Bank Completion Guaranty
GUARANTY OF PERFORMANCE AND COMPLETION
THIS GUARANTY OF PERFORMANCE AND COMPLETION (this "Completion Guaranty"),
dated as of February 26, 1998 is made by LONDON CLUBS INTERNATIONAL PLC, a
company registered in England and Wales under company number 2862479 ("LCI"),
THE TRUST UNDER ARTICLE SIXTH UNDER THE WILL OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Trust") and
ALADDIN BAZAAR HOLDINGS, LLC, a Nevada limited liability company ("ABH"; ABH,
the Trust and LCI are individually called a "Guarantor" and collectively called
the "Guarantors"), in favor of each of the Administrative Agent and the Lenders
and their respective successors, transferees and assigns.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of even date herewith
(together with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "Credit Agreement"), among Aladdin Gaming, LLC, a
Nevada limited liability company (the "Borrower"), the various lending
institutions (individually a "Lender" and collectively the "Lenders") as are, or
may from time to time become, parties thereto and The Bank of Nova Scotia as
administrative agent (together with any successor(s) thereto in such capacity,
the "Administrative Agent") for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as the syndication agent (together with any successor thereto in such capacity,
the "Syndication Agent") and CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp. as the documentation agent
(together with any successor thereto in such capacity, the "Documentation
Agent"), the Lenders have extended Commitments to make Loans to the Borrower and
to issue Letters of Credit for the account of the Borrower; and
WHEREAS, as a condition precedent to the effectiveness of the Credit
Agreement, the Guarantors are required to execute and deliver this Completion
Guaranty and certain subsidiaries of LCI (the "Subsidiary Guarantors") have
agreed to fully and unconditionally guarantee the payment of LCI's obligations
under this Completion Guaranty pursuant to a guaranty agreement of even date
herewith (the "Subsidiary Guaranty"); and
WHEREAS, the Guarantors have duly authorized the execution, delivery and
performance of this Completion Guaranty and the Subsidiary Guarantors have duly
authorized the execution, delivery and performance of the Subsidiary Guaranty;
and
WHEREAS, it is in the best interests of the Guarantors to execute this
Completion Guaranty and the Subsidiary Guarantors to execute the Subsidiary
Guaranty inasmuch as the Guarantors and the Subsidiary Guarantors will derive
substantial direct and indirect benefits from
the Loans made to the Borrower by the Lenders pursuant to the Credit Agreement
and the Letters of Credit issued for the account of the Borrower under the
Credit Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in order to induce the Lenders to make Loans to the
Borrower and to issue Letters of Credit for the account of the Borrower pursuant
to the Credit Agreement, the Guarantors agree, for the benefit of the
Administrative Agent, the Syndication Agent and each Lender, as follows:
1. Definitions. Terms defined in the Credit Agreement and not otherwise
defined in this Completion Guaranty shall have the meanings ascribed to
them in the Credit Agreement. For the purposes of Section 12(g) and
Section 13 hereof, the terms set forth on Schedule 1 hereto shall have the
meanings ascribed thereto on such Schedule. As used in this Completion
Guaranty, the following terms shall have the meanings respectively set
forth after each:
"Accelerated Payment Amount" shall have the meaning ascribed to such term
in the Keep-Well Agreement.
"Advance" shall have the meaning ascribed to such term in the Disbursement
Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States Code as amended
from time to time.
"Cash Equity Contributions" shall mean cash contributions by the
Guarantors to the Borrower in exchange for preferred interests of
Holdings.
"Consolidated Intangibles": at a particular date, all assets of a
Guarantor and its consolidated Subsidiaries, determined on a consolidated
basis, that would, in conformity with GAAP, be classified as intangible
assets, including, without limitation, unamortized debt discount and
expense, unamortized organization and reorganization expense, costs in
excess of the fair market value of acquired companies, patents, trade or
service marks, franchises, trade names, goodwill and, from and after June
30, 1997, the amount of all write-ups in the book value of assets
resulting from any revaluation thereof.
"Consolidated Tangible Assets": at a particular date, the amount equal to
(a) the amount which would be included as assets on the consolidated
balance sheet of a Guarantor and its consolidated Subsidiaries as at such
date in accordance with GAAP minus (b) Consolidated Intangibles.
"Dormant Subsidiary" means any Subsidiary of a Guarantor which has no
operating assets or property and conducts no business.
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"Enforcement Costs" means all reasonable out-of-pocket costs and expenses
of the Lenders in connection with the enforcement of the rights and
remedies of the Lenders under this Completion Guaranty and any amendment,
waiver or consent relating hereto including, without limitation,
reasonable attorneys' fees and costs and expenses, court costs and filing
fees in addition to all other amounts due hereunder whether or not such
Enforcement Costs are incurred in one or more proceedings.
"Existing Senior Debt" shall mean all principal, premium (if any),
interest and other amounts owing from time to time under (i) the Note
Agreements and (ii) the Facilities Agreement, in either case as amended,
supplemented or refinanced, from time to time, provided that the aggregate
principal amount of the Note Agreements and the Facilities Agreement shall
not be greater than the sum of (A) the maximum aggregate principal amount
which could be outstanding under the Facilities Agreement and the Note
Agreements in accordance with their terms as at the date hereof plus (B)
25% of Consolidated Net Assets of LCI; provided further, that the
aggregate principal amount of the Existing Senior Debt in excess of the
maximum aggregate principal amount which could be outstanding under the
Facilities Agreement and the Note Agreements in accordance with their
terms as at the date hereof shall be excluded from the parenthetical
phrase of Section 14(b) hereof.
"Facilities Agreement" shall mean that certain (pounds)65,000,000
Facilities Agreement (originally dated 24th May 1994 as amended and
restated) among, inter alia, LCI, various banks and National Westminster
PLC (the predecessor-in-interest to The Bank of Nova Scotia) as arranger
and agent, as in effect on the date hereof and as the same may be modified
by amendments that would not, in the aggregate, have the effect of making
LCI's obligations thereunder materially more onerous (it being understood
and agreed that any amendment, supplement or modification (i) that
increases the amount of the obligations of LCI thereunder, (ii) that would
permit the lenders thereunder to declare a default if LCI made any Cash
Equity Contribution required of the Guarantors hereunder or (iii) that
would permit the lenders thereunder to declare a default if LCI made net
payments (net of all reimbursements from the other Guarantors) of not more
than 25% of any Accelerated Payment Amount required of the Sponsors under
the Keep-Well Agreement, shall be deemed material).
"GAAP" shall mean the generally accepted accounting principles as in
effect from time to time in the United Kingdom with respect to LCI and in
the United States with respect to the other Guarantors, as the case may
be.
"Guaranteed Obligations" means the obligations of the Guarantors under
Section 2 of this Completion Guaranty.
"Insolvency Proceeding" shall mean any case or proceeding, voluntary or
involuntary, under the Bankruptcy Code, or any similar existing or future
law of any jurisdiction,
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foreign, state or federal, relating to bankruptcy, insolvency,
reorganization or relief of debtors.
"Leases" means, collectively, all agreements relating to the use,
occupancy and possession of space with respect to the Main Project entered
into by the Borrower and a tenant.
"LSE" means the London Stock Exchange Limited.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of a
Guarantor and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial conditions, assets or properties
of a Guarantor and its Subsidiaries taken as a whole, or (b) the ability
of a Guarantor to perform its Guaranteed Obligations or (c) the validity
or enforceability of this Completion Guaranty.
"Material Subsidiary" shall mean each of the Subsidiaries of LCI that are
party to that certain Subsidiary Guaranty dated as of June 30, 1997
guaranteeing the obligations of LCI under the Note Agreements. Each
Material Subsidiary of LCI as of the date hereof is listed on Schedule 2
hereof.
"Note Agreements" shall mean the several identical Note Purchase
Agreements dated as of June 30, 1997 among LCI and the purchasers named
therein relating to LCI's $50,000,000 aggregate principal amount of 7.74%
Guaranteed Senior Notes due 2004 and as the same may be modified by
amendments that would not, in the aggregate, have the effect of making
LCI's obligations thereunder materially more onerous (it being understood
and agreed that any amendment, supplement or modification (i) that
increases the amount of the obligations of LCI thereunder, (ii) that would
permit the lenders thereunder to declare a default if LCI made any Cash
Equity Contribution required of the Guarantors hereunder or (iii) that
would permit the lenders thereunder to declare a default if LCI made net
payments (net of all reimbursements from the other Guarantors) of not more
than 25% of any Accelerated Payment Amount required of the Sponsors under
the Keep-Well Agreement, shall be deemed material).
"Wholly-Owned Subsidiary" shall mean, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or
more of the Guarantors and such Guarantor's Wholly-Owned Subsidiaries at
such time.
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2. Guaranty of Completion and Performance. The Guarantors, jointly and
severally, absolutely, unconditionally and irrevocably, on the terms and
subject to the conditions set forth herein, guarantee to the Lenders:
(i) that the Borrower shall (A) prosecute the Work and the construction of
the Main Project to Final Completion with due diligence and continuity, in
an expeditious and first-class workmanlike manner, (B) cause the Work and
the construction of the Main Project to be performed and the Main Project
to be constructed, equipped and completed in compliance with the Plans and
Specifications in all material respects and in compliance in all material
respects with the provisions of the Loan Documents, the other Operative
Agreements, all Environmental Laws and all Legal Requirements, and (C)
correct or cause to be corrected as soon as possible any material defect
in the Main Project and the Work (including, without limitation, any
material defect in workmanship or quality of construction or materials) or
any material departure or variation from the Final Plans and
Specifications not made pursuant to Change Orders approved in writing by
the Administrative Agent, the Construction Consultant, the Architect of
Record and any of the Governmental Instrumentalities whose approval is
required; and
(ii) that the Borrower shall punctually pay and discharge (A) any and all
costs, expenses and liabilities incurred by the Borrower for or in
connection with the Final Completion of the Work and the Main Project, (B)
all claims and demands for labor, materials and services incurred by the
Borrower for or in connection with the Final Completion of the Work and
the Main Project which are or may become due and payable, or, if unpaid,
are or may become Liens on the Site or any portion thereof owned by the
Borrower, (C) all payments to be made for work to be performed by the
Borrower under Leases or under the Operative Documents for Tenant
Improvements, (D) Impositions and premiums for the insurance required by
the Loan Documents prior to the Conversion Date, (E) all interest accruing
on the Bank Credit Facility during construction and prior to the Final
Completion of the Work and the Main Project, and (F) the obligations of
the Borrower to keep the Bank Credit Facility In Balance; and
(iii) that the Borrower shall complete the Work and construction of the
Main Project Lien free and that the Main Project shall be and remain free
and clear of all Liens arising from the furnishing of materials, labor or
services for or in connection with the Work and the Main Project; and
(iv) that the Borrower shall provide the expertise necessary to supervise
construction of the Main Project and the Final Completion of the Work at
no cost to the Lenders or the Administrative Agent; and
(v) that in the event the Guarantors hereunder shall fail or refuse to pay
or perform the Guaranteed Obligations under this Completion Guaranty, the
Lenders may pay or perform or cause the payment and performance of the
Guaranteed Obligations of the
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Guarantors hereunder in which case the Guarantors, upon demand by the
Lenders, shall pay any and all costs, expenses and liabilities for such
costs and expenses in connection with the Final Completion of the Main
Project, or cause any Lien in connection with the Final Completion thereof
or any claim or demand for the payment of the cost of the Final Completion
of the Main Project to be bonded, discharged, released or paid, shall
reimburse the Lenders for all sums paid and all costs, expenses or
liabilities incurred by the Lenders in connection therewith; and
(vi) that the Guarantors shall pay the Enforcement Costs.
3. Payment Provisions. All payments required to be made by the Guarantors
pursuant to Section 2 shall be made subject to the following terms:
(a) The Guarantors shall make cash payments in the amounts required
under Section 2 into an interest-bearing deposit account designated
and controlled exclusively by the Disbursement Agent (the
"Guaranty Deposit Account") in accordance with the Borrower
Collateral Account Agreement in which the Disbursement Agent is
hereby granted a security interest for the benefit of the Lenders.
The Guaranty Deposit Account is intended to be a "deposit account"
for the purposes of Nevada Revised Statutes ("NRS") 40.430.4(g) and
Section 9301(g) of the California Uniform Commercial Code. Such
funds shall be held in the Guaranty Deposit Account as additional
collateral for the Obligations under the Credit Agreement and the
other Loan Documents; provided that, if requested by the Guarantors,
such funds shall be applied to payment of the Guaranteed
Obligations.
(b) The cash payments into the Guaranty Deposit Account and the funds
therein are for the purpose of paying the Guaranteed Obligations
under this Completion Guaranty and shall be free and clear of any
third party claims thereto, including any claims by the Borrower as
a third party beneficiary under this Completion Guaranty. The
Guarantors and the Administrative Agent on behalf of the Lenders
specifically agree that the Borrower is not an intended third party
beneficiary to this Completion Guaranty and that the Borrower nor
any other Person which is not party to this Completion Guaranty
(other than successors and assigns of the Lenders, the
Administrative Agent, the Documentation Agent and the Syndication
Agent) has no rights under this Completion Guaranty.
4. Continuation of Guaranty. In the event that the Obligations of the
Borrower under the Credit Agreement shall be accelerated pursuant to the
provisions of Section 8.1 thereof, this Guaranty shall continue to be in
full force and effect. Subject to the provisions of Section 10 hereof,
upon the indefeasible payment and performance of the Guaranteed
Obligations by the Guarantors, this Completion Guaranty shall terminate.
All amounts received by the Administrative Agent hereunder shall be
applied by it to the payment of the Guaranteed Obligations and in
accordance with the Loan Documents.
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5. Proof of Damages. If the Guarantors shall at any time or from time to time
fail to perform or comply with any of the Guaranteed Obligations contained
herein and if for any reason the Lenders have failed to receive when due
and payable the payment of interest or any other amount payable by the
Guarantors under this Completion Guaranty, then in each such case (i) it
shall be assumed conclusively without necessity of proof that such failure
by the Guarantors was the sole and direct cause of the Lenders failing to
receive such payment when due ( to the extent of the failure of the
Guarantors to perform the Guaranteed Obligations contained herein)
irrespective of any other contributing or intervening cause whatsoever,
and (ii) the Guarantors further irrevocably waive to the fullest extent
permitted by law any right or defense the Guarantors may have to cause the
Lenders to prove the cause or amount of such damages or to mitigate the
same.
6. Rights of the Administrative Agent. Each Guarantor authorizes the
Administrative Agent, on behalf of the Lenders, to perform any or all of
the following acts at any time in their sole discretion, all without
notice to the Guarantors and without affecting the payment and performance
of the Guaranteed Obligations by the Guarantors:
(a) The Administrative Agent and the Lenders may alter any terms of the Loan
Documents to which the Guarantors are not a party, including renewing,
compromising, extending, enforcing or accelerating, or otherwise changing
the time for payment of, or increasing or decreasing the rate of interest
on, the Loans or any part of them or increasing or decreasing the amount
of the Loans or any other fees payable under the Loan Documents.
(b) The Administrative Agent and the Lenders may take and hold security for
the Loans, the Letters of Credit and the Borrower's other obligations
under the Credit Agreement, the Sponsors' obligations under the Keep-Well
Agreement and the Guaranteed Obligations under this Completion Guaranty,
accept additional or substituted security for any of the foregoing, and
subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(c) The Administrative Agent and the Lenders may direct the order and manner
of any sale of all or any part of any security now or later to be held for
the Loans, the Letters of Credit, this Completion Guaranty or any of the
other Loan Documents, and may also bid at any such sale.
(d) The Administrative Agent and the Lenders may apply any payments or
recoveries from the Borrower, any Guarantor, any Sponsor or any other
source, and any proceeds of any security, to the Borrower's obligations
under the Loan Documents and/or the Guaranteed Obligations under this
Completion Guaranty in such manner, order and priority as they may elect,
whether or not those
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Guaranteed Obligations are supported by this Completion Guaranty or
secured at the time of the application.
(e) The Administrative Agent and the Lenders may release the Borrower of its
liability for the Obligations under the Credit Agreement or any portion
thereof.
(f) The Administrative Agent and the Lenders may substitute, add or release
any one or more Guarantors or endorsers.
(g) In addition to the Obligations under the Credit Agreement, the
Administrative Agent and the Lenders may extend other credit to the
Borrower, its Affiliates and any of the Guarantors and any of the Sponsors
or their respective Affiliates and may take and hold security for the
credit so extended, all without affecting the Guarantors' liability under
this Completion Guaranty.
(h) The Administrative Agent and the Lenders may change the terms or
conditions of disbursement of the Loans or the issuance of the Letters of
Credit.
(i) The Administrative Agent and the Lenders may advance additional funds to
the Borrower for any purpose.
7. Completion Guaranty to be Absolute. The Guarantors expressly agree that
for as long as the Credit Agreement remains in effect or any of the
Obligations under the Credit Agreement remain outstanding, the Guarantors
shall not be released from the Guaranteed Obligations hereunder by or
because of:
(a) Any act or event which might otherwise discharge, reduce, limit or modify
the Guaranteed Obligations;
(b) Any waiver, extension, modification, forbearance, delay or other act or
omission of the Administrative Agent or the Lenders, or any failure to
proceed promptly or otherwise as against the Borrower, any Sponsor, any
Guarantor or any security;
(c) Any action, omission or circumstance which might increase the likelihood
that the Guarantors may be called upon to perform under this Completion
Guaranty or which might affect the rights or remedies of the Guarantors as
against the Borrower or any Guarantor; or
(d) Any dealings occurring at any time between the Borrower, the Guarantors,
the Administrative Agent, the Syndication Agent, the Documentation Agent
or any Lender, whether relating to the Loans, the Letters of Credit or
otherwise.
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The Guarantors hereby expressly waive and surrender any defense to their
liability under this Completion Guaranty based upon any of the foregoing
acts, omissions, agreements, waivers or matters. It is the purpose and
intent of this Completion Guaranty that the Guaranteed Obligations shall
be absolute and unconditional under any and all circumstances.
