L/C Obligations shall equal the maximum amount that may be payable by the Issuing Lenders thereupon or pursuant thereto.

 

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“L/C Participants” means, collectively, all Revolving Lenders other than the applicable Issuing Lender.

 

“LCA Election” has the meaning specified in Section 1.6(c).

 

“LCA Test Time” has the meaning specified in Section 1.6(c).

 

“Lead Arrangers” has the meaning specified in the preamble hereto.

 

“Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee, sublessee or licensee in, to and under leases, subleases or licenses of land, improvements and/or fixtures.

 

“Lenders” has the meaning specified in the preamble hereto, and each of their respective successors and assigns as permitted hereunder.

 

“Letters of Credit” has the meaning specified in Section 3.1(a).

 

“License Revocation” shall mean the revocation, denial, failure to renew or suspension of, or the appointment of a receiver, supervisor or similar official with respect to, any material Gaming Permit or other material casino, gambling or gaming license issued by any Gaming Authority covering any Material Gaming Facility or relating to the ownership, management or operation thereof.

 

“Lien” means any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien (statutory or other), charge or other security interest or any other security agreement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title thereof, and any capital lease having substantially the same economic effect as any of the foregoing); provided that in no event shall an operating lease be deemed to be a Lien.

 

“Limited Condition Acquisition” means any acquisition or similar Investment by any Group Member or any merger of the Borrower permitted by the final paragraph of Section 7.4 that is not conditioned on the availability of, or on obtaining, third party financing, other than any acquisition of, or similar Investment in, any Unrestricted Subsidiary.

 

“Liquor Laws” shall mean all laws, rules, regulations and ordinances relating to the manufacture, sale or distribution of liquor or alcoholic beverages.

 

“Loan” means any loan made by any Lender pursuant to this Agreement.

 

“Loan Documents” means, collectively, this Agreement, the Security Documents, the Applications, the Fee Letters, the Intercompany Subordination Agreement, each intercreditor or subordination agreement entered into in connection with the Obligations, the Notes (if any), any Incremental Agreement, each Joinder Agreement, each Extension Agreement, each Refinancing Agreement and any other document related to this Agreement designated in writing by the Borrower and the Administrative Agent as a “Loan Document”.

 

“Loan Parties” means the Borrower and each Guarantor.

 

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“Majority Facility Lenders” means, with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans with respect to such Facility or the Revolving Extensions of Credit outstanding under such Facility (or, in the case of any Revolving Facility, prior to any termination of the Commitments under such Facility, the holders of more than 50% of the Commitments under such Facility), as applicable; provided that the Loans and Commitments (and the Revolving Extensions of Credit) of any Defaulting Lender and any Lender that is an Investor Affiliated Lender shall be excluded for the purposes of making a determination of Majority Facility Lenders.

 

“Material Acquisition” means any Permitted Acquisition or similar Investment, in each case, the aggregate consideration for which exceeds $80,000,000.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, financial condition or results of operations of the Group Members, taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform their payment obligations under the Loan Documents or (c) the rights and remedies (taken as a whole) of the Administrative Agent, the Collateral Agent or the Lenders under the Loan Documents.

 

“Material Gaming Facility” shall mean any gaming facility (including any hotel/casino or other gaming or gambling operation) the absence, loss, closing or partial closing of which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

“Material Real Estate” means (i) any fee-owned real property of a Loan Party located in the United States having a Fair Market Value (together with improvements thereof) (as reasonably determined by the Borrower after taking into account any liabilities with respect thereto that impact such Fair Market Value) in excess of $2,500,000 as of the Closing Date (or, if later, the date of acquisition thereof), (ii) any Leasehold subject to a ground lease, the Fair Market Value of which is in excess of $2,500,000 as of the Closing Date (or, if later, the date of leasing thereof), (iii) any Leasehold (other than ground leases) for which the aggregate annual rental payments are in excess of $2,500,000 as of the Closing Date (or, if later, the date of leasing thereof) and (iv) any fee-owned real property or Leasehold that was subject to a “Mortgage” under the Existing Credit Agreement.

 

“Maximum Rate” has the meaning specified in Section 10.20.

 

“Merger Partner” has the meaning specified in the last paragraph of Section 7.4.

 

“Minimum Collateral Amount” means, at any time, as to Cash Collateral consisting of cash or deposit account balances, an amount equal to 103% of the Fronting Exposure of all Issuing Lenders with respect to Letters of Credit issued and outstanding at such time.

 

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

 

“Mortgage” means any mortgage, leasehold mortgage, deed of trust, leasehold deed of trust, hypothec or other similar document made by any Loan Party in favor of, or for the benefit of, the Collateral Agent for the benefit of the Secured Parties, in form and substance reasonably satisfactory to the Administrative Agent and the Borrower (taking into account the law of the jurisdiction in which such mortgage, leasehold mortgage, deed of trust, leasehold deed of trust, hypothec or similar document is to be recorded).

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 3(37) of ERISA or Section 4001(a)(3) of ERISA, and to which any Group Member or any Commonly Controlled Entity is making, is obligated to make or has made or been obligated to make during the past six years, contributions on behalf of participants who are or were employed by any of them.

 

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“Net Cash Proceeds” means:

 

(a)                               in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received (x) by way of deferred payment of principal pursuant to a note or installment receivable, purchase price adjustment receivable, earn-out payment or otherwise or (y) in respect of any non-cash proceeds (with respect to this clause (y), to the extent such cash or Cash Equivalent proceeds are received within twelve months from the original date of receipt of such non-cash proceeds), but, in each case, only as and when received and valued at the principal amount thereof when received in the case of notes or other debt securities and valued at the Fair Market Value when received in the case of other non-cash proceeds) of such Asset Sale or Recovery Event received by any Group Member, net of (i) reasonable brokers’ fees and commissions, attorneys’ fees, accountants’ fees, investment banking fees, consulting fees and other reasonable fees and expenses (including legal fees and expenses and, in the case of a Recovery Event, costs in connection with the adjustment, settlement or collection of any claims in respect thereof or, if such Recovery Event is a taking, costs of putting any affected property in a safe and secured position) actually incurred by the Group Members in connection therewith, (ii) the principal amount, premium or penalty, if any, interest and other amounts required to be paid or prepaid or otherwise becomes due or would be in default on any Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of such Asset Sale or Recovery Event (other than the Obligations, any Indebtedness secured by a Lien that is pari passu with or expressly subordinated to the Lien securing the Obligations and in the case of an Asset Sale, Indebtedness assumed by the purchaser in any Asset Sale), (iii) taxes paid or reasonably estimated to be payable by any Group Member as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements and tax distributions) and (iv) any escrow or reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of the applicable Asset Sale undertaken by the Group Members or other liabilities in connection with such Asset Sale (provided that, upon release of any such escrow or reserve to any Group Member, the amount released shall be considered Net Cash Proceeds); provided that, in the case of any Asset Sale by a non-Wholly-Owned Restricted Subsidiary or Recovery Event with respect to assets of a non-Wholly-Owned Restricted Subsidiary, the pro rata portion of the net cash proceeds thereof attributable to minority interests and not available for distribution to or for the account of the Borrower or a Wholly-Owned Restricted Subsidiary as a result thereof shall not be included in Net Cash Proceeds; and

 

(b)                              in connection with any issuance or sale of Capital Stock, debt securities or instruments or the incurrence of Indebtedness, in each case, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received (when received) (x) by way of deferred payment of principal pursuant to a note or installment receivable, purchase price adjustment receivable, earn-out payment or otherwise or (y) in respect of any non-cash proceeds (with respect to this clause (y), to the extent such cash or Cash Equivalent proceeds are received within twelve months from the original date of receipt of such non-cash proceeds) received from such issuance or incurrence, net of taxes and customary transaction costs, attorneys’ fees, investment banking fees, accountants’ fees, consulting fees, underwriting discounts and commissions, placement fees and other fees and expenses (including legal fees and expenses) actually incurred in connection therewith.

 

“Non-Cash Charges” means any non-cash Charges, excluding amortization of a prepaid cash item that was paid in a prior period and any non-cash Charge in respect of an item that was included in Consolidated Net Income in a prior period; provided that if any non-cash Charge represents an accrual or reserve for a potential cash item in a future period, (i) the Borrower may elect not to add back such non-cash Charge in the current period and (ii) to the extent the Borrower elects to add back such non-cash Charge, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to such extent).

 

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“Non-Consenting Lender” has the meaning assigned to such term in Section 2.24.

 

“Non-Defaulting Lender” means, as to any Facility, a Lender thereunder that is not a Defaulting Lender.

 

“Non-Guarantor Subsidiary” means any Restricted Subsidiary of the Borrower which is not a Subsidiary Guarantor.

 

“Non-U.S. Lender” has the meaning specified in Section 2.20(e).

 

“Nonrenewal Notice” has the meaning specified in Section 3.1(a).

 

“Note” means any promissory note evidencing any Loan.

 

“Notice of Intent to Cure” has the meaning specified in Section 7.1(b).

 

“Obligations” means the unpaid principal of and interest on (including interest accruing after the maturity of the Loans, and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower or any other Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement Obligations and all other obligations and liabilities (excluding, for the avoidance of doubt, all Cash Management Obligations) of the Borrower and the other Loan Parties to the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender that are required to be paid by the Borrower or any other Loan Party pursuant hereto) or otherwise.

 

“OFAC” has the meaning specified in Section 4.20.

 

“Organizational Documents” means (a) with respect to any corporation or unlimited liability company, its certificate or articles of incorporation, amalgamation or organization and its by-laws, (b) with respect to any limited partnership, its certificate of limited partnership and its partnership agreement, (c) with respect to any general partnership, its partnership agreement, (d) with respect to any limited liability company, its articles of organization or certificate of formation, and its operating agreement, and (e) with respect to any other form of entity, such other organizational documents required by local Laws or customary under such jurisdiction to document the formation and governance principles of such type of entity.  In the event that any term or condition of this Agreement or any other Loan Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

 

“Other Applicable Indebtedness” has the meaning specified in Section 2.12(f).

 

“Other Commitments” means any Incremental Term Commitments, any Credit Agreement Refinancing Term Commitments and/or any Other Revolving Commitments, as the context requires.

 

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“Other Connection Taxes” means, with respect to any Recipient or the Collateral Agent, Taxes imposed as a result of a present or former connection between such Recipient or the Collateral Agent and the jurisdiction imposing such Tax (other than any such connection arising solely from the Recipient or the Collateral Agent having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced this Agreement or any other Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Facility” means any Incremental Term Facility, any Credit Agreement Refinancing Term Facility, any Extended Term Facility and/or any Other Revolving Facility, as the context requires.

 

“Other Loans” means any Incremental Term Loans, any Credit Agreement Refinancing Term Loans, any Extended Term Loans and/or any Other Revolving Loans, as the context requires.

 

“Other Revolving Commitments” means any Additional/Replacement Revolving Commitments, any Credit Agreement Refinancing Revolving Commitments and/or any Extended Revolving Commitments, as the context requires.

 

“Other Revolving Facility” means any Additional/Replacement Revolving Facility, any Credit Agreement Refinancing Revolving Facility and/or any Extended Revolving Facility and, in each case, any letters or credit issued and swing line loans made thereunder, as the context requires.

 

“Other Revolving Loans” means any Additional/Replacement Revolving Loans, any Credit Agreement Refinancing Revolving Loans and/or any Extended Revolving Loans, as the context requires.

 

“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.24).

 

“Outstanding Amount” means (a) with respect to the Term Loans, Revolving Loans, and Other Revolving Loans on any date, the outstanding principal amount thereof in Dollars after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Loans or Other Revolving Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the outstanding amount thereof on such date after giving effect to any and all transactions on such date.

 

“Overnight Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate and (b) an overnight rate determined by the Administrative Agent or any Issuing Lender, as the case may be, in accordance with banking industry rules on interbank compensation.

 

“Parent Company” means, if any Holding Company Election has been made, (a) Holdings and (b) any other Person of which the Borrower is an indirect Wholly-Owned Subsidiary.

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

 

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“Participant” has the meaning specified in Section 10.6(h).

 

“Participant Register” has the meaning specified in Section 10.6(h).

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

 

“Permitted Acquisition” means any acquisition by a Group Member, whether by purchase, merger, amalgamation or otherwise, of all or substantially all of the assets, of any Person, or of all or substantially all of the assets constituting a division, product line or business line of any Person or of the majority (or any greater portion) of the outstanding Capital Stock of any Person (and, in any event, including any Investment in (x) any Restricted Subsidiary the effect of which is to increase such Group Member’s equity ownership in such Restricted Subsidiary or (y) any joint venture for the purpose of increasing such Group Member’s ownership interest in such joint venture) (each, a “Proposed Acquisition”), if such Proposed Acquisition complies with the following criteria:

 

(a)        no Event of Default shall be in effect immediately prior or after giving effect to such Proposed Acquisition or would result therefrom;

 

(b)        any acquired Person shall become a Guarantor to the extent required by and otherwise comply with the provisions of Section 6.8 within the time periods specified therein;

 

(c)        after giving effect to the consummation of such acquisition, the Group Members shall be in compliance with Section 6.11; and

 

(d)        the aggregate amount of Proposed Acquisitions by Loan Parties in assets that are not (or do not become) owned by a Loan Party or in Capital Stock in Persons that do not become Loan Parties upon consummation of such acquisition (together with the aggregate amount of Investments by Loan Parties in Non-Guarantor Subsidiaries pursuant to Section 7.7(c)(iv) and Investments by Loan Parties in Persons that are not Loan Parties pursuant to Section 7.7(q)(i)) shall not exceed the sum of (i) the greater of (x) $18,750,000 and (y) 25% of Consolidated EBITDA as of the last day of the most recently ended Test Period, plus (ii) amounts otherwise available under Section 7.7; provided, that (x) this clause (d) shall not apply to any acquisition to the extent (1) any such consideration is financed with capital contributions with respect to Qualified Capital Stock of the Borrower or any Parent Company or proceeds of any issuance of Qualified Capital Stock by the Borrower or any Parent Company, in each case contributed to a Loan Party, or (2) the Person so acquired (or the Person owning the assets so acquired) becomes a Subsidiary Guarantor even though such Person owns Capital Stock in Persons that are not otherwise required to become Subsidiary Guarantors, if, in the case of this clause (2), at least 70% of the Consolidated EBITDA of the Person(s) acquired in such acquisition (or the Persons owning the assets so acquired) (for this purpose and for the component definitions used in the definition of “Consolidated EBITDA”, determined on a consolidated basis for such Person(s) and their respective Restricted Subsidiaries) is generated by Person(s) that will become Subsidiary Guarantors (i.e., disregarding any Consolidated EBITDA generated by Restricted Subsidiaries of such Persons that are not (or will not become) Subsidiary Guarantors) and (y) in the event that the amount available under this clause (d) is reduced as a result of any acquisition of any Restricted Subsidiary that does not become a Loan Party or any assets that are not transferred to a Loan Party and such Restricted Subsidiary subsequently becomes a Loan Party or such assets are subsequently transferred to a Loan Party, as the case may be, the amount available under this clause (d) shall be increased on a dollar for dollar basis as a result thereof.

 

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“Permitted Cure Security” means common or preferred equity (having such terms as are reasonably acceptable to the Administrative Agent, it being agreed that any Qualified Capital Stock shall be deemed to be reasonably acceptable to the Administrative Agent) of the Borrower or any Parent Company.

 

“Permitted Holders” means (a) the Investors and (b) any Person with which one or more Investors form a “group” (within the meaning of Section 14(d) of the Exchange Act) so long as, in the case of this clause (b), the Investors beneficially own more than 50% of the relevant voting Capital Stock beneficially owned by the group.

 

“Permitted Liens” means Liens permitted pursuant to Section 7.3.

 

“Permitted Refinancing Debt” means Refinancing Debt that satisfies the Refinancing Debt Requirements.

 

“Permitted Sale Leaseback Transaction” means any Sale Leaseback Transaction in respect of property consisting of equipment or capital assets for cash consideration in an amount not less than the Fair Market Value thereof so long as the Borrower shall comply with Section 2.12(b).

 

“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“Plan” means at a relevant time, any employee benefit plan (other than a Multiemployer Plan) as defined in Section 3(3) of ERISA which is sponsored, maintained or contributed to by, or required to be contributed to by, any Group Member or with respect to which any Group Member has or could reasonably be expected to have liability, contingent or otherwise, under ERISA.

 

“Planned Expenditures” has the meaning specified in the definition of the term “Excess Cash Flow”.

 

“Platform” has the meaning specified in Section 6.2.

 

“Pledged Securities” has the meaning specified in the Guarantee and Collateral Agreement.

 

“Previously Absent Financial Maintenance Covenant” means, at any time (x) any financial maintenance covenant that is not included in this Agreement at such time and (y) any financial maintenance covenant that is included in this Agreement at such time but with covenant levels in this Agreement that are less restrictive on Group Members.

 

“Prime Rate” means the rate of interest per annum announced from time to time by CS as its prime rate in effect at its principal office in New York City. The prime rate is a rate set by CS based upon various factors including CS’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such rate

 

“Pro Forma Basis” or “pro forma effect” means, with respect to any determination of the Total Leverage Ratio, the First Lien Leverage Ratio, the Consolidated EBITDA and Consolidated Total Assets (including component definitions of each of the foregoing), that each Subject Transaction with respect to any test or covenant for which such determination is being made shall be deemed to have occurred as of the first day of the applicable Test Period (or, in the case of Consolidated Total Assets (or with respect to any determination pertaining to the balance sheet, including the acquisition of cash and Cash Equivalents), as of the last day of such Test Period) and that:

 

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(a)        (i) in the case of (A) any Disposition of all or substantially all of the Capital Stock of any Restricted Subsidiary or any division and/or product line of the Borrower or any Restricted Subsidiary, (B) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary and (C) the implementation of any Cost Saving Initiative, income statement items (whether positive or negative and including any items giving rise to Expected Cost Savings) attributable to the property or Person subject to such Subject Transaction, shall be excluded as of the first day of the applicable Test Period with respect to any test or covenant for which the relevant determination is being made and (ii) in the case of (A) any Permitted Acquisition or other permitted Investment described in the definition of the term “Subject Transaction” and/or (B) the designation of an Unrestricted Subsidiary as a Restricted Subsidiary, income statement items (whether positive or negative) attributable to the property or Person subject to such Subject Transaction shall be included as of the first day of the applicable Test Period with respect to any test or covenant for which the relevant determination is being made; it being understood that any pro forma adjustment described in this Agreement may be applied to any such test or covenant solely to the extent that such adjustment is consistent with (and subject to the limitations set forth in) the definition of the term “Consolidated EBITDA”;

 

(b)        any retirement or repayment of Indebtedness (other than normal fluctuations in revolving Indebtedness incurred for working capital purposes) shall be deemed to have occurred as of the first day of the applicable Test Period with respect to any test or covenant for which the relevant determination is being made;

 

(c)        any Indebtedness incurred by any Group Member in connection therewith shall be deemed to have occurred as of the first day of the applicable Test Period with respect to any test or covenant for which the relevant determination is being made; provided that, (i) if such Indebtedness has a floating or formula rate, such Indebtedness shall have an implied rate of interest for the applicable Test Period for purposes of this definition determined by utilizing the rate that is or would be in effect with respect to such Indebtedness at the relevant date of determination (taking into account any interest hedging arrangements applicable to such Indebtedness), (ii) interest on any Capital Lease Obligations shall be deemed to accrue at an interest rate reasonably determined by the Borrower to be the rate of interest implicit in such obligation in accordance with GAAP and (iii) interest on any Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen by the Borrower; and

 

(d)        for purposes of determining Consolidated Total Assets, the acquisition of any asset (including cash and Cash Equivalents), whether pursuant to any Subject Transaction or any Person becoming a Subsidiary or merging, amalgamating or consolidating with or into the Borrower or any of its Subsidiaries, or the Disposition of any asset (including cash and Cash Equivalents), described in the definition of the term “Subject Transaction” shall be deemed to have occurred as of the last day of the applicable Test Period with respect to any test or covenant for which such calculation is being made.

 

“Projections” means the financial projections and pro forma financial statements of the Borrower and its Subsidiaries included in that certain Confidential Information Memorandum dated June 2016, relating to the Borrower and its Subsidiaries and the Transactions (or a supplement thereto).

 

“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

 

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“Proposed Acquisition” has the meaning specified in the definition of the term “Permitted Acquisition”.

 

“Public Lender” has the meaning specified in Section 6.2.

 

“Purchasing Borrower Party” means Holdings or any Group Member, in each case, that becomes an Assignee pursuant to Section 10.6(c).

 

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

 

“Qualified Person” shall mean, with respect to any Lender party to this Agreement on the Closing Date or that becomes a Lender pursuant to any provision hereof (whether pursuant to Section 2.25, Section 10.6 or otherwise), any Person which shall not have been found unsuitable under the Gaming Regulations of any Gaming Authority.

 

“Recipient” means the Administrative Agent, any Lender and any Issuing Lender, as applicable.

 

“Recovery Event” means any settlement of or payment in respect of any property, casualty or other insurance claim (other than business interruption insurance) or any condemnation or similar proceeding relating to any asset of any Group Member.

 

“Reference Rate” means the Eurodollar Base Rate for such day determined by the Administrative Agent on such date with reference to an Interest Period of one month.

 

“Refinanced Debt” means the applicable Indebtedness refinanced, extended, renewed or replaced by such Refinancing Debt.

 

“Refinancing” has the meaning specified in Section 5.1(c).

 

“Refinancing Agreement” means any agreement establishing and setting forth the terms of a Credit Agreement Refinancing Facility.

 

“Refinancing Debt” means Indebtedness issued, incurred or otherwise obtained in exchange for or as a replacement of (including by entering into alternative financing arrangements in respect of such exchange or replacement (in whole or in part), either by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, or after the original instrument giving rise to such Indebtedness has been terminated and including, by entering into any new credit agreement, loan agreement, note purchase agreement, indenture or other agreement) any Refinanced Debt, or the net proceeds of which are incurred for the purpose of extending, refinancing, renewing, replacing, redeeming, repurchasing, defeasing, restructuring, repaying or refunding such Refinanced Debt (or amending or modifying such Refinanced Debt to effectuate any of the foregoing).

 

“Refinancing Debt Requirements” means, with respect to any Refinancing Debt, the following requirements:

 

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(a)        the principal amount of such Refinancing Debt does not exceed the principal amount of the Refinanced Debt except by an amount equal to the unpaid accrued interest and premium thereon, defeasance costs, underwriting discounts and other reasonable amounts paid and fees, commissions and expenses (including upfront fees, original issue discount and initial yield payments) incurred in connection with the incurrence of such Refinancing Debt, an amount equal to any existing commitments unutilized under such Refinanced Debt and any other amounts permitted to be incurred pursuant to Section 7.2 (provided that any such additional amounts shall satisfy the other requirements set forth in this definition and with such additional amounts constituting a utilization of the relevant basket or exception pursuant to which such amounts are permitted and, if such Refinancing Debt is secured, the Lien securing such Refinancing Debt is permitted under Section 7.3);

 

(b)        (i) neither the Borrower nor any Restricted Subsidiary shall be an obligor or guarantor of such Refinancing Debt except to the extent that such Person was such an obligor or guarantor in respect of the Refinanced Debt at the time of the incurrence of such Refinancing Debt or such Borrower or Restricted Subsidiary becomes an obligor or guarantor of the Refinanced Debt at such time and (ii) such Refinancing Debt is not secured by any Property not securing (or of the type required to secure) the Refinanced Debt or such Property becomes Collateral for the Refinanced Debt at the time of incurrence of such Refinancing Debt;

 

(c)        such Refinancing Debt shall (1) either (x) have a Weighted Average Life to Maturity at least equal to (and no shorter than) the Weighted Average Life to Maturity of the Refinanced Debt (unless such Refinancing Debt is revolving Indebtedness) or (y) have a Weighted Average Life to Maturity at least equal to (and no shorter than) the Weighted Average Life to Maturity of the Initial Term Loans; provided that, if such Refinanced Debt had a maturity date that is at least 91 days after the maturity date of the Initial Term Loans, then such new maturity date must be at least 91 days following the maturity date of the Initial Term Loans and (2) have a final maturity date equal to or later than (and if such Refinancing Debt is revolving Indebtedness, does not require scheduled amortization or mandatory commitment reduction prior to) the final maturity date of the Refinanced Debt;

 

(d)        in the case of any Credit Agreement Refinancing Debt, such Refinancing Debt may be pari passu with or junior to any then-existing Class of Loans in right of payment and may be pari passu with or junior to such Class of Loans with respect to security or unsecured; provided that any Refinancing Debt that is pari passu with or junior to any then-existing Class of Loans with respect to security and is documented in a separate agreement or agreements shall be subject to an Acceptable Intercreditor Agreement;

 

(e)        if the Refinanced Debt is (i) secured, (x) such Refinancing Debt shall only be secured on the same or subordinated basis (including relative priority) as the Refinanced Debt (but may be unsecured) and (y) in the case of any Credit Agreement Refinancing Debt, shall only have (1) a Lien on Property constituting Collateral in which the Collateral Agent has a Lien or in which the Collateral Agent is granted a Lien concurrently with the incurrence or issuance of such Refinancing Debt and (2) a perfected Lien on any Property constituting Collateral in which the Collateral Agent has a perfected Lien or as to which a Lien in favor of the Collateral Agent is perfected concurrently with the incurrence or issuance of such Refinancing Debt, and shall be subject to intercreditor arrangements on terms reasonably acceptable to the Administrative Agent and (ii) subordinated in right of payment to the Obligations, the Refinancing Debt is subordinated in right of payment to the Obligations on terms not materially less favorable (taken as a whole) to the Lenders as those contained in the documentation governing such Refinanced Debt (as reasonably determined by the Borrower);

 

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(f)        such Refinancing Debt has covenants, terms and conditions (including, if applicable, as to collateral, but excluding (1) as to subordination, interest rates (including through fixed interest rates), interest rate margins, rate floors, fees, funding discounts, original issue discounts and redemption or prepayment terms and premiums and any other matter set forth in clauses (a) through (e) above and (2) covenants or other provisions applicable only to periods after the Latest Term Loan Maturity Date (if such Refinancing Debt constitutes term loans or notes) or the Latest Revolving Maturity Date (if such Refinancing Debt constitutes revolving Indebtedness), in each case, at the time of the incurrence or issuance of such Indebtedness), taken as a whole, are not materially more restrictive (when taken as a whole) than the terms and conditions of the Refinanced Debt, as reasonably determined by the Borrower, unless such terms and conditions constitute then-current market terms for the applicable type of Refinancing Debt; provided that such terms and conditions shall not be deemed to be more restrictive solely as a result of the inclusion in the documentation governing such Refinancing Debt of a Previously Absent Financial Maintenance Covenant, so long as the Administrative Agent shall have been given prompt written notice thereof and this Agreement is amended to include such Previously Absent Financial Maintenance Covenant for the benefit of each Facility to the extent applicable in the documentation governing such Refinancing Debt (but if the applicable Previously Absent Financial Maintenance Covenant is a “springing” financial maintenance covenant applicable only to revolving Indebtedness, the Previously Absent Financial Maintenance Covenant shall be automatically included in this agreement only for the benefit of each Revolving Facility and not for the benefit of any Facility in respect of Term Loans hereunder); provided, further, that in the case of Credit Agreement Refinancing Debt in the form of (x) term loans that are pari passu with the Initial Term Loans in right of payment and with respect to security, the holders thereof may decline to participate in any voluntary prepayments and/or to receive on a pro rata or less than pro rata basis any mandatory prepayments, and (y) revolving loans that are pari passu with the Initial Revolving Loans in right of payment and with respect to security may provide for the lenders thereof to elect lesser payments or commitment reductions in respect of such revolving loans;

 

(g)        in the case of any Credit Agreement Refinancing Revolving Facility, (i) the borrowing and repayment (except (x) payments of interest and fees at different rates in respect of any then-existing Revolving Commitments and such Refinancing Debt (and related outstandings), (y) repayments required on the maturity date of any then-existing Revolving Commitments and (z) repayments made in connection with any permanent repayment and termination of commitments (subject to clause (iv) below) in respect of such Refinancing Debt) after the incurrence or issuance of such Refinancing Debt shall be made on a pro rata basis with the then-existing Revolving Facility, (ii) all letters of credit shall be participated on a pro rata basis by all Revolving Lenders of the applicable Class, (iii) assignments and participations of such Refinancing Debt shall be governed by the assignment and participation provisions set forth in Section 10.6 and (iv) no termination of Commitments in respect of such Refinancing Debt and no repayment thereof accompanied by a corresponding permanent reduction in such Commitments shall be permitted unless (x) such Class of Commitments in respect of such Refinancing Debt is the earliest maturing Class of then-existing Revolving Commitments or (y) such termination or repayment (and corresponding reduction) is accompanied by at least a pro rata termination or permanent repayment (and corresponding pro rata permanent reduction), as applicable, of all then-existing Revolving Loans or Revolving Commitments and any other then-outstanding Permitted Refinancing Debt; and

 

(h)        if such Refinancing Debt is Credit Agreement Refinancing Debt, the Administrative Agent, the institutions providing such Refinancing Debt and the Borrower have consented to such Refinancing Debt.

 

“Register” has the meaning specified in Section 10.6(b)(iv).

 

“Regulation U” means Regulation U of the Board as in effect from time to time.

 

“Reimbursement Obligation” means the obligation of the Borrower to reimburse an Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing Lender.

 

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“Reinvestment Deferred Amount” means with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by any Group Member or any Subsidiary thereof for its own account in connection therewith that are not paid to the Administrative Agent pursuant to Section 2.12(b) as a result of the delivery of a Reinvestment Notice.

 

“Reinvestment Event” means any Asset Sale or Recovery Event in respect of which a Loan Party has delivered a Reinvestment Notice.

 

“Reinvestment Notice” means a written notice signed on behalf of the Borrower by a Responsible Officer stating that the Group Members (directly or indirectly through a Subsidiary) intend and expect to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event in a manner useful in their business (including Permitted Acquisitions).

 

“Reinvestment Prepayment Amount” means, with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount contractually committed to be expended prior to the relevant Reinvestment Prepayment Date within six months from the Reinvestment Prepayment Date (a “Committed Reinvestment Amount”), or actually expended prior to such date, in each case, to acquire or repair assets useful in the Group Members’ business (including in connection with a Permitted Acquisition).

 

“Reinvestment Prepayment Date” means, with respect to any Reinvestment Event, the date occurring 548 days after such Reinvestment Event.

 

“Rejection Notice” has the meaning specified in Section 2.12(e).

 

“Related Parties” means, as to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, attorneys-in-fact, trustees, administrators, managers, advisors, representatives and successors and assigns of such Person and of such Person’s Affiliates.

 

“Repayment Amount” means the amount of any installment (including the payment due on the maturity date thereof) of Term Loans scheduled to be repaid on any date.

 

“Reportable Event” means, with respect to any Single Employer Plan, any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period has been waived by the PBGC in accordance with the regulations thereunder.

 

“Repricing Transaction” means (a) the incurrence by any Loan Party of any Indebtedness (i) having an Effective Yield that is less than the Effective Yield for the Initial Term Loans, but excluding Indebtedness incurred in connection with a Change of Control or Material Acquisition and (ii) the proceeds of which are used substantially concurrently to prepay (or, in the case of a conversion, deemed to prepay or replace) (including as a result of a mandatory prepayment required pursuant to Section 2.12(a)), in whole or in part, outstanding principal of the Initial Term Loans or (b) any amendment, consent or other modification of this Agreement that has the primary purpose of reducing the Effective Yield for the Initial Term Loans, except for a reduction in connection with a Change of Control or Material Acquisition; provided, that if any such amendment, consent or other modification is being sought in connection with one or more Incremental Facilities that are to be used for the purpose of funding all or a portion of the purchase price for a Permitted Acquisition or other Material Acquisition, such amendment, consent or other modification shall be deemed not to be for the primary purpose of reducing the Effective Yield for the Initial Term Loans.

 

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“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate outstanding amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Lender for purposes of this definition), (b) aggregate unused Term Commitments, if any, then outstanding and (c) aggregate unused Revolving Commitments; provided that the unused Term Commitments, Revolving Commitments of, and the portion of the Total Outstandings held or deemed held by any Defaulting Lender or Lenders that are Investor Affiliated Lenders shall be excluded for purposes of making a determination of Required Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief financial officer (or similar title), chief operating officer, controller or treasurer (or similar title) of Holdings or a Group Member, with respect to financial matters (including execution of any Compliance Certificate or related financial condition delivery), the chief financial officer (or similar title), controller (or similar title) or treasurer (or similar title) of the Borrower, with respect to any document delivered on the Closing Date, including any secretary or assistant secretary or any other individual or similar official thereof with substantially equivalent responsibilities on behalf of a Loan Party and, solely for purposes of notices given pursuant to Section 2, any other officer of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent.  Any document delivered hereunder that is signed by a Responsible Officer of any Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party, and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Debt” means, collectively, Subordinated Debt and Indebtedness that is secured by a Lien (other than Indebtedness among the Group Members and their respective Subsidiaries) that is expressly junior and subordinated to the Lien securing the Obligations, in each case, having an individual outstanding principal amount in excess of $10,000,000.

 

“Restricted Debt Payment” has the meaning specified in Section 7.8(a).

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of the Borrower (or, solely for the purposes of Section 7.11, Holdings), or any payment (whether in cash, securities or other property), including any purchase, redemption, retirement, defeasance, acquisition, cancellation or termination for value (including any sinking fund payment or similar deposit) of any such Capital Stock, or on account of any return of capital to the holders of Capital Stock of the Borrower (or, solely for the purposes of Section 7.11, Holdings).

 

“Restricted Subsidiary” means any Subsidiary that is not an Unrestricted Subsidiary.  Unless explicitly set forth to the contrary, a reference to a “Restricted Subsidiary” means a Restricted Subsidiary of the Borrower.

 

“Retained Declined Proceeds” has the meaning specified in Section 2.12(e).

 

“Retained Excess Cash Flow” means, at any date of determination, an amount equal to the aggregate cumulative amount, which shall in no event be less than zero, of Excess Cash Flow for all fiscal years ending after the Closing Date (or in the case of the fiscal year ending December 31, 2016, the amount of Excess Cash Flow attributable to the period from and including July 1, 2016 through and including December 31, 2016) with respect to which the Borrower has delivered an annual Compliance Certificate, commencing with the fiscal year ending December 31, 2016, and prior to the Available Amount Reference Time that has not and is not required to be applied to the prepayment of the Term Loans pursuant to Section 2.12(c) minus the amount by which such required prepayments under Section 2.12(c) have been or will be reduced pursuant to Section 2.12(c)(ii), Section 2.12(e) and Section 2.12(h).

 

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“Returns” means, with respect to any Investment of any Person and without duplication (including as a result of such amount being included in Consolidated Net Income of such Person), any repayments, interest, returns, profits, distributions, income and similar amounts actually received in cash by such Person in respect of such Investment not in excess of the amount of the original Investment by such Person.

 

“Revolving Commitment Period” means the period after the Closing Date to, but excluding, the Revolving Termination Date.

 

“Revolving Commitments” means the Initial Revolving Commitments and/or the Other Revolving Commitments, as the context requires.

 

“Revolving Extension Request” has the meaning specified in Section 2.28(a)(ii).

 

“Revolving Extensions of Credit” means, as to any Revolving Lender at any time, an amount equal to the sum of (a) the Outstanding Amount of all Revolving Loans held by such Lender and (b) such Lender’s Revolving Percentage of the L/C Obligations then outstanding.

 

“Revolving Facility” means the Initial Revolving Facility and/or any Other Revolving Facility and the Initial Revolving Loans and/or Other Revolving Loans and Letters of Credit or letters of credit established in connection with any Other Revolving Facility made thereunder.

 

“Revolving Lender” means each Lender that has a Revolving Commitment or that holds Revolving Loans.

 

“Revolving Loans” means the Initial Revolving Loan and/or Other Revolving Loans, as the context requires.

 

“Revolving Percentage” means, as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the aggregate Revolving Commitments of all Lenders or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate Outstanding Amount of such Lender’s Revolving Loans constitutes of the aggregate Outstanding Amount of the Revolving Loans; provided that, in the event that the Revolving Loans are paid in full prior to the reduction to zero of the Revolving Extensions of Credit, the Revolving Percentage of any Revolving Lender shall be determined by dividing (x) such Lender’s Revolving Percentage of the L/C Obligations then outstanding by (y) all of the L/C Obligations then outstanding.

 

“Revolving Termination Date” means, in the case of the Initial Revolving Commitments, July 1, 2021 and, in the case of any Other Revolving Commitments, the date established in the applicable Incremental Agreement, Extension Agreement or Refinancing Agreement or, in any case, such earlier date as the Revolving Commitments are terminated in accordance with the terms hereof.

 

“Sale Leaseback Transaction” means any arrangement with any Person providing for the leasing by any Group Member of real or personal property which has been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Group Member.

 

“Same Day Funds” means, with respect to disbursements and payments in Dollars, immediately available funds.

 

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“S&P” means Standard & Poor’s Ratings Group, Inc., or any successor to the rating agency business thereof.

 

“SEC” means the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

 

“Secured Obligations” means all Obligations, together with (a) all Cash Management Obligations owing to the Administrative Agent, the Collateral Agent, any Lead Arranger, any Lender or any Affiliate of any of the foregoing (or Person who was any of the foregoing at the time of the incurrence thereof) and (b) all obligations of the Loan Parties and any other Group Members under Specified Hedge Agreements; provided that Cash Management Obligations and obligations of the Loan Parties and the other applicable Group Members under Specified Hedge Agreements shall cease to constitute Secured Obligations on and after the Facility Termination Date; provided, further, that as to any Guarantor, Secured Obligations shall not include Excluded Swap Obligations in respect of such Guarantor.

 

“Secured Parties” means, collectively, the Lenders, the Administrative Agent, the Collateral Agent, any Issuing Lender, any Hedge Counterparty, any other holder from time to time of any of the Secured Obligations (in their capacities as holders thereof) and, in each case, their respective successors and permitted assigns.

 

“Security Documents” means the collective reference to the Guarantee and Collateral Agreement, the Mortgages and all other security documents hereafter delivered to the Collateral Agent purporting to grant a Lien on any Property of any Loan Party to secure the Secured Obligations.

 

“Side Fee Letter” means the Side Fee Letter dated as of May 25, 2016, among the Borrower and Fifth Third Bank.

 

“Single Employer Plan” means any  (a) Plan and (b) employee benefit plan as defined in Section 3(3) of ERISA which is sponsored, maintained or contributed to by, or required to be contributed to by a Commonly Controlled Entity that, in each case, is (i) covered by Title IV of ERISA and  (ii) is not a Multiemployer Plan.

 

“Silver Point” means SPH Manager LLC and each of its Affiliates and any funds, partnerships or other investment vehicles managed or controlled by it or its Affiliates, but not including, however, any of their operating portfolio companies.

 

“Solvent” means, with respect to any Person, that (i) the sum of the debt (including contingent liabilities) of such Person does not exceed the fair value of the assets of such Person; (ii) the capital of such Person is not unreasonably small in relation to the business of such Person contemplated as of the date of determination; (iii) such Person does not intend to incur, or believe that it will incur, debts (including current obligations and contingent liabilities) beyond its ability to pay such debts as they mature in the ordinary course of business; and (iv) the present fair saleable value of the assets (on a going concern basis) of such Person is not less than the amount that will be required to pay the probable liabilities of such Person on its debts as they become absolute and matured in the ordinary course of business.  For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Specified Existing Revolving Class” has the meaning specified in Section 2.28(a)(ii).

 

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“Specified Hedge Agreement” means any Hedge Agreement (a) entered into by (i) any Group Member or Holdings and (ii) any Hedge Counterparty at the time such Hedge Agreement was entered into, as counterparty and (b) that has been designated by the Borrower, by notice to the Administrative Agent, as a Specified Hedge Agreement.  The designation of any Hedge Agreement as a Specified Hedge Agreement shall not create in favor of the Lender or Affiliate thereof that is a party thereto (in its capacity as such) any rights in connection with the management or release of any Collateral or of the obligations of any Guarantor under the Guarantee and Collateral Agreement.

 

“Specified Junior Debt” means (i) loans, notes or other long-term Indebtedness that is junior to the Initial Facilities in right of payment or in right of security or that is unsecured; provided that (A) the Additional Debt Requirements are satisfied, (B) the Total Leverage Ratio would not exceed 5.25:1.00 determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Indebtedness had been outstanding on the last day of such Test Period for testing compliance therewith (and assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder), (C) the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Specified Junior Debt had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder) and (D) the final maturity date thereof shall not be earlier than 91 days after the Latest Term Loan Maturity Date at the time of incurrence or issuance thereof; and (ii) any Permitted Refinancing Debt in respect thereof.

 

“Specified Junior Debt Facility” means any one or more debt facilities or other financing arrangements (including any credit agreement, loan agreement, note purchase agreement, indenture or other agreement) providing for Specified Junior Debt.

 

“Specified Second Lien Facility” means any Specified Junior Debt Facility in the form of a secured term loan that is junior to the Initial Facilities in right of security.

 

“Specified Second Lien Incremental Debt” means (i) any “incremental facility” (or any equivalent term) or “incremental equivalent debt” (or any equivalent term) under and as defined in any Specified Second Lien Facility; provided that (A) the Additional Debt Requirements are satisfied, (B) the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Specified Junior Debt had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder) and (C) the final maturity date thereof shall not be earlier than 91 days after the Latest Term Loan Maturity Date at the time of incurrence or issuance thereof and provided, further, that the aggregate outstanding principal amount thereof does not exceed:

 

(a)                               the Fixed Incremental Amount, plus

 

(b)                              in the case of any Specified Second Lien Incremental Debt that effectively extends the maturity date with respect to any class of loans and/or commitments under such Specified Second Lien Facility, an amount equal to the portion of the relevant class of loans or commitments that will be replaced by such Specified Second Lien Incremental Debt, plus

 

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(c)                               (i) the amount of any optional prepayment of any Loan in accordance with Section 2.11 and/or the amount of any permanent reduction of any Commitment and/or the amount of any optional prepayment of any loan under such Specified Second Lien Facility (in each case other than any such Loan or Commitment incurred pursuant to clause (e) of the definition of “Incremental Limit” and any loan incurred pursuant to clause (d) below) and (ii) the amount paid in cash in respect of any reduction in the outstanding amount of any Term Loan or any loan under such Specified Second Lien Facility (other than any Term Loan incurred in reliance on clause (e) of the definition of “Incremental Limit” and any loan incurred in reliance on clause (d) below) resulting from any assignment of such Term Loan or loan to (and/or purchase of such Term Loan or loan by) Holdings or any Group Member so long as the relevant prepayment or assignment and/or purchase was not funded with the proceeds of any long-term Indebtedness (other than revolving Indebtedness) incurred by the Group Members, plus

 

(d)                              an unlimited amount so long as, in the case of this clause (d), after giving effect to the relevant Specified Second Lien Incremental Debt (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and subsequent funding of the term debt borrowed or issued thereunder) on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Specified Second Lien Incremental Debt had been outstanding on the last day of such Test Period for testing compliance therewith, the Total Leverage Ratio does not exceed 5.25:1.00; plus

 

(e)                               solely for purposes of determining how much Indebtedness may be outstanding under this definition of “Specified Second Lien Incremental Debt,” but not for purposes of determining how much Indebtedness may then be incurred thereunder, amounts previously incurred in reliance on the “Specified Second Lien Incremental Debt” that otherwise reduced the Fixed Incremental Amount;

 

it being understood and agreed that, (I) unless the Borrower otherwise notifies the Administrative Agent, if all or any portion of the Specified Second Lien Incremental Debt would be permitted under clause (d) of this definition on the applicable date of determination, such Specified Second Lien Incremental Debt shall be deemed to have been incurred in reliance on clause (d) of this definition prior to the utilization of any amount available under any other clause of the foregoing proviso and (II) the Borrower may elect from time to time to reclassify any portion of any Specified Second Lien Incremental Debt incurred under clauses (a) through (c) above as incurred under clause (d) above, so long as the Borrower is in compliance with clause (d) above at the time of such reclassification; and (ii) any Permitted Refinancing Debt in respect thereof.

 

“Subject Person” has the meaning specified in the definition of the term “Consolidated Net Income”.

 

“Subject Transaction” means (a) the Transactions, (b) any Permitted Acquisition or similar permitted Investment, (c) any Disposition of all or substantially all of the assets or Capital Stock of any Subsidiary (or any business unit, line of business or division of the Borrower or Restricted Subsidiary) not prohibited by this Agreement, (d) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary or an Unrestricted Subsidiary as a Restricted Subsidiary in accordance this Agreement, (e) any incurrence or repayment of Indebtedness, (f) the implementation of any Cost Savings Initiative and/or (g) any other event that by the terms of the Loan Documents requires pro forma compliance with a test or covenant hereunder or requires such test or covenant to be calculated on a pro forma basis.

 

“Subordinated Debt” means Indebtedness for borrowed money incurred by any Group Member from a Person other than Holdings or another Group Member that is subordinated in right of payment to the prior payment of the Obligations under the Loan Documents.

 

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“Subsidiary” means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a direct or indirect Subsidiary or Subsidiaries of the Borrower; provided that in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a director’s “qualifying share” or shares required to be held by a resident of the relevant jurisdiction of the former Person shall be deemed to be outstanding.

 

“Subsidiary Guarantor” means (a) on the Closing Date, each Subsidiary of the Borrower (other than any such Subsidiary that is an Excluded Subsidiary on the Closing Date) and (b) thereafter, each Subsidiary of the Borrower that becomes a guarantor of the Obligations pursuant to the terms of this Agreement, in each case, until such time as the relevant Subsidiary is released from its guaranty of the Obligations of the Borrower in accordance with the terms hereof.

 

“Substitute Lender” shall have the meaning provided in Section 10.6(k).

 

“Successor Borrower” has the meaning specified in the last paragraph of Section 7.4.

 

“Successor Holdings” has the meaning specified in Section 7.11.

 

“Swap Obligations” means, with respect to any guarantee of the Secured Obligations, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

“Syndication Agent” has the meaning specified in the preamble hereto.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments or other similar charges imposed by any federal, state, local or foreign governmental authority responsible for administering taxes or otherwise having the power to assess and impose the payment, deduction or withholding of such amounts, including any interest, additions to tax or penalties applicable thereto.

 

“Term Commitment” means the Initial Term Commitment, any Incremental Term Commitment, and/or any Credit Agreement Refinancing Term Commitment, as the context requires.

 

“Term Lender” means, at any time, any lender that has a Term Commitment or a Term Loan at such time.

 

“Term Loan” means an Initial Term Loan, an Incremental Term Loan, an Extended Term Loan and/or a Credit Agreement Refinancing Term Loan, as the context requires.

 

“Term Loan Claim” has the meaning specified in Section 10.6(e).

 

“Term Loan Extension Request” has the meaning specified in Section 2.28(a)(i).

 

“Test Period” means, as of any date of determination, the most recently completed four consecutive fiscal quarters of the Borrower ending on or prior to such date for which financial statements pursuant to Section 6.1(a) or (b) have been delivered; provided that prior to the first date the financial statements pursuant to Section 6.1(a) or (b) have been delivered, the Test Period in effect shall be the period of four consecutive fiscal quarters of the Borrower ended March 31, 2016.

 

 

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“Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Debt as of the last day of the most recently ended Test Period to (b) Consolidated EBITDA for the most recently ended Test Period, in each case, of the Group Members on a consolidated basis.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

 

“Trade Date” has the meaning specified in Section 10.6(j).

 

“Transaction Expenses” means any fees, premiums, expenses and other transaction costs (including original issue discount and upfront fees) incurred or paid by any Investor, the Borrower, or any Subsidiary in connection with the Transactions.

 

“Transactions” means, collectively, (a) the funding of the Initial Term Loans on the Closing Date, (b) the Refinancing, (c) the consummation of any other transactions in connection with the foregoing and (d) the payment of the fees and expenses incurred in connection with any of the foregoing (including the Transaction Expenses).

 

“Transferee” means any Assignee or Participant.

 

“Trigger Date” has the meaning specified in Section 2.12(b).

 

“Type” means, as to any Loan, its classification as an ABR Loan or a Eurodollar Loan.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the creation or perfection of security interests.

 

“United States” and “US” means the United States of America.

 

“Unrestricted Subsidiary” means any Subsidiary designated (or redesignated) by the Borrower as an Unrestricted Subsidiary hereunder after the Closing Date in accordance with Section 6.16 and any Subsidiary of an Unrestricted Subsidiary.

 

“U.S. Lender” has the meaning specified in Section 2.20(f).

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:  (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (b) the then outstanding principal amount of such Indebtedness; provided that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness being refinanced or any Indebtedness that is being modified, refinanced, refunded, renewed, replaced or extended (the “Applicable Indebtedness”), the effects of any amortization or prepayments made on such Applicable Indebtedness vis-à-vis the amortization schedule prior to the date of the applicable modification, refinancing, refunding, renewal, replacement or extension shall be disregarded.

 

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“Wholly-Owned” means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Capital Stock of which (other than (x) director’s qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable Law) are owned by such Person and/or by one or more wholly-owned Subsidiaries of such Person.

 

“Withdrawal Liability” means any liability as a result of complete or partial withdrawal from a Multiemployer Plan as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

“Withdrawal Period” shall have the meaning provided in Section 10.6(l).

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

“Z Capital” means, collectively, Z Capital Partners LLC and James J. Zenni Jr. and each of their Affiliates and any funds, partnerships or other investment vehicles managed or controlled by them or their Affiliates, but not including, however, any of their operating portfolio companies.

 

1.2                            Terms Generally.  Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  The word “or” shall not be exclusive.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein or in any Loan Document (including any Loan Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, amended and restated, supplemented or otherwise modified or extended, replaced or refinanced (subject to any restrictions or qualifications on such amendments, restatements, amendment and restatements, supplements or modifications or extensions, replacements or refinancings set forth herein), (b) any reference to any Law in any Loan Document shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, superseding or interpreting such Law, (c) any reference herein or in any Loan Document to any Person shall be construed to include such Person’s successors and permitted assigns, (d) the words “herein,” “hereof” and “hereunder,” and words of similar import, when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision hereof, (e) all references herein or in any Loan Document to Articles, Sections, clauses, paragraphs, Exhibits and Schedules shall be construed to refer to Articles, Sections, clauses and paragraphs of, and Exhibits and Schedules to, such Loan Document, (f) in the computation of periods of time in any Loan Document from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” mean “to but excluding” and the word “through” means “to and including”, (g) the words “asset” and “property”, when used in any Loan Document, shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (h) the terms “license” and “lease” shall include sublicense and sublease, respectively.

 

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1.3                            Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature (i) shall be construed in accordance with GAAP, as in effect from time to time, provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision (including any definition) hereof to eliminate the effect of any  change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith, and (ii) shall not give effect to any election made by the Borrower or any of its Subsidiaries under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value Indebtedness or other liabilities of any such Person or any Subsidiary of any such Person at “fair value.”

 

1.4                            Reserved.

 

1.5                            Cashless Rollovers.  Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, to the extent that any Lender extends the maturity date of, or replaces, renews or refinances, any of its then-existing Loans with any Other Loans or Credit Agreement Refinancing Debt (including under a new credit facility), in each case, to the extent such extension, replacement, renewal or refinancing is effected by means of a “cashless roll” by such Lender, such extension, replacement, renewal or refinancing shall be deemed to comply with any requirement hereunder or any other Loan Document that such payment be made “in Dollars”, “in immediately available funds”, “in Same Day Funds”, “in cash” or any other similar requirement.

 

1.6                            Certain Calculations and Tests.

 

(a)                               Any financial ratios required to be satisfied in order for a specific action to be permitted under this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one decimal place more than the number of decimal places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).

 

(b)                              Notwithstanding anything to the contrary herein, but subject to Sections 1.6(c), (d) and (e), all financial ratios and tests (including the Total Leverage Ratio, the First Lien Leverage Ratio and the amount of Consolidated Total Assets and Consolidated EBITDA) contained in this Agreement that are calculated with respect to any Test Period during which any Subject Transaction occurs shall be calculated with respect to such Test Period and such Subject Transaction on a Pro Forma Basis.  Further, if since the beginning of any such Test Period and on or prior to the date of any required calculation of any financial ratio or test (x) any Subject Transaction has occurred or (y) any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into any Group Member since the beginning of such Test Period has consummated any Subject Transaction, then, in each case, any applicable financial ratio or test shall be calculated on a Pro Forma Basis for such Test Period as if such Subject Transaction had occurred at the beginning of the applicable Test Period (or, in the case of Consolidated Total Assets (or with respect to any determination pertaining to the balance sheet, including the acquisition of cash and Cash Equivalents), as of the last day of such Test Period); provided that notwithstanding anything to the contrary in this clause (b) or clauses (c), (d) or (e) of this Section 1.6, when calculating the First Lien Leverage Ratio for purposes of determining actual compliance (and not compliance on a Pro Forma Basis) with the financial covenant in Section 7.1, the “Applicable Commitment Fee Rate” and the “Applicable Margin”, the events described in this Section 1.6 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect.

 

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(c)                               Notwithstanding anything to the contrary herein (including in connection with any calculation made on a Pro Forma Basis), to the extent that the terms of this Agreement require  (i) compliance with any financial ratio or test (including any First Lien Leverage Ratio test and/or any Total Leverage Ratio test) and/or any cap expressed as a percentage of Consolidated EBITDA and/or Consolidated Total Assets or (ii) the absence of a Default or Event of Default (or any type of Default or Event of Default) as a condition to (A) the consummation of any transaction in connection with any acquisition or similar Investment (including the assumption or incurrence of Indebtedness), (B) the making of any Restricted Payment and/or (C) the making of any Restricted Debt Payment, in each case in connection with a Limited Condition Acquisition, at the election of the Borrower (the “LCA Election”), the determination of whether the relevant condition is satisfied may be made at the time (the “LCA Test Time”) of (or on the basis of the financial statements for the most recently ended Test Period at the time of) the execution of the definitive agreement with respect to such Limited Condition Acquisition.  If the Borrower has made an LCA Election, then in connection with any calculation of any financial ratio or basket availability following such LCA Test Time and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the definitive agreement with respect thereto is terminated, any such financial ratio or test or cap shall be calculated (and tested) (x) on a Pro Forma Basis assuming such Limited Condition Acquisition and other Subject Transactions in connection therewith have been consummated and (y) additionally, solely for purposes of calculating a financial ratio or basket availability under Section 7.6, on a standalone basis without giving effect to such Limited Condition Acquisition and the other Subject Transactions in connection therewith.

 

(d)                              For purposes of determining the permissibility of any action, change, transaction or event that requires a calculation of any financial ratio or test (including any First Lien Leverage Ratio test, any Total Leverage Ratio test and/or the amount of Consolidated EBITDA or Consolidated Total Assets), such financial ratio or test shall be calculated at the time (subject to clause (c) above) such action is taken, such change is made, such transaction is consummated or such event occurs, as the case may be, and no Default or Event of Default shall be deemed to have occurred solely as a result of a change in such financial ratio or test occurring after the time such action is taken, such change is made, such transaction is consummated or such event occurs, as the case may be.

 

(e)                               Notwithstanding anything to the contrary herein, unless the Borrower otherwise notifies the Administrative Agent, with respect to any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement) that does not require compliance with a financial ratio or test (including any First Lien Leverage Ratio test and/or any Total Leverage Ratio test) (any such amounts, the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with a financial ratio or test (including any First Lien Leverage Ratio test and/or any Total Leverage Ratio test) (any such amounts, the “Incurrence-Based Amounts”), it is understood and agreed that the Fixed Amounts shall be disregarded in the calculation of the financial ratio or test applicable to the Incurrence-Based Amounts.

 

(f)                                For purposes of determining compliance at any time with Sections 7.2 (other than clauses (a)(i), (a)(ii) and (a)(iv) and clause (r) thereof), 7.3 (other than clauses (h) and (r) thereof), 7.5, 7.7, 7.8 and 7.9, in the event that any Indebtedness, Lien, Disposition, Investment, Restricted Debt Payment and/or Affiliate transaction meets the criteria of more than one of the categories permitted pursuant to any clause of such Sections, the Borrower, in its sole discretion, may, from time to time, classify or reclassify such transaction or item (or portion thereof) and will only be required to include the amount and type of such transaction or item (or portion thereof) in any one category.  Further, it is understood and agreed that any Indebtedness, Lien, Disposition, Restricted Payment, Investment, Restricted Debt Payment and/or Affiliate transaction need not be permitted solely by reference to one category of permitted Indebtedness, Lien, Disposition, Restricted Payment, Investment, Restricted Debt Payment and/or Affiliate transaction under Sections 7.2, 7.3, 7.5, 7.6, 7.7, 7.8 and 7.9, respectively, but may instead be permitted in part under any combination thereof.

 

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1.7                            Effectuation of Transactions.  Each of the representations and warranties contained in this Agreement (and all corresponding definitions) is made after giving effect to the Transactions, unless the context otherwise requires.

 

1.8                            Timing of Payment of Performance.  (a)                                     If any payment hereunder (other than payments on Eurodollar Loans or as otherwise expressly provided herein) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day.  If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.  In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

 

(b)                              When performance of any covenant, duty or obligation in respect of any deliverable (other than payment of an obligation as described in clause (a) above) is required on a day which is not a Business Day, the date on which such performance is required shall be extended to the immediately succeeding Business Day.

 

1.9                            Times of Day.  Unless otherwise specified herein, all references herein to times of day shall be references to New York City time (daylight or standard, as applicable).

 

SECTION 2                     AMOUNT AND TERMS OF COMMITMENTS

 

2.1                            Term Commitments.  Subject to the terms and conditions hereof, each Initial Term Lender severally agrees to make a term loan (an “Initial Term Loan”) in Dollars to the Borrower on the Closing Date in an amount not to exceed the amount of the Initial Term Commitment of such Lender.  The Initial Term Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.13.  Each Lender’s Initial Term Commitment shall terminate immediately and without further action on the Closing Date after giving effect to the funding of such Lender’s Initial Term Commitment on such date.  Amounts repaid or prepaid with respect to Term Loans may not be reborrowed.

 

2.2                            Procedure for Term Loan Borrowing.  The Borrower shall give the Administrative Agent notice, substantially in the form of Exhibit A-1 hereto (which notice must be received by the Administrative Agent not later than 11:00 A.M. one (1) Business Day prior to the Closing Date or any Incremental Facility Closing Date (or, in the case of Eurodollar Loans on any Incremental Facility Closing Date, three Business Days prior thereto (unless waived by the Administrative Agent))) requesting that the applicable Term Lenders make the applicable Term Loans on the Closing Date or any Incremental Facility Closing Date and specifying (i) the aggregate principal amount to be borrowed, (ii) the requested Borrowing Date and (iii) whether such Term Loans being incurred are to be made as ABR Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period applicable thereto.  Upon receipt of such borrowing notice the Administrative Agent shall promptly notify each applicable Term Lender thereof.  Not later than 1:00 P.M. on the Closing Date or any Incremental Facility Closing Date each Term Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender.

 

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2.3                            Repayment of Term Loans.  The Initial Term Loan of each Term Lender shall be payable in equal consecutive quarterly installments, commencing on September 30, 2016, on the last Business Day of each of March, June, September and December thereafter, in an amount equal to one  quarter of one percent (0.25%) of the Initial Term Loans funded on the Closing Date (as adjusted to reflect any prepayments thereof in accordance with the applicable Sections of this Agreement), with the remaining balance thereof payable on the Initial Term Maturity Date.

 

2.4                            Revolving Commitments.  Subject to the terms and conditions hereof, each Revolving Lender with Initial Revolving Commitments severally agrees to make revolving loans (“Initial Revolving Loans”) in Dollars to the Borrower from time to time during the Revolving Commitment Period for the Initial Revolving Commitments in an aggregate principal amount at any one time outstanding which, when added to such Lender’s Revolving Percentage of the L/C Obligations then outstanding, after giving effect to the making of such Initial Revolving Loans, does not exceed the amount of such Lender’s Initial Revolving Commitment.  During the Revolving Commitment Period the Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof.  The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, in each case, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.5 and 2.13.

 

2.5                            Procedure for Revolving Loan Borrowing.  (a) The Borrower may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day; provided that the Borrower shall give the Administrative Agent notice in writing, substantially in the form of Exhibit A-1 hereto (which notice must be received by the Administrative Agent in the case of (i) Eurodollar Loans denominated in Dollars after the Closing Date, prior to 11:00 A.M. three Business Days prior to the requested Borrowing Date and (ii) Eurodollar Loans on the Closing Date and ABR Loans, in each case, denominated in Dollars prior to 11:00 A.M. one Business Day prior to the requested Borrowing Date, in each case, specifying (A) the aggregate principal amount and Type of Revolving Loans to be borrowed, (B) the requested Borrowing Date and (C) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor.  Each borrowing by the Borrower under the Revolving Commitments shall be in an amount equal to $1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then aggregate Available Revolving Commitments are less than $1,000,000, such lesser amount).  Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof.  Each Revolving Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior to 1:00 P.M., on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent.  Such borrowing will thereupon promptly be made available to the Borrower at the account of the Borrower so notified to the Administrative agent with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

 

(b)                              If no election as to the Type of a Revolving Loan is specified, then the requested Loan shall be an ABR Loan.  If no Interest Period is specified with respect to any requested Eurodollar Loan, the Interest Period with respect to such requested Loan shall be for one month from the Borrowing Date.

 

2.6                            [Reserved.]

 

2.7                            [Reserved.]

 

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2.8                            Repayment of Loans.  (a)  The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of the appropriate Revolving Lender the then unpaid principal amount of each Revolving Loan of such Revolving Lender made to the Borrower outstanding on the Revolving Termination Date (or on such earlier date on which the Loans become due and payable  pursuant to Section 8.1); and (ii) to the Administrative Agent for the account of the appropriate Term Lender the principal amount of each outstanding Term Loan of such Term Lender made to the Borrower in installments according to the amortization schedule set forth in Section 2.3 or, in the case of any Term Loans other than the Initial Term Loans, as set forth in the related Incremental Agreement, Extension Agreement or Refinancing Agreement (or, in each case, on such earlier date on which the Loans become due and payable pursuant to Section 8.1).  The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans made to the Borrower from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.15.

 

(b)                              Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

 

(c)                               (i) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 10.6(b)(iv), and a subaccount therein for each Term Lender, in which shall be recorded (A) the amount of each Term Loan made hereunder, the Type of such Term Loan and each Interest Period applicable thereto, (B) the amount of any principal, interest and fees, as applicable, due and payable or to become due and payable from the Borrower to each Term Lender hereunder and (C) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Term Lender’s share thereof; and (ii) the Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 10.6(b)(iv), and a subaccount therein for each Revolving Lender, in which shall be recorded (A) the amount of each Revolving Loan made hereunder, the Type of such Revolving Loan and each Interest Period applicable thereto, (B) the amount of any principal, interest and fees, as applicable, due and payable or to become due and payable from the Borrower to each Revolving Lender hereunder and (C) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Revolving Lender’s share thereof.  The Register shall be available for inspection by the Borrower, any Lender (but only, in the case of a Lender, at the Administrative Agent’s office and with respect to any entry relating to such Lender’s Commitments, Loans, L/C Obligations and other Obligations) or, upon the written request of the Borrower to the Administrative Agent, any Gaming Authority specified by the Borrower in such notice, in each case, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)                              The entries made in the Register and the accounts of each Lender maintained pursuant to Section 2.8(c) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded (absent manifest error); provided, however, that the failure of the Administrative Agent or any Lender to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender or the other obligations of the Borrower to such Lender in accordance with the terms of this Agreement.

 

(e)                               Any Lender may request that the Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in the form attached hereto as Exhibit I.

 

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2.9                            Commitment Fees, etc.  (a)  The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee for the period from and including the Closing Date to but excluding the last day of the Revolving Commitment Period, computed at the Applicable Commitment Fee Rate on the average daily amount of the Available Revolving Commitment  of such Lender during the period for which payment is made, payable quarterly in arrears on each Fee Payment Date.

 

(b)                              The Borrower agrees to pay on the Closing Date to the Administrative Agent, for the benefit of each Lender party to this Agreement as a Lender on the Closing Date, (i) as fee compensation for the funding of such Lender’s Term Loan, a closing fee in an amount equal to 0.50% of the stated principal amount of such Lender’s Term Loan, payable, at the election of the Lead Arrangers following consultation with the Borrower, to the Administrative Agent, for the benefit of each such Lender, from the proceeds of its Term Loan as and when funded on the Closing Date or in the form of original issue discount and (ii) as fee compensation for the availability of such Lender’s Revolving Commitment, a closing fee in an amount equal to 0.50% of the aggregate principal amount of such Lender’s Revolving Commitment, payable to the Administrative Agent, for the benefit of such Lender, on the Closing Date.  Such closing fees shall be in all respects fully earned, due and payable on the Closing Date and non-refundable and non-creditable thereafter.

 

(c)                               The Borrower agrees to pay to (i) CS or its Affiliates the fees in the amounts and on the dates as set forth in any fee agreements including, without limitation under the Agent Fee Letter and (ii) Fifth Third Bank the fees in the amounts and on the dates as set forth in any fee agreements including, without limitation under the Side Fee Letter.

 

2.10                    Termination or Reduction of Revolving Commitments.  The Borrower shall have the right, upon not less than three Business Days’ notice by the Borrower to the Administrative Agent (or such shorter period as to which the Administrative Agent may agree), to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments; provided that no such termination or reduction of such Revolving Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans made on the effective date thereof, the total Revolving Extensions of Credit would exceed the total Revolving Commitments.  Any such partial reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Revolving Commitments then in effect.  It being understood and agreed that, subject to Section 2.28(a)(ii), the Borrower may allocate any voluntary termination or reduction of Commitments among Classes of Commitments at the Borrower’s direction.

 

2.11                    Optional Prepayments.  The Borrower may at any time and from time to time prepay the Revolving Loans or the Term Loans, in whole or in part, subject to Section 2.18(e) and Section 2.21, without premium or penalty, upon notice by the Borrower in substantially the form of Exhibit H hereto delivered to the Administrative Agent no later than 11:00 A.M. three Business Days prior thereto, in the case of Eurodollar Loans, and no later than 11:00 A.M. one Business Day prior to, in the case of ABR Loans, which notice shall specify (i) the date and amount of prepayment, (ii) the Class of Loans which will be prepaid and (iii) whether the prepayment is of Eurodollar Loans or ABR Loans; provided that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21.  Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.  If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein (provided that such notice may be conditioned on receiving the proceeds of any transaction), together with accrued interest (except in the case of any prepayment of a Revolving Loan that is an ABR Loan not made in connection with a permanent reduction or termination of the Revolving Commitments) to such date on the amount prepaid.  Partial prepayments of Term Loans and Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof, and shall be subject to the provisions of Section 2.18.  Subject to Section 2.18(e), each prepayment of the Term Loans pursuant to this Section 2.11 shall be applied to the Repayment Amounts as directed by the Borrower.  Each prepayment of the Loans pursuant to this Section 2.11 shall be applied

 

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to Classes of Term Loans as directed by the Borrower (including, for the avoidance of doubt, the Borrower may (i) prepay Term Loans of an Existing Term Loan Class without any requirement to prepay Extended Term Loans that were converted or exchanged from such Existing Term Loan Class and (ii) prepay Extended Term Loans without any requirement to prepay Term Loans of an Existing Term Loan Class that were converted or exchanged for such Extended Term Loans).  In the event that the Borrower does not specify the order in which to apply prepayments to reduce Repayment Amounts or as between Classes of Term Loans, the Borrower shall be deemed to have elected that such proceeds be applied to reduce the installments in direct order of maturity on a pro-rata basis among Term Loan Classes.

 

2.12                    Mandatory Prepayments.  (a) If any Indebtedness (including Credit Agreement Refinancing Debt, but excluding any other Indebtedness permitted to be incurred in accordance with Section 7.2) shall be incurred by a Group Member, the Borrower shall pay an amount equal to 100% of the Net Cash Proceeds of such Indebtedness within three Business Days of the date of receipt thereof to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12.

 

(b)                              If on any date any Group Member shall for its own account receive Net Cash Proceeds in excess (but only to the extent of such excess) of $2,500,000 from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, the Borrower shall pay an amount equal to the Asset Sale/Recovery Event Prepayment Percentage of such Net Cash Proceeds within five Business Days of the date of receipt thereof to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12; provided that notwithstanding the foregoing, (i) on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be paid to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12 and (ii) on the date (the “Trigger Date”) that is six months after any such Reinvestment Prepayment Date, an amount equal to the portion of any Committed Reinvestment Amount with respect to the relevant Reinvestment Event not actually expended by such Trigger Date shall be paid to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12.

 

(c)                               Within five Business Days after financial statements have been delivered pursuant to Section 6.1(a) (commencing with the financial statements to be delivered with respect to the fiscal year ending December 31, 2016), the Borrower shall pay to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12 an amount equal to the (i) the Excess Cash Flow Percentage of Excess Cash Flow for such preceding fiscal year (or in the case of the fiscal year ending December 31 2016, for the period commencing on July 1, 2016 and ending on December 31, 2016) minus (ii) at the election of the Borrower, the sum of (without duplication of any amounts so deducted from Excess Cash Flow in any prior or subsequent years) (w) the aggregate principal amount of any Loans voluntarily prepaid pursuant to Section 2.11 prior to such date (but solely, in the case of the prepayment of any Revolving Loans, to the extent accompanied by a permanent reduction in the relevant Revolving Commitments), (x) the aggregate principal amount of any Incremental Equivalent Debt or Credit Agreement Refinancing Debt, in each case under this clause (x), that is secured by a Lien on a pari passu basis with the Facilities, voluntarily prepaid prior to such date (but solely, in the case of the prepayment of any revolving loans, to the extent accompanied by a permanent reduction in the relevant revolving commitments) and (y) the amount of any voluntary reduction in the outstanding amount of any Term Loans resulting from any purchase or assignment made in accordance with Section 10.6(c) of this Agreement (including in connection with any Dutch auction) prior to such date and, in each case under this clause (y), based upon the actual amount of cash paid by Holdings or any Group Member in connection with the relevant purchase or assignment, and, in each case of clauses (x) and (y) to the extent that the relevant prepayments were not financed with the proceeds of long-term Indebtedness (other than  revolving Indebtedness) of the Group Members; provided that if the difference between clauses (i) and (ii) for any fiscal year is less than or equal to $2,500,000, then no payment shall be required under this clause (c) for such fiscal year.

 

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(d)                              The Borrower shall immediately prepay the Revolving Loans to the extent necessary so that the Revolving Extensions of Credit of all Lenders shall not at any time exceed the Revolving Commitments then in effect.  To the extent that after such prepayments, the Revolving Extensions of Credit of all Lenders exceed the Revolving Commitments then in effect, the Borrower shall Cash Collateralize outstanding L/C Obligations to eliminate such excess.

 

(e)                               The Borrower shall notify the Administrative Agent in writing of any mandatory prepayment of Obligations required to be made pursuant to clauses (a), (b) and (c) of this Section 2.12 (including the amount of such prepayment so required) by 11:00 A.M. at least three (3) Business Days on the date of such prepayment.  The Administrative Agent will promptly notify each applicable Lender of the contents of the Borrower’s prepayment notice and of such applicable Lender’s pro rata share of the prepayment.  Each appropriate Lender may reject all (but not a portion) of its share of any mandatory prepayment made pursuant to clauses (a), (b) and (c) (such declined amounts, the “Declined Proceeds”) of Term Loans by providing written notice (each, a “Rejection Notice”) to the Administrative Agent and the Borrower no later than 5:00 p.m. one (1) Business Day after the date of such Lender’s receipt of notice from the Administrative Agent regarding such prepayment.  Each Rejection Notice from a given Lender shall specify the principal amount of the mandatory prepayment of Term Loans to be rejected by such Lender.  If a Lender fails to deliver a Rejection Notice to the Administrative Agent within the time frame specified above or such Rejection Notice fails to specify the principal amount of the Term Loans to be rejected, any such failure will be deemed an acceptance of the total amount of such mandatory repayment of Term Loans.  Any Declined Proceeds shall be retained by the Borrower (“Retained Declined Proceeds”).

 

(f)                                If, at any time the Borrower would be required to prepay the Term Loans pursuant to clause (b) or (c) above, the Borrower is required to offer to prepay or repurchase any Incremental Equivalent Debt or Credit Agreement Refinancing Debt (other than any Credit Agreement Refinancing Term Loans) that is pari passu with the Term Loans in right of payment and with respect to security pursuant to the terms of the documentation governing such Indebtedness in connection with the circumstances described in clause (b) or (c), as applicable (such Indebtedness, the “Other Applicable Indebtedness”), then the Borrower may apply the amounts required to be prepaid or used to repurchase on a pro rata basis (determined on the basis of the aggregate outstanding principal amount of the Term Loans and the Other Applicable Indebtedness at such time; provided that the portion of such prepayment allocated to any Other Applicable Indebtedness shall not exceed the amount required to be allocated to such Other Applicable Indebtedness pursuant to the terms thereof, and the remaining amount, if any, shall be allocated to the Term Loans in accordance with the terms hereof) to the prepayment of the Term Loans and the prepayment or repurchase of the Other Applicable Indebtedness, and the amount of the prepayment of the Term Loans that would have otherwise been required pursuant to such clause (b) or (c) shall be reduced accordingly; provided that, to the extent the holders thereof decline to have such Other Applicable Indebtedness prepaid or repurchased, the declined amount shall promptly be applied to prepay the Term Loans in accordance with the terms hereof.

 

(g)                               Except as otherwise provided in any Incremental Agreement, any Extension Agreement or any Refinancing Agreement for less than ratable prepayment of any Incremental Term Facility, Extended Term Facility or Credit Agreement Refinancing Facility, each prepayment of Term Loans pursuant to clauses (a), (b) and (c) of this Section 2.12 shall be applied ratably to each Class of Term Loans then outstanding (provided that any prepayment of Term Loans with the Net Cash Proceeds of any Permitted Refinancing Debt and/or any Incremental Term Facility incurred for the purpose of

 

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refinancing or replacing such Term Loans shall be applied to the applicable Class of Term Loans being refinanced or replaced).  With respect to each Class of Term Loans, all prepayments accepted under this Section 2.12 shall be applied against the remaining scheduled installments of principal due in respect of such Class of Term Loans as directed by the Borrower (or, in the absence of direction from the Borrower, to the remaining scheduled amortization payments in respect of such Class of Term Loans in direct order of maturity), and each such prepayment shall be paid to the Term Lenders of such Class pro rata according to the respective amounts due to such Term Lenders.  The amount of such mandatory prepayments shall be applied on a pro rata basis to the then outstanding Term Loans being prepaid irrespective of whether such outstanding Term Loans are ABR Loans or Eurodollar Rate Loans; provided that if no Lenders exercise the right to waive a given mandatory prepayment of the Term Loans pursuant to Section 2.12(e), then, such mandatory prepayment shall be applied first to the then outstanding Term Loans that are ABR Loans and then to the then outstanding Term Loans that are Eurodollar Loans in a manner that minimizes the amount of any payments required to be made by the Borrower pursuant to Section 2.21.

 

(h)                              Notwithstanding any other provisions of this Section 2.12, to the extent that (i) any of or all the Net Cash Proceeds of any Asset Sale by a Foreign Subsidiary (a “Foreign Disposition”), the Net Cash Proceeds of any Recovery Event from a Foreign Subsidiary (a “Foreign Recovery Event”), or Excess Cash Flow is prohibited or delayed by applicable local Law from being repatriated to the United States (the Borrower hereby agreeing to cause the applicable Foreign Subsidiary (and, if applicable, its parent entities) to use commercially reasonable efforts to take actions required by the applicable local Law to permit such repatriation) or (ii) the Borrower has determined in good faith that repatriation of any of or all the Net Cash Proceeds of any Foreign Disposition, any Foreign Recovery Event or Excess Cash Flow would have a material adverse tax cost consequence with respect to such Net Cash Proceeds or Excess Cash Flow, the portion of such Net Cash Proceeds or Excess Cash Flow so affected will not be required to prepay Term Loans; provided that if and to the extent any such repatriation ceases to be prohibited or delayed by the applicable local Law or such material adverse tax cost consequence ceases to exist, in each case, at any time during the one (1) year period immediately following the date the related prepayment under this Section 2.12 was required to be made, such repatriation will be promptly effected and such repatriated Net Cash Proceeds or Excess Cash Flow will be promptly (and in any event not later than five (5) Business Days after such repatriation) be offered to be applied (net of additional taxes payable or reserved against as a result thereof) to the prepayment of the Term Loans pursuant to this Section 2.12 to the extent provided herein.

 

2.13                    Conversion and Continuation Options.  (a)  The Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent prior notice substantially in the form of Exhibit A-2 hereto of such election no later than 11:00 A.M. on the third Business Day preceding the proposed conversion date; provided that if any Eurodollar Loan is so converted on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21.  The Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice substantially in the form of Exhibit A-2 hereto of such election no later than 11:00 A.M. on the third Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor); provided that no ABR Loan under a particular Facility may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing to the extent the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower.  Upon receipt of any such notice, the Administrative Agent shall promptly notify each relevant Lender thereof.

 

(b)                              Any Eurodollar Loan may be continued as such by the Borrower giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1 and no later than 11:00 A.M. on the third Business Day

 

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preceding the proposed continuation date, of the length of the next Interest Period to be applicable to such Loans; provided that if any Eurodollar Loan is so continued on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21 and; provided, further, that no Eurodollar Loan denominated in Dollars under a particular Facility may be continued as such when any Event of Default has occurred and is continuing to the extent the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower; provided, further, that (x) if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period and (y) if the Borrower shall fail to give any required notice as described above in this paragraph, such Loans shall be automatically converted to ABR Loans.  Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

2.14                    Minimum Amounts and Maximum Number of Eurodollar Tranches.  Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that (a) after giving effect thereto, the aggregate principal amount of Eurodollar Loans comprising each tranche of Eurodollar Loans shall be equal to a minimum of $1,000,000 or a whole multiple of $100,000 in excess thereof and (b) no more than eight tranches of Eurodollar Loans shall be outstanding at any one time (it being understood that such number may be increased at any time at the Administrative Agent’s discretion).

 

2.15                    Interest Rates and Payment Dates.  (a)  Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

 

(b)                              Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

 

(c)                               Notwithstanding clauses (a) and (b) above, at any time when an Event of Default under Section 8.1(a) exists with respect to any principal, interest or fees, to the extent the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, the Borrower shall pay interest on the applicable past due amounts hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.  Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(d)                              Subject to Section 2.15(c), interest shall be payable by the Borrower in arrears on each Interest Payment Date.

 

(e)                               If, as a result of any restatement of or other adjustment to the financial statements delivered pursuant to Sections 6.1(a) or (b), (x) the First Lien Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (y) a proper calculation of the First Lien Leverage Ratio would have resulted in a different Applicable Margin, Applicable Commitment Fee Rate or Excess Cash Flow Percentage for any period then:  (i) if the proper calculation of the First Lien Leverage Ratio would have resulted in a higher Applicable Margin, Applicable Commitment Fee Rate or Excess Cash Flow Percentage for such period, the Borrower shall automatically and retroactively be obligated to pay to the Administrative Agent, for the benefit of the applicable Lenders, promptly on demand by the Administrative Agent, an amount equal to the excess of the amount that should have been paid for such period over the amount actually paid for such period (and no Default or Event of Default shall have been deemed to occur solely as a result of such underpayment upon payment of such additional amounts) and (ii) if the proper calculation of the First Lien Leverage Ratio would have resulted in a lower Applicable  Margin, Applicable Commitment Fee Rate or Excess Cash Flow Percentage for such period, neither the Administrative Agent nor any Lender shall have any obligation to repay any amount to the Borrower.

 

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2.16                    Computations of Interest and Fees.  (a)  All computations of interest and of fees shall be made by the Administrative Agent on the basis of a year of 360 days and, in the case of ABR Loans 365/366 days, in each case, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest and fees are payable.  Each determination of an interest rate or the amount of a fee hereunder shall be made by the Administrative Agent (including determinations of a Eurodollar Rate or ABR in accordance with the definitions of “Eurodollar Rate” and “ABR”, respectively) and shall be conclusive, binding and final for all purposes, absent manifest error.

 

(b)                              The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate.  Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective.  The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate.  The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate or fee pursuant to Section 2.15(a) and Section 2.15(b).

 

2.17                    Inability to Determine Interest Rate.  If prior to the commencement of any Interest Period for any Eurodollar Loan:

 

(a)                               the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

 

(b)                              the Administrative Agent shall have received notice from the Majority Facility Lenders in respect of the relevant Facility that by reason of any changes arising after the date of this Agreement the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,

 

the Administrative Agent shall give email or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter.  If such notice is given (x) any Eurodollar Loans under the relevant Facility requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans under the relevant Facility that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility shall be converted, on the last day of the then-current Interest Period with respect thereto, to ABR Loans.  Until such notice has been withdrawn by the Administrative Agent (which action the Administrative Agent will take promptly after the conditions giving rise to such notice no longer exist), no further Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall the Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans.

 

Notwithstanding the foregoing, in the case of a pending request for a Eurodollar Loan as to which the Administrative Agent has made the determination described in clause (a) of the first sentence of this Section, the Administrative Agent, in consultation with the Borrower and the relevant Lenders, may establish an alternative interest rate that reflects the all-in-cost of funds to the Lenders for funding Loans in the applicable currency and amount, and with the same Interest Period as the Eurodollar Loan

 

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requested to be made, converted or continued, as the case may be (the “Impacted Loans”), in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (x) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a) of the first sentence of this Section, (y) the Required Lenders notify the Administrative Agent and the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (z) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.

 

2.18                    Pro Rata Treatment and Payments.  (a)  Each payment (excluding voluntary and mandatory prepayments which shall be applied in accordance with Section 2.11 and Section 2.12(g), respectively) in respect of principal, interest or fees in respect of Term Loans shall be applied to the amounts of such obligations owing to such Class of Term Lenders, pro rata according to the respective amounts then due and owing to such Class of Term Lenders.  Amounts repaid or prepaid on account of the Term Loans may not be reborrowed.  Principal prepayments (other than voluntary and mandatory prepayments which shall be applied in accordance with Section 2.11 and Section 2.12(g), respectively) of the Term Loans shall be applied to reduce the installments thereof in direct order of maturity.

 

(b)                              Except as otherwise provided herein, each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment fee and any reduction of a Class of Revolving Commitments of the Lenders shall be made pro rata according to the respective Revolving Percentages of the relevant Lenders.  Except as otherwise provided herein, each payment (including prepayments) by the Borrower on account of principal of and interest on any Class of Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving Lenders with respect to such Classes.  Each payment in respect of Reimbursement Obligations in respect of any Letter of Credit shall be made to the Issuing Lender that issued such Letter of Credit.

 

(c)                               Payments.  The Borrower shall make each payment (other than Issuing Lender fronting fees which shall be paid directly to the Issuing Bank) under any Loan Document not later than 2:00 P.M. on the day when due to the Administrative Agent by wire transfer to an account or by such other means to such other address as Administrative Agent shall have notified the Borrower in writing within a reasonable time prior to such payment in immediately available Dollars and without setoff (except as provided in Section 2.20) or counterclaim.  All payments received by the Administrative Agent after 2:00 P.M. shall be deemed received on the next Business Day (in the Administrative Agent’s sole discretion) and any applicable interest shall continue to accrue. The Administrative Agent shall promptly distribute to each Lender any payments received by the Administrative Agent on behalf of such Lender.

 

(d)                              Advancing Payments.

 

(i)                Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent on demand, such amount with interest thereon, at a rate

 

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equal to the greater of (i) the Overnight Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent.  A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be presumptively correct in the absence of manifest error.  If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall give notice of such fact to the Borrower and the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans under the relevant Facility, on demand, from the Borrower.  Nothing herein shall be deemed to limit the rights of the Administrative Agent or the Borrower against any Defaulting Lender.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing.

 

(ii)            Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the relevant Lenders their respective pro rata shares of a corresponding amount.  If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each relevant Lender to which any amount was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Overnight Rate.  Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

 

(e)                               Prepayment Premium.  In the event that, prior to the six month anniversary of the Closing Date, a Repricing Transaction occurs, the Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Term Lenders, (x) in the case of a Repricing Transaction described in clause (a) of the definition thereof, a prepayment premium of 1.00% of the amount of the Initial Term Loans being prepaid in connection with such Repricing Transaction and (y) in the case of a Repricing Transaction described in clause (b) of the definition thereof, an amount equal to 1.00% of the aggregate amount of the applicable Initial Term Loans outstanding immediately prior to such amendment that are subject to an effective pricing reduction pursuant to such Repricing Transaction.  Any payment required to be made by the Borrower pursuant to this clause (e) shall be made on the same date as the prepayment, repayment, refinancing or repricing giving rise to requirement for payment to be made under this clause (e) occurs.

 

(f)                                Application of Payments During an Event of Default.  Notwithstanding anything herein to the contrary, following the occurrence and during the continuance of an Event of Default, and notice thereof to the Administrative Agent by the Borrower or the Required Lenders, all payments received on account of the Secured Obligations shall, subject to Sections 2.26 and 2.27, be applied by the Administrative Agent as follows:

 

first, to payment of that portion of the Secured Obligations constituting fees, indemnities, expenses and other amounts payable to the Agents in their capacities as such;

 

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second, to payment of that portion of the Secured Obligations constituting fees, indemnities and other amounts (other than principal, reimbursement obligations in respect of drawings under Letters of Credit, interest and Letters of Credit fees) payable to the Lenders (including fees and disbursements and other charges of counsel) arising under the Loan Documents, ratably among them in proportion to the respective amounts described in this clause second payable to them;

 

third, to payment of that portion of the Secured Obligations constituting accrued and unpaid Letters of Credit fees, interest on the Loans and interest on unreimbursed borrowings under Letters of Credit, ratably among the Lenders in proportion to the respective amounts described in this clause third payable to them;

 

fourth, (A) to payment of that portion of the Secured Obligations constituting unpaid principal of the Loans, unreimbursed borrowings under Letters of Credit and amounts owing with respect to Specified Hedge Agreements (unless such payments are made with the proceeds of guarantees and collateral which do not support the Specified Hedge Agreements) and Cash Management Documents and (B) to Cash Collateralize that portion of L/C Obligations comprising the undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Section 2.27, ratably among the Lenders and the Issuing Lenders in proportion to the respective amounts described in this clause fourth payable to them; provided that (x) any such amounts applied pursuant to subclause (B) above shall be paid to the Administrative Agent for the ratable account of the applicable Issuing Lenders to Cash Collateralize such L/C Obligations, (y) subject to Section 3.5 or 2.27, amounts used to Cash Collateralize the aggregate amount of Letters of Credit pursuant to this clause fourth shall be used to satisfy drawings under such Letters of Credit as they occur and (z) upon the expiration of any Letter of Credit, the pro rata share of Cash Collateral shall be distributed in accordance with this clause fourth;

 

fifth, to the payment in full of all other Secured Obligations (other than Secured Obligations under the Specified Hedge Agreements to the extent of any payments made with the proceeds of guarantees and collateral which do not support the Specified Hedge Agreements), in each case, ratably among the Agents and the Lenders based upon the respective aggregate amounts of all such Secured Obligations owing to them in accordance with the respective amounts thereof then due and payable; and

 

finally, the balance, if any, after all Secured Obligations have been paid in full, to the Borrower or as otherwise required by Law.

 

If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Secured Obligations, if any, in the order set forth above.

 

2.19                    Increased Costs.  (a)  If any Change in Law shall:

 

(i)                impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate) or any Issuing Lender;

 

(ii)            subject the Administrative Agent, any Lender or any Issuing Lender to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Other Connection Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

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(iii)        impose on any Lender or any Issuing Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the actual cost to such Lender, the Administrative Agent or any Issuing Lender by an amount that is material of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, such Issuing Lender or the Administrative Agent of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, Issuing Lender or the Administrative Agent hereunder (whether of principal, interest or any other amount) then from time to time, after submission by such Lender, Issuing Lender or the Administrative Agent, as applicable, to the Borrower of the certificate contemplated by clause (c) of this Section 2.19, the Borrower will, within ten Business Days after the Borrower’s receipt of such certificate, pay to such Lender, Issuing Lender or Administrative Agent, as the case may be, such additional amount or amounts as will compensate such Lender, Issuing Lender or Administrative Agent, as the case may be, for such additional actual costs incurred or actual reduction suffered; provided that the Borrower shall not be liable for such compensation if (x) the relevant Change in Law occurs on a date prior to the date such Person becomes a party hereto, (y) such Person invokes Section 2.22 or (z) in the case of any request for reimbursement under clause (iii) of this Section 2.19(a) resulting from a market disruption, (A) the relevant circumstances do not generally affect the banking market or (B) the applicable request has not been made by Lenders constituting Required Lenders.

 

(b)                              If any Lender or Issuing Lender determines that any Change in Law affecting such Lender or Issuing Lender or any lending office of such Lender or such Lender’s or Issuing Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the actual rate of return on such Lender’s or Issuing Lender’s capital or on the capital of such Lender’s or Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by any Issuing Lender, to a level below that which such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Lender’s policies and the policies of such Lender’s or Issuing Lender’s holding company with respect to capital adequacy), then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of the certificate contemplated by clause (c) of this Section 2.19, the Borrower will pay within ten Business Days after the Borrower’s receipt of such request to such Lender or Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company for any such reduction suffered.

 

(c)                               The Administrative Agent, any Issuing Lender or any Lender requesting compensation under this Section 2.19 shall be required to deliver a certificate to the Borrower that (i) sets forth the amount or amounts necessary to compensate the Administrative Agent, such Lender or Issuing Lender or its holding company, as the case may be, (ii) sets forth, in reasonable detail (consistent with the detail provided by such Person to similarly situated borrowers), the manner in which such amounts were determined and (iii) certifies that such Person is generally charging such amounts to similarly situated borrowers under comparable syndicated credit facilities, which certificate shall be conclusive absent manifest error.  Failure or delay on the part of Administrative Agent, any Lender or Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of Administrative Agent’s, such Lender’s or Issuing Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate the Administrative Agent, a Lender or Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered more than six months prior to the date that  the Administrative Agent, such Lender or Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of the Administrative Agent’s, such Lender’s or Issuing Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

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2.20                    Taxes.  (a)  For purposes of this Section 2.20, the term “applicable law” includes FATCA.

 

(b)                              All payments made to a Recipient by or on behalf of the Borrower or any Guarantor under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(c)                               Except as otherwise provided in this Agreement, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law or, at the option of the Administrative Agent, reimburse the Administrative Agent or the relevant Lender for the payment of such Other Taxes in accordance with Section 2.20(g) below.

 

(d)                              Whenever any Indemnified Taxes are payable by the Borrower, as promptly as practicable thereafter, the Borrower shall send to the Administrative Agent for the account of the Administrative Agent or the relevant Lender, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof if such receipt is obtainable, or, if not, other reasonable evidence of payment.

 

(e)                               Each Recipient that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) (a “Non-U.S. Lender”) shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Borrower and to the Lender from which the related participation shall have been purchased) (i) two accurate, complete and executed copies of IRS Form W-8ECI, W-8EXP, W-8BEN or W-8BEN-E (claiming benefits under an applicable treaty) or W-8IMY (together with any applicable underlying forms) (or any successor or other applicable forms), or, (ii) in the case of a Non-U.S. Lender claiming exemption from United States federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, (A) a certificate substantially in the form of Exhibit F to the effect that such Non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (B) two accurate, complete and executed copies of IRS Form W-8BEN or W-8BEN-E, or any subsequent versions or successors to such forms, in each case properly completed and duly executed by such Non-U.S. Lender.  Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation) and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent.

 

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(i)                                  Each Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a party under this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation) and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent, executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.  Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form, certification or other similar information pursuant to this paragraph if in a Non-U.S. Lender’s reasonable judgment such completion, execution or delivery of such form, certification or similar information would subject such Non-U.S. Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Non-U.S. Lender.

 

(ii)                              If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (ii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(iii)                          In addition, each Non-U.S. Lender shall deliver such forms as necessary promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender pursuant to this Section 2.20(e) or shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the United States taxing authorities for such purpose).

 

(f)                                Each Recipient that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) (a “U.S. Lender”) shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Borrower and to the Lender from which the related participation shall have been purchased) two accurate, complete and executed copies of IRS Form W-9, or any subsequent versions or successors to such form certifying that such Lender is exempt from U.S. federal backup withholding tax.  Such forms shall be delivered by each U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation).  In addition, each U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such U.S. Lender or shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certifications to the Borrower (or any other form of certification adopted by the United States taxing authorities for such purpose).

 

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(g)                               The Borrower shall indemnify each Recipient, within ten Business Days after receipt of the certificate described in the succeeding sentence, for the full amount of any Indemnified Taxes (including any Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether or not such Taxes are correctly or legally imposed or asserted by the relevant Governmental Authority; provided that, if the Borrower reasonably believes that such Taxes were not correctly or legally asserted, the Administrative Agent or such Lender, as applicable, will use reasonable efforts to cooperate with the Borrower to challenge such Taxes or obtain a refund of such Taxes (which refund, when received, shall be repaid to the Borrower in accordance with Section 2.20(h)) so long as such efforts would not, in the sole determination of the Administrative Agent or such Lender, result in any additional out-of-pocket costs or expenses not reimbursed by the Borrower or be otherwise materially disadvantageous to the Administrative Agent or such Lender, as applicable; provided, further, that the Borrower shall not be obligated to make payment to the Lender or the Administrative Agent (as the case may be) for penalties and interest attributable to any Indemnified Taxes or Other Taxes arising from the gross negligence or willful misconduct of the Lender or the Administrative Agent.  In connection with any request for indemnification under this Section 2.20(g), the relevant Lender or Administrative Agent, as applicable, shall deliver a certificate to the Borrower setting forth, in reasonable detail, the basis and calculation of the amount of the relevant payment or liability, which certificate shall be conclusive absent manifest error.  Notwithstanding anything to the contrary contained in this Section 2.20(g), the Borrower shall not be required to indemnify the Administrative Agent or any Lender pursuant to this Section 2.20(g) for any amount to the extent the Administrative Agent or such Lender fails to notify the Borrower of the relevant possible indemnification claim within twelve months after the Administrative Agent or such Lender receives written notice from the applicable taxing authority of the specific tax assessment giving rise to such indemnification claim and provided that any delay in such notice did not materially adversely prejudice the Borrower.

 

(h)                              If any Recipient determines, in its sole discretion exercised in good faith, that it has received a credit or refund of any Taxes as to which it has been indemnified by an indemnifying party or with respect to which an indemnifying party has paid additional amounts pursuant to this Section, it shall pay over an amount equal to such credit or refund to such indemnifying party (but only to the extent of indemnity payments made, or additional amounts paid, by such indemnifying party under this Section with respect to the Taxes giving rise to such credit or refund), net of all reasonable out-of-pocket expenses (including Taxes) of such Recipient and without interest (other than any interest paid by the relevant Governmental Authority with respect to such credit or refund); provided that the indemnifying party, upon the request of such Recipient, agrees to repay the amount paid over to such indemnifying party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Recipient in the event such Recipient is required to repay such credit or refund to such Governmental Authority.  This Section 2.20(h) shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its Taxes which it deems confidential) to the Borrower or any other Person.

 

(i)                                  Each Lender shall severally indemnify the Administrative Agent, within ten Business Days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.6 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this clause (i).  The agreements in this clause (i) shall survive the resignation and/or replacement of the Administrative Agent.

 

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(j)                                  The Administrative Agent shall deliver to the Borrower on or before the date on which it becomes the Administrative Agent under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower) (x) an accurate and complete signed copy of IRS Form W-8ECI with respect to any amounts payable to the Administrative Agent for its own account and (y) an accurate and complete signed copy of IRS Form W-8IMY with respect to any amounts payable to the Administrative Agent for the account of others, certifying that it is a “U.S. branch,” that the payments its receives for the account of others are not effectively connected with the conduct of its trade or business within the United States and that it is using such form as evidence of its agreement with the Borrower to be treated as a U.S. person with respect to such payments (and the Borrower and the Administrative Agent agree to so treat the Administrative Agent as a U.S. person with respect to such payments as contemplated by, and in accordance with, Section 1.1441-1(b)(2)(iv) of the United States Treasury Regulations).

 

(k)                              The agreements in this Section shall survive the Facility Termination Date.

 

2.21                    Indemnity.  The Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, the actual loss or actual expense (other than lost profits, including the Applicable Margin) that such Lender may actually sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from Eurodollar Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment, conversion or continuation of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto (including as a result of Section 2.24 hereof).  For purposes of calculating amounts payable by the Borrower under this Section 2.21, each Lender shall be deemed to have funded each Eurodollar Loan made by it at the Eurodollar Rate (excluding the impact of clause (b) of the definition of “Eurodollar Rate”) for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Loan was in fact so funded; provided that, for the avoidance of doubt, the Borrower shall not be obligated to compensate any Lender under this Section 2.21 for any loss of anticipated profits.  Any Lender requesting compensation under this Section 2.21 shall deliver a certificate to the Borrower that sets forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.21, the basis therefor and, in reasonable detail (consistent with the detail provided by such Lender to similarly situated borrowers), the manner in which such amount or amounts were determined.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof.  This Section shall not apply with respect to Taxes, which shall be governed by Sections 2.19 and 2.20.

 

2.22                    Illegality.  Notwithstanding any other provision herein, if any Lender reasonably determines that any Change in Law has made it unlawful for such Lender or its applicable lending office to make or maintain Eurodollar Loans as contemplated by this Agreement, such Lender shall promptly give notice thereof to the Administrative Agent and the Borrower, and (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall be suspended during the period of such illegality and (b) such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the respective last days of the then current Interest Periods with respect to such Loans; provided that if such notice relates to the unlawfulness or asserted unlawfulness of charging interest based on clause (iii) of the definition of ABR, then all Base Rate Loans shall be determined based on the definition of the term “ABR” without giving effect to such clause (iii).

 

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2.23                    Mitigation of Costs; Change of Lending Office.  If any Recipient requests compensation under Section 2.19, requires the Borrower to pay any Taxes or additional amounts to any Recipient or any Governmental Authority for the account of any Recipient pursuant to Section 2.20 or gives a notice of illegality pursuant to Section 2.22, then such Recipient shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Recipient, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.19 or 2.20, as the case may be, in the future or mitigate the impact of Section 2.22, and (ii) would not subject such Recipient to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Recipient in any material respect.

 

2.24                    Replacement of Lenders.  If (a) any Lender requests reimbursement for amounts owing pursuant to Section 2.19 or Section 2.20 or gives a notice of illegality pursuant to Section 2.22, (b) any Lender is a Defaulting Lender, (c)  any Lender is incurring or is reasonably expected to incur costs which are or would be material in amount and are associated with a Gaming Authority’s investigation of whether or not such Lender is a Qualified Person, or (d) in connection with any proposed amendment, waiver, extension or consent requiring the consent of “each Lender” or “each Lender directly affected thereby” (or any other Class or group of Lenders other than the Required Lenders) with respect to which the Required Lenders’ consent (or the consent of Lenders holding loans or commitments of such Class or lesser group representing more than 50% of the sum of the total loans and unused commitments of such Class or lesser group at such time) has been obtained, as applicable, including in connection with any Repricing Transaction, any Lender is a non-consenting Lender (each such Lender described in this clause (d), a “Non-Consenting Lender”), then the Borrower may, upon notice to such Lender and the Administrative Agent, (i) terminate the applicable Commitments of such Lender and repay all Obligations of the Borrower owing to such Lender relating to the applicable Loans and participations held by such Lender as of such termination date or (ii) replace such Lender by requiring such Recipient to assign and delegate (and such Recipient shall be obligated to assign and delegate), all of its interests, rights and obligations under this Agreement to a Qualified Person who is a Person eligible to be an assignee pursuant to Section 10.6(b); provided that (w) such replacement does not conflict with any Law, (ii) the replacement Lender shall purchase all Loans and other Obligations owing to such replaced Lender on or prior to the date of replacement at par, (iii) the Borrower shall be liable to such replaced Lender under Section 2.21 (as though Section 2.21 were applicable) if any Eurodollar Loan owing to such replaced Recipient shall be purchased other than on the last day of the Interest Period relating thereto, (iv) the replacement Lender, if not already a Lender, shall be reasonably satisfactory to the Administrative Agent to the extent that an assignment to such replacement financial institution of the rights and obligations being acquired by it would otherwise require the consent of the Administrative Agent pursuant to Section 10.6(b) and (v) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

 

2.25                    Incremental Loans.

 

(a)                               The Borrower may at any time or from time to time after the Closing Date, by written notice delivered to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request (i) one or more additional Classes of term loans and/or additional commitments of any existing Class of Term Loans (the commitments in respect of any such

 

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new Class or increase, “Incremental Term Commitments” and loans made thereunder, “Incremental Term Loans”) and/or (ii) one or more additional Classes of Revolving Commitments (the commitments of any such new Class, “Additional/Replacement Revolving Commitments”) and/or increases in the amount of Revolving Commitments of any existing Class (any such increased commitments, “Increased Revolving Commitments” and, together with any Incremental Term Commitment and Additional/Replacement Revolving Commitments, collectively, “Incremental Facilities”; and the loans under such Increased Revolving Commitments and Additional/Replacement Revolving Commitments, “Incremental Revolving Loans” and, together with any Incremental Term Loans, “Incremental Loans”); provided that:

 

(i)                                  there shall be no more than three (3) separate Classes of Revolving Commitments under the Revolving Facility;

 

(ii)                              no Event of Default shall have occurred and be continuing or would exist after giving effect to such Incremental Commitments (subject, in the case of any Incremental Term Commitments are being used to finance a Limited Condition Acquisition, to Section 1.6(c));

 

(iii)                          subject to Section 1.6(c), the conditions of Section 5.2(a) shall be satisfied (it being understood that all references to “such date” or similar language in such Section 5.2(a) shall be deemed to refer to the effective date of such Incremental Agreement); provided that, if the proceeds of any Incremental Term Commitments are being used to finance a Limited Condition Acquisition, (A) the reference in Section 5.2(a) to the accuracy of the representations and warranties shall refer to the accuracy of the representations and warranties that would constitute “Specified Representations” (the definition of which shall be agreed by the Borrower and the lenders providing such Indebtedness) and the representations and warranties in the relevant acquisition agreement the breach of which would permit the buyer to terminate its obligations thereunder or decline to consummate such Limited Condition Acquisition and (B) the reference to “Material Adverse Effect” in the Specified Representations shall be understood for this purpose to refer to “Material Adverse Effect” or similar definition as defined in the main transaction agreement governing such Limited Condition Acquisition;

 

(iv)                          the Borrower and its Restricted Subsidiaries shall be in compliance with the covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any Incremental Term Loans or Incremental Revolving Loans, as applicable, available under such Incremental Commitments had been outstanding on the last day of such fiscal quarter of the Borrower for testing compliance therewith, and, in each case, assuming the full utilization of any unfunded revolving commitments provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder; and

 

(v)                              to the extent reasonably requested by the Administrative Agent, the Administrative Agent shall have received customary legal opinions addressed to the Administrative Agent, the Collateral Agent and the Lenders, board resolutions and officers’ certificates consistent with those delivered on the Closing Date (other than changes to such legal opinion resulting from a Change in Law, change in fact or change to counsel’s form of opinion) reasonably satisfactory to the Administrative Agent and, within 60 days (or such longer period as the Administrative Agent may agree to) after the closing date of such Incremental Facilities, completion by the Borrower and the other Credit Parties of such other actions relating to any Material Real Estate that is, or is required to be, subject to a Mortgage (or the Mortgages entered into in connection therewith) as the Administrative Agent may reasonably request in connection with such Incremental Facilities.

 

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(b)                              Each Incremental Facility shall be in an aggregate principal amount that is not less than $10,000,000 (provided that such amount may be less than $10,000,000 if such amount represents all remaining availability under the limit set forth below) (and in minimum increments of $5,000,000 in excess thereof), and the aggregate principal amount of all Incremental Facilities shall not exceed the Incremental Limit.