8. Guarantors' Waivers. The Guarantors waive:
(a) All statutes of limitations as a defense to any action or proceeding
brought against the Guarantors by the Administrative Agent or any Lender,
to the fullest extent permitted by law;
(b) Any right they may have to require the Administrative Agent or the Lenders
to proceed against the Borrower or any of the Sponsors, proceed against or
exhaust any security held from the Borrower or any of the Sponsors, or
pursue any other remedy in their power to pursue;
(c) Any defense based on any claim that the Guaranteed Obligations exceed or
are more burdensome than those of the Borrower;
(d) Any defense based on: (i) any legal disability of the Borrower, (ii) any
release, discharge, modification, impairment or limitation of the
liability of the Borrower and/or the Guarantors under the Loan Documents
from any cause, whether consented to by the Administrative Agent or any
Lender or arising by operation of law or from any Insolvency Proceeding,
(iii) any rejection or disaffirmance of the Loans or any security held for
the Loans, in any Insolvency Proceeding and (iv) the Guarantors' rights
under NRS 104.3605, the Guarantors specifically agreeing that this clause
(iv) shall constitute a waiver of discharge under NRS 104.3605;
(e) Any defense based on any action taken or omitted (other than gross
negligence or willful misconduct) by the Administrative Agent or any
Lender in any Insolvency Proceeding involving the Borrower or any of the
Sponsors, including any election to have a claim allowed as being secured,
partially secured or unsecured, any extension of credit by the
Administrative Agent or any Lender to the Borrower in any Insolvency
Proceeding, and the taking and holding by the Administrative Agent or any
Lender of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of acceptance
of this Completion Guaranty and of the existence, creation, or incurring
of new or additional indebtedness, and demands and notices of every kind;
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(g) Any defense based on or arising out of any defense that the Borrower may
have to the payment or performance of the Obligations under the Credit
Agreement or any portion of such Obligations; and
(h) Any defense or benefit based on NRS 40.430 and judicial decisions relating
thereto and NRS 40.451 et seq. and judicial decisions relating thereto,
the Guarantors agreeing that the waiver in this paragraph (h) is intended
to take advantage of the two (2) waivers permitted by NRS 40.495 (1) and
(2) to the maximum extent permitted.
9. Waivers of Subrogation and Other Rights.
(a) Upon the occurrence of any Event of Default, the Administrative Agent in
its sole discretion, without prior notice to or consent of the Guarantors,
may elect to: (i) foreclose either judicially or nonjudicially against any
real or personal property security for the Obligations under the Loan
Documents, (ii) accept a transfer of any such security in lieu of
foreclosure, (iii) compromise or adjust the Loans or any part thereof or
any of the Letters of Credit or make any other accommodation with the
Borrower or any Guarantor, or (iv) exercise any other remedy against the
Borrower, any Guarantor or any security. No such action by the
Administrative Agent or any Lender shall release or limit the liability of
the Guarantors, who shall remain liable under this Completion Guaranty
after the action, even if the effect of the action is to deprive the
Guarantors of any subrogation rights, rights of indemnity, or other rights
to collect reimbursement from the Borrower for any sums paid to the
Administrative Agent or the Lenders, whether contractual or arising by
operation of law or otherwise. The Guarantors expressly waive any defenses
or benefits that may be derived from NRS Section 40.451, et seq. and
judicial decisions relating thereto, or comparable provisions of Nevada
law which are comparable to California Civil Procedure ▇▇.▇▇. 580a, 580b,
580d, or 726 or comparable provisions of the laws of any other
jurisdiction, and all other suretyship defenses they otherwise might or
would have under Nevada law or other applicable law. The Guarantors
expressly agree that under no circumstances shall they be deemed to have
any right, title, interest or claim in or to any real or personal property
to be held by the Administrative Agent or any Lender or any third party
after any foreclosure or transfer in lieu of foreclosure of any security
for the Obligations under the Credit Agreement.
(b) Regardless of whether the Guarantors may have made any payments to the
Administrative Agent or any Lender, the Guarantors hereby waive: (i) all
rights of subrogation, all rights of indemnity, and any other rights to
collect reimbursement from the Borrower for any sums paid to the
Administrative Agent or any Lender, whether contractual or arising by
operation of law (including the Bankruptcy Code) or otherwise, (ii) all
rights to enforce any remedy that the Administrative
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Agent or any Lender may have against the Borrower or any other
Person, and (iii) all rights to participate in any security now or
later to be held by the Administrative Agent or any Lender for the
Obligations under the Credit Agreement. The waivers given in this
Section 9(b) shall be effective until the Loans and all other
Obligations under the Credit Agreement have been indefeasibly paid
and performed in full and all Commitments have been terminated.
(c) The Guarantors understand and acknowledge that if the Administrative
Agent or any Lender forecloses judicially or nonjudicially against
any real property security for the Obligations under the Loan
Documents, that foreclosure could impair or destroy any ability that
the Guarantors may have to seek reimbursement, contribution or
indemnification from the Borrower or others based on any right the
Guarantors may have of subrogation, reimbursement, contribution or
indemnification for any amounts paid by the Guarantors under this
Completion Guaranty. The Guarantors further understand and
acknowledge that in the absence of this Section 9, such potential
impairment or destruction of the Guarantors' rights, if any, may
entitle the Guarantors to assert a defense to this Completion
Guaranty. By executing this Completion Guaranty, the Guarantors
freely, irrevocably and unconditionally: (i) waive and relinquish
that defense and agree that the Guarantors will be fully liable
under this Completion Guaranty even though the Administrative Agent
of the Lenders may foreclose judicially or nonjudicially against any
real property security for the Obligations under the Loan Documents;
(ii) agree that the Guarantors will not assert that defense in any
action or proceeding which the Administrative Agent or the Lenders
may commence to enforce this Completion Guaranty; and (iii)
acknowledge and agree that the Administrative Agent and the Lenders
are relying on this waiver in making the Loans and issuing the
Letters of Credit, and that this waiver is a material part of the
consideration which they are receiving for making the Loans and
issuing the Letters of Credit.
10. Revival and Reinstatement. If the Lenders are required to pay, return or
restore to any of the Guarantors any amounts previously paid with respect
to the Guaranteed Obligations because of any Insolvency Proceeding of any
of the Guarantors, any stop notice or any other reason, to the extent that
the source of such payment was a Cash Equity Contribution from the
Guarantors or the payment of the Accelerated Payment Amount by the
Guarantors pursuant to this Completion Guaranty, the Guaranteed
Obligations shall be reinstated and revived and the rights of the
Administrative Agent and the Lenders shall continue with regard to such
amounts, as though they had never been paid.
11. Representations and Warranties. Each Guarantor hereby represents and
warrants unto the Administrative Agent and each Lender as follows:
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(a) The most recent audited consolidated balance sheet of LCI and ABH
and their respective consolidated Subsidiaries (in the case of ABH,
as of December 31, 1996 and in the case of LCI, as of March 30,
1997) and the related consolidated statements of earnings and
stockholders' equity (or profit and loss in the case of LCI) and of
cash flows for the fiscal year ended on such date, reported on by
such Guarantor's independent public accountants, copies of which
have heretofore been furnished to each Lender, are complete and
correct and present fairly (or give a true and fair view of in the
case of LCI) the consolidated financial condition of such Guarantor
and its consolidated Subsidiaries as at such date, and the results
of their operations (or consolidated profit and loss in the case of
LCI) and their consolidated cash flows for the fiscal year then
ended. The unaudited consolidated balance sheet of such Guarantor
and its consolidated Subsidiaries as at September 30, 1997 and the
related unaudited consolidated statements of earnings and of cash
flows for the nine-month period (or, in the case of LCI, six month
period) ended on such date, certified by an Authorized
Representative of such Guarantor, are complete and correct and
present fairly (or give a true and fair view of in the case of LCI)
the consolidated financial condition of such Guarantor and its
consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for
the nine-month period (or, in the case of LCI, six-month period)
then ended (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by
such accountants or Authorized Representative, as the case may be,
and as disclosed therein).
(b) Since December 31, 1996, in the case of ABH and since March 30, 1997
in the case of the Trust, there has been no development or event
which has had or could reasonably be expected to have a Material
Adverse Effect.
(c) Each of such Guarantor and its Subsidiaries (a) is duly organized,
and, to the extent applicable, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the
corporate or other power and authority, and the legal right, 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) to the extent applicable, is duly qualified as a foreign
corporation or company or trust and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification
and (d) is in compliance with all material Requirements of Law
except where failure to comply with any of the foregoing could not
individually or in the aggregate reasonably be expected to have a
Material Adverse Effect.
(d) Each of such Guarantors has the corporate or other power and
authority, and the legal right, to make, deliver and perform this
Completion Guaranty and to provide
12
the undertakings hereunder and has taken all necessary corporate or
other action to authorize the execution, delivery and performance of
this Completion Guaranty. No consent or authorization of, filing
with or other act by or in respect of, any Governmental
Instrumentality or any other Person is required to be obtained or
made, as the case may be, by such Guarantor in connection with this
Completion Guaranty or with the execution, delivery, performance,
validity or enforceability of this Completion Guaranty by or against
such Guarantor, except as has been obtained and remains in full
force and effect on the date hereof. This Completion Guaranty has
been duly executed and delivered on behalf of such Guarantor. This
Completion Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable against it in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement
is sought by proceedings in equity or at law).
(e) Each Subsidiary Guarantor has the corporate power and authority, and
the legal right, to make, deliver and perform the Subsidiary
Guaranty and to provide the undertakings thereunder and has taken
all necessary corporate action to authorize the execution, delivery
and performance of the Subsidiary Guaranty. No consent or
authorization of, filing with or other act by or in respect of, any
Governmental Instrumentality or any other Person is required to be
obtained or made, as the case may be, by such Subsidiary Guarantor
in connection with the Subsidiary Guaranty or with the execution,
delivery, performance, validity or enforceability of the Subsidiary
Guaranty by or against such Subsidiary Guarantor, except as has been
obtained and remains in full force and effect on the date hereof.
The Subsidiary Guaranty has been duly executed and delivered on
behalf of each Subsidiary Guarantor. The Subsidiary Guaranty
constitutes a legal, valid and binding obligation of each Subsidiary
Guarantor enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity
or at law).
(f) The execution, delivery and performance of this Completion Guaranty
by the Guarantors and the execution, delivery and performance by the
Subsidiary Guarantors of the Subsidiary Guaranty will not (i)
violate any Legal Requirement or contractual obligation of such
Guarantor or Subsidiary Guarantor, (ii) result in, or require, the
creation or imposition of any Lien on any of its properties or
revenues pursuant to any such Legal Requirement or contractual
obligation or (iii) conflict with or result in a breach of any of
the terms, conditions or provisions of any order, judgment, decree
or ruling of any court, arbitrator or Governmental Instrumentality
applicable to such Guarantor or Subsidiary Guarantor.
13
(g) Schedule 3 contains (except as noted therein) complete and correct
lists of each of LCI's and ABH's Subsidiaries (other than Dormant
Subsidiaries), showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage of
shares of each class of its capital stock or similar equity
interests outstanding owned by such Guarantor and each other
Subsidiary of such Guarantor. All of the outstanding shares of
capital stock or similar equity interests of each Subsidiary shown
in Schedule 3 as being owned by such Guarantor and its Subsidiaries
have been validly issued, are fully paid and nonassessable and are
owned by such Guarantor or another Subsidiary free and clear of any
Lien (except as otherwise disclosed in Schedule 3). Each Subsidiary
identified in Schedule 3 is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other
than those jurisdictions as to which the failure to be so qualified
or in good standing could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the
business, assets, debt service capacity, property or financial
condition, operations or prospects of such Subsidiary. Each such
Subsidiary has the corporate or other power and authority to own or
hold under lease the properties it purports to own or hold under
lease and to transact the business it transacts and proposes to
transact. No Subsidiary identified in Schedule 3 is a party to, or
otherwise subject to any legal restriction or any agreement (other
than this Completion Guaranty, the agreements listed on Schedule 3
and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to its
Guarantor parent or any of such Guarantor's Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of
such Subsidiary.
(h) Except as disclosed in Schedule 4 there are no actions, suits or
proceedings pending or, to the knowledge of any Guarantor,
threatened against or affecting such Guarantor or any Subsidiary or
any property of such Guarantor or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental
Instrumentality that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither
any Guarantor nor any Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Instrumentality or is in violation of any
applicable law, ordinance, rule or regulation (including without
limitation Environmental Laws) of any Governmental Instrumentality,
which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
14
(i) Except as disclosed in Schedule 3-A, each Guarantor and its
Subsidiaries have filed all material tax returns that are required
to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due
and payable and before they have become delinquent, except for any
taxes and assessments (i) the non-payment of which could not
reasonably be expected to have a Material Adverse Effect or (ii) the
amount, applicability or validity of which is currently being
contested in good faith by appropriate proceedings and with respect
to which such Guarantor or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. Each
Guarantor knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The
charges, accruals and reserves on the books of each Guarantor and
its Subsidiaries in respect of governmental or other taxes for all
fiscal periods are adequate.
(j) Each Guarantor and its Subsidiaries have adequate and appropriate
insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such
terms and in such amounts (including deductibles, co-insurance and
self-insurance) to the extent this is customary in the case of
entities of established reputations engaged in the same or a similar
business and similarly situated, except where the failure to so
maintain insurance, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(k) Each of LCI, ABH and its Subsidiaries have good and sufficient title
to their respective properties that individually or in the aggregate
are Material, including all such properties reflected in the most
recent audited balance sheet referred to in clause (a) hereof or
purported to have been acquired by such Guarantor or any Subsidiary
after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens
prohibited by this Completion Guaranty. All leases that individually
or in the aggregate are Material are valid and subsisting and are in
full force and effect in all material respects.
(l) Except as disclosed in Schedule 5,
(i) each Guarantor and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or
rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others;
(ii) to the best knowledge of each Guarantor, no product or such
Guarantor infringes in any material respect on any license,
permit, franchise,
15
authorization, patent, copyright, service ▇▇▇▇, trademark, trade
name or other right owned by any other Person; and
(iii) to the best knowledge of each Guarantor, there is no Material
violation by any Person of any right of such Guarantor or any
of its Subsidiaries with respect to any patent, copyright,
service ▇▇▇▇, trademark, trade name or other right owned or
used by such Guarantor or any of its Subsidiaries.
(m) Except as described therein, Schedule 6 sets forth a complete and
correct list of all outstanding Indebtedness of each of LCI and ABH
and its Subsidiaries as of September 30, 1997, since which date
there has been no Material changes in the amounts, interest rates,
sinking funds, installment payments or maturities of the
Indebtedness of such Guarantor or its Subsidiaries. Neither any such
Guarantor nor any Subsidiary is in default and no waiver of default
is currently in effect, in the payment of any principal or interest
on any Indebtedness of such Guarantor or such Subsidiary and no
event or condition exists with respect to any Indebtedness of any
such Guarantor or any Subsidiary in an aggregate principal amount in
excess of $1,500,000 that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause
such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment. Except
as disclosed in Schedule 6, neither any such Guarantor nor any
Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to
a Lien not permitted by Section 14(a).
(n) Neither any Guarantor nor any Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, or the Federal
Power Act, as amended.
(o) Neither any Guarantor nor any Subsidiary has knowledge of any claim
or has received any notice of any claim, and no proceeding has been
instituted raising any claim against such Guarantor or any of its
Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets,
alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.
(p) Each Guarantor's ownership interest in the Borrower as of the date
hereof is set forth on Schedule 7.
(q) LCI has delivered to the Administrative Agent true, correct and
complete copies of all material documents, instruments, opinions and
certificates with respect to the Existing Senior Debt.
16
12. Affirmative Covenants. Until all of the Guaranteed Obligations have been
indefeasibly paid and performed, each Guarantor agrees as follows:
(a) LCI shall furnish to the Administrative Agent the documentation
required to be delivered pursuant to Section 12.1(i) and (ii)(a),
(b), (c), (d) and (e) of the LCI Facilities Agreement, or the
comparable provisions of any facilities agreement executed in
substitution of, or as a replacement of, the LCI Facilities
Agreement.
(b) (i) ABH shall furnish to the Administrative Agent:
(A) as soon as available, but in any event within 120 days after
the end of each fiscal year of such Guarantor, a copy of the
consolidated and consolidating balance sheet of such Guarantor
and its consolidated Subsidiaries as at the end of such year
and the related consolidated and consolidating statements of
earnings and stockholders' equity and of cash flows for such
year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by an independent
certified public accountants of nationally recognized
standing; and
(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 such Guarantor, (A) the unaudited
consolidated and consolidating balance sheet of such Guarantor
and its consolidated Subsidiaries as at the end of such
quarter and in comparative form the figures for the end of the
previous fiscal year, (B) the unaudited consolidated and
consolidating statement of earnings of such Guarantor and its
consolidated Subsidiaries for such quarter and the portion of
the fiscal year through the end of such quarter, and in
comparative form the figures for the previous year and (C) the
consolidated and consolidating statement of cash flows of such
Guarantor and its consolidated Subsidiaries for the portion of
the fiscal year through the end of such quarter, and in
comparative form the figures for the previous year, certified
by an Authorized Representative of such Guarantor as being
fairly stated in all material respects when considered in
relation to the consolidated and consolidating financial
statements of such Guarantor and its consolidated Subsidiaries
(subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all
material respects and to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods
17
(except as approved by such accountants or officer, as the case may
be, and disclosed therein).
(ii) The Trust shall furnish the Administrative Agent with all
financial information, certificates, reports, and disclosures
that the Trust is providing to any other creditor in
connection with the Main Project, the Mall Project, and/or the
Music Project at such time as such information is made
available to such creditor.
(c) LCI shall furnish to the Administrative Agent, concurrently with the
delivery of the financial statements described in clause (a) above,
a certificate of an Authorized Representative of LCI showing in
reasonable detail the calculations demonstrating compliance with
Section 12(g) of this Completion Guaranty for the fiscal period
ending on such date. Each Guarantor shall furnish to the
Administrative Agent within thirty days after the same are sent,
copies of all financial statements and reports which such Guarantor
sends to its stockholders, and within thirty days after the same are
filed, copies of all financial statements and reports which such
Guarantor may make to, or file with, the LSE, the Securities and
Exchange Commission or any successor or analogous Governmental
Instrumentality. Each Guarantor shall furnish to the Administrative
Agent with reasonable promptness, such additional financial and
other information as the Administrative Agent, on behalf of any
Lender, may from time to time reasonably request.
(d) ABH and LCI shall keep true and correct books of records and account
in conformity with GAAP and all Requirements of Law; and permit the
Administrative Agent:
(i) No Event of Default -- if no Event of Default then exists,
at the expense of such Administrative Agent and upon reasonable
prior notice to such Guarantor, to visit the principal executive
office of such Guarantor and to discuss the affairs, finances and
accounts of such Guarantor and its Subsidiaries with such
Guarantor's officers, all at such reasonable times and as often as
may be reasonably requested in writing; and
(ii) Event of Default -- if an Event of Default then exists,
at the expense of such Guarantor to visit and inspect any of the
offices of properties of such Guarantor or any Subsidiary, to
examine their respective books and records and to make copies and
extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants, all at such reasonable times and as often as may
be requested.
A Guarantor shall not be under any obligation under this Completion
Guaranty to provide information pursuant to the last sentence of
Section 12(c) or pursuant to
18
this Section 12(d) if (i) disclosure of such information, on the
written advice of such Guarantor's counsel provided to such
Guarantor, would be prohibited by law or by decree of any
Governmental Instrumentality or arbitral body or by the terms of any
obligation of confidentiality contained in any agreement binding
upon such Guarantor and not entered into in contemplation of this
Section 12(d) or (ii) such information relates to the identity or
personal details of any of the customers or clients of LCI or any of
its Subsidiaries.
In addition, LCI shall not be under any obligation under this
Completion Guaranty to provide information pursuant to the last
sentence of Section 12(c) or pursuant to Section 12(d) if LCI has
been advised in writing by an investment or merchant bank in London,
that the requested disclosure to the Administrative Agent or any
Lender would require LCI to make public disclosure of such
information to comply with its continuing obligations under the
rules of the LSE or would otherwise be prohibited by such rules. If
the Administrative Agent shall contest such written advice from the
investment or merchant bank by itself providing advice in writing to
the contrary from an investment or merchant bank in London, then LCI
will obtain advice in writing from a senior official of the LSE as
to whether the requested disclosure would require LCI to make public
disclosure of such information to comply with any of such
obligations or would otherwise be prohibited as aforesaid. Before
seeking such advice from the LSE (either directly or through its
listing sponsor), LCI will consult with the Administrative Agent and
submit to the LSE such factual submissions and other representations
that the Administrative Agent may provide to LCI for such purpose.
The written advice of such senior official shall be conclusive as to
the disclosure in question.
(e) Each of LCI and ABH shall promptly give notice to the Administrative
Agent (which shall promptly transmit such notice to each Lender) of:
(i) any breach by such Guarantor of any of the Guaranteed
Obligations hereunder or with respect to Existing Senior Debt;
(ii) any (a) default or event of default under any contractual
obligation of such Guarantor or any of its Subsidiaries or (b)
litigation, investigation or proceeding which may exist at any
time between such Guarantor or any of its Subsidiaries and any
Governmental Instrumentality, which in either case, if not
cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(iii) any material litigation or proceeding affecting such Guarantor
or any of its Subsidiaries; and
19
(iv) any development or other event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this clause (e) shall be accompanied by a
statement of a Authorized Representative of such Guarantor setting
forth details of the occurrence referred to therein and stating what
action such Guarantor or any of its Subsidiaries propose to take
with respect thereto.
(f) Each of ABH and LCI shall, in the aggregate, continue to own,
directly or through one or more wholly-owned Subsidiaries, free of
any Lien other than Liens in favor of the Administrative Agent and
the Lenders, the same aggregate percentage of the capital stock of
the Borrower as set forth on Schedule 7 hereof, subject to
adjustment as provided in clause (k) in the definition of "Change in
Control" in the Credit Agreement.
(g) LCI covenants and agrees that
(i) the ratio of Group Operating Profit to Net Interest Payable in
respect of each 12 month period ending on the last day of each
financial year and financial half year of the Group shall not
be less than 2.5:1;
(ii) the ratio of Consolidated Net Borrowings to Consolidated Net
Worth shall not at any time exceed 1.5:1; and
(iii) Consolidated Net Worth shall at all times be greater than
(pounds)95,000,000,
and that the finance director of LCI for the time being shall
certify compliance or, as the case may be, non-compliance by LCI and
the Group with each of the provisions referred to in paragraphs (i),
(ii) and (iii) above at the same time as LCI shall furnish to the
Administrative Agent the financial statements referred to in Section
12(a) provided that following receipt of any such certificate the
Administrative Agent may in its absolute discretion require LCI to
instruct its auditors for the time being to certify compliance or,
as the case may be, non-compliance by LCI and the Group with each of
the provisions referred to in paragraphs (i), (ii) and (iii) above
and further that in the event of any changes in any of the
accounting principles and bases upon which any of such financial
statements are prepared, the financial covenants set out in this
sub-clause shall be adjusted or otherwise amended so as to ensure
that or, as nearly as possible that, following such changes the
obligations, limitations and restrictions contained in such
covenants shall, mutatis mutandis, have the same effect as if such
changes had not been made and that the Administrative Agent shall be
provided with all appropriate information and details that it may
request in connection with such adjustments or amendments.
20
(h) Each of ABH and LCI will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to
which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such
laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(i) Each Guarantor will and will cause each of its Subsidiaries to
maintain, with institutions it reasonably believes to be financially
sound insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance if adequate reserves
are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or similar
business and similarly situated.
(j) Each Guarantor will and will cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their
respective properties in reasonably good repair, working order and
condition (other than ordinary wear and tear), so that the business
carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent a Guarantor from
discontinuing the operation and maintenance of or the liquidation of
any Dormant Subsidiary and shall not prevent a Guarantor or any
Subsidiary from discontinuing the operation and the maintenance of
any of its properties if such discontinuance is desirable in the
conduct of its business and such Guarantor has concluded that such
discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(k) Each Guarantor will and will cause each of its Subsidiaries to file
all material tax returns required to be filed in any jurisdiction
and to pay and discharge all taxes, assessments, governmental
charges, or levies shown to be due and payable on such returns and
all other taxes imposed on them or any of their properties, assets,
income or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent and
all claims for which sums have become due and payable that have or
might become a Lien on properties or assets of such Guarantor or any
Subsidiary, provided that neither a Guarantor nor any Subsidiary
need to pay any such tax or assessment or claims if (i) the amount,
applicability or validity thereof is contested by such Guarantor or
such Subsidiary on a timely basis in good faith in appropriate
proceedings and such Guarantor or a Subsidiary has established
adequate reserves therefor in
21
accordance with GAAP on the books of such Guarantor or such
Subsidiary or (ii) the nonpayment of all such taxes and assessments
in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
(l) Each Guarantor will at all times preserve and keep in full force and
effect its corporate or other existence. Except as allowed under the
Note Agreements, each of ABH and LCI will at all times preserve and
keep in full force and effect the corporate or other existence of
each of its Subsidiaries (other than Dormant Subsidiaries or unless
merged into such Guarantor or a Subsidiary) and all licenses,
consents, certificates and authorizations of such Guarantor and its
Subsidiaries unless, in the good faith judgment of such Guarantor,
the termination of or failure to preserve and keep in full force and
effect such corporate or other existence, licenses, consents,
certificates and authorizations could not, individually or in the
aggregate, have a Material Adverse Effect.
(m) Each Guarantor will, and will cause each of its Subsidiaries to,
keep proper books of record and account in accordance with GAAP as
applied in the jurisdiction of its incorporation as such Guarantor
may deem appropriate from time to time.
(n) Neither ABH or LCI nor any Subsidiary will engage in any business
if, as a result, the general nature of the business, taken on a
consolidated basis, which would then be engaged in by such Guarantor
and its Subsidiaries would be materially changed from the general
nature of the business engaged in by such Guarantor and its
Subsidiaries as of the date hereof.
(o) Promptly upon the determination that any Subsidiary of LCI has
become a Material Subsidiary, LCI shall cause such Subsidiary to
execute and deliver a joinder agreement for the Subsidiary Guaranty
pursuant to which such Subsidiary shall become a party thereto and
Subsidiary Guarantor thereunder.
(p) The Trust covenants and agrees that the Trust will maintain a
minimum fair market value of assets less liabilities of
$100,000,000.
13. Consequences of Specified Events. If at any time prior to the indefeasible
payment and performance of the Guaranteed Obligations (each of the
following, a "Specified Event"),
(a) LCI shall at any time fail to comply with the covenants set forth in
Sections 12(f), 12(g), 12(o) or 14 hereof and to the extent such
non-compliance is capable of being cured, such non-compliance shall
not have been cured within twenty-five (25) days; or
(b) any borrowed money for a sum in excess of (pounds)2,500,000 or the
equivalent thereof in any other currency of LCI or any Material
Subsidiary shall by reason of breach
22
or default become due and payable prior to its stated maturity or
due date therefor or if any such borrowed money is not paid at the
maturity thereof or due date therefor (or within any originally
stated applicable grace period therefor) or, if payable on demand,
is not paid on demand; or
(c) LCI or any Material Subsidiary becomes insolvent or applies for or
consents to or suffers the appointment of a liquidator, receiver,
administrative receiver, administrator, guardian, encumbrancer,
trustee in bankruptcy or similar official of the whole or any
substantial part of its respective assets, business, property,
revenues or undertaking (other than in any of such cases (except for
the appointment of any administrator) for the purposes of a solvent
reconstruction or amalgamation the terms of which have previously
been approved by the Required Lenders) LCI or any Material
Subsidiary takes any proceedings under any law for adjustment,
deferment or rescheduling of its Indebtedness or any part thereof or
makes or enters or any proposal is made to make or enter into a
general assignment or arrangement (including, without limitation,
any voluntary arrangement under part I of the Insolvency Act 1986)
or composition with or for the benefit of its creditors or a
moratorium shall be declared on any of its Indebtedness or any part
thereof or any creditor of LCI or any Material Subsidiary exercises
a contractual right to take over the financial management of LCI or
any Material Subsidiary or LCI or any Material Subsidiary is deemed
or shall become unable to pay its debts as defined in Section 123
Insolvency Act 1986 or LCI or any Material Subsidiary fails
generally to pay its debts as and when they fall due or if the
equivalent of any of the foregoing shall occur in relation to LCI or
any Material Subsidiary under the laws of any jurisdiction to which
it or any of its rights, property or assets are subject; or
(d) a petition is presented (but only if such petition remains
undischarged 90 days after presentation thereof) or a meeting is
convened or an order is made or resolution is passed for or other
action or proceedings or steps are taken with a view to the
appointment of an administrator, winding-up, liquidation or
dissolution of LCI or any Material Subsidiary or if the equivalent
of any of the foregoing shall occur in relation to LCI or any
Material Subsidiary under the laws of any jurisdiction to which it
or any of its rights, property or assets are subject (other than in
any of such cases (except for the appointment of any administrator)
for the purposes of the winding up of a dormant member of the Group
or a solvent reconstruction or amalgamation, in each case the terms
of which have previously been approved by the Required Lenders), or
LCI or any Material Subsidiary stops or threatens to stop payments
generally or ceases or threatens to cease to carry on its business
or a substantial part thereof or LCI or any Material Subsidiary
merges, consolidates or amalgamates with or into any other company,
corporation or entity in a transaction not otherwise permitted under
the Facilities Agreement; or
23
(e) a distress, execution or other legal process is levied against any
of the assets of LCI or any Material Subsidiary and is not
discharged or paid out within 90 days, except where such distress,
execution or other legal process is in the reasonable opinion of the
Required Lenders being contested in good faith by LCI or the
relevant Material Subsidiary or any analogous proceedings shall be
commenced against LCI or any Material Subsidiary or its assets under
the laws of any other jurisdiction; or
(f) an encumbrancer takes possession or a receiver or an administrative
receiver is appointed of the whole or any substantial part of the
assets or undertaking of LCI or any Material Subsidiary or any
analogous action shall be taken against LCI or any Material
Subsidiary or its assets or undertaking under the laws of any
jurisdiction;
then, not later than five (5) days after such Specified Event, at the
option of the Required Lenders, the provisions of Section 17 shall apply.
14. Negative Covenants. At all times prior to indefeasible payment and
performance of the Guaranteed Obligations by the Guarantors hereunder,
(a) Each of ABH and LCI will not, and will not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise)
any Lien on or with respect to any property or asset except:
(i) Liens securing Existing Senior Debt;
(ii) any Lien arising by operation of law which secures amounts not
more than 45 days overdue or, if so overdue, are being
contested on a timely basis in good faith and in appropriate
proceedings;
(iii) any Lien imposed on a Guarantor or any of its Subsidiaries in
relation to its purchase of goods, products or supplies in the
ordinary course of business;
(iv) any rights of set-off in the normal course of trading or of
any bank or financial institution or combination of accounts
arising in favor of such bank or financial institution as a
result of the day-to-day operation of banking arrangements,
including without limitation, rights of set-off granted to
such bank or financial institution in respect of the issuance
of letters of credit, or as a result of any currency or
interest rate hedging operations carried out in the ordinary
course of business, in each case, provided that there is no
agreement to confer a security interest;
24
(v) statutory Liens of landlords, Liens over goods or documents of
title arising in the ordinary course of documentary credit
transactions and Liens of carriers, warehousemen, mechanics,
materialmen and other similar Liens, in each case, incurred in
the ordinary course of business;
(vi) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is
not at the time required by Note Agreements;
(vii) Liens incurred or deposits made in the ordinary course of
business (A) in connection with workers' compensation,
unemployment insurance and other types of social security or
retirement benefits, or (B) to secure (or to obtain letters of
credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other
than capital leases), performance bonds, purchase,
construction or sales contracts and other similar obligations,
in each case not incurred or made in connection with the
borrowing of money, the obtaining of advances or credit or the
payment of the deferred purchase price of property;
(viii)leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or
encumbrances, in each case incidental to, and not interfering
with, the ordinary conduct of business of a Guarantor and its
Subsidiaries, provided that such Liens do not, in the
aggregate, materially detract from the value of such property;
(ix) any Lien renewing, extending or refunding any Lien permitted
by clause (i), provided that (A) the principal amount of
Indebtedness secured by such Lien immediately prior to such
extension, renewal or refunding is not increased or the
maturity thereof reduced, (B) such Lien is not extended to any
other property and (C) immediately after such extension,
renewal or refunding no Specified Event would exist;
(x) any Lien securing the obligations of LCI under the Credit
Facility and the obligations of any Subsidiary Guarantor under
any Subsidiary Guarantee;
(xi) any Lien not otherwise permitted by clauses (i) through (x)
above, provided that on the date any Indebtedness secured by
any such Lien, is created, incurred, assumed or guaranteed by
such Guarantor or any Subsidiary, and immediately after giving
effect thereto and to the concurrent retirement of any other
Indebtedness, the sum of (A) the aggregate principal amount of
all Indebtedness secured by Liens pursuant to this clause (xi)
plus (B) all unsecured Indebtedness of such Guarantor and its
Subsidiaries (excluding any unsecured Existing Senior Debt)
that is
25
senior in any respect in right of payment to the obligations
of such Guarantor hereunder, does not exceed 25% of the
Consolidated Tangible Assets of such Guarantor as of such
date; and
(xii) any Lien set forth on Schedule 3, in the case of ABH.
(b) Each of ABH and LCI will not, and will not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or
suffer to exist any secured or unsecured Indebtedness (excluding (A)
any Indebtedness secured by Liens pursuant to clauses (i) through
(x) of Section 14(a) hereof and (B) any unsecured Existing Senior
Debt but including an Indebtedness secured by Liens pursuant to
clause (xi) of Section 14(a) hereof) if the aggregate amount of all
such Indebtedness described in this clause (b) would exceed 25% of
the Consolidated Tangible Assets of such Guarantor as of such date.
(c) In the case of ABH only, declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of interests (now or hereafter outstanding) of such Sponsor or
on any warrants, options or other rights with respect to any class
of interests (now or hereafter outstanding) of such Sponsor (other
than dividends or distributions payable in its common interests or
warrants to purchase its common interests or splitups or
reclassifications of its interests into additional or other
interests) or apply, or permit any of its Subsidiaries to apply, any
of its funds, property or assets to the purchase, redemption,
sinking fund or other retirement of, or agree or permit any of its
Subsidiaries to purchase or redeem, any shares of any class of
interests (now or hereafter outstanding) of such Sponsor, or
warrants, options or other rights with respect to any shares of any
class of interests (now or hereafter outstanding) of such Sponsor.
15. Payments Free and Clear of Taxes, etc. Each Guarantor hereby agrees that:
(a) All payments by such Guarantor hereunder to the Borrower or to a
Lender shall be made free and clear of and without deduction for any
present or future income, excise, stamp or franchise taxes and other
taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise
taxes and taxes imposed on or measured by any Lender's net income or
receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made
by a Guarantor hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then such
Guarantor will
(i) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
26
(ii) promptly forward to the Borrower or such Lender an official
receipt or other documentation satisfactory to the Borrower or
such Lender evidencing such payment to such authority; and
(iii) pay to the Borrower or such Lender such additional amount or
amounts ("Additional Amounts") as is necessary to ensure that
the net amount actually received by the Borrower or such
Lender will equal the full amount the Borrower or such Lender
would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Borrower or
any such Lender with respect to any payment received by the Borrower
or such Lender hereunder, the Borrower or such Lender may pay such
Taxes and the Guarantor will promptly pay such Additional Amounts
(including any penalties, interest or expenses ) as is necessary in
order that the net amount received by the Borrower or such Lender
after the payment of such Taxes (including any Taxes on such
Additional Amounts) shall equal the amount the Borrower or such
Lender would have received had not such Taxes been asserted.
Upon the request of any Guarantor, each Lender that is organized
under the laws of a jurisdiction other than the United States or a
State thereof (for purposes of this paragraph (k), a "Non-U.S.
Lender") shall, prior to the date on which any payment is made
hereunder (or in the case of a Lender that becomes a party to the
Credit Agreement pursuant to Section 4.11 of the Credit Agreement or
any Assignee Lender, before it becomes a party hereto) (i) execute
and deliver to each Guarantor and the Administrative Agent one or
more (as the Guarantors or the Administrative Agent may reasonably
request) United States Internal Revenue Service Forms 4224 or Forms
1001 or such other forms or documents (or successor forms or
documents), appropriately completed, certifying in each case that
such Lender or Assignee Lender is entitled to receive payments under
this Completion Guaranty without deduction or withholding of any
United States federal income taxes, and an applicable Internal
Revenue Service Form W-8 or Form W-9 or successor applicable form
(if required by law), as the case may be, to establish an exemption
from United States backup withholding tax or (ii) if such Non-U.S.
Lender is not a "bank" or other person described in Section 881 (c)
(3) of the Code and cannot deliver either Form 4224 or Form 1001
pursuant to clause (a) above, execute and deliver to each Guarantor
and the Administrative Agent one or more (as the Guarantors or the
Administrative Agent may reasonably request) copies of the Tax
Certificate, Form W-8 (or any successor form) and any other
certificate or statement of exemption required under the Code or
Treasury Regulations issued thereunder, appropriately completed,
certifying that such Lender or Assignee Lender is entitled to
receive payments under this Completion Guaranty without deduction or
withholding of United States federal
27
income tax and establishing an exemption from United States backup
withholding tax. All Lenders other than Non-U.S. Lenders shall,
prior to the date on which any payment is made hereunder (or in the
case of a Lender that becomes a party to the Credit Agreement
pursuant to Section 4.11 of the Credit Agreement or is an Assignee
Lender, before such Lender becomes a party hereto) execute and
deliver to the Borrower and the Administrative Agent one or more
copies (as the Borrower or Administrative Agent may reasonably
request) of United States Internal Revenue Form W-9 or successor
applicable form (if required by law), as the case may be, to
establish exemption from United States backup withholding tax.