 

(c)                               (i) Any Incremental Term Loans (A)(1) shall be pari passu with any then-existing Class of Term Loans in right of payment and in right of security, (2) shall not be the obligation of, or subject to any guarantee by any Person who is not also a Loan Party (or who becomes a Loan Party concurrently with the effectiveness thereof), and (3) shall not be secured by (x) a Lien on any Property in which the Collateral Agent does not have a Lien (or in which the Collateral Agent does not obtain a Lien concurrently with the effectiveness thereof) or (y) a perfected Lien on any Property in which the Collateral Agent does not have a perfected Lien (or in which the Collateral Agent does not obtain a perfected Lien concurrently with the effectiveness thereof); (B) shall not mature earlier than the maturity with respect to the Initial Term Loans; (C) shall not have a shorter Weighted Average Life to Maturity than the Initial Term Loans; (D) shall have a maturity date (subject to clause (B)), an amortization schedule (subject to clause (C)), and interest rates (including through fixed interest rates), interest margins, rate floors, upfront fees, funding discounts and original issue discounts as determined by the Borrower and the lenders providing the Incremental Term Loans; provided that, in the event that the Effective Yield for any such Incremental Term Loans is greater than the Effective Yield for the Initial Term Loans by more than 0.50%, then the Applicable Margins for the Initial Term Loans shall be increased to the extent necessary so that the Effective Yield for the Initial Term Loans is equal to the Effective Yield for the Incremental Term Loans minus 0.50%; (E) shall, to the extent any then-existing Term Loans require ratable prepayment, share ratably with such existing Term Loans, subject to the right of the Borrower to direct the application of voluntary prepayments and unless the Borrower and the lenders providing the Incremental Term Loans elect to share in such prepayments on a less than pro rata basis; and (F) may otherwise have terms and conditions different from those of the Initial Term Loans; provided that (x) except with respect to matters contemplated by clauses (B), (C), (D) and (E) above or terms applicable only after the Initial Term Maturity Date, any differences shall not be materially more restrictive (when taken as a whole) than the terms and conditions of the Loan Documents (when taken as a whole), as reasonably determined by the Borrower, unless such differences are consistent with then-current market terms for the applicable type of Indebtedness and (y) the documentation governing any Incremental Term Loans may include any Previously Absent Financial Maintenance Covenant so long as the Administrative Agent shall have been given prompt written notice thereof and this Agreement is amended to include such Previously Absent Financial Maintenance Covenant for the benefit of each Facility.

 

(i)                                  The Increased Revolving Commitments shall be treated the same as the Initial Revolving Commitments in effect on the Closing Date (including with respect to maturity date thereof) and shall be considered to be part of the Initial Revolving Facility in effect on the Closing Date (it being understood that, if required to obtain Increased Revolving Commitments, the interest rate margins, rate floors and undrawn commitment fees on the Initial Revolving Commitments as in effect on the Closing Date may be increased and additional upfront or similar fees may be payable to the lenders providing the Increased Revolving Commitments) and shall be effected as an increase in the Initial Revolving Commitments.

 

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(ii)                              Any Additional/Replacement Revolving Commitments (A)(1) shall be pari passu with any then-existing Class of Revolving Commitments in right of payment and in right of security, (2) shall not be the obligation of, or subject to any guarantee by any Person who is not also a Loan Party (or who becomes a Loan Party concurrently with the effectiveness thereof), and (3) shall not be secured by (x) a Lien on any Property in which the Collateral Agent does not have a Lien (or in which the Collateral Agent obtains a Lien concurrently with the effectiveness thereof) or (y) a perfected Lien on any Property in which the Collateral Agent does not have a perfected Lien (or in which a Lien in favor of the Collateral Agent is perfected concurrently with the effectiveness thereof); (B) shall not mature earlier than, and shall require no scheduled amortization prior to, the Revolving Termination Date applicable to the Revolving Facility on the Closing Date and shall require no mandatory commitment reduction prior to the Revolving Termination Date applicable to the Revolving Facility on the Closing Date; (C) shall have interest rates (including through fixed interest rates), interest margins, rate floors, upfront fees, undrawn commitment fees, funding discounts, original issue discounts, and premiums (including prepayment premiums) as determined by the Borrower and the lenders of providing such Additional/Replacement Revolving Commitments; (D) may include provisions relating to letters of credit issued thereunder, which issuances shall be on terms substantially similar (except for the overall size of such subfacilities, the fronting fees payable in connection therewith and the identity of the letter of credit issuer, which shall be determined by the Borrower, the lenders of such commitments and the applicable letter of credit issuers, which shall be specified in the applicable Incremental Agreement) to the terms relating to Letters of Credit with respect to the Revolving Commitments or otherwise reasonably acceptable to the Administrative Agent and (E) may otherwise have terms and conditions different from those of the Initial Revolving Facility; provided that (x) except with respect to matters contemplated by clauses (B), (C) and (D) above or terms applicable only after the Revolving Termination Date applicable to the Initial Revolving Facility, any differences shall not be materially more restrictive (when taken as a whole) than the terms and conditions of the Loan Documents (when taken as a whole), as reasonably determined by the Borrower, unless such differences shall be consistent with then-current market terms for the applicable type of Indebtedness and (y) the documentation governing any Additional/Replacement Revolving Commitments may include any Previously Absent Financial Maintenance Covenant so long as the Administrative Agent shall have been given prompt written notice thereof and this Agreement is amended to include such Previously Absent Financial Maintenance Covenant for the benefit of each Facility; provided, further, however, that if the applicable Previously Absent Financial Maintenance Covenant is a “springing” financial maintenance covenant applicable only to revolving Indebtedness, the Previously Absent Financial Maintenance Covenant shall be automatically included in this agreement only for the benefit of each Revolving Facility (and not for the benefit of any Facility in respect of Term Loans hereunder).

 

(d)                              Each notice from the Borrower pursuant to this Section 2.25 shall be given in writing and shall set forth the requested amount and proposed terms of the relevant Incremental Facility.  Incremental Facilities may be provided, subject to the prior written consent of the Borrower (not to be unreasonably withheld), by any existing Lender (it being understood that no existing Lender will have an obligation to provide any portion of any Incremental Facility) or by any other Person eligible to be an assignee pursuant to Section 10.6(b), subject to any applicable consent requirements and the other limitations set forth therein (any such other lender being called an “Additional Lender”); provided that any Additional Lender shall execute and deliver a Joinder Agreement.

 

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(e)                               (i)                                  Incremental Commitments shall become effective under this Agreement pursuant to an amendment (an “Incremental Agreement”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Lender agreeing to provide such Commitment, if any, each Additional Lender (who shall, upon the effectiveness thereof, become a Lender for all purposes in connection with this Agreement), if any, and the Administrative Agent.  The Incremental Agreement may, subject to Section 2.25(c), without the consent of any other Lender, effect such amendments to this Agreement and the other Loan Documents as may be necessary, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.25 (including, in connection with any Increased Revolving Commitments, to reallocate Revolving Extensions of Credit on a pro rata basis among the relevant Revolving Lenders).  The effectiveness of any Incremental Agreement shall be subject to the satisfaction on the date thereof (each, an “Incremental Facility Closing Date”) and the occurrence of any extension of credit thereunder shall be subject to only the satisfaction of such conditions as the parties thereto shall agree and as set forth in this Section 2.25.  The Borrower will use the proceeds of the Incremental Facilities for any purpose not prohibited by this Agreement.

 

(ii)                              Upon the effectiveness of any Increased Revolving Commitments pursuant to this Section 2.25, each Lender with a Revolving Commitment of such Class immediately prior to such increase will automatically and without further act be deemed to have assigned to each Lender providing a portion of the Increased Revolving Commitments (each, an “Increasing Revolving Commitment Lender”), and each such Increasing Revolving Commitment Lender will automatically and without further act be deemed to have assumed a portion of such Lender’s participations hereunder in outstanding Letters of Credit such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding participations hereunder in Letters of Credit held by each Lender with a Revolving Commitment of such Class (including each such Increasing Revolving Commitment Lender) will equal the percentage of the aggregate Revolving Commitments of such Class of all Lenders represented by such Lender’s Revolving Commitment of such Class.  If, on the date of such increase, there are any Revolving Loans of such Class outstanding, such Revolving Loans shall, on or prior to the effectiveness of such Increased Revolving Commitments, be prepaid from the proceeds of additional Revolving Loans made hereunder (reflecting such Increased Revolving Commitments of such Class), which prepayment shall be accompanied by accrued interest on the Revolving Loans of such Class being prepaid and any costs incurred by any Lender in accordance with Section 2.21.  The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.

 

(iii)                          Upon the effectiveness of any Additional/Replacement Revolving Commitments, then (A) the borrowing and repayment (except (x) payments of interest and fees at different rates in respect of any then-existing Revolving Commitments and such Additional/Replacement Revolving Commitments (and, in each case, related outstandings), (y) repayments required on the maturity date of any then-existing Revolving Commitments and (z) repayments made in connection with any permanent repayment and termination of Commitments (subject to clause (D) below) of Incremental Revolving Loans in respect thereof) after the effective date of such Additional/Replacement Revolving Commitments shall be made on a pro rata basis with the then-existing Revolving Facility, (B) all letters of credit shall be participated by all Revolving Lenders of such Additional/Replacement Revolving Commitments on a pro rata basis with all Revolving Lenders of the then-existing Revolving Facility, (C) assignments and participations of Additional/Replacement Revolving Commitments (and the related outstandings) shall be governed by the assignment and participation provisions set forth in Section 10.6 and (D) no termination of Additional/Replacement Revolving Commitments and no repayment of Incremental Loans in respect thereof accompanied by a corresponding permanent reduction in the related

 

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Additional/Replacement Revolving Commitments shall be permitted unless (x) such Class of Additional/Replacement Revolving Commitments are the earliest maturing Class of Revolving Commitments or (y) such termination or repayment (and corresponding reduction) is accompanied by at least a pro rata termination or permanent repayment (and corresponding pro rata permanent reduction), as applicable, of all then-existing Revolving Commitments (and, in each case, related outstandings).

 

(iv)                          On the date of the Borrowing of any Incremental Term Loans that will be of the same Class as any then-existing Class of Term Loans, and notwithstanding anything to the contrary set forth in Sections 2.2, 2.13 or 2.15, such Incremental Term Loans shall be added to (and constitute a part of, be of the same Type as and, at the election of the Borrower, have the same Interest Period as) each Borrowing of outstanding Term Loans of such Class on a pro rata basis (based on the relative sizes of such Borrowings), so that each Term Lender providing such Incremental Term Loans will participate proportionately in each then-outstanding Borrowing of Term Loans of such Class; it being acknowledged that the application of this clause (e)(iv) may result in new Incremental Term Loans having Interest Periods (the duration of which may be less than one (1) month) that begin during an Interest Period then applicable to outstanding Eurodollar Loans of the relevant Class and which end on the last day of such Interest Period.  The Incremental Agreement effectuating any Incremental Term Loans that will be of the same Class as any then-existing Class of Term Loans shall make such adjustments to Section 2.3 (or to the corresponding provisions of the applicable Incremental Agreement, Refinancing Agreement or Extension Agreement) to as are necessary to provide for the “fungibility” of such Incremental Term Loans with such then-existing Class of Term Loans.

 

(f)                                No Lender shall be obligated to provide any Incremental Facility unless it so agrees and the Borrower shall not be obligated to offer any existing Lender the opportunity to provide any Incremental Facility.  No Incremental Facility nor any Incremental Loan (nor the creation, provision or implementation thereof) shall require the approval of any existing Lender other than in its capacity, if any, as a lender providing all or a part of any Incremental Commitment or Incremental Loan or, in the circumstances described in Section 2.25(d), in its capacity as an Issuing Lender.

 

(g)                               Effective on the date of effectiveness of any Increased Revolving Commitments or Additional/Replacement Revolving Commitments, the L/C Commitments shall increase by an amount, if any, agreed upon by Administrative Agent, the applicable Issuing Lenders, if applicable, and the Borrower.

 

(h)                              This Section 2.25 shall supersede any provisions in Section 10.1 to the contrary.  For the avoidance of doubt, any provision of this Section 2.25 may be amended with the consent of the Required Lenders; provided that no such amendment shall require any Lender to provide any Incremental Commitment without such Lender’s consent.

 

2.26                    Defaulting Lenders.  (a)  Notwithstanding anything herein to the contrary, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(i)                                  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 10.1 unless otherwise agreed by the Borrower and the Administrative Agent.

 

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(ii)                              Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.7 shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the applicable Issuing Lender(s) hereunder; third, to Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.27; fourth, as the Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.27; sixth, to the payment of any amounts owing to the Lenders or the applicable Issuing Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the applicable Issuing Lenders against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and, eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or amounts outstanding under any Letter of Credit in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans or Letter of Credit draws were made at a time when the conditions set forth in Section 5.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and the amounts outstanding under any Letters of Credit owed to, all the Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or amounts outstanding under any Letters of Credit owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility without giving effect to Section 2.26(a)(iv).  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this clause (ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)                          No Defaulting Lender shall be entitled to receive any commitment fees payable under Section 2.9 or fees in connection with Letters of Credit as provided in Section 3.3 (except to the extent that the Defaulting Lender has provided Cash Collateral pursuant to Section 2.27 with respect to its participation in such Letter of Credit) for any period during which such Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender); provided that if the L/C Obligations of the Non-Defaulting Lenders are reallocated pursuant to the clause (iv) below, then the fees payable to the Lenders pursuant to Section 3.3 shall be adjusted in accordance with such Non-Defaulting Lenders’ Revolving Percentages and the Borrower shall not be required to pay any fees to the Defaulting Lender pursuant to Section 3.3 with respect to such Defaulting Lender’s L/C Obligations during the period that such Defaulting Lender’s L/C Obligations are reallocated, or if any Defaulting Lender’s L/C Obligations are neither Cash Collateralized nor reallocated pursuant to the requirements of clause (iv) below, then, without prejudice to any rights or remedies of the Issuing Lenders or any Lender hereunder, all fees payable under Section 3.3 with respect to such Defaulting Lender’s L/C Obligations shall be payable to the applicable Issuing Lenders until such L/C Obligations are Cash Collateralized and/or reallocated.

 

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(iv)                          All or any part of such Defaulting Lender’s participation in L/C Obligations shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 5.2 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time) and (y) such reallocation does not cause the sum of the aggregate Outstanding Amount of the Revolving Loans of any Non-Defaulting Lender, plus such Lender’s Revolving Percentage of the Outstanding Amount of all L/C Obligations at such time to exceed such Lender’s Revolving Commitment.  Subject to each party hereunder’s acknowledgment of the provisions set forth in Section 9.13, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from such Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation; provided, that, notwithstanding anything to the contrary herein, such acknowledgment shall not constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender.

 

(v)                              If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law Cash Collateralize the Issuing Lender’s Fronting Exposure in accordance with the procedures set forth in Section 2.27.

 

(b)                              If the Borrower, the Administrative Agent and each Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held pro rata by the Lenders in accordance with the Commitments under the applicable Facility (without giving effect to Section 2.26(a)(iv), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; provided, further, that, except to the extent otherwise expressly agreed in writing by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.

 

(c)                               So long as any Revolving Lender is a Defaulting Lender, no Issuing Lender shall be required to issue, extend, renew or amend (including any increase) any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

 

2.27              Cash Collateral (a)  If required pursuant to Section 3.1(a) or Section 8.1, the Borrower shall promptly Cash Collateralize the then outstanding amount of all L/C Obligations in an amount not less than the Minimum Collateral Amount.  At any time that there shall exist a Defaulting Lender, promptly upon the written request of the Administrative Agent or any applicable Issuing Lender (with a copy to the Administrative Agent), the Borrower shall Cash Collateralize all Fronting Exposure of such Issuing Lender with respect to such Defaulting Lender (determined after giving effect to Section 2.26(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

 

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(b)                              The Borrower and, to the extent provided by any Lender, such Lender, hereby grants to (and subject to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the applicable Issuing Lenders and the applicable Lenders, and agrees to maintain, a first priority security interest (subject to ordinary course Liens of the depositing bank holding such Cash Collateral) in all such Cash Collateral, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and all proceeds of the foregoing, as security for the obligations to which such Cash Collateral may be applied pursuant to clause (c) of this Section 2.27.  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person (subject to ordinary course Liens of the depositing bank holding such Cash Collateral) other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

(c)                               Notwithstanding anything herein to the contrary, Cash Collateral provided under this Section 2.27, Section 3.1, Section 8.1 or otherwise in respect of Letters of Credit shall be applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligations) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(d)                              Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of the Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.6), or (ii) the determination by the Administrative Agent and each Issuing Lender that there exists excess Cash Collateral; provided that (A) Cash Collateral furnished by or on behalf of the Borrower shall not be released during the continuance of a Default under Section 8.1(a) or (f) or an Event of Default (and following application as provided in this Section may be otherwise applied in accordance with Section 8.1) and (B) the Person providing Cash Collateral and the applicable Issuing Lender(s) may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations hereunder and provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

 

2.28                    Extensions of Term Loans and Revolving Commitments.

 

(a)                               (i) The Borrower may, at any time and from time to time, request that all or a portion of each Term Loan of any Class (an “Existing Term Loan Class”) be converted or exchanged to extend the scheduled final maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of such Term Loans (any such Term Loans which have been so extended, “Extended Term Loans”) and to provide for other terms consistent with this Section 2.28.  Prior to entering into any Extension Agreement with respect to any Extended Term Loans, the Borrower shall provide written notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Existing Term Loan Class, with such request offered equally to all such Lenders of such Existing Term Loan Class) (a “Term Loan Extension Request”) setting forth the proposed terms

 

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of the Extended Term Loans to be established, which terms shall be substantially similar to the Term Loans of the Existing Term Loan Class, or otherwise not materially more restrictive than the terms of such Existing Term Loan Class, taken as a whole (as reasonably determined by the Borrower), except that (w) the scheduled final maturity date shall be extended and all or any of the scheduled amortization payments of all or a portion of any principal amount of such Extended Term Loans may be delayed to later dates than the scheduled amortization of principal of the Term Loans of such Existing Term Loan Class (with any such delay resulting in a corresponding adjustment to the scheduled amortization payments reflected in Section 2.3 or in the Extension Agreement or the Incremental Agreement or the Refinancing Agreement, as the case may be, with respect to the Existing Term Loan Class of Term Loans from which such Extended Term Loans were extended, in each case, as more particularly set forth in Section 2.28(c) below), (x)(A) the interest rates (including through fixed interest rates), interest margins, rate floors, upfront fees, funding discounts, original issue discounts and prepayment premiums with respect to the Extended Term Loans may be different than those for the Term Loans of such Existing Term Loan Class and/or (B) additional fees and/or premiums may be payable to the Lenders providing such Extended Term Loans in addition to any of the items contemplated by the preceding clause (A), in each case, to the extent provided in the applicable Extension Agreement, (y) the Extension Agreement may provide for other covenants and terms that apply to any period after the Latest Term Loan Maturity Date with respect to the then-existing Term Loans and such terms and conditions that constitute then-current market terms for the applicable type of Indebtedness and (z) any provisions applicable to such Extended Term Loans that also expressly apply to (and for the benefit of) the Existing Term Loan Class may be more favorable to the Lenders providing such Extended Term Loans than those originally applicable to the Existing Term Loan Class; provided that any Class of Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayment or prepayment (but, for purposes of clarity, not scheduled amortization payments) in respect of the Term Loans, in each case as specified in the relevant Extension Agreement.  No Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Class exchanged or converted into Extended Term Loans pursuant to any Term Loan Extension Request.  Any Extended Term Loans of any Extension Series shall constitute a separate Class of Term Loans from the Existing Term Loan Class of Term Loans from which they were extended; provided that in no event shall there be more than ten Classes of Term Loans outstanding at any time.

 

(ii)                                                The Borrower may, at any time and from time to time, request that all or a portion of the Revolving Commitments of any Class existing at the time of such request (each, an “Existing Revolving Commitment” and any related Revolving Loans under any such facility, “Existing Revolving Loans”; each Existing Revolving Commitment and related Existing Revolving Loans together being referred to as an “Existing Revolving Class”) be converted or exchanged to extend the termination date thereof and the scheduled maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of Existing Revolving Loans related to such Existing Revolving Commitments (any such Existing Revolving Commitments which have been so extended, “Extended Revolving Commitments” and any related Revolving Loans, “Extended Revolving Loans”) and to provide for other terms consistent with this Section 2.28.  Prior to entering into any Extension Agreement with respect to any Extended Revolving Commitments, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Class of Existing Revolving Commitments, with such request offered equally to all Lenders of such Class) (a “Revolving Extension Request”) setting forth the proposed terms of the Extended Revolving Commitments to be established thereunder, which terms shall be substantially similar to those applicable to the Existing Revolving Commitments from which they are to be extended (the “Specified Existing Revolving Class”) or otherwise not materially more restrictive than the terms of such Existing Revolving Class, taken as a whole (as reasonably determined by the Borrower), except that (x) all or any of the final maturity dates of such Extended Revolving Commitments may be delayed to later dates than the final maturity dates of the Existing Revolving Commitments of the Specified Existing Revolving Class, (y)(A) the interest rates,

 

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interest margins, rate floors, upfront fees, funding discounts, original issue discounts and prepayment premiums with respect to the Extended Revolving Commitments may be different than those for the Existing Revolving Commitments of the Specified Existing Revolving Class and/or (B) additional fees and/or premiums may be payable to the Lenders providing such Extended Revolving Commitments in addition to or in lieu of any of the items contemplated by the preceding clause (A), and (z) the Extension Agreement may provide for other covenants and terms that apply to any period after the Latest Revolving Maturity Date or such terms and conditions that constitute then-current market terms for the applicable type of Indebtedness; provided that notwithstanding anything to the contrary in this Section 2.28, or otherwise, (I) the borrowing and repayment (except (1) payments of interest and fees at different rates in respect of any Existing Revolving Commitments and such Extended Revolving Commitments (and related outstandings), (2) repayments required on the maturity date of any Existing Revolving Commitments and such Extended Revolving Commitments and (3) repayments made in connection with any permanent repayment and termination of commitments (subject to clause (IV) below) of the Extended Revolving Loans under any Extended Revolving Commitments shall be made on a pro rata basis with any borrowings and repayments of the Existing Revolving Loans of the Specified Existing Revolving Class (the mechanics for which may be implemented through the applicable Extension Agreement and may include technical changes related to the borrowing and repayment procedures of the Specified Existing Revolving Class), (II) all letters of credit shall be participated on a pro rata basis by all Lenders with Extended Revolving Commitments and Existing Revolving Commitments, (III) assignments and participations of Extended Revolving Commitments and Extended Revolving Loans shall be governed by the assignment and participation provisions set forth in Section 10.6 and (IV) no termination of Extended Revolving Commitments and no repayment of Extended Revolving Loans accompanied by a corresponding permanent reduction in the related Extended Revolving Commitments shall be permitted unless (A) such Extended Revolving Loans have the earliest maturity date of all Revolving Loans or (B) such termination or repayment (and corresponding reduction) is accompanied by at least a pro rata termination or permanent repayment (and corresponding pro rata permanent reduction), as applicable, of the Existing Revolving Loans or Existing Revolving Commitments, as the case may be.  No Lender shall have any obligation to agree to have any of its Revolving Loans or Revolving Commitments of any Existing Revolving Class converted or exchanged into Extended Revolving Loans or Extended Revolving Commitments pursuant to any Extension Request.  Any Extended Revolving Commitments of any Extension Series shall constitute a separate Class of revolving commitments from Existing Revolving Commitments of the Specified Existing Revolving Class and from any other Existing Revolving Commitments (together with any other Extended Revolving Commitments so established on such date); provided that in no event shall there be more than three Classes of revolving commitments outstanding at any one time.

 

(b)                              The Borrower shall provide the applicable Extension Request to the Administrative Agent at least five Business Days (or such shorter period as the Administrative Agent may determine in its reasonable discretion) prior to the date on which Lenders under the Existing Class are requested to respond, and shall agree to such procedures, if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably, to accomplish the purpose of this Section 2.28.  Any Lender (an “Extending Lender”) wishing to have all or a portion of its Term Loans and/or Revolving Commitments of an Existing Class subject to such Extension Request converted or exchanged into Extended Loans/Commitments shall notify the Administrative Agent (an “Extension Election”) on or prior to the date specified in such Extension Request of the amount of its Term Loans and/or Revolving Commitments (and/or any earlier extended Extended Revolving Commitments) which it has elected to convert or exchange into Extended Loans/Commitments (subject to any minimum denomination requirements imposed by the Administrative Agent).  In the event that the aggregate amount of Term Loans and/or Revolving Commitments subject to Extension Elections exceeds the amount of Extended Loans/Commitments requested pursuant to the Extension Request, the Term Loans, and/or Revolving Commitments, as applicable, subject to Extension Elections shall be converted to or

 

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exchanged to Extended Loans/Commitments on a pro rata basis (subject to such rounding requirements as may be established by the Administrative Agent) based on the amount of Term Loans and/or Revolving Commitments included in each such Extension Election or as may be otherwise agreed to in the applicable Extension Agreement.  Notwithstanding the conversion of any Existing Revolving Commitment into an Extended Revolving Commitment, unless expressly agreed by the holders of each affected Existing Revolving Commitment of the Specified Existing Revolving Class, such Extended Revolving Commitment shall not be treated more favorably than all Existing Revolving Commitments of the Specified Existing Revolving Class for purposes of the obligations of a Revolving Lender in respect of Letters of Credit under Section 3, except that the applicable Extension Agreement may provide that the last day for issuing Letters of Credit may be extended and the related obligations to issue Letters of Credit may be continued (pursuant to mechanics to be specified in the applicable Extension Agreement) so long as the applicable Issuing Lenders have consented to such extensions (it being understood that no consent of any other Lender shall be required in connection with any such extension).

 

(c)                               Extended Loans/Commitments shall be established pursuant to an amendment (an “Extension Agreement”) to this Agreement (which notwithstanding anything to the contrary set forth in Section 10.1, shall not require the consent of any Lender other than the Extending Lenders with respect to the Extended Loans/Commitments established thereby) executed by the Borrower, the Administrative Agent and the Extending Lenders.  In addition to any terms and changes required or permitted by Section 2.28(a), each Extension Agreement in respect of Extended Term Loans shall amend the scheduled amortization payments pursuant to Section 2.3 or the applicable Incremental Agreement or Extension Agreement with respect to the Existing Class of Term Loans from which the Extended Term Loans were exchanged to reduce each scheduled Repayment Amount for the Existing Class in the same proportion as the amount of Term Loans of the Existing Class is to be reduced pursuant to such Extension Agreement (it being understood that the amount of any Repayment Amount payable with respect to any individual Term Loan of such Existing Class that is not an Extended Term Loan shall not be reduced as a result thereof).  In connection with any Extension Agreement, the Borrower shall deliver an opinion of counsel reasonably acceptable to the Administrative Agent as to the enforceability of such Extension Agreement, this Agreement as amended thereby and such other customary matters as reasonably requested by the Administrative Agent, and such of the other Loan Documents (if any) as may be amended thereby (in the case of such other Loan Documents as contemplated by the immediately preceding sentence).

 

(d)                              Notwithstanding anything to the contrary contained in this Agreement, (i) on any date on which any Existing Term Loan Class or Class of Existing Revolving Commitments is converted or exchanged to extend the related scheduled maturity date(s) in accordance with clause (a) above (an “Extension Date”), (A) in the case of the existing Term Loans of each Extending Lender, the aggregate principal amount of such existing Term Loans shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Term Loans so converted or exchanged by such Lender on such date, and the Extended Term Loans shall be established as a separate Class of Term Loans (together with any other Extended Term Loans so established on such date), and (B) in the case of the Existing Revolving Commitments of each Extending Lender under any Specified Existing Revolving Class, the aggregate principal amount of such Existing Revolving Commitments shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Revolving Commitments so converted or exchanged by such Lender on such date, and such Extended Revolving Commitments shall be established as a separate Class of revolving commitments from the Specified Existing Revolving Class and from any other Existing Revolving Commitments (together with any other Extended Revolving Commitments so established on such date) and (ii) if, on any Extension Date, any Existing Revolving Loans of any Extending Lender are outstanding under the Specified Existing Revolving Class, such Existing Revolving Loans (and any related participations) shall be deemed to be converted or exchanged to Extended Revolving Loans (and related participations) of the applicable Class in the same proportion as such

 

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Extending Lender’s Specified Existing Revolving Commitments to Extended Revolving Commitments of such Class.

 

(e)                               In the event that the Administrative Agent determines in its sole discretion that the allocation of Extended Term Loans of a given Extension Series or the Extended Revolving Commitments of a given Extension Series, in each case, to a given Lender was incorrectly determined as a result of manifest administrative error in the receipt and processing of an Extension Election timely submitted by such Lender in accordance with the procedures set forth in the applicable Extension Agreement, then the Administrative Agent, the Borrower and such affected Lender may (and hereby are authorized to), in their sole discretion and without the consent of any other Lender, enter into an amendment to this Agreement and the other Loan Documents (each, a “Corrective Extension Agreement”) within fifteen days following the effective date of such Extension Agreement, as the case may be, which Corrective Extension Agreement shall (i) provide for the conversion or exchange and extension of Term Loans under the Existing Term Loan Class or Existing Revolving Commitments (and related Revolving Extensions of Credit), as the case may be, in such amount as is required to cause such Lender to hold Extended Term Loans or Extended Revolving Commitments (and related Revolving Extensions of Credit) of the applicable Extension Series into which such other Term Loans or commitments were initially converted or exchanged, as the case may be, in the amount such Lender would have held had such administrative error not occurred and had such Lender received the minimum allocation of the applicable Loans or Commitments to which it was entitled under the terms of such Extension Agreement, in the absence of such error, (ii) be subject to the satisfaction of such conditions as the Administrative Agent, the Borrower and such Lender may agree (including conditions of the type required to be satisfied for the effectiveness of an Extension Agreement described in Section 2.28(c)), and (iii) effect such other amendments of the type (with appropriate reference and nomenclature changes) described in the penultimate sentence of Section 2.28(c).

 

(f)                                No conversion or exchange of Loans or Commitments pursuant to any Extension Agreement in accordance with this Section 2.28 shall constitute a voluntary or mandatory payment or prepayment for purposes of this Agreement.

 

(g)                               This Section 2.28 shall supersede any provisions in Section 10.1 to the contrary.  For the avoidance of doubt, any of the provisions of this Section 2.28 may be amended with the consent of the Required Lenders; provided that no such amendment shall require any Lender to provide any Extended Loans/Commitments without such Lender’s consent.

 

 

SECTION 3                     LETTERS OF CREDIT

 

3.1                            L/C Commitment.

 

(a)                               Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Revolving Lenders set forth in Section 3.4(a), agrees to issue standby and/or trade letters of credit (“Letters of Credit”) for the account of the Borrower (provided that any Letter of Credit may be for the benefit of Holdings or any other Group Member) on any Business Day prior to the end of the Revolving Commitment Period in Dollars; provided that neither the Administrative Agent or any of its Affiliates shall have any obligation to issue trade Letters of Credit and provided, further, that no Issuing Lender shall have any obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) (x) the L/C Obligations would exceed the aggregate L/C Commitments of all Issuing Lenders or (y) unless the applicable Issuing Lender consents, the aggregate L/C Obligations in respect of all Letters of Credit issued by such Issuing Lender exceed such Issuing Lender’s L/C Commitment, (ii) the aggregate amount of the Available Revolving Commitments would be less than zero or (iii) the Available

 

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Revolving Commitment of any Revolving Lender would be less than zero.  Each Letter of Credit shall expire no later than the earlier of (x) the first anniversary of its date of issuance unless otherwise agreed by the Issuing Lender in its sole discretion and (y) the date that is five Business Days prior to the Revolving Termination Date; provided that, if requested by the Borrower and accepted by the applicable Issuing Lender in its sole and absolute discretion, a Letter of Credit issued by such Issuing Lender may provide for the renewal thereof for additional one year periods containing an expiry date of more than twelve months after the date of issuance (which shall in no event extend beyond the date referred to in clause (y) above (unless, at least five Business Days prior to the notice period for the then current expiry date, such Borrower shall Cash Collateralize the L/C Obligations with respect to such Letter of Credit in an amount not less than the Minimum Collateral Amount applicable to such Letter of Credit)); provided, however, that (1) any such Letter of Credit shall permit such Issuing Lender to prevent any such renewal at least once in each twelve month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof (the “Nonrenewal Notice”) not later than a number of days in each such twelve month period to be agreed upon at the time such Letter of Credit is issued, (2) such Issuing Lender shall not (x) permit any such renewal if such Issuing Lender has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 3.1(b) or otherwise) or (y) be obligated to permit such renewal if it has received notice (which may be in writing or by telephone (if immediately confirmed in writing)) on or before the day that is seven Business Days before the date of the Nonrenewal Notice from the Administrative Agent, the Majority Facility Lenders in respect of the Revolving Facility or the Borrower that one or more of the applicable conditions set forth in Section 5.2 is not then satisfied and, in each such case, directing such Issuing Lender not to permit such renewal.

 

(b)                              No Issuing Lender shall at any time be obligated to issue any Letter of Credit if (i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Lender from issuing such Letter of Credit, or any Law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Lender shall prohibit, or request that such Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such Issuing Lender in good faith deems material to it, (ii) the issuance of such Letter of Credit would violate one or more policies of such Issuing Lender applicable to letters of credit generally, (iii) except as otherwise agreed by the Administrative Agent and such Issuing Lender, such Letter of Credit is in an initial stated amount less than $10,000, (iv) such Letter of Credit is to be denominated in a currency other than Dollars, (v) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder or (vi) any Revolving Lender is at such time a Defaulting Lender, unless such Issuing Lender has entered into arrangements, including reallocation of such Lender’s Revolving Percentage of the outstanding L/C Obligations pursuant to Section 2.26(a)(iv) or the delivery of Cash Collateral with the Borrower or such Lender to eliminate such Issuing Lender’s actual or potential Fronting Exposure (after giving effect to Section 2.26(a)(iv)) with respect to such Lender arising from either the Letter of Credit then proposed to be issued or such Letter of Credit and all other L/C Obligations as to which such Issuing Lender has actual or potential Fronting Exposure, as it may elect in its sole discretion.  In addition, no Issuing Lender shall be under any obligation to amend or extend any Letter of Credit if (A) such Issuing Lender would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment thereto.

 

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3.2                      Procedure for Issuance of Letter of Credit.  The Borrower may from time to time request that the relevant Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender, not later than 1:00 p.m. on the third Business Day prior to the requested date of issuance of such Letter of Credit to be denominated in Dollars (or such other time as the applicable Issuing Lender may agree in a particular circumstance in its sole discretion), at its address for notices specified to the Borrower by such Issuing Lender an Application therefor, with a copy to the Administrative Agent, completed to the reasonable satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender may reasonably request.  Upon receipt of any Application, the relevant Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by such Issuing Lender and such Borrower.  Such Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof.  Each Issuing Lender shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the relevant Lenders, notice of the issuance of each Letter of Credit issued by it (including the amount thereof).

 

3.3                      Fees and Other Charges.  (a)  The Borrower will pay a fee on each outstanding Letter of Credit, at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility on the face amount of such Letter of Credit, which fees shall be shared ratably among the Revolving Lenders and payable quarterly in arrears on each Fee Payment Date after the issuance date.  In addition, the Borrower shall pay to each Issuing Lender for its own account a fronting fee equal to 0.125% on the aggregate face amount of all outstanding Letters of Credit issued by it to such Borrower (but in no event less than $500 per annum for each such Letter of Credit), payable quarterly in arrears on each Fee Payment Date after the issuance date.

 

(b)                              In addition to the foregoing fees, the Borrower shall pay or reimburse each Issuing Lender for such customary fees and expenses as are incurred or charged by such Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit requested by the Borrower (which fees and expenses shall have been agreed to from time to time by the Borrower and the relevant Issuing Lender).

 

3.4                      L/C Participations.  (a)  Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce such Issuing Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from such Issuing Lender, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Percentage in such Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued by it and the amount of each draft paid by such Issuing Lender thereunder.  Each L/C Participant agrees with each Issuing Lender that, if a draft is paid prior to the Revolving Termination Date under any Letter of Credit issued by it for which such Issuing Lender is not reimbursed in full by the Borrower on the date due therefor in accordance with the terms of this Agreement, such L/C Participant shall pay to the Administrative Agent for the account of such Issuing Lender upon demand an amount equal to such L/C Participant’s Revolving Percentage of the amount of such draft, or any part thereof, that is not so reimbursed.  Each L/C Participant’s obligation to pay such amount shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against any Issuing Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5, (iii) any adverse change in the financial condition of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

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(b)                              If any amount required to be paid by any L/C Participant to the Administrative Agent for the account of any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit is paid to the Administrative Agent for the account of such Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to the Administrative Agent for the account of such Issuing Lender on demand an amount equal to the sum of (x) the product of (i) such amount, times (ii) the Overnight Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to such Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360, plus (y) any reasonable administrative, processing or similar fees customarily charged by such Issuing Lender in connection with the foregoing.  If any such amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is not made available to the Administrative Agent for the account of the relevant Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, such Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans under the Revolving Facility.  A certificate of the relevant Issuing Lender submitted to any relevant L/C Participant with respect to any amounts owing under this Section shall be presumptively correct in the absence of manifest error.

 

(c)                               Whenever, at any time after any Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.4(a) such Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by such Issuing Lender), or any payment of interest on account thereof, such Issuing Lender will distribute to the Administrative Agent for the account of such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by such Issuing Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return to the Administrative Agent for the account of such Issuing Lender the portion thereof previously distributed by such Issuing Lender to it.

 

(d)                              Until each L/C Participant reimburses the applicable Issuing Lender for any amount drawn under any Letter of Credit, interest in respect of such L/C Participant’s Revolving Percentage of such amount shall be solely for the account of such Issuing Lender.

 

3.5                      Reimbursement Obligation of the Borrower.  The Borrower agrees to reimburse each Issuing Lender in respect of any drawing under a Letter of Credit following notice of any drawing under a Letter of Credit.  Not later than 11:00 a.m. on the second Business Day immediately succeeding the date of any payment by the relevant Issuing Lender under a Letter of Credit, the Borrower shall reimburse such Issuing Lender in an amount equal to the amount of such drawing as set forth above; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.5 that such reimbursement be financed with a borrowing of ABR Loans or Eurodollar Loans in Dollars in an equivalent amount and, to the extent so financed, the Borrower’s obligation to reimburse such Issuing Lender shall be discharged and replaced by the resulting ABR Loans or Eurodollar Loans, as applicable.  Each such payment shall be made to such Issuing Lender at its address for notices specified to the Borrower and in immediately available funds whether cash on hand or proceeds of Revolving Loans as described in the proviso of the preceding sentence.  Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at a rate equal to the rate applicable to ABR Loans under the Revolving Facility.

 

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3.6                      Obligations Absolute.  The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of (i) any setoff, counterclaim or defense to payment that such Borrower may have or have had against any Issuing Lender, any beneficiary or transferee of a Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting) or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (ii) the enforceability, validity or genuineness of documents (including any draft, demand, certificate or other document presented under any Letter of Credit) or of any endorsements thereon, even though such documents shall in fact prove to be unenforceable, invalid, insufficient, fraudulent or forged, or any statement therein being untrue or inaccurate in any respect, or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit; (iii) any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee; (iv) any payment by the applicable Issuing Lender under such Letter of Credit against presentation of a draft or certificate that does not comply strictly with the terms of such Letter of Credit; or any payment made by the applicable Issuing Lender under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including arising in connection with any proceeding under any Debtor Relief Laws; (v) any exchange, release or nonperfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the Obligations of the Borrower in respect of such Letter of Credit; or (vi) any other events or circumstances whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower.  The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the applicable Issuing Lender.  The Borrower shall be conclusively deemed to have waived any such claim against any Issuing Lender and its correspondents unless such notice is given as aforesaid.

 

3.7                      Letter of Credit Payments.

 

(a)                       If any draft shall be presented for payment under any Letter of Credit, the relevant Issuing Lender shall promptly notify the Borrower of the date and amount thereof; provided that failure (or delay) to so notify shall not relieve the Borrower of its obligation to reimburse the Issuing Lender hereunder.

 

(b)                      In paying any drawing under a Letter of Credit, the applicable Issuing Lender shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any document or the authority of the Person executing or delivering any document.  None of the applicable Issuing Lender, its Related Parties nor any of the respective correspondents, participants or assignees of such Issuing Lender shall be liable to any Revolving Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the requisite Revolving Lenders; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Application.  The Borrower hereby assumes all risks of the acts of omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower from pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the applicable Issuing Lender, its Related Parties nor any of the respective correspondents, participants or assignees of such Issuing Lender shall be liable or responsible for any of the matters described in Section 3.6; provided that, notwithstanding anything in such clauses to the contrary, the Borrower may have a claim against such Issuing Lender, and such Issuing Lender may be liable to the Borrower, to the extent, but only to the

 

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extent, of any direct (as opposed to indirect, special, punitive, consequential or exemplary) damages suffered by the Borrower which a court of competent jurisdiction determines in a final nonappealable judgment were caused by such Issuing Lender’s bad faith, gross negligence or willful misconduct or such Issuing Lender’s willful or grossly negligent failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit or other material breach of this Agreement by such Issuing Lender.  In furtherance and not in limitation of the foregoing (but subject to the provisos therein), the applicable Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such Issuing Lender shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

3.8                      Applicability of ISP98 and UCP; Reporting; Applications.

 

(a)                       Unless otherwise expressly agreed by the applicable Issuing Lender and the Borrower when a Letter of Credit is issued, the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Letter of Credit.

 

(b)                      Not later than the third Business Day following the last day of each month (or at such other intervals as the Administrative Agent and the applicable Issuing Lender shall agree), each Issuing Lender shall provide to the Administrative Agent a schedule of the Letters of Credit issued by it, in form and substance reasonably satisfactory to the Administrative Agent, showing the date of issuance of each Letter of Credit, the account party, the original face amount (if any), the expiration date, and the reference number of any Letter of Credit outstanding at any time during such month, and showing the aggregate amount (if any) payable by the Borrower to such Issuing Lender during such month.

 

(c)                       To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

 

SECTION 4                     REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and warrants (as to itself and each of its Restricted Subsidiaries) to the Agents and each Lender, on the dates and to the extent required pursuant to Section 5.1 or 5.2 hereof, as applicable:

 

4.1                      Financial Condition.  (a)  The audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at December 31, 2013, December 31, 2014 and December 31, 2015, and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by and accompanied by an unqualified report from Ernst & Young LLP, present fairly in all material respects the financial condition of the Borrower and its consolidated Subsidiaries as at such date in accordance with GAAP consistently applied, and the results of its operations and its cash flows for the respective fiscal years then ended, except in each case as otherwise disclosed on Schedule 4.1(a) hereto.

 

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(b)                      The unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at March 31, 2016, and the related consolidated statements of income and of cash flows for the fiscal quarters ended on such date, present fairly in all material respects the financial condition of the Borrower and its consolidated Subsidiaries as at such date, and the results of its operations and its cash flows for the fiscal quarter then ended, in accordance with GAAP consistently applied, except in each case (i) as otherwise disclosed on Schedule 4.1(b) hereto and (ii) subject to changes resulting from audit, normal year-end audit adjustments and to the absence of footnotes.

 

(c)                       The Borrower has furnished to the Administrative Agent the Borrower’s pro forma consolidated balance sheet and related pro forma consolidated statement of income as of the last day of and for the fiscal quarter ended March 31, 2016, prepared giving effect to the Transactions as if the Transactions had occurred on such date (in the case of such balance sheet) or at the beginning of such period (in the case of such statement of income).  Such pro forma consolidated balance sheet and consolidated statement of income have been prepared in good faith by the Borrower based on assumptions believed to be reasonable by the Borrower at the time furnished, it being understood that no such pro forma financial statement is required to include adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)).

 

4.2                      No Change.  Since December 31, 2015, there has been no event, development or circumstance, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect.

 

4.3                      Existence; Compliance with Law.  Each Group Member (a) (i) is duly organized (or incorporated) and validly existing and (ii) in good standing (or, in the case of any Foreign Subsidiary, the equivalent status in any foreign jurisdiction) under the laws of the jurisdiction of its organization or incorporation, (b) has the requisite organizational power and authority to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign entity and in good standing (where such concept is relevant) under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (d) is in compliance with all Laws (including, without limitation, Gaming Regulations and Gaming Permits), except, in each case referred to in this Section 4.3 (other than clause (a)(i) and (b), in each case, with respect to the Borrower), to the extent that any such failure to be so organized and existing, in good standing or qualified, to have such requisite organizational power and authority or to comply with such Laws, as applicable, would not reasonably be expected to have a Material Adverse Effect.  Each Loan Party is not an EEA Financial Institution.

 

4.4                      Organizational Power; Authorization; Enforceable Obligations.  Each Loan Party has the corporate or other organizational power and authority to execute, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to borrow or have Letters of Credit issued hereunder.  Each Loan Party has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the extensions of credit on the terms and conditions of this Agreement.  Each Loan Party has duly executed and delivered each Loan Document to which it is a party.  Except as would not reasonably be expected to have a Material Adverse Effect, no consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority (including, without limitation, any Gaming Authority) or any other Person is required in connection with the extensions of credit hereunder or the execution, delivery and performance of any Loan Document by any Loan Party party thereto, except (i) consents, authorizations, filings and notices described in Schedule 4.4, which consents, authorizations, filings and notices have been obtained or made (except to the extent not yet required to have been obtained or made), each of which is in full force and effect, (ii) the filings referred to in Section 4.17, (iii) the consent or approval of the applicable Gaming Authorities of the pledge of any Gaming Collateral and any other Gaming Business pursuant to the Guarantee and Collateral Agreement and other informational filings with and under Nevada Gaming Commission Regulation 8.130 and other notices required to be delivered to the applicable Gaming

 

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Authorities pursuant to applicable Gaming Regulations in connection with such pledge of such Gaming Collateral, and (iv) the approval of one or more Gaming Authorities that may be required in connection with foreclosure and the exercise of rights and remedies under the Loan Documents.  This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in an proceeding in equity or at law) and/or principles of good faith and fair dealing.

 

4.5                      No Legal Bar.  The execution, delivery and performance of this Agreement and the other Loan Documents by each Loan Party party hereto or thereto, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof and the granting and perfection of the Liens contemplated thereunder, do not violate (a) such Loan Party’s Organizational Documents, (b) any Law (including, without limitation, Gaming Regulations) applicable to such Loan Party or (c) any Contractual Obligation of such Loan Party except, in each case referred to in clause (b) or (c), to the extent that any such violation would not reasonably be expected to have a Material Adverse Effect.

 

4.6                      No Material Litigation.  No litigation, proceeding or investigation of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened in writing, against any Group Member or against any of their Properties or revenues which, taken as a whole, would reasonably be expected to have a Material Adverse Effect.

 

4.7                      Use of Proceeds. The Borrower shall use the proceeds of each Loan and Letter of Credit hereunder solely for the purposes provided in Section 6.10.

 

4.8                      Ownership of Property; Liens.  Except as set forth in Schedule 4.8, each Group Member has good and indefeasible title in fee simple to, or a valid leasehold or subleasehold interest in, all its real property, and good title to, or a valid leasehold interest in or right to use, all its Property (other than Intellectual Property), in each case, that are necessary for the operation of their respective businesses as currently conducted and as proposed to be conducted, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, and none of such Property is subject to any Lien other than Permitted Liens.  As of the Closing Date, except as set forth in Schedule 4.8, no real property is owned by any Loan Party in fee simple or leased by any Loan Party.

 

4.9                      Intellectual Property.  Each Group Member owns, or has a valid right to use, all Intellectual Property necessary for the conduct of its business as currently conducted free and clear of all Liens (other than Permitted Liens) without, to the knowledge of the Borrower, conflict with the rights of any other Person, except where the failure to do so or such conflict would not reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Borrower, no holding, injunction, decision or judgment has been rendered by any Governmental Authority and no Group Member has entered into any settlement stipulation or other agreement (except license agreements in the ordinary course of business) which would limit, cancel or question the validity of any Group Member’s rights in any Intellectual Property owned by such Group Member in any respect that would reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Borrower, no claim has been asserted, is pending or is threatened by any Person challenging or questioning the use by any Group Member of any Intellectual Property or the validity of any Intellectual Property, or alleging any infringement, misappropriation or violation by any Group Member of any Intellectual Property of any Person, except in each case as would not reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Borrower, the operation of the respective businesses of each Group Member as currently conducted does not infringe upon, misappropriate or otherwise violate any rights held by any Person, except for such infringements,

 

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misappropriations or violations that would not reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Borrower, except as would not reasonably be expected to have a Material Adverse Effect, no Person is infringing, misappropriating or violating any Intellectual Property owned by any Group Member, and no Group Member has made or threatened to make any claim relating to the foregoing.  Each Group Member has taken all actions that in the exercise of their reasonable business judgment should be taken to protect the Intellectual Property necessary for the conduct of its business as currently conducted, including Intellectual Property that is confidential in nature, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

4.10              Taxes.  Except as would not reasonably be expected to result in a Material Adverse Effect, (a) each Group Member has filed or caused to be filed all federal income tax returns and all other tax returns (including tax returns to be filed in foreign jurisdictions) that are required to be filed and has paid all Taxes shown to be due and payable on said returns other than those (i) not yet delinquent or (ii) contested in good faith and as to which adequate reserves have been provided in accordance with GAAP and (b) each Group Member has paid all other Taxes imposed on it or any of its Property by any Governmental Authority responsible for administering taxes, or such taxes are being contested in good faith and have provided adequate reserves in accordance with GAAP for the payment of all such Taxes.

 

4.11              Federal Reserve Regulations.  No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for any purpose that violates Regulation T, U or X.

 

4.12              ERISA.  (a)  Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (i) no ERISA Event has occurred or is expected to occur; (ii) there are no pending or, to the knowledge of any Group Member, claims, actions or lawsuits or action by any Governmental Authority, participant or beneficiary with respect to any Plan threatened in writing; (iii) there are no violations of the fiduciary responsibility rules with respect to any Plan; (iv) no Group Member has engaged in any non-exempt “prohibited transaction,” as defined in Section 406 of ERISA or Section 4975 of the Code, in connection with any Plan, that would subject any Group Member to a tax on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of the Code; and (v) each Plan has complied with the applicable provisions of ERISA and the Code.  The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Single Employer Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Single Employer Plan allocable to such accrued benefits by an amount that, if required to be paid as of such date by the Borrower and its Subsidiaries, would reasonably be expected to have a Material Adverse Effect.  As of the date hereof, no Group Member participates in a Multiemployer Plan.

 

(b)                              No Group Member has incurred, and no Group Member reasonably expects to incur, any liability under ERISA or the Code with respect to any plan within the meaning of Section 3(3) of ERISA which is subject to Title IV of ERISA that is maintained by a Commonly Controlled Entity (other than a Group Member) (a “Commonly Controlled Plan”) merely by virtue of being treated as a single employer under Title IV of ERISA with the sponsor of such plan that would reasonably be expected to have a Material Adverse Effect and result in a direct obligation of such Group Member to pay money.

 

(c)                               Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect:  (i) each Foreign Pension Plan is in compliance and in good standing in all respects with all laws, regulations and rules applicable thereto, and the respective requirements of the governing documents for such Foreign Pension Plan, and each Foreign Pension Plan that is required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities; (ii) with respect to each Foreign Pension Plan maintained or contributed to by a Group

 

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Member (A) that is required by applicable to law to be funded in a trust or other funding vehicle, such Foreign Pension Plan is in compliance with applicable law regarding funding requirements, and (B) that is not required by applicable law to be funded in a trust or other funding vehicle, reserves have been established where required by ordinary accounting practices in the jurisdiction in which such Foreign Pension Plan is maintained; and (iii) no actions or proceedings have been taken or instituted to terminate or wind-up a Foreign Pension Plan with respect to which any Group Member could reasonably be expected to have any liability.  The accrued benefit obligations of each Foreign Pension Plan (based on the assumptions used to fund such Foreign Pension Plan) do not exceed the assets of such Foreign Pension Plan by an amount that, if required to be paid immediately, would reasonably be expected to have a Material Adverse Effect.

 

4.13              Investment Company Act.  No Loan Party is required to be registered as an “investment company” under and within the meaning of the Investment Company Act of 1940.

 

4.14              Subsidiaries.  (a)  The Subsidiaries listed on Schedule 4.14 constitute all the Subsidiaries of the Borrower as of the Closing Date.  Schedule 4.14 sets forth as of the Closing Date the name and jurisdiction of incorporation of each Subsidiary and, as to each Subsidiary, the percentage of each class of Capital Stock owned by any Loan Party.  All Capital Stock of each Group Member has been validly issued, are (as applicable) fully paid and nonassessable and are free and clear of all Liens other than Permitted Liens.

 

(b)                      As of the Closing Date, except as set forth on Schedule 4.14, there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments of any nature (other than compliance with any requirements of any applicable Gaming Regulations) to which the Borrower or any of its Subsidiaries is a party relating to any Capital Stock of any Group Member.

 

4.15              Environmental Matters.  Other than exceptions to any of the following that would not reasonably be expected to have a Material Adverse Effect:

 

(a)                       No Group Member, nor any of their respective businesses or operations nor any real property currently owned by any Group Member, nor to the knowledge of the Borrower any real property currently leased or operated by the Group Members or any real property formerly owned, leased or operated by any Group Member, are subject to any outstanding Environmental Claim or any order (unilateral or consent), consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Claim;

 

(b)                      No Group Member has received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law;

 

(c)                       To the knowledge of the Borrower, there are and have been, no conditions or occurrences that would reasonably be expected to form the basis of an Environmental Claim against any Group Member or any real property currently owned, leased or operated by the Group Members or any such claim arising out of the ownership, lease or operation by the Group Members of any real property formerly owned, lease or operated by the Group Members but no longer owned, leased or operated by the Group Members;

 

(d)                      Each Group member is in compliance with all Environmental Laws and all permits issued under such Environmental Laws; and

 

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(e)                       Hazardous Materials have not at any time been generated, used, treated or stored on, or transported to or from, or released on or from, any real property owned, leased or operated by the Group Members or, to the knowledge of the Borrower, any property adjoining or adjacent to any real property, where such generation, use, treatment, storage, transportation or release would reasonably be expected to give rise to an Environmental Claim against the Group Members.

 

4.16              Accuracy of Information, Etc..  All written information (other than the Projections, other forward-looking information and information of a general economic or industry nature) concerning any Group Member or any of their respective Subsidiaries that has been made available by the Borrower or their respective representatives and made available to the Agents or any Lead Arranger or Lender in connection with the Transactions or this Agreement, when taken as a whole, did not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements were made (after giving effect to all supplements and updates thereto from time to time).  The Projections, when taken as a whole, have been prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time furnished (it being recognized that such Projections are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, that no assurance can be given that any particular financial projections will be realized, that actual results may differ from projected results and that such differences may be material).

 

4.17              Security Documents.  (a)  The Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent for the benefit of the Secured Parties, a legal and valid security interest in the Collateral described therein (subject, in the case of the Pledged Securities described in the Guarantee and Collateral Agreement, to the receipt of any approvals required by the applicable Gaming Authorities (including those described in Section 10.24) in order to pledge any of the Gaming Collateral of any entity licensed by or registered with such Gaming Authorities).  In the case of (i) the Pledged Securities described in the Guarantee and Collateral Agreement, when any stock certificates or notes, as applicable, representing such Pledged Securities are delivered to the Collateral Agent and subject to the receipt of any approvals required by the applicable Gaming Authorities (including those described in Section 10.24) in order to pledge any of the Gaming Collateral of any entity licensed by or registered with such Gaming Authorities and (ii) the other Collateral described in the Guarantee and Collateral Agreement, when financing statements in appropriate form are filed in the offices specified on Schedule 4.17(a), the Collateral Agent shall have a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral (including any proceeds of any item of Collateral) (to the extent a security interest in such Collateral can be perfected through the filing of financing statements under the Laws of the jurisdictions in which the offices specified on Schedule 4.17(a) are located and through the delivery of the Pledged Securities required to be delivered on the Closing Date), as security for the Secured Obligations.

 

(b)                      Upon the execution and delivery of any Mortgage to be executed and delivered pursuant to Section 6.8(b), such Mortgage shall be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal and valid Lien on the mortgaged property described therein and proceeds thereof; and when such Mortgage is filed in the recording office designated by the Borrower, such Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such mortgaged property and the proceeds thereof, as security for the Secured Obligations (as defined in the relevant Mortgage).

 

4.18              Solvency.  On the Closing Date, immediately after giving effect to the Transactions and the incurrence and repayment of all Indebtedness and obligations being incurred and repaid in connection herewith and therewith on the Closing Date, the Borrower and its Subsidiaries, on a consolidated basis, are Solvent.

 

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4.19              Labor Matters.  No strike, stoppage, lockout, slowdown or dispute with the employees of any Group Member exists or, to the knowledge of the Borrower, has been threatened in writing, there are no unfair labor practice complaints pending or, to the knowledge of the Borrower, threatened in writing against any of Group Member, and there is no violation by any Group Member of the Fair Labor Standards Act or any other applicable federal, state or foreign wage and hour laws, in each case of this Section 4.19, which have had, or would reasonably be expected to have, a Material Adverse Effect.

 

4.20              PATRIOT Act; OFAC; FCPA; Sanctions.

 

(a)                       To the extent applicable and to its knowledge, each Group Member is in compliance, in all material respects, with (i) the Trading with the Enemy Act and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto (collectively, “OFAC”), and (ii) the PATRIOT Act.  No Borrower will directly or, to its knowledge, indirectly, use any part of the proceeds of the Loans for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.

 

(b)                      No Group Member, and, to the knowledge of the Borrower, no Affiliate of any Group Member, (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2, (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order or (iv) is a person resident in a country that is subject to a sanctions program identified on the list maintained and published by the European Union and available at http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm (or equivalent page thereto as otherwise published from time to time by the European Union).  The Borrower will not directly or, to its knowledge, indirectly, use any part of the proceeds of the Loans to finance the activities of any Person described in clauses (i) through (iv) above.

 

4.21              Gaming Matters.  Neither the Borrower nor any of its Restricted Subsidiaries has received any written notice or other written communications from any Gaming Authority regarding (i) any revocation, withdrawal, suspension, termination or modification of, or the imposition of any material conditions with respect to, any Gaming Permit, or (ii) any other limitations on the conduct of business by the Borrower or any of its Restricted Subsidiaries, except, in each case, where any such revocation, withdrawal, suspension, termination, modification, imposition or limitation could not reasonably be expected to result in, either individually or in the aggregate, a Material Adverse Effect.

 

4.22              Insurance. The properties of the Borrower and its Restricted Subsidiaries are insured with financially sound and reputable insurance companies, in such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as the Borrower and its Restricted Subsidiaries) with such deductibles and covering such risks and liabilities as are customarily carried by companies engaged in similar businesses and owning similar

 

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properties in localities where the Borrower or its Restricted Subsidiaries operate. All insurance maintained by the Group Members is in full force and effect, all premiums have been duly paid, no Group Member has received notice of violation, invalidity or cancellation thereof, and the use, occupancy and operation thereof comply with all Insurance Requirements, and there exists no default under any Insurance Requirement, in each case, except as could not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5                     CONDITIONS PRECEDENT

 

5.1                      Conditions to Initial Extension of Credit.  The obligations of each Lender to make Initial Term Loans and Revolving Loans to be made on the Closing Date shall be subject to the satisfaction (or waiver by the Lead Arrangers), of the following conditions precedent:

 

(a)                       Credit Agreement; Security Documents.  The Administrative Agent (or its counsel) shall have received from each Loan Party party thereto a counterpart signed by such Loan Party (or written evidence satisfactory to the Administrative Agent (which may include a copy transmitted by facsimile or other electronic method) that such party has signed a counterpart) of (i) this Agreement, (ii) any Notes requested by any Lender hereunder pursuant to Section 2.8(e) at least three (3) Business Days prior to the Closing Date, (iii) the Guarantee and Collateral Agreement and Intellectual Property security agreements to be executed and delivered on the Closing Date and (iv) the Intercompany Subordination Agreement.

 

(b)                      Reserved.

 

(c)                       Consummation of the Refinancing; Extinguishment of Liens.  Substantially concurrently with the initial incurrence of the Loans, (i) all Indebtedness under the Existing Credit Agreement shall have been repaid in full (together with all fees and other amounts owing thereon) and all commitments thereunder shall have been terminated and all liens securing the obligations under the Existing Credit Agreement shall have been terminated (or arrangements reasonably satisfactory to the Administrative Agent for such termination shall have been made), (ii) all of the Existing Notes shall have been redeemed (or the Borrower shall have provided irrevocable notice to the trustee therefor for the redemption thereof and set aside (or substantially simultaneously with the initial incurrence of the Loans will have set aside from the proceeds thereof) cash and cash equivalents sufficient to pay the redemption price thereof) and (iii)  the Group Members shall have (x) no third party Indebtedness for borrowed money outstanding as of the Closing Date other than under the Initial Facilities, ordinary course Capital Lease Obligations, purchase money Indebtedness, equipment financings, letters of credit, surety bonds and short-term working capital facilities and any other Indebtedness listed on Schedule 7.2(c) and (y) no other third party Indebtedness other than Indebtedness permitted by Section 7.2 (collectively, the “Refinancing”).

 

(d)                      Solvency Certificate.  The Administrative Agent shall have received a solvency certificate signed by the chief financial officer (or other officer with reasonably equivalent responsibilities) of the Borrower, substantially in the form of Exhibit G hereto.

 

(e)                       Insurance.  Administrative Agent shall have received evidence of insurance complying with the requirements of Section 6.5 and certificates naming Collateral Agent as an additional insured and/or loss payee to the extent required pursuant to such Section 6.5.

 

(f)                                Closing Certificate.  The Administrative Agent shall have received (i) a closing certificate of the Borrower dated the Closing Date substantially in the form of Exhibit D-1 certifying as to the matters set forth therein and (ii) an officer’s certificate of each Loan Party dated the Closing Date, substantially in the form of Exhibit D-2, with appropriate insertions and attachments.

 

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(g)                       Legal Opinions.  The Administrative Agent shall have received executed customary legal opinions of (i) Morrison & Foerster LLP, in its capacity as special New York counsel to the Loan Parties, (ii) Lewis Roca Rothgerber Christie LLP, local counsel to the Loan Parties organized under the laws of Nevada and Colorado and special gaming counsel to the Loan Parties in Nevada, Colorado and Iowa and (iii) Lathrop & Gage, special gaming counsel to the Loan Parties in Missouri.

 

(h)                      Pledged Stock; Stock Powers; Pledged Notes.  Subject to clause (iii) below, the Collateral Agent shall have received (i) the certificates, if any, representing the shares of the Pledged Stock (as defined in the Guarantee and Collateral Agreement) (other than Pledged Stock constituting Gaming Collateral, the delivery of which is subject to clause (iii) below) required to be delivered to the Collateral Agent pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, (ii) any Pledged Notes (as defined in the Guarantee and Collateral Agreement) required to be delivered to the Collateral Agent pursuant to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an transfer form endorsed in blank) by the pledgor thereof and (iii) to the extent the Loan Parties have received any approvals required by the applicable Gaming Authorities (including those described in Section 10.24 in order to pledge the Pledged Stock constituting Gaming Collateral of any entity licensed by or registered with such Gaming Authorities), the certificates, if any, and all of the remaining Gaming Collateral, if any, referred to in the Guarantee and Collateral Agreement required to be delivered to the Collateral Agent pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof.

 

(i)                          Filings, Registrations and Recordings.  The Collateral Agent shall have received evidence that all financing statements under the Uniform Commercial Code in the jurisdiction of organization of each Loan Party have been filed or are otherwise in a form appropriate for filing.

 

(j)                          Financial Statements.  The Lead Arrangers shall have received (i) the financial statements of the Borrower and its Subsidiaries referred to in Section 4.1(a) and 4.1(b) and (ii) a pro forma consolidated balance sheet and related pro forma consolidated statement of income of the Borrower referred to in Section 4.1(c).

 

(k)                      PATRIOT Act.  At least three Business Days prior to the Closing Date, the Administrative Agent shall have received from each of the Loan Parties documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act, reasonably requested by any Lender, in each case, at least ten days prior to the Closing Date.

 

(l)                          Approvals. Other than as set forth in Section 10.24, all necessary Gaming Permits in connection with the Transactions, including without limitation, the transactions contemplated by the Loan Documents, shall have been obtained and shall remain in full force and effect, and all applicable waiting periods shall have expired without any action being taken by any competent authority which restrains, enjoins, prevents or imposes materially adverse conditions upon the consummation of the Transactions.  In addition, there shall not exist any judgment, order, injunction or other restraint, and there shall be no pending litigation or proceeding by any Governmental Authority, prohibiting, enjoining or imposing materially adverse conditions upon the Transactions, or on the consummation thereof.

 

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(m)                  Fees.  All (i) fees required to be paid by the Borrower on the Closing Date pursuant to the Fee Letters and (ii) fees and expenses required to be paid by the Borrower on the Closing Date pursuant to the Engagement Letter, to the extent invoiced at least three Business Days prior to the Closing Date shall, in each case, upon the initial Borrowing under the Facilities, have been, or will be substantially simultaneously, paid (which amounts may be offset against the proceeds of the Facilities, at the election of the Borrower).

 

(n)                      Material Adverse Effect.  Since December 31, 2015, no Material Adverse Effect shall have occurred.

 

For purposes of determining whether the conditions specified in this Section 5.1 have been satisfied, by funding the Loans hereunder, the Administrative Agent and each Lender shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to the Administrative Agent or such Lender, as the case may be.

 

5.2                      Conditions to Each Extension of Credit.  The agreement of each Lender to make any Loan (which, for the avoidance of doubt, shall not include any Incremental Loans advanced to the extent not otherwise required by the Incremental Lenders (other than in respect of the absence of any Event of Default under Section 8.1(a) or (f)) or of the Issuing Lender to issue, amend, renew or extend any Letter of Credit (other than any amendment or modification of a Letter of Credit which does not increase the face amount or extend the expiration date thereof), in each case, is subject to the satisfaction (or waiver in accordance with Section 10.1) of the following conditions precedent:

 

(a)                               Representations and Warranties.  Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects, in each case on and as of such date as if made on and as of such date, except to the extent that such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date (provided that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects).

 

(b)                              No Default.  No Default or Event of Default shall have occurred and be continuing on such date or shall occur immediately after giving effect to the extensions of credit requested to be made on such date.

 

(c)                               Borrowing Notice.  The Administrative Agent shall have received a notice of borrowing in accordance with Section 2.5 and substantially in the form of Exhibit A-1 hereto, a letter of credit application or such other request for borrowing as may be required under the terms hereof.

 

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower under this Section 5.2 shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 5.2 have been satisfied (unless such condition was waived in accordance with Section 10.1 hereof).

 

 

SECTION 6                     AFFIRMATIVE COVENANTS

 

Until the Facility Termination Date, the Borrower shall and (to the extent relevant) shall cause each of the Restricted Subsidiaries to:

 

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6.1                      Financial Statements.  Furnish to the Administrative Agent for delivery to each Lender (which may be delivered to the Lenders via posting the E-System to the extent provided in the paragraph below):

 

(a)                       within 105 days (or, if the Borrower is no longer required to publicly file its financial statements with the SEC, 120 days) after each fiscal year of the Borrower, commencing with the fiscal year ended December 31, 2016, a copy of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income, cash flows and changes in shareholder equity for such year, in each case, setting forth in comparative form the figures as of the end of and for the previous year, reported on without qualification arising out of the scope of the audit or “going concern” or like qualification (except for any such qualification pertaining to the maturity of any Facility and/or Specified Junior Debt Facility occurring within the four fiscal quarter period following the relevant audit opinion or any anticipated breach of any financial covenant under any Facility and/or Specified Junior Debt Facility), by Ernst & Young LLP or other independent certified public accountants of nationally recognized standing;

 

(b)                      as soon as available, but in any event not later than 60 days after the end of each of the first three quarterly periods of each fiscal year of the Borrower, commencing with the fiscal quarter ending June 30, 2016, the unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, in each case, setting forth in each case in comparative form the figures as of the end of and for the corresponding period in the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes); and

 

(c)                       simultaneously with the delivery of each set of consolidated financial statements referred to in Sections 6.1(a) and 6.1(b) above, a summary of the pro forma adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements.

 

All such financial statements shall be prepared in reasonable detail and shall fairly present, in all material respects, the consolidated financial position of the Borrower and its Subsidiaries as at the dates indicated therein and its income and cash flows for the periods indicated therein in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountant and disclosed therein and except, in the case of the financial statements referred to in clause (b), for customary year-end adjustments and the absence of footnotes) (collectively, the “Financial Requirements”).

 

Documents required to be delivered pursuant to this Section 6.1 and Section 6.2 may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower (or a representative thereof) posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed in Section 10.2; (ii) on which such documents are delivered by the Borrower (or a representative thereof) to the Administrative Agent for posting on Borrower’s behalf on an E-System to which each Lender and the Administrative Agent have access; or (iii) on which executed certificates or other documents are faxed to the Administrative Agent (or electronically mailed to an address provided by the Administrative Agent); provided that the Borrower shall notify the Administrative Agent (by facsimile or electronic mail) of the posting of any such documents pursuant to clause (i) above and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.  The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event, shall have no responsibility to monitor compliance by the Borrower with any such request

 

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by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

Notwithstanding the foregoing, the obligations in clauses (a) and (b) of this Section 6.1 and clause (c) of Section 6.2 may be satisfied with respect to any financial statements of the Borrower and its consolidated Subsidiaries by furnishing to the Administrative Agent (A) the applicable financial statements of the Borrower (or any Parent Company) or (B) the Borrower (or any Parent Company’s), as applicable, Form 10-K or 10-Q, as applicable, filed with the SEC or any securities exchange, in each case, within the time periods specified in such paragraphs; provided that, with respect to each of clauses (A) and (B), (i) such financial statements shall be accompanied by consolidating information that summarizes in reasonable detail the differences between the information relating to any Parent Company, on the one hand, and the information relating to the Borrower and its consolidated Subsidiaries on a standalone basis, on the other hand, which consolidating information shall be certified by a Responsible Officer of the Borrower as having been fairly presented in all material respects and (ii) to the extent such statements are in lieu of statements required to be provided under Section 6.1(a), such statements shall be accompanied by a report of Ernst & Young LLP or other independent certified public accountants of nationally recognized standing satisfying the applicable requirements set forth in Section 6.1(a).

 

6.2                      Certificates; Other Information.  Furnish to the Administrative Agent for delivery to each Lender:

 

(a)                       concurrently with the delivery of any financial statements pursuant to Sections 6.1(a) and (b), a Compliance Certificate from a Responsible Officer of the Borrower (i) certifying that all such financial statements are consistent with the Financial Requirements, (ii) certifying that such Responsible Officer has obtained no knowledge of any existing Default or Event of Default except as specified in such certificate, (iii) setting forth a reasonably detailed calculation of Consolidated EBITDA of the Group Members for the Test Period ended as of the last day of the relevant fiscal quarter or fiscal year of the Borrower, as the case may be, and the Total Leverage Ratio and the First Lien Leverage Ratio as of the last day of the relevant fiscal quarter or fiscal year of the Borrower, as the case may be, (iv) if such Compliance Certificate is being delivered in connection with financial statements delivered under Section 6.1(a), (x) a calculation of Excess Cash Flow with respect to the relevant fiscal year, and (y) calculation demonstrating the Available Amount, the Available Equity Amount and the Available Excluded Contribution Amount, in each case, as of the last day of such reporting period, (v) listing of each Unrestricted Subsidiary as of the last day of such reporting period and of any new Subsidiary of the Borrower formed or acquired during such reporting period and (vi) setting forth management’s discussion and analysis of the important operational and financial developments of Borrower and the Restricted Subsidiaries during such fiscal quarter or fiscal year, as applicable;

 

(b)                      no later than 105 days following the first day of each fiscal year of the Borrower, commencing with a budget for the fiscal year ending December 31, 2017, an annual budget (including forecasted balance sheets, statements of income and loss and statements of cash flows), together with such supporting information as the Administrative Agent may reasonably request, such projected financial budget to be prepared for such fiscal year (and, in the case of the statements of income and loss, on a quarterly basis) in form customarily prepared by the Borrower;

 

(c)                       promptly after the same are available, copies of (i) all financial statements and reports that the Borrower or any Parent Company sent or made generally to such Person’s security holders acting in such capacity and (ii) all regular and periodic reports, filed by the Borrower or any Parent Company with the SEC, in each case of this Section 6.2(c), to the extent not already provided pursuant to Section 6.1 or any other clause of this Section 6.2;

 

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(d)                      promptly, such additional financial and other information as the Administrative Agent (for its own account or upon the reasonable request from any Lender) may from time to time reasonably request regarding the financial condition or business of the Group Members, as well as any information required by the USA Patriot Act; provided, however, that no Group Member shall be required to disclose or provide any information (a) that constitutes non-financial trade secrets or non-financial proprietary information of such Person or any of its Subsidiaries or any of their respective customers and/or suppliers, (b) in respect of which disclosure to the Administrative Agent or any Lender (or any of their respective representatives) is prohibited by any applicable Law (including any applicable Gaming Regulations), (c) that is subject to attorney-client or similar privilege or constitutes attorney work product or (d) in respect of which such Group Member owes confidentiality obligations to any third party (provided such confidentiality obligations were not entered into in contemplation of the requirements of this Section 6.2(d)); provided, further, that in the event that any Group Member does not provide information in reliance on the preceding clause (c) or (d) due to confidentiality or waiver concerns, such Group Member shall provide notice to the Administrative Agent that such information is being withheld and shall use its commercially reasonable efforts to communicate the applicable information in a way that would not violate the applicable obligation or risk waiver of such privilege.

 

The Borrower hereby acknowledges that (a) the Agents may, but shall not be obligated to, make available to the Lenders and the Issuing Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on Debt Domain, IntraLinks, SyndTrak or another E-System (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Subsidiaries, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities.  The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to have authorized the Agents, the Issuing Lenders and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower, its subsidiaries or their respective securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information as defined in Section 10.14, they shall be treated as set forth in Section 10.14); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information”; and (z) the Agents shall treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information” (provided, however, that in any event, the Borrower shall be deemed to have authorized the Agents, the Issuing Lenders and the Lenders to treat any information delivered pursuant to Sections 6.1(a), 6.1(b) and, unless otherwise specified by the Borrower in writing to the Administrative Agent, 6.2(a) as not containing any material non-public information with respect to the Borrower, its subsidiaries or their respective securities for purposes of United States Federal and state securities laws and to make such information available to Public Lenders).

 

6.3                      Payment of Taxes.  Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its federal and other (including foreign) material Taxes upon it or its Property, except (a) where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves required in conformity with GAAP with respect thereto have been provided on the books of the applicable Group Member or (b) to the extent that failure to pay or satisfy such obligations would not reasonably be expected to have a Material Adverse Effect.

 

6.4                      Conduct of Business and Maintenance of Existence, etc.; Compliance with Laws.  (a) Preserve, renew and keep in full force and effect (i) its legal existence and (ii) good standing (or the equivalent thereof) under the laws of the jurisdiction of its organization, (b) take all reasonable action to maintain all rights, privileges, permits (including Gaming Permits), licenses and franchises necessary or desirable in the normal conduct of its business and (c) comply with all Laws except, in each case referred to in clause (a) and (b), as otherwise permitted by Section 7.4, 7.5 or 7.11 and, in each case referred to in this Section 6.4 (other than clause (a)(i) with respect to the Borrower), to the extent that failure to do any of the foregoing would not, in the aggregate, reasonably be expected to have a Material Adverse Effect

 

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6.5                      Maintenance of Property; Insurance.  (a)  Keep all Property material to the conduct of its business in reasonably good working order and condition, ordinary wear and tear excepted except where a failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

(b)                      Except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, maintain insurance with insurance companies that the Borrower believes (in the good faith judgment of the management of the Borrower) are financially sound and responsible at the time the relevant coverage is placed or renewed on all its material Property in at least such amounts (after giving effect to any self-insurance which the Borrower believes (in the good faith judgment of management of the Borrower) is reasonable and prudent in light of the size and nature of its business) and against at least such risks as the Borrower believes (in the good faith judgment of the management of the Borrower) is reasonable and prudent in light of the size and nature of its business.  The Borrower shall use commercially reasonable efforts to ensure that all such insurance shall, to the extent customary, provide that no cancellation thereof shall be effective until at least 30 days (or, in the case failure to pay any premiums thereunder, 10 days) after receipt by the Administrative Agent of written notice thereof.  All such insurance shall, to the extent customary, name the Collateral Agent as additional insured or loss payee, as applicable

 

6.6                      Books and Records; Inspection of Property; Discussions.  (a) Keep proper books of records and account in which entries that are full, true and correct in all material respects and permit the preparation of consolidated financial statements in conformity with GAAP shall be made of all material dealings and transactions in relation to its business, assets and activities, (b) permit representatives of the Administrative Agent to visit and inspect any of its properties at which the principal financial records and executive officers of the Group Members are located (in the case of any real property lease, to the extent permitted in the relevant lease agreement) and examine and make copies and abstracts from any of its financial and accounting books and records, upon reasonable prior notice and during normal business hours, (c) permit representatives of the Administrative Agent to have reasonable discussions regarding the business, operations, properties and financial condition of the Group Members with Responsible Officers of the Group Members and their independent public accountants (provided that a Responsible Officer of the Borrower shall be given notice and an opportunity to participate during such discussion with such independent public accountants) upon reasonable prior notice and during normal business hours; provided that (i) excluding any such visits and inspections during the continuation of an Event of Default (x) the Administrative Agent shall not exercise the rights set forth in clauses (b) and (c) more than one time (in the aggregate) in any calendar year and (y) only one (in the aggregate) such visit set forth in clauses (b) and (c) shall be at the Borrower’s expense and (ii) that when an Event of Default exists, the Administrative Agent (or any of its representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and upon reasonable advance notice.  Notwithstanding anything to the contrary in this Section 6.6, no Group Member will be required to disclose or permit the inspection or discussion of, any document, information or other matter (1) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by Law (including any applicable Gaming Regulations) or any binding agreement not entered not in contemplation of avoiding such inspection and disclosure rights, (2) that is subject to attorney client or similar privilege or constitutes attorney work product, (3) in respect of which any Group Member owes confidentiality obligations to any third party not entered into in contemplation avoiding such inspection and disclosure or (4) that constitutes non-financial trade secrets or non-financial proprietary information of a Group Member or any Subsidiary thereof and/or any customers and/or suppliers of the foregoing; provided that in the event that any Group Member does not provide any information requested in connection with an examination or a discussion permitted under this Section 6.6 in reliance on the preceding clause (2) or (3) due to confidentiality or waiver concerns, such Person shall provide notice to the Administrative Agent that such information is being withheld and shall use its commercially reasonable efforts to communicate the applicable information in a way that would not violate the applicable obligation or risk waiver of such privilege.

 

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6.7                      Notices.  Promptly upon a Responsible Officer of any Loan Party obtaining knowledge thereof, give notice to the Administrative Agent (who shall promptly notify each Lender) of:

 

(a)                       the occurrence of any Default or Event of Default;

 

(b)                      any litigation, investigation or proceeding (including any Environmental Claim or under Environmental Law or by any Gaming Authority) or any development or significant change with respect to such litigation, investigation or proceeding which may exist at any time between Holdings, the Borrower or any of its Subsidiaries and any other Person, which ligation, investigation or proceeding, would reasonably be expected to be adversely determined, and, if so determined, would reasonably be expected to result in a Material Adverse Effect;

 

(c)                       the occurrence of any ERISA Event or any event that occurred or failed to occur with respect to a Foreign Pension Plan that would reasonably be expected to result in a Material Adverse Effect; and

 

(d)                      any other development or event that has had or would reasonably be expected to have a Material Adverse Effect.

 

In addition, the Borrower shall give notice to the Administrative Agent of any proposed change (i) in any Loan Party’s corporate or company name, (ii) in the jurisdiction of incorporation or organization of any Loan Party or (iii) any Loan Party’s organizational identification number, in each case, prior to the effectiveness thereof (or such later date as may be agreed by the Collateral Agent in its reasonable discretion).

 

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Group Members or the relevant Subsidiary proposes to take with respect thereto (or, in the case of any notice provided pursuant to clause (b), such other non-privileged information as may be reasonably available to the Loan Parties to enable the Lenders to evaluate such matters).

 

6.8                      Additional Collateral, Etc.  (a) Subject to applicable Gaming Regulations and the terms herein, with respect to any personal property (including, without limitation any Capital Stock) or Intellectual Property (in each case, other than assets expressly excluded from the Collateral pursuant to the Security Documents) acquired or created after the Closing Date by any Loan Party (other than Instruments, Certificated Securities, Securities and Chattel Paper, which are referred to in the last sentence of this paragraph (a)) as to which the Collateral Agent for the benefit of the Secured Parties does not have a perfected Lien, promptly, but in any case within the later of (i) the receipt of all requisite approvals under the applicable Gaming Regulations and (ii) sixty days (in each case, which period may be extended by the Administrative Agent in its reasonable discretion) or, in the case of any Intellectual Property, if later, concurrently with the delivery of the first Compliance Certificate after such acquisition

 

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or creation, (i) execute and deliver to the Collateral Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Collateral Agent reasonably requests, if any, as are necessary to grant to the Collateral Agent for the benefit of the Secured Parties a security interest in such Property and (ii) take all actions reasonably requested by the Collateral Agent or required by the Security Documents to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents) in such property, including, without limitation, the filing of UCC financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Collateral Agent.  Any Instrument, Certificated Security (other than in respect of the Capital Stock of any Subsidiary which is addressed in clause (c) below), Security or Chattel Paper in excess of $2,500,000 shall be promptly, in any event, within the later of (i) the receipt of all requisite approvals under the applicable Gaming Regulations and (ii) sixty days of the receipt thereof, delivered to the Collateral Agent indorsed in a manner reasonably satisfactory to the Collateral Agent to be held as Collateral pursuant to the relevant Security Document; provided that if the pledge of the Capital Stock of any Subsidiary acquired or created after the Closing Date requires approval under applicable Gaming Regulations, the Borrower shall be required to pledge such Capital Stock only if the requisite approvals from the applicable Gaming Authorities are obtained after the exercise of its commercially reasonable efforts to obtain such approvals (and the Borrower agrees to use its commercially reasonable efforts to obtain such approvals).

 

(b)                      With respect to any Material Real Estate acquired or leased after the Closing Date by any Loan Party (i) within ten Business Days (which period may be extended by the Collateral Agent in its reasonable discretion) of such acquisition, give notice of such acquisition to the Collateral Agent and, if requested by the Collateral Agent and subject to the Borrower’s use of commercially reasonable efforts to obtain consent of the lessor to grant a mortgage in any Leasehold that constitutes Material Real Estate, within ninety days (which period may be extended by the Collateral Agent in its reasonable discretion) thereafter, execute and deliver a Mortgage in favor of the Collateral Agent for the benefit of the Secured Parties, covering such real property, (ii) if reasonably requested by the Collateral Agent provide the Lenders with a lenders’ title insurance policy with extended coverage covering such Mortgaged real property in an amount reasonably specified by the Collateral Agent (but not to exceed the market value thereof) as well as a current ALTA survey thereof, together with a surveyor’s certificate unless the title insurance policy referred to above shall not contain an exception for any matter shown by a survey (except to the extent an existing survey has been provided and specifically incorporated into such title insurance policy) and such customary flood certificates and insurance and environmental reports as shall be reasonably required by the Collateral Agent in form and substance reasonably satisfactory to the Collateral Agent and (iii) if requested by the Collateral Agent, deliver to the Collateral Agent a customary legal opinion with respect to the enforceability of such Mortgage, which opinion shall be in form and substance reasonably satisfactory to the Collateral Agent.  Notwithstanding the foregoing, the Loan Parties shall only be required to use commercially reasonable efforts to obtain any necessary third party consents to the granting of any Mortgage in respect of a Leasehold (including any Leasehold subject to a Mortgage under the Existing Credit Agreement), and any failure to obtain such consent after use of such efforts (and thus otherwise comply with the requirements of clauses (i) through (iv) of this Section 6.8(b) in such Leasehold) shall not constitute a Default or Event of Default.

 

(c)                       With respect to (i) any new Domestic Subsidiary (other than an Excluded Subsidiary) that is created or acquired after the Closing Date by any Loan Party, (ii) any Unrestricted Subsidiary that is designated as a Restricted Subsidiary (other than an Excluded Subsidiary) and (iii) any formerly Excluded Subsidiary which ceases to be an Excluded Subsidiary, promptly, but in any case within the later of (x) the receipt of all requisite approvals under the applicable Gaming Regulations and (y) sixty days of such creation, acquisition or change (which period may be extended by the Administrative Agent in its reasonable discretion), (A) give notice of such acquisition, creation or change to the Collateral Agent and, if requested by the Collateral Agent, execute and deliver to the Collateral

 

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Agent such amendments or joinders to the Guarantee and Collateral Agreement or such other documents as the Collateral Agent reasonably deems necessary to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents) in the Capital Stock of such new Subsidiary that is owned by such Loan Party, (B) deliver to the Collateral Agent the certificates, if any, representing such Capital Stock (and any Capital Stock of its Subsidiaries required to be delivered by the Security Documents), together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Loan Party, (C) cause such Subsidiary (1) to become a party to the Guarantee and Collateral Agreement and (2) to take such actions necessary or advisable to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents) in the Collateral described in the Guarantee and Collateral Agreement with respect to such Subsidiary, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement and (iv) deliver such Lien searches, customary legal opinions, authorizing resolutions and other corporate documents relating to such Subsidiary as reasonably requested by the Collateral Agent.

 

(d)                      Notwithstanding anything to the contrary herein or in any other Loan Document, it is understood and agreed that:

 

(i)                                  any Lien required to be granted from time to time pursuant to this Section 6.8 shall be subject to the exceptions and limitations set forth in the applicable Security Documents,

 

(ii)                              (A) perfection by control shall not be required with respect to assets requiring perfection through control agreements or other control arrangements, including deposit accounts, securities accounts and commodities accounts (other than control of Pledged Securities) and (B) no blocked account agreement, deposit account control agreement or similar agreement shall be required for any deposit account or securities account,

 

(iii)                          no Loan Party shall be required to seek any landlord lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access or similar letter or agreement (other than use of commercially reasonable efforts to obtain any consents referenced in Section 6.8(b) above),

 

(iv)                          no action outside of the US shall be required in order to create or perfect any security interest in any asset of any Loan Party, and no non-US law security agreement, non-US law pledge agreement or non-US law Intellectual Property filing, search or schedule shall be required with respect to any asset of any Loan Party,

 

(v)                              in no event will the Collateral include any Excluded Asset,

 

(vi)                          no action shall be required to perfect any Lien with respect to (A) any vehicle or other asset subject to a certificate of title, (B) letter-of-credit rights, and/or (C) fixtures, unless, in the case of clauses (A) and (B), to the extent that a security interest therein can be perfected by filing a UCC-1 financing statement and, in the case of clause (C), unless otherwise covered by a Mortgage required to be delivered hereunder,

 

(vii)                      any joinder or supplement to the Collateral and Guarantee Agreement and/or any other Loan Document executed by any Restricted Subsidiary that is required to become a Loan Party pursuant to Section 6.8(c) may, with the consent of the Administrative Agent (not to be unreasonably withheld, delayed or conditioned), include such schedules (or updates to schedules) as may be necessary to qualify any representation or warranty set forth in any Loan Document to the extent necessary to ensure that such representation or warranty is true and correct to the extent required thereby or by the terms of any other Loan Document,

 

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(viii)                  if there is a conflict between any Security Document and this Agreement, then, to the extent permitted by law, the provisions of this Agreement will take priority over the provisions of such Security Document, and

 

(ix)                          the Administrative Agent shall not require the granting of a security interest, or require the perfection of a security interest granted in, those assets as to which the cost, burden, difficulty or consequence (including any effect on the ability of the relevant Loan Party to conduct its operations and business in the ordinary course of business) of obtaining or perfecting a security interest therein outweighs the benefit of a security interest to the relevant Secured Parties afforded thereby, as reasonably determined by the Borrower and the Administrative Agent.

 

6.9                      Further Assurances.  Subject to the limitations set forth herein and in the Security Documents and subject to the applicable Gaming Regulations, from time to time the Loan Parties shall execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take all such actions, as the Administrative Agent or the Collateral Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of renewing the rights of the Secured Parties with respect to the Collateral as to which the Collateral Agent, for the ratable benefit of the Secured Parties, has a perfected Lien pursuant hereto or thereto, including, without limitation, filing any financing or continuation statements or financing change statements under the Uniform Commercial Code (or other similar laws) in effect in any United States jurisdiction with respect to the security interests created by the Security Documents.

 

6.10              Use of Proceeds.  The Borrower shall use (i) the proceeds of the Initial Term Loans on the Closing Date solely to pay the obligations outstanding under the Existing Credit Agreement and Existing Notes and, to the extent of any remaining proceeds of Initial Term Loans after application thereto, Transaction Expenses, (ii) the proceeds of the Revolving Loans for general corporate purposes (including any transaction not prohibited by this Agreement); (iii) Letters of Credit for general corporate purposes; (iv) the proceeds of the Incremental Term Loans for general corporate purposes (including any transaction not prohibited by this Agreement) subject to any limitations specified in the applicable Incremental Agreement; and (v) the proceeds of the Additional/Replacement Revolving Loans for general corporate purposes (including any transaction not prohibited by this Agreement) subject to any limitations specified in the applicable Incremental Agreement and, in each case of this Section 6.10, in compliance with Section 4.11 and the last sentence of each of clauses (a) and (b) of Section 4.20.

 

6.11              Nature of Business.  Fundamentally and substantively engage in the type of business, taken as a whole, as the business conducted by the Group Members, taken as a whole, on the Closing Date and any business reasonably related to, necessary for, in support or anticipation of, ancillary or complementary to or in preparation for (or required by a Gaming Authority to be developed, constructed, improved or acquired in connection with licensing approval for) any such business, and such other lines of business to which the Administrative Agent may consent.

 

6.12              End of Fiscal Year.  Maintain a fiscal year end of December 31 of each year; provided, however, that any Group Member may, upon written notice to, and consent by, the Administrative Agent, change the financial reporting convention specified above to any other financial reporting convention reasonably acceptable to the Administrative Agent, in which case, the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement and the other Loan Documents that are necessary in order to reflect such change in financial reporting.

 

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6.13              Lender Calls.  Following each delivery of financial statements pursuant to Section 6.1(a) and (b), to the extent requested by the Administrative Agent, the Borrower shall participate, and cause key management personnel of the Borrower to participate, in a conference call with the Administrative Agent and the Lenders to provide discussion and analysis with respect to the financial condition and results of operations of the Group Members at a time to which the Borrower Representative and the Administrative Agent shall mutually agree.

 

6.14              Maintenance of Ratings.  Use commercially reasonable efforts to maintain a public corporate credit rating of the Borrower and public rating of the Facilities from S&P and a public corporate family rating of the Borrower and public rating of the Facilities from Moody’s; provided that in no event shall the Borrower be required to maintain any specific rating with any such agency.

 

6.15              Holding Company Election. The Borrower may, at its option following the Closing Date, deliver a written notice to the Administrative Agent informing the Administrative Agent that a Holding Company Election has been made.  Within sixty days (or such longer period as the Administrative Agent may agree to) of the date of such notice (the “Joinder Date”), the Borrower shall cause Holdings to become a party to this Agreement (and agrees that the representations and warranties set forth in Sections 4.3, 4.4, 4.5, 4.10, 4.11, 4.13, 4.17(a) and 4.20 shall be applicable to it from and after such Joinder Date and to abide by Sections 6.3, 6.4, 6.7, 6.8(c), 6.9 and 7.11 of this Agreement and any other Section of this Agreement that is expressly applicable to Holdings), and the Guarantee and Collateral Agreement, in each case, pursuant to joinder documentation reasonably satisfactory to the Borrower and the Administrative Agent (which joinder documentation may make such technical amendments and modifications to the Loan Documents as the Administrative Agent and the Borrower determine to be necessary in order to implement the Holding Company Election with Holdings as a customary passive parent guarantor) and to deliver to the Administrative Agent the items set forth in clauses (f)(ii), (g), (h) (with respect to the Capital Stock of the Borrower, subject to any necessary Gaming Authority approvals), (i) and (k) of Section 5.1.

 

6.16              Unrestricted Subsidiaries.

 

(a)                               The Loan Parties shall only designate or redesignate a Subsidiary as an Unrestricted Subsidiary after the Closing Date by written notice from the Borrower to the Administrative Agent if such designation or redesignation is in compliance with the following conditions: (i) immediately before and after such designation (or redesignation), (x) no Event of Default shall have occurred and be continuing or shall exist after giving effect to such designation and (y) the Borrower shall be in compliance with the Financial Condition Covenant on a Pro Forma Basis (for purposes of such compliance at any time prior to September 30, 2016, the maximum First Lien Leverage Ratio permitted under the Financial Condition Covenant shall be deemed to be 5.75:1.00), (ii) no Subsidiary may be designated (or redesignated) as an Unrestricted Subsidiary if, after such designation (or redesignation), it would be a “Restricted Subsidiary” for the purpose of any Specified Junior Debt Facility, any Incremental Facility or any Incremental Equivalent Debt, (iii) the designation (or redesignation) of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the applicable Group Members therein at the date of designation (or redesignation) in an amount equal to the Fair Market Value of the Group Members’ Investment therein, and (iv) the Borrower shall have delivered to the Administrative Agent an officer’s certificate executed by a Responsible Officer of the Borrower, certifying compliance with the requirements of the preceding clauses (i) through (iii); provided, that no Unrestricted Subsidiary that has been designated as a Restricted Subsidiary may again be designated as an Unrestricted Subsidiary.

 

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(b)                              The Loan Parties shall only designate an Unrestricted Subsidiary as Restricted Subsidiary after the Closing Date by written notice from the Borrower to the Administrative Agent if (i) immediately before and after such designation, (x) no Event of Default shall have occurred and be continuing or shall exist after giving effect to such designation and (y) the Borrower shall be in compliance with the Financial Condition Covenant on a Pro Forma Basis (for purposes of such compliance at any time prior to September 30, 2016, the maximum First Lien Leverage Ratio permitted under the Financial Condition Covenant shall be deemed to be 5.75:1.00), (ii) the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time is permitted under Sections 7.2 and 7.3, respectively, and (iii) the Borrower shall have delivered to the Administrative Agent an officer’s certificate executed by a Responsible Officer of the Borrower, certifying compliance with the requirements of the preceding clauses (i) and (ii).

 

SECTION 7                     NEGATIVE COVENANTS

 

Until the Facility Termination Date, the Borrower shall not, nor shall the Borrower permit any Restricted Subsidiaries to, directly or indirectly:

 

7.1                            Financial Covenant.

 

(a)                               Commencing with September 30, 2016, permit the First Lien Leverage Ratio for any Test Period set forth below to be greater than the ratio set forth opposite such Test Period below:

 

	
Test Period Date
    	
 
    	
First Lien Leverage
   Ratio
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
September 30, 2016 through 
    	
 
    	
5.75:1.00
    	
 
    
	
June 30, 2017
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
September 30, 2017
    	
 
    	
5.50:1.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
December 31, 2017 through 
    	
 
    	
5.25:1.00
    	
 
    
	
September 30, 2018
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
December 31, 2018 through 
    	
 
    	
5.00:1.00
    	
 
    
	
September 30, 2019
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
December 31, 2019 through 
    	
 
    	
4.75:1.00
    	
 
    
	
September 30, 2020
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
December 31, 2020 and
    	
 
    	
4.50:1.00
    	
 
    
	
thereafter
    	
 
    	
 
    	
 
    

 

(b)                              Certain Cure Rights.

 

(i)                                  Financial Condition Covenant.  Notwithstanding anything to the contrary contained herein, in the event the Group Members fail to comply with the requirements of the covenant as set forth in Section 7.1(a) (the “Financial Condition Covenant”) as at the last day of any fiscal quarter (a fiscal quarter ending on such day, a “Curable Period”), at any time during such Curable Period and until the expiration of the 15th Business Day subsequent to the date the certificate calculating the Financial Condition Covenant is required to be delivered pursuant to Section 6.2(a) with respect to the Test Period ending on the last day of such Curable Period, the Borrower shall have the right (the “Cure Right”) to issue Permitted Cure Securities for cash or otherwise receive cash contributions in respect of Permitted Cure Securities (such proceeds received by the Borrower as a result of  such issuance, or such other cash contributions, the “Cure Amount”).  Upon the receipt by the Borrower of cash in an amount equal to the Cure Amount pursuant to the exercise of such Cure Right, the Financial Condition Covenant shall be recalculated giving effect to the following pro forma adjustments:

 

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(A)                           Consolidated EBITDA for the Curable Period shall be increased, solely for the purpose of measuring the Financial Condition Covenant, and disregarded for any other purpose under this Agreement (including determining the Applicable Margin, the Applicable Commitment Fee Rate, the availability of any baskets and step-downs and for determining whether any financial ratio-based condition has been satisfied), by an amount equal to the Cure Amount; and

 

(B)                            if, after giving effect to the foregoing recalculations, the Group Members shall then be in compliance with the requirements of the Financial Condition Covenant, the Group Members shall be deemed to have satisfied the requirements of the Financial Condition Covenant as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the Financial Condition Covenant which had occurred (or would have occurred) shall be deemed cured for purposes of Section 7.1.

 

(ii)                              Limitations on Exercise of Cure Right, etc.  Notwithstanding anything herein to the contrary, (A) in no event shall the Borrower be entitled to exercise the Cure Right more than twice in any consecutive four quarter period or more than five times during the term of this Agreement, (B) the Cure Amount shall be no greater than the amount which, if added to Consolidated EBITDA for the Curable Period, would cause the Group Members to be in compliance with the Financial Condition Covenant for the Test Period ending on the last day of such Curable Period; provided that if the Cure Right is exercised prior to the date financial statements are required to be delivered for such Curable Period, then the Cure Amount shall be equal to the amount reasonably determined by the Borrower in good faith that is required for purposes of complying with the Financial Condition Covenant for such Test Period, (C) to the extent a fiscal quarter for which the Financial Condition Covenant is initially recalculated as a result of a Cure Right is included in the calculation of the Financial Condition Covenant in a subsequent fiscal period, the Cure Amount shall be included in the amount of Consolidated EBITDA for such fiscal quarter when calculating the Financial Condition Covenant for such subsequent fiscal period and (D) there shall be no pro forma or other reduction of Indebtedness by the Cure Amount for purposes of determining compliance with the Financial Condition Covenant for the fiscal quarter in respect of which such Cure Amount was made (other than, with respect to any future period, to the extent of any portion of such Cure Amount that is actually applied to repay Indebtedness).  Upon the Administrative Agent’s receipt of a notice from the Borrower that it intends to exercise the Cure Right (the “Notice of Intent to Cure”), then, until the 15th Business Day subsequent to the date the certificate calculating such Financial Condition Covenant is required to be delivered pursuant to Section 6.2(a) to which such Notice of Intent to Cure relates, neither the Administrative Agent nor the Collateral Agent (nor, in each case, any sub-agent therefor) nor any Lender shall exercise the right to accelerate the Loans or terminate the Commitments, and neither the Administrative Agent nor the Collateral Agent (nor, in each case, any sub-agent therefor) nor any Lender shall exercise any right to foreclose on or take possession of the Collateral or exercise any other right or remedy under the Loan Documents, in each case, solely on the basis of a breach of the Financial Condition Covenant in respect of the period ending on the last day of such fiscal quarter and the ensuing Event of Default having occurred and being continuing under Section 8.1(c)(ii); provided that, without limiting the generality of Section 5.2, after the  Administrative Agent’s receipt of a Notice of Intent to Cure, no Revolving Lender or Issuing Lender shall be required to make any Revolving Loan or issue any Letter of Credit hereunder if an Event of Default under Section 8.1(c)(ii) exists solely on the basis of a breach of the Financial Condition Covenant unless and until the Cure Amount is actually received.

 

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7.2                            Indebtedness.  Create, issue, incur, assume, or suffer to exist any Indebtedness, except:

 

(a)                               (i) the Secured Obligations, (ii) any Indebtedness incurred to refinance, extend, renew, or replace the Obligations; provided that the Refinancing Debt Requirements are satisfied (such Indebtedness, the “Credit Agreement Refinancing Debt”), (iii) Indebtedness under any Hedge Agreements (other than any Hedge Agreement entered into for speculative purposes), (iv) (A) any Specified Junior Debt and (B) any Specified Second Lien Incremental Debt and (v) any “cash management obligations” or Indebtedness in respect of a “specified hedge agreement” (or, in each case, any equivalent term) under any Specified Junior Debt Facility.