Each Lender which undertakes to deliver to the Guarantors or the
Administrative Agent a Tax Certificate, a Form 4224, Form 1001, Form
W-8 or Form W-9 pursuant to the preceding paragraph shall further
undertake to deliver to the Guarantors and the Administrative Agent
two further copies of said Tax Certificate, Form 4224, Form 1001,
Form W-8 or Form W-9 (if required by law), or successor applicable
forms, or other manner of certification, as the case may be, on or
before the date that such form expires or becomes obsolete or after
the occurrence of an event requiring a change in the most recent
form delivered by it to the Guarantors and the Administrative Agent,
and such extensions or renewals thereof as may be reasonably
requested by the Guarantors or Administrative Agent, certifying in
the case of a Tax Certificate, Form 4224 or Form 1001 that such
Lender is entitled to receive payments under this Completion
Guaranty without deduction or withholding of any United States
federal income taxes, unless in any case an event (including any
change in treaty, law or regulation) has occurred prior to the date
on which such delivery would otherwise be required which renders all
forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such
Lender advises the Guarantors and the Administrative Agent that it
is not capable of receiving payments without any deduction or
withholding of United States federal income tax, and in the case of
a Form W-8 or Form W-9, establishing an exemption from backup
withholding.
(b) If the Guarantor fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Borrower or any Lender the
required receipts or other required documentary evidence, the
Guarantor shall indemnify the Borrower or such Lender for any
incremental Taxes, interest or penalties that may become payable by
the Borrower or such Lender as a result of any such failure.
(c) In the event that an Additional Amount is paid by a Guarantor for
the account of any Lender and such Lender is entitled to a refund of
the Tax (a "Tax Refund") to which such payment is attributable, then
such Lender shall take all reasonable steps which are necessary to
obtain such Tax Refund, including filings such
28
forms, certificates, documents, applications or returns as may be
required to obtain such Tax Refund. If such Lender subsequently
receives such a Tax Refund, and such Lender is readily able to
identify the Tax Refund as being attributable to the Tax with
respect to which the Additional Amount was made, then such Lender
shall reimburse such Guarantor such amount as such Lender shall
determine acting in good faith to be the proportion of the Tax
Refund, together with any interest received thereon, attributable to
such Additional Amount as will leave such Lender after the
reimbursement (including such interest) in no better or worse
position than it would have been if the Additional Amount had not
been required.
(d) Without prejudice to the survival of any other agreement of the
Guarantors hereunder, the agreements and obligations of the
Guarantors contained in this Section 15 shall survive the payment in
full of the principal of and interest on the Loans.
16. Judgment. Each Guarantor hereby agrees that:
(a) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in United States Dollars
into another currency, such Guarantor agrees, to the fullest extent
permitted by law, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the
Administrative Agent could purchase United States Dollars with such
other currency on the Business Day preceding that on which final
judgment is given.
(b) The obligation of each Guarantor in respect of any sum due from it
to any Lender hereunder shall, notwithstanding any judgment in a
currency other than United States Dollars, be discharged only to the
extent that on the Business Day following receipt by such Lender of
any sum adjudged to be so due in such other currency such Lender
may, in accordance with normal banking procedures, purchase United
States Dollars with such other currency; in the event that the
United States Dollars so purchased are less that the sum originally
due to such Lender in United States Dollars, the Guarantor, as a
separate obligation and notwithstanding any such judgment, shall
indemnify and hold harmless such Lender and such holder against such
loss, and if the United States Dollars so purchased exceed the sum
originally due to such Lender in United States Dollars, such Lender
shall remit to such Guarantor such excess.
17. Breaches by Any Guarantor. If, at any time prior to the indefeasible
payment and performance of the Guaranteed Obligations by the Guarantors
hereunder, any of the Guarantors breaches the Guaranteed Obligations
(after the expiration of applicable grace, notice and/or cure periods),
then, at the option of the Required Lenders, an Event of Default shall
exist under this Completion Guaranty and the other Loan Documents and
29
the Lenders, without any further notice to any of the Guarantors or any
other Person, shall be entitled to exercise all rights and remedies
available hereunder, under the other Loan Documents and at law and equity;
provided, however, the Lenders may, at their option, commence collection
proceedings against one or more of the Guarantors without declaring an
Event of Default under the other Loan Documents.
18. Miscellaneous Provisions.
(a) This Completion Guaranty is a Loan Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with
the terms and provisions thereof.
(b) This Completion Guaranty shall be binding upon the Guarantors and
their permitted successors, transferees and assigns and shall inure
to the benefit of and be enforceable by the Administrative Agent and
each Lender and their respective successors, transferees and
assigns; provided, however, that the Guarantors may not assign any
of their Guaranteed Obligations hereunder without the prior written
consent of the Required Lenders.
(c) No amendment to or waiver of any provision of this Completion
Guaranty, nor consent to any departure by any Guarantor herefrom,
shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
(d) All notices and other communications provided to any party hereto
under this Completion Guaranty shall be in writing and addressed,
delivered or transmitted to such party at its address or facsimile
number set forth below or at such other address or facsimile number
as may be designated by such party in a notice to the other parties.
All such notices and communications shall be deemed to have been
properly given if (x) hand delivered with receipt acknowledged by
the recipient; (y) if mailed, upon the fifth Business Day after the
date on which it is deposited in registered or certified mail,
postage prepaid, return receipt requested or (z) if by Federal
Express or other nationally-recognized express courier service with
instructions to deliver on the following Business Day, on the next
Business Day after delivery to such express courier service. Notices
and other communications may also be properly given by facsimile but
shall be deemed to be received upon automatic facsimile confirmation
of receipt thereof by the intended recipient machine therefor with
the original of such notice or communication to be given in the
manner provided in the second sentence of this Section; provided,
however, that the failure to deliver a copy in accordance with the
second sentence of this paragraph (d) shall not invalidate the
effectiveness of such facsimile notice. The address information for
the parties is set forth below:
30
If to the Administrative
Agent: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone No(415) ▇▇▇-▇▇▇▇
Facsimile No(415) 397-0791
If to the Trust: c/o Aladdin Holdings
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No(212) ▇▇▇-▇▇▇▇
Facsimile No(212) 661-0844
If to ABH: Aladdin Bazaar Holdings, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No(702) ▇▇▇-▇▇▇▇
Facsimile No(702) 736-7107
If to LCI: London Clubs International, plc
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No011-44-171-518-0000
Facsimile No011-44-171-493-6981
with a copy to: Ohrenstein & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No(212)- ▇▇▇-▇▇▇▇
Facsimile No(212)- 557-0910
and: Lionel, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone No(702)-383-8888
Facsimile No(702)-383-8845
31
(e) No failure on the part of the Administrative Agent or any Lender 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 right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies
provided by law.
(f) Section captions used in this Completion Guaranty are for
convenience of reference only, and shall not affect the construction
of this Completion Guaranty.
(g) Wherever possible each provision of this Completion Guaranty shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Completion Guaranty
shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Completion Guaranty.
(h) THIS COMPLETION GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THIS
COMPLETION GUARANTY AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE
ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR COMPLETION GUARANTIES,
WRITTEN OR ORAL, WITH RESPECT HERETO.
(i) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS COMPLETION GUARANTY, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF THE ADMINISTRATIVE AGENT, THE LENDERS OR THE GUARANTORS SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇ IN THE CITY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH PROPERTY MAY BE FOUND. THE GUARANTORS HEREBY EXPRESSLY
AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK IN THE CITY OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE
OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
32
IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. THE GUARANTORS HEREBY IRREVOCABLY
APPOINT CT CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE
ON THE DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, AS THEIR AGENT TO RECEIVE, ON THE GUARANTORS' BEHALF
AND ON BEHALF OF THE GUARANTORS' PROPERTY, SERVICE OF COPIES OF THE
SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING
OR DELIVERING A COPY OF SUCH PROCESS TO THE GUARANTORS IN CARE OF
THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND THE
GUARANTORS HEREBY IRREVOCABLY AUTHORIZE AND DIRECT THE PROCESS AGENT
TO ACCEPT SUCH SERVICE ON THEIR BEHALF. AS AN ALTERNATIVE METHOD OF
SERVICE, THE GUARANTORS FURTHER IRREVOCABLY CONSENT TO THE SERVICE
OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE GUARANTORS
HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
GUARANTORS HAVE OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
OF EXECUTION OR OTHERWISE) WITH RESPECT TO THEMSELVES OR THEIR
PROPERTY, THE GUARANTORS HEREBY IRREVOCABLY WAIVE SUCH IMMUNITY IN
RESPECT OF THE GUARANTEED OBLIGATIONS UNDER THIS COMPLETION GUARANTY
AND THE OTHER LOAN DOCUMENTS.
(j) THE GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS COMPLETION GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
ADMINISTRATIVE AGENT OR THE
33
LENDERS OR THE GUARANTORS. THE GUARANTORS ACKNOWLEDGE AND AGREE THAT
THEY HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
LENDERS ENTERING INTO THE CREDIT AGREEMENT.
34
IN WITNESS WHEREOF, the Guarantors have caused this Completion Guaranty to
be duly executed and delivered by their officers thereunto duly authorized as of
the date first above written.
ALADDIN BAZAAR HOLDINGS, LLC
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
------------------------------
▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary, Treasurer
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇.▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
THE TRUST UNDER ARTICLE SIXTH UNDER
THE WILL OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Title: Trustee
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Trustee
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
LONDON CLUBS INTERNATIONAL PLC
By: /s/ G. ▇▇▇▇▇ ▇▇▇▇▇
------------------------------
G. ▇▇▇▇▇ ▇▇▇▇▇
Title: Finance Director
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attention: G. ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 011-44-171-518-0174
35
SCHEDULE 1
Additional Defined Terms
"Cash and Cash Equivalents" means:
(a) cash in hand or at a bank and beneficially owned by LCI or a
Subsidiary of LCI;
(b) Sterling or Dollar denominated commercial paper maturing not
more than nine months from the date of issue and rated A-1 or better by
Standard & Poor's Corporation or P-1 or better by ▇▇▇▇▇'▇ Investors
Service, Inc.;
(c) any deposit with, or acceptance maturing not more than one year
after issue, accepted by, an authorized institution or an exempted
institution within the meaning of the Banking ▇▇▇ ▇▇▇▇ which has a
combined capital and surplus and undistributable profits of not less than
(pounds)100,000,000 or by any bank, either of which shall have a long-term
debt rating of A- or better by Standard & Poor's Corporation or A3 or
better by ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) Sterling or Dollar denominated debt securities having not more
than one year until final maturity and listed on a recognized stock
exchange or in respect of which there is an active trading market in
London and rated at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. or at
least AA by Standard and Poor's Corporation;
(e) direct obligations of the United States of America or any agency
or instrumentality of the United States of America, the payment or
guarantee of which constitutes a full faith and credit obligation of the
United States of America, in each case maturing twelve months or less from
the date of acquisition thereof;
(f) gilt-edge securities issued directly, or unconditionally
guaranteed, by the United Kingdom Treasury, in each case maturing twelve
months or less from the date of acquisition thereof, legally and
beneficially owned, free of Liens and freely accessible by LCI or any
Subsidiary; or
(g) short-term liquid debt securities which for the time being are
rated at least AAA by Standard & Poor's Corporation or an equivalent
rating by any other reputable, rating agency.
"Consolidated Net Borrowings" means the aggregate outstanding
principal amount of Indebtedness of the Group less Cash and Cash Equivalents.
"Consolidated Net Worth" means, the aggregate of the amounts paid-up
or credited as paid-up on LCI's issued share capital and the amount of the
consolidated capital and revenue reserves of the Group (including, without
limitation, any share premium account, merger reserve, capital redemption
reserve, revaluation reserve and retained earnings) and any credit balance on
LCI's consolidated profit and loss account all as shown by the latest
consolidated financial statements of LCI delivered or to be delivered pursuant
to this Completion Guaranty from time to time but after:
(i) deducting any debit balance on such consolidated profit and
loss account;
(ii) deducting the net book value of all assets, after deducting
any reserves applicable thereto, which would be treated as
intangible under GAAP (excluding amounts attributable to
acquisition goodwill, trademarks, trade names, service marks,
brand names, copyrights, patents and similar property);
(iii) deducting any amounts distributed or proposed to be
distributed (other than to LCI or any other member of the
Group) out of the profits accrued prior to the date of such
financial statements to the extent that such distribution is
not provided for therein;
(iv) deducting all amounts attributable to minority interests, if
any, in Subsidiaries of LCI;
(v) excluding any sums set aside or otherwise reserved or provided
for taxation;
(vi) adding back any diminution due to the writing off or
amortization of acquisition goodwill or the debiting of
acquisition goodwill to any reserve; and
(vii) making such adjustments to reflect any variations which shall
have occurred since the date of such financial statements:
(a) in the amounts paid up or credited as paid up on the
issued share capital of LCI and the consolidated capital
and revenue reserves of the Group;
(b) to reflect any changes in generally accepted accounting
principles and bases and the application of standards
and practices since then as may be appropriate in the
opinion of the auditors for the time being of LCI; and
(c) in the interest of LCI in any other member of the Group.
2
"Group" means LCI and its subsidiaries.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital
or other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation,
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof;
provided that, the obligations of LCI under the Keep-Well Agreement to pay the
Accelerated Payment Amount shall be treated at any time as a Guaranty of
Indebtedness of the Borrower in an amount equal to 25% of the Accelerated
Payment Amount at such time. In any computation of the indebtedness or other
liabilities of the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"Group Operating Profit" means, in respect of any period of the
Group, (a) the consolidated profit of the Group for such period before crediting
or deducting amounts attributable to extraordinary and exceptional items, all as
determined in accordance with GAAP, plus (to the extent deducted in determining
such consolidated profits), (b) all provisions for Taxes and (c) Net Interest
Payable; in each case as determined from the relevant consolidated financial
statements of LCI delivered or to be delivered pursuant to this Completion
Guaranty for such period.
"Indebtedness" with respect to any Person means, at any time,
without duplication,
3
(a) its liabilities for borrowed money (excluding accounts payable
in the ordinary course of business) and its redemption obligations upon
and following the date of redemption in respect of mandatorily redeemable
Preferred Stock;
(b) its liabilities pursuant to any note purchase facility or the
issue of bonds, notes, debentures, commercial paper, loan stock or similar
instruments;
(c) all actual (as opposed to contingent) reimbursement obligations
(other than accounts payable in the ordinary course of business) in
respect of any acceptance or documentary credit facilities;
(d) its liabilities for the deferred purchase price of property,
assets or services acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property, assets or services);
(e) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(f) its liabilities in respect of the principal amount of any
receivables sold or discounted to a third party to the extent of recourse
to such Person or any of its Subsidiaries;
(g) Swaps of such Person; and
(h) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (h) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (h) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Subsidiary" means, as to any particular parent corporation, any
corporation of which more than 50% (by number of votes) of the Voting Shares
shall be owned, directly or indirectly, by such parent corporation; provided,
however, that notwithstanding the foregoing, the term subsidiary shall, in any
event, include any company or legal entity which is a "subsidiary" as defined in
Section 736 of the Companies ▇▇▇ ▇▇▇▇, as amended by Section 144 of the
Companies ▇▇▇ ▇▇▇▇, or as detailed in analogous legislation.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Completion Guaranty, the
amount of the obligation under any Swap shall be the amount determined in
respect thereof as of the end of the then most recently ended fiscal quarter of
such
4
Person, based on the assumption that such Swap had terminated at the end of such
fiscal quarter, and in making such determination, if any agreement relating to
such Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Taxes" means all present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other governmental charges of any
nature whatsoever and any liabilities with respect thereto, including any
surcharge, penalties, additions to tax, fines or interest thereon, now or
hereafter imposed, levied, collected withheld or assessed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein.
5
SCHEDULE 2
MATERIAL SUBSIDIARIES
LONDON CLUBS HOLDINGS LIMITED
LES AMBASSADEURS CLUB LIMITED
RENDEZVOUS CLUB (LONDON) LIMITED
PALM BEACH CLUB LIMITED
SIX ▇▇▇▇▇▇▇▇ PLACE LIMITED
BURLINGTON STREET SERVICES LIMITED
ZEALCASTLE LIMITED
CORBY LEISURE RETAIL DEVELOPMENTS LIMITED
UNITLAW TRADING LIMITED
LONDON PARK TOWER CLUB LIMITED
PUBLICACE LIMITED
LOMASBOND PROPERTIES LIMITED
LONDON CLUBS (OVERSEAS) LIMITED
DECBURY LIMITED
GOLDEN NUGGET CLUB LIMITED
LONDON CLUBS MANAGEMENT LIMITED
THE SPORTSMAN CLUB LIMITED
RITZ CLUB (LONDON) LIMITED
SCHEDULE 3-A
TAX LIABILITIES
With respect to the Trust, none other than potential tax liability that may
result from liabilities to which the Site is subject exceeding the tax basis of
the Site.
SCHEDULE 3
SUBSIDIARIES
(other than Dormant Subsidiaries)
ABH's Subsidiaries
Name: Aladdin Bazaar, LLC
State of Organization: Delaware
ABH Ownership: 50% member
In connection with the development of the Mall Project by Aladdin Bazaar, LLC
("Aladdin Bazaar"), if a guaranty, letter of credit or other form of credit
enhancement is required to be obtained by the Trust or ABH in order to insure
Aladdin Bazaar or any of its members that the Hotel/Casino will be completed and
opened successfully, ABH will be permitted to convey up to 50% of its interest
in Aladdin Bazaar to CS First Boston or any other institutional investor and
pledge any of its remaining interest in Aladdin Bazaar to CS First Boston or to
such other institutional investor providing financing for the development of the
Mall Project. Furthermore, the Trust shall be entitled to pledge its membership
interest in ABH to either or both of CS First Boston or such other institutional
investor in connection with the financing of the Mall Project.
London Clubs' Subsidiaries
See attachment.
SCHEDULE 4
LITIGATION
▇▇▇▇▇▇, et al. ▇. ▇▇▇▇▇▇, et al., Index No. 112618/95 (New York Sup. Ct.)
Kanbar, et al. ▇. ▇▇▇▇▇▇, et al., Index No. 600301/97 (New York Sup. Ct.)
▇▇▇▇▇▇, et al. v. PMEC Associates and Co., et al., No. 88 Civ. 2537 (S.D.N.Y.)
SCHEDULE 5
LICENSES, PERMITS, ETC.
ABH
See attachment.
SCHEDULE 6
EXISTING INDEBTEDNESS
Trust
None.
ABH and/or its Subsidiaries
$30,000,000 contingent liability (see Schedule 3)
London Clubs and/or its Subsidiaries
See attachment.
SCHEDULE 7
OWNERSHIP OF BORROWER
Aladdin Bazaar Holdings, LLC
Aladdin Bazaar Holdings, LLC has no ownership interest in Borrower.
The Trust
The Trust owns an indirect interest in Borrower through its ownership interests
in the following entities:
o The Trust owns a 95% membership interest in Aladdin Holdings, LLC (AHL).
o AHL owns a 98.7% membership interest in ▇▇▇▇▇▇ Enterprises, LLC
(▇▇▇▇▇▇ Enterprises).