 

(b)                              Indebtedness of any Group Member owing to Holdings or any other Group Member to the extent constituting an Investment permitted by Section 7.7; provided that any Indebtedness of a Loan Party to any Restricted Subsidiary shall be subordinated to the Obligations pursuant to the Intercompany Subordination Agreement or otherwise on terms reasonably satisfactory to the Collateral Agent;

 

(c)                               Indebtedness listed on Schedule 7.2(c) and any Indebtedness incurred to refinance, extend, renew, or replace such Indebtedness; provided that the Refinancing Debt Requirements are satisfied;

 

(d)                              Indebtedness consisting of Capital Lease Obligations and purchase money Indebtedness in an aggregate principal amount not to exceed the greater of (x) $20,000,000 and (y) 26.66% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any one time outstanding;

 

(e)                               Guarantee Obligations of Indebtedness of any Group Member so long as such Indebtedness is permitted under this Section 7.2; provided that (i) Guarantee Obligations by a Loan Party of Indebtedness of any Non-Guarantor Subsidiary shall be subject to Section 7.7 and (ii) Guarantee Obligations permitted under this clause (e) shall be subordinated to the Obligations to the same extent as the terms of the Indebtedness so guaranteed;

 

(f)                                Indebtedness of the Borrower or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Borrower or such Restricted Subsidiary in the ordinary course of business against insufficient funds so long as such Indebtedness is promptly repaid;

 

(g)                               additional Indebtedness of a Group Member in an aggregate principal amount (for the Group Members) not to exceed the greater of (x) $15,000,000 and (y) 20.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any one time outstanding;

 

(h)                              (i) (1) Indebtedness of any Person that becomes a Restricted Subsidiary after the date hereof and assumed in connection with a Permitted Acquisition or similar Investment permitted under this Agreement and (2) Indebtedness incurred to finance a Permitted Acquisition or similar Investment permitted under this Agreement, provided that:

 

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(A)                           (x) if such Indebtedness is secured by a Lien that is pari passu with the Lien securing the Initial Facilities, the First Lien Leverage Ratio does not exceed 4.20:1.00 and (y) if such Indebtedness is unsecured or secured by a Lien that is junior to the Lien securing the Initial Facilities, the Total Leverage Ratio does not exceed 5.25:1.00;

 

(B)                            in the case of Indebtedness described in clause (2), the Additional Debt Requirements are satisfied;

 

(C)                            after giving effect to the incurrence or assumption of such Indebtedness, the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Indebtedness had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder)

 

(D)                           the aggregate principal amount of Indebtedness incurred in reliance on this Section 7.2(h) by Non-Guarantor Subsidiaries (together with the aggregate amount of Indebtedness incurred by Non-Guarantor Subsidiaries pursuant to clause (i) below) shall not exceed (i) the greater of (x) $18,750,000 and (y) 25% of Consolidated EBITDA at any one time outstanding; and

 

(ii)                              any Indebtedness incurred to refinance, extend, renew, or replace Indebtedness incurred under clause (i) above; provided that the Refinancing Debt Requirements are satisfied;

 

(i)                                  (i) additional Indebtedness of the Group Members; provided that (1) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis, (A) if such Indebtedness is secured by a Lien that is pari passu with the Lien securing the Initial Facilities, the First Lien Leverage Ratio does not exceed 4.20:1.00 and (B) if such Indebtedness is unsecured or secured by a Lien that is junior to the Lien securing the Initial Facilities, the Total Leverage Ratio does not exceed 5.25:1.00, (2) after giving effect to the incurrence of such Indebtedness, the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Incremental Equivalent Debt had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder), (3) the Additional Debt Requirements are satisfied and (4) the aggregate principal amount of Indebtedness incurred in reliance on this Section 7.2(i) by Non-Guarantor Subsidiaries (together with the aggregate amount of Indebtedness incurred or assumed by Non-Guarantor Subsidiaries pursuant to clause (h) above) shall not exceed (i) the greater of (x) $15,000,000 and (y) 20% of Consolidated EBITDA at any one time outstanding; and (ii) any Indebtedness incurred to refinance, extend, renew, or replace Indebtedness incurred under clause (i) above; provided that the Refinancing Debt Requirements are satisfied;

 

(j)                                  Indebtedness incurred by a Group Member in the form of customary obligations under indemnification, incentive, non-compete, deferred compensation, or other similar arrangements in the ordinary course of business (including in connection with the Transactions, any Permitted Acquisition or any other Investment permitted hereunder and including to any current or former Employees of the Borrower or any Parent Company);

 

116

 

(k)                              Indebtedness in respect of (i) statutory obligations, bids, leases, governmental contracts, trade contracts, performance, surety, stay, customs, appeal, performance and/or return of money bonds, completion guarantees and similar obligations not in connection with money borrowed, in each case, provided in the ordinary course of business or consistent with past practice, including those incurred to secure health, safety and environmental obligations in the ordinary course of business or consistent with past practice and (ii) letters of credit, bank guarantees, surety bonds, performance bonds or similar instruments to support any of the foregoing;

 

(l)                                  Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities or surety bonds, performance bonds or similar instruments entered into or incurred in the ordinary course of business in respect of workers compensation claims, unemployment insurance, other types of social security, pension obligations, vacation pay, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims or similar obligations;

 

(m)                          Indebtedness in respect of overdraft facilities, employee credit card programs, netting services, automatic clearinghouse arrangements and other cash management and similar arrangements and in respect of incentive, supplier finance or similar programs, in each case, in the ordinary course of business;

 

(n)                              Indebtedness in respect of any bankers’ acceptances, bank guarantees, letters of credit or similar instruments or facilities entered into in the ordinary course of business;

 

(o)                              Indebtedness of a Group Member consisting of (i) obligations to pay insurance premiums, (ii) take or pay obligations contained in supply agreements and (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements, in each case, in the ordinary course of business;

 

(p)                              Indebtedness incurred in connection with any Permitted Sale Leaseback Transaction in an aggregate principal amount not to exceed the greater of (x) $5,000,000 and (y) 6.67% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any one time outstanding;

 

(q)                              [Reserved];

 

(r)                                 Incremental Equivalent Debt;

 

(s)                                Indebtedness supported by a letter of credit in a principal amount not to exceed the face amount of such letter of credit;

 

(t)                                  Guarantee Obligations incurred in the ordinary course of business in respect of obligations to or of suppliers, customers, franchisees, lessors, licensees, sublicensees or distribution partners to the extent constituting an Investment permitted under Section 7.7(l);

 

(u)                              Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of a Group Member pursuant to any such agreement;

 

117

 

(v)                              Indebtedness consisting of promissory notes issued by a Group Member to any stockholder of the Borrower or any Parent Company or any current or former Employee of the Borrower, any Subsidiary of the Borrower or of any Parent Company (or any affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any such Employee) to finance the purchase or redemption of Capital Stock of the Borrower or any Parent Company permitted by Section 7.6(b); and

 

(w)                           unfunded pension fund and other employee benefit plan obligations and liabilities incurred by the Group Members and their Subsidiaries in the ordinary course of business to the extent that the unfunded amounts, obligations and/or liabilities would not, individually or in the aggregate (and when taken together with other events) cause an Event of Default under Section 8.1(g).

 

Premiums, interest, fees and expenses incurred in connection with an obligation described in clauses (a) through (w) above shall not, themselves, be deemed to be included as Indebtedness for purposes of calculating the baskets set forth above.

 

7.3                            Liens.  Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for:

 

(a)                               Liens for Taxes, assessments or governmental charges or claims, which (i) are not yet due, (ii) are being contested in good faith by appropriate proceedings diligently conducted and as to which adequate reserves are maintained on the books of such Group Member to the extent required by GAAP or (iii) do not in the aggregate materially detract from the value of the Borrower’s or such Restricted Subsidiary’s property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Restricted Subsidiary;

 

(b)                              landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens, in each case, arising in the ordinary course of business which (i) are not overdue for a period of more than sixty days, (ii) are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Group Members, as the case may be, to the extent required by GAAP or (iii) do not in the aggregate materially detract from the value of the Borrower’s or such Restricted Subsidiary’s property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Restricted Subsidiary;

 

(c)                               Liens incurred in the ordinary course of business arising out of pledges, deposits or statutory trusts in connection with workers’ compensation, unemployment insurance and other social security legislation and deposits securing liability insurance carriers under insurance or self-insurance arrangements;

 

(d)                              pledges, deposits and other Liens to secure the performance of bids, tenders, contracts (other than for Indebtedness), leases, subleases, statutory obligations, surety and appeal bonds, performance bonds, government contracts and other obligations of a like nature, in each case, incurred in the ordinary course of business;

 

(e)                               easements, zoning restrictions, minor defects or irregularities in title, rights-of-way, licenses, covenants, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, do not materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of the Group Members, taken as a whole;

 

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(f)                                Liens (i) in existence on the date hereof listed on Schedule 7.3(f) and any modification, replacement, refinancing, renewal or extension thereof; provided that (x) no such Lien  extends to any additional property other than (A) after-acquired property that is affixed or incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 7.2 and (B) proceeds and products thereof, accessions thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 7.2(d) or (p) provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates) and (y) any such modification, replacement, refinancing, renewal or extension of the obligations secured or benefited by such Liens, if the same constitute Indebtedness, is permitted by Section 7.2 and (ii) securing Indebtedness permitted by Sections 7.2(a)(ii);

 

(g)                               Liens securing Indebtedness of a Group Member incurred pursuant to Section 7.2(d) or (p); provided that (x) such Liens shall be created within 270 days after the acquisition of the assets financed by such Indebtedness and (y) such Liens do not at any time encumber any Property of the Group Members other than the Property financed by such Indebtedness and the proceeds and products thereof, accessions thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 7.2(d) or (p) provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates);

 

(h)                              Liens securing Indebtedness permitted under (i) Section 7.2(a)(i) and (ii) Section 7.2(a)(iv) and (v); provided that, in the case of clause (ii) of this Section 7.3(h), such Liens are subject to the terms of an Acceptable Intercreditor Agreement;

 

(i)                                  any interest or title of a licensor, sublicensor, lessor or sublessor under any license or lease entered into by a Group Member in the ordinary course of its business and covering only the assets so leased or licensed, and any financing statement filed in connection with any such lease or license so long as such Liens do not interfere in any material respects with the business of the Group Members, taken as a whole;

 

(j)                                  Liens arising from judgments or decrees in circumstances not constituting an Event of Default under Section 8.1(h) and any pledge and/or deposit securing any settlement of litigation;

 

(k)                              Liens on (i) property or assets acquired pursuant to an acquisition permitted under Section 7.7 (and the proceeds thereof) and not created in contemplation thereof (so long as such Lien attaches only to such property or assets so acquired and initially subject to such Lien and such Lien secures only that Indebtedness permitted under Section 7.2(h)(i)(1) and (h)(ii) (with respect to Indebtedness pursuant to (h)(i)(1)) (it being understood that individual financings of the type permitted under Section 7.2(d) or (p) provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates)) and (ii) securing Indebtedness permitted under Section 7.2(h)(i)(2) and (h)(ii) (with respect to Indebtedness pursuant to (h)(i)(2)); provided that any Lien incurred in reliance on this clause (k)(ii) is subject to an Acceptable Intercreditor Agreement;

 

(l)                                  Liens arising out of customary conditional sales, installment sales, title retention, consignment or similar arrangements for the sale or purchase by a Group Member of goods through third parties in the ordinary course of business or by operation of law under Article 2 of the UCC (or any similar Law under any jurisdiction);

 

(m)                          licenses of Intellectual Property granted by a Group Member in the ordinary course of business that do not constitute a disposition of all substantial rights in such Intellectual Property;

 

(n)                              rights of setoff or bankers’ liens of banks or other financial institutions where the Group Members maintain deposits in the ordinary course of business;

 

119

 

(o)                              ground leases (under which a Group Member is the tenant) in respect of real property on which facilities owned or leased by the Group Members are located;

 

(p)                              Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

 

(q)                              Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Group Members to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Group Members or (iii) relating to purchase orders and other agreements entered into with customers of the Group Members in the ordinary course of business;

 

(r)                                 Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

 

(s)                                [Reserved];

 

(t)                                  other Liens with respect to obligations the principal amount of which do not exceed the greater of (x) $15,000,000 and (y) 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any one time outstanding;

 

(u)                              Liens (to the extent subject to an Acceptable Intercreditor Agreement) securing Indebtedness permitted under Section 7.2(r);

 

(v)                              Liens securing Indebtedness permitted pursuant to Section 7.2(i) to the extent subject to an Acceptable Intercreditor Agreement;

 

(w)                           precautionary or purported Liens evidenced by the filing of UCC financing statements or similar financing statements under applicable Law relating solely to (i) operating leases or consignment or bailee arrangements entered into in the ordinary course of business and/or (ii) accounts receivable sold in the ordinary course of business as permitted under this Agreement and pursuant to arrangements that are non-recourse to Holdings or any Group Member (except for customary representations, warranties, reporting and receivables servicing covenants and indemnities in connection therewith);

 

(x)                              (i) Liens on Capital Stock of joint ventures or Unrestricted Subsidiaries securing capital contributions to, or obligations of, such Persons and (ii) customary rights of first refusal and tag, drag and similar rights in joint venture agreements and agreements with respect to non-Wholly-Owned Subsidiaries;

 

(y)                              Liens disclosed in any mortgage policy delivered pursuant to Section 6.8(b) with respect to any Material Real Estate and any replacement, extension or renewal thereof; provided that no such replacement, extension or renewal Lien shall cover any property other than the property that was subject to such Lien prior to such replacement, extension or renewal (and additions thereto, improvements thereon and the proceeds thereof);

 

(z)                               Liens on cash and Cash Equivalents used to satisfy or discharge Indebtedness; provided such satisfaction or discharge is permitted hereunder;

 

120

 

(aa)                        Liens solely on any cash earnest money deposits made by the Group Members in connection with any letter of intent or purchase agreement with respect to any Investment permitted hereunder;

 

(bb)                      Liens on securities that are the subject of repurchase agreements constituting Investments permitted under Section 7.7 arising out of such repurchase transaction; and

 

(cc)                        Liens (i) in favor of any Loan Party and/or (ii) granted by any non-Loan Party in favor of any Restricted Subsidiary that is not a Loan Party, in each case of the foregoing clauses (i) and (ii), securing intercompany Indebtedness permitted under Section 7.2.

 

7.4                            Fundamental Changes.  Consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business, except that:

 

(a)                               (i) any Restricted Subsidiary may be merged, amalgamated, liquidated or consolidated with or into the Borrower (provided that the Borrower (including any Successor Borrower pursuant to the last paragraph of this Section 7.4) shall be the continuing or surviving corporation) or (ii) any Subsidiary may be merged, amalgamated, liquidated or consolidated with or into any Restricted Subsidiary (provided that if one of the parties to such merger, amalgamation or consolidation is a Subsidiary Guarantor, either (x) such Subsidiary Guarantor shall be the continuing or surviving corporation or (y) simultaneously with such transaction, the continuing or surviving corporation shall become a Subsidiary Guarantor and the Borrower shall comply with Section 6.8 in connection therewith);

 

(b)                              any Non-Guarantor Subsidiary that is a Foreign Subsidiary or FSHCO may be merged or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary, and any Non-Guarantor Subsidiary that is a Domestic Subsidiary may be merged or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary that is a Domestic Subsidiary;

 

(c)                               any Non-Guarantor Subsidiary that is a Foreign Subsidiary or FSHCO may Dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding-up or otherwise) to any other Non-Guarantor Subsidiary, and any Non-Guarantor Subsidiary that is a Domestic Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation dissolution, winding-up or otherwise) to any other Non-Guarantor Subsidiary that is a Domestic Subsidiary;

 

(d)                              any Restricted Subsidiary may liquidate or dissolve if (i) the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders and (ii) to the extent such Restricted Subsidiary is a Loan Party, any assets or business not otherwise disposed of or transferred in accordance with Section 7.5 (or, in the case of any such business, discontinued), shall be transferred to, or otherwise owned or conducted by, a Loan Party (other than Holdings) after giving effect to such liquidation or dissolution;

 

(e)                               any Subsidiary Guarantor may (i) merge, amalgamate or consolidate with or into any other Subsidiary Guarantor, (ii) merge, amalgamate or consolidate with or into any Non-Guarantor Subsidiary; provided that if such Subsidiary Guarantor is not the surviving entity, such merger, amalgamation or consolidation shall be deemed to be an “Investment” permitted to be made pursuant to Section 7.7 and (iii) Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any other Subsidiary Guarantor; and

 

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(f)                                any merger, amalgamation, dissolution, liquidation or consolidation or Disposition of all or substantially all of a the Property or business of a Group Member, the purpose of  which is to effect (i) any Disposition permitted under Section 7.5 (other than in reliance on clause (c) thereof), (ii) any Investment permitted under Section 7.7 (other than in reliance on clause (k) thereof), (iii) any merger permitted under Section 7.11(d), (iv) the Transactions or (v)(A) the conversion of the Borrower or any Restricted Subsidiary into another form of entity or (B) any reorganization or reincorporation of (1) the Borrower or any Domestic Subsidiary in another jurisdiction in the United States or (2) any Foreign Subsidiary in the United States or any other jurisdiction; provided that in the case of this clause (v), (x) no Event of Default has occurred and is continuing or would result therefrom, (y) such conversion, reorganization or reincorporation does not adversely affect the aggregate value of the guarantee of the Secured Obligations or the Collateral or the Secured Parties’ rights and remedies (taken as a whole) under the Loan Documents (in each case, as reasonably determined by the Borrower in consultation with the Administrative Agent) and (z) if reasonably requested by the Administrative Agent, customary legal opinions, authorizing resolutions and other corporate documents as reasonably requested by the Agents shall have been delivered to the Administrative Agent.

 

Notwithstanding anything herein to the contrary, the Borrower may merge or consolidate with or into any other Person (such other Person, the “Merger Partner”) so long as:  (i) the Borrower shall be the continuing or surviving corporation or, in the case of a merger or consolidation in which the Borrower is not the continuing or surviving Person, the Person formed by or surviving any such merger shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (the Borrower or such other Person, as the case may be, being herein referred to as the “Successor Borrower”), (ii) the Successor Borrower (if other than the Borrower) shall expressly assume all the obligations of the Borrower under this Agreement and the other Loan Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (iii) no Event of Default has occurred and is continuing at the date of such merger or consolidation or would result from such merger or consolidation, (iv)  each Subsidiary Guarantor, unless such Subsidiary Guarantor is the other party to such merger or consolidation, shall have by a supplement to the Guarantee and Collateral Agreement in form reasonably satisfactory to the Administrative Agent confirmed that its obligation under the Guarantee and Collateral Agreement shall apply to the Successor Borrower’s obligations under this Agreement, (v) the Successor Borrower shall, immediately following such merger or consolidation, directly or indirectly own all Subsidiaries owned by the Borrower immediately prior to such merger or consolidation, (vi) the Secured Parties’ rights and remedies under the Loan Documents, including their rights and remedies with respect to any Collateral owned by the Successor Borrower, and the Successor Borrower’s obligations under the Guarantee and Collateral Agreement will not be impaired in any manner as a result of such merger or consolidation, (vii) if reasonably requested by the Administrative Agent, customary legal opinions, authorizing resolutions and other corporate documents as reasonably requested by the Agents shall be required to be provided and (viii) the Borrower shall have provided any documentation and other information regarding the Successor Borrower as shall have been reasonably requested in writing by any Lender through the Administrative Agent that such Lender shall have reasonably determined is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and each Lender shall be reasonably satisfied with its “know your customer” and PATRIOT Act review of the proposed Successor Borrower; provided that, if the foregoing are satisfied, the Successor Borrower (if other than the existing Borrower) will succeed to, and be substituted for, the Borrower under this Agreement.

 

7.5                            Dispositions of Property.  Dispose of any of its Property (including, without limitation, receivables), or, in the case of any Restricted Subsidiary, issue or sell any shares of such Restricted Subsidiary’s Capital Stock to any Person, except:

 

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(a)                               (i) the Disposition of surplus, obsolete or worn out property, vehicles and other assets in the ordinary course of business and (ii) the Disposition, abandonment, cancellation or lapse of  Intellectual Property which, in the reasonable good faith determination of the Borrower, are not material to the conduct of the business of the Group Members, or are no longer economical to maintain in light of their respective use, in the ordinary course of business;

 

(b)                              (i) the sale of inventory, goods and/or services in the ordinary course of business, (ii) the cross-licensing or licensing of Intellectual Property, in the ordinary course of business that does not constitute a disposition of all substantial rights in such Intellectual Property and does not materially interfere with the business of the Group Members, taken as a whole, and (iii) the contemporaneous exchange of Property for Property of a like kind (other than as set forth in clause (ii)), to the extent that the Property received in such exchange is of a value substantially equivalent to or greater than the value of the Property exchanged (provided that after giving effect to such exchange, the value of the Property of the Borrower or any Subsidiary Guarantor subject to perfected first priority Liens in favor of the Collateral Agent under the Security Documents is substantially equivalent or greater than the value of the Property of the Borrower and the Subsidiary Guarantors immediately prior to such exchange);

 

(c)                               Dispositions permitted by Section 7.4 (other than clause (d)(ii) or clause (f)(i) thereof);

 

(d)                              the sale or issuance of (i) any Restricted Subsidiary’s Capital Stock to the Borrower or any Subsidiary Guarantor or (ii) any Non-Guarantor Subsidiary’s Capital Stock held by a Non-Guarantor Subsidiary to another Non-Guarantor Subsidiary;

 

(e)                               the Disposition of other assets for Fair Market Value after the Closing Date; provided that (i) with respect to any Disposition pursuant to this clause (e) for a purchase price in excess of the greater of (x) $2,500,000 and (y) 3.33% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at least 75% of the consideration received in respect of such Disposition shall be cash or Cash Equivalents; provided, further that for purposes of the foregoing requirement, (1) the amount of any Indebtedness or other liabilities (other than Indebtedness or other liabilities that are subordinated to the Obligations or that are owed to a Group Member) of the Group Members (as shown on the most recent balance sheet or statement of financial position (or in the notes thereto) that are assumed by the transferee of any such assets and for which the Group Members have been validly released by all relevant creditors in writing, (2) the amount of any trade-in value applied to the purchase price of any replacement assets acquired in connection with such Disposition, (3) any securities received by the Group Members from the transferee that are converted into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within 180 days following the closing of the applicable Disposition and (4) any Designated Non-Cash Consideration received in respect of such Disposition having an aggregate Fair Market Value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (4) that is at that time outstanding, not in excess of the greater of $10,000,000 and 13.33% of Consolidated EBITDA as of the last day of the most recently ended Test Period, in each case, shall be deemed to be cash), (ii) no Event of Default has occurred and is continuing or would result therefrom and (iii) the requirements of Section 2.12(b), to the extent applicable, are complied with in connection therewith;

 

(f)                                the Dispositions listed on Schedule 7.5(f);

 

(g)                               any Recovery Event; provided that the requirements of Section 2.12(b), to the extent applicable, are complied with in connection therewith;

 

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(h)                              the leasing, occupancy agreements or sub-leasing of Property that would not materially interfere with the required use of such Property by the Borrower or their Restricted Subsidiaries (including the leasing of assets acquired in a permitted Investment hereunder during the  period of time the Borrower or the respective Subsidiary is diligently pursuing obtaining any necessary Gaming Permits for the Borrower or such Subsidiary to operate such assets in compliance with the applicable Gaming Regulations);

 

(i)                                  foreclosures or transfers of condemned property as a result of the exercise of “eminent domain” or other similar policies to the respective Governmental Authority or agency that has condemned same (whether by deed in lieu of condemnation or otherwise) and transfers of properties that have been subject to a casualty to the respective insurer of such property as part of an insurance settlement;

 

(j)                                  Dispositions (including of Capital Stock) among the Group Members (upon voluntary liquidation or otherwise); provided that (x) any such Disposition made by any Loan Party to any Person that is not a Loan Party shall be (i) for Fair Market Value with at least 75% of the consideration for such Disposition consisting of cash or Cash Equivalents at the time of such Disposition or (ii) treated as an Investment and otherwise made in compliance with Section 7.7 (other than in reliance on clause (k) thereof), (y) any such Disposition from a Non-Guarantor Subsidiary to the Borrower or any Subsidiary Guarantor shall be for no more than Fair Market Value;

 

(k)                              Liens permitted by Section 7.3;

 

(l)                                  Restricted Payments permitted by Section 7.6;

 

(m)                          Investments permitted by Section 7.7 (other than in reliance on clause (k) thereof);

 

(n)                              the sale or issuance of the Capital Stock of any Foreign Subsidiary (other than a Loan Party) to any other Foreign Subsidiary or a FSHCO including in connection with any tax restructuring activities not otherwise prohibited hereunder;

 

(o)                              Dispositions of cash and Cash Equivalents and/or other assets that were Cash Equivalents when the relevant original Investment was made in the ordinary course of business;

 

(p)                              Dispositions of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business or in any situation of a work-out or financial distress, in each case, of the Person owing such accounts receivable;

 

(q)                              terminations or the unwinding of any Hedge Agreement permitted hereunder;

 

(r)                                 any Foreign Subsidiary may issue Capital Stock to qualified directors where required by applicable law or to satisfy other requirements of applicable law with respect to ownership of Capital Stock in Foreign Subsidiaries;

 

(s)                                Dispositions of property pursuant to Permitted Sale Leaseback Transactions to the extent any Indebtedness incurred in connection therewith is permitted under Section 7.2(p);

 

(t)                                  leases, subleases, licenses or sublicenses, in each case in the ordinary course of business and which do not materially interfere with the business of the Borrower and its Restricted Subsidiaries, taken as a whole;

 

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(u)                              Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

 

(v)                              the Disposition of the Capital Stock in, Indebtedness of, or other securities issued by, an Unrestricted Subsidiary;

 

(w)                           Dispositions and/or terminations in the ordinary course of business of leases, subleases, licenses or sublicenses, (i) the Disposition or termination of which will not materially interfere with the business of the Group Members or (ii) which relate to closed facilities or the discontinuation of any product line;

 

(x)                              the expiration of any option agreement in respect of real or personal property and any surrender or waiver of contractual rights or the settlement, release or surrender of contractual rights or litigation claims (including in tort) in the ordinary course of business;

 

(y)                              Dispositions of non-core fee-owned real property, in each case acquired in any acquisition permitted hereunder which, within 180 days of the date of such acquisition, are designated in writing to the Administrative Agent as being held for sale and not for the continued operation of the Group Members or any of their respective businesses; provided that (i) no Event of Default exists on the date on which the definitive agreement governing the relevant Disposition is executed and (ii) only fee-owned real property that is no longer used or useful in the conduct of the business of the Borrower or its Restricted Subsidiaries may be sold pursuant to this Section 7.5(y);

 

(z)                               [Reserved];

 

(aa)                        Dispositions of fee-owned real property and related assets in the ordinary course of business in connection with relocation activities for Employees of any Group Member or any Parent Company;

 

(bb)                      Dispositions made to comply with any order of any Governmental Authority or any applicable Law; and

 

(cc)                        any sale of motor vehicles and information technology equipment purchased at the end of an operating lease and resold thereafter;

 

provided further that any Sale Leaseback Transaction that is consummated substantially simultaneously with a Permitted Acquisition and relates to assets acquired in such Permitted Acquisition shall not be restricted by this Section 7.5 and shall not constitute an Asset Sale.

 

To the extent that any Collateral is Disposed of as expressly permitted by this Section 7.5 to any Person other than a Loan Party, such Collateral shall be Disposed of free and clear of the Liens created by the Loan Documents, which Liens shall be automatically released upon the consummation of such Disposition; it being understood and agreed that the Administrative Agent and the Collateral Agent shall be authorized to take, and shall take, any actions reasonably requested by the Borrower in order to effect the foregoing in accordance with Section 9 hereof.

 

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7.6                            Restricted Payments.  Make or pay directly or indirectly, any Restricted Payment, except:

 

(a)                               the Borrower may make such Restricted Payments to any Parent Company:

 

(i)                                  the proceeds of which shall be used to pay the portion of any consolidated, combined or similar income tax liability attributable to the income of the Borrower or its Subsidiaries; provided that (x) no such payments shall exceed the income tax liability that would have been imposed on the Borrower and/or the applicable Subsidiaries had such entity(ies) filed on a stand-alone basis and (y) any such payments attributable to an Unrestricted Subsidiary shall be limited to the amount of any cash paid by such Unrestricted Subsidiary to the Borrower or any Restricted Subsidiary for such purposes;

 

(ii)                              the proceeds of which shall be used to pay any such Parent Company’s operating costs and expenses incurred in the ordinary course of business, other overhead costs and expenses and fees (including insurance premiums, administrative, legal, accounting, reporting and similar expenses provided by third parties) as well as trustee, directors and general partner fees which are reasonable and customary and incurred in the ordinary course of business and attributable to the ownership or operations of the Group Members and their respective Subsidiaries (including any reasonable and customary indemnification claims made by directors or officers attributable to the direct or indirect ownership or operations of the Group Members and their Subsidiaries;

 

(iii)                          the proceeds of which shall be used to pay franchise and excise taxes and other fees, taxes and expenses, required to maintain any such Parent Company’s existence;

 

(iv)                          to finance any Investment permitted to be made pursuant to Section 7.7; provided that (x) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (y) the applicable Parent Company shall, immediately following the closing thereof, cause all property acquired (whether assets or Capital Stock) to be held by or contributed to Group Member;

 

(v)                              the proceeds of which shall be used to pay customary costs, fees and expenses (other than to Affiliates) related to any equity or debt offering, refinancing, issuance, incurrence, Disposition, acquisition or Investment permitted by this Agreement (including, without limitation, Section 7.11 hereof) (in each case, whether or not consummated); and

 

(vi)                          the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current and former Employees of the Group Members or any Parent Company to the extent such salaries, bonuses, severance and other benefits are attributable to the ownership or operation of the Group Members;

 

(b)                              repurchases, retirements or other acquisitions or retirements for value of Capital Stock (or any options or warrants or stock appreciation or similar rights issued with respect to any of such Capital Stock) of any such Parent Company or the Borrower held by any future, present or former Employee (or any affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any such Employee) of any Parent Company, any Group Member or any Subsidiary thereof pursuant to any employee, management or director equity plan, employee, management or director stock option plan or any other employee, management or director benefit plan or any agreement (including any stock option or stock appreciation or similar rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription

 

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plan, employment termination agreement or any other employment agreements or equity holders’ agreement) with any such Employee; provided that such payments, measured at the time made, do not exceed (i) $5,000,000, in any fiscal year, plus (ii) all net proceeds obtained by a Group Member during such calendar year from the sale of Qualified Capital Stock of any Parent Company or the Borrower not included in Consolidated Net Income for purposes of calculating the Available Amount and not utilized to increase the Available Equity Amount, the Available Excluded Contribution Amount (unless designated for such purpose), as a Cure Amount or for any other purpose (including to increase any available basket) under this Agreement plus (iii) all net cash proceeds obtained from any key-man life insurance policies received by the Group Members during such calendar year minus (iv) the amount of Restricted Payments previously made with the proceeds described in clauses (ii) or (iii) of this clause (b) during such calendar year; provided, further, that any unused portion of the preceding basket in clause (i) for any fiscal year may be carried forward to the immediately succeeding two fiscal years (but no other subsequent fiscal years); and provided, further, that cancellation of Indebtedness owing to any Parent Company from Employees of Holdings, the Group Members or any of their respective Subsidiaries in connection with a repurchase of Capital Stock of any Parent Company or the Borrower will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement;

 

(c)                               (i) the Borrower may make Restricted Payments (including to any Parent Company) to pay cash in lieu of fractional shares in connection with any exercise of warrants, options, or other securities convertible into or exchangeable for Capital Stock of the Borrower (or such Parent Company) or in connection with any other dividend, split or combination thereof or any Permitted Acquisition, in each case, otherwise permitted hereunder and (ii) the Borrower may repurchase (or make Restricted Payments to any Parent Company to enable it to repurchase) Capital Stock upon the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;

 

(d)                              (i) the Borrower may (or may make Restricted Payments to permit any Parent Company to) redeem in whole or in part any Capital Stock of the Borrower (or such Parent Company) for another class of Qualified Capital Stock of the Borrower (or such Parent Company) or rights to acquire Qualified Capital Stock of the Borrower (or such Parent Company) or with proceeds from substantially concurrent equity contributions or issuances of new Capital Stock of the Borrower (or such Parent Company) (the proceeds of which are not included in Consolidated Net Income for purposes of calculating the Available Amount and not utilized to increase the Available Equity Amount, the Available Excluded Contribution Amount (unless designated for such purpose) or as a Cure Amount or for any other purpose (including to increase any available basket) under this Agreement; provided that any terms and provisions material to the interests of the Lenders, when taken as a whole, contained in such other class of Qualified Capital Stock is at least as advantageous to the Lenders as those contained in the Capital Stock redeemed thereby and (ii) the Borrower may declare and make any Restricted Payment payable solely in the Qualified Capital Stock of the Borrower or any Parent Company;

 

(e)                               Restricted Payments to the extent any Gaming Authority having jurisdiction over the Borrower or any of its Subsidiaries requires the Borrower (or any Parent Company) to redeem Capital Stock of a particular equity owner of the Borrower (or any Parent Company) in order to avoid the suspension, revocation or denial of a Gaming Permit by any Gaming Authority;

 

(f)                                [Reserved];

 

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(g)                               the Borrower may make additional Restricted Payments, in an amount equal to (i) the Available Excluded Contribution Amount at such time, plus (ii) the Available Equity Amount at such time, plus (iii) so long as (x) no Event of Default shall have occurred and is continuing and (y) the  Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, the Available Amount at such time (other than the portion thereof consisting of clauses (a)(i) and (a)(ii) of the definition of the Available Amount), plus, (iv) so long as (x) no Event of Default shall have occurred and is continuing, (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period and (z) the First Lien Leverage Ratio, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, is less than 4.20:1.00, amounts available under clauses (a)(i) and (a)(ii) of the definition of the Available Amount; provided, however, that, in the case of clauses (iii) and (iv), the Borrower shall deliver a certificate of a Responsible Officer certifying (and demonstrating in reasonable detail) compliance with the foregoing requirements;

 

(h)                              (x) so long as no Event of Default shall have occurred and is continuing or would result therefrom and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, the Borrower may make additional Restricted Payments in an aggregate amount not to exceed $40,000,000, minus the amount of Restricted Debt Payments made in reliance on Section 7.8(a)(v)(B), minus the outstanding amount of Investments made in reliance on Section 7.7(q)(ii);

 

(i)                                  so long as no Event of Default shall have occurred and is continuing or would result therefrom, the Borrower may make additional Restricted Payments; provided that, after giving effect thereto on a Pro Forma Basis, the Total Leverage Ratio for the most recently ended Test Period would not exceed 3.00:1.00;

 

(j)                                  to the extent constituting Restricted Payments, the Borrower may enter into and consummate transactions expressly permitted by Section 7.4, 7.5 (other than in reliance on clause (l) thereof), 7.7 (other than in reliance on clause (k) thereof) and 7.9; and

 

(k)                              the Borrower may (or may make Restricted Payments to allow any Parent Company to) make Restricted Payments in an amount equal to withholding or similar taxes payable or expected to be payable with respect to any present or former Employee (or any affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) and any repurchases of Capital Stock in consideration of such payments including deemed repurchases in connection with the exercise of stock options.

 

7.7                            Investments.  Make any Investments, except:

 

(a)                               extensions of trade credit in the ordinary course of business;

 

(b)                              Investments in Cash Equivalents and/or other assets that were Cash Equivalents at the time made;

 

(c)                               Investments (i) by any Loan Party in any other Loan Party (other than Holdings) (it being understood and agreed that any Investments by any Loan Party in any Non-Guarantor Subsidiary that is part of a series of simultaneous Investments by the Borrower and any Restricted Subsidiaries in other Restricted Subsidiaries that result in the proceeds of the intercompany Investment being substantially simultaneously invested in any Loan Party shall be permitted pursuant to this clause (i)), (ii) by any Restricted Subsidiary in any Loan Party (other than Holdings), (iii) by any Non Guarantor Subsidiary in any other Non-Guarantor Subsidiary, (iv) by any Loan Party in any Non-Guarantor Subsidiary; provided that Investments pursuant to clause (iv) (together with the aggregate amount of Proposed Acquisitions by Loan Parties in assets that are not (or do not become) owned by a Loan Party or

 

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in Capital Stock in Persons that do not become Loan Parties upon consummation of such acquisition and Investments by Loan Parties in Persons that are not Loan Parties pursuant to Section 7.7(q)(i)) shall not, in the aggregate exceed (measured at the time such Investment is made, as valued at the Fair Market Value and including all related commitments for future Investments), in each case, after the Closing Date, the greater of (x) $18,750,000 and (y) 25% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any time outstanding, and (v) in the Borrower, Restricted Subsidiary or other Subsidiary to the extent of such Investment existing on the Closing Date;

 

(d)                              (i) Permitted Acquisitions consummated after the Closing Date and (ii) any Investment in any Non-Guarantor Subsidiary in an amount required to permit such Non-Guarantor Subsidiary to consummate a Permitted Acquisition, which amount is actually applied by such Non-Guarantor Subsidiary to consummate such Permitted Acquisition substantially concurrently with the making of such Investment;

 

(e)                               loans and advances of payroll payments or other compensation to present or former Employees of any Parent Company (to the extent such payments or other compensation relate to services provided to such Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Group Members and/or their subsidiaries)), the Borrower and/or any Subsidiary in the ordinary course of business;

 

(f)                                Investments (i) in existence on, or contractually committed to or contemplated as of, the Closing Date and listed on Schedule 7.7 and (ii) any modification, replacement, renewal or extension of any Investment described in clause (i) above so long as no such modification, renewal or extension increases the amount of such Investment except by the terms thereof or as otherwise permitted by this Section 7.7;

 

(g)                               Investments of the Borrower or any Restricted Subsidiary under Hedge Agreements permitted hereunder;

 

(h)                              (i) Investments of the Borrower or any Restricted Subsidiary acquired after the Closing Date, or of any Person acquired by, or merged into or consolidated or amalgamated with, any Group Member after the Closing Date, in each case as part of an Investment otherwise permitted by this Section 7.7, to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger, amalgamation or consolidation and were in existence on the date of the relevant acquisition, merger, amalgamation or consolidation and (ii) any modification, replacement, renewal or extension of any Investment permitted under clause (i) above so long as no such modification, replacement, renewal or extension thereof increases the amount of such Investment except as otherwise permitted by this Section 7.7;

 

(i)                                  Investments made by any Unrestricted Subsidiary prior to the date on which such Unrestricted Subsidiary is designated as a Restricted Subsidiary, so long as such Investments were not made in contemplation of the designation of such Unrestricted Subsidiary as a Restricted Subsidiary;

 

(j)                                  Subsidiaries of a Group Member may be established or created (but not capitalized unless otherwise permitted under this Section 7.7);

 

(k)                              Investments consisting of (or resulting from) Indebtedness permitted under Section 7.2 (other than Indebtedness permitted under clause (b) or (e)), Permitted Liens, mergers, consolidations, amalgamations, liquidations, windings up, dissolutions permitted under Section 7.4 (other than in reliance on clause (e) or (f)), Dispositions permitted by Section 7.5 (other than in reliance on  clause (m)), Restricted Payments permitted under Section 7.6 (other in reliance on clause (j)) and Restricted Debt Payments permitted under Section 7.8;

 

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(l)                                  (i) Guarantees of leases (other than Capital Leases) of Group Members or of other obligations of Group Members not constituting Indebtedness and (ii) Guarantees of obligations of suppliers, customers, franchisees and licensees of the Borrower and/or its Restricted Subsidiaries, in each case, in the ordinary course of business;

 

(m)                          Investments received (i) in connection with the bankruptcy or reorganization of any Person, (ii) in satisfaction or partial satisfaction of accounts receivable or notes receivable from financially troubled account debtors, including Investments received in connection with the bankruptcy or reorganization of suppliers or customers and in settlement of delinquent obligations of, and other disputes with, customers arising in the ordinary course of business, (iii) upon foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment and/or (iv) as a result of the settlement, compromise, resolution of litigation, arbitration or other disputes;

 

(n)                              Investments in the ordinary course of business consisting of endorsements for collection or deposit and customary trade arrangements with customers;

 

(o)                              loans and advances to any Parent Company in lieu of, and not in excess of the amount of, dividends permitted to be made to such Parent Company in accordance with Section 7.6;

 

(p)                              loans or advances to present or former Employees (or any of their respective affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees) of any Parent Company, any Group Member or any Subsidiary or joint venture of any Group Member to the extent permitted by applicable Law, in connection with such Person’s purchase of Capital Stock of any Parent Company or the Borrower, either (i) in an aggregate principal amount not to exceed $1,000,000 at any one time outstanding or (ii) so long as the proceeds of such loan or advance are substantially contemporaneously contributed to a Group Member for the purchase of such Capital Stock;

 

(q)                              additional Investments (including Investments in minority investments, Investments in Unrestricted Subsidiaries, Investments in joint ventures or similar entities that do not constitute Restricted Subsidiaries, Investments constituting acquisitions and Investments in Restricted Subsidiaries that are not, and do not become, Subsidiary Guarantors); provided that the aggregate amount of such additional Investments shall not exceed the sum of:

 

(i)                                  the greater of $15,000,000 and 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period (it being understood that the aggregate amount of Investments in reliance on this clause (q)(i) in Persons that are not Loan Parties (together with the aggregate amount of Proposed Acquisitions by Loan Parties in assets that are not (or do not become) owned by a Loan Party or in Capital Stock in Persons that do not become Loan Parties upon consummation of such acquisition and the aggregate amount of Investments by Loan Parties in Non-Guarantor Subsidiaries pursuant to Section 7.7(c)(iv)) shall not exceed the greater of $18,750,000 and 25% of Consolidated EBITDA as of the last day of the most recently ended Test Period), plus

 

(ii)                              (x) so long as no Event of Default shall have occurred and is continuing or would result therefrom and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, $40,000,000, minus the amount of  Restricted Payments made by the Group Members in reliance on Section 7.6(h), minus the amount of Restricted Debt Payments made by the Group Members in reliance on Section 7.8(a)(v)(B); plus

 

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(iii)                          the greater of $5,000,000 and 6.67% of Consolidated EBITDA, minus the amount of the Restricted Debt Payments made by the Group Members in reliance on Section 7.8(a)(v)(A); plus

 

(iv)                          in the event that (A) any Group Member makes any Investment after the Closing Date in any Person that is not a Subsidiary and (B) such Person subsequently becomes a Restricted Subsidiary, an amount equal to 100% of the Fair Market Value of such Investment as of the date on which such Person becomes a Restricted Subsidiary;

 

(r)                                 purchases of inventory, supplies and materials in the ordinary course of business;

 

(s)                                advances to Employees for travel, moving and relocation expenses in the ordinary course of business;

 

(t)                                  Investments received in lieu of cash in connection with any Disposition permitted by Section 7.5;

 

(u)                              Investments to the extent that payment therefor is made solely with Capital Stock of the Borrower or any Parent Company to the extent not resulting in a Change of Control;

 

(v)                              Investments made by any Non-Guarantor Subsidiary with the proceeds received by such Non-Guarantor Subsidiary from an Investment made by any Loan Party in such Non-Guarantor Subsidiary pursuant to this Section 7.7 (other than Investments made pursuant to Section 7.7(d)(ii));

 

(w)                           Investments in Subsidiaries in connection with internal reorganizations and/or restructurings and activities related to tax planning; provided that, after giving effect to any such reorganization, restructuring or activity, neither the guaranties provided by the Guarantors, taken as a whole, nor the security interest of the Collateral Agent in the Collateral, taken as a whole, is materially impaired;

 

(x)                              Investments consisting of the licensing of Intellectual Property pursuant to joint marketing arrangements with other Persons entered into in the ordinary course of business;

 

(y)                              Investments made in joint ventures as required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture agreements and similar binding arrangements entered into in the ordinary course of business;

 

(z)                               unfunded pension fund and other employee benefit plan obligations and liabilities to the extent that the same are permitted to remain unfunded under applicable Law;

 

(aa)                        Investments in Holdings, any Group Member, any Subsidiary of any Group Member and/or any joint venture in connection with intercompany cash management arrangements and related activities in the ordinary course of business;

 

(bb)                      Investments (i) constituting deposits, prepayments and/or other credits to suppliers, (ii) made in connection with obtaining, maintaining or renewing client and customer contracts and/or (iii) in the form of advances made to distributors, suppliers, licensors and licensees, in each case,  in the ordinary course of business or, in the case of clause (iii), to the extent necessary to maintain the ordinary course of supplies to the Group Members;

 

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(cc)                        Investments made after the Closing Date in an aggregate amount at any time outstanding amount not to exceed (i) so long as (x) no Event of Default shall have occurred and is continuing and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, the Available Amount at such time, plus, (ii) the Available Equity Amount at such time plus (iii) the Available Excluded Contribution Amount at such time; provided, however, that, in the case of clause (i) above, the Borrower shall deliver a certificate of a Responsible Officer certifying (and demonstrating in reasonable detail) compliance with the foregoing requirements;  and

 

(dd)                      additional Investments so long as, after giving effect thereto on a Pro Forma Basis, the Total Leverage Ratio would not exceed 3.50:1.00 as of the last day of the most recently ended Test Period.

 

7.8                            Optional Payments of Certain Indebtedness; Modifications of Certain Agreements and Instruments.  (a)  Pay, prepay, redeem, purchase, defease or otherwise satisfy for value prior to the scheduled maturity thereof any amount owing with respect to any Restricted Debt (collectively, “Restricted Debt Payments”), except for:

 

(i)                                  payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due (other than payments with respect to Subordinated Debt that are prohibited by the subordination provisions thereof);

 

(ii)                              the refinancing thereof (in whole or part) with the Net Cash Proceeds of any Indebtedness (to the extent such Indebtedness constitutes Permitted Refinancing Debt, and, in any case, is permitted to be incurred pursuant to Section 7.2);

 

(iii)                          (A) Restricted Debt Payments in exchange for Qualified Capital Stock of the Borrower or any Parent Company and (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower or any Parent Company;

 

(iv)                          additional Restricted Debt Payments in an amount equal to (A) the Available Excluded Contribution Amount at such time, plus (B) the Available Equity Amount at such time, plus (C) so long as (x) no Event of Default shall have occurred and is continuing and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, the Available Amount at such time (other than the portion thereof consisting of clauses (a)(i) and (a)(ii) of the definition of the Available Amount), plus (D) so long as (x) no Event of Default shall have occurred and is continuing and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period and (z) the First Lien Leverage Ratio, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, is less than 4.20:1.00, amounts available under clauses (a)(i) and (a)(ii) of the definition of the Available Amount; provided, however, that, in the case of clauses (C) and (D) above, the Borrower shall deliver a certificate of a Responsible Officer certifying (and demonstrating in reasonable detail) compliance with the foregoing requirements;

 

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(v)                              (A) the greater of $5,000,000 and 6.67% of Consolidated EBITDA, minus the outstanding amount of Investments made in reliance on Section 7.7(q)(iii), plus (B) (x) so long as no Event of Default shall have occurred and is continuing or would result therefrom and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, additional Restricted Debt Payments in an aggregate amount not to exceed $40,000,000, minus (1) the amount of Restricted Payments made in reliance on Section 7.6(h), minus (2) the outstanding amount of Investments made in reliance on Section 7.7(q)(ii);

 

(vi)                          so long as no Event of Default shall have occurred and is continuing or would result therefrom, additional Restricted Debt Payments; provided that, after giving effect thereto on a Pro Forma Basis, the Total Leverage Ratio as of the last day of the most recently ended Test Period would not exceed 3.50:1.00;

 

(vii)                      as part of an applicable high yield discount obligation catch-up payment; and

 

(viii)                  mandatory prepayments of any Specified Junior Debt Facility (and related payments of interest) made with Retained Declined Proceeds;

 

(b)                              Amend, modify or otherwise change, or consent or agree to any amendment, modification, waiver or other change in, the terms of any Restricted Debt (or the documentation governing any Restricted Debt) if, taken together with all other amendments or modifications, waivers and other changes, the effect thereof is materially adverse to the interests of the Lenders (in their capacities as such) other than to the extent permitted by the terms of any applicable intercreditor agreement; provided that, for purposes of clarity, it is understood and agreed that the foregoing limitation shall not otherwise prohibit any Permitted Refinancing Debt or any other replacement, refinancing, amendment, supplement, modification, extension, renewal, restatement or refunding of any Restricted Debt, in each case, that is permitted under the Loan Documents in respect thereof.

 

(c)                               Amend, modify or otherwise change their respective Organizational Documents in a manner materially adverse to the Lenders (in their capacities as such) without obtaining the prior written consent of the Administrative Agent; provided that, for purposes of clarity, it is understood and agreed that any Group Member may, without the prior consent of the Administrative Agent or any other Person, effect a change to its organizational form and/or consummate any other transaction that is permitted under Section 7.4.

 

7.9                            Transactions with Affiliates.  Enter into any transaction involving payment in excess of $2,500,000 with any of their respective Affiliates, whether or not in the ordinary course of business, other than:

 

(a)                               transactions between or among Loan Parties and Restricted Subsidiaries or any entity that becomes a Restricted Subsidiary as a result of such transaction which transaction is otherwise permitted hereunder;

 

(b)                              transactions on terms substantially as favorable to the Group Members as would be obtainable by such Group Member at the time in a comparable arm’s-length transaction with a Person other than an Affiliate;

 

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(c)                               [Reserved];

 

(d)                              (i) so long as no Event of Default under Sections 8.1(a) or 8.1(f) then exists or would result therefrom, the payment of management, monitoring, advisory and similar fees to any Investor in an aggregate amount in any fiscal year not to exceed the greater of $4,000,000 and 5.00% of Consolidated EBITDA, (ii) so long as no Event of Default under Sections 8.1(a) or 8.1(f) then exists or would result therefrom, consulting and/or operational consulting fees to the Investors and (iii) related indemnities and reasonable expenses relating to the services described in clauses (i) and (ii) above; provided that upon the occurrence and during the continuance of an Event of Default under Sections 8.1(a) or 8.1(f) such amounts under clause (i) and clause (ii) may accrue, but not be payable in cash during such period, but all such accrued amounts (plus accrued interest, if any, with respect thereto) may be payable in cash upon the cure, termination or waiver of such Event of Default (notwithstanding the cap set forth in clause (i));

 

(e)                               Restricted Payments permitted under Section 7.6;

 

(f)                                loans, Investments and other transactions to the extent permitted under Section 7.2(b), (c), (e) and (v), Section 7.4, Section 7.5(d), (j), (h), (r) and (u) and Section 7.7(c)(i), (e), (j), (o), (p), (t), (u), (w), (x) and (bb);

 

(g)                               employment and severance or termination arrangements between any Group Member and any of the Group Members’ respective Employees (including management and employee benefit plans or agreements, subscription agreements or similar agreements pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with current or former Employees and stock option or incentive plans and other compensation arrangements) in the ordinary course of business and otherwise permitted under this Agreement;

 

(h)                              transactions pursuant to permitted agreements in existence on the Closing Date and set forth on Schedule 7.9 or any amendment thereto to the extent such an amendment, taken as a whole, is not adverse to the Lenders in any material respect;

 

(i)                                  the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, Employees of the Group Members or of any Parent Company in the ordinary course of business to the extent attributable to the ownership or operation of the Group Members;

 

(j)                                  [Reserved];

 

(k)                              any issuance of Capital Stock of the Borrower or any Parent Company, or other payments, awards or grants in cash, securities, Capital Stock of the Borrower any Parent Company pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the board of directors of any Parent Company or the Borrower; and

 

(l)                                  transactions with customers, clients, suppliers, joint ventures, purchasers or sellers of goods or services or providers of employees or other labor entered into in the ordinary course of business, which are (i) fair to the Group Members in the good faith determination of the board of directors (or similar governing body) of the Borrower or the senior management thereof or (ii) on terms at least as favorable as might reasonably be obtained from a Person other than an Affiliate.

 

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7.10                          Restrictive Agreements.  Enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or limits (a) the ability of the Borrower or any Loan Party to create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the Secured Obligations or its obligations under the Guarantee and  Collateral Agreement or (b) the ability of any Restricted Subsidiary to pay dividends or other distributions with respect to any of its Capital Stock or to make or repay loans or advances to the Borrower or any other Restricted Subsidiary, other than (i) this Agreement and the other Loan Documents, (ii) the documentation governing Indebtedness permitted under Section 7.2(a)(ii), (a)(iv), (g), (h), (i) and (r) (in the case of each of the foregoing other than clause (h)(i)(1), so long as such restrictions are not materially more restrictive than the terms of the Loan Documents), (iii) with respect to clause (a) only, any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets secured thereby and the proceeds thereof), (iv) with respect to clause (a) only, Contractual Obligations incurred in the ordinary course of business and on customary terms which limit Liens on such Contractual Obligation, (v) prohibitions and limitations in effect on the date hereof and listed on Schedule 7.10, (vi) with respect to clause (a) only, customary provisions restricting the subletting or assignment of any lease governing a leasehold interest, (vii) customary restrictions and conditions contained in any agreement relating to a Disposition permitted by Section 7.5; provided that such restrictions and conditions apply only to the asset or Person to be sold, (viii) customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 7.7 and applicable solely to such joint venture and entered into in the ordinary course of business, (ix) any prohibition or limitation that exists pursuant to any applicable Law, (x) with respect to clause (a) only, restrictions on pledges or other deposits expressly permitted by Section 7.3 imposed by agreements entered into in the ordinary course of business, (xi) with respect to clause (a) only, restrictions on cash or other deposits or net worth imposed by suppliers, landlords, customers, insurance and surety or bonding companies under contracts entered into in the ordinary course of business, and (xii) with respect to clause (a) only, provisions restricting the granting of a security interest in intellectual property contained in licenses or sublicenses by the Borrower and its Restricted Subsidiaries of such intellectual property, which licenses and sublicenses were entered into in the ordinary course of business (in which case such restriction shall relate only to such intellectual property).

 

7.11                          Limitation on Activities of Holdings.  In the case of Holdings only, notwithstanding anything to the contrary in this Agreement or any other Loan Document:

 

(a)                               conduct, transact or otherwise engage in any business or operations other than (i) those incidental to its ownership of the Capital Stock of the Borrower and those incidental to other Investments by or in Holdings (including the issuance of preferred Capital Stock (other than Disqualified Capital Stock) in consideration for the purchase of its Capital Stock from present or former Employees (and their spouses, former spouses, heirs, estates and assigns) of any Group Member or pursuant to any equity subscription, shareholder, employment or other agreement), (ii) activities incidental to the maintenance of its existence and compliance with applicable Laws and legal, tax and accounting matters related thereto, (iii) activities relating to the performance of obligations under the Loan Documents and any Specified Junior Debt Facility to which it is a party or in respect of which Holdings is a guarantor or any other Indebtedness otherwise permitted hereunder for which Holdings provides a guarantee, (iv) the receipt and payment by Holdings of Restricted Payments permitted under Section 7.6, (v) preparing reports to Governmental Authorities and to its shareholders, (vi) providing indemnification for its Employees, (vii) making payments of the type permitted under Section 7.9 and the performance of its obligations under any document, agreement and/or Investment contemplated by the Transactions or Investments consisting of Guarantee Obligations (other than in respect of Indebtedness) entered into in the ordinary course of business, (viii) the other transactions expressly permitted under this Section 7.11 and (ix) activities incidental to any of the foregoing;

 

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(b)                              incur, create, assume or suffer to exist any Indebtedness or any Liens on its assets, except (i) the Indebtedness incurred by Holdings under the Loan Documents (and any Permitted Refinancing Debt in respect of the Indebtedness thereunder) and any Specified Junior Debt Facility or  otherwise in connection with the Transactions, (ii) Guarantee Obligations or other obligations of the Group Members that are otherwise permitted hereunder, (iii) the Liens created under the Security Documents to which it is a party (and, in each case, under the security documents entered into in connection with any Permitted Refinancing Debt in respect thereof) and, subject to the applicable Acceptable Intercreditor Agreement, any security documents relating to a Specified Junior Debt Facility, (iv) Permitted Liens on the Collateral that are secured on a pari passu or junior basis with the Secured Obligations, (v) Permitted Liens arising in the ordinary course of business or by operation of Law and (vi) the other transactions expressly permitted under this Section 7.11;

 

(c)                               own, lease, manage or otherwise operate or transfer any properties or assets (including cash other than (i) the ownership of shares of Capital Stock of the Borrower and de minimis amounts of other assets incidental to its business, (ii) (A) cash, Cash Equivalents and other assets received in connection with Restricted Payments permitted under Section 7.6 received from any of its Subsidiaries or permitted contributions to the capital of, or proceeds from the issuance of Capital Stock of, Holdings pending the application thereof and (B) the proceeds of Indebtedness permitted by Section 7.2, (iii) the other transactions expressly permitted under this Section 7.11 and (iv) assets temporarily held by Holdings pending contribution to the Borrower or any other Group Member);

 

(d)                              consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business; or

 

(e)                               change its fiscal year from December 31; provided, however, that Holdings may, upon written notice to, and consent by, the Administrative Agent, change the financial reporting convention specified above to any other financial reporting convention reasonably acceptable to the Administrative Agent, in which case Holdings and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement and the other Loan Documents that are necessary in order to reflect such change in financial reporting.

 

Notwithstanding anything herein to the contrary, Holdings may merge or consolidate with or into any other Person (other than the Borrower) so long as: (i) Holdings shall be the continuing or surviving corporation or, in the case of a merger or consolidation in which Holdings is not the continuing or surviving Person, the Person formed by or surviving any such merger or consolidation shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (Holdings or such Person, as the case may be, being herein referred to as the “Successor Holdings”), (ii) the Successor Holdings (if other than Holdings) shall expressly assume all the obligations of Holdings under this Agreement and the other Loan Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (iii) no Event of Default has occurred and is continuing at the date of such merger, consolidation or liquidation or would result from such merger, consolidation or liquidation, (iv) each Subsidiary Guarantor, unless it is the other party to such merger or consolidation, or unless the Successor Holdings is Holdings, shall have by a supplement to the Guarantee and Collateral Agreement in form reasonably satisfactory to the Administrative Agent confirmed that its obligation under the Guarantee and Collateral Agreement shall apply to the Successor Holdings’ obligations under this Agreement, (v) the Successor Holdings shall, immediately following such merger, consolidation or liquidation directly or indirectly own all Subsidiaries owned by Holdings immediately prior to such merger, consolidation or liquidation; (vi) the Secured Parties’ rights and remedies under the Loan Documents, taken as a whole, including their rights and remedies with respect to any Collateral owned by the Successor Holdings, and the Successor Holdings’ obligations under the Guarantee and Collateral Agreement, will not be impaired in any manner as a result of such merger, consolidation or liquidation and (vii) if reasonably requested by the Administrative Agent, an opinion of counsel shall be required to be provided to the effect that such

 

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merger, consolidation or liquidation does not violate this Agreement or any other Loan Document; provided that, if the foregoing are satisfied, the Successor Holdings (if other than Holdings) will succeed to, and be substituted for, Holdings under this Agreement; provided, further, that the Borrower agrees to provide any documentation and other information regarding the Successor Holdings as shall have been reasonably requested in writing by any Lender through the Administrative Agent that such Lender shall have reasonably determined is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act.

 

SECTION 8                     EVENTS OF DEFAULT

 

8.1                            Events of Default.

 

If any of the following events shall occur and be continuing:

 

(a)                               the Borrower shall fail to pay (i) any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof or (ii) any interest owed by it on any Loan or any other amount payable by it hereunder or under any other Loan Document within five Business Days after any such interest or other amount becomes due in accordance with the terms hereof; or

 

(b)                              Any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate required to be delivered in connection herewith or therewith shall prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished; or

 

(c)                               Any Loan Party shall default in the observance or performance of any agreement contained in (i) any of Section 6.4(a)(i) (solely with respect to the Borrower), Section 6.7(a) (provided that the delivery of a notice of Default or Event of Default at any time will cure such Event of Default arising from the failure to timely deliver such notice of Default or Event of Default, as applicable), Section 6.10, Section 6.11, Section 7 (other than Section 7.1(a)) or Section 10.24 or (ii) Section 7.1(a); provided that an Event of Default under Section 7.1(a) is subject to a cure pursuant to Section 7.1(b); or

 

(d)                              Any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in clause (a) or (c) of this Section 8.1), and such default shall continue unremedied for a period of thirty days after receipt by Borrower of written notice from the Administrative Agent; or

 

(e)                               (1) Holdings or any Group Member shall (i) default in making any payment of any principal of, interest on, or any other amount payable with respect to, any Indebtedness (excluding the Obligations and any Hedge Agreement) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event of default shall occur, in each case, beyond the period of grace, if any, provided in the applicable instrument or agreement, the effect of which event of default described in clauses (i) or (ii) of this clause (e)(1) is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due (or redeemable) prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder prior to its stated maturity; provided that (A) a default, event or condition described in this paragraph shall not at any time constitute an Event of Default unless, at such time, one or more defaults or events of default of the type described in this paragraph shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $10,000,000, (B) a default, event or

 

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condition described in this paragraph shall not at any time constitute an Event of Default unless, at such time such default or event or condition is unremedied and is not waived by the holders of such Indebtedness, and (C) this paragraph (e)(1) shall not apply to (I) secured Indebtedness that becomes due as a result of the sale, transfer, destruction or other disposition of the Property or assets securing such Indebtedness if such sale, transfer, destruction or other disposition and the prepayment of such secured Indebtedness are permitted hereunder or (II) any Guarantee Obligations except to the extent such Guarantee Obligations shall become due and payable by Holdings or any Group Member and remain unpaid after any applicable grace period permitted following demand for the payment thereof; or (2) there occurs under any Hedge Agreement an early termination date resulting from any event of default under such Hedge Agreement as to which Holdings or any Group Member is the defaulting party and the net swap termination value owned by Holdings or such Group Member as a result thereof is greater than $10,000,000; or

 

(f)                                (i) Holdings or any Group Member (other than Immaterial Subsidiaries) shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Holdings or any Group Member (other than any Immaterial Subsidiary) shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Holdings or any Group Member (other than any Immaterial Subsidiary) any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief by a court of competent jurisdiction or any such adjudication or appointment or (B) remains undismissed, undischarged or unstayed pending appeal for a period of 60 consecutive days; or (iii) Holdings or any Group Member (other than any Immaterial Subsidiary) shall admit in writing its inability to, pay its debts as they become due; or

 

(g)                               (i) Holdings, the Borrower or any of its Subsidiaries shall incur any liability in connection with any non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan that would reasonably be expected to result in a Material Adverse Effect, (ii) the occurrence of any ERISA Event that, when taken together with other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect, (iii) an event shall have occurred or failed to occur with respect to a Foreign Pension Plan that, when taken together with any other liability in connection with any such events, would reasonably be expected to result in a Material Adverse Effect or (iv) any other similar event or condition shall occur or exist with respect to a Commonly Controlled Plan that would result in a Material Adverse Effect; or

 

(h)                              One or more final judgments or decrees of a court of competent jurisdiction shall be entered against Holdings or any Group Member or any of their respective assets involving for Holdings, any Group Member or their respective assets, taken as a whole, for the payment of money (in any case, to the extent not adequately covered by self-insurance, if applicable, or not paid or covered by insurance as to which the applicable third party insurance company has not disputed coverage) of $10,000,000 or more, and such judgments or decrees shall have remained unpaid, unvacated, undischarged, unstayed or unbonded pending appeal for a period of sixty (60) consecutive days from the entry thereof; or

 

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(i)                                  (i) Any of the material Security Documents shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 10.15) to be in full force and effect or shall be asserted in writing by any Loan Party not to be a legal, valid and binding obligation of any party thereto, (ii) any security interests purported to be created by any Security Document shall cease to be, or  shall be asserted in writing by any Loan Party not to be, a valid and perfected, security interest in a material portion of the Collateral covered thereby, except to the extent that any such loss of perfection results from the failure of the Collateral Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Guarantee and Collateral Agreement or to file UCC continuation statements after notice from the Borrower to file the same, due to a release of such Collateral in accordance with the terms hereof or thereof or the occurrence of the Facility Termination Date or any other termination of such Collateral Document in accordance with the terms thereof, (iii) any material Guarantee Obligations pursuant to the Guarantee and Collateral Agreement by any Loan Party of any of the Secured Obligations shall cease to be in full force and effect (other than in accordance with the terms thereof), or shall be asserted in writing by any Loan Party not to be in effect or not to be legal, valid and binding obligations (other than as a result of the discharge of such Loan Party in accordance with the terms thereof), or (iv) the Intercompany Subordination Agreement or any other subordination agreement (or subordination provisions incorporated in any Restricted Debt) or any intercreditor agreement ceases to be valid and enforceable against any holder of Indebtedness (the outstanding principal amount of which Indebtedness exceeds $10,000,000) party thereto or any Loan Party shall so assert in writing; or

 

(j)                          any License Revocation occurs with respect to any Material Gaming Facility; or a disciplinary complaint is filed by any Gaming Authority seeking a License Revocation with respect to any material Gaming Permit issued to or held by the Borrower or any of its Restricted Subsidiaries, provided that the Borrower or such Restricted Subsidiary shall have 90 days from the date of the filing of such disciplinary complaint (or such longer period expressly permitted by the applicable Gaming Authority not to exceed 180 days from the date of the filing of the disciplinary complaint) to cure any issue or deficiency giving rise to the filing of the disciplinary complaint such that the disciplinary complaint is dismissed or settled without a revocation, denial, non-renewal or suspension of any such Gaming Permit or license; or

 

(k)                      A Change of Control occurs;

 

then, and in any such event, (A) if such event is an Event of Default specified in Section 8.1(f) with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable and (B) if such event is any other Event of Default, with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans hereunder in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), together with accrued interest thereon and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable.  In the case of all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of (x) an acceleration pursuant to this paragraph or (y) the occurrence of the Revolving Termination Date, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the Minimum Collateral Amount.  Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been backstopped or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the other Loan Documents.  After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other Obligations of the Borrower in respect of such Letters of Credit shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto).  Except as expressly provided above in this Section or otherwise in any Loan Document, presentment, demand and protest of any kind are hereby expressly waived by Holdings and the Borrower.

 

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SECTION 9                     THE AGENTS

 

9.1                                  Appointment.  Each Lender and each Issuing Lender hereby irrevocably appoints CS (or any successor appointed pursuant hereto) to act on its behalf as each Agent hereunder and under the other Loan Documents and authorizes such Agent to take such actions on its behalf and to exercise such powers as are delegated to such Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article (other than Sections 9.1, 9.8(a), 9.9 and 9.11 and the first sentence of Section 9.12) are solely for the benefit of the Agents and the Lenders (including the Issuing Lenders) and the Borrower shall not have rights as a third party beneficiary of such provisions.  It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

Each Issuing Lender shall act on behalf of the Revolving Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each Issuing Lender shall have all of the benefits and immunities (a) provided to the Agents in this Article with respect to any acts taken or omissions suffered by such Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and documents pertaining to such Letters of Credit as fully as if the term “Agent” as used in this Article and the definition of “Agent-Related Person” included such Issuing Lender with respect to such acts or omissions, and (b) as additionally provided herein with respect to each Issuing Lender.

 

9.2                                  Delegation of Duties.  Each Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by such Agent (other than a Disqualified Institution).  Each Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of such Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Facilities as well as activities as such Agent.  No Agent shall be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that such Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

9.3                                  Exculpatory Provisions.  (a)  No Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature.  Without limiting the generality of the foregoing, no Agent shall:  (i) be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing; (ii) have any duty to take any discretionary action or exercise any discretionary powers, except (in the case of any Agent) discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that such Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and (iii) except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by such Agent or any of its Affiliates in any capacity.

 

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(b)                              The Administrative Agent shall not be liable to any other Secured Party for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 8 and Section 10.1), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and non-appealable judgment.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless and until the Administrative Agent shall have received written notice from a Lender, an Issuing Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.”

 

(c)                               No Agent-Related Person shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of any Lien purported to be granted by the Security Documents, (vi) the value or sufficiency of any Collateral, or (vii) the satisfaction of any condition set forth in Section 5 or elsewhere herein, other than (in the case of the Administrative Agent) to confirm receipt of items expressly required to be delivered to it.

 

(d)                              The Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified Institutions.  Without limiting the generality of the foregoing, the Administrative Agent shall not (x) be obligated to ascertain, monitor or inquire as to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Institution or (y) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified Institution.

 

9.4                                  Reliance by the Agents.  Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, E-System, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to any Borrowing or any draft under any Letter of Credit that by its terms shall be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or such Issuing Lender prior to any such Borrowing or Letter of Credit draft.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

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9.5                                  Non-Reliance on Agents and Other Lenders.  Each Lender expressly acknowledges that neither the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by the Agents hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any Lender.  Each Lender and each Issuing  Lender represents to the Agents that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of an investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Loans hereunder and enter into this Agreement.  Each Lender and each Issuing Lender also represents that it will, independently and without reliance upon any Agent or any other Lender, 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 the applicable Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates.  Each of the Lenders acknowledges and agrees that outside legal counsel to the Administrative Agent in connection with the preparation, negotiation, execution, delivery and administration (including any amendments, waivers and consents) of this Agreement and the other Loan Documents is acting solely as counsel to the Administrative Agent and is not acting as counsel to any Lender (other than the Administrative Agent and its Affiliates) in connection with this Agreement, the other Loan Documents or any of the transactions contemplated hereby or thereby.  Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Agents hereunder, the Agents shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into the possession of either Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

 

9.6                                  Indemnification.  Whether or not the transactions contemplated hereby are consummated, each Lender shall indemnify upon demand each Agent-Related Person, any Issuing Lender or any Related Party with respect to such Person (in each case, to the extent not reimbursed by or on behalf of the Borrower and without limiting the obligations of any Loan Party to do so) on a pro rata basis (determined as of the time that the applicable payment is sought based on each Lender’s ratable share of the sum of the Total Outstandings and unused Commitments at such time) and hold harmless each Agent-Related Person, any Issuing Lender or any Related Party with respect to such Person against any and all Indemnified Liabilities incurred by it (including any such unpaid Indemnified Liabilities in respect of a claim asserted by such Lender); provided that (a) no Lender shall be liable for payment to any Agent-Related Person, any Issuing Lender or any Related Party with respect to such Person of any portion of such Indemnified Liabilities to the extent determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted from such Agent-Related Person’s, any Issuing Lender’s or Related Party’s own gross negligence or willful misconduct (and no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section) and (b) to the extent any Issuing Lender is entitled to indemnification under this Section solely in its capacity and role as an Issuing Lender, only the Revolving Lenders shall be required to indemnify such Issuing Lender in accordance with this Section (determined as of the time that the applicable payment is sought based on each Revolving Lender’s Revolving Percentage thereof at such time).  In the case of any investigation, litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.6 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person.  Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent and the Collateral Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including the fees, disbursements and other charges of counsel) incurred by the Administrative Agent or the Collateral Agent in connection with preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights and responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent or the Collateral Agent is not reimbursed for such costs or expenses by or on behalf of the Borrower.

 

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To the extent required by any applicable Law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any U.S. federal income tax.  If the IRS or any other Governmental Authority asserts a claim that the Administrative Agent did not properly withhold U.S. federal income tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered or was not properly executed or because such Lender failed to notify the Administrative Agent of a change in circumstance which rendered the exemption from, or reduction of, U.S. federal income tax ineffective or for any other reason, or if the Administrative Agent reasonably determines that a payment was made to a Lender pursuant to this Agreement without deduction of applicable withholding tax from such payment, such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as Tax or otherwise, including any penalties or interest and together with all reasonable costs and out-of-pocket expenses (including reasonable fees and expenses of counsel) incurred in connection therewith.

 

This Section 9.6 shall survive the occurrence of the Facility Termination Date and the resignation of the Administrative Agent.

 

9.7       Agent in Its Individual Capacity.  Any Agent shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent hereunder, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as such Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not an Agent hereunder and without any duty to account therefor to the Lenders.

 

9.8       Successor Agents.

 

(a)        The Administrative Agent may resign as Administrative Agent upon ten days’ notice to the Lenders, the Issuing Lenders and the Borrower.  If the Person serving as Administrative Agent and Collateral Agent is a Defaulting Lender or an Affiliate of a Defaulting Lender, either the Required Lenders or the Borrower may, upon ten days’ notice, remove the Administrative Agent and Collateral Agent.  Upon receipt of any such notice of resignation or delivery of any such notice of removal, the Required Lenders shall appoint a successor Administrative Agent and Collateral Agent (which shall be a commercial bank or trust company with offices in the U.S. having combined capital and surplus in excess of $1,000,000,000) with the consent of the Borrower at all times other than during the existence of an Event of Default under Section 8.1(a) or Section 8.1(f) (with respect to the Borrower), which consent shall not be unreasonably withheld or delayed.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days following the resignation or removal of the Administrative Agent and Collateral Agent, then (a) in the case of any resignation, the resigning Administrative Agent and Collateral Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent and Collateral Agent meeting the qualifications set forth above (including, for the avoidance of doubt, the consent of the Borrower to the extent required above) or (b) in the case of a removal, the Borrower may, after consulting with the Required Lenders, appoint a successor Administrative Agent and Collateral Agent meeting the qualifications set forth above.  Whether or not a successor has been appointed, such resignation or removal shall become effective in accordance with such notice on such effective date, where (i) the retiring or removed Administrative Agent and Collateral Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent or Collateral Agent on behalf of the Lenders or the Issuing Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent and

 

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Collateral Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent or Collateral Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent or Collateral Agent shall instead be made by or to each Lender and Issuing Lender directly (and each Lender and each Issuing Lender will cooperate with the Borrower to enable the Borrower to take such actions), until such time, if any, as the Required Lenders or the Borrower, as applicable, appoint a successor Administrative Agent and Collateral Agent as provided for above.  Upon the acceptance of a successor’s appointment as Administrative Agent and Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Administrative Agent and Collateral Agent, and the retiring or removed Administrative Agent and Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (other than its obligations under Section 10.14 hereof).  The fees payable by the Borrower to a successor Administrative Agent and Collateral Agent shall be the same as those payable to its predecessor unless otherwise agreed among the Borrower and such successor.  After an Administrative Agent’s and Collateral Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Section 9 and Section 10.5 shall continue in effect for the benefit of such retiring or removed Administrative Agent and Collateral Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent and Collateral Agent was acting as Administrative Agent and Collateral Agent.  Notwithstanding anything to the contrary herein, no Disqualified Institution (nor any Affiliate thereof) may be appointed as a successor Administrative Agent or Collateral Agent.

 

(b)        Any resignation by, or removal of, CS, as Administrative Agent pursuant to this Section 9.8 shall also constitute its resignation as an Issuing Lender.  If CS resigns as an Issuing Lender, it shall retain all the rights, powers, privileges and duties of an Issuing Lender hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an Issuing Lender and all L/C Obligations with respect thereto, including the right to require the Lenders to make Loans or fund risk participations in unreimbursed amounts pursuant to Section 3.4.  Upon the appointment by the Borrower of a successor Issuing Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender and (b) the retiring Issuing Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Lender shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.

 

9.9       Authorization to Execute other Loan Documents; Collateral.

 

(a)        Each Lender (and each other Secured Party by accepting the benefits of the Collateral) authorizes the Administrative Agent and/or the Collateral Agent to enter into each of the Loan Documents (including, without limitation, any intercreditor or subordination agreement contemplated by the terms hereof, each Joinder Agreement and each Extension Agreement) (other than this Agreement) and to take all action contemplated by such Loan Documents and agrees that it shall be bound by such Loan Documents as if a signatory thereto.  Each Lender (and each other Secured Party by accepting the benefits of the Collateral) agrees (except to the extent provided in Section 9.8(a) following the resignation of the Administrative Agent and Collateral Agent) that no Secured Party, other than the Administrative Agent and/or the Collateral Agent acting on behalf of all Secured Parties, shall have the right individually to seek to realize upon the security granted by any Loan Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent and/or the Collateral Agent for the benefit of the Secured Parties, upon the terms of the Loan Documents.

 

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(b)        Each Lender (and each other Secured Party by accepting the benefits of the Collateral) hereby authorizes and instructs the Collateral Agent to release any Lien or Guarantee Obligation granted to or held by the Collateral Agent upon any Collateral and to subordinate any Lien on any Collateral granted to or held by the Collateral Agent under any Loan Document as contemplated by Section 10.15 hereof.  Upon request by the Administrative Agent or the Collateral Agent at any time, the Required Lenders will confirm in writing the Collateral Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations pursuant to this Section 9.9.

 

(c)        No Agent shall be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall any Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

 

9.10     Lead Arrangers.  None of the Lead Arrangers, Syndication Agent or Joint Bookrunners identified on the cover page of this Agreement shall have any rights, powers, obligations, liabilities, responsibilities or duties under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or an Issuing Lender hereunder.  Without limiting any other provision of this Article, none of the Lead Arrangers, Syndication Agent or Joint Bookrunners in their respective capacities as such shall have or be deemed to have any fiduciary relationship with any Lender (including any Issuing Lender) or any other Person by reason of this Agreement or any other Loan Document.

 

9.11     Administrative Agent May File Proofs of Claim; Credit Bidding.  In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any such Loan Party) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

 

(a)        to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, all L/C Obligations and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders, the Administrative Agent and the other Secured Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders, the Administrative Agent, the other Secured Parties and their respective agents and counsel and all other amounts due to the Lenders, the Issuing Lenders and the Administrative Agent under Sections 2.9 and 10.5) allowed in such judicial proceeding; and

 

(b)        to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender, each Issuing Lender and each other Secured Party accepting the benefits of the Collateral to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lenders and the other Secured Parties, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.9 and 10.5.

 

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The parties hereto and each other Secured Party accepting the benefits of the Collateral hereby irrevocably authorize the Administrative Agent, based upon the instruction of the Required Lenders, to (a) credit bid and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including under Section 363 of the Bankruptcy Code of the United States or any similar Laws in any other jurisdictions to which a Loan Party is subject, or (b) credit bid and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any other sale or foreclosure conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with applicable Law.  In connection with any such credit bid and purchase, the Secured Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (with Secured Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not unduly delay the ability of the Administrative Agent to credit bid and purchase at such sale or other disposition of the Collateral and, if such claims cannot be estimated without unduly delaying the ability of the Administrative Agent to credit bid, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the asset or assets purchased by means of such credit bid) and the Secured Parties whose Secured Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Secured Obligations credit bid in relation to the aggregate amount of Secured Obligations so credit bid) in the asset or assets so purchased (or in the Capital Stock of the acquisition vehicle or vehicles that are used to consummate such purchase).  Upon request by the Administrative Agent, the Collateral Agent or the Borrower at any time, the Secured Parties will confirm in writing the Collateral Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 9.11.

 

9.12     Cash Management Agreements and Secured Hedge Agreements.  Except as otherwise expressly set forth herein, no holder of Cash Management Obligations or Hedge Counterparty that obtains the benefit of the provisions of Section 2.18(f), the Guarantee and Collateral Agreement or any Collateral by virtue of the provisions hereof or any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Guarantee and Collateral Agreement or any Security Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents.  Notwithstanding any other provision of this Section 9 to the contrary, no Agent shall be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Obligations arising under Cash Management Obligations and Specified Hedge Agreements except to the extent expressly provided herein and unless the such Agent has received written notice of such Secured Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable holder of Cash Management Obligations or Hedge Counterparty, as the case may be.  The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Obligations arising under Cash Management Documents and Specified Hedge Agreements in the case of a Facility Termination Date.

 

9.13     Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution and (b) the effects of any Bail-in

 

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Action on any such liability, including, if applicable, (i) a reduction in full or in part or cancellation of any such liability, (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

SECTION 10   MISCELLANEOUS

 

10.1     Amendments and Waivers.

 

(a)        Except as otherwise expressly set forth in this Agreement, neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended (including this Section 10.1), supplemented or modified except in accordance with the provisions of this Section 10.1.  The Required Lenders and each Loan Party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent (or the Collateral Agent if it (but not the Administrative Agent) is a party thereto) and each Loan Party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights or obligations of the Agents, the Issuing Lenders, the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent and/or the Collateral Agent, as applicable, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) forgive or reduce the principal amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date or reduce the amount of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee or other amounts payable hereunder (except that any amendment or modification of defined terms used in the financial ratios in this Agreement or waiver of post-default rates of interest shall not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof (in each case other than any extension for administrative convenience as agreed by the Administrative Agent), or increase the amount (other than an increase with respect to any Incremental Facility agreed to by such Lender) or extend the expiration date of any Lender’s Commitment, in each case without the written consent of each Lender directly and adversely affected thereby (but not the Required Lenders) (it being understood that a waiver of any condition precedent or the waiver of any Default, Event of Default or mandatory prepayment shall not constitute an extension or increase of any Loan or Commitment hereunder); (ii) eliminate or reduce the voting rights of any Lender under this Section, or of any provision of this Agreement or any other Loan Document that requires the consent of all Lenders or all affected Lenders, in each case without the written consent of such Lender (but not the Required Lenders); (iii) reduce any percentage specified in the definition of “Required Lenders” or, except as expressly permitted hereunder, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, in each case, without the written consent of all Lenders, (iv) except as expressly permitted by Sections 7.4 and 7.5, release all or substantially all of the Collateral or release all or substantially all of the Guarantors from their obligations under the Guarantee and Collateral Agreement, as applicable, in each case, without the written consent of all Lenders; (v) amend, modify or waive any provision of Section 9 or other term of this Agreement which would adversely affect the Agents without the written consent of the Agents directly and adversely affected thereby; (vi) amend, modify or waive any provision of Section 3 or otherwise directly affect the rights of the Issuing Lenders without the written consent of the Issuing Lenders; (vii) without the consent of the Majority Facility Lenders of the respective Facility affected thereby, amend the definition of

 

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Majority Facility Lenders or eliminate any provision of this Agreement or the other Loan Documents that requires the consent of the Majority Facility Lenders; or (viii) amend, modify or waive the pro rata sharing provisions of Section 2.18 or Section 10.7 or the waterfall provisions of Section 2.18(f) without the consent of each Lender directly and adversely affected thereby; and, provided, further, that, (v) the Fee Letters may be amended only by the parties thereto, (w) only the consent of the applicable Issuing Lender and the Administrative Agent shall be required with respect to any amendment that changes such Issuing Lender’s L/C Commitment, (x) no amendment or waiver shall, unless signed by the Majority Facility Lenders in respect of the Revolving Facility (or by the Administrative Agent with the consent of the Majority Facility Lenders in respect of the Revolving Facility) in addition to the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) (A) amend or waive compliance with the conditions precedent to the obligations of any Revolving Lender to make any Revolving Loan (or of any Issuing Lender to issue any Letter of Credit) in Section 5.2, (B) amend or waive Sections 2.4, 2.5, 2.9(a), 2.10, 2.18(f) (to the extent pertaining to Revolving Loans) or Section 3 or (C) amend or waive this clause (x), (y) except in cases where additional extensions of term loans and/or revolving loans are being afforded substantially the same treatment afforded to the Initial Term Loans and the Initial Revolving Facility pursuant to this Agreement on the Closing Date, without the consent of the Majority Facility Lenders of each Class of Loans which is being allocated a lesser prepayment, repayment or commitment reduction as a result of the actions described below, alter the required application of any prepayments or repayments (or commitment reduction), as between the various Classes of Loans, pursuant to Section 2.12(g) (it being understood, however, that (1) the Required Lenders may waive, in whole or in part, any such prepayment, repayment or commitment reduction, so long as the application, as amongst the various Classes of Loans, of any such prepayment, repayment or commitment reduction which is still required to be made is not altered, (2) any conversion of any Class of Loans into another Class of Loans hereunder in like principal amount shall not be considered a “prepayment” or “repayment” for purposes of this clause (2)) and (z) the consent of the Lenders or the Required Lenders, as the case may be, shall not be required to make any such changes necessary to effect (A) the provisions of Sections 2.25, 2.28, 10.23 or, except as expressly set forth in the definition of Refinancing Debt Requirements, Section 7.2(a)(ii).

 

Notwithstanding anything herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all the Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders, except that (x) the Commitment of any Defaulting Lender may not be increased or extended, or the maturity of any of its Loan may not be extended, the rate of interest on any of its Loans may not be reduced and the principal amount of any of its Loans may not be forgiven, in each case without the consent of such Defaulting Lender) and (y) any amendment, waiver or consent requiring the consent of all the Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than the other affected Lenders shall require the consent of such Defaulting Lender.

 

(b)        Each waiver or consent under any Loan Document shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice to or demand on any Loan Party shall entitle any Loan Party to any notice or demand in the same, similar or other circumstances.  No failure on the part of any Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.

 

(c)        Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and all future holders of the Loans.  In the case of any waiver, the Loan Parties, the Lenders and the Agents shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing  unless limited by the terms of such waiver, but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent on any such subsequent or other Default or Event of Default.

 

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(d)        In addition, notwithstanding anything in this Section to the contrary, if the Administrative Agent and the Borrower shall have jointly identified any ambiguity, mistake, defect, inconsistency, obvious error or any error or omission of a technical nature or any necessary or desirable technical changes, in each case, in any provision of the Loan Documents, then the Administrative Agent and/or the Collateral Agent, as applicable, and the Borrower shall be permitted to amend such provision, and, in each case, such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders to the Administrative Agent within five Business Days following receipt of notice thereof.

 

(e)        Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably (or less than ratably) in the benefits of this Agreement and the other Loan Documents with the Term Loans, the Revolving Loans and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and/or the Majority Facility Lenders, as applicable.

 

(f)        Upon notice thereof by the Borrower to the Administrative Agent with respect to the inclusion of any Previously Absent Financial Maintenance Covenant, this Agreement shall be amended by an agreement in writing entered into by the Borrower and the Administrative Agent without the need to obtain the consent of any Lender to include such Previously Absent Financial Maintenance Covenant on the date of the incurrence of the applicable Indebtedness to the extent required by the terms of such definition or section.

 

(g)        Notwithstanding anything to the contrary contained in this Section 10.1 or any other provision of this Agreement or any provision of any other Loan Document:

 

(i)         the Borrower and any Agent may, without the input or consent of any Lender, amend, supplement and/or waive any Security Document executed in connection with this Agreement to (A) comply with any Law (including any applicable Gaming Regulations) or (B) cause any such Security Document to be consistent with this Agreement and/or the relevant other Loan Documents, and

 

(ii)        the Administrative Agent and the Borrower may amend, restate, amend and restate or otherwise modify any intercreditor, subordination, collateral trust agreement or similar agreement, in each case, as set forth in such agreement.

 

10.2     Notices.  All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice or, subject to the last sentence of this Section 10.2, email notice, when received, addressed as follows in the case of the Borrower, the Agents, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

 

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Borrower:
    	
Affinity Gaming
   3755 Breakthrough Way
   Suite 300
   Las Vegas, Nevada  89135

Attention: Marc H. Rubinstein

Facsimile No.: (702) 341-2581

E-mail: 
   mrubinstein@affinitygaming.com

 
    
	
With a copy to:

 

 

 

 

 

 
    	
Morrison & Foerster LLP

250 West 55th Street

New York, NY 10019-9601

Attn: Geoffrey Peck

Facsimile No.: (212) 468-7900

E-mail: GPeck@mofo.com

 

 
    
	
Administrative Agent or Collateral Agent:
    	
Credit Suisse AG, Cayman Islands 
   Branch

Eleven Madison Avenue

New York, NY 10010

Attn: Agency Manager

Tel: (919) 994-6369

Facsimile: (212) 322-2291

Email: agency.loanops@credit-
   suisse.com
    

 

provided that any notice, request or demand to or upon the Agents, the Lenders, Holdings, or the Borrower shall not be effective until received.

 

Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Agents; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Agents.  Each of the Agents may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it and communicated to the Borrower; provided that approval of such procedures may be limited to particular notices or communications.

 

10.3     No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents 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.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

10.4     Survival of Representations and Warranties.  All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.  Such representations and warranties have been or will be relied upon by the Agents and each Lender regardless of any investigation made by  the Agent or any Lender or on their behalf and notwithstanding that the Agent or any Lender may have had notice or knowledge of any Default at the time of any credit extension, and shall continue in full force and effect as long as any Loan or other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

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10.5     Payment of Expenses; Indemnification.

 

(a)        The Borrower agrees (i) to pay or reimburse each Agent and the Lead Arrangers for all their respective reasonable and documented out-of-pocket costs and expenses incurred in connection with the syndication of the Facilities (other than fees payable to syndicate members) and the development, preparation, execution and delivery of this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith and any amendment, supplement, waiver or modification thereto, and, as to the Agents only, the administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable and documented fees and disbursements and other charges of counsel to the Agents (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons taken as a whole and, if necessary, of one local counsel in any relevant jurisdiction to such Persons, taken as a whole) in connection with all of the foregoing, and (ii) to pay or reimburse each Lender, each Issuing Lender, the Agents and the Lead Arrangers for all their documented out-of-pocket costs and expenses incurred in connection with the enforcement of any rights under this Agreement, the other Loan Documents and any such other documents, including, without limitation, the fees and disbursements of counsel (but limited, in the case of (x) legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons taken as a whole (and, in the case of an actual or perceived conflict of interest, one additional firm of counsel for all similarly affected Persons) and, if necessary, of one local counsel in each relevant jurisdiction to such Persons, taken as a whole (and, in the case of an actual or perceived conflict of interest, one additional firm of local counsel in each relevant jurisdiction for all similarly affected Persons) and (y) any other advisors or professionals, to other advisors and professionals engaged by the Administrative Agent) in connection with enforcement proceedings.  Other than to the extent required to be paid on the Closing Date, all amounts due under this paragraph (a) shall be payable by the Borrower within 30 days of receipt of an invoice relating thereto, setting forth such expenses in reasonable detail and together with backup documentation supporting such reimbursement requests.  Except with respect to stamp, recording and similar Other Taxes (and, in any event, excluding any such Other Taxes in respect of any assignments or participations), this Section 10.5(a) shall not apply with respect to Taxes, which shall be governed by Sections 2.19 and 2.20.

 

(b)        The Borrower agrees to indemnify or reimburse each Lender, each Issuing Lender, each Agent, the Lead Arrangers and their respective affiliates, and their respective officers, directors, trustees, employees, advisors, agents, controlling Persons and successors and assigns (each, an “Indemnitee”) for, and hold each Indemnitee harmless from and against any and all other losses, claims, damages, liabilities or related expenses arising out of any actions, investigations, judgments or suits of any kind or nature whatsoever, arising out of or in connection with any claim, investigation, action or proceeding relating to or otherwise with respect to the execution, delivery, enforcement, performance and administration of this Agreement and the other Loan Documents including, without limitation, any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to, or any Environmental Claims related to, the operations of Holdings, the Borrower, or any of its Subsidiaries (excluding with regard to any events occurring or circumstances existing solely after the Facility Termination Date) and the fees and disbursements and other charges of legal counsel in connection with claims, investigations, actions or proceedings regarding the foregoing (limited to the reasonable and documented out-of-pocket fees, disbursements and other charges of a single firm of counsel for all Indemnitees, taken as a whole (and, in the case of an actual or

 

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perceived conflict of interest, one additional firm of counsel for all similarly affected Indemnitees), and, if necessary, by a single firm of local counsel in each relevant jurisdiction (which may include a single firm of special counsel acting in multiple jurisdictions) for all Indemnitees taken as a whole (and, in the case of an actual or perceived conflict of interest, one additional firm of local counsel in each relevant jurisdiction for similarly affected Indemnitees)) (all the foregoing in this clause (b), collectively, the “Indemnified Liabilities”) regardless of whether any such Indemnitee is a party thereto, whether or not such proceedings are brought by Holdings, the Borrower, any Subsidiaries, Affiliates, equity holders, or creditor of the Borrower, Holdings or any other person; provided that the Borrower shall not have any obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities have resulted from (i) the gross negligence, bad faith or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision), (ii) a material breach by such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision) or (iii) any proceeding between and among Indemnified Parties (other than any claims against an Indemnitee in its capacity as an Agent or Lead Arranger) that does not involve an act or omission by Holdings, the Borrower or any other Subsidiary of the Borrower; provided, however, that the Administrative Agent, Issuing Lenders, and other Agents, to the extent acting in their capacity as such, shall remain indemnified in respect of such proceeding to the extent that neither the exception set forth in clause (i) of the immediately preceding proviso nor the exception set forth in clause (ii) of the immediately preceding proviso applies to such Person at such time.  Each Indemnitee shall be obligated to refund or return any and all amounts paid by the Borrower pursuant to this Section 10.5(b) to such Indemnitee for any fees, expenses, or damages to the extent such Indemnitee is not entitled to payment of such amounts in accordance with the terms hereof.  All amounts due under this paragraph (b) shall be payable by the Borrower within 30 days (x) after written demand thereof, in the case of any indemnification obligations and (y) in the case of reimbursement of costs and expenses, after receipt of an invoice relating thereto, setting forth such expenses in reasonable detail and together with backup documentation supporting such reimbursement requests. Statements payable by the Borrower pursuant to this Section shall be submitted to the Borrower at the address thereof set forth in Section 10.2, or to such other Person or address as may be hereafter designated by the Borrower in a written notice to the Administrative Agent.  This Section 10.5(b) shall not apply with respect to Taxes other than any Indemnified Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)        The Borrower shall not be liable for any settlement of any proceeding effected without its consent (which consent shall not be unreasonably withheld, delayed or conditioned), but if any proceeding is settled with the Borrower’s written consent, or if there is a final judgment against any Indemnitee in any such proceeding, the Borrower agrees to indemnify and hold harmless each Indemnitee to the extent and in the manner set forth in Section 10.5(b) above.  Notwithstanding anything to the contrary herein, if at any time any Indemnitee shall have requested in accordance with the terms and conditions of this Agreement that the Borrower reimburse such Indemnitee for legal or other expenses in connection with investigating, responding to or defending any proceeding, the Borrower shall be liable for any settlement effected without the Borrower’s prior written consent if (i) such settlement is entered into more than sixty (60) days after receipt by the Borrower of such request for reimbursement and (ii) the Borrower shall not have reimbursed such Indemnitee in accordance with such request in the manner and to the extent set forth in this Agreement prior to the date of such settlement.  The Borrower shall not, without the prior written consent of the affected Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened proceeding in respect of which indemnity could have been sought hereunder by such Indemnitee unless (i) such settlement includes an unconditional release of such Indemnitee from all liability or claims that are the subject matter of such proceeding and (ii) such settlement does not include any statement as to any admission of fault or culpability.

 

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(d)                              To the extent permitted by applicable Law, no party to this Agreement shall assert, and each party hereby waives, any claim against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated herein or therein, any Loan or any Letter of Credit or the use of proceeds thereof, except, in the case of a claim by any Indemnitee against the Borrower, to the extent such damages would otherwise be subject to indemnification pursuant to the terms of Section 10.5(b).  No party to this Agreement shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems (including any E-System) in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, except to the extent any such damages arise from the gross negligence, bad faith or willful misconduct of, or material breach of this Agreement or the other Loan Documents by, such party or its Affiliates, as applicable, in each case as determined by a final non-appealable judgment of a court of competent jurisdiction.

 

(e)                               Without duplication of clause (a) above, the Borrower further agrees to pay the reasonable documented out-of-pocket legal fees of gaming counsel for the Agents in Missouri, Nevada, Colorado and Iowa and any other relevant state or other jurisdiction and all reasonable documented out-of-pocket costs (including reasonable documented out-of-pocket costs of investigation) associated with any qualification (or exemption or waiver therefrom) of any Lender under, or compliance of any Lender with, the Gaming Regulations in connection with this Agreement or the other Loan Documents.

 

The agreements in this Section shall survive the Facility Termination Date.

 

10.6                    Successors and Assigns; Participations and Assignments.

 

(a)                               The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any affiliate of any Issuing Lender that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder in a manner not permitted by Section 7.4 without the prior written consent of the Administrative Agent and each Lender (and any attempted assignment or transfer by such Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.

 

(b)                              (i)                                  Subject to the conditions set forth below and Section 10.6(m), any Lender may assign to one or more assignees (other than (i) a natural person, (ii) except as permitted under Section 10.6(c), the Borrower or any of its Affiliates or (iii) a Defaulting Lender) (each, an “Assignee”), all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

 

(A)                           the Borrower; provided that no consent of the Borrower shall be required (x) for an assignment of (1) Term Loans to a Lender, an Affiliate of a Lender, or an Approved Fund (as defined below) or (2) the Initial Revolving Facility or any unfunded Commitments with respect to any other Facility if such assignment is to a Lender with an existing Commitment in respect of such Facility or any Affiliate or Approved Fund of a Lender with an existing Commitment in respect of such Facility or (y) if an Event of Default under Section 8.1(a) or 8.1(f) has occurred and is continuing, for an assignment to any Assignee; provided, further, that the Borrower shall be deemed to have consented to any such assignment of Term Loans unless it shall object thereto by written notice to the Administrative Agent within 10 Business Days after having received notice thereof;

 

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(B)                            the Administrative Agent; provided that no consent of the Administrative Agent shall be required for (x) an assignment of Term Loans to a Lender, an Affiliate of a Lender or an Approved Fund or (y) an assignment of the Initial Revolving Facility or any unfunded Commitments with respect to any other Facility if such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund of a Lender with an existing Commitment in respect of such Facility (provided that the Administrative Agent shall acknowledge any such assignment referenced in clause (x) or (y)); and

 

(C)                            in the case of an assignment under any Revolving Facility, each Issuing Lender;

 

Any such assignment by any Lender need not be ratable as among the Facilities.

 

(ii)                              Assignments shall be subject to the following additional conditions:

 

(A)                           except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans under any Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of (I) the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or (II) if earlier, the “trade date” (if any) specified in such Assignment and Assumption) shall not be less than $2,500,000 in the case of any assignment in respect of the Revolving Facility, or $1,000,000 in the case of any assignment in respect of a Term Facility, unless the Borrower and the Administrative Agent otherwise consent; provided that (1) no such consent of the Borrower shall be required if an Event of Default under Section 8.1(a) or 8.1(f) has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its Affiliates or Approved Funds, if any;

 

(B)                            the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 (which shall not be payable by a Lead Arranger or by the Borrower or any of their respective Affiliates except in respect of an assignment of interests purchased under Section 10.6(c)); provided that only one such fee shall be payable in the case of contemporaneous assignments to or by two or more related Approved Funds;

 

(C)                            no Revolving Commitment or Revolving Loans may be assigned to any Investor Affiliated Lender or Purchasing Borrower Party and Term Loans may not be assigned to any Investor Affiliated Lender or Purchaser Borrower Party except as provided in clause (c) below; and

 

(D)                           the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire.

 

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For the purposes of this Section, “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in commercial loans and similar extensions of credit in the ordinary course of its activities and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) (i) an entity or an Affiliate of an entity that administers or manages a Lender or (ii) an entity or an Affiliate of an entity that is the investment advisor to a Lender.

 

(iii)                          Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each Assignment and Assumption the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.19, 2.20, 2.21 and 10.5).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall, subject to the Borrower’s rights under Section 10.6(j), be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

 

(iv)                          The Administrative Agent, acting as a non-fiduciary agent of the Borrower solely for tax purposes, and solely with respect to the actions described in this Section 10.6(b) and Section 2.8, shall establish and maintain at its address referred to in Section 10.2  (A)  a record within the meaning of Section 5f.103-1(c) of the United States Treasury Regulations (the “Register”) that identifies each Lender, including the Administrative Agent, of an interest in a portion of the Obligations, including the name and address of the Lender, and each Lender’s right to principal and stated interest, and each Lender’s obligations under this Agreement to participate in each Loan and any assignment of any such interest, obligation or right and (B) accounts in the applicable Register in accordance with its usual practice in which it shall record (1) the names and addresses of the Lenders and the Issuing Lenders, as applicable (and each change thereto pursuant to Section 2.24 and Section 10.6), (2) the Commitments of each applicable Lender, (3) the amount of each Loan and each funding of any participation described in clause (A) above, for Eurodollar Loans, the Interest Period applicable thereto, (4) the amount of any principal or interest due and payable or paid with respect to Loans recorded in the applicable Register, (5) the amount of the Reimbursement Obligations due and payable or paid and (6) any other payment received by the Administrative Agent from the Borrowers and its application to the Obligations.  The parties intend for all Obligations to be in registered form for Tax purposes.

 

(v)                              Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register.  The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Agents and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.

 

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(vi)                          In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each Issuing Lender and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Revolving Percentage.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs

 

(c)                               (i)  Notwithstanding anything else to the contrary contained in this Agreement, any Lender may assign all or a portion of its Term Loans to any Purchasing Borrower Party or any Investor Affiliated Lender (collectively, “Affiliated Lenders”) on a non-pro rata basis (A) through “Dutch auctions” open to all Lenders holding the relevant Term Loans, on a pro rata basis or (B) through open market purchases, in each case with respect to clauses (A) and (B), without the consent of the Administrative Agent or any other Person; provided that:

 

(A)                           with respect to any assignment to a Purchasing Borrower Party, no Event of Default has occurred or is continuing at the time of acceptance of bids for the “Dutch auction” or entry into a binding agreement with respect to open market purchases;

 

(B)                            the assigning Lender and Affiliated Lender purchasing such Term Loans, as applicable, shall execute and deliver to the Administrative Agent an assignment and assumption agreement substantially in the form of Exhibit M hereto or such other form as reasonably approved by the Administrative Agent (an “Affiliated Lender Assignment Agreement”) in lieu of an Assignment and Assumption;

 

(C)                            for the avoidance of doubt, Lenders shall not be permitted to assign Revolving Commitments or Revolving Loans to any Affiliated Lender;

 

(D)                           any Term Loans assigned to any Purchasing Borrower Party shall be automatically and permanently cancelled upon the effectiveness of such assignment and will thereafter no longer be outstanding for any purpose hereunder;

 

(E)                             no Purchasing Borrower Party may use the proceeds from Revolving Loans to purchase any Term Loans;

 

(F)                              no Term Loan may be assigned to any Investor Affiliated Lender pursuant to this Section 10.6(c) or otherwise, if after giving effect to such assignment, Investor Affiliated Lenders in the aggregate would own in excess of 25% of the Term Loans of any Class then outstanding (determined as of the time of such purchase and after giving effect to any simultaneous cancellations thereof) and any assignments to Investor Affiliated Lenders that would cause the Investor Affiliated Lenders to hold in excess of 25% of the aggregate principal amount of the Term Loans of any Class then outstanding shall be deemed void ab initio and the Register shall be modified to reflect a reversal of such assignment;

 

 

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(G)                           any purchases or assignments of Loans by an Affiliated Lender made through “Dutch auctions” shall be conducted pursuant to procedures to be established by the Administrative Agent that are consistent with this Section 10.6(c)(i) and are otherwise reasonably acceptable to the Borrower;

 

(H)                           by its acquisition of Term Loans, each relevant Affiliated Lender shall be deemed to have acknowledged and agreed that the Term Loans held by such Affiliated Lender shall be disregarded in both the numerator and denominator in the calculation of any Required Lender, Majority Facility Lender or other Lender vote (and the Term Loans held by such Affiliated Lender shall be deemed to be voted pro rata along with the other Lenders that are not an Affiliated Lender); provided that (x) such Affiliated Lender shall have the right to vote (and the Term Loans held by such Affiliated Lender shall not be so disregarded) with respect to any amendment, modification, waiver, consent or other action that requires the vote of all Lenders or all Lenders directly and adversely affected thereby, as the case may be, and (y) no amendment, modification, waiver, consent or other action shall (1) disproportionately affect such Affiliated Lender in its capacity as a Lender as compared to other Lenders of the same Class that are not Affiliated Lenders or (2) deprive any Affiliated Lender of its share of any payments which the Lenders are entitled to share on a pro rata basis hereunder, in each case without the consent of such Affiliated Lender; and

 

(I)                                 no Affiliated Lender shall be required to represent or warrant that it is not in possession of material non-public information with respect to any Parent Company, the Borrower and/or any Subsidiary thereof and/or their respective securities in connection with any assignment or purchase permitted by this Section 10.6(c).

 

(ii)                              Notwithstanding anything to the contrary in this Agreement, no Investor Affiliated Lender shall have any right to (I) attend (including by telephone) any meeting or discussions (or portion thereof) among the Administrative Agent or any Lender to which representatives of the Loan Parties are not invited, (II) receive any information or material prepared by Administrative Agent or any Lender or any communication by or among the Administrative Agent and/or one or more Lenders, except to the extent such information or materials have been made available to any Loan Party or its representatives or (III) make or bring (or participate in, other than as a passive participant in or recipient of its pro rata benefits of) any claim, in its capacity as a Lender, against the Administrative Agent, the Collateral Agent or any other Lender with respect to any duties or obligations or alleged duties or obligations of such Agent or any other such Lender under the Loan Documents.

 

(iii)                          Notwithstanding anything to the contrary contained herein, any Lender may, at any time, assign all or a portion of its rights and obligations under this Agreement in respect of its Term Loans to any Debt Fund Affiliate, and any Debt Fund Affiliate may, from time to time, purchase Term Loans (x) on a non-pro rata basis through “Dutch auctions” open to all applicable Lenders or (y) on a non-pro rata basis through open market purchases without the consent of the Administrative Agent or any other Person, in each case, notwithstanding the requirements set forth in subclauses (A) through (I) of clause (c)(i) above; provided that the Term Loans of all Debt Fund Affiliates shall not account for more than 49.9% of the amounts included in determining whether the Required Lenders or Majority

 

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Facility Lenders have (A) consented to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Loan Document or any departure by any Loan Party therefrom, or subject to the immediately succeeding paragraph, any plan of reorganization pursuant to the Bankruptcy Code, (B) otherwise acted on any matter related to any Loan Document or (C) directed or required the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document.  Any Term Loans acquired by any Debt Fund Affiliate and/or Investor Affiliated Lender may (but shall not be required to) be contributed to the Borrower for purposes of cancelling such Indebtedness (it being understood that any Term Loans so contributed shall be retired and cancelled immediately upon the contribution thereof); provided that upon any such cancellation, the aggregate outstanding principal amount of the Term Loans shall be deemed reduced, as of the date of such contribution, by the full par value of the aggregate principal amount of the Term Loans so contributed and cancelled, and each principal repayment installment with respect to the Term Loans pursuant to Section 2.8(a) shall be reduced pro rata by the full par value of the aggregate principal amount of Term Loans so contributed and cancelled.

 

(d)                              [Reserved.]