▇ ▇▇▇▇▇▇ Enterprises owns a 47% membership interest in Aladdin
Gaming Holdings, LLC (Holdings) and a 100% membership interest
in Aladdin Gaming Enterprises, Inc. (Enterprises). Enterprises
owns a 25% membership interest in Holdings.
o Holdings owns 100% of the common membership interest and
100% of the Series A Preferred membership interest in
the Borrower.
LCI
See chart attached hereto.
Exhibit C
To Credit Agreement
GUARANTY OF PERFORMANCE AND COMPLETION
THIS GUARANTY OF PERFORMANCE AND COMPLETION (this "Completion Guaranty"),
dated as of February 26, 1998 is made by LONDON CLUBS INTERNATIONAL PLC, a
company registered in England and Wales under company number 2862479 ("LCI"),
THE TRUST UNDER ARTICLE SIXTH UNDER THE WILL OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Trust") and
ALADDIN BAZAAR HOLDINGS, LLC, a Nevada limited liability company ("ABH"; ABH,
the Trust and LCI are individually called a "Guarantor" and collectively called
the "Guarantors"), in favor of each of the Administrative Agent and the Lenders
and their respective successors, transferees and assigns.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of even date herewith
(together with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "Credit Agreement"), among Aladdin Gaming, LLC, a
Nevada limited liability company (the "Borrower"), the various lending
institutions (individually a "Lender" and collectively the "Lenders") as are, or
may from time to time become, parties thereto and The Bank of Nova Scotia as
administrative agent (together with any successor(s) thereto in such capacity,
the "Administrative Agent") for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation
as the syndication agent (together with any successor thereto in such capacity,
the "Syndication Agent") and CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp. as the documentation agent
(together with any successor thereto in such capacity, the "Documentation
Agent"), the Lenders have extended Commitments to make Loans to the Borrower and
to issue Letters of Credit for the account of the Borrower; and
WHEREAS, as a condition precedent to the effectiveness of the Credit
Agreement, the Guarantors are required to execute and deliver this Completion
Guaranty and certain subsidiaries of LCI (the "Subsidiary Guarantors") have
agreed to fully and unconditionally guarantee the payment of LCI's obligations
under this Completion Guaranty pursuant to a guaranty agreement of even date
herewith (the "Subsidiary Guaranty"); and
WHEREAS, the Guarantors have duly authorized the execution, delivery and
performance of this Completion Guaranty and the Subsidiary Guarantors have duly
authorized the execution, delivery and performance of the Subsidiary Guaranty;
and
WHEREAS, it is in the best interests of the Guarantors to execute this
Completion Guaranty and the Subsidiary Guarantors to execute the Subsidiary
Guaranty inasmuch as the Guarantors and the Subsidiary Guarantors will derive
substantial direct and indirect benefits
from the Loans made to the Borrower by the Lenders pursuant to the Credit
Agreement and the Letters of Credit issued for the account of the Borrower under
the Credit Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and in order to induce the Lenders to make Loans to the
Borrower and to issue Letters of Credit for the account of the Borrower pursuant
to the Credit Agreement, the Guarantors agree, for the benefit of the
Administrative Agent, the Syndication Agent and each Lender, as follows:
1. Definitions. Terms defined in the Credit Agreement and not otherwise
defined in this Completion Guaranty shall have the meanings ascribed to
them in the Credit Agreement. For the purposes of Section 12(g) and Section
13 hereof, the terms set forth on Schedule 1 hereto shall have the meanings
ascribed thereto on such Schedule. As used in this Completion Guaranty,
the following terms shall have the meanings respectively set forth after
each:
"Accelerated Payment Amount" shall have the meaning ascribed to such term
in the Keep-Well Agreement.
"Advance" shall have the meaning ascribed to such term in the Disbursement
Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States Code as amended
from time to time.
"Cash Equity Contributions" shall mean cash contributions by the Guarantors
to the Borrower in exchange for preferred interests of Holdings.
"Consolidated Intangibles": at a particular date, all assets of a
Guarantor and its consolidated Subsidiaries, determined on a consolidated
basis, that would, in conformity with GAAP, be classified as intangible
assets, including, without limitation, unamortized debt discount and
expense, unamortized organization and reorganization expense, costs in
excess of the fair market value of acquired companies, patents, trade or
service marks, franchises, trade names, goodwill and, from and after June
30, 1997, the amount of all write-ups in the book value of assets resulting
from any revaluation thereof.
"Consolidated Tangible Assets": at a particular date, the amount equal to
(a) the amount which would be included as assets on the consolidated
balance sheet of a Guarantor and its consolidated Subsidiaries as at such
date in accordance with GAAP minus (b) Consolidated Intangibles.
"Dormant Subsidiary" means any Subsidiary of a Guarantor which has no
operating assets or property and conducts no business.
2
"Enforcement Costs" means all reasonable out-of-pocket costs and expenses
of the Lenders in connection with the enforcement of the rights and
remedies of the Lenders under this Completion Guaranty and any amendment,
waiver or consent relating hereto including, without limitation, reasonable
attorneys' fees and costs and expenses, court costs and filing fees in
addition to all other amounts due hereunder whether or not such Enforcement
Costs are incurred in one or more proceedings.
"Existing Senior Debt" shall mean all principal, premium (if any), interest
and other amounts owing from time to time under (i) the Note Agreements and
(ii) the Facilities Agreement, in either case as amended, supplemented or
refinanced, from time to time, provided that the aggregate principal amount
of the Note Agreements and the Facilities Agreement shall not be greater
than the sum of (A) the maximum aggregate principal amount which could be
outstanding under the Facilities Agreement and the Note Agreements in
accordance with their terms as at the date hereof plus (B) 25% of
Consolidated Net Assets of LCI; provided further, that the aggregate
principal amount of the Existing Senior Debt in excess of the maximum
aggregate principal amount which could be outstanding under the Facilities
Agreement and the Note Agreements in accordance with their terms as at the
date hereof shall be excluded from the parenthetical phrase of Section
14(b) hereof.
"Facilities Agreement" shall mean that certain L65,000,000 Facilities
Agreement (originally dated 24th May 1994 as amended and restated) among,
inter alia, LCI, various banks and National Westminster PLC (the
predecessor-in-interest to The Bank of Nova Scotia) as arranger and agent,
as in effect on the date hereof and as the same may be modified by
amendments that would not, in the aggregate, have the effect of making
LCI's obligations thereunder materially more onerous (it being understood
and agreed that any amendment, supplement or modification (i) that
increases the amount of the obligations of LCI thereunder, (ii) that would
permit the lenders thereunder to declare a default if LCI made any Cash
Equity Contribution required of the Guarantors hereunder or (iii) that
would permit the lenders thereunder to declare a default if LCI made net
payments (net of all reimbursements from the other Guarantors) of not more
than 25% of any Accelerated Payment Amount required of the Sponsors under
the Keep-Well Agreement, shall be deemed material).
"GAAP" shall mean the generally accepted accounting principles as in effect
from time to time in the United Kingdom with respect to LCI and in the
United States with respect to the other Guarantors, as the case may be.
"Guaranteed Obligations" means the obligations of the Guarantors under
Section 2 of this Completion Guaranty.
"Insolvency Proceeding" shall mean any case or proceeding, voluntary or
involuntary, under the Bankruptcy Code, or any similar existing or future
law of any jurisdiction,
3
foreign, state or federal, relating to bankruptcy, insolvency,
reorganization or relief of debtors.
"Leases" means, collectively, all agreements relating to the use, occupancy
and possession of space with respect to the Main Project entered into by
the Borrower and a tenant.
"LSE" means the London Stock Exchange Limited.
"Material" means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of a Guarantor and
its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial conditions, assets or properties
of a Guarantor and its Subsidiaries taken as a whole, or (b) the ability of
a Guarantor to perform its Guaranteed Obligations or (c) the validity or
enforceability of this Completion Guaranty.
"Material Subsidiary" shall mean each of the Subsidiaries of LCI that are
party to that certain Subsidiary Guaranty dated as of June 30, 1997
guaranteeing the obligations of LCI under the Note Agreements. Each
Material Subsidiary of LCI as of the date hereof is listed on Schedule 2
hereof.
"Note Agreements" shall mean the several identical Note Purchase Agreements
dated as of June 30, 1997 among LCI and the purchasers named therein
relating to LCI's $50,000,000 aggregate principal amount of 7.74%
Guaranteed Senior Notes due 2004 and as the same may be modified by
amendments that would not, in the aggregate, have the effect of making
LCI's obligations thereunder materially more onerous (it being understood
and agreed that any amendment, supplement or modification (i) that
increases the amount of the obligations of LCI thereunder, (ii) that would
permit the lenders thereunder to declare a default if LCI made any Cash
Equity Contribution required of the Guarantors hereunder or (iii) that
would permit the lenders thereunder to declare a default if LCI made net
payments (net of all reimbursements from the other Guarantors) of not more
than 25% of any Accelerated Payment Amount required of the Sponsors under
the Keep-Well Agreement, shall be deemed material).
"Wholly-Owned Subsidiary" shall mean, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or
more of the Guarantors and such Guarantor's Wholly-Owned Subsidiaries at
such time.
4
2. Guaranty of Completion and Performance. The Guarantors, jointly and
severally, absolutely, unconditionally and irrevocably, on the terms and
subject to the conditions set forth herein, guarantee to the Lenders:
(i) that the Borrower shall (A) prosecute the Work and the construction of
the Main Project to Final Completion with due diligence and continuity, in
an expeditious and first-class workmanlike manner, (B) cause the Work and
the construction of the Main Project to be performed and the Main Project
to be constructed, equipped and completed in compliance with the Plans and
Specifications in all material respects and in compliance in all material
respects with the provisions of the Loan Documents, the other Operative
Agreements, all Environmental Laws and all Legal Requirements, and (C)
correct or cause to be corrected as soon as possible any material defect in
the Main Project and the Work (including, without limitation, any material
defect in workmanship or quality of construction or materials) or any
material departure or variation from the Final Plans and Specifications not
made pursuant to Change Orders approved in writing by the Administrative
Agent, the Construction Consultant, the Architect of Record and any of the
Governmental Instrumentalities whose approval is required; and
(ii) that the Borrower shall punctually pay and discharge (A) any and all
costs, expenses and liabilities incurred by the Borrower for or in
connection with the Final Completion of the Work and the Main Project, (B)
all claims and demands for labor, materials and services incurred by the
Borrower for or in connection with the Final Completion of the Work and the
Main Project which are or may become due and payable, or, if unpaid, are or
may become Liens on the Site or any portion thereof owned by the Borrower,
(C) all payments to be made for work to be performed by the Borrower under
Leases or under the Operative Documents for Tenant Improvements, (D)
Impositions and premiums for the insurance required by the Loan Documents
prior to the Conversion Date, (E) all interest accruing on the Bank Credit
Facility during construction and prior to the Final Completion of the Work
and the Main Project, and (F) the obligations of the Borrower to keep the
Bank Credit Facility In Balance; and
(iii) that the Borrower shall complete the Work and construction of the
Main Project Lien free and that the Main Project shall be and remain free
and clear of all Liens arising from the furnishing of materials, labor or
services for or in connection with the Work and the Main Project; and
(iv) that the Borrower shall provide the expertise necessary to supervise
construction of the Main Project and the Final Completion of the Work at no
cost to the Lenders or the Administrative Agent; and
(v) that in the event the Guarantors hereunder shall fail or refuse to pay
or perform the Guaranteed Obligations under this Completion Guaranty, the
Lenders may pay or perform or cause the payment and performance of the
Guaranteed Obligations of the
5
Guarantors hereunder in which case the Guarantors, upon demand by the
Lenders, shall pay any and all costs, expenses and liabilities for such
costs and expenses in connection with the Final Completion of the Main
Project, or cause any Lien in connection with the Final Completion thereof
or any claim or demand for the payment of the cost of the Final Completion
of the Main Project to be bonded, discharged, released or paid, shall
reimburse the Lenders for all sums paid and all costs, expenses or
liabilities incurred by the Lenders in connection therewith; and
(vi) that the Guarantors shall pay the Enforcement Costs.
3. Payment Provisions. All payments required to be made by the Guarantors
pursuant to Section 2 shall be made subject to the following terms:
(a) The Guarantors shall make cash payments in the amounts required under
Section 2 into an interest-bearing deposit account designated and
controlled exclusively by the Disbursement Agent (the "Guaranty
Deposit Account") in accordance with the Borrower Collateral Account
Agreement in which the Disbursement Agent is hereby granted a security
interest for the benefit of the Lenders. The Guaranty Deposit Account
is intended to be a "deposit account" for the purposes of Nevada
Revised Statutes ("NRS") 40.430.4(g) and Section 9301(g) of the
California Uniform Commercial Code. Such funds shall be held in the
Guaranty Deposit Account as additional collateral for the Obligations
under the Credit Agreement and the other Loan Documents; provided
that, if requested by the Guarantors, such funds shall be applied to
payment of the Guaranteed Obligations.
(b) The cash payments into the Guaranty Deposit Account and the funds
therein are for the purpose of paying the Guaranteed Obligations under
this Completion Guaranty and shall be free and clear of any third
party claims thereto, including any claims by the Borrower as a third
party beneficiary under this Completion Guaranty. The Guarantors and
the Administrative Agent on behalf of the Lenders specifically agree
that the Borrower is not an intended third party beneficiary to this
Completion Guaranty and that the Borrower nor any other Person which
is not party to this Completion Guaranty (other than successors and
assigns of the Lenders, the Administrative Agent, the Documentation
Agent and the Syndication Agent) has no rights under this Completion
Guaranty.
4. Continuation of Guaranty. In the event that the Obligations of the
Borrower under the Credit Agreement shall be accelerated pursuant to the
provisions of Section 8.1 thereof, this Guaranty shall continue to be in
full force and effect. Subject to the provisions of Section 10 hereof,
upon the indefeasible payment and performance of the Guaranteed Obligations
by the Guarantors, this Completion Guaranty shall terminate. All amounts
received by the Administrative Agent hereunder shall be applied by it to
the payment of the Guaranteed Obligations and in accordance with the Loan
Documents.
6
5. Proof of Damages. If the Guarantors shall at any time or from time to time
fail to perform or comply with any of the Guaranteed Obligations contained
herein and if for any reason the Lenders have failed to receive when due
and payable the payment of interest or any other amount payable by the
Guarantors under this Completion Guaranty, then in each such case (i) it
shall be assumed conclusively without necessity of proof that such failure
by the Guarantors was the sole and direct cause of the Lenders failing to
receive such payment when due ( to the extent of the failure of the
Guarantors to perform the Guaranteed Obligations contained herein)
irrespective of any other contributing or intervening cause whatsoever, and
(ii) the Guarantors further irrevocably waive to the fullest extent
permitted by law any right or defense the Guarantors may have to cause the
Lenders to prove the cause or amount of such damages or to mitigate the
same.
6. Rights of the Administrative Agent. Each Guarantor authorizes the
Administrative Agent, on behalf of the Lenders, to perform any or all of
the following acts at any time in their sole discretion, all without notice
to the Guarantors and without affecting the payment and performance of the
Guaranteed Obligations by the Guarantors:
(a) The Administrative Agent and the Lenders may alter any terms of the
Loan Documents to which the Guarantors are not a party, including
renewing, compromising, extending, enforcing or accelerating, or
otherwise changing the time for payment of, or increasing or
decreasing the rate of interest on, the Loans or any part of them or
increasing or decreasing the amount of the Loans or any other fees
payable under the Loan Documents.
(b) The Administrative Agent and the Lenders may take and hold security
for the Loans, the Letters of Credit and the Borrower's other
obligations under the Credit Agreement, the Sponsors' obligations
under the Keep-Well Agreement and the Guaranteed Obligations under
this Completion Guaranty, accept additional or substituted security
for any of the foregoing, and subordinate, exchange, enforce, waive,
release, compromise, fail to perfect and sell or otherwise dispose of
any such security.
(c) The Administrative Agent and the Lenders may direct the order and
manner of any sale of all or any part of any security now or later to
be held for the Loans, the Letters of Credit, this Completion Guaranty
or any of the other Loan Documents, and may also bid at any such sale.
(d) The Administrative Agent and the Lenders may apply any payments or
recoveries from the Borrower, any Guarantor, any Sponsor or any other
source, and any proceeds of any security, to the Borrower's
obligations under the Loan Documents and/or the Guaranteed Obligations
under this Completion Guaranty in such manner, order and priority as
they may elect, whether or not those
7
Guaranteed Obligations are supported by this Completion Guaranty or
secured at the time of the application.
(e) The Administrative Agent and the Lenders may release the Borrower of
its liability for the Obligations under the Credit Agreement or any
portion thereof.
(f) The Administrative Agent and the Lenders may substitute, add or
release any one or more Guarantors or endorsers.
(g) In addition to the Obligations under the Credit Agreement, the
Administrative Agent and the Lenders may extend other credit to the
Borrower, its Affiliates and any of the Guarantors and any of the
Sponsors or their respective Affiliates and may take and hold security
for the credit so extended, all without affecting the Guarantors'
liability under this Completion Guaranty.
(h) The Administrative Agent and the Lenders may change the terms or
conditions of disbursement of the Loans or the issuance of the Letters
of Credit.
(i) The Administrative Agent and the Lenders may advance additional funds
to the Borrower for any purpose.
7. Completion Guaranty to be Absolute. The Guarantors expressly agree that
for as long as the Credit Agreement remains in effect or any of the
Obligations under the Credit Agreement remain outstanding, the Guarantors
shall not be released from the Guaranteed Obligations hereunder by or
because of:
(a) Any act or event which might otherwise discharge, reduce, limit or
modify the Guaranteed Obligations;
(b) Any waiver, extension, modification, forbearance, delay or other act
or omission of the Administrative Agent or the Lenders, or any failure
to proceed promptly or otherwise as against the Borrower, any Sponsor,
any Guarantor or any security;
(c) Any action, omission or circumstance which might increase the
likelihood that the Guarantors may be called upon to perform under
this Completion Guaranty or which might affect the rights or remedies
of the Guarantors as against the Borrower or any Guarantor; or
(d) Any dealings occurring at any time between the Borrower, the
Guarantors, the Administrative Agent, the Syndication Agent, the
Documentation Agent or any Lender, whether relating to the Loans, the
Letters of Credit or otherwise.
8
The Guarantors hereby expressly waive and surrender any defense to their
liability under this Completion Guaranty based upon any of the foregoing
acts, omissions, agreements, waivers or matters. It is the purpose and
intent of this Completion Guaranty that the Guaranteed Obligations shall be
absolute and unconditional under any and all circumstances.
8. Guarantors' Waivers. The Guarantors waive:
(a) All statutes of limitations as a defense to any action or proceeding
brought against the Guarantors by the Administrative Agent or any
Lender, to the fullest extent permitted by law;
(b) Any right they may have to require the Administrative Agent or the
Lenders to proceed against the Borrower or any of the Sponsors,
proceed against or exhaust any security held from the Borrower or any
of the Sponsors, or pursue any other remedy in their power to pursue;
(c) Any defense based on any claim that the Guaranteed Obligations exceed
or are more burdensome than those of the Borrower;
(d) Any defense based on: (i) any legal disability of the Borrower, (ii)
any release, discharge, modification, impairment or limitation of the
liability of the Borrower and/or the Guarantors under the Loan
Documents from any cause, whether consented to by the Administrative
Agent or any Lender or arising by operation of law or from any
Insolvency Proceeding, (iii) any rejection or disaffirmance of the
Loans or any security held for the Loans, in any Insolvency Proceeding
and (iv) the Guarantors' rights under NRS 104.3605, the Guarantors
specifically agreeing that this clause (iv) shall constitute a waiver
of discharge under NRS 104.3605;
(e) Any defense based on any action taken or omitted (other than gross
negligence or willful misconduct) by the Administrative Agent or any
Lender in any Insolvency Proceeding involving the Borrower or any of
the Sponsors, including any election to have a claim allowed as being
secured, partially secured or unsecured, any extension of credit by
the Administrative Agent or any Lender to the Borrower in any
Insolvency Proceeding, and the taking and holding by the
Administrative Agent or any Lender of any security for any such
extension of credit;
(f) All presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of
acceptance of this Completion Guaranty and of the existence, creation,
or incurring of new or additional indebtedness, and demands and
notices of every kind;
9
(g) Any defense based on or arising out of any defense that the Borrower
may have to the payment or performance of the Obligations under the
Credit Agreement or any portion of such Obligations; and
(h) Any defense or benefit based on NRS 40.430 and judicial decisions
relating thereto and NRS 40.451 et seq. and judicial decisions
relating thereto, the Guarantors agreeing that the waiver in this
paragraph (h) is intended to take advantage of the two (2) waivers
permitted by NRS 40.495 (1) and (2) to the maximum extent permitted.
9. Waivers of Subrogation and Other Rights.
(a) Upon the occurrence of any Event of Default, the Administrative Agent
in its sole discretion, without prior notice to or consent of the
Guarantors, may elect to: (i) foreclose either judicially or
nonjudicially against any real or personal property security for the
Obligations under the Loan Documents, (ii) accept a transfer of any
such security in lieu of foreclosure, (iii) compromise or adjust the
Loans or any part thereof or any of the Letters of Credit or make any
other accommodation with the Borrower or any Guarantor, or (iv)
exercise any other remedy against the Borrower, any Guarantor or any
security. No such action by the Administrative Agent or any Lender
shall release or limit the liability of the Guarantors, who shall
remain liable under this Completion Guaranty after the action, even if
the effect of the action is to deprive the Guarantors of any
subrogation rights, rights of indemnity, or other rights to collect
reimbursement from the Borrower for any sums paid to the
Administrative Agent or the Lenders, whether contractual or arising by
operation of law or otherwise. The Guarantors expressly waive any
defenses or benefits that may be derived from NRS Section 40.451, et
seq. and judicial decisions relating thereto, or comparable provisions
of Nevada law which are comparable to California Civil Procedure
Sections 580a, 580b, 580d, or 726 or comparable provisions of the
laws of any other jurisdiction, and all other suretyship defenses they
otherwise might or would have under Nevada law or other applicable
law. The Guarantors expressly agree that under no circumstances shall
they be deemed to have any right, title, interest or claim in or to
any real or personal property to be held by the Administrative Agent
or any Lender or any third party after any foreclosure or transfer in
lieu of foreclosure of any security for the Obligations under the
Credit Agreement.
(b) Regardless of whether the Guarantors may have made any payments to the
Administrative Agent or any Lender, the Guarantors hereby waive: (i)
all rights of subrogation, all rights of indemnity, and any other
rights to collect reimbursement from the Borrower for any sums paid to
the Administrative Agent or any Lender, whether contractual or arising
by operation of law (including the Bankruptcy Code) or otherwise, (ii)
all rights to enforce any remedy that the
10
Administrative Agent or any Lender may have against the Borrower or
any other Person, and (iii) all rights to participate in any security
now or later to be held by the Administrative Agent or any Lender for
the Obligations under the Credit Agreement. The waivers given in this
Section 9(b) shall be effective until the Loans and all other
Obligations under the Credit Agreement have been indefeasibly paid and
performed in full and all Commitments have been terminated.
(c) The Guarantors understand and acknowledge that if the Administrative
Agent or any Lender forecloses judicially or nonjudicially against any
real property security for the Obligations under the Loan Documents,
that foreclosure could impair or destroy any ability that the
Guarantors may have to seek reimbursement, contribution or
indemnification from the Borrower or others based on any right the
Guarantors may have of subrogation, reimbursement, contribution or
indemnification for any amounts paid by the Guarantors under this
Completion Guaranty. The Guarantors further understand and
acknowledge that in the absence of this Section 9, such potential
impairment or destruction of the Guarantors' rights, if any, may
entitle the Guarantors to assert a defense to this Completion
Guaranty. By executing this Completion Guaranty, the Guarantors
freely, irrevocably and unconditionally: (i) waive and relinquish that
defense and agree that the Guarantors will be fully liable under this
Completion Guaranty even though the Administrative Agent of the
Lenders may foreclose judicially or nonjudicially against any real
property security for the Obligations under the Loan Documents; (ii)
agree that the Guarantors will not assert that defense in any action
or proceeding which the Administrative Agent or the Lenders may
commence to enforce this Completion Guaranty; and (iii) acknowledge
and agree that the Administrative Agent and the Lenders are relying on
this waiver in making the Loans and issuing the Letters of Credit, and
that this waiver is a material part of the consideration which they
are receiving for making the Loans and issuing the Letters of Credit.
10. Revival and Reinstatement. If the Lenders are required to pay, return or
restore to any of the Guarantors any amounts previously paid with respect
to the Guaranteed Obligations because of any Insolvency Proceeding of any
of the Guarantors, any stop notice or any other reason, to the extent that
the source of such payment was a Cash Equity Contribution from the
Guarantors or the payment of the Accelerated Payment Amount by the
Guarantors pursuant to this Completion Guaranty, the Guaranteed
Obligations shall be reinstated and revived and the rights of the
Administrative Agent and the Lenders shall continue with regard to such
amounts, as though they had never been paid.
11. Representations and Warranties. Each Guarantor hereby represents and
warrants unto the Administrative Agent and each Lender as follows:
11
(a) The most recent audited consolidated balance sheet of LCI and ABH and
their respective consolidated Subsidiaries (in the case of ABH, as of
December 31, 1996 and in the case of LCI, as of March 30, 1997) and
the related consolidated statements of earnings and stockholders'
equity (or profit and loss in the case of LCI) and of cash flows for
the fiscal year ended on such date, reported on by such Guarantor's
independent public accountants, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly
(or give a true and fair view of in the case of LCI) the consolidated
financial condition of such Guarantor and its consolidated
Subsidiaries as at such date, and the results of their operations (or
consolidated profit and loss in the case of LCI) and their
consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of such Guarantor and its consolidated
Subsidiaries as at September 30, 1997 and the related unaudited
consolidated statements of earnings and of cash flows for the
nine-month period (or, in the case of LCI, six month period) ended on
such date, certified by an Authorized Representative of such
Guarantor, are complete and correct and present fairly (or give a true
and fair view of in the case of LCI) the consolidated financial
condition of such Guarantor and its consolidated Subsidiaries as at
such date, and the consolidated results of their operations and their
consolidated cash flows for the nine-month period (or, in the case of
LCI, six-month period) then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as
approved by such accountants or Authorized Representative, as the case
may be, and as disclosed therein).
(b) Since December 31, 1996, in the case of ABH and since March 30, 1997
in the case of the Trust, there has been no development or event which
has had or could reasonably be expected to have a Material Adverse
Effect.
(c) Each of such Guarantor and its Subsidiaries (a) is duly organized,
and, to the extent applicable, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the
corporate or other power and authority, and the legal right, 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) to
the extent applicable, is duly qualified as a foreign corporation or
company or trust and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification and (d) is in
compliance with all material Requirements of Law except where failure
to comply with any of the foregoing could not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect.
12
(d) Each of such Guarantors has the corporate or other power and
authority, and the legal right, to make, deliver and perform this
Completion Guaranty and to provide the undertakings hereunder and has
taken all necessary corporate or other action to authorize the
execution, delivery and performance of this Completion Guaranty. No
consent or authorization of, filing with or other act by or in respect
of, any Governmental Instrumentality or any other Person is required
to be obtained or made, as the case may be, by such Guarantor in
connection with this Completion Guaranty or with the execution,
delivery, performance, validity or enforceability of this Completion
Guaranty by or against such Guarantor, except as has been obtained and
remains in full force and effect on the date hereof. This Completion
Guaranty has been duly executed and delivered on behalf of such
Guarantor. This Completion Guaranty constitutes a legal, valid and
binding obligation of such Guarantor enforceable against it in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
(e) Each Subsidiary Guarantor has the corporate power and authority, and
the legal right, to make, deliver and perform the Subsidiary Guaranty
and to provide the undertakings thereunder and has taken all necessary
corporate action to authorize the execution, delivery and performance
of the Subsidiary Guaranty. No consent or authorization of, filing
with or other act by or in respect of, any Governmental
Instrumentality or any other Person is required to be obtained or
made, as the case may be, by such Subsidiary Guarantor in connection
with the Subsidiary Guaranty or with the execution, delivery,
performance, validity or enforceability of the Subsidiary Guaranty by
or against such Subsidiary Guarantor, except as has been obtained and
remains in full force and effect on the date hereof. The Subsidiary
Guaranty has been duly executed and delivered on behalf of each
Subsidiary Guarantor. The Subsidiary Guaranty constitutes a legal,
valid and binding obligation of each Subsidiary Guarantor enforceable
against it in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(f) The execution, delivery and performance of this Completion Guaranty by
the Guarantors and the execution, delivery and performance by the
Subsidiary Guarantors of the Subsidiary Guaranty will not (i) violate
any Legal Requirement or contractual obligation of such Guarantor or
Subsidiary Guarantor, (ii) result in, or require, the creation or
imposition of any Lien on any of its properties or revenues pursuant
to any such Legal Requirement or contractual obligation or
(iii) conflict with or result in a breach of any of the terms,
conditions or
13
provisions of any order, judgment, decree or ruling of any court,
arbitrator or Governmental Instrumentality applicable to such
Guarantor or Subsidiary Guarantor.
(g) Schedule 3 contains (except as noted therein) complete and correct
lists of each of LCI's and ABH's Subsidiaries (other than Dormant
Subsidiaries), showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage of
shares of each class of its capital stock or similar equity interests
outstanding owned by such Guarantor and each other Subsidiary of such
Guarantor. All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 3 as being owned
by such Guarantor and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by such Guarantor or
another Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 3). Each Subsidiary identified in Schedule 3 is
a corporation or other legal entity duly organized, validly existing
and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other
legal entity and is in good standing in each jurisdiction in which
such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could
not, individually or in the aggregate, reasonably be expected to have
a material adverse effect on the business, assets, debt service
capacity, property or financial condition, operations or prospects of
such Subsidiary. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact. No Subsidiary identified in
Schedule 3 is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Completion Guaranty, the
agreements listed on Schedule 3 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to
pay dividends out of profits or make any other similar distributions
of profits to its Guarantor parent or any of such Guarantor's
Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.
(h) Except as disclosed in Schedule 4 there are no actions, suits or
proceedings pending or, to the knowledge of any Guarantor, threatened
against or affecting such Guarantor or any Subsidiary or any property
of such Guarantor or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental
Instrumentality that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither any
Guarantor nor any Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Instrumentality or is in violation of any
applicable law, ordinance, rule or regulation (including without
limitation
14
Environmental Laws) of any Governmental Instrumentality, which default
or violation, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(i) Except as disclosed in Schedule 3-A, each Guarantor and its
Subsidiaries have filed all material tax returns that are required to
have been filed in any jurisdiction, and have paid all taxes shown to
be due and payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or franchises, to
the extent such taxes and assessments have become due and payable and
before they have become delinquent, except for any taxes and
assessments (i) the non-payment of which could not reasonably be
expected to have a Material Adverse Effect or (ii) the amount,
applicability or validity of which is currently being contested in
good faith by appropriate proceedings and with respect to which such
Guarantor or a Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP. Each Guarantor knows of no
basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and
reserves on the books of each Guarantor and its Subsidiaries in
respect of governmental or other taxes for all fiscal periods are
adequate.
(j) Each Guarantor and its Subsidiaries have adequate and appropriate
insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such
terms and in such amounts (including deductibles, co-insurance and
self-insurance) to the extent this is customary in the case of
entities of established reputations engaged in the same or a similar
business and similarly situated, except where the failure to so
maintain insurance, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(k) Each of LCI, ABH and its Subsidiaries have good and sufficient title
to their respective properties that individually or in the aggregate
are Material, including all such properties reflected in the most
recent audited balance sheet referred to in clause (a) hereof or
purported to have been acquired by such Guarantor or any Subsidiary
after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens
prohibited by this Completion Guaranty. All leases that individually
or in the aggregate are Material are valid and subsisting and are in
full force and effect in all material respects.
(l) Except as disclosed in Schedule 5,
(i) each Guarantor and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service
marks, trademarks
15
and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of
others;
(ii) to the best knowledge of each Guarantor, no product or such
Guarantor infringes in any material respect on any license,
permit, franchise, authorization, patent, copyright, service
▇▇▇▇, trademark, trade name or other right owned by any other
Person; and
(iii) to the best knowledge of each Guarantor, there is no
Material violation by any Person of any right of such
Guarantor or any of its Subsidiaries with respect to any
patent, copyright, service ▇▇▇▇, trademark, trade name or
other right owned or used by such Guarantor or any of its
Subsidiaries.
(m) Except as described therein, Schedule 6 sets forth a complete and
correct list of all outstanding Indebtedness of each of LCI and ABH
and its Subsidiaries as of September 30, 1997, since which date there
has been no Material changes in the amounts, interest rates, sinking
funds, installment payments or maturities of the Indebtedness of such
Guarantor or its Subsidiaries. Neither any such Guarantor nor any
Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any
Indebtedness of such Guarantor or such Subsidiary and no event or
condition exists with respect to any Indebtedness of any such
Guarantor or any Subsidiary in an aggregate principal amount in excess
of $1,500,000 that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or
before its regularly scheduled dates of payment. Except as disclosed
in Schedule 6, neither any such Guarantor nor any Subsidiary has
agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted
by Section 14(a).
(n) Neither any Guarantor nor any Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, or the Federal Power
Act, as amended.
(o) Neither any Guarantor nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been
instituted raising any claim against such Guarantor or any of its
Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets,
alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably
be expected to result in a Material Adverse Effect.
16
(p) Each Guarantor's ownership interest in the Borrower as of the date
hereof is set forth on Schedule 7.
(q) LCI has delivered to the Administrative Agent true, correct and
complete copies of all material documents, instruments, opinions and
certificates with respect to the Existing Senior Debt.
12. Affirmative Covenants. Until all of the Guaranteed Obligations have been
indefeasibly paid and performed, each Guarantor agrees as follows:
(a) LCI shall furnish to the Administrative Agent the documentation
required to be delivered pursuant to Section 12.1(i) and (ii)(a), (b),
(c), (d) and (e) of the LCI Facilities Agreement, or the comparable
provisions of any facilities agreement executed in substitution of, or
as a replacement of, the LCI Facilities Agreement.
(b) (i) ABH shall furnish to the Administrative Agent:
(A) as soon as available, but in any event within 120 days after the
end of each fiscal year of such Guarantor, a copy of the
consolidated and consolidating balance sheet of such Guarantor
and its consolidated Subsidiaries as at the end of such year and
the related consolidated and consolidating statements of earnings
and stockholders' equity and of cash flows for such year, setting
forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the
scope of the audit, by an independent certified public
accountants of nationally recognized standing; and
(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 such Guarantor, (A) the unaudited
consolidated and consolidating balance sheet of such Guarantor
and its consolidated Subsidiaries as at the end of such quarter
and in comparative form the figures for the end of the previous
fiscal year, (B) the unaudited consolidated and consolidating
statement of earnings of such Guarantor and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, and in comparative form the
figures for the previous year and (C) the consolidated and
consolidating statement of cash flows of such Guarantor and its
consolidated Subsidiaries for the portion of the fiscal year
through the end of such quarter, and in comparative form the
figures for the previous year, certified by an Authorized
Representative of such Guarantor as being fairly stated in all
material respects when considered in relation to the consolidated
and consolidating financial statements of such
17
Guarantor and its consolidated Subsidiaries (subject to normal
year-end audit adjustments);
all such financial statements to be complete and correct in all
material respects and to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein).
(ii) The Trust shall furnish the Administrative Agent with all
financial information, certificates, reports, and disclosures that the
Trust is providing to any other creditor in connection with the Main
Project, the Mall Project, and/or the Music Project at such time as
such information is made available to such creditor.
(c) LCI shall furnish to the Administrative Agent, concurrently with the
delivery of the financial statements described in clause (a) above, a
certificate of an Authorized Representative of LCI showing in
reasonable detail the calculations demonstrating compliance with
Section 12(g) of this Completion Guaranty for the fiscal period ending
on such date. Each Guarantor shall furnish to the Administrative
Agent within thirty days after the same are sent, copies of all
financial statements and reports which such Guarantor sends to its
stockholders, and within thirty days after the same are filed, copies
of all financial statements and reports which such Guarantor may make
to, or file with, the LSE, the Securities and Exchange Commission or
any successor or analogous Governmental Instrumentality. Each
Guarantor shall furnish to the Administrative Agent with reasonable
promptness, such additional financial and other information as the
Administrative Agent, on behalf of any Lender, may from time to time
reasonably request.
(d) ABH and LCI shall keep true and correct books of records and account
in conformity with GAAP and all Requirements of Law; and permit the
Administrative Agent:
(i) No Event of Default -- if no Event of Default then exists,
at the expense of such Administrative Agent and upon reasonable prior
notice to such Guarantor, to visit the principal executive office of
such Guarantor and to discuss the affairs, finances and accounts of
such Guarantor and its Subsidiaries with such Guarantor's officers,
all at such reasonable times and as often as may be reasonably
requested in writing; and
(ii) Event of Default -- if an Event of Default then exists, at
the expense of such Guarantor to visit and inspect any of the offices
of properties of
18
such Guarantor or any Subsidiary, to examine their respective books
and records and to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective
officers and independent public accountants, all at such reasonable
times and as often as may be requested.
A Guarantor shall not be under any obligation under this Completion
Guaranty to provide information pursuant to the last sentence of
Section 12(c) or pursuant to this Section 12(d) if (i) disclosure of
such information, on the written advice of such Guarantor's counsel
provided to such Guarantor, would be prohibited by law or by decree of
any Governmental Instrumentality or arbitral body or by the terms of
any obligation of confidentiality contained in any agreement binding
upon such Guarantor and not entered into in contemplation of this
Section 12(d) or (ii) such information relates to the identity or
personal details of any of the customers or clients of LCI or any of
its Subsidiaries.