 

(e)                               Each Investor Affiliated Lender hereby agrees that if any Loan Party or any of their assets shall be subject to any voluntary or involuntary proceeding commenced under the Bankruptcy Code (“Bankruptcy Proceedings”), (i) such Investor Affiliated Lender shall not take any step or action in such Bankruptcy Proceeding to object to, impede or delay the exercise of any right or the taking of any action by the Administrative Agent (or the taking of any action by a third party that is supported by the Administrative Agent) in relation to such Investor Affiliated Lender’s claim with respect to its Term Loans (“Term Loan Claim”) (including, without limitation, objecting to any debtor in possession financing, use of cash collateral, grant of adequate protection, sale or disposition (including under 363 of the Bankruptcy Code), compromise, or plan of reorganization) so long as such Investor Affiliated Lender is treated in connection with such exercise or action the same or better terms as the other Lenders holding Term Loans and (ii) with respect to any matter requiring the vote of Lenders holding Term Loans during the pendency of a Bankruptcy Proceeding (including, without limitation, voting on any plan of reorganization), the Loans held by such Investor Affiliated Lender (and any Term Loan Claim with respect thereto) shall be deemed to be voted in the same proportion as the allocation of voting with respect to such matter by Lenders holding Term Loans who are not Investor Affiliated Lenders, so long as such Investor Affiliated Lender is treated in connection with the exercise of such right or taking of such action on the same or better terms as the other Lenders holding Term Loans.  Each Investor Affiliated Lender hereby irrevocably appoints the Administrative Agent (such appointment being coupled with an interest) as such Investor Affiliated Lender’s attorney-in-fact with full authority in the place and stead of such Investor Affiliated Lender and in the name of such Investor Affiliated Lender, from time to time in the Administrative Agent’s discretion to take any action and to execute any instrument the Administrative Agent may deem reasonably necessary to carry out the provisions of this clause (e).

 

(f)                                Upon any contribution of Term Loans to the Borrower or any Subsidiary and upon any purchase of Term Loans by a Purchasing Borrower Party, subject to Section 10.6(c)(i)(C), (A) the aggregate principal amount (calculated on the face amount thereof) of such Term Loans shall automatically be cancelled and retired by the Borrower on the date of such contribution or purchase (and, if requested by the Administrative Agent, with respect to a contribution of Term Loans, any applicable contributing Lender shall execute and deliver to the Administrative Agent an Assignment and Assumption, or such other form as may be reasonably requested by the Administrative Agent, in respect thereof pursuant to which the respective Lender assigns its interest in such Loans to the Borrower for immediate cancellation) and (B) the Administrative Agent shall record such cancellation or retirement in the Register.

 

 

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(g)                               In no event shall the Administrative Agent, in its capacity as such, be obligated to ascertain, monitor or inquire as to whether any Lender is an Investor Affiliated Lender or Debt Fund Affiliate nor shall Administrative Agent be obligated to monitor the number of Investor Affiliated Lenders or Debt Fund Affiliates or the aggregate amount of Term Loans held by Investor Affiliated Lenders or Debt Fund Affiliates.

 

(h)                              Any Lender may, without the consent of the Borrower or the Administrative Agent sell participations to one or more banks or other entities (other than to any natural person) (a “Participant”), but in any event not to a Person that the Administrative Agent has identified in a notice to the Lenders as a Defaulting Lender, in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Lenders and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 9.6 with respect to any payments made by such Lender to its Participants.  Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) is described in the first proviso of Section 10.1(a), and (2) directly affects such Participant.  Subject to paragraph (h)(i) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.19, 2.20 and 2.21 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law each Participant also shall be entitled to the benefits of Section 10.7(b) as though it were a Lender; provided that such Participant agrees to be subject to Section 10.7(a) as though it were a Lender.

 

(i)                                  A Participant shall not be entitled to receive any greater payment under Section 2.19 or 2.20 than the applicable Lender and their respective successors and assigns would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Representative Borrower’s consent to such participation (acknowledging the possibility of payment of such greater payment).  No Participant shall be entitled to the benefits of Section 2.20 unless such Participant complies with Section 2.20(e) or (f), as (and to the extent) applicable, as if such Participant were a Lender; provided that any documentation under those sections shall be provided by the Participant to the Participating Lender and the Representative Borrower.

 

(ii)                              Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

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(i)                                  Any Lender may, without the consent of or notice to the Administrative Agent or the Borrower, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (other than to any natural person) to secure obligations of such Lender, including any pledge or assignment to secure obligations to (i) a Federal Reserve Bank or any other central bank or (ii) any holder of, or trustee for the benefit of the holders of, such Lender’s Capital Stock, voting trust certificates, bonds, debentures, instruments and other evidence of Indebtedness, and all warrants, options and other rights to acquire the foregoing, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or Assignee for such Lender as a party hereto.  The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in this paragraph (i).

 

(j)                                  Disqualified Institutions; non-Qualified Persons.

 

(i)                                  No assignment or participation shall be made to any Person that (x) was a Disqualified Institution or (y) not a Qualified Person as of the date (the “Trade Date”) on which the assigning or participating, as applicable, Lender entered into a binding agreement to sell and assign or participate in all or a portion of its rights and obligations under this Agreement to such Person (unless the Borrower has consented to such assignment in writing in its sole and absolute discretion, in which case such Person will not be considered a Disqualified Institution for the purpose of such assignment or participation).  For the avoidance of doubt, with respect to any assignee that becomes a Disqualified Institution or a non-Qualified Person after the applicable Trade Date (including as a result of the delivery of a notice pursuant to, and/or the expiration of the notice period referred to in, the definition of “Disqualified Institution”), (x) such assignee shall not retroactively be disqualified from becoming a Lender and (y) the execution by the Borrower of an Assignment and Assumption with respect to such assignee will not by itself result in such assignee no longer being considered a Disqualified Institution or non-Qualified Person. Any assignment in violation of this clause (j)(i) shall not be void, but the other provisions of this clause (j) shall apply.

 

(ii)                              If any assignment or participation is made to any Disqualified Institution, its Affiliates or any Person who has represented that it was a Qualified Person as of the relevant Trade Date (but in fact was not a Qualified Person as of the relevant Trade Date) without the Borrower’s prior written consent in violation of clause (j)(i) above, or if any Person becomes a Disqualified Institution or an Affiliate thereof after the applicable Trade Date, the Borrower may, at its sole expense and effort, upon notice to the applicable Disqualified Institution or Affiliate or non-Qualified Person, as applicable, and the Administrative Agent, (A) terminate any Revolving Commitment of such Disqualified Institution or Affiliate or such non-Qualified Person, as applicable, and repay all obligations of the Borrower owing to such Disqualified Institution or Affiliate or such non-Qualified Person, as applicable, in connection with such Revolving Commitment, (B) in the case of outstanding Term Loans held by Disqualified Institutions or their respective Affiliates or such non-Qualified Person, purchase or prepay such Term Loan by paying the lower of (x) the principal amount thereof and (y) the amount that such Disqualified Institution or its Affiliate or such

 

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non-Qualified Person, as applicable, paid to acquire such Term Loans, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (C) require such Disqualified Institution,  Affiliate or non-Qualified Person, as applicable, to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 10.6), all of its interest, rights and obligations under this Agreement to one or more Eligible Assignees at the lower of (x) the principal amount thereof and (y) the amount that such Disqualified Institution or its Affiliates or such non-Qualified Person, as applicable, paid to acquire such interests, rights and obligations of such Term Loans, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder; provided that if any Lender (including any Disqualified Institution or Affiliate thereof or any non-Qualified Person that becomes a Lender) does not execute and deliver an Assignment and Assumption to the Administrative Agent within one Business Day after having received a request therefor, such Lender (including any Disqualified Institution or Affiliate or any non-Qualified Person thereof that becomes a Lender) hereby grants to the Borrower an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender, as assignor, any Assignment and Assumption necessary to effectuate any assignment in full of such Lender’s interests hereunder and the Borrower shall notify the Administrative Agent in advance of any exercise of such power of attorney.

 

(iii)                          Notwithstanding anything to the contrary contained in this Agreement, Disqualified Institutions or any of their Affiliates (A) will not (x) have the right to receive information, reports or other materials provided to Lenders by the Borrower, the Administrative Agent or any other Lender, (y) attend or participate in meetings attended by the Lenders and the Administrative Agent, or (z) access any electronic site established for the Lenders or confidential communications from counsel to or financial advisors of the Administrative Agent or the Lenders and (B) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Loan Document, each Disqualified Institution or its Affiliates, as applicable, will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Institutions consented to such matter, and (y) for purposes of voting on any plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws, each Disqualified Institution or its Affiliates, as applicable, party hereto hereby agrees (1) not to vote on such plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws, (2) if such Disqualified Institution or its Affiliates, as applicable, does vote on such plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws), and such vote shall not be counted in determining whether the applicable class has accepted or rejected such Plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws) and (3) not to contest any request by any party for a determination by the Bankruptcy Court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).

 

(iv)                          The Administrative Agent shall have the right, and the Borrower hereby expressly authorizes the Administrative Agent, to provide the list of Disqualified Institutions provided by the Borrower and any updates thereto from time to time (collectively, the “DQ List”) to each Lender requesting the same.

 

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(k)                              It is hereby agreed and understood that the Agents, the Lenders and their respective assignees may be required by certain Gaming Authorities to obtain a license or a finding of suitability in order to remain or become a Lender under this Agreement.   If any Gaming Authority shall determine that any Lender is not qualified as an approved financial source or otherwise does not meet the standards pursuant to the Gaming Regulations in the relevant jurisdiction, or any Gaming Authority with jurisdiction over the Gaming Business shall determine that any Lender does not meet its suitability standards (in any such case, a “Former Lender”), the Administrative Agent or the Borrower shall have the right (but not the duty) to designate a lender or lenders (in each case, a “Substitute Lender”, which may be any Lender or Lenders that agree to become a Substitute Lender and with the consent of the Administrative Agent, each Issuing Lender and the Borrower to the extent any such consent is provided for in Section 10.6(b)) that has agreed to assume the rights and obligations of the Former Lender, subject to receipt by the Administrative Agent of evidence satisfactory to the Administrative Agent that such Substitute Lender is a Qualified Person, or has a reasonable basis for a belief that the Substitute Lender is eligible to be a Qualified Person, and in compliance with Gaming Regulations.  The Substitute Lender shall assume the rights and obligations of the Former Lender under this Agreement pursuant to an Assignment and Assumption, which assumption shall be required to comply with, and shall become effective in accordance with, the provisions of Section 10.6(b); provided that the purchase price to be paid by the Substitute Lender to the Administrative Agent for the account of the Former Lender for such assumption shall equal the sum of (i) the unpaid principal amount of any Notes held or Loans made by the Former Lender plus accrued interest thereon, plus (ii) the Former Lender’s pro rata share of the aggregate amount of drawings under all Letters of Credit that have not been reimbursed by the Borrower, plus accrued interest thereon, plus (iii) such Former Lender’s pro rata share of accrued fees owing to such Former Lender to the date of the assumption; and, provided, further, the Borrower shall pay all Obligations owing to the Former Lender under the Loan Documents (including all obligations, if any, owing pursuant to Section 2.21, but excluding (x) contingent Obligations for which no claim has been asserted and (y) those amounts in respect of which the purchase price is being paid as provided above).  Each Lender agrees that if it becomes a Former Lender, upon payment to it by the Borrower of all such amounts, if any, owing to it under the Loan Documents, it will execute and deliver an Assignment and Assumption upon payment of such purchase price.

 

(l)                                  Notwithstanding the provisions of clause (k) of this Section 10.6, but subject to applicable Gaming Regulations, if any Lender becomes a Former Lender, and if the Administrative Agent or the Borrower fails to find a Substitute Lender pursuant to clause (k) of this Section 10.6 within any time period specified by the appropriate Gaming Authority for the withdrawal of a Former Lender (the “Withdrawal Period”), the Borrower shall immediately (i) prepay in full the outstanding principal amount of each Note held or Loan made by such Former Lender, together with accrued interest thereon to the earlier of (x) the date of payment or (y) the last day of any Withdrawal Period, and (ii) at the option of the Borrower either (A) place an amount equal to such Former Lender’s Revolving Percentage in each Letter of Credit in a separate cash collateral account with the Administrative Agent for each outstanding Letter of Credit, which amount will be applied by the Administrative Agent to satisfy the Borrower’s reimbursement obligations to the respective Issuing Lender in respect of drawings under the applicable Letter of Credit or (B) terminate the Revolving Loan Commitment of such Former Lender at which time the other Lenders’ Revolving Percentages will be automatically adjusted as a result thereof; provided, that the option specified in this clause (B) may only be exercised if, immediately after giving effect thereto no Lender’s outstanding Revolving Loans, when added to the product of (a) such Lender’s Revolving Percentage and (b) the aggregate amount of all L/C Obligations then outstanding, would exceed such Lender’s Revolving Commitment at such time.

 

(m)                          Subject to the last sentence of this Section 10.6(m), each Lender agrees that all participations and assignments made hereunder shall be subject to, and made in compliance with, all Gaming Regulations applicable to lenders.  The Borrower hereby acknowledges that no Lender or Agent shall have the responsibility of determining whether or not a potential assignee of such Lender would be a Qualified Person under the Gaming Regulations of any such jurisdiction (provided that any relevant Gaming Authority may nonetheless determine such assignee not to be a Qualified Person).

 

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10.7              Adjustments; Set-off.  (a)  Except to the extent that this Agreement provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender (a “Benefited Lender”) shall at any time receive any payment of all or part of the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by setoff, pursuant to events or proceedings of the nature referred to in Section 8.1(f), or otherwise), other than in connection with assignments hereunder, in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender’s Obligations, such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender’s Obligations, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

 

(b)                              In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, with the consent of the Administrative Agent upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) after the expiration of any cure or grace periods, to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final but excluding trust accounts, employee benefit accounts, payroll, petty cash, tax and withholding accounts and the like), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.26 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders and the Lenders and (y) such Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

10.8              Counterparts.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of this Agreement by facsimile transmission or by electronic mail as a “.pdf” or “.tif” attachment shall be effective as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

 

10.9              Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  Without limiting the foregoing provisions of this Section, if and to the extent that the enforceability of any provision of this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or any Issuing Lender, then such provision shall be deemed to be in effect only to the extent not so limited.

 

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10.10            Integration; Survival.  This Agreement and the other Loan Documents represent the entire agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof.  The provisions of Section 2.19, Section 2.20, Section 2.21 and Section 10.5, Section 10.14 and Section 9 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

 

10.11            GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

10.12            Submission to Jurisdiction; Waivers.  Each party to this Agreement hereby irrevocably and unconditionally:

 

(a)                               agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise, in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in a forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable Law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.  Nothing in this Agreement or any other Loan Document shall affect (i) any right that any Agent may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document in any other jurisdiction to realize on the Collateral or any other security for the Secured Obligations or to enforce a judgment or other court order in favor of the Collateral Agent or the Administrative Agent, (ii) any party from bringing any legal action or proceeding in any jurisdiction for the recognition and enforcement of any judgment or (iii) if all such New York courts decline jurisdiction over any Person or decline (or in the case of the Federal District Court, lack) jurisdiction over any subject matter of such action or proceeding, a legal action or proceeding from being brought with respect thereto in another court having jurisdiction;

 

(b)                              waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in clause (a) of this Section 10.12.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court;

 

(c)                               agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth in Section 10.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

(d)                              agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

164

 

(e)                               waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

10.13            Acknowledgments.  The Borrower hereby acknowledges that:

 

(a)                               it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

 

(b)                              neither the Agents nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Agents and Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)                               no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders.

 

10.14            Confidentiality.  Each of the Agents, the Lead Arrangers, each Issuing Lender and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors on a “need to know” basis solely in connection with the Transactions and the administration of this Agreement and the other Loan Documents (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential, and such Person shall be responsible for its Affiliates’ compliance with this Section 10.14), (b) to the extent requested by any regulatory or self-regulatory authority (in which case such Person shall, except with respect to any audit or examination conducted by bank accountants or any Governmental Authority or regulatory or self-regulatory authority exercising examination or regulatory authority, to the extent practicable and permitted by law, (i) inform the Borrower promptly in advance thereof and (ii) use commercially reasonable efforts to ensure that any information so disclosed is accorded confidential treatment), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process (in which case such Person shall (i) to the extent practicable and permitted by law, inform the Borrower promptly in advance thereof and (ii) use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement (in each case, other than a Disqualified Institution), (g) with the consent of the Borrower, (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent, any Lead Arranger, any Issuing Lender or any Lender on a nonconfidential basis from a source not known by such Person to be bound by any confidentiality obligations owing to the Investors, any Parent Company or any Group Member, (i) subject to an agreement containing provisions substantially the same as those of this Section, to any credit insurance provider or direct, indirect, actual or prospective counterparty (and its advisor) to any swap, derivative or securitization transaction related to the obligations under this Agreement or (j) on a confidential basis to (i) any rating agency in connection with rating any Parent Company, the Borrower or their Subsidiaries or the Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities.  For the purposes of this Section, “Information” means all information received from or on behalf of the Investors, any Parent Company, any Group Member or any of their representatives in connection with the transactions contemplated by this Agreement relating to any Parent Company or any Group Member and their respective businesses, the Investors or the Transactions (including any information obtained by any Agent, any Issuing Lender, any Lender or any Lead Arranger, or any of their respective Affiliates, based on a review of the books and records relating to the Borrower and/or any of their Subsidiaries and their respective Affiliates in connection with the transactions contemplated by this Agreement from time to time, including prior to the date hereof).  For the avoidance of doubt, in no event shall any disclosure of any Information be made to a Person that is a Disqualified Institution at the time of disclosure.

 

165

 

10.15            Release of Collateral and Guarantee Obligations; Subordination of Liens.

 

(a)                               The Lenders and each Agent (and each other Secured Party by accepting the benefits of the Collateral) hereby irrevocably agree that the Liens granted to the Secured Parties by the Loan Parties on any Collateral shall be automatically released (i) in full, as set forth in clause (b) below, (ii) upon the Disposition of such Collateral to any Person other than another Loan Party, to the extent such Disposition is permitted hereunder (and the Administrative Agent and the Collateral Agent may rely conclusively on a certificate to that effect provided to it by any Loan Party upon its reasonable request without further inquiry), (iii) to the extent such Collateral is comprised of property leased to a Loan Party by a Person that is not a Loan Party, upon termination or expiration of such lease, (iv) if the release of such Lien is approved, authorized or ratified in writing by the Required Lenders (or such other percentage of the Lenders whose consent may be required in accordance with Section 10.1), (v) to the extent the property constituting such Collateral is owned by any Guarantor, upon the release of such Guarantor from its Guarantee Obligations under the Guarantee and Collateral Agreement so long as such Guarantor is no longer a Loan Party hereunder, and (vi) to the extent such Collateral ceases to be Collateral.  Any such release shall not in any manner discharge, affect, or impair the Secured Obligations or any Liens (other than those being released) upon (or obligations (other than those being released) of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral except to the extent otherwise released in accordance with the provisions of the Loan Documents.  Additionally, the Lenders (and each other Secured Party by accepting the benefits of the Collateral) hereby irrevocably agree that the Guarantors shall be released from the Guarantees upon consummation of any transaction permitted hereunder resulting in such Subsidiary ceasing to constitute a Restricted Subsidiary, or otherwise becoming an Excluded Subsidiary, in each case, solely to the extent such Subsidiary ceasing to constitute a Restricted Subsidiary or otherwise becoming an Excluded Subsidiary is not prohibited by this Agreement, or, in the case of a Successor Holdings, the prior Holdings shall be released in accordance with the conditions set forth in Section 7.11.  The Lenders (and each other Secured Party by accepting the benefits of the Collateral) hereby authorize the Administrative Agent and the Collateral Agent, as applicable, at the expense of the Borrower, to execute and deliver any instruments, documents, and agreements necessary or desirable to evidence and confirm the release of any Guarantor or Collateral pursuant to the foregoing provisions of this paragraph, all without the further consent or joinder of any Lender.  Any representation, warranty or covenant contained in any Loan Document relating to any such Collateral or Guarantor shall no longer be deemed to be repeated solely with respect to such Collateral or Guarantor.

 

(b)                              Notwithstanding anything to the contrary contained herein or any other Loan Document, upon the Facility Termination Date, upon request of the Borrower, the Administrative Agent and/or Collateral Agent, as applicable, shall (without notice to, or vote or consent of, any Secured Party) take such actions, at the expense of the Borrower, as shall be reasonably requested to evidence termination or release of its security interest in all Collateral, and to release all obligations under any Loan Document.  Any such release of Obligations shall be deemed subject to the provision that such Obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.

 

166

 

(c)                               The Lenders (and each other Secured Party by accepting the benefits of the Collateral) hereby agree that the Agents are authorized to, at the request of the Borrower, enter into subordination, intercreditor and/or similar agreements to subordinate the Liens of the Collateral Agent in the Collateral to Permitted Liens with respect to Indebtedness.

 

10.16            Waivers of Jury Trial. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

10.17            USA PATRIOT ACT.  The Administrative Agent, the Collateral Agent and each Lender and Issuing Lender hereby notifies the Loan Parties that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or Issuing Lender or the Administrative Agent or Collateral Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act.  Each Loan Party shall, and shall cause each of its Subsidiaries to, provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Administrative Agent, the Collateral Agent or any Lender or Issuing Lender in order to assist the Administrative Agent, the Collateral Agent and the Lenders and Issuing Lenders in maintaining compliance with the Patriot Act.

 

10.18            Lender Action.  Each Lender (and each other Secured Party by accepting the benefits of the Collateral) agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party or any other obligor under any of the Loan Documents or the Specified Hedge Agreements or the Cash Management Documents (including the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, without the prior written consent of the Administrative Agent.

 

10.19            Marshalling; Payments Set Aside.  Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor of any Loan Party or any other Person or against or in payment of any or all of the Secured Obligations.  To the extent that any Loan Party makes a payment or payments to any Agent or Lenders (or to an Agent, on behalf of Lenders), or any Agent or Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

 

10.20            Interest Rate Limitation.  Notwithstanding anything herein to the contrary, the interest rate applicable to any Loan, together with all fees, charges and other amounts which may be treated as interest on such Loan under applicable law (collectively, the “Interest Charges”), shall not exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged,

 

167

 

taken, received or reserved by a Lender holding such Loan in accordance with applicable law. If any Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to Borrower. In determining whether the interest contracted for, charged, or received by an Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. To the extent permitted by applicable Law, the Interest Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 10.20 shall be cumulated and the Interest Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.  Thereafter, interest hereunder shall be paid at the rate(s) of interest and in the manner provided in this Agreement, unless and until the rate of interest again exceeds the Maximum Rate, and at that time this Section 10.20 shall again apply.

 

10.21            Application of Gaming Regulations.  This Agreement and the Security Documents are subject to the Gaming Regulations, including Liquor Laws.  Without limiting the foregoing, the Agents and the Lenders acknowledge that rights, remedies and powers in or under this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of the Gaming Regulations and Liquor Laws and only to the extent that required approvals (including prior approvals) are obtained from the requisite Gaming Authorities and such other Governmental Authorities.  Each of the Lenders and the Agents agrees, at the request of the Borrower or the respective Gaming Authority, to cooperate with the applicable Gaming Authorities in connection with the administration of their regulatory jurisdiction over the Borrower to the extent not inconsistent with the internal policies of such Lender or Agent and any applicable legal or regulatory restrictions, including the provision of such documents or other information as may be requested by any such Gaming Authorities relating to the Borrower, any of its Affiliates or the Loan Documents.  Notwithstanding any other provision of this Agreement, the Borrower expressly authorizes, and will cause each other Loan Party to authorize, each Agent and each Lender to cooperate with the applicable Gaming Authorities as described above and releases each Agent and each Lender from any liability for any such cooperation or related disclosure.  Notwithstanding anything to the contrary, all actions taken by each Lender and each Agent pursuant to this Section 10.21 shall be at sole reasonable expense of the Borrower, who hereby agrees to reimburse all reasonable expenses, including attorneys’ fees, incurred by each Lender and each Agent in connection with such actions in accordance with Section 10.5(e).

 

10.22            No Advisory or Fiduciary Relationship.  In connection with all aspects of the transactions contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:  (i) (A) the arranging and other services regarding this Agreement provided by the Agents, the Lenders and the Lead Arrangers are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Lenders and the Lead Arrangers, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Agents, the Lenders and the Lead Arrangers is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither any Agent nor any Lender or Lead Arranger has any obligation to the Borrower or any of its Affiliates with respect to the transactions

 

168

 

contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Agents, each Lender and the Lead Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Agents nor any Lender or any Arranger has any obligation to disclose any of such interests to the Borrower or any of its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against any Agent, any Lender or any Lead Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

10.23            Conflicts.  Notwithstanding anything to the contrary contained herein or in any other Loan Document (but excluding any intercreditor or subordination agreement), in the event of any conflict or inconsistency between this Agreement and any other Loan Document (excluding any intercreditor or subordination agreement), the terms of this Agreement shall govern and control; provided that in the case of any conflict or inconsistency between any intercreditor or subordination agreement and any other Loan Document, the terms of such intercreditor or subordination agreement shall govern and control.

 

10.24                  Post-Closing Covenants.

 

Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, the parties hereto acknowledge and agree that:

 

(a)                               the Borrower shall have delivered to the Collateral Agent the items required by Section 6.8(b) for the properties identified on Schedule 10.24 within 60 days after the Closing Date (as such date may be extended (with respect to a given action or actions) at the sole discretion of the Administrative Agent); provided that the Borrower shall not be in violation of this clause (a) in respect of any Leasehold where the consent of any third party is necessary to deliver the Mortgage contemplated by Schedule 10.24 with respect to such Leasehold (and such consent is not obtained after the Borrower’s use of commercially reasonable efforts to obtain the same); and

 

(b)                              the Borrower shall (x) obtain as promptly as possible, but in any event within 150 days after the Closing Date (as such date may be extended at the sole discretion of the Administrative Agent), all approvals of any Gaming Authority (collectively, the “Gaming Commission Approvals”) required to pledge, or cause to be pledged, the Capital Stock of The Sands Regent, LLC, The Primadonna Company, LLC, Flamingo Paradise Gaming, LLC, Plantation Investments, LLC, Dayton Gaming, LLC and California Prospectors, Ltd.  pursuant to the Guarantee and Collateral Agreement and (y) upon receipt of the Gaming Commission Approvals, be required as promptly as possible, but in any event within five Business Days after such date of receipt, to pledge, and cause to be pledged, the Capital Stock of The Sands Regent, LLC, The Primadonna Company, LLC, Flamingo Paradise Gaming, LLC, Plantation Investments, LLC, Dayton Gaming, LLC, California Prospectors, Ltd.  in accordance with the terms of the Guarantee and Collateral Agreement.

 

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

 

169

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

	
 
    	
AFFINITY   GAMING, as Borrower
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name:
    	
Walter   Bogumil
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President, Chief Financial Officer and Treasurer
    

 

Signature page to Credit Agreement

 

 

	
 
    	
CREDIT   SUISSE AG, CAYMAN ISLANDS BRANCH
    
	
 
    	
as   Administrative Agent, Issuing Lender and Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ Whitney Gaston
    
	
 
    	
 
    	
Name:
    	
Whitney   Gaston
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ Nicholas Goss
    
	
 
    	
 
    	
Name:
    	
Nicholas   Goss
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    

 

Signature page to Credit Agreement

 

 

	
 
    	
MACQUARIE   CAPITAL FUNDING LLC,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ Lisa Grushkin
    
	
 
    	
 
    	
Name:
    	
Lisa   Grushkin
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ Ayesha Farooqi
    
	
 
    	
 
    	
Name:
    	
Ayesha   Farooqi
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    

 

Signature page to Credit Agreement

 

 

	
 
    	
FIFTH   THIRD BANK,
    
	
 
    	
as   an Issuing Lender and Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ Andy Tessema
    
	
 
    	
 
    	
Name:
    	
Andy   Tessema
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

Signature page to Credit Agreement

 

 

EXHIBIT B

 

FORM OF GUARANTEE AND COLLATERAL AGREEMENT

 

[See attached]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit B-1

 

	
 
    

 

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

AFFINITY GAMING,

 

and

 

THE OTHER GRANTORS PARTY HERETO,

 

in favor of

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
 as Collateral Agent

 

Dated as of July 1, 2016

 

 

 

 

	
 
    

 

 

TABLE OF CONTENTS

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SECTION 1.
    	
DEFINED TERMS
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Definitions
    	
2
    
	
1.2
    	
Interpretation
    	
5
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    	
Guarantee
    	
5
    
	
 
    	
 
    	
 
    
	
2.1
    	
Guarantee
    	
5
    
	
2.2
    	
Right   of Contribution
    	
6
    
	
2.3
    	
No   Subrogation
    	
6
    
	
2.4
    	
Amendments, etc.   with respect to the Guaranteed Obligations
    	
6
    
	
2.5
    	
Guarantee   Absolute and Unconditional
    	
7
    
	
2.6
    	
Reinstatement
    	
8
    
	
2.7
    	
Payments
    	
8
    
	
2.8
    	
Information
    	
8
    
	
2.9
    	
Keepwell
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    	
GRANT OF SECURITY INTEREST
    	
9
    
	
 
    	
 
    	
 
    
	
3.1
    	
Grant   of Security Interests
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    	
REPRESENTATIONS AND WARRANTIES
    	
10
    
	
 
    	
 
    	
 
    
	
4.1
    	
Representations   in Credit Agreement
    	
10
    
	
4.2
    	
Title;   No Other Liens
    	
11
    
	
4.3
    	
Names;   Jurisdiction of Organization; Chief Executive Office
    	
11
    
	
4.4
    	
Pledged   Stock; Pledged Notes
    	
11
    
	
4.5
    	
Intellectual   Property
    	
11
    
	
4.6
    	
Chattel   Paper
    	
11
    
	
4.7
    	
Commercial   Tort Claims
    	
12
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    	
COVENANTS
    	
12
    
	
 
    	
 
    	
 
    
	
5.1
    	
Covenants   in Credit Agreement
    	
12
    
	
5.2
    	
Investment   Property
    	
12
    
	
5.3
    	
Perfected   Security Interests; Defense of Claims
    	
13
    
	
5.4
    	
Commercial   Tort Claims
    	
13
    
	
5.5
    	
Intellectual   Property
    	
13
    
	
 
    	
 
    	
 
    
	
SECTION 6.
    	
REMEDIAL PROVISIONS
    	
13
    
	
 
    	
 
    	
 
    
	
6.1
    	
Certain   Matters Relating to Receivables
    	
14
    
	
6.2
    	
Certain   Matters Relating to Receivables; Grantors Remain Liable
    	
14
    
	
6.3
    	
Pledged   Securities
    	
15
    
	
6.4
    	
Intellectual   Property
    	
15
    
	
6.5
    	
Proceeds   to be Turned Over To Collateral Agent
    	
16
    
	
6.6
    	
Application   of Proceeds
    	
16
    
	
6.7
    	
Code   and Other Remedies
    	
16
    
	
6.8
    	
Private   Sales
    	
17
    
	
6.9
    	
Deficiency
    	
17
    
	
 
    	
 
    	
 
    
	
SECTION 7.
    	
THE COLLATERAL AGENT
    	
17
    

 

i

 

TABLE OF CONTENTS (cont’)

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
7.1
    	
Collateral   Agent’s Appointment as Attorney-in-Fact, etc.
    	
17
    
	
7.2
    	
Duty   of Collateral Agent
    	
19
    
	
7.3
    	
Execution   of Financing Statements
    	
19
    
	
7.4
    	
Authority   of Collateral Agent
    	
19
    
	
 
    	
 
    	
 
    
	
SECTION 8.
    	
MISCELLANEOUS
    	
20
    
	
 
    	
 
    	
 
    
	
8.1
    	
Amendments   in Writing
    	
20
    
	
8.2
    	
Notices
    	
20
    
	
8.3
    	
No   Waiver by Course of Conduct; Cumulative Remedies
    	
20
    
	
8.4
    	
Enforcement   Expenses; Indemnification
    	
20
    
	
8.5
    	
Successors   and Assigns
    	
20
    
	
8.6
    	
Set-Off
    	
20
    
	
8.7
    	
Counterparts
    	
20
    
	
8.8
    	
Severability
    	
21
    
	
8.9
    	
Section Headings
    	
21
    
	
8.10
    	
Integration
    	
21
    
	
8.11
    	
GOVERNING   LAW
    	
21
    
	
8.12
    	
Submission   To Jurisdiction; Waivers
    	
21
    
	
8.13
    	
Acknowledgements
    	
22
    
	
8.14
    	
Additional   Guarantors and Grantors
    	
22
    
	
8.15
    	
Releases
    	
22
    
	
8.16
    	
WAIVER   OF JURY TRIAL
    	
22
    
	
8.17
    	
Credit   Agreement Governs
    	
22
    
	
8.18
    	
Compliance   with Gaming Regulations
    	
22
    
	
8.19
    	
Compliance   with Missouri Gaming Law
    	
24
    

 

 

 

 

SCHEDULES

 

	
Schedule   1
    	
Investment   Property
    	
 
    
	
Schedule   2
    	
Legal   Name, Jurisdictions of Organization and Organizational Identification Number
    	
 
    
	
Schedule   3
    	
Intellectual   Property
    	
 
    
	
Schedule   4
    	
Commercial   Tort Claims
    	
 
    

 

ANNEX

 

	
Annex   I
    	
Assumption   Agreement
    	
 
    

 

 

 

 

 

 

 

ii

 

GUARANTEE AND COLLATERAL AGREEMENT

 

This GUARANTEE AND COLLATERAL AGREEMENT (as amended, restated, replaced, refinanced, supplemented, waived and/or otherwise modified from time to time, this “Agreement”), dated as of July 1, 2016, made by each Grantor (as defined below) signatory hereto, in favor of CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH (“Credit Suisse”), as Collateral Agent (in such capacity, together with its successors and permitted assigns, the “Collateral Agent”) for the Secured Parties, including the banks and other financial institutions or Persons from time to time parties to the Credit Agreement (the “Lenders”), dated as of the date hereof (as amended, restated, replaced, refinanced, supplemented, waived and/or otherwise modified from time to time, the “Credit Agreement”), among AFFINITY GAMING, a Nevada corporation, the Lenders and Issuing Lenders party thereto from time to time and Credit Suisse, as Administrative Agent and Collateral Agent.

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, pursuant to the Credit Agreement, the other Loan Documents, and the other agreements executed in connection therewith, including without limitation, any Specified Hedge Agreements and Cash Management Documents, the Secured Parties have severally agreed to make extensions of credit and other financial accommodations to the Borrower (and in the case of the Specified Hedge Agreements and Cash Management Documents, the Group Members) upon the terms and subject to the conditions set forth therein;

 

WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Grantor;

 

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses;

 

WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit and other financial accommodations under the Credit Agreement, the other Loan Documents, and the other agreements executed in connection therewith, including without limitation, any Specified Hedge Agreements and Cash Management Documents; and

 

WHEREAS, it is a condition precedent to the obligation of the Secured Parties to make their respective financial accommodations or extensions of credit to the Borrower under the Credit Agreement and the other Loan Documents, that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent, the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Secured Parties to make their respective extensions of credit or other financial accommodations to the Borrower under the Credit Agreement, the other Loan Documents, and the other agreements executed in connection therewith, including without limitation, any Specified Hedge Agreements and Cash Management Documents, each Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:

 

SECTION 1.    DEFINED TERMS

 

 

1.1       Definitions.  (a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms are used herein as defined in the New York UCC: “Accession”, “Account”, “Account Debtor”, “As-Extracted Collateral”, “Cash”, “Certificated Security”, “Chattel Paper”, “Commercial Tort Claim”, “Commodities Account”, “Deposit Account”, “Document”, “Electronic Chattel Paper”, “Equipment”, “Fixture”, “General Intangible”, “Goods”, “Instrument”, “Inventory”, “Letter-of-Credit Right”, “Record”, “Securities Account”, “Security”, “Supporting Obligations” and “Uncertificated Securities”.

 

(b)        The following terms shall have the following meanings:

 

“Agreement” has the meaning specified in the preamble hereto.

 

“Collateral” has the meaning specified in Section 3.1.

 

“Collateral Account” means any collateral account established by the Collateral Agent as provided in Section 6.5.

 

“Collateral Agent” has the meaning specified in the preamble hereto.

 

“Copyright Licenses” means all written agreements naming any Grantor as licensor or licensee, granting any right under any Copyright, including, without limitation, the grant of rights to exploit materials derived from any Copyright.

 

“Copyrights” means (i) all copyrights arising under the laws of the United States, multinational or foreign laws or otherwise, whether registered or unregistered and whether published or unpublished (including, without limitation, those listed in Schedule 3), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) the right to obtain all renewals thereof, (iii) all income, royalties, damages and payments now and hereafter due and/or payable under and with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith and damages and payments for past or future infringements thereof, (iv) the right to sue for past, present and future infringements thereof and (v) all rights corresponding thereto throughout the world in any and all media, whether now existing or hereafter developed.

 

“Direct Secured Obligations” means, with respect to any Loan Party, any Secured Obligation of such Loan Party in its capacity as a borrower under the Credit Agreement or a counterparty obligor with respect to a Cash Management Document or a Specified Hedge Agreement.

 

“Gaming Stock” has the meaning specified in Section 8.18(b).

 

“Grantors” means the collective reference to each signatory hereto (other than the Collateral Agent) together with any other entity that may become a party hereto as provided herein and, in the event of a Holding Company Election, shall also include Holdings from and after the Joinder Date.

 

“Guaranteed Obligations” has the meaning specified in Section 2.1(a).

 

“Guarantors” means the collective reference to the Borrower and the Subsidiary Guarantors that are or may become a party hereto as provided herein and, in the event of a Holding Company Election, shall also include Holdings from and after the Joinder Date.

 

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“Intellectual Property” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, now existing or hereafter adopted, created or acquired, including, without limitation, the Copyrights, the Patents, the Trademarks, domain names, technology, trade secrets, know-how and processes, any applicable goodwill associated with each of the foregoing and all rights to sue at law or in equity or otherwise recover for any past, present or future infringement, misappropriation or other violation or impairment thereof, including the right to receive all proceeds and damages therefrom.

 

“Intellectual Property Licenses” means the collective reference to Copyright Licenses, Patent Licenses, and Trademark Licenses.

 

“Intercompany Note” means any promissory note evidencing loans made by any Grantor to Holdings, the Borrower or any of its Subsidiaries.

 

“Investment Accounts” means any and all Securities Accounts, brokerage accounts and commodities accounts now owned or hereafter acquired by such Person, or in which such Person has or acquires any rights.

 

“Investment Property” means the collective reference to all “investment property” as such term is defined in Section 9-102(a)(49) of the New York UCC now owned or hereafter acquired by such Person or in which such Person has or acquires any rights and, in any event, shall mean and include, without limitation, (i) all “certificated securities”, “uncertificated securities”, “security entitlements”, “commodity contracts”, “commodity accounts” (as all such terms are defined in the UCC) and Securities Accounts of such Person, (ii) any other securities, whether certificated or uncertificated, including, but not limited to, stocks, bonds, interests in limited liability companies, partnership interests, treasuries, certificates of deposit, and mutual fund shares, (iii) all securities entitlements of such Person, including, but not limited to, the rights of such Person to any Investment Accounts and the financial assets held by a financial intermediary in such accounts and any free credit balance or other money owing by any financial intermediary with respect to such accounts, (iv) all commodity contracts of such Person and (v) all Investment Accounts of such Person, and shall in any event, include all Pledged Stock.

 

“Issuers” means the collective reference to each issuer of a Pledged Security.

 

“Maximum Amount” has the meaning specified in Section 2.1(b).

 

“Missouri Licensee” has the meaning specified in Section 8.19(a).

 

“Missouri Licenses” has the meaning specified in Section 8.19(a).

 

“Missouri Commission” has the meaning specified in Section 8.19(a).

 

“New York UCC” means the Uniform Commercial Code from time to time in effect in the State of New York.

 

“Patent License” means all written agreements providing for the grant by or to any Grantor of any right to manufacture, use, sell or otherwise exploit any invention covered in whole or in part by a Patent.

 

“Patents” means (i) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, including, without limitation, any of the foregoing referred to in Schedule 3, (ii) all applications for letters patent of the United States, any other country or any political subdivision thereof, and all reissues, divisionals, continuations and continuations in part, 

 

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renewal applications and all renewals thereof, including, without limitation, any of the foregoing referred to in Schedule 3, (iii) all rights to obtain any reissues, rexaminations or extensions of the foregoing and (iv) the right to sue for past, present and future infringements thereof.

 

“Pledged MO Collateral” has the meaning specified in Section 8.19(b).

 

“Pledged Notes” means (i) all promissory notes listed on Schedule 1 and (ii) all Intercompany Notes and other promissory notes at any time issued to or held by any Grantor the aggregate principal amount of which is in excess of $2,500,000 individually; provided that in the event the aggregate principal amount of all promissory notes excluded under clause (ii) due to the principal amounts being below $2,500,000 individually shall exceed $5,000,000, Pledged Notes shall include such promissory notes designated by the Borrower to the extent necessary to eliminate such excess.

 

“Pledged Securities” means the collective reference to the Pledged Notes and the Pledged Stock.

 

“Pledged Stock” means the collective reference to (i) all shares of Capital Stock of each Grantor’s Subsidiaries as listed on Schedule 1 (including, for the avoidance of doubt and subject to the receipt of Required Gaming Approvals, Gaming Stock) and (ii) any other shares, stock certificates, options, interests or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect and that are required to become Collateral pursuant to Section 3.1.

 

“Proceeds” means all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall include, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

 

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time such Swap Obligation is incurred or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder.

 

“Receivable” means any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).

 

“Required Gaming Approvals” means any approvals and consents required under any Gaming Regulations (including, without limitation, the approvals required in Section 10.24 of the Credit Agreement) in connection with the pledge of any of the Pledged Stock or Gaming Collateral of a gaming licensee or registered company under applicable Gaming Regulations and the transactions contemplated by the Loan Documents.

 

“Sale Proceeds” means (i) the proceeds from the sale of Borrower or one or more of the other Grantors, as a going concern or from the sale of any Grantor’s business as a going concern, (ii) the proceeds from another sale or disposition of any assets of the Grantors that includes any gaming or racing license, permit or approval or benefits from any gaming or racing license, permit or approval or where the assets sold have the benefit of any gaming or racing license, permit or approval or (iii) any other economic value (whether in the form of cash or otherwise) received or distributed (whether pursuant to any bankruptcy or insolvency proceeding, liquidation proceeding or otherwise) that is associated with the gaming or racing licenses, permits or approvals.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

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“Tax or Trust Funds” means, with respect to any Grantor, cash, cash equivalents or other assets comprised solely of (i) funds used for payroll and payroll taxes and other employee benefit payments to or for the benefit of such Grantor’s employees, (ii) all taxes required to be collected, remitted or withheld (including, without limitation, federal and state withholding taxes (including the employer’s share thereof)) and (iii) any other funds which such Grantor holds in trust or as an escrow or fiduciary for another person (which is not a Grantor) in the ordinary course of business.

 

“Trademark License” means all written agreements providing for the grant by or to any Grantor of any right to use any Trademark.

 

“Trademarks” means (i) all United States and foreign trademarks, trade names, corporate names, company names, business names, domain names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof, or otherwise, all common-law rights related thereto, including, without limitation, any registrations and applications for registrations in respect of the foregoing referred to in Schedule 3, and all goodwill of the business connected with the use of or symbolized by any of the foregoing, (ii) the right to obtain all renewals thereof and (iii) the right to sue for past, present or future infringement and dilutions thereof.

 

1.2       Interpretation.  (a) Sections 1.2, 1.7, 1.8 and 1.9 of the Credit Agreement are applicable to this Agreement as and to the extent set forth therein.

 

(b)        Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

 

SECTION 2.    Guarantee

 

2.1       Guarantee.  (a) Each of the Guarantors hereby, jointly and severally, absolutely, unconditionally and irrevocably, guarantees to the Collateral Agent for the ratable benefit of the Secured Parties and their respective permitted successors, indorsees, transferees and assigns, the prompt, full and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations (the “Guaranteed Obligations”), including, without limitation, any interest therein (including, without limitation, interest as provided in the Credit Agreement, the Specified Agreements and the Cash Management Documents accruing after the filing of a petition initiating any insolvency proceedings, whether or not such interest accrues or is recoverable against the Borrower after the filing of such petition for purposes of the Bankruptcy Code or is an allowed claim in such proceeding); provided, however that that the term “Guaranteed Obligations” as it applies to any Loan Party in its capacity as a Guarantor hereunder shall exclude any Direct Secured Obligations of such Loan Party.

 

(b)        Anything herein or in any other Loan Document, Specified Hedge Agreement or Cash Management Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder shall not exceed the maximum amount which could be paid by such Guarantor without rendering this guarantee void or voidable as would otherwise be held or determined by a court of competent jurisdiction in any action or proceeding involving any state or Federal bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2) (the “Maximum Amount”).

 

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(c)        Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor on the date hereof under this Agreement without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Collateral Agent or any other Secured Party hereunder.  It is the intention of each Guarantor and the Secured Parties that each Guarantor’s obligations hereunder shall be at all times, but not in excess of, the Maximum Amount.

 

(d)        The guarantee contained in this Section 2 shall remain in full force and effect until the Facility Termination Date.

 

(e)        Except as provided in Section 8.15, no payment made by the Borrower, any of the other Guarantors, any other guarantor or any other Person or received or collected by the Collateral Agent or any other Secured Party from the Borrower, any of the other Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or any payment received or collected from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the Maximum Amount of such Guarantor hereunder until the Facility Termination Date.

 

2.2       Right of Contribution.  Each Subsidiary Guarantor hereby agrees that, to the extent that a Subsidiary Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against any other Subsidiary Guarantor hereunder which has not paid its proportionate share of such payment.  Each Subsidiary Guarantor’s right of contribution shall be subject to the terms and conditions of Section 2.3.  The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Subsidiary Guarantor to the Collateral Agent and the other Secured Parties, and each Subsidiary Guarantor shall remain liable to the Collateral Agent and the other Secured Parties for the Guaranteed Obligations up to the Maximum Amount of such Subsidiary Guarantor hereunder.

 

2.3       No Subrogation.  Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Collateral Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Collateral Agent or any other Secured Party against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Collateral Agent or any other Secured Party for the payment of the Guaranteed Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor, and such Guarantor shall not exercise any right or remedy with respect to such rights, in respect of payments made by such Guarantor hereunder, until the Facility Termination Date.  If any amount shall be paid to any Guarantor on account of such subrogation rights at any time before the Facility Termination Date, such amount shall be held by such Guarantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Guarantor, and shall, promptly upon receipt (but in any event, within 1 Business Day) by such Guarantor, be turned over to the Collateral Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if required), to be applied against the Secured Obligations, whether matured or unmatured, in such order as the Collateral Agent may determine.

 

2.4       Amendments, etc. with respect to the Guaranteed Obligations.  To the fullest extent permitted by applicable law, each Guarantor acknowledges and agrees that no change in the nature or terms of the Guaranteed Obligations or any of the Loan Documents, or other agreements, instruments or contracts evidencing, related to or attendant with the Guaranteed Obligations (including any novation), 

 

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including, without limitation, the taking of further security for the Guaranteed Obligations, shall discharge all or any part of the liabilities and obligations of such Guarantor pursuant to this guarantee, and each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Guaranteed Obligations made by the Collateral Agent or any other Secured Party may be rescinded by the Collateral Agent or such other Secured Party and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent or any other Secured Party, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith (including, without limitation any Specified Hedge Agreement or Cash Management Document) may be, amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent may reasonably deem advisable from time to time, and any collateral security, guarantee or right of set-off at any time held by the Collateral Agent or any other Secured Party for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released.  Neither the Collateral Agent nor any other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Guaranteed Obligations or for the guarantee contained in this Section 2 or any property subject thereto.  Without limiting the generality of the foregoing, each Guarantor agrees that, until the Facility Termination Date, such Guarantor’s undertakings hereunder shall not be released, in whole or in part, by any action or thing which might, but for this paragraph, be deemed a legal or equitable discharge of a surety or guarantor, or by reason of any waiver, omission of the Secured Parties, or any of them, or their failure to proceed promptly or otherwise, or by reason of any action taken or omitted by the Secured Parties, or any of them, whether or not such action or failure to act varies or increases the risk of, or affects the rights or remedies of, such Guarantor or by reason of any further dealings between the Borrower, on the one hand, and any Secured Party, on the other hand, or any other guarantor or surety, and such Guarantor hereby expressly waives and surrenders any defense to its liability hereunder (other than a defense of payment or performance in full in cash of the Guaranteed Obligations or release of such Guarantor pursuant to Section 8.15 hereof), or any right of counterclaim, cross-claim, or offset of any nature or description which it may have or may exist against the Collateral Agent or any other Secured Party based upon, and shall be deemed to have consented to, any of the foregoing acts, omissions, things, agreements or waivers.

 

2.5       Guarantee Absolute and Unconditional.  To the fullest extent permitted by applicable law, each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Collateral Agent or any other Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the other Guarantors, on the one hand, with respect to the Loan Documents and the Collateral Agent and the other Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2.  To the fullest extent permitted by applicable law, each Guarantor waives each of the following: diligence, presentment, protest, demand for payment and notice of default, dishonor, or nonpayment to or upon the Borrower or any of the other Guarantors with respect to the Guaranteed Obligations; notice of acceptance of the guarantee of such Guarantor contained in this Section 2, and all other defenses of a surety available by law but not otherwise mentioned (other than a defense of payment or performance in full in cash of the Guaranteed Obligations).  Each Guarantor understands and agrees that the guarantee of such Guarantor contained in this Section 2, to the fullest extent permitted by applicable law, is a continuing, absolute, irrevocable and unconditional guarantee of 

 

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payment and performance and not of collection, without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, Specified Hedge Agreement or Cash Management Document, any of the Guaranteed Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Collateral Agent or any other Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance in full in cash of the Guaranteed Obligations or release of such Guarantor pursuant to Section 8.15 hereof) which may at any time be available to or be asserted by the Borrower or any other Person against the Collateral Agent or any other Secured Party, or (c) any other circumstance whatsoever (other than a defense of payment or performance in full in cash of the Guaranteed Obligations or release of such Guarantor pursuant to Section 8.15 hereof) (with or without notice to or knowledge of the Borrower or any other Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Group Members from the Guaranteed Obligations, or of such Guarantor under the guarantee of such Guarantor contained in this Section 2, in bankruptcy or in any other instance.   When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Collateral Agent or any other Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Borrower or any other Guarantor or any right of offset with respect thereto, and any failure or delay by the Collateral Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies, to exercise any right, power, or privilege, to collect any payments from the Borrower, any other Guarantor or any other Person, to realize upon any such collateral security or guarantee, or to exercise any such right of offset, or any release of the Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, shall not act as a waiver of any rights or remedies of any Secured Party, shall not be construed as a course of dealing, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Collateral Agent or any other Secured Party against any Guarantor.  For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

 

2.6       Reinstatement.  The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the Collateral Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any other Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any other Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

2.7       Payments.  Each Guarantor hereby guarantees that payments hereunder will be paid to the Collateral Agent (x) without set-off or counterclaim in Dollars at the Funding Office and (y) free and clear of, and without deduction for, any Indemnified Taxes or Other Taxes on the same terms and to the same extent that payments by the Borrower are required to be made pursuant to the terms of Section 2.20 of the Credit Agreement, applying the provisions of Section 2.20 of the Credit Agreement to such Guarantor and the Collateral Agent mutatis mutandis.

 

2.8       Information.  Each Guarantor (a) assumes all responsibility for being and keeping itself informed of the financial condition and assets of the Borrower and each other Loan Party, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and (b) agrees that none of the Collateral Agent or the other Secured Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.

 

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2.9       Keepwell.  Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this guarantee in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 2.9 for its Maximum Amount that can be hereby incurred without rendering its obligations under this Section 2.9, or otherwise under this guarantee, as it relates to such other Loan Party, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 2.9 shall remain in full force and effect until the Facility Termination Date.  Each Qualified ECP Guarantor intends that this Section 2.9 constitute, and this Section 2.9 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section (18)(A)(v)(II) of the Commodity Exchange Act.