In addition, LCI shall not be under any obligation under this
Completion Guaranty to provide information pursuant to the last
sentence of Section 12(c) or pursuant to Section 12(d) if LCI has been
advised in writing by an investment or merchant bank in London, that
the requested disclosure to the Administrative Agent or any Lender
would require LCI to make public disclosure of such information to
comply with its continuing obligations under the rules of the LSE or
would otherwise be prohibited by such rules. If the Administrative
Agent shall contest such written advice from the investment or
merchant bank by itself providing advice in writing to the contrary
from an investment or merchant bank in London, then LCI will obtain
advice in writing from a senior official of the LSE as to whether the
requested disclosure would require LCI to make public disclosure of
such information to comply with any of such obligations or would
otherwise be prohibited as aforesaid. Before seeking such advice from
the LSE (either directly or through its listing sponsor), LCI will
consult with the Administrative Agent and submit to the LSE such
factual submissions and other representations that the Administrative
Agent may provide to LCI for such purpose. The written advice of such
senior official shall be conclusive as to the disclosure in question.
(e) Each of LCI and ABH shall promptly give notice to the Administrative
Agent (which shall promptly transmit such notice to each Lender) of:
(i) any breach by such Guarantor of any of the Guaranteed Obligations
hereunder or with respect to Existing Senior Debt;
(ii) any (a) default or event of default under any contractual
obligation of such Guarantor or any of
19
its Subsidiaries or (b) litigation, investigation or proceeding
which may exist at any time between such Guarantor or any of its
Subsidiaries and any Governmental Instrumentality, which in
either case, if not cured or if adversely determined, as the case
may be, could reasonably be expected to have a Material Adverse
Effect;
(iii) any material litigation or proceeding affecting such Guarantor or
any of its Subsidiaries; and
(iv) any development or other event which could reasonably be expected
to have a Material Adverse Effect.
Each notice pursuant to this clause (e) shall be accompanied by a
statement of a Authorized Representative of such Guarantor setting
forth details of the occurrence referred to therein and stating what
action such Guarantor or any of its Subsidiaries propose to take with
respect thereto.
(f) Each of ABH and LCI shall, in the aggregate, continue to own, directly
or through one or more wholly-owned Subsidiaries, free of any Lien
other than Liens in favor of the Administrative Agent and the Lenders,
the same aggregate percentage of the capital stock of the Borrower as
set forth on Schedule 7 hereof, subject to adjustment as provided in
clause (k) in the definition of "Change in Control" in the Credit
Agreement.
(g) LCI covenants and agrees that
(i) the ratio of Group Operating Profit to Net Interest Payable in
respect of each 12 month period ending on the last day of each
financial year and financial half year of the Group shall not be
less than 2.5:1;
(ii) the ratio of Consolidated Net Borrowings to Consolidated Net
Worth shall not at any time exceed 1.5:1; and
(iii) Consolidated Net Worth shall at all times be greater than
L95,000,000,
and that the finance director of LCI for the time being shall certify
compliance or, as the case may be, non-compliance by LCI and the Group
with each of the provisions referred to in paragraphs (i), (ii) and
(iii) above at the same time as LCI shall furnish to the
Administrative Agent the financial statements referred to in
Section 12(a) provided that following receipt of any such certificate
the Administrative Agent may in its absolute discretion require LCI to
instruct its auditors for the time being to certify compliance or, as
the case may be, non-compliance by LCI and the Group with each of the
provisions referred to in paragraphs (i), (ii) and (iii) above and
further that in the event of any changes in any of the accounting
principles and bases upon which any of such financial
20
statements are prepared, the financial covenants set out in this
sub-clause shall be adjusted or otherwise amended so as to ensure that
or, as nearly as possible that, following such changes the
obligations, limitations and restrictions contained in such covenants
shall, mutatis mutandis, have the same effect as if such changes had
not been made and that the Administrative Agent shall be provided with
all appropriate information and details that it may request in
connection with such adjustments or amendments.
(h) Each of ABH and LCI will cause each of its Subsidiaries to comply with
all laws, ordinances or governmental rules or regulations to which
each of them is subject, including, without limitation, Environmental
Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such
laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits,
franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(i) Each Guarantor will and will cause each of its Subsidiaries to
maintain, with institutions it reasonably believes to be financially
sound insurers, insurance with respect to their respective properties
and businesses against such casualties and contingencies, of such
types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance if adequate reserves are maintained
with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or similar business and
similarly situated.
(j) Each Guarantor will and will cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their
respective properties in reasonably good repair, working order and
condition (other than ordinary wear and tear), so that the business
carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent a Guarantor from
discontinuing the operation and maintenance of or the liquidation of
any Dormant Subsidiary and shall not prevent a Guarantor or any
Subsidiary from discontinuing the operation and the maintenance of any
of its properties if such discontinuance is desirable in the conduct
of its business and such Guarantor has concluded that such
discontinuance could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(k) Each Guarantor will and will cause each of its Subsidiaries to file
all material tax returns required to be filed in any jurisdiction and
to pay and discharge all taxes, assessments, governmental charges, or
levies shown to be due and payable on such returns and all other taxes
imposed on them or any of their properties, assets,
21
income or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent and all
claims for which sums have become due and payable that have or might
become a Lien on properties or assets of such Guarantor or any
Subsidiary, provided that neither a Guarantor nor any Subsidiary need
to pay any such tax or assessment or claims if (i) the amount,
applicability or validity thereof is contested by such Guarantor or
such Subsidiary on a timely basis in good faith in appropriate
proceedings and such Guarantor or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of
such Guarantor or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
(l) Each Guarantor will at all times preserve and keep in full force and
effect its corporate or other existence. Except as allowed under the
Note Agreements, each of ABH and LCI will at all times preserve and
keep in full force and effect the corporate or other existence of each
of its Subsidiaries (other than Dormant Subsidiaries or unless merged
into such Guarantor or a Subsidiary) and all licenses, consents,
certificates and authorizations of such Guarantor and its Subsidiaries
unless, in the good faith judgment of such Guarantor, the termination
of or failure to preserve and keep in full force and effect such
corporate or other existence, licenses, consents, certificates and
authorizations could not, individually or in the aggregate, have a
Material Adverse Effect.
(m) Each Guarantor will, and will cause each of its Subsidiaries to, keep
proper books of record and account in accordance with GAAP as applied
in the jurisdiction of its incorporation as such Guarantor may deem
appropriate from time to time.
(n) Neither ABH or LCI nor any Subsidiary will engage in any business if,
as a result, the general nature of the business, taken on a
consolidated basis, which would then be engaged in by such Guarantor
and its Subsidiaries would be materially changed from the general
nature of the business engaged in by such Guarantor and its
Subsidiaries as of the date hereof.
(o) Promptly upon the determination that any Subsidiary of LCI has become
a Material Subsidiary, LCI shall cause such Subsidiary to execute and
deliver a joinder agreement for the Subsidiary Guaranty pursuant to
which such Subsidiary shall become a party thereto and Subsidiary
Guarantor thereunder.
(p) The Trust covenants and agrees that the Trust will maintain a minimum
fair market value of assets less liabilities of $100,000,000.
13. Consequences of Specified Events. If at any time prior to the indefeasible
payment and performance of the Guaranteed Obligations (each of the
following, a "Specified Event"),
22
(a) LCI shall at any time fail to comply with the covenants set forth in
Sections 12(f), 12(g), 12(o) or 14 hereof and to the extent such
non-compliance is capable of being cured, such non-compliance shall
not have been cured within twenty-five (25) days; or
(b) any borrowed money for a sum in excess of L2,500,000 or the
equivalent thereof in any other currency of LCI or any Material
Subsidiary shall by reason of breach or default become due and payable
prior to its stated maturity or due date therefor or if any such
borrowed money is not paid at the maturity thereof or due date
therefor (or within any originally stated applicable grace period
therefor) or, if payable on demand, is not paid on demand; or
(c) LCI or any Material Subsidiary becomes insolvent or applies for or
consents to or suffers the appointment of a liquidator, receiver,
administrative receiver, administrator, guardian, encumbrancer,
trustee in bankruptcy or similar official of the whole or any
substantial part of its respective assets, business, property,
revenues or undertaking (other than in any of such cases (except for
the appointment of any administrator) for the purposes of a solvent
reconstruction or amalgamation the terms of which have previously been
approved by the Required Lenders) LCI or any Material Subsidiary takes
any proceedings under any law for adjustment, deferment or
rescheduling of its Indebtedness or any part thereof or makes or
enters or any proposal is made to make or enter into a general
assignment or arrangement (including, without limitation, any
voluntary arrangement under part I of the Insolvency Act 1986) or
composition with or for the benefit of its creditors or a moratorium
shall be declared on any of its Indebtedness or any part thereof or
any creditor of LCI or any Material Subsidiary exercises a contractual
right to take over the financial management of LCI or any Material
Subsidiary or LCI or any Material Subsidiary is deemed or shall become
unable to pay its debts as defined in Section 123 Insolvency Act 1986
or LCI or any Material Subsidiary fails generally to pay its debts as
and when they fall due or if the equivalent of any of the foregoing
shall occur in relation to LCI or any Material Subsidiary under the
laws of any jurisdiction to which it or any of its rights, property or
assets are subject; or
(d) a petition is presented (but only if such petition remains
undischarged 90 days after presentation thereof) or a meeting is
convened or an order is made or resolution is passed for or other
action or proceedings or steps are taken with a view to the
appointment of an administrator, winding-up, liquidation or
dissolution of LCI or any Material Subsidiary or if the equivalent of
any of the foregoing shall occur in relation to LCI or any Material
Subsidiary under the laws of any jurisdiction to which it or any of
its rights, property or assets are subject (other than in any of such
cases (except for the appointment of any administrator) for the
purposes of the winding up of a dormant member of the Group or a
23
solvent reconstruction or amalgamation, in each case the terms of
which have previously been approved by the Required Lenders), or LCI
or any Material Subsidiary stops or threatens to stop payments
generally or ceases or threatens to cease to carry on its business or
a substantial part thereof or LCI or any Material Subsidiary merges,
consolidates or amalgamates with or into any other company,
corporation or entity in a transaction not otherwise permitted under
the Facilities Agreement; or
(e) a distress, execution or other legal process is levied against any of
the assets of LCI or any Material Subsidiary and is not discharged or
paid out within 90 days, except where such distress, execution or
other legal process is in the reasonable opinion of the Required
Lenders being contested in good faith by LCI or the relevant Material
Subsidiary or any analogous proceedings shall be commenced against LCI
or any Material Subsidiary or its assets under the laws of any other
jurisdiction; or
(f) an encumbrancer takes possession or a receiver or an administrative
receiver is appointed of the whole or any substantial part of the
assets or undertaking of LCI or any Material Subsidiary or any
analogous action shall be taken against LCI or any Material Subsidiary
or its assets or undertaking under the laws of any jurisdiction;
then, not later than five (5) days after such Specified Event, at the
option of the Required Lenders, the provisions of Section 17 shall apply.
14. Negative Covenants. At all times prior to indefeasible payment and
performance of the Guaranteed Obligations by the Guarantors hereunder,
(a) Each of ABH and LCI will not, and will not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any
Lien on or with respect to any property or asset except:
(i) Liens securing Existing Senior Debt;
(ii) any Lien arising by operation of law which secures amounts not
more than 45 days overdue or, if so overdue, are being contested
on a timely basis in good faith and in appropriate proceedings;
(iii) any Lien imposed on a Guarantor or any of its Subsidiaries in
relation to its purchase of goods, products or supplies in the
ordinary course of business;
24
(iv) any rights of set-off in the normal course of trading or of
any bank or financial institution or combination of accounts
arising in favor of such bank or financial institution as a
result of the day-to-day operation of banking arrangements,
including without limitation, rights of set-off granted to
such bank or financial institution in respect of the issuance
of letters of credit, or as a result of any currency or
interest rate hedging operations carried out in the ordinary
course of business, in each case, provided that there is no
agreement to confer a security interest;
(v) statutory Liens of landlords, Liens over goods or documents of
title arising in the ordinary course of documentary credit
transactions and Liens of carriers, warehousemen, mechanics,
materialmen and other similar Liens, in each case, incurred in
the ordinary course of business;
(vi) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is
not at the time required by Note Agreements;
(vii) Liens incurred or deposits made in the ordinary course of
business (A) in connection with workers' compensation,
unemployment insurance and other types of social security or
retirement benefits, or (B) to secure (or to obtain letters
of credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other
than capital leases), performance bonds, purchase,
construction or sales contracts and other similar
obligations, in each case not incurred or made in connection
with the borrowing of money, the obtaining of advances or
credit or the payment of the deferred purchase price of
property;
(viii) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or
encumbrances, in each case incidental to, and not
interfering with, the ordinary conduct of business of a
Guarantor and its Subsidiaries, provided that such Liens do
not, in the aggregate, materially detract from the value of
such property;
(ix) any Lien renewing, extending or refunding any Lien permitted
by clause (i), provided that (A) the principal amount of
Indebtedness secured by such Lien immediately prior to such
extension, renewal or refunding is not increased or the
maturity thereof reduced, (B) such Lien is not extended to any
other property and (C) immediately after such extension,
renewal or refunding no Specified Event would exist;
(x) any Lien securing the obligations of LCI under the Credit
Facility and the obligations of any Subsidiary Guarantor under
any Subsidiary Guarantee;
25
(xi) any Lien not otherwise permitted by clauses (i) through (x)
above, provided that on the date any Indebtedness secured by
any such Lien, is created, incurred, assumed or guaranteed by
such Guarantor or any Subsidiary, and immediately after giving
effect thereto and to the concurrent retirement of any other
Indebtedness, the sum of (A) the aggregate principal amount of
all Indebtedness secured by Liens pursuant to this clause (xi)
plus (B) all unsecured Indebtedness of such Guarantor and its
Subsidiaries (excluding any unsecured Existing Senior Debt)
that is senior in any respect in right of payment to the
obligations of such Guarantor hereunder, does not exceed 25%
of the Consolidated Tangible Assets of such Guarantor as of
such date; and
(xii) any Lien set forth on Schedule 3, in the case of ABH.
(b) Each of ABH and LCI will not, and will not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or
suffer to exist any secured or unsecured Indebtedness (excluding (A)
any Indebtedness secured by Liens pursuant to clauses (i) through (x)
of Section 14(a) hereof and (B) any unsecured Existing Senior Debt
but including an Indebtedness secured by Liens pursuant to clause
(xi) of Section 14(a) hereof) if the aggregate amount of all such
Indebtedness described in this clause (b) would exceed 25% of the
Consolidated Tangible Assets of such Guarantor as of such date.
(c) In the case of ABH only, declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of interests (now or hereafter outstanding) of such Sponsor or
on any warrants, options or other rights with respect to any class of
interests (now or hereafter outstanding) of such Sponsor (other than
dividends or distributions payable in its common interests or warrants
to purchase its common interests or splitups or reclassifications of
its interests into additional or other interests) or apply, or permit
any of its Subsidiaries to apply, any of its funds, property or assets
to the purchase, redemption, sinking fund or other retirement of, or
agree or permit any of its Subsidiaries to purchase or redeem, any
shares of any class of interests (now or hereafter outstanding) of
such Sponsor, or warrants, options or other rights with respect to any
shares of any class of interests (now or hereafter outstanding) of
such Sponsor.
15. Payments Free and Clear of Taxes, etc. Each Guarantor hereby agrees that:
(a) All payments by such Guarantor hereunder to the Borrower or to a
Lender shall be made free and clear of and without deduction for any
present or future income, excise, stamp or franchise taxes and other
taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but
26
excluding franchise taxes and taxes imposed on or measured by any
Lender's net income or receipts (such non-excluded items being called
"Taxes"). In the event that any withholding or deduction from any
payment to be made by a Guarantor hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then
such Guarantor will
(i) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(ii) promptly forward to the Borrower or such Lender an official
receipt or other documentation satisfactory to the Borrower or
such Lender evidencing such payment to such authority; and
(iii) pay to the Borrower or such Lender such additional amount or
amounts ("Additional Amounts") as is necessary to ensure
that the net amount actually received by the Borrower or
such Lender will equal the full amount the Borrower or such
Lender would have received had no such withholding or
deduction been required.
Moreover, if any Taxes are directly asserted against the Borrower or
any such Lender with respect to any payment received by the Borrower
or such Lender hereunder, the Borrower or such Lender may pay such
Taxes and the Guarantor will promptly pay such Additional Amounts
(including any penalties, interest or expenses ) as is necessary in
order that the net amount received by the Borrower or such Lender
after the payment of such Taxes (including any Taxes on such
Additional Amounts) shall equal the amount the Borrower or such Lender
would have received had not such Taxes been asserted.
Upon the request of any Guarantor, each Lender that is organized under
the laws of a jurisdiction other than the United States or a State
thereof (for purposes of this paragraph (k), a "Non-U.S. Lender")
shall, prior to the date on which any payment is made hereunder (or in
the case of a Lender that becomes a party to the Credit Agreement
pursuant to Section 4.11 of the Credit Agreement or any Assignee
Lender, before it becomes a party hereto) (i) execute and deliver to
each Guarantor and the Administrative Agent one or more (as the
Guarantors or the Administrative Agent may reasonably request) United
States Internal Revenue Service Forms 4224 or Forms 1001 or such other
forms or documents (or successor forms or documents), appropriately
completed, certifying in each case that such Lender or Assignee Lender
is entitled to receive payments under this Completion Guaranty without
deduction or withholding of any United States federal income taxes,
and an applicable Internal Revenue Service Form W-8 or Form W-9 or
successor applicable form (if required by law), as the case may be, to
establish an exemption from United States backup withholding tax or
(ii) if
27
such Non-U.S. Lender is not a "bank" or other person described in
Section 881 (c) (3) of the Code and cannot deliver either Form 4224 or
Form 1001 pursuant to clause (a) above, execute and deliver to each
Guarantor and the Administrative Agent one or more (as the Guarantors
or the Administrative Agent may reasonably request) copies of the Tax
Certificate, Form W-8 (or any successor form) and any other
certificate or statement of exemption required under the Code or
Treasury Regulations issued thereunder, appropriately completed,
certifying that such Lender or Assignee Lender is entitled to receive
payments under this Completion Guaranty without deduction or
withholding of United States federal income tax and establishing an
exemption from United States backup withholding tax. All Lenders other
than Non-U.S. Lenders shall, prior to the date on which any payment is
made hereunder (or in the case of a Lender that becomes a party to the
Credit Agreement pursuant to Section 4.11 of the Credit Agreement or
is an Assignee Lender, before such Lender becomes a party hereto)
execute and deliver to the Borrower and the Administrative Agent one
or more copies (as the Borrower or Administrative Agent may reasonably
request) of United States Internal Revenue Form W-9 or successor
applicable form (if required by law), as the case may be, to establish
exemption from United States backup withholding tax.