 

SECTION 3.    GRANT OF SECURITY INTEREST

 

3.1       Grant of Security Interests.  Each Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in and Lien on all of the right, title and interest of such Grantor in all of the following property now owned or at any time hereafter acquired or created by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”), as collateral security for the prompt and complete payment in full and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor:

 

(a)        all Accounts;

 

(b)        all Cash and cash equivalents;

 

(c)        all Chattel Paper;

 

(d)        all Commercial Tort Claims set forth on Schedule 4 hereto;

 

(e)        all Deposit Accounts;

 

(f)        all Documents;

 

(g)        all Equipment;

 

(h)        all Fixtures;

 

(i)         all General Intangibles (including all contract rights);

 

(j)         all Goods not covered by the other clauses of this Section 3;

 

(k)        all Instruments, including the Pledged Notes;

 

(l)         all Intellectual Property and the Intellectual Property Licenses;

 

(m)       all Letter-of-Credit Rights;

 

(n)        all Inventory;

 

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(o)        all Investment Property;

 

(p)        all Sale Proceeds;

 

(q)        all books and records (including all of its Records evidencing its assets (including the Collateral)); and

 

(r)        to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any of the Collateral and products of any and all of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all proceeds of any insurance, indemnity, or warranty payable to such Grantor from time to time, together with any and all other collateral security and guarantees given by any Person with respect to any of the foregoing;

 

provided, however, that notwithstanding any of the other provisions set forth in this Section 3.1, this Agreement shall not constitute a grant of a security interest in (and the term “Collateral” or any component definition thereof shall exclude) (x) any Excluded Assets and (y) with respect to each item of Gaming Collateral, until such time as the applicable Grantor receives the Required Gaming Approvals for such item of Gaming Collateral, such item of Gaming Collateral.  It is hereby understood and agreed that (x) any Excluded Assets and (y) any Gaming Collateral which at such time is not permitted to be subject to Liens created hereunder, shall be excluded from the definition of “Collateral” and all defined terms in “Collateral”; provided, however, except to the extent prohibited by applicable Gaming Regulations, Proceeds of Excluded Assets and such Gaming Collateral that are not themselves Excluded Assets shall constitute Collateral.

 

Nothing set forth in this Agreement or any other Loan Document shall relieve any Grantor from the performance of any term, covenant, condition or agreement on such Grantor’s part to be performed or observed under or in respect of any of the Collateral (except to the extent any Collateral consisting of a contract or agreement has been assigned to the Collateral Agent or any Secured Party following an exercise of remedies by the Collateral Agent) or from any liability to any Person under or in respect of any of the Collateral or shall impose any obligation on the Collateral Agent or any other Secured Party to perform or observe any such term, covenant, condition or agreement on such Grantor’s part to be so performed or observed or shall impose any liability on the Collateral Agent or any other Secured Party for any act or omission on the part of such Grantor relating thereto or for any breach of any representation or warranty on the part of such Grantor contained in this Agreement, the Credit Agreement, any Specified Hedge Agreement, any Cash Management Document or the other Loan Documents, or under or in respect of the Collateral or made in connection herewith or therewith.

 

SECTION 4.    REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders and the other Secured Parties to enter into the Credit Agreement and to induce the Secured Parties to make their respective extensions of credit and other financial accommodations to the Borrower and the other Group Members, each Grantor hereby represents and warrants to the Collateral Agent and, with respect to Section 4.1, each Lender and, with respect to Sections 4.2 through 4.7, each other Secured Party, on the dates and to the extent required pursuant to Section 5.1 or Section 5.2 of the Credit Agreement that:

 

4.1       Representations in Credit Agreement.  In the case of each Grantor, each of the representations and warranties set forth in Section 4 of the Credit Agreement to the extent they refer to such Grantor or to the Loan Documents to which such Grantor is a party, each of which is hereby incorporated herein by reference, is true and correct in all material respects on and as of such date as if made on and as of such date, except to the extent that such representation and warranty relates to an

 

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earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date (provided that any representation and warranty that is qualified by “materiality” or “Material Adverse Effect” or similar language shall be true and correct in all respects), and the Collateral Agent and each Lender shall be entitled to rely on each of them as if they were fully set forth herein; provided that each reference in each such representation and warranty to any Group Member’s knowledge shall, for the purposes of this Section 4.1, be deemed to be a reference to such Grantor’s knowledge.

 

4.2       Title; No Other Liens.  Such Grantor owns or has rights in each item of the Collateral free and clear of any and all Liens other than Permitted Liens.  Except for (a) liens permitted under Section 7.3(a) – 7.3(g), 7.3(h)(i), 7.3(i), 7.3(k) – 7.3(r) and 7.3(w) – 7.3(bb) of the Credit Agreement and (b) except to the extent already obtained, compliance with applicable Gaming Regulations and the receipt by each Grantor of Required Gaming Approvals in respect of its Gaming Collateral, as of the date hereof, the Collateral Agent has a first priority security interest in and Lien on the Collateral subject to, in the case of any Pledged Stock that constitutes a Certificated Security or any Pledged Note, delivery of such Pledged Security to the Collateral Agent properly endorsed for transfer, in the case of all registrations, recordings and applications of Copyrights, Trademarks and Patents with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, all appropriate filings having been made with the United States Copyright Office or the United Stated Patent and Trademark Office, as applicable, and, in the case of all other Collateral that can be perfected by filing a financing statement under the UCC, the filing of a financing statement in the jurisdiction of organization of such Grantor.

 

4.3       Names; Jurisdiction of Organization; Chief Executive Office.  As of the date hereof, such Grantor’s full and correct legal name, jurisdiction of organization, type of organization, taxpayer identification number, chief executive office and identification number from the jurisdiction of organization (if any) are specified on Schedule 2.

 

4.4       Pledged Stock; Pledged Notes. (a) As of the date hereof, Schedule 1 sets forth all of the Pledged Stock owned by such Grantor and such Pledged Stock constitutes the percentage of issued and outstanding shares of stock, membership interests or partnership interests, as applicable, indicated on such Schedule.  As of the date hereof, the shares of Pledged Stock issued by any Group Member pledged by such Grantor hereunder, have been duly authorized, validly issued and are fully paid and non-assessable, to the extent such concepts are applicable, and all Pledged Stock consisting of Certificated Securities and all Pledged Notes, have been delivered to the Collateral Agent.

 

(b)        Subject to compliance with applicable Gaming Regulations and the receipt by each Grantor of Required Gaming Approvals, no consent of any Person including any other general or limited partner, any other member of a limited liability company or any other shareholder is necessary in connection with the creation, perfection or first priority status of the security interest in any Pledged Stock or the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement or the exercise of remedies in respect thereof subject, in the case of enforcement, to any limitations in the Organizational Documents of the applicable Issuer (other than Issuers that are the Borrower or Wholly-Owned Subsidiaries of the Borrower) to the admission of new members or holders.

 

4.5       Intellectual Property.  On the date hereof, Schedule 3 lists all registrations, recordings and applications of Copyrights, Trademarks and Patents with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, that are owned by such Grantor in its own name on the date hereof.

 

4.6       Chattel Paper.  On the date hereof, all Chattel Paper in an amount over $2,500,000 has been delivered to the Collateral Agent.

 

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4.7       Commercial Tort Claims.  On the date hereof, all Commercial Tort Claims in favor of each Grantor in an amount over $5,000,000 are listed on Schedule 4.

 

SECTION 5.    COVENANTS

 

Each Grantor covenants and agrees with the Collateral Agent and, with respect to Section 5.1, the Lenders and, with respect to Section 5.2 through 5.5, the other Secured Parties, that, from and after the date of this Agreement until the Facility Termination Date:

 

5.1       Covenants in Credit Agreement.  In the case of each Grantor that is not party to the Credit Agreement, to the extent applicable, such Grantor shall comply with the covenants in Section 6 and Section 7 of the Credit Agreement to the extent applicable to such Grantor.

 

5.2       Investment Property.    (a) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Securities issued by it and will comply with such terms insofar as such terms are applicable to it and (ii) the terms of Sections 6.3 and 6.8 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 6.3 or 6.8 with respect to the Pledged Securities issued by it.

 

(b)        To the extent any Investment Property (x) constitutes interests in any limited liability company or limited partnership controlled now or in the future by any Grantor and (y) is a “Security” within the meaning of Article 8 of the New York UCC and the pledge hereunder of which is governed by Article 8 of the New York UCC, such interest shall be certificated and each such interest shall at all times hereafter continue to be such a security and represented by such certificate.  Each Grantor further acknowledges and agrees that, with respect to any interest in any limited liability company or limited partnership controlled now or in the future by such Grantor and pledged hereunder that is not a “Security” within the meaning of Article 8 of the New York UCC, such Grantor shall at no time elect to treat any such interest as a “Security” within the meaning of Article 8 of the New York UCC, nor shall such interest be represented by a certificate, unless such Grantor provides written notification to the Collateral Agent of such election and such interest is thereafter represented by a certificate that is promptly (but in any event within 30 days after the issuance of such certificate (or such later time as may be agreed by the Collateral Agent)) delivered to the Collateral Agent pursuant to the terms hereof.

 

(c)        Any Instrument, Certificated Security (other than in respect of the Capital Stock of any Subsidiary which is addressed in Section 6.8(c) of the Credit Agreement), Security or Chattel Paper in excess of $2,500,000 shall be promptly, in any event, within the later of (i) the receipt of all requisite approvals under the applicable Gaming Regulations and (ii) sixty days of the receipt thereof, delivered to the Collateral Agent indorsed in a manner reasonably satisfactory to the Collateral Agent to be held as Collateral; provided that if the pledge of the Capital Stock of any Subsidiary acquired or created after the Closing Date requires approval under applicable Gaming Regulations, the Grantor shall be required to pledge such Capital Stock only if the requisite approvals from the applicable Gaming Authorities are obtained after the exercise of its commercially reasonable efforts to obtain such approvals (and the Grantor agrees to use its commercially reasonable efforts to obtain such approvals).  To the extent that any Investment Property in any Subsidiary is an Uncertificated Security, except to which the issuer thereof is a Grantor with respect to which the immediately succeeding sentence applies, each Grantor shall, subject to applicable Gaming Regulations and receipt of Required Gaming Approvals, obtain an agreement giving the Collateral Agent “control”, within the meaning of Section 8-106 of the UCC, from each issuer of Uncertificated Securities promptly (but in any event, within 2 days of the issuing of such Uncertificated Security (or such later time as may be agreed by the Collateral Agent)) included in the Collateral of such Grantor.  For purposes of Section 8-106 of the UCC, subject to applicable Gaming Regulations and receipt of Required Gaming Approvals, each Grantor that is an Issuer of Uncertificated 

 

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Securities hereby agrees to comply with any “instruction”, within the meaning of Section 8-102 of the UCC, received by it from the Collateral Agent without further consent by such other Grantor.

 

(d)        After the occurrence and during the continuance of an Event of Default after written notice from the Collateral Agent provided pursuant to Section 6.3(b), if such Grantor shall, as a result of its ownership of any Investment Property, become entitled to receive or shall receive any sums paid upon or in respect of such Investment Property upon the liquidation or dissolution of any Issuer (except any liquidation or dissolution of any Grantor in accordance with the Credit Agreement) shall be paid over to the Collateral Agent to be held by it hereunder as additional collateral security for the Secured Obligations, and in case any property shall be distributed upon or with respect to the Investment Property, pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Collateral Agent, be delivered to the Collateral Agent to be held by it hereunder as additional collateral security for the Secured Obligations.  If any sums of money or property so paid or distributed in respect of Investment Property shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Collateral Agent, hold such money or property in trust for Collateral Agent for the benefit of the Secured Parties, segregated from other funds of such Grantor, as additional collateral security for the Obligations.

 

5.3       Perfected Security Interests; Defense of Claims.  Each Grantor agrees to notify the Collateral Agent of any change (i) in the legal name of such Grantor, (ii) in the identity or type of organization or corporate structure of such Grantor, (iii) in the jurisdiction of organization of such Grantor, (iv) in the chief executive office or in the “location” (as determined in accordance with Section 9-307 of the New York UCC) of such Grantor or (v) in the organizational identification number of such Grantor, in each case, prior to the effectiveness thereof (or such later date as may be agreed by the Collateral Agent).

 

5.4       Commercial Tort Claims.  Each Grantor shall promptly notify the Collateral Agent in writing upon incurring or otherwise obtaining a Commercial Tort Claim in an amount exceeding $5,000,000 against any third party after the date hereof and, upon request of the Collateral Agent, (i) promptly amend Schedule 4 attached hereto, (ii) authorize the filing of additional, or amendments to existing, UCC financing statements and (iii) do such other acts or things deemed reasonably necessary or desirable by the Collateral Agent to give the Collateral Agent a first priority, perfected security interest in any such Commercial Tort Claim.

 

5.5       Intellectual Property.  In order to facilitate filings with the United States Patent and Trademark Office and the United States Copyright Office, each Grantor shall, upon the reasonable request of the Collateral Agent, execute and deliver to the Collateral Agent one or more Copyright Security Agreements, Trademark Security Agreements and Patent Security Agreements in such form as is acceptable to the Collateral Agent in its reasonable discretion and such other documentation as may be necessary, appropriate or reasonably requested by the Collateral Agent to evidence the Collateral Agent’s Lien on such Grantor’s Patents, Trademarks, Copyrights, Intellectual Property Licenses, and the General Intangibles of such Grantor relating thereto or represented thereby.  Each Grantor agrees to give the Collateral Agent written notice of the acquisition or creation of any Intellectual Property at the times required pursuant to Section 6.8(a) of the Credit Agreement (for purposes thereof, such notice being deemed necessary in order for the Collateral Agent to have a perfected Lien on such Intellectual Property).

 

SECTION 6.    REMEDIAL PROVISIONS

 

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Subject to compliance with applicable Gaming Regulations and receipt of Required Gaming Approvals:

 

6.1       Certain Matters Relating to Receivables

 

(a)        At any time after the occurrence and during the continuance of an Event of Default, upon the Collateral Agent’s reasonable request and at the expense of the relevant Grantor, such Grantor shall use its best efforts to cause independent public accountants or others satisfactory to the Collateral Agent to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Receivables.

 

(b)        If required by the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within three Business Days (or such later time as may be agreed by the Collateral Agent)) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent if required, in a Collateral Account maintained under the sole dominion and control of the Collateral Agent, subject to withdrawal by the Collateral Agent for the account of the Collateral Agent and the other Secured Parties only as provided in Section 6.6 and (ii) until so turned over, shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor.  Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

 

(c)        If an Event of Default has occurred and is continuing and at the Collateral Agent’s request, each Grantor shall deliver to the Collateral Agent all documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including, without limitation, all orders, invoices and shipping receipts.

 

6.2       Certain Matters Relating to Receivables; Grantors Remain Liable

 

(a)        Upon the request of the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify Account Debtors on the Receivables that such Receivables have been assigned to the Collateral Agent for the ratable benefit of the Collateral Agent and the other Secured Parties and that payments in respect of such Receivables shall be made directly to the Collateral Agent. Once any such notice has been given to any such Account Debtor or other Person obligated on the Collateral, such Grantor shall not give any contrary instructions to such Account Debtor or other Person without the Collateral Agent’s prior written consent.

 

(b)        Anything herein to the contrary notwithstanding, each Grantor shall remain liable under the Receivables (or any agreements giving rise thereto) to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither the Collateral Agent nor any other Secured Party shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating thereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

 

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6.3       Pledged Securities.  (a) Unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given written notice to the relevant Grantor of the Collateral Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all cash dividends, payments or other Proceeds paid in respect of the Pledged Securities to the extent permitted in the Credit Agreement, and to exercise all voting and corporate or other organizational rights with respect to the Pledged Stock.

 

(b)        If an Event of Default shall occur and be continuing, upon written notice to the relevant Grantor, (i) unless otherwise provided in the Credit Agreement, the Collateral Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Securities and make application thereof to the Secured Obligations in accordance with Section 6.6 and all such dividends, payments and other Proceeds shall be held in trust for the Collateral Agent until such time of receipt and (ii) the Collateral Agent shall have the right to have any or all of the Pledged Securities registered in the name of the Collateral Agent or its nominee (whether or not such Pledged Securities have been so registered), and the Collateral Agent or its nominee may immediately exercise (x) all voting, corporate and other rights pertaining to any such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Securities as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any Grantor or the Collateral Agent of any right, privilege or option pertaining to such Pledged Securities, and in connection therewith, the right to deposit and deliver any and all of the Pledged Securities with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent may determine), all without liability except to account for property actually received by it, but the Collateral Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing unless the Collateral Agent has given notice of its intent to exercise as set forth above.

 

(c)        Each Grantor hereby authorizes and instructs each Issuer of any Pledged Securities pledged by such Grantor hereunder to comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other consent or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying.

 

6.4       Intellectual Property.

 

(a)        Without limiting any rights of the Collateral Agent under the Loan Documents, for the purpose of enabling the Collateral Agent to exercise rights and remedies under this Section 6, after the occurrence and during the continuance of an Event of Default, each Grantor hereby grants to the Collateral Agent, to the extent permitted by law, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to such Grantor) to use, assign, license, sublicense or otherwise exploit any of the Intellectual Property now owned or hereafter acquired or created by such Grantor, wherever the same may be located; provided, however, that nothing in this Section 6.4 shall require a Grantor to grant any license that is prohibited by any rule of law, statute or regulation or is prohibited by, or constitutes a breach or default under or results in the termination of or gives rise to any right of acceleration, modification or cancellation under any contract, license, agreement, instrument or other document evidencing, giving rise to a right to use or theretofore granted with respect to such property.

 

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(b)        Notwithstanding anything contained herein to the contrary, but subject to the provisions of Section 7.5 of the Credit Agreement that limit the rights of the Grantors to dispose of their property and the Collateral Agent’s exercise of its rights and remedies under this Section 6, the Grantors will be permitted to exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property.  In furtherance of the foregoing, so long as no Event of Default shall have occurred and be continuing, the Collateral Agent shall from time to time, upon the request of the respective Grantor (through the Borrower), execute and deliver any instruments, certificates or other documents, in the form so reasonably requested, that such Grantor (through the Borrower) shall have certified are appropriate in its judgment to allow it to take any action permitted above (including relinquishment of the license provided pursuant to Section 6.4(a) above as to any specific Intellectual Property).  Further, upon the Facility Termination Date or earlier release of the Collateral in accordance with the terms of the Credit Agreement or this Agreement, the license granted pursuant to Section 6.4(a) above shall terminate and become null and void.  Notwithstanding the foregoing, the exercise of rights and remedies under Section 6 by the Collateral Agent shall not terminate the rights of the holders of any licenses or sublicenses theretofore granted by the Grantors in accordance with the first sentence of this Section 6.4(b).

 

6.5       Proceeds to be Turned Over To Collateral Agent.  If an Event of Default shall have occurred and be continuing, upon written notice from the Collateral Agent, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, if required); provided that in no event shall any Tax or Trust Funds be required to be turned over.  All Proceeds received by the Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral Account maintained under its sole dominion and control.  All Proceeds while held by the Collateral Agent in a Collateral Account (or by such Grantor in trust for the Collateral Agent and the other Secured Parties) shall continue to be held as collateral security for all of the Secured Obligations and shall not constitute payment thereof until applied as provided in Section 6.6.

 

6.6       Application of Proceeds.  If an Event of Default shall have occurred and be continuing, the Collateral Agent shall apply all or any part of Proceeds constituting Collateral and any proceeds of the guarantee set forth in Section 2, after deducting all reasonable and documented costs and expenses incurred in connection therewith or incidental to the care or safe keeping of any Collateral, in payment of the Secured Obligations in accordance with Section 2.18(f) of the Credit Agreement, and shall make any such application in accordance with the Credit Agreement, and only after such application and after the payment by the Collateral Agent of any other amount required by any applicable law, need the Collateral Agent account for the surplus, if any, to any Grantor.

 

6.7       Code and Other Remedies.  If an Event of Default shall have occurred and be continuing, the Collateral Agent, on behalf of itself and the other Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law.  Without limiting the generality of the foregoing, if an Event of Default shall have occurred and be continuing, the Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below or notices otherwise provided in the Loan Documents) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived unless otherwise provided in the Loan Documents), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any 

 

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part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Collateral Agent or any Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk.  Any Agent or any Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released.  Each Grantor further agrees, at the Collateral Agent’s request, if an Event of Default shall have occurred and be continuing, to assemble the Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.  If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.  Collateral Agent may sell any Collateral without giving any warranties as to the Collateral and may specifically disclaim any warranties of title, merchantability or the like.

 

6.8       Private Sales.  Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Securities, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws, Gaming Regulations or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner.  The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. Each Grantor hereby waives, to the fullest extent permitted by law, any claims against Collateral Agent arising by reason of the fact that the price at which the Collateral or any part thereof may have been sold, assigned or licensed at such a private sale was less than the price which might have been obtained at a public sale, even if Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree.

 

6.9       Deficiency.  Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Secured Obligations.

 

SECTION 7.    THE COLLATERAL AGENT

 

7.1       Collateral Agent’s Appointment as Attorney-in-Fact, etc.

 

(a)        Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement for the sole use and benefit of the Collateral Agent on behalf of the Secured Parties, to, subject to applicable Gaming Regulations, take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, subject to any notice expressly required hereby, to do any or all of the following (provided that anything in this Section 7.1(a) to the contrary notwithstanding, the Collateral Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1(a) unless an Event of 

 

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Default shall have occurred and be continuing except with respect to any actions required for the maintenance of a perfected security interest in the Collateral):

 

(i)         in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any and all such moneys due under any Receivable or with respect to any other Collateral whenever payable;

 

(ii)        in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Collateral Agent may request to evidence and/or perfect the Secured Parties’ security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

 

(iii)       pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or provide any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

 

(iv)       execute, in connection with any sale provided for in Section 6.7 or 6.8, any indorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

 

(v)        (1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral and to extend the time of payment with reference to the Collateral and to make any allowance and other adjustments with reference to the Collateral; (3) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark (along with any applicable goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (8) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral Agent’s security interest therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

 

(b)        If any Grantor fails to perform or comply with any of its agreements contained herein, after giving effect to all applicable grace periods, the Collateral Agent, at its option, but without any obligation so to do, may give such Grantor written notice of such failure to perform or comply and if an Event of Default exists and such Grantor fails to perform or comply within five (5) Business Days of 

 

18

 

receiving such notice (or if the Collateral Agent reasonably determines that irreparable harm to the Collateral or to the security interest of the Secured Parties hereunder could result prior to the end of such five (5)-Business Day period), then the Collateral Agent may perform or comply, or otherwise cause performance or compliance, with such agreement.

 

(c)        Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until (i) release of such Grantor from this Agreement pursuant to Section 8.15 or (ii) if later, this Agreement is terminated and the security interests created hereby are released.

 

7.2       Duty of Collateral Agent.

 

(a)        Beyond reasonable care in the custody thereof, the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto.

 

(b)        The Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral of any Grantor in its possession if such Collateral is accorded treatment substantially equal to that which it accords its own property.  The Collateral Agent shall not be liable or responsible for any loss or damage to any of the Grantors’ Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Collateral Agent in good faith.

 

(c)        Neither the Collateral Agent nor any Secured Party shall be required to marshal any present or future Collateral for, or other assurance of payment of, the Secured Obligations or to resort to such Collateral or other assurances of payment in any particular order.  All of the rights of the Collateral Agent hereunder and the Collateral Agent or any other Secured Party in respect of such Collateral and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising.  To the extent that it lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s rights under this Agreement or under any other instrument creating or evidencing any of the Secured Obligations and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefit of all such laws.

 

7.3       Execution of Financing Statements.  Pursuant to any applicable law, each Grantor authorizes the Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form from time to time and in such offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent (for the benefit of the Secured Parties) under this Agreement.  Each Grantor authorizes the Collateral Agent to use the collateral description “all personal property”, “all assets” or any similar phrase in any such financing statements.

 

7.4       Authority of Collateral Agent.  Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as among the Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain 

 

19

 

from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

SECTION 8.    MISCELLANEOUS

 

8.1       Amendments in Writing.  None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 10.1 of the Credit Agreement.

 

8.2       Notices.  Except as otherwise set forth herein, all notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Section 10.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Grantor not party to the Credit Agreement shall be addressed to such Grantor in the care of the Borrower at the Borrower’s notice address set forth in the Credit Agreement.

 

8.3       No Waiver by Course of Conduct; Cumulative Remedies.  Neither the Collateral Agent nor any other Secured Party shall by any act (except by a written instrument pursuant to Section 8.1 above), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default.  No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Collateral Agent or such Secured Party would otherwise have on any future occasion.  The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

8.4       Enforcement Expenses; Indemnification.  Each Grantor agrees to pay, and to save the Collateral Agent and the Lenders harmless from, any and all losses, claims, damages, liabilities or related expenses arising out of any actions, judgments or suits of any kind or nature whatsoever, with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to Section 10.5 of the Credit Agreement.  The agreements in this Section 8.4 shall survive the Facility Termination Date.

 

8.5       Successors and Assigns.  This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Collateral Agent and the other Secured Parties and their permitted successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent (it being understood that Dispositions and fundamental changes permitted under the Credit Agreement shall not be subject to this proviso).

 

8.6       Set-Off.  The Collateral Agent and each Secured Party shall have the rights, as against each Grantor, specified in Section 10.7(b) of the Credit Agreement as if each Grantor were the Borrower, which is incorporated herein by reference and the provisions and rights set forth therein shall apply herein as if such provisions were set forth herein, mutatis mutandis.

 

8.7       Counterparts.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of this

 

20

 

Agreement by facsimile transmission or by electronic mail as a “.pdf” or “.tif” attachment shall be effective as delivery of a manually executed counterpart hereof.

 

8.8       Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

8.9       Section Headings.  The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

8.10     Integration.  This Agreement and the other Loan Documents represent the agreement of the Grantors, the Collateral Agent and the other Secured Parties with respect to the subject matter hereof and thereof.

 

8.11     GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

8.12     Submission To Jurisdiction; Waivers.  Each party to this Agreement hereby irrevocably and unconditionally:

 

(a)        agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise, in any way relating to this Agreement or the transactions relating hereto, in a forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable Law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.  Nothing in this Agreement or any other Loan Document shall affect (i) any right that the Administrative Agent, Collateral Agent or any other Secured Party may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document in any other jurisdiction to realize on the Collateral or any other security for the Secured Obligations or to enforce a judgment or other court order in favor of the Collateral Agent or any other Secured Party, (ii) any party from bringing any legal action or proceeding in any jurisdiction for the recognition and enforcement of any judgment or (iii) if all such New York courts decline jurisdiction over any Person or decline (or in the case of the Federal District Court, lack) jurisdiction over any subject matter of such action or proceeding, a legal action or proceeding from being brought with respect thereto in another court having jurisdiction;

 

(b)        waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement in any court referred to in clause (a) of this Section 8.12.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court;

 

21

 

(c)        agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth in Section 8.2 or at such other address of which the Collateral Agent shall have been notified pursuant thereto;

 

(d)        agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)        waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

8.13     Acknowledgements.  Each Grantor hereby acknowledges that:

 

(a)        it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

 

(b)        neither the Collateral Agent nor any other Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Collateral Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)        no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Collateral Agent and the other Secured Parties or among the Grantors and the Collateral Agent and the other Secured Parties.

 

8.14     Additional Guarantors and Grantors.  Each Subsidiary of the Borrower that is required to become a party to this Agreement pursuant to Section 6.8 of the Credit Agreement, and/or, in the event of a Holding Company Election is made, Holdings, shall become a Guarantor and a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary or Holdings, as applicable, of an Assumption Agreement in the form of Annex I hereto.

 

8.15     Releases.  Each Guarantor shall be released from its obligations under Section 2 and any Collateral shall be released from the Lien created hereby in accordance with Section 10.15 of the Credit Agreement.

 

8.16     WAIVER OF JURY TRIAL.  EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH OF THE COLLATERAL AGENT AND EACH OTHER SECURED PARTY, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

8.17     Credit Agreement Governs.  In the event of any conflict between the terms of the Credit Agreement and this Agreement, the terms of the Credit Agreement shall govern.

 

8.18     Compliance with Gaming Regulations. Notwithstanding anything to the contrary herein or in any of the other Loan Documents, the Collateral Agent, on behalf of the Secured Parties, acknowledges and agrees that the exercise of all rights and remedies under this Agreement is subject to applicable Gaming Regulations and further acknowledges and agrees that:

 

22

 

(a)        The exercise of certain rights or remedies set forth in this Agreement may require the prior approval or authorization of the applicable Gaming Authorities pursuant to applicable Gaming Regulations and/or the licensing of the Collateral Agent or other Secured Parties or their transferee(s), unless such licensing requirement is waived by the applicable Gaming Authorities.

 

(b)        In the event that the Collateral Agent or any Secured Party exercises one or more of the remedies set forth in this Agreement or any other Loan Document with respect to any Pledged Stock that are subject to the Requisite Gaming Approvals (the “Gaming Stock”), including foreclosure, sale, transfer or other disposition of such Gaming Stock, or of the possessory security therein (except a transfer back to the applicable Grantor) and the exercise of any of the voting and consensual rights afforded the Collateral Agent hereunder or thereunder, such exercise of remedies may be deemed a separate transfer of the Gaming Stock and may require the separate and prior approval of the applicable Gaming Authorities pursuant to applicable Gaming Regulations and/or the licensing of the Collateral Agent and Secured Parties, unless such licensing requirement is waived by the Gaming Authorities.

 

(c)        With respect to each item of Gaming Stock, the pledge of such item of Gaming Stock hereunder is not effective until approval of the applicable Gaming Authorities has been received. Any amendment of this Agreement may require the approval of the applicable Gaming Authorities in order to become effective.

 

(d)        The sale, transfer, possession or disposition of gaming devices, cashless wagering systems, mobile gaming systems, interactive gaming systems, gambling games and implements of gambling (as those terms are defined in the Gaming Regulations) may be subject to the requirements of the Gaming Regulations, including the approval of the applicable Gaming Authorities or the licensing of the Collateral Agent or other Secured Parties or their transferee(s) before any of them may sell or distribute such Collateral for use or play in any State in which a Grantor is licensed or registered to own or conduct a Gaming Business or for distribution outside of any State in which a Grantor is licensed or registered to own or conduct a Gaming Business to the extent required by applicable Gaming Regulations.

 

(e)        The approval by the applicable Gaming Authority of this Agreement shall not be, and shall not be construed as, the approval, either express or implied, for the Secured Parties to take any actions or steps provided for in this Agreement for which approval by the Gaming Authorities is required, without first obtaining such prior and separate approval of such Gaming Authority, to the extent required by the applicable Gaming Regulations.

 

(f)        The Collateral Agent and each sub-agent of the Collateral Agent shall comply with the conditions, if any, imposed by any Gaming Authority in connection with the approvals of the security interests granted in Gaming Collateral hereunder by the Grantors, including, without limitation, any conditions requiring the Collateral Agent or sub-agent of the Collateral Agent to maintain the certificates representing certain Pledged Stock at a location within the applicable jurisdiction provided to the applicable Gaming Authority and to permit representatives of the Gaming Authorities to inspect such Pledged Securities and certificates thereof during normal business hours. Neither the Collateral Agent nor any sub-agent of the Collateral Agent shall surrender possession of any Pledged Securities to any Person other than to the respective Grantor without prior notice to or approval of the applicable Gaming Authorities or as otherwise permitted by applicable Gaming Regulations.

 

(g)        In connection with the foregoing provisions of this Section 8.18, it is acknowledged and agreed that neither the Collateral Agent, nor any other Secured Party, shall have any liability to any Grantor for any non-compliance or failure to meet obligations as otherwise provided above in this Section 8.18, except to the extent of the gross negligence, bad faith, willful misconduct of the Collateral Agent or 

 

23

 

the respective Secured Parties or the material breach of its obligations under this Agreement (in each case, as determined by a court of competent jurisdiction in a final and non-appealable decision).

 

8.19     Compliance with Missouri Gaming Law. Notwithstanding anything to the contrary herein or in any of the other Loan Documents, and without limiting anything herein or in any other Loan Document, the Collateral Agent, on behalf of the Secured Parties, acknowledges and agrees that, to the extent Missouri gaming laws are applicable, the exercise of all rights and remedies under this Agreement is subject to applicable Missouri gaming laws, rules and regulations and further acknowledges and agrees that:

 

(a)        The security interest granted in this Agreement does not authorize the pledge, hypothecation, or transfer of any gaming license (the “Missouri Licenses”) issued by the Missouri Gaming Commission (the “Missouri Commission”) under the Missouri Riverboat Gambling Act or any security interest attached to any such license.  The prohibitions and other limitations set forth in this paragraph shall apply to the extent and for so long as, the security interests, rights, and interests referenced in this paragraph are prohibited by or are a violation of Missouri gaming laws, rules or regulations.

 

(b)        Approval of the Missouri Commission may be required before the pledged ownership interests (“Pledged MO Collateral”) of any entity licensed by the Missouri Commission (a “Missouri Licensee”) can be transferred or sold, and Pledged MO Collateral and its transfer and sale may be subject to gaming law requirements that limit to whom the collateral may be transferred.  Under 11 CSR 45-10.040(3)(B), notice must be given to the Missouri Commission at least thirty (30) days prior to any such sale or transfer of ownership of a Missouri Licensee.  The prohibitions of this paragraph shall apply to the extent and for so long as the security interests, rights, and interests referenced in this paragraph are prohibited by or are a violation of Missouri gaming laws, rules or regulations.

 

(c)        Missouri law does not presently permit, and the security interest granted by this Agreement will not authorize, the Collateral Agent to foreclose, take possession, or otherwise exercise ownership or possessory rights of any slot machine (as defined in 11 CSR 45-10.055) located or to be located in the State of Missouri without the Collateral Agent holding a valid license issued by the Missouri Commission, or in the alternative, the creation of a different mechanism that is in compliance with applicable Missouri laws and is acceptable to the Missouri Commission. The prohibitions and other limitations set forth in this paragraph shall apply to the extent and for so long as, the security interests or rights referenced therein are so restricted under Missouri gaming laws, rules and regulations.

 

(signature pages follow)

 

24

 

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.

 

 

GRANTORS:

 

	
 
    	
AFFINITY   GAMING
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AFFINITY   GAMING FINANCE CORP.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AFFINITY   GAMING BLACK HAWK, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HGI-ST.   JO, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HGI-MARK   TWAIN, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HGI-LAKESIDE,   LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

	
 
    	
THE   SANDS REGENT, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PLANTATION   INVESTMENTS, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DAYTON   GAMING, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FLAMINGO   PARADISE GAMING, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE   PRIMADONNA COMPANY, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CALIFORNIA   PROSPECTORS, LTD.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

COLLATERAL AGENT:

 

	
 
    	
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Collateral Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

Schedule 1

 

 

DESCRIPTION OF INVESTMENT PROPERTY

 

Pledged Stock:

	
Issuer
    	
Holder
    	
Class of
   Stock
    	
Stock
   Certificate No.
    	
No. of Shares
    	
 

% of Issued
   and
   Outstanding
   Shares

 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Pledged Notes:

 

Notes issued to or held by any Grantor the aggregate principal amount of which is in excess of $[5,000,000] individually as of the date hereof.

	
 

Issuer

 
    	
 

Payee

 
    	
 

Amount   ($)

 
    	
 

Maturity   Date

 
    
	
 
    	
 
    	
 
    	
 
    

 

 

Schedule 2

 

 

LEGAL NAME, LOCATION OF JURISDICTION OF ORGANIZATION, ORGANIZATIONAL IDENTIFICATION NUMBER, TAXPAYER ID NO., CHIEF EXECUTIVE OFFICE, AND TYPE OF ORGANIZATION

 

 

 

	
Legal Name
     	
 

Jurisdiction
    of
    Organization

 
     	
 

Organizational
    Identification
    Number

 
     	
 

Taxpayer
    ID No.
     	
 

Chief
    Executive
    Office

 
     	
 

Type of
    Organization
     
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Schedule 3

 

 

INTELLECTUAL PROPERTY

 

Trademarks:

 

	
 
    	
Trademark
    	
Application No.
    	
Status
    	
Registration No.
    	
Registration Date
    	
Owner 
    
	
1.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
13.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
15.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
17.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
18.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
19.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
20.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Copyrights:

 

	
 
     	
Title
     	
Registration    No.
     	
Owner
     
	
1.
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
 
    	
 
    

 

 

	
 
     	
Title
     	
Registration    No.
     	
Owner
     
	
12.
    	
 
    	
 
    	
 
    
	
13.
    	
 
    	
 
    	
 
    
	
14.
    	
 
    	
 
    	
 
    
	
15.
    	
 
    	
 
    	
 
    
	
16.
    	
 
    	
 
    	
 
    
	
17.
    	
 
    	
 
    	
 
    
	
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Patents:

 

	
 
    	
Patent
    	
Status
    	
 

Application No.

 
    	
Filing Date
    	
Patent No.
    	
Issue Date
    
	
1.

 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Schedule 4

 

 

 

COMMERCIAL TORT CLAIMS

 

 

Annex I to
 Guarantee and Collateral Agreement

 

ASSUMPTION AGREEMENT, dated as of __________ __, 20__, made by ______________________________ (the “Additional Grantor”), in favor of Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as collateral agent (in such capacity, the “Collateral Agent”) for the banks and other financial institutions or entities (the “Secured Parties”) in connection with the Credit Agreement referred to below.  All capitalized terms not defined herein shall have the meaning ascribed to them in such Credit Agreement.

 

W I T N E S S E T H :

 

WHEREAS, there exists that Credit Agreement, dated as of July 1, 2016 (as amended, restated, replaced, refinanced, supplemented, waived and/or otherwise modified from time to time, the “Credit Agreement”), among, inter alia, AFFINTIY GAMING, a Nevada corporation (the “Borrower”), the Lenders and Issuing Lenders party thereto from time to time and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent and Collateral Agent;

 

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Affiliates (other than the Additional Grantor) have entered into the Guarantee and Collateral Agreement, dated as of July 1, 2016 (as amended, restated, supplemented, waived and/or otherwise modified from time to time, the “Guarantee and Collateral Agreement”) in favor of the Collateral Agent for the benefit of the Secured Parties;

 

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party to the Guarantee and Collateral Agreement; and

 

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

1.  Guarantee and Collateral Agreement.  By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Grantor and as a Guarantor thereunder with the same force and effect as if originally named therein as a Grantor and Guarantor, respectively, and, subject to applicable Gaming Regulations and receipt of Required Gaming Approvals and without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor and Guarantor, as applicable, thereunder.  The information set forth in Annex 1-A hereto is hereby added to the information set forth in the Schedules to the Guarantee and Collateral Agreement.  Subject to applicable Gaming Regulations, the Additional Grantor hereby represents and warrants, to the extent applicable, that each of the representations and warranties contained in Section 4 of the Guarantee and Collateral Agreement is true and correct in all material respects on and as of the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date except to the extent that any representation and warranty relates to an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date (provided that any representation and warranty that is qualified by “materiality” or “Material Adverse Effect” or similar language shall be true and correct in all respects).

 

Without limiting the foregoing:

 

 

(a)        the Additional Grantor hereby absolutely, unconditionally and irrevocably, guarantees to the Collateral Agent for the ratable benefit of the Secured Parties and their respective permitted successors, indorsees, transferees and assigns, the prompt, full and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Guaranteed Obligations, including, without limitation, any interest therein (including, without limitation, interest as provided in the Credit Agreement, the Specified Agreements and the Cash Management Documents accruing after the filing of a petition initiating any insolvency proceedings, whether or not such interest accrues or is recoverable against the Borrower after the filing of such petition for purposes of the Bankruptcy Code or is an allowed claim in such proceeding); and

 

(b)        the Additional Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in and Lien on all of the right, title and interest of such Grantor in all of the Collateral now owned or at any time hereafter acquired or created by the Additional Grantor or in which the Additional Grantor now has or at any time in the future may acquire any right, title or interest, as collateral security for the prompt and complete payment in full and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations of the Additional Grantor.

 

2.  GOVERNING LAW.  THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

[ADDITIONAL GRANTOR]

 

 

	
By:
    	
 
    	
 
    

 

	
 
    	
Name:
    
	
 
    	
Title:
    

 

 

Annex I-A to
  Assumption Agreement

 

 

 

Supplement to Schedule 1

 

 

 

Supplement to Schedule 2

 

 

 

Supplement to Schedule 3

 

 

 

Supplement to Schedule 4Fourth Amendment to the Second Amended and Restated Loan Agreement

 Exhibit 10.1 

FOURTH AMENDMENT 
 TO

 SECOND AMENDED AND RESTATED LOAN AGREEMENT 

This Fourth Amendment to Second Amended and Restated Loan Agreement (this “Amendment”) is dated June 29, 2016, by and
among: (i) RTI Surgical, Inc., a Delaware corporation formerly known as RTI Biologics, Inc. (“Borrower”); (ii) TD Bank, N.A., a national banking association, as administrative agent for the Lenders (in such capacity,
including any successor thereto, the “Administrative Agent”); and (iii) each of the Lenders from time to time party to the Loan Agreement. 

Capitalized terms used herein without definition shall have the respective meaning assigned to such terms in that ce1iain Second Amended and
Restated Loan Agreement, dated July 16, 2013, by and among Borrower, the Administrative Agent and the Lenders, as amended by: (i) that certain First Amendment to Second Amended and Restated Loan Agreement, dated December 30, 2013;
(ii) that ce1iain Second Amendment to Second Amended and Restated Loan Agreement, dated October 15, 2014; and (iii) that certain Third Amendment to Second Amended and Restated Loan Agreement, dated June 29, 2015 (collectively,
the “Loan Agreement”). 
 Borrower, the Administrative Agent and the Lenders are party to the Loan Agreement pursuant to
which the Lenders have extended credit to Borrower on the terms set forth in the Loan Agreement. 
 Borrower, the Administrative Agent and
the Lenders desire to amend the Loan Agreement to: (i) increase the Maximum Revolving Credit Amount from Thirty Million and 00/100 Dollars ($30,000,000.00) to Forty Five Million and 00/100 Dollars ($45,000,000.00); and (ii) make certain
corresponding amendments. 
 Borrower, the Administrative Agent and the Lenders are willing to make such amendments to the Loan Agreement on
the terms and conditions set forth in this Amendment. 
 Now, therefore, the parties hereto, intending to be legally bound, hereby agree as
follows: 
 SECTION 1 

AMENDMENTS TO LOAN AGREEMENT 
 1.1
Amendment of Section 1.l(jjjj), Definition of Maximum Revolving Credit Amount. Section 1.l(jjjj) of the Loan Agreement is deleted in its entirety and the following new Section 1.l(jjjj) is substituted in its place: 

(jjjj) “Maximum Revolving Credit Amount” means the sum of Forty Five Million and 00/100 Dollars
($45,000,000.00). 
 1.2 Amendment of Section 2.9, Unused Revolving Credit Fee. Section 2.9 of the Loan Agreement is
deleted in its entirety and the following new Section 2.9 is substituted in its place: 
 2.9 Unused Revolving Credit
Fee. Borrower shall pay to Lender a quarterly fee in arrears based upon the unused portion of the Revolving Credit. 

(a) For purposes of this Agreement, “Unused Revolving Credit” means an amount equal to: (i) the Maximum
Revolving Credit Amount (i.e., Forty Five Million and 00/100 Dollars ($45,000,000.00); minus (ii) the average daily outstanding principal balance of the Revolving Credit for the immediately preceding Quarter. 

(b) The “Unused Revolving Credit Fee” shall be an amount equal to the Unused Revolving Credit for such immediately
preceding Quarter multiplied by the Applicable Basis Points. For purposes of this Agreement, the “Applicable Basis Points” are determined based on Borrower’s financial performance under the Leverage Ratio as follows: 

Confidential 

			
	 Leverage Ratio
	  	 Applicable Basis Points per annum

	 Less than lx
	  	15 basis points
	 Equal to or greater than lx but less than 1.5x
	  	20 basis points
	 Equal to or greater than 1.5x but less than 2x
	  	25 basis points
	 Equal to or greater than 2x
	  	30 basis points

 (c) Changes in the Applicable Basis Points resulting from changes in the Leverage Ratio shall
become effective on the date that is three (3) Business Days after the date on which financial statements are delivered to the Administrative Agent pursuant to Section 5.14 and shall remain in effect until the next change to be
effected pursuant to this Section 2.9(c). 
 1.3 Amendment of Exhibit A, Lenders, to Loan Agreement. Exhibit A to the Loan
Agreement is deleted in its entirety and the Exhibit A to this Amendment is substituted in its place as Exhibit A to the Loan Agreement. 

1.4 Amended and Restated Revolving Credit Notes. On the Amendment Date, Borrower shall execute and deliver one or more amended and
restated promissory notes to Lenders for the Maximum Revolving Credit Amount (“Amended and Restated Revolving Credit Note(s)”). The Amended and Restated Revolving Credit Notes will amend and restate in their entirety the Revolving
Credit Notes in effect immediately prior to the Amendment Date. The Amended and Restated Revolving Credit Notes shall be treated as the Revolving Credit Notes for all purposes under the Loan Agreement. Any reference in the Loan Agreement to the
Revolving Credit Notes shall be deemed a reference to the Amended and Restated Credit Notes. The Amended and Restated Revolving Credit Notes shall be in form and substance satisfactory to Administrative Agent and Lenders. 

SECTION 2 
 CONDITIONS TO
EFFECTIVENESS OF AMENDMENT 
 2.1 Conditions to Effectiveness. This Amendment shall become effective as of the date (the
“Amendment Date”) when each of the following conditions is met (all instruments, documents and agreements to be in form and substance satisfactory to Administrative Agent and Lenders): 

(a) Receipt by the Administrative Agent of this Amendment duly and properly authorized, executed and delivered by each of the respective
patties to this Amendment. 
 (b) Receipt by the Administrative Agent of the Amended and Restated Promissory Notes. 

(c) Receipt by the Administrative Agent of certified copies of (i) resolutions of Borrower’s board of directors authorizing the
execution, delivery and performance of this Amendment and (ii) Borrower’s ce1tificate of incorporation and by-laws. 
 (d) Receipt
by the Administrative Agent of an incumbency certificate for Borrower identifying all Authorized Officers, with specimen signatures. 
 (e)
Receipt of a certification by an officer of Borrower that, after giving effect to this Amendment, there has not occurred any Post-Closing Material Adverse Effect. 

  

					
	Confidential	 	-2-	  	

 (f) Receipt of the Lien searches. 

(g) Payment by Borrower of the Amendment and Increase Fee. 

(h) Payment by Borrower of all of the Administrative Agent’s reasonable legal fees and expenses incurred in connection with the
preparation and negotiation of this Amendment. 
 SECTION 3 

REPRESENTATIONS AND WARRANTIES 

3.1 Representations and Warranties. Borrower’ represents and warrants to the Administrative Agent and the Lenders as follows: 

(a) The making and performance of this Amendment will not violate any Requirement of Law, or the charter, minutes or bylaw provisions of
Borrower, or violate or result in a default (immediately or with the passage of time) under any material contract, agreement or instrument to which Borrower is a party, or by which Borrower is bound. Borrower is not in violation of any term of any
material agreement or instrument to which it is a party or by which it may be bound which violation has or could reasonably be expected to have a Material Adverse Effect, or of its chatter, minutes or bylaw provisions. 

(b) Borrower has all requisite power and authority to enter into and perform this Agreement and to incur the obligations herein provided for,
and has taken all proper and necessary action to authorize the execution, delivery and performance of this Amendment. 
 (c) This Amendment,
when delivered, will be valid and binding upon Borrower, and enforceable in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors’ rights generally and by general equitable principles. 
 (d) The execution, delivery and performance by
Borrower of this Amendment does not require any approval or consent of, or filing with, any governmental agency or authority other than those already obtained, if any. 

(e) The representations and warranties contained in Section 4 of the Loan Agreement and the other Loan Documents are
true and correct in all material respects as of the Amendment Date as though made on and as of the Amendment Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true
and correct as of such earlier date and except to the extent of changes resulting from transactions contemplated or permitted by this Amendment and changes occurring in the ordinary course of business which singly or in the aggregate do not have a
Material Adverse Effect. For purposes of this Section 3.1, the representations and warranties contained in Section 4.7 of the Loan Agreement shall be deemed to refer to the most recent financial statements furnished pursuant to
Section 5.14(a) of the Loan Agreement. 
 (f) After giving effect to this Amendment, no Default or Event of Default under the Loan
Agreement has occurred and is continuing. 
 SECTION 4 

MISCELLANEOUS 
 4.1 Amendment
and Increase Fee. At Closing, Lenders shall have fully earned and Borrower shall unconditionally pay to Lenders, a non-refundable fee with respect to this Amendment (the “Amendment and Increase Fee”) of Fifty Two Thousand Five
Hundred and 00/100 Dollars ($52,500.00). 

  

					
	Confidential	 	-3-	  	

 4.2 Ratification and Confirmation. Except as expressly amended by this Amendment, the Loan
Agreement, the other Loan Documents and all documents, instruments and agreements related thereto are hereby ratified and confirmed in all respects and shall continue in full force and effect. This Amendment and the Loan Agreement shall hereafter be
read and construed together as a single document, and all references in the Loan Agreement, any other Loan Document or any agreement or instrument related to the Loan Agreement shall hereafter refer to the Loan Agreement as amended by this
Amendment. 
 4.3 Governing Law. THIS AMENDMENT, AND ALL MATTERS ARISING OUT OF OR RELATING TO THIS AMENDMENT, AND ALL RELATED
AGREEMENTS AND DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF FLORIDA. THE PROVISIONS OF THIS AMENDMENT AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO HEREIN ARE TO BE DEEMED SEVERABLE, AND
THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT. 

4.4 Successors and Assigns. This Amendment shall inure to the benefit of and be binding upon the successors and assigns of each of the
parties. 
 4.5 Duplicate Originals. Two (2) or more duplicate originals of this Agreement may be signed by the parties, each of
which shall be an original but all of which together shall constitute one and the same instrument. 
 [SIGNATURES TO FOLLOW ON SEPARATE
PAGE] 

  

					
	Confidential	 	-4-	  	

 WITNESS the due execution of this Fourth Amendment to Second Amended and Restated Loan
Agreement as a document under seal as of the date first written above. 
  

			
	RTI SURGICAL, INC., as Borrower
		
	By:	 	 /s/ Robert P. Jordheim

	Name:	 	Robert P. Jordheim
	Title:	 	Executive Vice President/CFO

 (Signature Page to Fourth Amendment to Second Amended and Restated Loan Agreement) 

 

  
 Confidential 

 
			
	TD BANK, N.A., as Administrative Agent
		
	By:	 	 /s/ Coley Jones

	Name:	 	Coley Jones
	Title:	 	Vice President, Middle Market Banking
	
	TD BANK, N.A., as Lender
		
	By:	 	 /s/ Coley Jones

	Name:	 	Coley Jones
	Title:	 	Vice President, Middle Market Banking
	
	REGIONS BANK, as Lender
		
	By:	 	 /s/ Ned Spitzer

	Name:	 	Ned Spitzer
	Title:	 	Managing Director

 (Signature Page to Fourth Amendment to Second Amended and Restated Loan Agreement) 

  
 Confidential 

 EXHIBIT A 

EXHIBIT A TO LOAN AGREEMENT 

LENDERS 
  

																			
	 	  	 	  	Commitments and Applicable Percentages	 
	 Lender
	  	 Notice Address
	  	Term Loan	 	 	Revolving Credit	 
	 	  	 	  	Amount	 	  	Percentage	 	 	Amount	 	  	Percentage	 
	 TD Bank, N.A.
	  	 9715 N. Gate Parkway
 Jacksonville, Florida
32246
 Attention: Mike Nursey
 Telecopy No.
904-265-0295
	  	$	37,500,000.00	  	  	 	62.5	% 	 	$	33,750,000.00	  	  	 	75.0	% 
		  	 with copies to:
 Rogers Towers, P.A.

1301 Riverplace Blvd.
 Suite 1500

Jacksonville, Florida 32207
 Attention: Timothy F. May

Telecopy No. 904-396-0663
	  				  				 				  			
	 Regions Bank
	  	 One Nashville Place
 150 4th Avenue North

10th Floor
 Nashville, Tennessee 37219

Attention: W. Brooks Hubbard
 Telecopy No.: (615)
748-8480
	  	$	22,500,000.00	  	  	 	37.5	% 	 	$	11,250,000.00	  	  	 	25.0	% 

  
 Confidential

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