Each Lender which undertakes to deliver to the Guarantors or the
Administrative Agent a Tax Certificate, a Form 4224, Form 1001, Form
W-8 or Form W-9 pursuant to the preceding paragraph shall further
undertake to deliver to the Guarantors and the Administrative Agent
two further copies of said Tax Certificate, Form 4224, Form 1001, Form
W-8 or Form W-9 (if required by law), or successor applicable forms,
or other manner of certification, as the case may be, on or before the
date that such form expires or becomes obsolete or after the
occurrence of an event requiring a change in the most recent form
delivered by it to the Guarantors and the Administrative Agent, and
such extensions or renewals thereof as may be reasonably requested by
the Guarantors or Administrative Agent, certifying in the case of a
Tax Certificate, Form 4224 or Form 1001 that such Lender is entitled
to receive payments under this Completion Guaranty without deduction
or withholding of any United States federal income taxes, unless in
any case an event (including any change in treaty, law or regulation)
has occurred prior to the date on which such delivery would otherwise
be required which renders all forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form
with respect to it and such Lender advises the Guarantors and the
Administrative Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income
tax, and in the case of a Form W-8 or Form W-9, establishing an
exemption from backup withholding.
28
(b) If the Guarantor fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Borrower or any Lender the
required receipts or other required documentary evidence, the
Guarantor shall indemnify the Borrower or such Lender for any
incremental Taxes, interest or penalties that may become payable by
the Borrower or such Lender as a result of any such failure.
(c) In the event that an Additional Amount is paid by a Guarantor for the
account of any Lender and such Lender is entitled to a refund of the
Tax (a "Tax Refund") to which such payment is attributable, then such
Lender shall take all reasonable steps which are necessary to obtain
such Tax Refund, including filings such forms, certificates,
documents, applications or returns as may be required to obtain such
Tax Refund. If such Lender subsequently receives such a Tax Refund,
and such Lender is readily able to identify the Tax Refund as being
attributable to the Tax with respect to which the Additional Amount
was made, then such Lender shall reimburse such Guarantor such amount
as such Lender shall determine acting in good faith to be the
proportion of the Tax Refund, together with any interest received
thereon, attributable to such Additional Amount as will leave such
Lender after the reimbursement (including such interest) in no better
or worse position than it would have been if the Additional Amount had
not been required.
(d) Without prejudice to the survival of any other agreement of the
Guarantors hereunder, the agreements and obligations of the Guarantors
contained in this Section 15 shall survive the payment in full of the
principal of and interest on the Loans.
16. Judgment. Each Guarantor hereby agrees that:
(a) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in United States Dollars into
another currency, such Guarantor agrees, to the fullest extent
permitted by law, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative
Agent could purchase United States Dollars with such other currency on
the Business Day preceding that on which final judgment is given.
(b) The obligation of each Guarantor in respect of any sum due from it to
any Lender hereunder shall, notwithstanding any judgment in a currency
other than United States Dollars, be discharged only to the extent
that on the Business Day following receipt by such Lender of any sum
adjudged to be so due in such other currency such Lender may, in
accordance with normal banking procedures, purchase United States
Dollars with such other currency; in the event that the United States
Dollars so purchased are less that the sum originally due to such
Lender in United States Dollars, the Guarantor, as a separate
obligation and
29
notwithstanding any such judgment, shall indemnify and hold harmless
such Lender and such holder against such loss, and if the United
States Dollars so purchased exceed the sum originally due to such
Lender in United States Dollars, such Lender shall remit to such
Guarantor such excess.
17. Breaches by Any Guarantor. If, at any time prior to the indefeasible
payment and performance of the Guaranteed Obligations by the Guarantors
hereunder, any of the Guarantors breaches the Guaranteed Obligations (after
the expiration of applicable grace, notice and/or cure periods), then, at
the option of the Required Lenders, an Event of Default shall exist under
this Completion Guaranty and the other Loan Documents and the Lenders,
without any further notice to any of the Guarantors or any other Person,
shall be entitled to exercise all rights and remedies available hereunder,
under the other Loan Documents and at law and equity; provided, however,
the Lenders may, at their option, commence collection proceedings against
one or more of the Guarantors without declaring an Event of Default under
the other Loan Documents.
18. Miscellaneous Provisions.
(a) This Completion Guaranty is a Loan Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
(b) This Completion Guaranty shall be binding upon the Guarantors and
their permitted successors, transferees and assigns and shall inure to
the benefit of and be enforceable by the Administrative Agent and each
Lender and their respective successors, transferees and assigns;
provided, however, that the Guarantors may not assign any of their
Guaranteed Obligations hereunder without the prior written consent of
the Required Lenders.
(c) No amendment to or waiver of any provision of this Completion
Guaranty, nor consent to any departure by any Guarantor herefrom,
shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
(d) All notices and other communications provided to any party hereto
under this Completion Guaranty shall be in writing and addressed,
delivered or transmitted to such party at its address or facsimile
number set forth below or at such other address or facsimile number as
may be designated by such party in a notice to the other parties. All
such notices and communications shall be deemed to have been properly
given if (x) hand delivered with receipt acknowledged by the
recipient; (y) if mailed, upon the fifth Business Day after the date
on which it is deposited in registered or certified mail, postage
prepaid, return receipt requested or (z) if
30
by Federal Express or other nationally-recognized express courier
service with instructions to deliver on the following Business Day, on
the next Business Day after delivery to such express courier service.
Notices and other communications may also be properly given by
facsimile but shall be deemed to be received upon automatic facsimile
confirmation of receipt thereof by the intended recipient machine
therefor with the original of such notice or communication to be given
in the manner provided in the second sentence of this Section;
provided, however, that the failure to deliver a copy in accordance
with the second sentence of this paragraph (d) shall not invalidate
the effectiveness of such facsimile notice. The address information
for the parties is set forth below:
If to the Administrative Agent: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trust: c/o Aladdin Holdings
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to ABH: Aladdin Bazaar Holdings, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to LCI: London Clubs International, plc
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: 011-44-171-493-6981
31
with a copy to: Ohrenstein & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇)- ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇)- ▇▇▇-▇▇▇▇
and: Lionel, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇)-▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇)-▇▇▇-▇▇▇▇
(e) No failure on the part of the Administrative Agent or any Lender 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 right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
(f) Section captions used in this Completion Guaranty are for convenience
of reference only, and shall not affect the construction of this
Completion Guaranty.
(g) Wherever possible each provision of this Completion Guaranty shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Completion Guaranty shall
be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of this Completion Guaranty.
(h) THIS COMPLETION GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THIS
COMPLETION GUARANTY AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDE ANY PRIOR COMPLETION GUARANTIES, WRITTEN
OR ORAL, WITH RESPECT HERETO.
(i) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS COMPLETION GUARANTY, OR
32
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS OR THE
GUARANTORS SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE CITY OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. THE GUARANTORS HEREBY
EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK IN THE CITY OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE
OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREE TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION. THE GUARANTORS HEREBY IRREVOCABLY APPOINT CT CORPORATION
SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, AS THEIR AGENT
TO RECEIVE, ON THE GUARANTORS' BEHALF AND ON BEHALF OF THE GUARANTORS'
PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH
SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO
THE GUARANTORS IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S
ABOVE ADDRESS, AND THE GUARANTORS HEREBY IRREVOCABLY AUTHORIZE AND
DIRECT THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON THEIR BEHALF. AS
AN ALTERNATIVE METHOD OF SERVICE, THE GUARANTORS FURTHER IRREVOCABLY
CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID,
OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE
GUARANTORS HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE GUARANTORS HAVE OR HEREAFTER MAY ACQUIRE ANY
33
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
THEMSELVES OR THEIR PROPERTY, THE GUARANTORS HEREBY IRREVOCABLY WAIVE
SUCH IMMUNITY IN RESPECT OF THE GUARANTEED OBLIGATIONS UNDER THIS
COMPLETION GUARANTY AND THE OTHER LOAN DOCUMENTS.
(j) THE GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS COMPLETION GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
ADMINISTRATIVE AGENT OR THE LENDERS OR THE GUARANTORS. THE GUARANTORS
ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDERS ENTERING INTO THE CREDIT AGREEMENT.
34
IN WITNESS WHEREOF, the Guarantors have caused this Completion Guaranty to
be duly executed and delivered by their officers thereunto duly authorized as of
the date first above written.
ALADDIN BAZAAR HOLDINGS, LLC
By:
--------------------------
Title:
Address:
-----------------------
--------------------------------
Attention:
----------------------
Telecopy:
----------------------
THE TRUST UNDER ARTICLE SIXTH UNDER
THE WILL OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:
---------------------------
Title: Trustee
Address:
----------------------
--------------------------------
Attention:
----------------------
Telecopy:
----------------------
By:
---------------------------
Title: Trustee
Address:
----------------------
--------------------------------
Attention:
-----------------------
Telecopy:
-----------------------
LONDON CLUBS INTERNATIONAL PLC
By:
-----------------------------
Title:
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attention:
-------------------------
35
Telecopy:
-------------------------
36
SCHEDULE 1
Additional Defined Terms
"Cash and Cash Equivalents" means:
(a) cash in hand or at a bank and beneficially owned by LCI or a
Subsidiary of LCI;
(b) Sterling or Dollar denominated commercial paper maturing not more
than nine months from the date of issue and rated A-1 or better by Standard
& Poor's Corporation or P-1 or better by ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) any deposit with, or acceptance maturing not more than one year
after issue, accepted by, an authorized institution or an exempted
institution within the meaning of the Banking ▇▇▇ ▇▇▇▇ which has a combined
capital and surplus and undistributable profits of not less than
L100,000,000 or by any bank, either of which shall have a long-term debt
rating of A- or better by Standard & Poor's Corporation or A3 or better by
▇▇▇▇▇'▇ Investors Service, Inc.;
(d) Sterling or Dollar denominated debt securities having not more
than one year until final maturity and listed on a recognized stock
exchange or in respect of which there is an active trading market in London
and rated at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc. or at least AA by
Standard and Poor's Corporation;
(e) direct obligations of the United States of America or any agency
or instrumentality of the United States of America, the payment or
guarantee of which constitutes a full faith and credit obligation of the
United States of America, in each case maturing twelve months or less from
the date of acquisition thereof;
(f) gilt-edge securities issued directly, or unconditionally
guaranteed, by the United Kingdom Treasury, in each case maturing twelve
months or less from the date of acquisition thereof, legally and
beneficially owned, free of Liens and freely accessible by LCI or any
Subsidiary; or
(g) short-tem liquid debt securities which for the time being are
rated at least AAA by Standard & Poor's Corporation or an equivalent rating
by any other reputable, rating agency.
"Consolidated Net Borrowings" means the aggregate outstanding
principal amount of Indebtedness of the Group less Cash and Cash Equivalents.
"Consolidated Net Worth" means, the aggregate of the amounts paid-up
or credited as paid-up on LCI's issued share capital and the amount of the
consolidated capital and revenue reserves of the Group (including, without
limitation, any share premium account, merger reserve, capital redemption
reserve, revaluation reserve and retained earnings) and any credit balance on
LCI's consolidated profit and loss account all as shown by the latest
consolidated financial statements of LCI delivered or to be delivered pursuant
to this Completion Guaranty from time to time but after:
(i) deducting any debit balance on such consolidated profit and loss
account;
(ii) deducting the net book value of all assets, after deducting any
reserves applicable thereto, which would be treated as intangible
under GAAP (excluding amounts attributable to acquisition
goodwill, trademarks, trade names, service marks, brand names,
copyrights, patents and similar property);
(iii) deducting any amounts distributed or proposed to be distributed
(other than to LCI or any other member of the Group) out of the
profits accrued prior to the date of such financial statements to
the extent that such distribution is not provided for therein;
(iv) deducting all amounts attributable to minority interests, if any,
in Subsidiaries of LCI;
(v) excluding any sums set aside or otherwise reserved or provided
for taxation;
(vi) adding back any diminution due to the writing off or amortization
of acquisition goodwill or the debiting of acquisition goodwill
to any reserve; and
(vii) making such adjustments to reflect any variations which shall
have occurred since the date of such financial statements:
(a) in the amounts paid up or credited as paid up on the issued
share capital of LCI and the consolidated capital and
revenue reserves of the Group;
(b) to reflect any changes in generally accepted accounting
principles and bases and the application of standards and
practices since then as may be appropriate in the opinion of
the auditors for the time being of LCI; and
2
(c) in the interest of LCI in any other member of the Group.
"Group" means LCI and its subsidiaries.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation,
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof;
provided that, the obligations of LCI under the Keep-Well Agreement to pay the
Accelerated Payment Amount shall be treated at any time as a Guaranty of
Indebtedness of the Borrower in an amount equal to 25% of the Accelerated
Payment Amount at such time. In any computation of the indebtedness or other
liabilities of the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"Group Operating Profit" means, in respect of any period of the Group,
(a) the consolidated profit of the Group for such period before crediting or
deducting amounts attributable to extraordinary and exceptional items, all as
determined in accordance with GAAP, plus (to the extent deducted in determining
such consolidated profits), (b) all provisions for Taxes and (c) Net Interest
Payable; in each case as determined from the relevant consolidated financial
statements of LCI delivered or to be delivered pursuant to this Completion
Guaranty for such period.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
3
(a) its liabilities for borrowed money (excluding accounts payable in
the ordinary course of business) and its redemption obligations upon and
following the date of redemption in respect of mandatorily redeemable
Preferred Stock;
(b) its liabilities pursuant to any note purchase facility or the
issue of bonds, notes, debentures, commercial paper, loan stock or similar
instruments;
(c) all actual (as opposed to contingent) reimbursement obligations
(other than accounts payable in the ordinary course of business) in respect
of any acceptance or documentary credit facilities;
(d) its liabilities for the deferred purchase price of property,
assets or services acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property, assets or services);
(e) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(f) its liabilities in respect of the principal amount of any
receivables sold or discounted to a third party to the extent of recourse
to such Person or any of its Subsidiaries;
(g) Swaps of such Person; and
(h) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (h) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (h) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Subsidiary" means, as to any particular parent corporation, any
corporation of which more than 50% (by number of votes) of the Voting Shares
shall be owned, directly or indirectly, by such parent corporation; provided,
however, that notwithstanding the foregoing, the term subsidiary shall, in any
event, include any company or legal entity which is a "subsidiary" as defined in
Section 736 of the Companies ▇▇▇ ▇▇▇▇, as amended by Section 144 of the
Companies ▇▇▇ ▇▇▇▇, or as detailed in analogous legislation.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Completion Guaranty, the
amount of the obligation under any Swap shall be the amount
4
determined in respect thereof as of the end of the then most recently ended
fiscal quarter of such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such determination,
if any agreement relating to such Swap provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligation shall be the net amount so determined.
"Taxes" means all present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other governmental charges of any
nature whatsoever and any liabilities with respect thereto, including any
surcharge, penalties, additions to tax, fines or interest thereon, now or
hereafter imposed, levied, collected withheld or assessed by any jurisdiction or
by any political subdivision or taxing authority thereof or therein.
5
SCHEDULE 2
MATERIAL SUBSIDIARIES
LONDON CLUBS HOLDINGS LIMITED
LES AMBASSADEURS CLUB LIMITED
RENDEZVOUS CLUB (LONDON) LIMITED
PALM BEACH CLUB LIMITED
SIX ▇▇▇▇▇▇▇▇ PLACE LIMITED
BURLINGTON STREET SERVICES LIMITED
ZEALCASTLE LIMITED
CORBY LEISURE RETAIL DEVELOPMENTS LIMITED
UNITLAW TRADING LIMITED
LONDON PARK TOWER CLUB LIMITED
PUBLICACE LIMITED
LOMASBOND PROPERTIES LIMITED
LONDON CLUBS (OVERSEAS) LIMITED
DECBURY LIMITED
GOLDEN NUGGET CLUB LIMITED
LONDON CLUBS MANAGEMENT LIMITED
THE SPORTSMAN CLUB LIMITED
RITZ CLUB (LONDON) LIMITED
SCHEDULE 3-A
TAX LIABILITIES
With respect to the Trust, none other than potential tax liability that may
result from liabilities to which the Site is subject exceeding the tax basis of
the Site.
SCHEDULE 3
SUBSIDIARIES
(other than Dormant Subsidiaries)
ABH's Subsidiaries
Name: Aladdin Bazaar, LLC
State of Organization: Delaware
ABH Ownership: 50% member
In connection with the development of the Mall Project by Aladdin Bazaar, LLC
("Aladdin Bazaar"), if a guaranty, letter of credit or other form of credit
enhancement is required to be obtained by the Trust or ABH in order to insure
Aladdin Bazaar or any of its members that the Hotel/Casino will be completed and
opened successfully, ABH will be permitted to convey up to 50% of its interest
in Aladdin Bazaar to CS First Boston or any other institutional investor and
pledge any of its remaining interest in Aladdin Bazaar to CS First Boston or to
such other institutional investor providing financing for the development of the
Mall Project. Furthermore, the Trust shall be entitled to pledge its membership
interest in ABH to either or both of CS First Boston or such other institutional
investor in connection with the financing of the Mall Project.
London Clubs' Subsidiaries
See attachment.
SCHEDULE 4
LITIGATION
▇▇▇▇▇▇, et al. ▇. ▇▇▇▇▇▇, et al., Index No. 112618/95 (New York Sup. Ct.)
Kanbar, et al. ▇. ▇▇▇▇▇▇, et al., Index No. 600301/97 (New York Sup. Ct.)
▇▇▇▇▇▇, et al. v. PMEC Associates and Co., et al., No. 88 Civ. 2537 (S.D.N.Y.)
SCHEDULE 5
LICENSES, PERMITS, ETC.
ABH
See attachment.
SCHEDULE 6
EXISTING INDEBTEDNESS
Trust
None.
ABH and/or its Subsidiaries
$30,000,000 contingent liability (see Schedule 3)
London Clubs and/or its Subsidiaries
See attachment.
SCHEDULE 7
OWNERSHIP OF BORROWER
Aladdin Bazaar Holdings, LLC
Aladdin Bazaar Holdings, LLC has no ownership interest in Borrower.
The Trust
The Trust owns an indirect interest in Borrower through its ownership interests
in the following entities:
- The Trust owns a 95% membership interest in Aladdin Holdings, LLC (AHL).
- AHL owns a 98.7% membership interest in ▇▇▇▇▇▇ Enterprises, LLC
(▇▇▇▇▇▇ Enterprises).
- ▇▇▇▇▇▇ Enterprises owns a 47% membership interest in Aladdin
Gaming Holdings, LLC (Holdings) and a 100% membership interest in
Aladdin Gaming Enterprises, Inc. (Enterprises). Enterprises owns
a 25% membership interest in Holdings.
- Holdings owns 100% of the common membership interest and
100% of the Series A Preferred membership interest in the
Borrower.
LCI
See chart attached hereto.